Improvement of valuation activities within the transition to a unified market for property valuation services in the EAEU

1. What specific measures are provided for in the draft Law to protect the rights and legitimate interests of consumers of Kazakhstan's services from the actions/inaction of appraisers from other EAEU member states?

 

On December 10, 2021, Decision of the Supreme Eurasian Economic Council No. 23 approved the General Approaches to the Conditions for the Implementation of Appraisal Activities within the Framework of the Functioning of the Single Service Market (hereinafter, the General Approaches).

Each EAEU country is obliged to amend its legislation on appraisal activities in accordance with the specified General Approaches.

Thus, the general approaches include informing the appraisers of their competent authority at the place of its registration (in the Republic of Kazakhstan and in the Russian Federation - these are the chambers of appraisers) of the intention to carry out their activities in the territory of other countries of the Union, maintaining by the competent authorities of each party a register of appraisers intending to conduct an assessment in any other party, exercising control functions, consideration by the competent authority of appeals (complaints), etc.

The competent authority of the EAEU country, based on the information provided by the appraiser, enters information about it in the above register. This register is open and publicly available in all EAEU countries.

In case of violation by a foreign appraiser of the legislation on appraisal activities of the EAEU country in the territory of which he evaluates the property, information on this violation and measures of influence, including the suspension of the right of the appraiser to carry out appraisal activities in the territory of this country, is also entered into the specified register for the period provided for by its legislation.

The above is one of the main measures to protect the interests of consumers of services of the EAEU member states.

In accordance with the legislation of the Republic of Kazakhstan on appraisal activities, the customer independently selects an appraiser.

In this regard, when choosing a foreign appraiser, consumers of Kazakhstan's services can be guided by the above register.

Also, in accordance with the General Approaches, the appraiser of any Member State evaluates the property taking into account the Comparative List of Property Assessment Objects, indicating the permits granting the right to conduct property assessment in relation to the relevant objects.

The comparative list includes the name of the objects of assessment in the EAEU member states and the name of the permits granting the right to conduct an assessment to the appraiser.

In this regard, the draft law provides for the addition of a new chapter regulating the activities of appraisers of Kazakhstan, chambers of appraisers, the authorized body in the field of appraisal activities, as well as the activities of appraisers of other EAEU member states within the framework of the functioning of the SMS.

The draft law defines measures to protect the rights and interests of Kazakhstani consumers of assessment services, including:

 - maintenance by the Internal State Audit Committee of the Ministry of Finance of the Republic of Kazakhstan of the register of appraisers of other EAEU countries on the territory of the Republic of Kazakhstan based on the information provided by the chambers of appraisers;

- consideration by the chambers of evaluators of appeals (complaints) in relation to the evaluator of another EAEU member state.

 

2.  How will the principle of reciprocity be ensured, especially in terms of access of Kazakhstani appraisers to facilities of strategic importance in other EAEU countries (for example, to subsoil use facilities, large industrial assets)?

The draft law provides for a norm prohibiting appraisers of other EAEU countries from assessing property in the territory of the Republic of Kazakhstan as part of public procurement of property assessment services, as well as providing property assessment services supplied in pursuance of the functions of state authorities.

Thus, only Kazakhstani appraisers are entitled to evaluate the above objects in the territory of the Republic of Kazakhstan.

In other EAEU states, the situation is similar for these facilities.

 

3. What is the mechanism for real prosecution and recovery of damage from a foreign appraiser working in the Republic of Kazakhstan, if his report led to financial losses? Will they be required to provide compulsory liability insurance according to Kazakhstani standards or make financial security?

The draft law establishes the obligation of appraisers of other EAEU countries when carrying out appraisal activities in the territory of the Republic of Kazakhstan to comply with the requirements of the legislation of the Republic of Kazakhstan on appraisal activities, other legal acts of the Republic of Kazakhstan.

That is, these appraisers ensure property liability on the terms of the national regime.

At the same time, measures to ensure property liability are determined by Article 21 of the current Law.

 

4. How will the effective control of the quality of work of foreign appraisers in the territory of the Republic of Kazakhstan be carried out?

As mentioned above, the draft Law provides for the rule on maintaining the register of appraisers of other EAEU countries on the territory of the Republic of Kazakhstan based on the information provided by the chambers of appraisers by the ISAC.

In addition, when foreign appraisers inform their body at the place of its registration of their intention to carry out their activities in the territory of the Republic of Kazakhstan, it is obliged to indicate the chamber of appraisers that will consider appeals on issues related to its activities in Kazakhstan.

Thus, in case of controversial issues based on the results of the assessment, violation or non-compliance by foreign appraisers of the requirements of the legislation of the Republic of Kazakhstan on appraisal activities, other legal acts of the Republic of Kazakhstan, the customer has the right to contact the chamber of appraisers, which was indicated by the above appraiser in the contract for the assessment, to consider the appeal and take appropriate measures.