Identifier
Created
Classification
Origin
08ASHGABAT869
2008-07-11 05:14:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN PASSES NEW LAW ON LICENSING
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UNCLAS SECTION 01 OF 02 ASHGABAT 000869
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: N/A
TAGS: PGOV PREL ECON EPET TX
SUBJECT: TURKMENISTAN PASSES NEW LAW ON LICENSING
REF: a) ASHGABAT 0683
b) ASHGABAT 0697
UNCLAS SECTION 01 OF 02 ASHGABAT 000869
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: N/A
TAGS: PGOV PREL ECON EPET TX
SUBJECT: TURKMENISTAN PASSES NEW LAW ON LICENSING
REF: a) ASHGABAT 0683
b) ASHGABAT 0697
1. (U) Sensitive but unclassified. Not for public Internet.
2. (U) SUMMARY: Less than two months after amending Turkmenistan's
licensing law, President Berdimuhamedov on July 8 signed a newly
redrafted licensing law. The new version of the law reduces the
list of licensed activities and clarifies supervision of licensing
agencies. The new law also for the first time exempts petroleum
sector operations covered by the Petroleum Law, supporting earlier
suggestions that Turkmenistan's Petroleum Law, which reportedly is
being redrafted, will eventually cover licensing for certain types
of petroleum operations. In general, the new licensing law should
be seen as a moderate step toward gradual implementation of a market
economy. END SUMMARY.
3. (U) On July 8, President Berdimuhamedov signed a new Law on
Licensing of Certain Activities. The law was originally adopted in
1999 and subsequently amended five times, most recently on May 8
(reftel A). The new licensing law does not differ substantially
from the previous version, but it does reduce the list of licensed
activities from 66 to 44 and clarifies supervision of licensing
agencies.
LICENSED ACTIVITIES
4. (U) The new list of licensed activities shrank from 66 to 44
items. Among the most significant abolished items are those related
to the purchase, storage, sale of grain and cereals, processing of
grain and production of flour and grits/cereals, oil and gas
processing, design, construction, repair and operation of main gas,
oil and oil products pipelines, and operation of gas stations. The
list has become more general in description than before. For
example, rather than list individual licensed food production
business sectors, the new law instead lists food stuffs production
in general. The July 8 Law now requires licensing for aviation,
banking, pedigree cattle breeding and Astrakhan fur production, fire
fighting and prevention, production and sale of food stuffs and
feed, real estate appraisal, petroleum products trading, activities
in special customs regimes and customs clearance related services,
securities trading, and overseas job placement.
5. (U) The law specifically states that it does not apply to
intellectual property rights, petroleum operations regulated by the
Petroleum law, and law enforcement, defense, and security.
REGULATION OF LICENSING
6. (U) The Cabinet of Ministers remains the key policy-making
instrument in licensing. The Cabinet appoints licensing agencies,
as well as licensing supervision bodies. The Cabinet also approves
all licensing procedures. Relevant agencies are authorized to issue
licenses in specific sectors after mandatory due diligence.
7. (U) Although the previous law did not provide for the
supervision of licensing agencies, the new version of the law
dedicates an entire chapter to this issue. Although the law does
not clearly state which government body will serve as the licensing
supervisory entity, its language suggests that there will be only
one such entity. The licensing supervisory entity is authorized to
coordinate operations of licensing agencies, provide policy advice
on licensing, including on the list of licensed activities and
procedures, and maintain the registry of licenses. The supervisory
entity has the right to demand relevant data and documents from
licensing agencies, conduct inspections, including those related to
complaints of licensees, demand licensing agencies to cancel their
decisions made in violation of the licensing legislation.
PRIVATE VS. STATE ENTITIES
ASHGABAT 00000869 002 OF 002
8. (SBU) The newly approved law still exempts state-owned entities
from getting licenses. However, the law now allows private entities
to operate without licenses in free trade zones, including free
tourism zones.
9. (U) Licenses for professional services, for example legal
counsel, auditing, appraisal and others, under the provisions of the
new law, do not expire. Business activities are licensed for at
least three years, as was previously the case. The new law also
streamlines license application and extension procedures for
physical entities (including individual businessmen).
10. (SBU) COMMENT: Although the text of the new licensing law has
not been dramatically amended, it should be viewed as a moderate
step toward a market economy. The text incorporates a statement
that licensing should not support monopolization or inhibit free
enterprise or professional services activities. Private businesses
and individuals now have a forum-licensing supervisory body that can
address their issues.
11. (SBU) COMMENT CONTINUED: Petroleum sector-related activities,
other than trading, are not covered. In addition, there is a
specific reference to the Petroleum Law as the applicable
legislation for licensing of petroleum activities. This supports
reftel B's suggestion that the government might be currently working
on revised licensing arrangements for petroleum operations like
geophysical, well drilling, well completion, well work-over
operations, offshore construction, and abandonment. END COMMENT.
HOAGLAND
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: N/A
TAGS: PGOV PREL ECON EPET TX
SUBJECT: TURKMENISTAN PASSES NEW LAW ON LICENSING
REF: a) ASHGABAT 0683
b) ASHGABAT 0697
1. (U) Sensitive but unclassified. Not for public Internet.
2. (U) SUMMARY: Less than two months after amending Turkmenistan's
licensing law, President Berdimuhamedov on July 8 signed a newly
redrafted licensing law. The new version of the law reduces the
list of licensed activities and clarifies supervision of licensing
agencies. The new law also for the first time exempts petroleum
sector operations covered by the Petroleum Law, supporting earlier
suggestions that Turkmenistan's Petroleum Law, which reportedly is
being redrafted, will eventually cover licensing for certain types
of petroleum operations. In general, the new licensing law should
be seen as a moderate step toward gradual implementation of a market
economy. END SUMMARY.
3. (U) On July 8, President Berdimuhamedov signed a new Law on
Licensing of Certain Activities. The law was originally adopted in
1999 and subsequently amended five times, most recently on May 8
(reftel A). The new licensing law does not differ substantially
from the previous version, but it does reduce the list of licensed
activities from 66 to 44 and clarifies supervision of licensing
agencies.
LICENSED ACTIVITIES
4. (U) The new list of licensed activities shrank from 66 to 44
items. Among the most significant abolished items are those related
to the purchase, storage, sale of grain and cereals, processing of
grain and production of flour and grits/cereals, oil and gas
processing, design, construction, repair and operation of main gas,
oil and oil products pipelines, and operation of gas stations. The
list has become more general in description than before. For
example, rather than list individual licensed food production
business sectors, the new law instead lists food stuffs production
in general. The July 8 Law now requires licensing for aviation,
banking, pedigree cattle breeding and Astrakhan fur production, fire
fighting and prevention, production and sale of food stuffs and
feed, real estate appraisal, petroleum products trading, activities
in special customs regimes and customs clearance related services,
securities trading, and overseas job placement.
5. (U) The law specifically states that it does not apply to
intellectual property rights, petroleum operations regulated by the
Petroleum law, and law enforcement, defense, and security.
REGULATION OF LICENSING
6. (U) The Cabinet of Ministers remains the key policy-making
instrument in licensing. The Cabinet appoints licensing agencies,
as well as licensing supervision bodies. The Cabinet also approves
all licensing procedures. Relevant agencies are authorized to issue
licenses in specific sectors after mandatory due diligence.
7. (U) Although the previous law did not provide for the
supervision of licensing agencies, the new version of the law
dedicates an entire chapter to this issue. Although the law does
not clearly state which government body will serve as the licensing
supervisory entity, its language suggests that there will be only
one such entity. The licensing supervisory entity is authorized to
coordinate operations of licensing agencies, provide policy advice
on licensing, including on the list of licensed activities and
procedures, and maintain the registry of licenses. The supervisory
entity has the right to demand relevant data and documents from
licensing agencies, conduct inspections, including those related to
complaints of licensees, demand licensing agencies to cancel their
decisions made in violation of the licensing legislation.
PRIVATE VS. STATE ENTITIES
ASHGABAT 00000869 002 OF 002
8. (SBU) The newly approved law still exempts state-owned entities
from getting licenses. However, the law now allows private entities
to operate without licenses in free trade zones, including free
tourism zones.
9. (U) Licenses for professional services, for example legal
counsel, auditing, appraisal and others, under the provisions of the
new law, do not expire. Business activities are licensed for at
least three years, as was previously the case. The new law also
streamlines license application and extension procedures for
physical entities (including individual businessmen).
10. (SBU) COMMENT: Although the text of the new licensing law has
not been dramatically amended, it should be viewed as a moderate
step toward a market economy. The text incorporates a statement
that licensing should not support monopolization or inhibit free
enterprise or professional services activities. Private businesses
and individuals now have a forum-licensing supervisory body that can
address their issues.
11. (SBU) COMMENT CONTINUED: Petroleum sector-related activities,
other than trading, are not covered. In addition, there is a
specific reference to the Petroleum Law as the applicable
legislation for licensing of petroleum activities. This supports
reftel B's suggestion that the government might be currently working
on revised licensing arrangements for petroleum operations like
geophysical, well drilling, well completion, well work-over
operations, offshore construction, and abandonment. END COMMENT.
HOAGLAND