SOME QUESTIONS REGARDING THE CHALLENGE OF THE LEGALITY OF A REGULATORY LEGAL ACT IN COURT

In a court hearing, the court examines the competence of the state body or local self-government body, or the authority of the official who adopted the regulatory legal act, as well as the compliance of the entire regulatory legal act or its individual parts with the Constitution of the Republic of Kazakhstan and the laws of the Republic of Kazakhstan (paragraph 3, Article 300 of the Civil Procedure Code of the Republic of Kazakhstan).

1. A Regulatory Legal Act and Its Distinctions from Other Acts

According to paragraph 1 of Article 298 of the Civil Procedure Code of the Republic of Kazakhstan, a citizen or legal entity subject to the effect of a regulatory legal act, who believes that their rights and legitimate interests guaranteed by the Constitution and laws of the Republic of Kazakhstan are violated by a regulatory legal act adopted and published in accordance with the procedure established by law, has the right to file a lawsuit in court seeking to declare this regulatory legal act, in whole or in part, inconsistent with the law.

Before challenging an act in court, it is essential to first determine whether it qualifies as a regulatory legal act.

According to subparagraph 25) of Article 1 of the Law of the Republic of Kazakhstan «On Legal Acts» (hereinafter referred to as the Law), a regulatory legal act is a written official document of an established form, adopted at a republican referendum or by an authorized body, which establishes legal norms, amends, supplements, terminates, or suspends their effect.

A legal norm is a universally binding rule of conduct, either permanent or temporary, designed for repeated application and applicable to an undefined group of individuals within the scope of regulated social relations (subparagraph 18) of Article 1 of the Law).

Therefore, the main distinguishing feature of a regulatory legal act is the presence of legal norms – rules of conduct.

The list of regulatory legal acts is established in Article 7 of the Law.

Non-regulatory legal acts include: acts providing official clarification of regulatory legal acts; administrative acts; legal acts of individual application; and legal acts in the field of the state planning system (Article 55 of the Law).

2. Verification of the Competence of a State Body in Adopting a Regulatory Legal Act

According to paragraph 3 of Article 34 of the Law, the adoption of a regulatory legal act by an authorized body is permitted only in cases where the authority of the authorized body to adopt such an act is provided for by the legislation of the Republic of Kazakhstan.

At the same time, the list of subordinate regulatory legal acts derived from higher-level regulatory legal acts is determined by the Government of the Republic of Kazakhstan in the regulations of state bodies. The list of subordinate regulatory legal acts derived from higher-level regulatory legal acts, whose developers are state bodies directly subordinate and accountable to the President of the Republic of Kazakhstan, is determined by the President of the Republic of Kazakhstan.

According to subparagraph 16) of Article 1 of the Law, the legislation of the Republic of Kazakhstan is a set of regulatory legal acts adopted in the prescribed manner.

Thus, the competence of a state body to adopt a regulatory legal act can only be established in higher-level regulatory legal acts and must be determined by the Government of the Republic of Kazakhstan in the regulations of state bodies or by the President of the Republic of Kazakhstan.

What violations may occur in this context? Let us highlight the key aspects that, in our opinion, require attention:

- whether the act establishing competence qualifies as a higher-level regulatory legal act (a state body cannot establish its own competence or that of bodies on the same hierarchical level to adopt a regulatory legal act);

- competence may not be defined in the regulations of the state body but may only be stated in a non-normative legal act, which is not part of the legislation (for example, in legal acts in the field of state planning system – the National Development Plan of the Republic of Kazakhstan, the National Security Strategy of the Republic of Kazakhstan, development plans of state bodies, development plans of regions, cities of republican significance, the capital, as well as concepts, national projects, state programs, doctrines (strategies), comprehensive plans, National Infrastructure Plan);

- the content of a regulatory legal act may exceed the scope of its regulation as defined in the legislation (for example, the title of the rules must exactly match the title established by the higher-level regulatory legal act, and the rules themselves must strictly correspond in content to their title);

- territorial subdivisions of authorized bodies, as well as local executive bodies authorized by the akim, financed from local budgets, are not entitled to issue regulatory legal acts (paragraph 5, Article 7 of the Law);

- regulatory legal orders are adopted by the heads of the central state bodies departments only if they have the authority to approve them in the regulatory legal acts of the state body to which the department belongs, and they cannot affect the rights and freedoms of individuals and citizens (paragraph 6, Article 7 of the Law).

Any of the violations listed above, in our opinion, may serve as grounds for the court to recognize the challenged regulatory legal act, in whole or in part, as inconsistent with the law and therefore invalid.

3. Verification of the Existence of Contradictions in Legal Norms in Regulatory Legal Acts

To determine the existence of contradictions between the challenged act and other regulatory legal acts of greater legal force, it is necessary to correctly identify the scope of legal norms related to the challenged act or its part.

The lawsuit must include a reference to the specific legal norm (article, paragraph, subparagraph) that the challenged act contradicts.

It is important to distinguish and not confuse issues of law enforcement, regulatory regulation (expediency), and the legality of a regulatory legal act.

The following cases do not constitute a violation of the legality of a regulatory legal act:

- when the challenged act does not contain a legal norm that contradicts a higher-level regulatory legal act;

- when the plaintiff believes the challenged act should be supplemented with new provisions that are absent or the wording of the current act should be revised;

- when there are uniform restrictions for everyone regarding timeframes and deadlines, which, in the plaintiff’s opinion, resulted in the denial of certain benefits.

Claims demanding that additions be made, the wording revised in a specific manner, or deadlines changed in a regulatory legal act cannot be satisfied by a court decision. This is because the current legislation stipulates that the court may only declare a regulatory legal act, in whole or in part, as inconsistent with the law and invalid. The court is not authorized to mandate additions or specify exact wording, as such matters fall within the competence of the authorized body.

At the same time, according to paragraph 3 of Article 24 of the Law, the text of a regulatory legal act must comply with the norms of literary language, legal terminology, and legal drafting techniques. Its provisions should be as concise as possible and convey a clear and unambiguous meaning. The text of a regulatory legal act must not include declarative provisions that carry no substantive or legal significance.

The use of outdated and ambiguous words and expressions, epithets, metaphors, or abbreviations is not permitted. The texts of regulatory legal acts in Kazakh and Russian must be identical.

In accordance with Article 270 of the Civil Procedure Code of the Republic of Kazakhstan, in cases where a violation of legality is identified, the court has the right to issue and send a special ruling. If the violations are committed by state bodies, officials, or public servants, the court issues and sends a special ruling to the relevant organizations, officials, or other persons performing managerial functions, who are obligated to report the measures they have taken within one month.

In this regard, we believe that if the challenged act does not comply with the requirements of Article 24 of the Law, the plaintiff has the right to file a motion requesting the court to issue a special ruling against the authorized body to address the identified violations.

In accordance with paragraph 3 of Article 10 of the Law, each regulatory legal act of a lower level must not contradict regulatory legal acts of higher levels.

At the same time, if a regulatory legal act specifies that any of its legal norms are to be applied based on an additional regulatory legal act, such a norm is applied in accordance with both the primary and the additional regulatory legal act (paragraph 3, Article 11 of the Law).

In this regard, it is important to distinguish between a contradiction in legal norms and the application of primary and additional regulatory legal acts.

For example, paragraph 1 of Article 427 of the Code of the Republic of Kazakhstan «On Taxes and Other Mandatory Payments to the Budget» (hereinafter referred to as the Code) specifies goods placed under the customs procedure for release for domestic consumption for which value-added tax (VAT) is paid using the offset method. These goods include live cattle.

At the same time, paragraph 1 of Article 427 of the Code also stipulates that the list of these goods and the procedure for its formation are determined by the authorized body in the field of tax policy.

In the List of Imported Goods for which Value-Added Tax (VAT) is Paid Using the Offset Method (hereinafter referred to as the List), approved by the order of the Acting Minister of National Economy of the Republic of Kazakhstan on February 21, 2018, No. 67 (as amended until May 5, 2020), live cattle were not included. (For reference: live cattle were added to the List according to the order of the Minister of National Economy of the Republic of Kazakhstan on May 5, 2020, № 35).

Therefore, we believe that in this case, there was no contradiction in the norms. The legal norm should have been applied in accordance with both the primary and additional regulatory legal acts, rather than solely based on the Code.

It is also important to note that in accordance with paragraph 3 of Article 11 of the Law, until the adoption of an additional regulatory legal act, the regulatory legal acts regulating the relevant relations remain in effect. For example, after the adoption of a subordinate act, a certain issue may later be regulated differently in the law (if amendments to the subordinate act have not yet been made). At the same time, the law itself provides that the relevant legal norm is applied based on the additional regulatory legal act.

Therefore, in this case, there is also no contradiction in the norms – the additional subordinate regulatory legal act regulating the relevant relations remains in effect.

The plaintiff must prove to the court that their rights and legitimate interests are violated by the provisions of the challenged act. If the regulatory legal act does not affect the plaintiff s rights and legitimate interests, the court cannot satisfy their claim.

4. Challenging the Legality of a Regulatory Legal Act Based on the Procedure for Its Development and Adoption

All regulatory legal acts are adopted in accordance with the procedure established by law, including general and special rules for the preparation and drafting of regulatory legal act projects.

For example, Article 19 of the Law provides the specifics for the development and adoption of consultative documents and regulatory legal acts affecting the interests of business entities; Article 20 of the Law outlines the specifics for the development and adoption of regulatory legal acts concerning the rights, freedoms, and duties of citizens.

According to paragraph 4 of Article 300 of the Civil Procedure Code of the Republic of Kazakhstan, when considering a claim for recognizing a regulatory legal act as contradictory to the law, the burden of proving the circumstances that served as the basis for the adoption of the said regulatory legal act is placed on the state body, local government body, or official who adopted the regulatory legal act.

Therefore, the responsibility for proving the legality of a regulatory legal act based on the procedure for its development and adoption lies with the authorized body.

The plaintiff only needs to include in the motion the required list of documents and information established by law, which are necessary to verify the compliance with the procedure for the development and adoption of the challenged act, to be provided by the authorized body.

Failure to comply with the specified procedure, including the absence of required legal expertise, opinions, and other necessary documents, may serve as grounds for the court to recognize the challenged regulatory legal act as inconsistent with the law and therefore invalid.

5. The Scope of Regulation of a Regulatory Legal Act and Other Limitations

Regulatory legal acts can be challenged not only in the case of direct contradiction to higher-level regulatory legal acts but also when they exceed the scope of their regulatory subject matter, as defined by legislation.

The Constitution and legislative acts establish the boundaries for the subject matter of regulation by subordinate regulatory legal acts and other limitations. Let us outline the main ones.

Thus, paragraph 1) of Article 61 of the Constitution of the Republic of Kazakhstan establishes that the Parliament has the authority to adopt laws that regulate the most important public relations, establish fundamental principles and norms concerning the legal capacity of individuals and legal entities, civil rights and freedoms, obligations, and responsibilities of individuals and legal entities.

Furthermore, paragraph 3 of Article 61 of the Constitution of the Republic of Kazakhstan lists other public relations regulated by laws and specifies that all other relations are regulated by subordinate acts.

In accordance with paragraph 3 of Article 2 of the Civil Code of the Republic of Kazakhstan, goods, services, and money are freely moved and circulated throughout the territory of the Republic of Kazakhstan. Restrictions on the movement of goods and services are introduced in accordance with legislative acts if necessary to ensure security, protect human life and health, and preserve nature and cultural values.

In accordance with paragraphs 2 and 3 of Article 2 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter – EC), entrepreneurial activity can only be restricted by the laws of the Republic of Kazakhstan. The adoption of regulatory legal acts by state bodies that establish a privileged position for individual business entities is prohibited.

Paragraph 17 of Article 129 of the EC stipulates that the procedure for conducting state control and supervision, as well as the relations arising from it, are regulated by the laws of the Republic of Kazakhstan, international treaties of the Republic of Kazakhstan, and acts forming the law of the Eurasian Economic Union.

Article 194 of the EC establishes prohibitions on anti-competitive actions that have led to or may lead to the restriction or elimination of competition, including the adoption of corresponding regulatory legal acts.

Legislation may provide special requirements for the effective date of a particular regulatory legal act (for example, Article 18 of the Law of the Republic of Kazakhstan «On Permits and Notifications»).

In the event of exceeding the established limits of the subject of regulation or failing to comply with other restrictions, we believe that such subordinate regulatory legal acts may be challenged in court on this basis.

6. Recognition of a Regulatory Legal Act as Invalid in Time

In accordance with paragraph 22 of the normative resolution of the Supreme Court of the Republic of Kazakhstan dated July 11, 2003, № 5 «On Court Decisions in Civil Cases» if a claim by individuals or legal entities regarding the recognition of a regulatory legal act as inconsistent with the law, either in full or in part, is satisfied, the court is obliged to recognize such an act as invalid either in its entirety or in specific provisions, starting from the moment the act was adopted.

However, the unconditional statement that a regulatory legal act or its part must be recognized as invalid exclusively from the moment of its adoption is incorrect. For example, a challenged subordinate act may have been adopted before a law, to which it or part of it later became contradictory. In this case, the subordinate regulatory legal act or its part should be recognized as invalid from the time it began to contradict the law.

Therefore, we believe that in its decision, the court can recognize the act or its part as invalid not only from the moment of adoption but also from another point in time.