Appendix I. Resource Revenue Transparency
Appendix II. Summary of Key Findings from Past Fiscal Transparency Assessments
At the time this assessment was prepared, a broad-based group of business leaders and government officials was working to prepare a proposal for reforming mining legislation and regulation in the Kyrgyz Republic with the aim of clarifying roles and responsibilities of the various parties and improving the functioning of activity in the mining sector.
In places, these laws refer to terms and practices that were part of the legal and operating environment during Soviet times—for example, the Soviet system of reserve classification, the need for the government to evaluate the economic feasibility of a project prior to issuing a license, and the requirement that a deposit be exploited optimally in a technical rather than in an economic sense.
At the time this report was written, there were discussions and proposals to revise the tax code.
This mineral and raw materials tax is not earmarked for any particular use, despite the reference to “replenishment” in its name.
Full EITI implementation requires most importantly that: (i) companies and government both submit information on resource-revenue payments and receipts to an independent third party, (ii) the third party reconciles any differences between the two sets of data to international audit standards, and (iii) the third party publishes and discusses the data, including any discrepancies between company and government data.
In December 2006, Centerra agreed to loan (interest free) the Kyrgyz Republic C$4.4 million to help the government make payments “to assist the government in fulfilling its responsibilities” in compensating members of local communities. C$3 million was disbursed in 2006, with the remainder to be loaned in 2007. C$2.2 million is repayable in 2010, with the remaining C$1.4 forgivable in 2012 if there is no default. The loan is secured with Centerra shares owned by Kyrgyzaltyn.