The Kyrgyz Republic has significant deposits of coal, gold, silver, uranium and antimony, and nonferrous metals and minerals are key export commodities. The country also has some oil and natural gas resources. Gold extraction is the biggest contributor to the economy with about 70% of the government’s extractive revenue generated by the Kumtor gold mine. Despite falling commodity prices and production in recent years, mining remains the largest economic sector and is a core element for the National Development Strategy.
The Kyrgyz Republic implements the EITI in alignment with national priorities for data mainstreaming and digitalisation as part of its Open Government Partnership action plan. The EITI can further play a role in supporting the government’s anti-corruption agenda by addressing corruption risks in the licensing process, disclosing company ownership and empowering citizens to keep the government accountable.
Economic contribution of the extractive industries
- to government revenues
- to exports
- to GDP
- to employment
Three takeaways from Kyrgyz Republic on implementing beneficial ownership transparency
Kyrgyzstan receives the first EITI Chair’s Award for Beneficial Ownership Transparency
Kyrgyz Republic - Investigating beneficial ownership in the extractives industries
Mainstreaming of the EITI into the Kyrgyz Republic mining sector governance system
- The Law on Subsoil, amended in 2018, mandates that extractive companies report in accordance with the EITI Standard, enables transparency of license agreements and requires companies to disclose their beneficial owners when applying for licenses. In 2018, the government simplified the reporting process for companies in line with the EITI Standard and government requirements.
- An EITI feasibility study evaluates systematic disclosure of extractives data. As part of EITI implementation, the State Committee for Industry, Energy and Subsoil Use began disclosing information on production volumes, taxes paid and payments in open data format.
The Kyrgyz Republic’s extractive sector is mainly governed by the Law on Subsoil Use, which mandates extractive companies to report financial data in accordance with the EITI Standard. Other related legal acts include the Land Code, Water Code, Environmental Protection Law, Concessions Law and the PSA Law, among others. The extractive sector is mainly regulated by the Ministry of Economy.
Mining companies operate under a general tax regime in accordance with the Tax Code and pay specific taxes such as royalties and bonuses. There are several non-tax payments which are governed by the Law on Non-Tax Payments.
Extractive licenses are issued by tender, auction or direct negotiation and are granted by the State Committee for Industry, Energy and Subsoil Use (SCIESU). The government discloses license information via its online license registry, including license holders, coordinates, relevant dates and commodities produced. The register also links to the general business register and to the Open Budget Portal of the Treasury.
The Kyrgyz Republic has not published license agreements or other contractual arrangements with extractive companies, apart from the concession agreement of the Kumtor project, as legally mandated.
The Law on Subsoil Use, enacted in 2018, requires public access to beneficial ownership information and imposes sanctions for non-reporting. In 2020, the government adopted amendments to the licensing regulation, enabling collection and publishing of beneficial ownership information and a template declaration form. Extractive companies are required to submit declaration forms as of March 2021.
The State Committee on Industry, Energy and Subsoil Use (SCIESU) is considering reforming the existing license register to include beneficial ownership information. Currently, the committee collects information on company ownership in hard copies as a part of licensing procedures.
To implement the beneficial ownership register, the government entered an agreement with Open Ownership to collected and disclose beneficial ownership data through the Open Ownership Register.
The fiscal system in the Kyrgyz Republic is highly centralised. All revenues from extractive industries go to the state budget and local governments collect property tax and land tax. While shares of revenues are distributed from the central government to local governments, it is unclear how these transfers are calculated.
Nonetheless, revenue transparency is improved with daily updated information available on the Open Budget website for all transactions to and from the Central Treasury disaggregated by company, budget level (regional or local) and revenue stream.
The Kyrgyz Republic EITI is administered the Kyrgyz Republic Multi-Stakeholder Group (MSG), also known as the Supervisory Board. The MSG is hosted by the Ministry of Energy and Industry Department of Subsoil Use Policy and chaired by Toktobaev Akyl, Deputy Chairman of the State Committee for Industry, Energy and Subsoil Use (SCIESU).
Government announces commitment to join the EITI
Kyrgyz Republic joined
Multi-stakeholder group is formed
2004-2008 EITI Report published
Found to be “close to compliant”
Designated compliant country
2009 EITI Report published
2011 EITI Report published
2012 EITI Report published
2013-2014 EITI Report published
First Validation – Found to have made inadequate progress
2015-2017 EITI Report published
Kyrgyz Republic status
2018-2020 EITI Report published
Kyrgyz Republic was found to have made meaningful progress in implementing the 2016 EITI Standard in September 2020, following its second Validation. Kyrgyz Republic fully addressed 12 of the 20 corrective actions identified in its previous Validation. The next Validation is expected to commence in April 2023.