Article 303. Types of Pledge

amended by (11) Law No. 154 of 11th July 1997 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Banking Activity.

1. Mortgage is a type of pledge under which the pledged property remains in the possession and use of the pledger or a third person.

Enterprises, structures, buildings, installations, apartments in blocks of apartments, transport vehicles, cosmic items, goods in circulation and other property which is not excluded from the civil circulation, may be subject to mortgage.

Separable fruits may be subject to mortgage only on the condition that they do not become subject to rights of any third party from the moment of separation. The mortgage of enterprises, structures, buildings, installations, apartments in blocks of apartments, transport vehicles and cosmic items shall be subject to registration at the bodies which carry out the registration of such items.

2. Pawning shall be the type of pledge whereby the pledged property is transferred by the pledger into the possession of the pledge holder.

With the consent of the pledge holder the pledged items may be left with the pledger under lock and seal of the pledge holder. The pledged item may be left in the possession of the pledger with the application of the signs which witness the pledge (secure pledge).

3. In the pledge of rights, the property rights which may be alienated may be subject to pledge, and in particular, the leasing rights to enterprises, structures, buildings, installations, the right to a share in the assets of a business partnership, debt claims, copyright, inventor's rights and other property rights.

The pledge of the rights to a land plot and also of the rights to other natural resources shall be allowed within the limits and under the conditions stipulated in the legislation concerning land and any other natural resources.

A term right may be subject to pledge only prior to the expiry of the term of its validity.

The debtor of a pledged right must be notified of the pledge.

When a pledged right is confirmed by a document, the pledge agreement may be documented in the form of a transfer of the document which establishes the right.

4. In pledging a property right certified with a security, the security shall be transferred to the pledge holder or office placed in a bank, unless the agreement stipulates otherwise.

5. Unless it is otherwise stipulated in the pledge agreement, money which are the pledged item shall be placed in a bank.

Remuneration (interest) owing on those funds shall belong to the pledger.

Article 304. The Pledge of the Property Which is in Common Ownership

The property which constitutes common property may be pledged only with the consent of all the owners. The right to a share in common property may be an independent pledgeable item.

Article 305. A Pledger

1. Both the debtor and a third party may be pledgers.

2. The owner of an item, or with the consent of the owner, any other person who has in respect to that item the right of business authority, may be pledgers, unless it is otherwise provided for by legislative acts.

3. A person to whom the right to be pledged belongs may be a pledger of the right.

The pledging of the right to lease or any other right to somebody else's item shall not be allowed without consent of its owner, or of the person who has, in respect to that item the right of business authority, when legislative acts or an agreement prohibit the alienation of that right without consent of said persons.