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Kazakhstan is taking decisive action against a sophisticated scheme where notaries allegedly created over 280,000 fraudulent debt records in the past three years. These illicit activities have enabled collectors and microfinance organizations to illegally acquire approximately 400 million tenge, effectively turning notary services into a form of legalized racketeering.

In response to this widespread issue, members of the Parliament have approved a draft law aimed at preventing such abuses and strengthening oversight of notary practices.

Notaries' Illicit Activities Uncovered

During a plenary session of the Mazhilis (Parliament), Member of Parliament Bakytzhan Bazarbek highlighted a prosecutor's report from 2023. The report detailed how dozens of notaries across the country were illegally issuing executable endorsements for fabricated debts, salaries, and public procurement contracts.

"Many notaries bypassed the law by not requiring written acknowledgments from debtors or proper evidence of non-performance of obligations," Bazarbek stated. "Some notaries illegally issued such endorsements in favor of microfinance organizations, pawnshops, and collectors, burdening individuals with fake debts or obligations. Subsequently, private bailiffs would aggressively collect these sums, intimidating citizens."

Bazarbek revealed that 280,000 questionable endorsements were identified nationwide. For each dubious record, notaries allegedly received an average of 5,000 tenge from microfinance organizations and collectors. Half of this income was reportedly returned to the clients as a bonus, transferred to microfinance employees through third parties or handed over in cash.

Blocking Legalized Racketeering

"Over three years, these notaries have transferred 400 million tenge to employees of microfinance and collection agencies. This is no longer notary work; it's legalized racketeering!" Bazarbek exclaimed. He also questioned the lack of accountability, asking, "Where are the arrests? Where are the criminal cases? No one can answer these questions!"

The proposed amendments seek to significantly increase the responsibility of notaries. Penalties will be introduced for violating personal data requirements, and a ban on transferring citizens' digital signatures to third parties will be implemented. Strict limitations will also be imposed if a notary has a connection with parties involved in a transaction.

Additionally, MP Nurlssultan Baitilesov proposed that executable endorsements will now only be processed at the debtor's registered address. If the residential area does not match, an automatic blocking mechanism will be activated. Notaries will also be obligated to register the mandatory delivery of copies of executable endorsements via the e-government portal and SMS to the debtor.

"The draft law proposes additional restrictions to prevent connections between notaries and private bailiffs, microfinance organizations, and other related parties," Baitilesov explained. "Specifically, notary actions will be prohibited in cases of close kinship or other dependencies. Executable endorsements for state and quasi-state sector contracts will be entirely removed from the purview of notaries and transferred to the courts for consideration."

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