General legal newsletter for November 2021

Some of the most notable legal changes of November 2021 in Uzbekistan include the adoption of new Laws on Privatization of Non-Agricultural Land Plots, the Insurance Activities, and the Publishing Activities; liberalization reforms in the grain sector; increasing the liability for personal data violations; and the reduction of categories of goods subject to the mandatory certification.

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 1.  NEW LAW ON PRIVATIZATION OF NON-AGRICULTURAL LANDS 

A new Law on Privatization of Non-Agricultural Land Plots has been adopted. It replaces the Law with the same name that was adopted in 2019, but has not become workable in practice due to the absence of subordinate legislation.

It is provided in the new version of the Law that the following lands may be privatized:

• land plots provided to Uzbek legal entities for carrying out entrepreneurial and urban construction activities;
• land plots provided to citizens of Uzbekistan for building individual houses, for servicing residential houses, for carrying out business and urban construction activities;
• land plots on which state-owned facilities subject to privatization are located;
• free land plots.

Available forms of privatization include:

• direct purchase of land plots by individuals and legal entities holding these plots based on the permanents use rights, permanent possession, or life-long inherited possession;
• purchase of free lands at an electronic online auction.

Only Uzbek citizens and legal entities (foreign shareholding must be less than 15%) may participate in privatization. To purchase the land that is already in the possession of individuals (legal entities), they need to submit a relevant application to a local Centre for State Services. If the application is approved, an applicant has 10 days to pay a purchase price. After the price is paid, a state order confirming ownership rights is issued to the applicant.

A list of accompanying documents to be submitted along with an application, rules for considering applications, rules for the calculation of a privatization price are yet to be approved by the Cabinet of Ministers (the Law remains dysfunctional until they are set).

Privatized land plots may be withdrawn from their owners only in the following exceptional cases: (i) foreclosure on land based on enforcement documents (court orders, etc.); (ii) purchase of land for state or public needs; (iii) confiscation; or (iv) requisition. 

Law No. ZRU-728 of 15 November 2021

 2.  NEW LAW ON INSURANCE ACTIVITIES 

A new edition of the Law on the Insurance Activities has been adopted. It will enter in force on 25 February 2022. The new edition provides for definitions of such concepts as cross-border insurance, reinsurance, co-insurance, insurance pools, and prudential standards and contains a number of other novelties, among others, including the following:

• it is provided that insurance and reinsurance companies may only be established in the legal form of a joint-stock company;
• new qualification requirements for top managers and chief accountants of insurers, reinsurers, insurance brokers, and their sub-divisions are set in the Law (previously, such standards were set in orders of the Minister of Finance);
• rules for exchanging documents related to insurance activities in an electronic form are set; it is provided that relevant documents executed electronically have equal legal force with paper documents;
• insurers and reinsurers must comply with prudential standards, which include the following requirements: requirements for a minimum amount of the charter capital; for the adequacy of the solvency margin; for amounts of liabilities under specific risks; for the formation and placement of insurance reserves; other requirements as set forth by the Ministry of Finance;
• requirements for insurers’ and reinsurers’ internal systems of control and risk management are provided;
• measures and sanctions that the Ministry of Finance may impose on insurers, reinsurers, or insurance brokers not complying with the insurance legislation are set; the Law, among others, provides for a list of one-time gross violations that may lead to the annulment of relevant licenses;
• basic rules for the protection of consumers of insurance services are set.

Law No. ZRU-730 of 23 November 2021

 3.  NEW LAW ON PUBLISHING ACTIVITIES 

A new edition of the Law on the Publishing Activities was signed by the President on 26 November 2021. It is, among others, provided in the new edition of the Law:

• the publishing activities are a complex of organizational, creative, production, and other measures aimed at preparing and issuing publications;
• the main principles of the publishing activities are the freedom to publish, the promotion of the culture of reading, copyright protection, the inadmissibility of abuse of the freedom to publish;
• the main regulatory bodies in the area are the Cabinet of Ministers and the Agency for Information and Mass Communications under the President;
• it is prohibited to issue and distribute publications that defame the dignity or business reputation of citizens, the content of which can be considered as an interference with their privacy;
• the publishing activities may start to be carried out after a relevant notification is sent to the above Agency.

Law No. ZRU-731 of 26 November 2021

 4.  REFORMS IN THE GRAIN SECTOR  

The President has signed a Resolution on the introduction of market mechanisms in (liberalization of) the grain sector, which has been tightly controlled by the state for many years. The following is, among others, envisaged by the Resolution:

• starting from 2022, business entities are independent in deciding what sorts of wheat to sow (out of those recommended to be sown in the country) based on relevant land and water conditions;
• in 2022- 2024, on average, 2.5 tons of grain from each hectare of irrigated land sown with grain will be traded through a commodity exchange, while the rest may be sold based on direct agreements;
• soft loans will be provided to grain farms, seed farms, and grain clusters being a part of the Center for Developing the Seed Production for covering grain production costs;
• grain farms, seed farms, and grain clusters being a part of the Center for Developing the Seed Production are allowed to use received state loans at their own discretion and to directly purchase necessary mineral fertilizers, plant protection products, fuels, and agricultural machinery (previously, that was done only through state intermediaries);
• the Inspection for Control over the Agricultural Sector under the Cabinet of Ministers is instructed to develop a Regulation on state purchases of grain at commodities exchanges for ensuring the stability of relevant markets;
• the creation of entities competing with state-owned JSC Uzdonmakhsulot will be supported for developing the grain processing;
• in 2022, grain enterprises being a part of JSC Uzdonmakhsulot will be privatized to business entities intending to create grain clusters; seed workshops of the company will be transferred to the Center for Developing the Seed Production; after the relevant measures are taken, the company will be liquidated;
• electronic databases with comprehensive information on the placement of agricultural crops will be created; drones will be used to collect and update information;
• state bodies are prohibited from interfering into agricultural and technical activities related to the production of grain, including by giving orders on the use of granted soft loans.

Presidential Resolution No. PP-10 of 15 November 2021

 5.  VIOLATIONS RELATED TO PERSONAL DATA 

 6.  CERTIFICATION OF GOODS 

The Cabinet of Ministers has adopted a Resolution reducing a number of categories of goods subject to the mandatory certification. Thus:

• a list of goods subject to the sanitary certification now includes 22 categories of goods, instead of 53 earlier, with only agricultural and food products being now listed (such categories of goods as, for example, shoes, clothes, kitchenware, furniture, toys, and ceramics have been excluded);
• a list of goods subject to the technical certification now only has 82 categories, instead of 102 earlier (such categories of goods as, for example, meat, fish, tea, coffee, vegetables, sugar, and milk products have been excluded).

Resolution of the Cabinet of Ministers No. 683 of 16 November 2021

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Have a good day!

Sincerely,
Kosta Legal Law Firm