Newsletter on pharmaceutics for February 2020

This legal alert highlights the most important legal developments of February 2020 that affect the Uzbek pharmaceutical industry as a whole and activities of foreign pharmaceutical producers and their representative offices in Uzbekistan in particular.

 1.  TRADE IN NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES

• 2 Regulations concerning the trade in narcotic drugs and psychotropic substances were approved. The first one covers the matter of storing relevant drugs and materials, the second one – the matter of their transportation. The procedures set in the first Regulation must be followed before applying for the trade license, whereas the procedures set in the second Regulation must be adhered to by license holders;
• The Regulation on the Procedure for Issuing a Written Opinion on the Conformity of Premises with Technical Requirements for the Storage of Narcotic Drugs, their Analogs, Psychotropic Substances and Precursors provides for specific storage conditions that must be ensured based on a category of the relevant premises (the Regulation distinguishes 3 categories of premises). Written opinions are issued by territorial police departments (i.e. the Departments for Internal Affairs) and serve as a prerequisite for applying for the trade license. To obtain a written opinion, an applicant has to (i) submit an application providing detailed information on itself and the premises used for storing the relevant medicines and (ii) send, by post or e-mail, the application and supporting documentation. There is no chargeable state fee. A term during which the application is reviewed and the opinion is issued is 2 weeks.
• The Regulation for the Transportation of Narcotic Drugs, their Analogs, Psychotropic Substances and Precursors within the Territory of Uzbekistan provides that only the legal entities authorized to trade in narcotic drugs and psychotropic substances are eligible to act as a consignor/consignee in their transportation. These legal entities’ representatives having sufficient knowledge on relevant drugs and materials must accompany each transportation. Some other detailed transportation requirements are also set depending on transportation form used.

Resolution of the Cabinet of Ministers No. 85 of February 14, 2020

 2.   THE USE OF INTERNATIONAL REPORTING STANDARDS

• The President signed a decree on the adaptation and use of International Financial Reporting Standards (IFRS). The decree provides for the following measures:
• Starting from January 2021, joint-stock companies, commercial banks, insurance companies and legal entities that are classified as large taxpayers (i.e. entities with the total net income exceeding UZS 100 bln; entities that are engaged in the production of excisable goods; entities that are parties to product sharing agreements; Navoi Mining and Metallurgical Combine, Almalyk Mining and Metallurgical Combine and their subsidiaries; banks and their branch offices; commodity, stock and currency exchanges) will be required to organize accounting and financial reporting based on IFRS and to ensure that their accounting department is staffed with at least 3 accountants who have passed “IFRS Financial Reporting” courses or have obtained relevant international certificates (CIPA, ACCA, CPA, or DipIFR);
• Business entities voluntary using IFRS in accounting and financial reporting will be exempt from the requirement to apply national accounting standards;
• Until June 2020, the Agency for the State Assets Management will publish a schedule for the transition to the use of IFRS for state-owned enterprises on its official website.

Additionally, the Action Plan for Staged Incorporation of IFRS and Relevant Training Methods was approved that provides for exact steps to be taken with the assistance of international consultants to ensure correct application of IFRS within Uzbekistan. This includes the adaptation of the IFRS requirements and the publication of explanatory notes throughout 2020.

Presidential Decree No. PP-4611 of February 24, 2020

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Sincerely,
Kosta Legal Law Firm