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Newsletter on Pharmaceutics: May 2019
This legal alert highlights the most important legal developments of May 2019 that affect the Uzbek pharmaceutical industry as a whole and activities of foreign pharmaceutical producers and their representative offices in Uzbekistan in particular.
1. IMPORT OF TECHNOLOGICAL EQUIPMENT
A list of technological equipment exempted from import customs duties and the value added tax levied after import into Uzbekistan has been amended.
A number of items have been excluded from the list, making customs privileges no longer applicable to 21 types of technological equipment, including single-use syringes (including those without needles), spare parts for dentist drills, blood pressure measuring instruments and equipment, systems for taking and transfusion of blood, blood substitutes and infusion solutions. These changes will come into force on August 2, 2019.
Resolution No. 2436-9 of May 2, 2019
A number of items have been excluded from the list, making customs privileges no longer applicable to 21 types of technological equipment, including single-use syringes (including those without needles), spare parts for dentist drills, blood pressure measuring instruments and equipment, systems for taking and transfusion of blood, blood substitutes and infusion solutions. These changes will come into force on August 2, 2019.
Resolution No. 2436-9 of May 2, 2019
2. CREATION OF AN EXPORT PROMOTION AGENCY
The Regulation for the Export Promotion Agency under the Ministry of Investment and Foreign Trade has been approved.
This document sets forth the main functions of the Agency, including, among other things, (i) providing information and advisory support to exporters on matters of marketing, pricing, transport logistics, certification, standardization and quality controls, tax and customs procedures, foreign market access conditions, based on the one-stop shop principle, (ii) assisting in searching for potential foreign customers, (iii) helping to negotiate, formalize and close relevant export transactions, (iv) providing exporters with the data on available preferences and benefits, and (v) providing financial assistance for the introduction of international systems of standardization and certification, and the registration of national products with foreign authorized bodies.
Resolution of the Cabinet of Ministers No. 373 of May 6, 2019
This document sets forth the main functions of the Agency, including, among other things, (i) providing information and advisory support to exporters on matters of marketing, pricing, transport logistics, certification, standardization and quality controls, tax and customs procedures, foreign market access conditions, based on the one-stop shop principle, (ii) assisting in searching for potential foreign customers, (iii) helping to negotiate, formalize and close relevant export transactions, (iv) providing exporters with the data on available preferences and benefits, and (v) providing financial assistance for the introduction of international systems of standardization and certification, and the registration of national products with foreign authorized bodies.
Resolution of the Cabinet of Ministers No. 373 of May 6, 2019
3. STATE SUPPORT FOR EXPORTERS
A Presidential Decree providing for measures for supporting exporters has been adopted.
First, the State Fund for Supporting the Development of Entrepreneurship under the Cabinet of Ministers will provide exporters with a surety for up 50% of the amount of a particular pre-export loan, but not in excess of UZS 4 bln, and a financial compensation covering the interest on a pre-export loan (with certain limits having been set).
Secondly, the National Company for Export Import Insurance Uzbekinvest will begin to offer to exporters various insurance products, including insurance of loans to purchasers, of accounts receivable, and loans for replenishment of working capital.
Some other support measures include the provision of subsidies for compensating costs of transportation by rail; deferral of VAT; financial assistance for obtaining necessary licenses, permits, and certificates in foreign countries; financial assistance for paying registration fees or making other payments for facilitating participation of business entities in foreign tenders and competitions.
Presidential Decree No. UP - 4337 of May 24, 2019
First, the State Fund for Supporting the Development of Entrepreneurship under the Cabinet of Ministers will provide exporters with a surety for up 50% of the amount of a particular pre-export loan, but not in excess of UZS 4 bln, and a financial compensation covering the interest on a pre-export loan (with certain limits having been set).
Secondly, the National Company for Export Import Insurance Uzbekinvest will begin to offer to exporters various insurance products, including insurance of loans to purchasers, of accounts receivable, and loans for replenishment of working capital.
Some other support measures include the provision of subsidies for compensating costs of transportation by rail; deferral of VAT; financial assistance for obtaining necessary licenses, permits, and certificates in foreign countries; financial assistance for paying registration fees or making other payments for facilitating participation of business entities in foreign tenders and competitions.
Presidential Decree No. UP - 4337 of May 24, 2019
4. STATE SUPPORT FOR MANUFUCATURERS
The state will support producers of some categories of highly demanded products by (i) providing a surety of the State Fund for Supporting the Development of Entrepreneurship under the Cabinet of Ministers for up to 50% of the amount of a loan taken for implementing an investment project for the production of highly demanded product; (ii) causing the Fund to reimburse the interest on loans of commercial banks at the level of up to 5 %, provided for furthering the production of highly demanded goods. A list of highly demanded products has already been approved and now includes more than 100 items, including equipment for greenhouses, syringes with needles, electric kettles, etc. A technopark will also be established at the territory of JSC “Tashkent Mechanical Plant” with entities engaged in the production of highly demanded goods getting the right to place its production facilities there.
It is also envisaged that a unified online system will be created for facilitating trade in industrial goods for legal entities. The system will be synchronised with the state portal for public procurement that will allow both state purchasers and private suppliers engage in procurement more effectively.
Presidential Decree No. PP – 4302 of May 1, 2019
It is also envisaged that a unified online system will be created for facilitating trade in industrial goods for legal entities. The system will be synchronised with the state portal for public procurement that will allow both state purchasers and private suppliers engage in procurement more effectively.
Presidential Decree No. PP – 4302 of May 1, 2019
5. THE LAW ON PUBLIC-PRIVATE PARTNERSHIP
The Law on Public - Private Partnership (“PPP”) has been adopted and will enter into force on June 10, 2019. In accordance with the Law, the PPP Development Agency under the Ministry of Finance will serve as the central PPP support and development unit in Uzbekistan.
PPP agreements may be concluded for a period from 3 to 49 years between eligible private partners and the state represented by authorized state agencies and state-owned enterprises. Tender biddings have to be organized to select a private partner, whereas direct negotiations are possible only in limited cases, as listed by the Law. Projects initiated by private parties are subject to approval by a public partner, the Agency, or the Cabinet of Ministers, depending on the total project cost, and private participation in them is also subject to tender bidding after a concept of the project is approved.
The Law also defines some general rights and obligations of parties to PPP. It is also provided that all projects being implemented will have to be recorded in a special state register, which will be open for public access.
Law No. ZRU – 537 of May 10, 2019
PPP agreements may be concluded for a period from 3 to 49 years between eligible private partners and the state represented by authorized state agencies and state-owned enterprises. Tender biddings have to be organized to select a private partner, whereas direct negotiations are possible only in limited cases, as listed by the Law. Projects initiated by private parties are subject to approval by a public partner, the Agency, or the Cabinet of Ministers, depending on the total project cost, and private participation in them is also subject to tender bidding after a concept of the project is approved.
The Law also defines some general rights and obligations of parties to PPP. It is also provided that all projects being implemented will have to be recorded in a special state register, which will be open for public access.
Law No. ZRU – 537 of May 10, 2019