UZBEKISTAN LEGAL NEWSLETTER FOR AUGUST 2023

Some of the most notable legal developments in Uzbekistan in August 2023 were measures to simplify some procedures related to the operation and liquidation of business entities, the adoption of the Law “On the Safety of Hydrotechnical Facilities” in the new edition, and the transfer of state shares in 31 large state-owned enterprises, including 9 state-owned banks, to the Ministry of Economy and Finance.  

 1.  OPERATION AND LIQUIDATION OF BUSINESS ENTITIES

The Cabinet of Ministers has adopted Resolutions aimed at simplifying a number of procedures related to the operation and liquidation of business entities. The following is, among other things, envisaged by the Resolutions (subject to further amendment of relevant Laws):

• the abolishment of the practice where electric energy is not supplied to entities that have consumed it in excess of the volumes specified in an electricity supply agreement;
• the provision of taxpayers with the right to directly appeal to court decisions made by the tax authorities based on the results of on-site tax inspections and tax audits;
• in case of a decrease in the charter capital of a business entity, it will no longer be required to notify its creditors and to publicize a relevant notification in mass media;
• in case of voluntary liquidation of a business entity, it is no longer required to submit to the registration authorities: (i) statements confirming the closure of all its bank accounts; the relevant information is submitted by banks themselves electronically; (ii) seals and stamps of the entity; and (iii) paper originals of all obtained licenses and permits.

Resolution of the Cabinet of Ministers No. 348 of 9 August 2023
Resolution of the Cabinet of Ministers No. 382 of 14 August 2023

 2.  NEW LAW ON THE SAFETY OF HYDRO-TECHNICAL FACILITIES

On 30 August 2023, a new edition of the Law “On the Safety of Hydrotechnical Facilities” was adopted. The new edition will come into force on 1 December 2023 and, among other things, provides for the following novelties:

• Similar to the current edition, relevant hydrotechnical facilities include reservoir dams; dams on rivers, streams, canals, and collectors; structures blocking riverbeds; water intake, culvert, spillway, and bank protection structures; hydroelectric power plants; and pumping stations. The term “operating organization” has, however, been expanded to include not only those organizations that have a hydro-technical facility on their balance sheet but also organizations that have some right to operate a hydro-technical facility;
• hydro-technical facilities will be divided into those of I, III, III, and IV classes, depending on their project indicators; loads and relevant influencing factors; terms of their operation; and used construction materials. Based on the classification of hydrotechnical facilities, different requirements for ensuring their safety will apply. Moreover, (i) the design of hydro-technical facilities of classes I and II will have to be done with the attraction of highly qualified experts of scientific centers, international organizations, and international companies and (ii) pre-design and design documentation for hydro-technical facilities of I-III classes will have to be agreed with the State Inspection for the Control over Water Facilities;
• operating organizations will have to obtain insurance of civil liability for causing harm to the life, health, and (or) property of other persons as well as the environment as a result of emergencies related to a hydro-technical facility. Operating organizations compensate relevant damages within the limits of the insurance amount. The relevant provisions of the Law will come into force on 1 January 2024. Rules for insuring this civil liability and rules for the compensation of damages above the insurance amount will be developed by the Cabinet of Ministers.

Law No. ZRU-865 of 30 August 2023

 3.  TRANSFER OF LARGE STATE-OWNED ENTERPRISES

The President has signed a Resolution on the transfer of state shares in 9 large state-owned banks and 22 large state-owned enterprises (as per the Annex to Presidential Resolution No. PP-83 of 1 March 2023) from the Agency for Strategic Reforms under the President to the Ministry of Economy and Finance, which will manage them through JSC “UzAssets” and will control their transformation (envisaging improvement of corporate governance, partial privatization, etc.). The Agency, in turn, received these shares in March 2023.
 
The Ministry of Economy of Finance will also manage those shares in these enterprises that belong to the State Fund for Reconstruction and Development.
 
Presidential Resolution No. PP-283 of 18 August 2023

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Kosta Legal Law Firm