In July 2024, significant legal developments in Uzbekistan included changes to the rules for public procurement, new regulations for the use of main power transmission lines, reforms in hydropower, measures to facilitate the development of the jewellery production and tourism sectors, and new regulations on the provision of Islamic finance services by microfinance organizations.

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 1.  CHANGES IN RULES FOR PUBLIC PROCUREMENT

The President has signed a Resolution on the improvement of public procurement procedures. It, among other things, envisages that starting from 1 October 2024:

• state customers shall hold public discussions of direct procurement contracts before their execution and executed minutes of tender trades by placing them on a special information portal;
• suppliers of technically complex goods that have no analogues on the local market may be included in the Register of Single Suppliers only upon the obtainment of a relevant opinion of the Competition Committee;
• where only one bidder participates in a tender and, due to this, a repeated tender is held without changing a procurement procedure and qualification criteria, if the same bidder is the only participant, the repeated tender is considered successful.

Presidential Resolution No. PP-249 of 7 July 2024

 2.  RULES FOR THE USE OF MAIN POWER TRANSMISSION LINES

The Cabinet of Ministers has approved new rules for the use of the main power transmission lines. The rules aim to align the relevant local standards and procedures with those applied internationally and, among other things, establish (i) a new procedure for the connection of operators of energy facilities and large consumers to the main power transmission lines and (ii) new general technical requirements for all participants of the wholesale and retail power energy markets, which aim to ensure rational and transparent use of the lines. The new rules will apply to both current and newly connected enterprises and consumers. 

Resolution of the Cabinet of Ministers No. 338 of 15 June 2024

 3.  ACCELERATION OF REFORMS IN HYDROPOWER

The President has signed a Resolution on accelerating reforms in hydropower, which, among other things, provides for the following:

• it is aimed to increase the total capacity of the hydropower sector up to 5,508 MW by 2028, including through the construction of pumped storage hydropower plants with a total capacity of 1,600 MW;
• the Program for Further Development of Hydropower in 2024-2028 is approved, which includes the following:
  • a list of hydropower investment projects with a total capacity of 1,018 MW to be implemented by JSC “Uzhydroenergo” (Annex 1);
  • a roadmap for implementing hydropower investment projects with a total capacity of 449 MW with the attraction of foreign loans under a sovereign guarantee in 2024 (Annex 1a);
  • a list of investment projects in the hydropower sector with a total capacity of 2,275 MW to be implemented with the involvement of private investors (Annex 2);
• the Republican Commission for the Development of the Hydropower Sector is established to implement the Program;
• for projects listed in the Program, based on relevant proposals of foreign consultants and upon consultations with the Commission, design documentation may be developed based on international construction standards;
• for implementing projects listed in the Program, tariffs for the sale of power energy generated by hydropower plants within the structure of JSC “Uzhydroenergo” will be reconsidered;
• within 2 months from the date of this Resolution, the Ministry of Energy, the Ministry of Economy and Finance, and JSC “Uzhydroenergo” shall study foreign experience in the construction of micro- and small hydropower plants (in particular, in Turkey and China) and develop proposals on attracting and incentivizing private investors.

Presidential Resolution No. PP-252 of 12 July 2024

 4.  DEVELOPMENT OF JEWELLERY PRODUCTION

The President has issued a Decree on the development of jewellery production, which, among other things, envisages the following:

• increase of the annual production of jewellery up to USD 1 bln and the annual export – up to USD 100 mln by the end of 2025;
• the creation of jewellery centres with all necessary infrastructure (production and trading platforms, showrooms, storage facilities, testing laboratories, etc.) in the Bukhara and Namangan regions and Tashkent with the participation of JSC “National Bank of Uzbekistan” in 2024-2026;
• JSC “Almalyk Mining and Metallurgical Combine” and JSC “Navoi Minning and Metallurgical Combine” shall ensure an uninterrupted supply of precious metals to jewellery manufacturers;
• starting from 1 September 2024, (i) refining enterprises — members of the Association “Uzbekzargarsanoati” are allowed to purchase precious metals from JSC “Almalyk Mining and Metallurgical Combine” and JSC “Navoi Minning and Metallurgical Combine” based on direct agreements on the terms of full prepayment and further resale to jewellery manufacturers; (ii) jewellery manufacturers will be entitled to sell semi-finished products manufactured by them to other jewellery manufacturers;
• the Fund for Reconstruction and Development will allocate USD 100 mln to commercial banks to provide preferential loans to jewellery manufacturers for implementing investment projects, purchasing equipment, and replenishing working capital;
• from 1 September 2024 to 1 September 2027, immovable property and land plots of jewellery manufacturers — members of the Association “Uzbekzargarsanoat” will be exempt from property tax and land tax;
• from 1 October 2024 to 1 October 2027, imported equipment, packaging, and labelling products used in the jewellery manufacturing and not produced in Uzbekistan as per lists approved in accordance with law will be exempt from customs duties;
• the Program of Measures for the Development of the Jewellery Industry in 2024-2027 (Annex 4);
• the Target Indicators for the Development of the Jewellery Industry for 2024-2027 (Annex 5).

Presidential Decree No. UP-104 of 23 July 2024

 5.  DEVELOPMENT OF TOURISM

The President has signed a Decree to encourage the development of the tourism industry. It, among other things, provides for the following:

• the Fund for Reconstruction and Development will allocate USD 50 mln to commercial banks to provide preferential loans to tour operators  - residents of Uzbekistan;
• until 1 October 2024, a competition for the creation of a national tourist brand will be organized;
• until 1 August 2025, tour operators and business entities in tourism will enjoy customs duties exemptions for the import of specific vehicles;
• within one month from the date of the Decree, a program for the development of extreme tourism in the Muynak and Parkent districts will be developed;
• within 3 months from the date of the Decree, a program for developing business (MICE) tourism will be prepared;
• a roadmap for further increase of the flow of foreign and local tourists (Annex 3 to the Decree).

Presidential Decree No. UP-102 of 18 July 2024

 6.  ISLAMIC FINANCE SERVICES OF MICROFINANCE ORGANIZATIONS

The Central Bank of Uzbekistan has approved a regulation on rendering Islamic finance services by microfinance organizations. According to the regulation, microfinance organizations may offer the following products of Islamic finance: ijara (Islamic lease), murabaha (trade credit financing), salam (forward financing), mudarabah (profit sharing), and musharakah (profit and loss sharing). To offer these products, a microfinance organization must establish or outsource the Islamic finance council, consisting of specific professionals designated in the regulation.

Resolution of the Central Bank of Uzbekistan No. 3536 of 26 July 2024

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