UZBEKISTAN LEGAL NEWSLETTER FOR MARCH 2024

Some of the most important legal developments in March 2024 included the adoption of a Presidential Resolution on the development of the insurance market, the introduction of so-called “lifecycle contracts”, the establishment of JSC “Trade Development Company” to support exporters, and the creation of the special industrial zone “Yangi Avlod” in Tashkent.

 1.  DEVELOPMENT OF INSURANCE MARKET 

The President has signed a Resolution on the development of the insurance market, which, among other things, provides for the following:

- new minimum amounts of the charter capital for insurers (as differ depending on provided insurance services);

- starting from 1 July 2024, it is prohibited to finance the construction of facilities at the expense of state funds and loans provided under sovereign guarantees without a construction risk insurance policy for the entire construction period;

- starting from 1 September 2024, (i) all insurance and reinsurance contracts and insurance policies will have to be registered with the Unified Automated Information System, which will be maintained by the National Agency for Prospective Projects (“NAPP”); (ii) the practice of issuing insurance policies only in paper form shall be abolished; (iii) NAPP will start to determine and publish insurers ratings based on the quality of their services;

- till 1 January 2025, NAPP shall submit to the Administration of the President proposals on:

• the introduction of compulsory insurance of real estate of legal entities against natural and technological disasters;
• principles of the operation and products of takaful (Islamic insurance);
• wider application of imputed insurance.

- NAPP and relevant ministries shall simplify rules and procedures for the conclusion of mandatory insurance contracts by, in particular, facilitating the possibility to conclude such contracts in electronic form with ensuring the right of insured persons/entities to choose insurers freely;

- a roadmap for further development of the insurance market (Annex 1 to the Resolution).

Presidential Resolution No. PP-108 of 1 March 2024

 2.  USE OF LIFECYCLE CONTRACTS FOR IMPLEMENTING INFRASTRUCTURE PROJECTS 

The Cabinet of Ministers has adopted a Resolution establishing a procedure for implementing infrastructure projects worth up to USD 1 mln based on so-called “lifecycle contracts” in Tashkent. Lifecycle contracts are public procurement contracts between the specially designated state-owned enterprise, JSC “Company Tashkent Invest” (CTI) and private investors for performing the entire set of works related to implementing a specific infrastructure project from its development to commissioning and further operation and maintenance. As an experiment, till 1 January 2027, lifecycle contracts with respect to the following kinds of facilities may be concluded: roads and roadside infrastructure, public utilities, social facilities, and related hardware and software infrastructure.

The following procedure applies to the conclusion of lifecycle contracts. Before 1 September of each year, state authorities identify specific infrastructure projects they wish to develop in Tashkent, along with the sources of their funding. Subsequently, they approach CTI with an order to implement the relevant projects. After CTI verifies that the projects relate to infrastructure that may be developed based on lifecycle contracts and the availability of funding, the state authorities – initiators and CTI enter into joint implementation agreements. CTI then tenders the projects in accordance with the Law “On Public Procurement” and concludes lifecycle contracts with the winners of the tenders.

Resolution of the Cabinet of Ministers No. 116 of 6 March 2024

 3.  ESTABLISHMENT OF TRADE DEVELOPMENT COMPANY

The President has signed a Resolution on supporting business associations for enhancing foreign trade and regional industrial development. It, among other things, provides for establishing JSC “Trade Development Company” based on the Export Support Agency and the Export Support Fund. The company will take over the functions of the two latter for supporting exporters, including the following: providing assistance with the implementation of international standardisation and certification systems, compensating insurance premiums paid for insurance services, compensating transportation costs related to export, compensating costs for implementing international financial reporting standards, etc. Starting from 1 July 2024, the relevant support measures will be provided based on the Business Stability Rating (the rating system was introduced in January 2024).

Presidential Resolution No. PP-126 of 14 March 2024

 4.  CREATION OF SPECIAL INDUSTRIAL ZONE "YANGI AVLOD" IN TASHKENT

The President has signed a Resolution establishing the special industrial zone “Yangi Avlod” with an area of about 700 ha in the Yangihayot district of Tashkent. The zone has been established for 30 years for, among other things, facilitating the manufacturing of competitive products with a high added value in cooperation with international brands. It is planned that the zone will attract foreign direct investments in the amount of USD 1.5 bln until the end of 2025 and will ensure additional export of local goods of USD 5 mln per year. Land plots necessary for implementing relevant investment projects will be leased by a zone management company through the electronic trading platform “E-Auksion”. Investors  - members of the zone will be entitled to customs, tax, and other general incentives available to members of special economic zones. Members of the zone will also have access to necessary utility infrastructure.

Presidential Decree No. PP-138 of 20 March 2024

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Have a good day!

Sincerely,
Kosta Legal Law Firm