General legal newsletter for May 2022

In May 2022, some of the most notable legal developments in Uzbekistan were the adoption of new regulations on public procurement, the introduction of changes to the Economic Procedural Code clarifying the role of Uzbek economic courts in international arbitration proceedings, the streaming of a practice allowing the opening of special bank accounts, and special measures to prevent the growth of prices in food markets.

 1.  NEW REGULATION ON PUBLIC PROCUREMENT PROCEDURES

Based on relevant requirements of the Law on Public Procurement No. ZRU-684 of 22 April 2021, the Cabinet of Ministers has approved a new Regulation on conducting public procurement procedures, which includes, among others, the following:

• general rules for conducting public procurement procedures as well as specific rules for each particular type of procedures (purchases through a specialized electronic store, based on an auction, a tender, selection of the best offers, a direct agreement);
• a new type of procurement procedures has been introduced for corporate purchasers – a purchase based on framework supply contracts. It may be used where (i) relevant purchase criteria include not only price, but also quantitate and qualitative criteria; (ii) the cost of relevant goods (works, services) exceeds 25,000 times the baseline calculation value (approx. USD 682,000); (iii) there is a need to ensure the continuity of supplies for production purposes. At the first stage of relevant procurement, based on technical proposals of bidders, framework supply contracts are concluded with 3 winners of the procedure for a term not exceeding 3 years. At the second stage, requests for price are sent to all the winners as often as necessary with relevant supplies being ordered from that winner who has offered the best price.

Resolution of Cabinet of Ministers No.276 of 20 May 2022

 2.   INTERNATIONAL COMMERCIAL ARBITRATION

A Law introducing changes related to international commercial arbitration into the Economic Procedural Code has been adopted. It has been, among others, provided that economic courts may consider cases related to (i) the appointment of an arbitrator; (ii) the recusal of an arbitrator; (iii) the termination of powers of an arbitrator; (iv) on matters related to a jurisdiction of an arbitration court; (v) on the recognition and enforcement of interim measures; (vi) on the application of interim measures; (vii) on the assistance in obtaining evidence; (viii) on the annulment of an arbitral award; (ix) on the recognition and enforcement of an arbitral award. Cases (i)-(iv), (vii), and (viii) are only considered where arbitration proceedings have taken place in Uzbekistan.

Law No. ZRU-769 of 16 May 2022

 3.  SPECIAL BANK ACCOUNTS OF BUSINESS ENTITIES

The President has issued a Decree on improving the system of payments of business entities, which, among others, envisages that:

• starting from 15 June 2022, all special target bank accounts of business entities, which are exempted from mandatory foreclosure, shall be closed;
• special target bank accounts may now only be opened and closed by a Resolution of the Cabinet of Ministers.

Presidential Decree No. UP-141 of 25 May 2022

 4.  STABILITY OF PRICES IN FOOD MARKETS

Given the unstable situation on global food markets, the President has signed the Decree on the Measures to Ensure the Stability of Prices in Consumer Markets and to Increase the Effectiveness of Antimonopoly Measures. It, among others, sets the following:
(A) from 1 May 2022 till 1 January 2023, (i) a zero customs duty rate will apply to food products listed in Annex 1 to the Decree (including, among others, fish, milk, eggs, butter, coffee, and tea); (ii) a double rate of customs duties will not apply to goods originating from the countries in respect of which the regime of the most favored nation treatment has not been established;
(B) till 1 January 2023, the following limitations are suspended: (i) for public purchasers, to purchase imported food products where public procurement procedures are conducted (as established by the Resolution of the Cabinet of Ministers No. 41 of 29 January 2021); (ii) for importers, to ensure the labeling of imported food products in the Uzbek language;
(C) the Antimonopoly Committee and the Consumer Protection Agency under the Committee have been given the following powers:

• during a “period of sharp fluctuations in prices for basic food products”, (i) to issue binding prescriptions to business entities (irrespectively of their profit for the last calendar year), associations of business entities, and state bodies, to prevent violations of the competition legislation and manipulations undermining the sustainable functioning of commodity and financial markets; (ii) to have direct access to premises of business entities and to make an inventory of their stocks for revealing excessive pricing and concerted actions (after notifying the Commissioner for Protecting the Rights of Business Entities); (iii) to issue binging prescriptions to reduce excessive prices or to sell excessive volumes of food products. A “period of sharp fluctuations in prices for basic food products”  is a period of up to 6 months set by the Cabinet of Ministers when prices for relevant food products increase for an amount equal or exceeding the rate of the Central Bank within 30 calendar days;
• to issue binding prescriptions for manufacturers and sellers with the requirement to suspend the production, import, or sale of goods recognized dangerous or unfit for human health or property of individuals or legal entities; to request the withdrawal of relevant goods from consumers;
• to issue binding prescriptions for shopping centers, retails chains, and markets selling consumer goods for (i) eliminating practices aimed at manipulation, unreasonable and artificial increase in prices for basic food products; stimulation of a shortage of such goods and an excessive demand for them; (ii) ensuring compliance with applicable price regulations; (ii) removing artificial barriers and restrictions on accessing relevant market places.

Presidential Decree No. UP-145 of 31 May 2022