UZBEKISTAN LEGAL NEWSLETTER FOR NOVEMBER 2023

Some of the most notable legal developments in Uzbekistan in November 2023 were the strengthening of state control in urban construction, the adoption of the Template Regulation on Processing Personal Data for owners and operators of personal data databases, and the Presidential Resolution on the development of the market of microfinance services. 

 1.  CONTROL IN URBAN CONSTRUCTION

The Cabinet of Ministers has adopted a Resolution on improving control in urban construction. It, among other things, envisages the following:

• it has been specified that the following licenses can be obtained by foreign entities provided they have a permanent establishment in Uzbekistan: (i) for the performance of repair, construction, and installation works at heights using industrial mountaineering methods; (ii) for the design, construction, and repair of bridges and tunnels; (iii) for the design, construction, and operation of high-risk and potentially hazardous industrial facilities (including, for example, power plants);
• the review period for applications for the above licenses has been reduced;
• starting from 1 May 2024, new stringer license requirements will apply to the following licenses: (i) for the design, construction, and repair of bridges and tunnels; (ii) for the design, construction, and operation of high-risk and potentially hazardous industrial facilities; (iii) for the development of architectural and urban planning documentation; (iv) for the design, construction, operation, and repair of main gas pipelines, oil pipelines, and petroleum product pipelines;
• starting from 1 April 2024, the Inspection for Control in the Area of Construction and Housing and Communal Services shall stop issuing permits for the operation of buildings and structures constructed without prior registration with the Inspection;
• new categorisation of the complexity of construction objects by risk level has been introduced.

Resolution of the Cabinet of Ministers No. 619 of 23 November 2023

 2.  TEMPLATE REGULATION ON PROCESSING PERSONAL DATA

In accordance with Article 31 of the Law “On Personal Data”, owners and operators of personal data databases shall ensure that their departments and (or) officers responsible for processing personal data do this in accordance with the Template Regulation on Processing Personal Data, as developed by the Ministry of Justice. The Minister of Justice approved the relevant Regulation on 23 November 2023. It, among other things, provides for the following:

• the key principles for processing personal data:
• requirements for the contents of data subjects’ consent to data processing;
• a data subject may provide his/her consent to processing his/her personal data by accepting a public offer provided that the offer clearly states the purposes of the data processing;
• data subject’s consent to terms and conditions for the use of services of database owners or operators may constitute due consent to processing his/her personal data.

Order of the Minister of Justice No. 3478 of 15 November 2023

 3.  DEVELOPMENT OF MICROFINANCE SERVICES MARKET

The President has signed a Resolution on measures for developing the market of microfinance services, which, among other things, provides for the following:

(a) the implementation of the Program for Increasing the Accessibility of Microfinance Services in 2024-2026, envisaging the increase of the microfinance market by 5 times by 2027;

(b) the instruction to Joint-Stock Bank “Xalq Bank” to attract funds from international financial institutions for microfinancing operations and financing microcredit organisations;

(c) the instruction to the Central Bank to develop (i) regulations on providing Sharia-compliant microfinance services till 1 January 2024; (ii) changes to Laws on banking providing for the possibility to establish microfinance banks and to transform microfinance organizations into microfinance banks till 1 April 2024;

(d) starting from 1 January 2024:

• the maximum size of microloans will increase from UZS 50 to 100 mln (approx. USD 8,122);
• non-bank credit organizations (microfinance organizations, pawnshops, and mortgage refinancing organizations) shall be established in the form of a joint-stock company or a limited liability company;
• microfinance organizations will be allowed to attract loans from non-residents and to provide financial services to legal entities in foreign currency;
• the requirement for individuals and legal entities to obtain prior permission from the Central Bank for the acquisition of shares in the charter capital of a non-bank credit organization will only apply if 20% or more shares are acquired (instead of 10% or more). Where from 10% to 20% of shares are acquired, it is sufficient to notify the Central Bank of the acquisition.

Presidential Resolution No. PP-364 of 11 November 2023

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Have a good day!

Sincerely,
Kosta Legal Law Firm