Tashkent, Uzbekistan (UzDaily.com) – Uzbekistan introduced changes to the procedure for concluding and implementing investment agreements.

A corresponding resolution of the government of the country was adopted on 30 April, Dunyo reports.

The document envisages the introduction of a number of amendments to the resolution of the Cabinet of Ministers “On measures to implement the resolution of the President of the Republic of Uzbekistan “On additional measures to stimulate the attraction of direct private foreign investment ”from 2 August 2005.

Changes were made taking into account modern realities, as well as the level of modern development of the domestic economy, taking into account the large-scale reforms. They relate to the provision of additional benefits and preferences and the conclusion of investment agreements.

So, from now on, when a foreign investor is provided with additional guarantees and support measures (privileges and preferences) to established legislation, an investment agreement is concluded between him and the Government of the Republic of Uzbekistan represented by the Ministry of Investments and Foreign Trade, followed by approval of the agreement by the President of the Republic of Uzbekistan or the Cabinet of Ministers of the country.

The document also approved the new Regulation on the procedure for notification of the application of the guarantee established by the Law of the Republic of Uzbekistan “On Investments and Investment Activities”, which determines the procedure for notification of the application of the guarantee provided to foreign investors and their investments.

The authorized bodies that are notified of the application by the foreign investor of the guarantee are state organizations that carry out state registration of legal entities, the Ministry of Foreign Affairs, the Ministry of Internal Affairs, the Ministry of Investment and Foreign Trade of the Republic of Uzbekistan, the State Tax Committee of the Republic of Uzbekistan and serving banks.

The notice may be sent by the investor at any time after the adoption of an act of legislation that worsens the conditions of investment. It is the basis for the application by the authorized body in relation to a foreign investor of the legislation in force at the date of investment. It is effective from the moment the legislative act comes into force that worsens the conditions for investment.

In case of disagreement with the notification of a foreign investor, the authorized body may apply to the Ministry of Justice of the Republic of Uzbekistan for a legal opinion on the legality of the application by a foreign investor of Article 19 of the Law on Investments and Investment Activities. The authorized body may file a lawsuit with the court about the illegality of applying the guarantee by a foreign investor.

Changes were also made to the “Regulation on the procedure for concluding, amending, terminating and implementing investment agreements between the Government of the Republic of Uzbekistan and foreign investors”.

In accordance with the new regulation, the conclusion and implementation of agreements with foreign investors aimed at securing their investment obligations not related to the provision of additional benefits and preferences is carried out in the manner prescribed by law.

The regulation does not apply to the right to conclude investment agreements with foreign investors by the khokims of the regions of the city of Tashkent and the city of Tashkent when implementing investment projects with a share of foreign investment in the equivalent of not more than 10 million US dollars.

Privileges and preferences are provided to foreign investors in each particular case, when investing in priority sectors that ensure sustainable economic growth, progressive technological changes in the country’s economy, strengthening and expanding the republic’s export potential, and its integration into world economic relations.

At the same time, additional benefits for paying taxes, customs and other obligatory payments are provided to enterprises with foreign investments created by foreign investors only for a clearly defined period of time and cannot be unlimited.

In this case, the investor also necessarily concludes an investment agreement with the Government of the Republic of Uzbekistan represented by the Ministry of Investments and Foreign Trade. At the same time, it is prohibited to provide the investor with exclusive provisions and rights in the investment contract that place the investor in a dominant position in the market.

After agreeing with all authorized bodies on the draft investment agreement, the Ministry submits it to the Cabinet of Ministers of the Republic of Uzbekistan, which considers it in the prescribed manner and makes a decision on its approval or returns it for revision if there are disagreements. After approval, the investment agreement is signed by the Ministry.

Monitoring of the progress by a foreign investor in fulfilling obligations arising from an investment agreement is carried out by the Ministry of Investment and Foreign Trade.

The Cabinet of Ministers also approved a new model of a standard investment agreement between the government of the Republic of Uzbekistan and a foreign company (investor).

In accordance with the agreement, the investor is obliged to ensure the full and timely implementation of the Investment project in the volumes and terms specified by the document, and additional investments in case of an increase in the value of the object, to attract investments to the implementation of the Investment project, to create jobs during the implementation of the investment project, to use modern equipment and technologies that meet international standards, as well as modern requirements for energy efficiency and environmental standards, information on the volume of production, localization, product quality, export of goods and services, to inform the state body in writing about a change in its mailing address or payment details, reorganization and (or) change in the ownership of the property or suspension or termination of its activities as a legal entity. Moreover, the investor must quarterly by the 10th day of the month following the reporting period, submit to the state body information on the implementation of the investment project and the implementation of the contract.

The investor also undertakes not to take actions conducive to unfair competition, as well as aimed at preventing, eliminating or restricting competition, causing harm to the rights, freedoms, legal interests of others.

Copies of the contract, additional agreements thereto are submitted to the tax authorities at the place of registration within one month from the date of their conclusion, respectively, information is provided on the procedure for technical supervision of the project in compliance with the legislation of the Republic of Uzbekistan, including in the field of labor protection, environmental protection, rational use of natural resources, labor law and safety.

The investor also agrees to reimburse the republic or its administrative-territorial units the amount of benefits and (or) preferences in case of termination of the contract on grounds other than the fulfillment by the investor of its obligations and others.

In turn, the government of Uzbekistan is obliged to provide the investor with benefits and preferences in accordance with applicable law, including international treaties signed by the republic regarding double taxation, stimulation and protection of investments, as well as an agreement.

It can also provide the investor with advisory and methodological assistance in the implementation of the investment project on issues falling within the competence of the state body, ensure the stability of investor rights and protection of investments in accordance with the contract and applicable legislation, and not interfere with the investor’s business if this activity does not contradict the law Republic of Uzbekistan and the terms of the contract.

At the same time, the government has the right to unilaterally refuse to fulfill its obligations under the contract if the investor fails or improperly fulfills his obligations. The Government reserves the right to reimburse the investor in the event of failure to fulfill or improper performance of obligations, monitoring the fulfillment of obligations and monitoring the implementation of the project, recovering penalties from the investor for unfulfilled obligations and fines established by law.

The government may refuse to amend or amend the agreement if the investor submits the relevant application to the state body after the expiration of the agreement or the completion of the investment project

The investor and the government are liable for their obligations in accordance with applicable law.

Among the additional guarantees and support measures provided to investors are exemption from certain taxes and duties, protection of all investor rights during the implementation of an investment project, provision of a regime no less favorable than that provided by the government of the republic to its own investors or other foreign investors operating in a similar industry and producing similar products, restoring the violated rights and interests of the investor, ensuring the right of free movement throughout her territory of the country.

The investor also undertakes not to take actions conducive to unfair competition, as well as aimed at preventing, eliminating or restricting competition, causing harm to the rights, freedoms, legal interests of others.

It can also provide the investor with advisory and methodological assistance in the implementation of the investment project on issues falling within the competence of the state body, ensure the stability of investor rights and protection of investments in accordance with the contract and applicable legislation, and not interfere with the investor’s business if this activity does not contradict the law Republic of Uzbekistan and the terms of the contract.

At the same time, the government has the right to unilaterally refuse to fulfill its obligations under the contract if the investor fails or improperly fulfills his obligations. The Government reserves the right to reimburse the investor in the event of failure to fulfill or improper performance of obligations, monitoring the fulfillment of obligations and monitoring the implementation of the project, recovering penalties from the investor for unfulfilled obligations and fines established by law.

The government may refuse to amend or amend the agreement if the investor submits the relevant application to the state body after the expiration of the agreement or the completion of the investment project

The investor and the government are liable for their obligations in accordance with applicable law.

Among the additional guarantees and support measures provided to investors are exemption from certain taxes and duties, protection of all investor rights during the implementation of an investment project, provision of a regime no less favorable than that provided by the government of the republic to its own investors or other foreign investors operating in a similar industry and producing similar products, restoring the violated rights and interests of the investor, ensuring the right of free movement throughout her territory of the country.