Legal Alert for August 2024

1. WHICH CHANGES ARE EFFECTIVE FROM SEPTEMBER 1, 2024?

Starting from September 1, 2024:

• All insurance contracts must be registered through the Unified Automated Information System, with non-compliance resulting in the insurance policies being declared invalid.[https://lex.uz/ru/docs/6824174]
• In cases where bidders provide equal prices and other conditions in government procurement through electronic store, a priority will be given to small businesses employing people with disabilities, women, and youth, based on specific criteria.[https://lex.uz/ru/docs/7010515]
• Retail trade in beer products can be carried out by notification of the tax authorities [https://lex.uz/uz/docs/6947647].
• A monthly fee of 10% of the BCV for the right to retail trade in tobacco and beer products will be introduced.[https://lex.uz/uz/docs/6947647]
• The following financial support measures will be implemented through the Trade Promotion Fund for[https://lex.uz/uz/docs/7059244]:

2. THE AUGUST AMNESTY TO THE INVASION OF PUBLIC LANDS

On August 5, 2024, the President of Uzbekistan signed the Law “On Recognition of Rights to Unauthorized Land Plots and Buildings.”  No. ZRU-937[https://lex.uz/ru/docs/7049444].

Starting from November 8, 2024, citizens and businesses will be able to legally register the following real estate objects in their name (on the basis of a lease agreement or ownership rights):

• Land plots that were unlawfully occupied by either citizens or stateless persons for individual housing construction before May 1, 2018, as well as the buildings and structures on them;
• Land plots that were occupied by either citizens, individual entrepreneurs or legal entities beyond the area specified in the documents before May 1, 2018, as well as the buildings and structures on them;
• Land plots, as well as the buildings and structures on them, for which rights have not been finally recognized due to the expiration of the “one-time action”;
• Land plots allocated by the decisions of district (city) khokims (: District or City Mayors) before June 8, 2021 (before the termination of the powers of the khokimiyats), but not approved by the regional khokim (ed.: Regional Mayor) or the Council of People’s Deputies;
• Residential premises located within gardening and vineyard associations, as well as the land plots occupied by them;
• Land plots of business entities located in Small Industrial Zones before March 9, 2020;
• Land plots occupied by buildings and structures privatized under a state order;
• Land plots occupied by buildings and structures, the ownership of which has been recognized by the decision of the khokim.

Please note that there are specific grounds, procedures and state fees for recognizing rights over the land plots and residential premises.

3. NEW ELECTRIC POWER LAW 

On 5 August 2024, the Government of Uzbekistan adopted the new Law “On Electric Power” ZRU-939 which lays out a legislative framework for the development of principal rules on[https://lex.uz/docs/7051594]:

• competitive wholesale and retail electricity market,
• use of trunk & distribution power grids,
• central purchaser.

Electricity generation is conducted under a state license issued by the Energy Market Regulator (currently - the Agency for Development and Regulation of the Energy Market of the Republic of Uzbekistan).

A producer operating multiple power plants must obtain a separate license for each facility.

Licensing is not required in the following circumstances:

• when generating electricity for personal use at a power plant with an installed capacity of less than 5 MW;
• when producing electricity at a power plant that is not connected to the unified electric power system;
• when generating electricity at a micro electric power plant.

Power plants may be either state-owned or privately owned. However, at least 25% of hydroelectric power plants and pumped-storage power plants with more than 5 MW capacity must be state-owned.

Producers generating electricity solely for their consumption are classified as consumers.

The Law also delineates licensed activities within this sector, which include:

• electricity market operation;
• electric energy production;
• electric energy storage;
• electric energy transmission;
• central purchasing functions;
• electric energy distribution;
• electricity supply.

The Law enters into force on November 9, 2024.

4.  FACTORING MARKET DEVELOPMENT

The Decree of the President “On measures for accelerated development of the factoring services market” UP-109 dated 12 August 2024 has established the initial regulatory framework for factoring organizations engaged in financing based on the assignment of monetary claims[https://lex.uz/uz/docs/7061749].

A factoring organization will be authorized to operate only after registering with the Central Bank of Uzbekistan as a non-banking credit organization.

Starting from 1 January 2025:

• factoring organizations will be authorized to conduct factoring operations in foreign currency when the client’s counterparty is a non-resident;
• credit organizations will be authorized to resell monetary claims acquired through factoring agreements (refactoring);
• liability for violations concerning the assignment of monetary claims will be abolished;
• notifications on the assignment of monetary claims will be recorded in the State Pledge Register.
• changes to the currency of the monetary obligation and the country of payment will require the debtor’s consent.

Please note that an electronic platform for factoring services allowing for input of details of monetary claims will be introduced.

5.  RESOLUTION OF DISPUTES IN URBAN PLANNING

As per the Resolution of the Cabinet of Minister “On approval of the regulation on pre-trial consideration of disputes in the sphere of urban planning” No. 496 dated 12 August 202, disputes in urban planning shall be resolved based on documents of a permissive nature issued for the execution of the following measures:

• conclusion on consent for alterations to the appearance of a building or a structure;
• authorization for changes in the specialization of buildings and structures, including reconstruction, renovation, and the design of additional facilities on the premises;
• architectural and planning assignments;
• decision of the regional architectural and town-planning council;
• conclusion of the working body of the architectural and town-planning council under regional administrations;
• a consolidated expert opinion of urban planning documentation;
• permission of the regional inspectorate to register the object for the start of construction and installation works (invoice or statement with a QR code);
• permission to use the facility with completed construction and installation works.

Moreover, the state electronic platform “Transparent Construction” will create a Register of the Results of Dispute Resolution in Urban Planning.

The Resolution also provides for:

• procedure of formation of the Interdepartmental Commission for resolution of disputes in urban planning (the “Commission”) and its functions;
• form and procedure of application to the Commission;
• procedure for consideration of applications.

The Commission will review the application within 15 working days, extendable by another 15 days if additional information or site visits are needed.

6.  INTELLECTUAL PROPERTY PROTECTION

Under the Governmental Resolution “On approval of the administrative regulation on prolongation of the term of validity of protection documents related to intellectual property objects” No. 468 dated 1 August 2024, the term of validity of protection documents relating to the following intellectual property objects may be extended by the Ministry of Justice:

• invention;
• utility model;
• industrial design;
• breeding achievement;
• trademark and service mark;
• geographical indication;
• name of the place of origin of goods.

In order to use the state service above, an applicant should apply to one of the following electronic platforms – https://im.adliya.uz or https://my.gov.uz.

The application shall be considered within 15 days from the date of its receipt by the authorized body.