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Spotlight on Uzbekistan: Kinstellar's regular look at the Uzbek market

August 2019 – Kinstellar’s regular look at the Uzbek market.

Adoption of the Personal Data Law

The Law on Personal Data ("Law") No. ZRU-547 was signed by the President on 2 July 2019. It will come into force on 1 October 2019.

The Law defines personal data as information recorded on an electronic, paper and/or other material carrier relating to a specific individual or enabling him/her to be identified. Processing of personal data includes the following activities: collecting, classification, storing, changing, adding, use, submission, dissemination, transfer, depersonalization and eliminating of personal data.

The State Personalisation Centre under the Cabinet of Ministers is the authorised body in the field of personal data. Databases of personal data should be registered in the state register of personal databases. The Centre will maintain such register.

The state guarantees the protection of personal data. Disclosure or distribution of personal data without consent of the owner of such data is prohibited by the Law. The owner of personal data must consent to the processing, unless it is expressly permitted by Law. When personal data is included in a database, the owner must be notified in writing about the purposes of processing the data and his/her rights. The Law prohibits processing of special personal data as nationality, religious and political beliefs, intimate life or criminal convictions. For processing of such data, the consent of the owner must be in writing.

Furthermore, the Law governs the cross-border transfer of personal data out of Uzbekistan. The Law provides for cases when personal data can be transferred to foreign states. The international transfer of personal data is possible if the respective states will adequately protect such data. However, there are cases permitting personal data transfer to foreign states that do not adequately protect personal data, for example, if there is the consent of the owner. Such transfer can be implemented in the presence of international treaties in force and where required to protect the constitutional system, the public, the rights and freedoms of citizens, and public health and morals.

Law "On Personal Data" No. ZRU-547 of 2 July 2019.

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Reorganisation of Uzbekneftgaz JSC

In accordance with the Presidential Resolution No. PP-4388 (“Resolution”), one of the Resolution’s defining issues is the improvement of the management system and establishment of an effective organizational structure of Uzbekneftgaz JSC. It is planned that Uzbekneftegaz, Uzneftegazdobycha, Uztransgaz, Uznefteprodukt and Uzneftegazmash will become joint-stock companies.

Furthermore, Uztransgaz JSC is removed from the structure of Uzbekneftegaz JSC. The shares of Uztransgaz JSC will be transferred to the State Assets Management Agency. Khududgaztaminot JSC is being formed on the basis of the territorial gas supply branches of Uztransgaz JSC. The Agency will be a shareholder of Khududgaztaminot JSC.

Among other significant changes is the creation of Uzneftegazgeologiya LLC and Neftgazexport LLC as a part of Uzbekneftegaz. Uzneftegazgeologiya LLC will be responsible for geologic exploration activities, increase of reserves of hydrocarbons and opening new deposits and their preparation and transfer for further development. Neftgazexport LLC will specialize in the export of products of the Uzbek oil and gas industry.

After the reorganization, the five largest companies belonging to Uzbekneftegaz will receive an updated list of priority tasks. In particular, Uzneftegazdobycha will work on development of deposits and oil, gas and gas condensate extraction. Uznefteprodukt will process raw hydrocarbon deposits and produce oil products. Uzurneftegaz will drill and build exploration and production wells. Uzneftegazmash will produce oil and gas and chemical equipment. Uztransgaz will be responsible for providing the population and enterprises of Uzbekistan with natural and liquefied gas.

Presidential Resolution “On measures on stable ensuring economy and population by energy resources, financial recovery and improvement of the system management of oil and gas industry” No. PP-4388 of 9 July 2019.

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Changes in public procurement

The Presidential Resolution No. PP-4388 provides the following changes in public procurement that will be effective from 1 October 2019.

  • the Public Procurement Law requirements as to ensuring monitoring, control, transparency, analysis of efficiency and effectiveness, apply to all types of procurement, including procurement carried out by enterprises of strategic importance, although they have separate procurement procedures;
  • public sector customers must post the results of procurement with a detailed description on its official webpage;
  • the Accounts Chamber and the Antimonopoly Committee will review the effectiveness and efficiency of procurement on a regular basis. The results will be published on the Special Information Portal of Government Procurement.

Presidential Resolution “On measures on stable ensuring economy and population by energy resources, financial recovery and improvement of the system management of oil and gas industry” No. PP-4388 of 9 July 2019.

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"Large taxpayer" criteria has been changed

In accordance with the Tax Code of the Republic of Uzbekistan, large taxpayers are legal entities of a particular category that are subject to tax administration on the basis of criteria established by the State Tax Committee of the Republic of Uzbekistan.

Large taxpayers, regardless of their location, file tax reports to the Interregional State Tax Inspectorate for large taxpayers.

The provision "On Establishment of Criteria for Classifying Legal Entities as Large Taxpayers" sets the category of "large taxpayers" that include:

  • enterprises producing goods that are subject to an excise tax;
  • banks and their branches, commodity, stock and currency exchanges;
  • Navoi MMC and Almalyk MMC and enterprises included in their structure;
  • organizations involved in the performance of work under a production sharing agreement;
  • legal entities with annual net proceeds from sales of products over UZS 100 billion.

Order of the State Tax Committee “On Establishment of Criteria for Classifying Legal Entities as Large Taxpayers” No. 2019-45 of 8 July 2019; registered by Ministry of Justice No. 3172 of 12 July 2019.

For further information, please contact Joel Benjamin, the Managing Partner of the Central Asia practice of Kinstellar at

e-mail

or Muborak Kambarova, Counsel, Tashkent. at .