On measures to radically improve contractual relations (DP-6313-son)

14.09.2021

Decree

of the President of the Republic of Uzbekistan

In order to further improve civil law relations, cancel the established artificial restrictions when concluding individual contracts, as well as create the necessary conditions for the use of information systems in contractual relations:

1. Agree with the proposal of the Ministry of Justice, the Ministry of Economic Development and Poverty Reduction and the Antimonopoly Committee to cancel following from December 1, 2021:

a ban on acceptance by commercial banks of payments for delivered products (work performed, services rendered) at the expense of third parties;

requirements for the mandatory establishment of prepayment in contracts for the supply of goods (performance of work, provision of services) concluded by economic entities with a state share of 50 percent or more;

requirements for the mandatory establishment of an advance in contracts concluded between producers of agricultural and livestock products and procurement organizations.

Note that the advance payment and advance payment provided for in the third and fourth paragraphs of this clause are determined by agreement of the parties to the contract.

2. Allow individuals to provide and repay loans among themselves in foreign currency by notarial certification of loan agreements.

The Ministry of Justice, together with the Ministry of Finance, within two months, shall submit to the Cabinet of Ministers a draft law providing for a halving of the amount of state fees charged for notarization of loan agreements and execution of enforcement inscriptions on the recovery of monetary amounts arising from loan agreements.

3. Establish a procedure according to which, starting from January 1, 2022:

a) the property put up for sale at an electronic online auction in the execution of judicial acts and acts of other bodies is transferred to the winner of the auction without debts and with the prohibitions lifted, at the expense of the funds received from its sale. In case of insufficient funds received from the sale of property, the obligation to pay the debt remains with its former owner - the debtor.

The amount of the deposit is subject to return within three working days from the date of the application of the winner of the auction in cases of non-acceptance of the property by the winner of the auction on the following grounds:

non-compliance of the property sold at the auction with the declared technical characteristics of the object of the auction;

the transfer of property into the possession of third parties prior to its sale at the auction and the establishment of this circumstance after the end of the auction;

b) a party to the contract that has accepted from the other party full or partial performance of obligations under the contract or otherwise confirmed the validity of the contract, is not entitled to further demand the recognition of this contract as invalid if such a requirement is contrary to the principle of good faith;

c) in contracts related to public procurement concluded by economic entities, anti-corruption clauses are mandatory.

If the anti-corruption clauses are not observed by the party to the contract and the persons involved by it (subcontractors, agents and other persons controlled by the parties), the other party has the right to suspend, terminate the contract unilaterally and demand compensation for losses;

d) in case of non-payment by legal entities and individual entrepreneurs of debts on tax and customs payments, tax or customs authorities send an order to the bank to freeze funds in the payer's accounts in an amount equal to the amount of the debt, and then collect them after thirty calendar days with a notification of this payer.

If the payer appeals this order to the court within thirty calendar days from the date of receipt of the notification, the debiting or non-debiting of funds from the client's accounts is carried out in accordance with the decision of the court;

e) public contracts in the field of public utilities, energy supply, communication services, passenger and freight transportation and in other similar areas of great social importance, developed by subjects of natural monopolies, are concluded with consumers after agreement with the antimonopoly authority.

4. Cancel the practice of approving model contracts by normative legal acts, except for cases where the law expressly provides for the approval of model contracts that are binding on the parties.

5. Approve following:

Plan of measures for further improvement of relations when concluding civil law contracts and fulfilling obligations in accordance with Appendix #1;

“Roadmap” for the development of samples of civil law contracts in accordance with Appendix #2.

6. Approve the proposal of the Ministry of Justice, the Ministry for the Development of Information Technologies and Communications, the Central Bank and the Chamber of Commerce and Industry on the introduction of the escrow system when buying and selling products through electronic trading platforms in the field of e-commerce and concluding transactions in other areas.

7. Recommend to farms and procurement organizations to conclude and register contracting agreements in electronic form through the use of information systems.

The Ministry of Agriculture, together with the Ministry for the Development of Information Technologies and Communications, within three months, should create the necessary conditions for the conclusion and registration of contracting agreements in electronic form through the use of information systems.

8. The Supreme Court should, on a systematic basis, but at least once every six months, analyze judicial practice on the application by courts of legislative acts when considering disputes arising from contractual legal relations and interpreting the terms of contracts, and, based on the results, send appropriate instructions to the courts to form a unified law enforcement practice.

9. Government and local executive authorities, as well as state-owned enterprises supplying goods and providing services to the population in the communal and other similar areas, within two months, develop and approve measures for the widespread use of information systems when concluding contracts with the population and business entities.

10. The Ministry of Finance, in order to further strengthen public control over procurement procedures on a special information portal for public procurement, must ensure the mandatory placement in the register of contracts concluded by state customers:

concluded contracts, as well as all documentation and data on additional agreements on making changes to them;

reports on the execution of contracts by state customers upon the expiration of the contract, the execution of the contract or its termination.

11. The Antimonopoly Committee, together with the Ministry of Justice, within three months, should analyze public contracts developed by subjects of natural monopolies for compliance with consumer rights and compliance with the principle of equality of arms, if necessary, submit proposals to the Cabinet of Ministers on revising public contracts.

12. The Ministry of Investments and Foreign Trade, together with the Ministry of Justice, within a month, submit proposals to the Cabinet of Ministers on attracting leading international consulting and legal companies at the stage of developing and agreeing on draft investment agreements with the Government of the Republic of Uzbekistan in the fields of energy, mining metallurgy and communications, as well as by definition their funding sources.

13. Starting from the 2022/2023 academic year, the Ministry of Higher and Secondary Specialized Education should introduce the practice of concluding training agreements in higher educational institutions in electronic form through the use of information systems.

14. Ministry of Justice shall:

together with the Central Bank, within three months, submit to the Cabinet of Ministers a draft regulatory legal act establishing the rules for using the escrow system in the field of electronic commerce;

in cooperation with the Chamber of Commerce and Industry, carry out activities to widely attract business entities to the provision of services for signing, storing and sending contracts through the information system.

15. To recognize as invalid some decrees of the President of the Republic of Uzbekistan in accordance with Appendix #3.

16. Ministry of Justice shall:

a) together with the Anti-Corruption Agency and the Chamber of Commerce and Industry, within two months, develop and publish anti-corruption clauses of a recommendatory nature for use by business entities when concluding contracts;

b) within three months, post samples of contracts on the special information portal “yurxizmat.uz” and regularly maintain them in a control state, based on changes made to the legislation;

c) together with interested ministries and departments:

within two months, conduct an inventory of by-laws on the approval of standard contracts, submit appropriate proposals for amending or canceling by-laws that do not comply with this Decree to the body that adopted them;

within three months, submit proposals to the Cabinet of Ministers on amendments and additions to the legislation arising from this Decree.

17. Assign to the Minister of Justice R.K. Davletov personal responsibility for the effective organization of the implementation of this Decree.

Discussion of the implementation of this Decree, coordination and control over the activities of the bodies responsible for its implementation, shall be entrusted to the Prime Minister of the Republic of Uzbekistan A.N. Aripov.

President of the Republic of Uzbekistan MIRZIYOYEV

Tashkent,

September 14, 2021

№ DP-6313

APPENDIX #1 to the Decree of the President of the Republic of Uzbekistan dated September 14, 2021, DP-6313

PLAN OF MEASURES

to further improve relations when concluding civil law contracts and fulfilling obligations

№ Measure Implementation form Due date Responsible parties from ministries and departments from the Cabinet of Ministers 1. Development of proposals for improving the procedure for organizing and conducting electronic online auctions for the sale of property in the execution of judicial acts and acts of other bodies, including on: introduction of a system for automatic registration of ownership of property obtained as a result of winnings with the direction of the protocol, drawn up in the name of the winner, to the departments of the cadastre and enforcement, banks and notary offices through an electronic data interchange system; automation of pre-trading and trading processes of electronic auctions, including the establishment of a system for the return of a deposit without the participation of a human factor; improving the order of open and transparent organization of the electronic online auction process. Draft Resolution of the Cabinet of Ministers November 1, 2021 Agency for Management of State Assets (Ortikov), Prosecutor-Generalʼs Office (Yuldoshev) Ministry of Justice (Davletov) D. Kuchkarov, D. Kholmurodov 2. Development of proposals for notarization of loan agreements, providing for: permission for individuals to provide and repay loans between themselves in foreign currency through notarization of loan agreements; halving the amount of the current state fee charged for notarization of the loan agreement, as well as for the execution of executive inscriptions on the recovery of the amount of money arising from the loan agreement. Law draft December 1, 2021 Ministry of Justice (Davletov), Central Bank (Zohidov), Ministry of Finance (Ishmetov) D. Kalandarov, M. Yakubov 3. Amendments and additions to the laws of the Republic of Uzbekistan “On Joint Stock Companies and Protection of Shareholdersʼ Rights” and “On Limited and Additional Liability Companies”, providing that if, as a result of a violation by the executive body of a business company of the procedure for concluding a major transaction or a transaction with affiliated persons, damage to the company and at the same time the fault of the director, members of the board of directors or the trustee of the company has been proven, they, along with the company, are liable with their property in a subsidiary manner for obligations arising from damage caused to creditors. Law draft December 1, 2021 Ministry of Justice (Davletov), Agency for Management of State Assets (Ortikov) D. Kuchkarov, D. Kholmurodov 4. Establishment of rules for using the escrow system in the sale and purchase in the field of e-commerce and other areas. Draft legal acts December 1, 2021 Ministry of Justice (Davletov), Central Bank (Zohidov), Chamber of Commerce and Industry (Jasimov), Ministry for the Development of Information Technologies and Communications (Sadikov) O. Umarov, Sh. Rajabbaev 5. Development of a procedure for concluding, amending, terminating and storing contracts in an electronic system. Draft Resolution of the Cabinet of Ministers December 1, 2021 Antimonopoly Committee (Sharakhmetov), Ministry for the Development of Information Technologies and Communications (Sadikov) D. Kuchkarov, D. Kholmurodov 6. Development of proposals for further improvement of the procedure for conducting settlement and clearing operations on commodity exchanges, while providing for: establishment of countermeasures against artificially high prices for goods; taking measures to identify and eliminate cases of prior agreement and collusion. Draft Resolution of the Cabinet of Ministers December 1, 2021 Antimonopoly Committee (Sharakhmetov), Ministry of Justice (Davletov) D. Kuchkarov, D. Kholmurodov 7. Carrying out an inventory of by-laws, which approved model contracts of a civil law nature, and making appropriate proposals for amending or repealing by-laws to the bodies that adopted them. Proposals November 1, 2021 Ministry of Justice (Davletov), interested ministries and departments D. Kalandarov, M. Yakubov 8. Ensuring the openness of procurement on a special information portal on public procurement by mandatory placement in the register of contracts concluded by state customers: concluded agreements, as well as all documentation and data on additional agreements on amendments to concluded agreements; reports on the execution of contracts by state customers upon expiration, performance or termination of contracts. Organizational measures November 1, 2021 Ministry of Finance (Ishmetov), JSC “Uzbekistan Republican Commodity and Raw Materials Exchange”, government customers D. Kuchkarov, D. Kholmurodov 9. Introduction to the Law of the Republic of Uzbekistan “On Electronic Digital Signature” of the rules for recognizing certificates of keys of electronic digital signatures of foreign states on the territory of the Republic of Uzbekistan. Law draft December 1, 2021 Ministry for the Development of Information Technologies and Communications (Sadikov), Ministry of Foreign Affairs (Kamilov), Ministry of Justice (Davletov) O. Umarov, Sh. Rajabbaev 10. Development and submission to the Cabinet of Ministers of proposals for the recognition in foreign countries of certificates of keys of electronic digital signatures issued on the territory of the Republic of Uzbekistan. Organizational measures December 1, 2021 Ministry for the Development of Information Technologies and Communications (Sadikov), Ministry of Foreign Affairs (Kamilov), Ministry of Investment and Foreign Trade (Voitov) O. Umarov, Sh. Rajabbaev 11. Development and approval of measures for the widespread use of information systems when concluding contracts with the population and business entities. Organizational measures November 1, 2021 Ministry of Justice (Davletov), ministries and departments, local executive authorities, state-owned enterprises supplying goods and providing services to the population O. Umarov, Sh. Rajabbaev 12. Development and publication of anti-corruption clauses of a recommendatory nature for use by business entities when concluding contracts. Joint decision of performers November 1, 2021 Ministry of Justice (Davletov), Anti-Corruption Agency (Burkhanov), Chamber of Commerce and Industry (Jasimov) D. Kalandarov, M. Yakubov 13. Analysis of public contracts developed by subjects of natural monopolies for compliance with consumer rights and their compliance with the principles of equality of the parties with the introduction of information based on the results of the analysis. Analytical reference December 1, 2021 Antimonopoly Committee (Sharakhmetov), Ministry of Justice (Davletov), interested ministries and departments D. Kuchkarov, D. Kholmurodov 14. Creation of the necessary conditions for the conclusion and registration of contracting agreements in electronic form through information systems. Organizational measures December 1, 2021 Ministry of Agriculture (Khodjaev), Ministry for the Development of Information Technologies and Communications (Sadikov) Sh. Ganiev T. Rapikov 15. Establishing the practice of electronic drafting of training contracts in the areas of undergraduate education and graduate specialties through information systems. Organizational measures Starting from 2022/2023 academic year Ministry of Higher and Secondary Specialized Education (Toshkulov), higher educational institutions B. Musaev M. Vahobov 16. Carrying out a systematic analysis of judicial practice on the application by courts of acts of legislation when considering disputes arising from contractual legal relations and interpreting the terms of contracts, based on the results - the development of appropriate guidelines for the formation of a unified law enforcement practice. Plan of measures Every semester starting February 1, 2022 Supreme Court (Komilov), Ministry of Justice (Davletov), interested ministries and departments 17. In order to exclude tasks assigned to state bodies that provide for state intervention as control over work related to the conclusion, execution, amendment and termination of business contracts enshrined in the Law of the Republic of Uzbekistan “On the contractual and legal framework for the activities of business entities”, as well as taking into account duplication certain norms of this Law and the current legislation, the development of proposals for the abolition of the Law, if necessary, the full reflection in the Civil Code of the Republic of Uzbekistan of issues of liability for violation of contractual obligations. Law draft December 1, 2021 Ministry of Justice (Davletov), Prosecutor-General's Office (Yuldoshev) Supreme Court (Komilov), Ministry of Agriculture (Khodjaev), Chamber of Commerce and Industry (Jasimov) D. Kuchkarov, D. Kholmurodov 18. Development of a draft law on the abolition of administrative liability for overdue receivables and payables, as well as for violation of contractual discipline provided for in the Administrative Liability Code of the Republic of Uzbekistan. Law draft November 1, 2021 Ministry of Justice (Davletov), Prosecutor-General's Office (Yuldoshev) Supreme Court (Komilov), Ministry of Finance (Ishmetov), State Tax Committee (Kudbiev) D. Kuchkarov, D. Kholmurodov

APPENDIX #2 to the Decree of the President of the Republic of Uzbekistan dated September 14, 2021, DP-6313

ROADMAP

for the development of samples of civil law contracts

№ Name of draft standard contracts Developers Deadlines for submission to the Ministry of Justice 1. Loan Central Bank November 1, 2021 Credit Mortgage Financing against the assignment of a monetary claim in favor of another person Bank deposit Bank account Pledge Guarantee 2. Insurance Ministry of Finance November 1, 2021 State contract for the supply of goods Contracts required for participation in procurement procedures Public-private partnership agreements 3. Construction contract Ministry of Construction November 1, 2021 Contract for design and survey work Supply of building materials 4. Contracting Ministry of Agriculture November 1, 2021 Long-term lease of a land plot by a farm Long-term lease of a land plot by an agricultural cooperative (shirkat) Supply of material and technical resources Sublease of agricultural land Leasing of irrigated and rainfed lands taken out of agricultural circulation on the basis of an investment agreement or public-private partnership Lease of pastures, fallow lands, perennial plantations on the basis of an investment agreement or public-private partnership 5. Lease of unused forest fund lands on the basis of public-private partnership State Committee for Forestry October 1, 2021 6. Supply of process water Ministry of Water Resources November 1, 2021 Urgent (temporary) use or lease of areas under dumps of soils in the coastal strips of canals, irrigation and collector-drainage networks Conducting business activities in reservoirs (reservoirs) of fishery importance 7. Power supply Ministry of Energy December 1, 2021 Supply of electricity to sub-consumers Supply of natural gas Supply of liquefied hydrocarbon gas to the population Supply of liquefied petroleum gas to social facilities Transfer for temporary use of household gas cylinders to consumers 8. Vehicle rental Ministry of transportation November 1, 2021 Rail freight transportation (by type of cargo) Transportation of passengers, baggage and cargo Maintenance of suburban, intercity and international passenger routes Leasing Transport expedition Provision of airport services 9. Rental of buildings and structures Agency for Management of State Assets November 1, 2021 Leasing an enterprise Trust management of property Rental housing in the public housing stock Object valuation 10. Accompanying tourists and tourist groups Ministry of Internal Affairs October 1, 2021 Provision of services to maintain public order at tourist display facilities Provision of services to maintain public order and ensure public safety in crowded places 11. Provision of drinking water supply and sanitation services to consumers Ministry of Housing and Communal Services October 1, 2021 Providing consumers with services for the supply of drinking water by transport Heat supply, supply of thermal energy and hot water Management of apartment buildings 12. Provision of services for the collection and removal of household waste to individuals State Committee for Ecology and Environmental Protection October 1, 2021 Provision of services for the collection and removal of household waste Carrying out the state ecological expertise Provision of hunting grounds for otkhodnik farms 13. Provision of paid educational services Ministry of Public Education October 1, 2021 Lease of textbooks Transfer for free use of textbooks and / or teaching aids 14. Provision of postal services Ministry for the Development of Information Technologies and Communications October 1, 2021

APPENDIX #3 to the Decree of the President of the Republic of Uzbekistan dated September 14, 2021, DP-6313

LIST

of some decrees of the President of the Republic of Uzbekistan, recognized as invalid

1. Clause 1 of the Decree #1154 of the President of the Republic of Uzbekistan “On measures to increase the responsibility of heads of enterprises and organizations for the timeliness of settlements in the national economy” dated May 12, 1995

2. Clause 5 of the Decree #1504 of the President of the Republic of Uzbekistan “On measures to increase the responsibility of business entities for settlements with the budget” dated August 9, 1996

3. Paragraph two of Clause 1 of the Decree #3274 of the President of the Republic of Uzbekistan “On amendments to some decrees of the President of the Republic of Uzbekistan” dated July 4, 2003.

5. Paragraph two of Annex to the Decree #5476 of the President of the Republic of Uzbekistan “On amendments to some acts of the President of the Republic of Uzbekistan” dated July 12, 2018.

6. Clause 1 Annex No. 2 to the Decree #5564 of the President of the Republic of Uzbekistan “On measures to further liberalize trade and develop competition in commodity markets” dated October 30, 2018