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INFORMATION DIGEST № 76

Press-service of MFA of the Republic of Uzbekistan

BUSINESS CLIMATE
Presidential Decree provides measures for radical improvement of business environment

On April 7, 2014, President of Uzbekistan signed a Decree "On additional measures to further improve the investment climate and business environment in the Republic of Uzbekistan".

This document was adopted in order to further improve the business environment, create favorable investment climate, increase transparency of government and economic management bodies, to radical improve the conditions for doing business and to create new jobs in the private sector.

The Decree has approved the Program of additional measures to further improve the investment climate and business environment, raise the efficiency of stimulation of entrepreneurial activity for the years 2014-2015.

Thus, according to the Decree, starting from June 1, 2014, it is prohibited to apply to businesses the penalties for violations of legal and other acts of government and economic management bodies, local authorities, regulating the issues of relations with business entities, not published on their official website.

In addition, legal norms that may complicate doing business, lay new legal obligations on businesses, or introduce new measures of legal liability for businesses go into effect no earlier than three months from the date of publication.

Additionally, till January 1, 2017 it is prohibited to carry out tax audits of financial and economic activities of small businesses, that pay taxes and other obligatory payments in a timely manner, and those that show sustainable growth and profitability figures.

The Central Bank of Uzbekistan, commercial banks are instructed to abolish the practice of charging small businesses for bank services when paying taxes and other obligatory payments to the State Budget of the Republic of Uzbekistan.

This Decree establishes the procedure, according to which:
- freezing of operations of business entities in commercial banks in case of failure to submit tax, financial reporting and their absence at the stated address, is carried out by state tax authorities only on court’s decision;
- from 1 January 2015 small businesses submit statistical reporting on an annual basis with quarterly selective checks by statistical agencies in relevant areas and directions of activity.

The Decree also points out that in recent years a wide range of measures have been taken in Uzbekistan aimed at improving the business and investment climate, introduction of internationally accepted system of criteria for evaluating the business environment and achievement of higher international ratings.

Procedures of state registration of business entities, lending, examination of economic disputes, business liquidation have been significantly simplified and are now much less expensive. A lot of work has been done for wide implementation of One-window principle during registration of property, land allocation, construction permit issue, connection to electricity networks.

However, the current state of business environment and conditions in Uzbekistan do not fully meet the requirements and principles of the free market economy and international norms. There is still excessive business regulation, opportunities of contactless forms of interaction between government bodies and business entities are not used to the full extent. Measures taken to improve the environment for doing business are not being properly implemented on the ground.
(Source: Uzreport.uz)

INTERNATIONAL COOPERATION: UZBEKISTAN – UNITED KINGDOM
Unique Systems
The United Kingdom is a special country. An island nation known worldwide for its indisputable traditions, football, capricious weather and many more that can be drawn from this diversity as a unique brand. For businessmen and investors this is a principal financial center of Europe, if not the world. For tourists it is the English monarchy and the famed Big Ben, along with the Union Jack that has long become an icon for fashion designers. So what is common between Uzbekistan, which is rapidly gaining weight in the global investment coordinate system, and one of its leaders, the UK?

What the Albion and Uzbekistan primarily have in common is the attitude towards development of their economic models. Both nations, having instituted unique systems of their own, received hoardes of expert critiques. Nevertheless, the two countries in point kept moving forward. Uzbekistan in the early 1990s chose the path of gradual and progressive development without the so-called “shock therapy” methods that ruined markets and virtually destroyed middle classes in many post-Soviet states. Uzbekistan not only stuck by its social obligations, but it also placed the cornerstone principle “everything for the sake of human being”. And the steady GDP growth rates at 8% in recent years are suggestive of the aptness of steps taken at the dawn of independence. The UK, on the other hand, has asserted throughout its history that it is necessary to go its own way. At a time, the country joined the European Union on special terms, retaining its national currency. In modern conditions, when the existence of the EU has been repeatedly called into question due to the collapse of the Greek economy, problems in Spain, Ireland, Cyprus and other countries, this solution has proved its right to exist.

Experts say that the Uzbek-British trade and economic relations have a huge but still a completely untapped potential. According to the UK Trade and Investment, for three quarters of 2013, the trade turnover between the two countries reached US$82m. Britain exported to Uzbekistan goods and services for US$61m (15-percent increase compared with the same period in 2012), and imported for US$21m.

An effective mechanism to promote the bilateral relations is the Uzbek- British Trade and Industry Council (UBTIC), the first meeting of which took place twenty years ago. Over the years it has turned into a full-blown discussion platform, where many major joint projects appeared. At the end of last year, representatives of more than 70 British companies attended the 20th Anniversary Meeting of the UBTIC in London. This speaks of the attractiveness of the Uzbekistan’s market and created there favorable business conditions. Representatives of British companies operating successfully in our country, think so, too. In various sectors of the economy of Uzbekistan there are about 140 enterprises with 100 percent of British capital. Representatives of 88 British companies are accredited in Tashkent. Many of them have been successfully carrying out business activities for many years, have an impeccable reputation and are respected by their Uzbek partners and consumers.

Experts stress that the representation of British companies in the Uzbek market will only grow. The key issue here is the mutual interest of the parties for partnership. In early 2014, a cooperation agreement was signed between the Chamber of Commerce and Industry of Uzbekistan and the Thames Valley Chamber of Commerce Group, which consist of more than three thousand British and international firms and companies. Under the document, it is planned to conduct a series of activities involving business communities of the two countries, facilitating signing of trade and economic agreements and contracts between the parties concerned. If necessary, there will be marketing and advertising researches, exchange of investment marketing information, materials on companies’ export offers. The Chambers also agree to promote mutual visits of trade delegations and business organizations, participation of Uzbek and British companies at trade fairs and exhibitions held in the two countries.

One of the fastest growing segments of cooperation is the electrical engineering industry. Uzbekistan is currently implementing a major program to organize the production of energy saving lamps and replacement bulbs used. According to experts, the demand in the domestic market of energy-saving lamps in 2015 will exceed 27.3 million units. First experience in this direction was the creation in 2010 of the Uzbek-British Joint Venture Neo Sun Light in the Olmazor district of Tashkent. Equipment for the company was purchased in China, and the production process is established under the technology companies Philips and Osram. Total volume of investments exceeded US$6m. The Uzbek-British JV White Machine Technology established in Nukus successfully developed and markets a modern vacuum cleaner models.

Another example of successful partnerships is pharmaceutical and cosmetic industries. At Uzbek-British JV Novopharma Plus operating in Tashkent produces more than 40 kinds of medicines. Modern equipment is used in manufacturing high-quality, competitive products that meet international requirements. Product quality control is provided by a special laboratory. The enterprise’s innovation department conducts research to develop new drugs. Other JV Eclair Cosmetic in the short term has implemented a number of innovative projects for production of cosmetics, which are not inferior analogues produced in Europe. At the enterprise, means branded Eclair are released for hair care and skin care, including cream of 34 colors, 60 kinds of shampoos and conditioners, liquid soap, various creams and more.
A number of interesting joint initiatives are underway. For example, British Euro Ceramic Trade LLP later this year plans to complete the project by the architectural organization of production of bricks on the territory of SIZ Angren. After reaching full capacity the plant will produce 25 million bricks. Company Treponti Tower Ltd intends to organize the production of injectable solutions on the basis of Uzbiofarm in Tashkent with a capacity of 5 million units. Considering the issue of a major project worth more than US$28m, under which the capital will house modern facilities for producing medical, food and household glassware.

Actively developing cooperation in the relatively new field of Uzbekistan is waste recycling based on the latest technologies. There is currently a pilot project in Tashkent to develop an effective waste management system, and the experience of advanced nations will help make significant progress in this direction. An Uzbek delegation recently visited transfer stations, as well as plants for waste sorting and recycling in three regions of the UK. The representatives of Uzbekistan familiarized with the work equipment used here, including containers for waste collection vehicles for their transportation, special equipment for sorting and recycling of plastic, paper, cardboard and aluminum cans, as well as plants for the production of renewable energy. Now, the experience gained will be used to develop local capacity in waste management. British companies are invited to participate in future tenders for the construction of new facilities for waste disposal, the purchase of specialized equipment and the provision of advisory services to assist regional authorities.

Uzbekistan and the United Kingdom continue to build their own model of economic development. The nations, separated by thousands of kilometers, at the same time have close approaches to economic development and investment cooperation. Maybe, that’s why there are so many British companies in Uzbekistan, working in comfort for the benefit of both countries. The case for small is to maximize the current investment channel.
(Source: “Uzbekistan Today” newspaper)

SPORTS
Turdikhon Islamova Wins Gymnastics Asia Championship
Uzbekistan’s Turdikhon Islamova has earned the gold medal of the sporting gymnastics juniors Asian Championship in Tashkent.

This prominent contest was organized by the International Gymnastics Federation, the Asian Gymnastics Union, Uzbekistan’s Gymnastics Federation and the Ministry of Culture and Sports. Athletes from 22 countries of the continent competed and vied for tickets to the 2nd Youth Olympics due 16-28 August later this year in the Chinese city of Nanjing.

In the course of the championship, Uzbek gymnasts proved successful in addressing the challenges they faced and booked two tickets for the 2nd Youth Olympics.
On the last day of the Asian Championship, young men and women performed on gymnastics apparatus and struggled for the title of the continental champion.
Our promising gymnast Turdikhon Islamova earned 14.075 points in exercises on balance beam and became the champion of Asia.

Uzbekistan’s state flag was raised high and state anthem was played in honor of the young athlete.
In addition, Turdikhon displayed her superb mastery in floor exercises and won the bronze medal by having scored 13.75 points.
Athletes from China, Japan, Thailand and Kazakhstan also became winners and prize holders of the Asian Championship.
(Source: Uza.uz)