Uzbekistan

    Legislative Updates in E-Commerce Uzbekistan – January 2025   New Initiatives for the Advancement of E-Commerce in Uzbekistan On December 26, 2024, the Cabinet of Ministers of the Republic of Uzbekistan (“Uzbekistan”) adopted Resolution No. 885 "On Measures for the Further Development with the sphere E-Commerce in the Republic of Uzbekistan" (the "Regulation No. 885"). Below is an overview of the key regulatory innovations in e-commerce introduced by the Regulation No. 885. Conditions for Recognizing E-Commerce Operators in Uzbekistan have been established According to the Regulation No. 885, only legal entities that are residents of Uzbekistan can qualify as e-commerce operators (including electronic trading platforms, order aggregators, and digital streaming service providers). Meanwhile, legal entities and/or individual entrepreneurs who do not assume obligations under electronic contracts or transactions and are limited to providing information about goods (works, services) and digital products through their informational resources or platforms are not considered e-commerce operators. New Conditions and Requirements for E-Commerce Operators will be Introduced starting from July 1, 2025 According to the Regulation No. 885, starting from July 1, 2025, e-commerce operators must adhere to a notification-based regulatory framework, which includes the following conditions and requirements: Register as a legal entity within Uzbekistan, Comply with the applicable legislation of Uzbekistan in the fields of e-commerce, personal data protection, copyright, consumer rights, advertising, and other regulatory legal acts, Provide information related to their activities in the field of e-commerce to the authorized body upon request and free of charge, Comply with the retail trade regulations in force within Uzbekistan, Ensure the availability of an information system that guarantees the required level of functionality for providing services to e-commerce participants, Ensure the accuracy of the information contained in the notification of the commencement of activities, Ensure mandatory registration of information regarding new employment contracts, amendments to existing contracts, terminations, and details of active employment contracts in the interdepartmental software and hardware complex “Unified National Labor System,” if required for performing relevant employee-related actions. Comply with other requirements and conditions, considering the specific nature of the activities carried out under the notification procedure. In addition, according to the Regulation No. 885, starting from July 1, 2025, legal entities, individual entrepreneurs, and self-employed individuals engaged in e-commerce will be subject to the following requirements: Legal entities, individual entrepreneurs, and self-employed individuals engaged in the sale of goods, provision of services, or passenger transportation through electronic platforms are now required to use separate bank accounts for all financial transactions, The income generated by self-employed individuals in the field of e-commerce must be credited to a specially designated bank account. A bank card linked to this account shall be used to track incoming funds. Funds credited to this account will be included in the calculation of revenue for goods and services sold. Based on this data, self-employed individuals will be recognized as turnover taxpayers. Special Conditions for Legal Entities, Entrepreneurs, and Self-Employed Individuals As an exception, the Regulation No. 885 permits self-employed individuals engaged in the delivery of goods (works, services) or passenger transportation by light motor vehicles to: Pre-deposit funds into specially designated bank accounts of self-employed individuals, with subsequent debiting in favor of suppliers of goods (works, services) or e-commerce entities, Accept cash payments for delivered goods (works, services). In this case, it is permissible for self-employed individuals to retain cash in an amount equivalent to the amount transferred to the supplier of goods (services) from the separate bank account, without mandatory cash collection. When exporting goods via electronic trading platforms, legal entities, individual entrepreneurs, and self-employed individuals are allowed to send goods sold online to foreign buyers through courier and postal services, including without registering contracts in the Unified Electronic Information System for Foreign Trade Operations. Note: Additionally, electronic trading platforms are required to ensure the integration of their systems with the information resources of the State Tax Committee of Uzbekistan and the Customs Committee under the Ministry of Economy and Finance of Uzbekistan. Instructions on Improving E-Commerce Regulation and Implementing Control Mechanisms In accordance with the Regulation No. 885, the Statistics Agency of Uzbekistan, in collaboration with the National Agency for Perspective Projects (the “NAPP”) and with the support of foreign experts, has been tasked with introducing reporting forms for e-commerce entities by July 1, 2025, based on international best practices. In addition, within the context of fulfilling the requirements of the Regulation No. 885, the NAPP is required to undertake the following actions within three months: Develop and approve the procedure for conducting courier activities in the field of e-commerce, In collaboration with the Committee for Competition Development and Consumer Rights Protection develop mechanisms for online dispute resolution within the realm of electronic commerce in Uzbekistan and present the corresponding proposals to the Cabinet of Ministers. In collaboration with other authorized ministries and agencies, develop and submit draft regulatory legal acts to the Cabinet of Ministers. These proposals should introduce new concepts and terms into e-commerce legislation and provide for the implementation of the notification procedure for e-commerce operators in accordance with the conditions and requirements mentioned above. Additionally, the establishment of a register of e-commerce entities is planned.

On October 4, 2024, the Cabinet of Ministers of the Republic of Uzbekistan adopted Resolution No. 628, titled "On the approval of the Regulation on the Procedure for Conducting Post-marketing Surveillance of Pharmaceutical Products" (the "Regulation No. 628"), which came into effect on October 5, 2024. According to Regulation No. 628, post-marketing surveillance is conducted by the Pharmaceutical Product Safety Center under the Ministry of Health of the Republic of Uzbekistan (the “Center”) without interfering in the financial and economic activities of business entities." Procedure for introducing pharmaceutical products into circulation Pursuant to Regulation No. 628, medicines, medical purpose devices, and medical equipment ("MPDs, and ME") manufactured by enterprises that do not possess a valid certificate of conformity may be placed into circulation only after the authorized representative of the enterprise enters information regarding the relevant batch, name, pharmaceutical form, international nonproprietary name (INN), quantity, prices, and production date into a special electronic system maintained by the Center, or in paper form. The responsibility for the accuracy of the provided information rests with the manufacturer. Grounds and procedures for conducting post-marketing surveillance The grounds for conducting post-marketing surveillance include: A post-marketing surveillance plan approved monthly by the head of the Center, Receipt of information and complaints from individuals and legal entities, including governmental bodies and organizations, concerning the quality, safety, illegal circulation, and side effects of pharmaceutical products, Information from mass media and the results of public opinion surveys utilizing information and communication technologies. The Center develops the post-marketing surveillance plan based on a protocol with respect to identified samples once a month. This plan is approved by an order of the head of the Center by the 25th of each month. If information regarding the quality, safety, illicit trafficking, or adverse effects of pharmaceutical products is received from individuals, legal entities, government bodies and organizations, mass media, and information and communication technologies, the head of the Center shall within one business day issue an order for the implementation of post-marketing surveillance. To carry out post-marketing surveillance, the Center procures medicines and/or MPDs . Notably, acquiring ME and MPDs not included in the pharmacy assortment is not mandatory for conducting post-marketing surveillance. The acquired samples must be submitted to testing laboratories within two business days for laboratory testing to assess compliance with regulatory requirements. Testing laboratories shall conduct tests on samples within five business days. Following the testing, they shall prepare reports that include a statement regarding the conformity or non-conformity of the samples. For pharmaceutical products requiring testing timeframes exceeding five days, including those requiring sterility, testing shall be conducted within a period of fifteen business days. Based on Regulation No. 628, should the findings indicate non-conformance of samples of medicines, MPDs, and ME with regulatory requirements, the Center shall take the following measures within three days: To prevent adverse effects from pharmaceutical products, the Center shall decide to suspend their use in medical practice, withdraw them from circulation, implement destruction procedures, and issue directives to enterprises specifying compliance deadlines, The Center shall require businesses to conduct temporary mandatory certification for the first ten batches of pharmaceutical products manufactured after identifying non-conformance. The Center shall submit a mandatory compliance request to the relevant organizations to conduct an unscheduled inspection on the compliance of entities involved in the circulation of nonconforming medicines with the requirements of Good Practices (GxP) and assess manufacturers of MPDs and ME for compliance with ISO 13485, If post-market surveillance indicates regular (twice or more within one year) nonconformance in one or several products from a single enterprise, the Center shall decide to implement temporary mandatory certifications for all products of that organization for one year, The Center shall take actions to suspend the validity of the registration certificate for medicines, as well as licenses for pharmaceutical activities, and proceed with their annulment per the legislation of the Republic of Uzbekistan, Based on the causes and consequences of recognizing samples as non-conforming, the Center shall send conclusions to the relevant state authorities for legal assessment, The Center shall undertake additional measures as per the legislation of the Republic of Uzbekistan. It is important to note that the Center purchases samples using its extrabudgetary funds to conduct post-marketing surveillance. However, if the samples acquired are found to be non-compliant with regulatory requirements, all expenses, including laboratory research costs, shall be borne by the manufacturing enterprises or organizations engaged in the wholesale trade of pharmaceutical products. The results of post-marketing surveillance will be regularly published on the official website of the Center. Implementation of post-marketing surveillance of pharmaceutical products will begin on January 1, 2025. The Regulation on the reimbursement program for the compensation of medicine expenses in the treatment of diseases in outpatient settings. On October 2, 2024, the Cabinet of Ministers of the Republic of Uzbekistan adopted Resolution No. 619, titled "On the approval of the Regulation on the Reimbursement Program for the Compensation of Expenditures for Pharmaceutical Products in the Treatment of Diseases in Outpatient Conditions" No. 619 ("Regulation No. 619"), which came into effect on October 5, 2024. General information Medications included in the state-guaranteed volume of medical services and medicines are provided to patients free of charge within the reimbursement program, which is predicated on an electronic prescription issued by a physician. Еxpenses incurred by pharmacies for the medications dispensed within the reimbursement program are compensated by the state budget via the State Medical Insurance Fund ("Fund"). А direct contract is concluded between the Fund and the pharmacies, and reimbursements are made by the treasury authorities at least once a month. The Center shall continuously monitor the availability of medicinal products provided within the reimbursement program in the retail sector and must report the monitoring to the Fund by the 5th day of each month. The Ministry of Health of the Republic of Uzbekistan determines the list of diseases included in the reimbursement program and the medicines dispensed for their treatment. The procedure for establishing the maximum reimbursement amount and effectuating payments is approved by the Supervisory Board of the Fund. The maximum reimbursement amount, INN, forms, and dosages of medicines provided within the reimbursement program are determined by a commission established within the Fund. The budget for the reimbursement program is set at up to ten percent of the value of the contract executed between the Fund and the relevant medical facility. Participation of pharmacies in the reimbursement program Pursuant to the Regulation No. 619, medicines dispensed within the reimbursement program shall be provided to a patient free of charge via electronic prescription through the pharmacies that have entered into agreements with the Fund and are connected to the electronic information system. Participating pharmacies are responsible for ensuring the continuous availability of medicines dispensed within this program and maintaining their uninterrupted supply. Pharmacies must notify the Fund within seven days of any disruptions in medicine supply. The Regulation No. 619 establishes the procedure whereby an electronic prescription issued by a physician is forwarded to participating pharmacies, and a patient (or their legal representative or assigned visiting nurse) receives an SMS notification containing the number and date of the electronic prescription. Upon visiting the pharmacy, the patient provides the number of the electronic prescription, and the pharmacy staff dispenses the medicine by requesting a special code sent via SMS. Following the entry of this code into the information system, the patient is supplied with the medicines available at the lowest cost of reimbursement under the program, while the pharmacy staff confirms the dispensing and closes the electronic prescription. If pharmacies charge patients for medicines provided within the reimbursement program or breach the established requirements, the Fund will take the following actions: for the first violation, the pharmacy will receive a warning; for repeated violations, the Fund reserves the right to exclude the pharmacy from the reimbursement program, thereby unilaterally terminating the agreement.  

The Cabinet of Ministers of the Republic of Uzbekistan adopted the Resolution on Approval of Normative Legal Acts on Antimonopoly Regulation in the Commodity and Financial Markets No. 256 on May 1, 2024 (the "Resolution 256"). The Resolution will enter into force on August 3, 2024. Please see an overview of the notable novelties introduced by the Resolution 256. General information The Resolution 256 approves the procedure for: Identification and recognition of the dominant position or superior bargaining power of an economic entity or a group of persons on a commodity or financial market; Recognition of the dominant position and superior bargaining power of a digital platform operator, as well as identification of actions resulting in restriction of competition and/or infringement of the rights and legitimate interests of consumers and other economic entities; Recognition of economic entity as a subject of natural monopoly; Detecting anticompetitive agreements and coordinated actions; Obtaining prior consent for economic concentration; Determining monopolistically high and monopolistically low prices of services in the financial market; Forced split-off or separation of economic entities. Recognition of a dominant position in a commodity or financial market The new version of the regulation on the procedure for identification and recognition of the dominant position or superior bargaining power of an economic entity or a group of persons on a commodity or financial market (Annex No. 1 to the Resolution 256) introduces an additional power of the Committee for competition development and consumer protection (the "Committee"), enabling the head of the Committee to recognize the cancellation ("Recognition of cancellation") of the dominant position or superior bargaining power of an economic entity or a group of persons on a commodity or financial market. The head of the Committee may issue an order Recognizing the cancellation in the following cases: change of the position of the economic entity and group of persons to the extent at which the cancellation of a dominant position or superior bargaining power may be recognized; complete termination of production and sale of a type of goods (rendered service) by an economic entity recognized as having a dominant position or superior bargaining power; application of liquidation proceedings with respect to the economic entity. Recognition of a dominant position of a digital platform operator The Regulation on the procedure for recognition of the dominant position and superior bargaining power of a digital platform operator, as well as identifying actions resulting in restriction of competition and/or infringement of the rights and legitimate interests of consumers and other economic entities ("Regulation on recognition of the dominant position of a digital platform operator") (Annex No. 2 to the Resolution 256) introduces new terms, including digital space, digital platform operator, digital products, pricing algorithm, network effect and other terms. At the same time, the Regulation on recognition of the dominant position of a digital platform operator mentions the following forms of digital platforms[1]: marketplaces (electronic trading platforms); aggregators (intermediaries); online maps; crowdfunding (collective financing) platforms; crypto asset exchange platforms; and other forms of digital platforms. The procedure for recognition of the dominant position of a digital platform operator is also defined as one of the following conditions being met, as well as if there is a direct and indirect network effect[2]: if the revenue of the digital platform operator for the previous calendar year within the borders of the digital space is equal or more than one hundred times the basic calculation value (UZS 34 million or USD 2,700[3]); if the total average monthly number of active users of the digital platform is at least fifty thousand or the average monthly number of active users-entrepreneurs is at least three thousand. Moreover, the Committee, when recognizing the dominant position of a digital platform operator through analysis, may determine the boundaries of the digital space, as well as the existence of the possibility to use personal and other user data by the digital platform operator which affects or likely to affect the competitive environment. The following conditions under which a digital platform operator is recognized as having superior bargaining power are also introduced: absence of another digital platform operator providing users with similar services; presence of another digital platform operator providing users with similar services, which services are difficult to use; limitation of the possibility of simultaneous use of different digital platforms; the possibility of the digital platform services’ unilateral influence on conditions such as price, quality, volume, and territory. The regulation recognizing the dominant position of a digital platform operator prohibits the following actions of a digital platform operator to: not allow users to simply uninstall previously installed applications or change the default settings of operating systems, virtual assistants, or web browsers referring to the digital platform's products and services, and not provide selection screens for essential services; restrict users from installing third-party applications or application stores that use or work with the digital platform; restrict users from quickly unsubscribing from the core services of the digital platform. Recognition of economic entity as a natural monopoly The new regulation on the procedure for recognizing economic entity as a natural monopoly entity (Annex No. 3 to the Resolution 256) classifies as natural monopoly the economic entity which produces and/or sells goods under natural monopoly conditions[4] as well as have sectoral infrastructure on the territory of the Republic of Uzbekistan ("Uzbekistan") or its part, including entity operating in the following areas: transportation of oil and oil products by pipeline; transportation and distribution of gas by pipeline; transportation and distribution of electric and thermal energy; public railroad infrastructure services; water supply services by pipeline and sewerage; air navigation and airport services. According to the new procedure, the Committee analyzes (i) data on the production (sale) of goods under natural monopoly conditions received from executive authorities and other sources and (ii) the "questionnaire of a natural monopoly entity" filled out by the economic entity, which contains data on the volume of goods produced. The list of natural monopoly entities is published on the Committee’s official website at the end of each calendar quarter. The new procedure provides for the revocation of the status of an economic entity as a natural monopoly in cases of: liquidation of an economic entity; complete termination of production (sale) of goods by an economic entity under conditions of natural monopoly. Identification of anticompetitive agreements and coordinated actions The Regulation on the procedure for detecting anticompetitive agreements and coordinated actions ("Regulation on detection of anticompetitive agreements") (Annex No. 4 to the Resolution 256) contains an expanded definition of coordinated actions. The Regulation on detection of anticompetitive agreements provides a new definition of anticompetitive agreements. These are agreements of two or more parties in a commodity or financial market made in written form (one or more documents), as well as in oral form, which leads or may lead to restriction of competition or damage to the rights and legitimate interests of consumers. The additional indicators of coordinated actions and anticompetitive agreements between economic entities have also been introduced, including: simultaneous or consecutive increase (decrease) of prices in the absence of economic reasons, common external factors for price increase or decrease, including limitation of acquisition of goods by new buyers based on existing prices (tariffs); simultaneous or consecutive establishment of the same prices while having different costs for the production, purchasing, or realization of similar goods. The Regulation on detection of anticompetitive agreements provides authorizes the Committee to require an economic entity to prove that the suspected price increase (in case of a negative impact on the competitive environment in the market and/or a sharp synchronous price increase for goods (works/services) of the same industry) is not the result of anticompetitive agreements and to indicate reasonable individual economic reasons for the price increase. The Regulation on detection of anticompetitive agreements in a more detail lists what qualifies as direct evidence and indirect evidence of anticompetitive agreements, coordinated actions, and coordination of economic activities. Thus, contracts (agreements) between the parties to the agreement, providing for execution of agreements or planning their execution, telephone conversations, correspondence in social networks, testimony and evidence of the parties to the agreement, including economic entities that received an offer to participate in the agreement but refused to join it and other may serve as direct evidence. Exchange of information verbally or electronically, public announcement of prices when there is no need for publication, identical and synchronized actions, the simultaneous or consecutive establishment of identical prices while having different costs of production or acquisition or sale of goods, as well as meetings of persons considered to be parties to anticompetitive agreements and coordinated actions, including visits to the same place, participation of the same economic entities in different tenders and/or the existence of a scheme of sequence (priority) for participation in tenders and price offers and other indicators and other may serve as indirect evidence. Obtaining prior consent for economic concentration The Regulation on the procedure for obtaining prior consent for economic concentration ("Regulation on obtaining consent for economic concentration") (Annex No. 5 to the Resolution 256) defines the cases of state control over economic concentration, including: reorganization of an economic entity through a merger or consolidation; acquisition by a person or a group of persons of the right to dispose of more than 25% of voting shares of a joint stock company registered in the Uzbekistan; acquisition by a person or a group of persons of the right to dispose of more than one-third of participatory interests in the charter fund (charter capital) of a limited liability company or an additional liability company. In addition to the above, the economic entity must obtain the Committee's prior consent to economic concentration if one of the following conditions exists: the book value of the assets of one of the economic entities or the revenue from the sale of goods for the preceding calendar year is equal or more than two hundred and fifty thousand times the basic calculation value (UZS 85 billion or USD 6,756,756[5]); the total book value of assets of the participants of transactions or the total revenue received from the sale of goods for the preceding calendar year is equal or more than five hundred thousand times the basic calculation value (UZS 170 billion or USD 13,513,513[6]). The Regulation on obtaining consent for economic concentration also details the procedure for obtaining approval for economic concentration: (а) in order to obtain the Committee’s prior consent, a person or a group of persons must apply to the Committee through the Public Services Center; (b) the fee is 0.05% of the revenue, but not less than 7 times (UZS 2,38 million or USD 189[7]) and not more than 1,000 times (UZS 340 million or USD 27,027[8]) the basic calculation value. Determination of monopolistically high and low prices of services on the financial market The Regulation on the procedure for determining monopolistically high and monopolistically low prices of services in the financial market (Annex No. 6 to the Resolution 256) is similar to the earlier regulation on the procedure for determining monopolistically high and monopolistically low prices of services in the financial market (Annex No. 2 to the Resolution of the Cabinet of Ministers No. 230 of August 20, 2013) and does not contain any significant changes. Forced split-off or separation of economic entities The Regulation on the procedure for forced split-off or separation of economic entities (Annex No. 7 to the Resolution 256) is similar to the earlier regulation on the procedure for consideration of issues of forced split-off or separation of economic entities (Annex No. 4 to Cabinet of Ministers Resolution No. 230 dated August 20, 2013) and does not contain any significant changes and amendments.   Due to adoption of the Resolution 256, the following normative and legal acts shall cease their force: The Resolution of the Cabinet of Ministers on measures to improve antimonopoly regulation in commodity and financial Markets No. 230 dated August 20, 2013; The Resolution of the Cabinet of Ministers on measures to further improve antimonopoly regulation in commodity markets No. 249 of March 30, 2018. Footnotes [1] According to Article 4 of the Law "On Competition" No. ZRU-850 dated 03.07.2023, "a digital platform is an information system that provides paid or free use of digital products via the worldwide information network Internet". [2] According to clause 2 of the Regulation on recognition of the dominant position of the digital platform operator, "network effect is a phenomenon whereby by changing the number of one group of users of a digital platform, the value of the goods for another group of users changes, resulting in the digital platform operator being able to maintain or increase its economic advantages and its market share through the collection and processing of user data". [3] According to the exchange rate of the Central Bank of Uzbekistan as of June 26, 2024. [4] According to Article 4 of the Law "On Competition" No. ZRU-850 dated 03.07.2023, "natural monopoly is a state of the commodity market in which, due to technological features, it is impossible or economically inexpedient to create competitive conditions for satisfying the demand for a certain type of goods." [5] According to the exchange rate of the Central Bank of Uzbekistan as of June 26, 2024. [6] According to the exchange rate of the Central Bank of Uzbekistan as of June 26, 2024. [7] According to the exchange rate of the Central Bank of Uzbekistan as of June 26, 2024. [8] According to the exchange rate of the Central Bank of Uzbekistan as of June 26, 2024.

The founder and owner of the insurance company "INSON" approached the law firm "Digests Global Law Firm" as the defendant in a case concerning the recovery of an insurance sum.The plaintiff, AKIB "Ipoteka Bank," Ahangaran branch, sought compensation through insurance for a significant amount of 5 billion UZS. However, despite the substantial claims, the court dismissed the plaintiff's demands. The court's decision was largely influenced by the arguments presented by the defendant, the insurance company JSC IC "INSON," which insisted on the necessity of investigative actions. The company's primary argument was that the insurance contract had been signed by an unauthorized person. This legal case became a striking example of successful client representation in a complex insurance dispute and concluded in favor of JSC IC "INSON." This victory underscored the importance of thoroughly verifying the authority and legality of the parties' actions when entering into contracts and demonstrated the high qualifications and professionalism of the defendant's legal team, who effectively protected their client's interests.