LAW OF THE REPUBLIC OF UZBEKISTAN «GUARANTEES AND PROTECTION OF THE RIGHTS OF FOREIGN INVESTORS»

Article 1. Aims and objectives of the Act

This Act provides guarantees and rights of foreign investors for investments in the territory of the Republics of Uzbekistan.

The main objectives:

– Provide a set of measures on the guarantees and rights of foreign investors;

– Determine the concession rights conditions and additional guarantees for investors and foreign investment;

Article 2. Legislation on guarantees and rights of foreign investors.

The legal relationships, related guarantees and rights of foreign investors are regulated by this Law, the Law of the Republic of Uzbekistan “Foreign investment” and other legislative acts.

If the regulations established by the Treaty of Uzbekistan, are different compared to those established by the law on guarantees and rights of foreign investors, treaty regulations are in force.

Article 3. Guarantees of foreign investors.

The State guarantees and protects the rights of foreign investors for investments in the territory of the Republics of Uzbekistan.

Are unacceptable discrimination against foreign investors to their nationality, place of residence, religion, place of investment, and the countries of origin of investors or investments for the implementation of treaties of the Republic of Uzbekistan . Legislative acts, including administrative normative acts are irreparable if realization causes damage to investors or foreign investment.

In case of worsening conditions for investment by the next legislation of the Republic of Uzbekistan, foreign investment will benefit for 10 years, а from the date of investment, legislation а that date.

Investors have the right, on their own, to implement the provisions of the new legislation, if it improves their investments.

All agreements of foreign investment, and above all, private agreements on unconditional guarantees of their fulfillment, are under the contrфle delegated bodies by the Government of the Republic of Uzbekistan.

The bodies of public authority and local government authorities are not allowed а intervene in the economic relations of foreign investors, if they are in accordance with the legislation of the Republic of Uzbekistan.

In cases where the local authorities in measures of their power, are offenses а legislation by foreign investors, they are only allowed а take, they are mandated and which are directly linked to eliminate specific offenses.

The bodies of public authority and local government authorities are not allowed to intervene in relations а а or restrict an activity in accordance with the law, because of the revelation of an offense.

This section does not apply to the adaptation, annexation or repeal of legislative acts, which are directly related to the interests of the State sыreté, determined in accordance with the principles of international rights.

Article 4.Guarantees and additional protective measures granted to foreign investors.

The legislation provides, in addition to guarantees and main rights of foreign investors, a series of additional measures of guarantees and safeguards, including the unconditional fulfillment by the partners of obligations to foreign investors.

Guarantees and additional protective measures may be granted to foreign investors in the case of concrete investment:

– For the acquisition of industries, ensuring stable economic growth and positive changes in the country’s economic structure;

– In the priority projects, ensuring renforcementet increasing the export potential of the country and its integration into world economic relations;

– In the projects of small and medium enterprises, which aim the transformation of the raw material and materials, the manufacture of large consumer products and services, provide jobs.

Guarantees and additional protection measures to foreign investors may be composed of government guarantees of the Republic of Uzbekistan, assistance in financing investment projects, introduction of special tax regimes and payment of Using а the realization of government monitoring for projects and other legislation.

Guarantees and additional protection measures are granted to foreign investors by special government decisions in which, in particular, are planned conditions and procedures for investment, uses and guarantees to cover expenditure foreign investment.

Article 5. Nationalization guarantees. Terms of requisitions.

Foreign investment and other foreign assets are not subject а requisition in the Republic of Uzbekistan.

Foreign investment and other foreign assets are not subject а requisition in Uzbekistan а except claims, accidents, epidemics and outbreaks. The decision of the requisition is made by the Cabinet of Ministers of the Republic of Uzbekistan in accordance with the procedures, including the requisition:

– Is limited to the minimum investments or assets necessary for the achievement of objectives in the cases listed:

– Continues without discrimination and legislative compliance;

– Is accompanied by payment of adequate compensation to sudden losses.

The State shall guarantee for the payment of the indicated time а compensations.

The investor has the right to challenge the judiciary and arbitrary, in particular:

– The legitimacy of objectives, used for applications;

– The extent of the requisition;

– The estimated investments and other assets requisitioned;

– Correspondence а pay compensation and procedure that have been incurred by the administrative authorities and local power for the requisition.

Article 6. Guarantees of use of resources.

The benefits obtained in the Republic of Uzbekistan by investors may be reinvested in Uzbekistan or used by the investor а will. Companies with foreign investments in accordance а legislation, have the rights:

– To open, use and manage accounts in any currency in all banks in the territory of the Republic of Uzbekistan, as well as outside the country;

– Receive and repay loans in foreign currencies.

Limitation of use of accounts or forced withdrawals on the accounts of the company to foreign investment by the administrative authorities or local power authorities can be performed only in legal form, established by law.

Article 7. Guaranteed transfers.

Foreign investors guarantees to freely make transfers of foreign currency in the Republic of Uzbekistan and the Republic of Uzbekistan, with no limits “а requirement to pay and other obligatory payments impфts according to the legislative procedures of the Republic of Uzbekistan. These transfers include:

– The initial and additional amounts to maintain or increase investment;

– The benefit of investments;

– The means, obtained as compensation for damages in accordance а this Act;

– The payments made for contracts;

– The sales revenue of all or a portion of foreign investment;

– The payments obtained by the regularization of litigation, including judicial or arbitrary decisions;

– Salaries and payments variety of staff;

– The financial resources arriving from other sources and reзus in accordance with the law.

In accordance with international nuns rights, the state is authorized а stop the repatriation means investors, the conditions for implementing non-discriminatory legislation, in the case of insolvency and bankruptcy of the company to foreign investment or for the protection of creditors’ rights, criminal acts or administrative offenses committed by foreign physical person-investor, or for some other need to stop the repatriation in accordance with judicial or arbitrary decisions.

Article 8. Repayment guarantees of investments following а an investment interruption.

The foreign investor has the right to stop its investments in the Republic of Uzbekistan according to the legislative procedures. After the cessation of investment, the foreign investor has the right а free repatriation either financial or in kind of assets obtained as a result of the end of investments, without prejudice to fulfill the obligations of investor vis а vis the Uzbekistan or other creditors.

Article 9. Free access а open information.

Legislative acts, including normative acts and judicial decisions, putting at stake the interests of foreign investors, must be accessible, in the cases envisaged by the legislation of the Republic of Uzbekistan published. Administrative authorities and local power authorities а investor demand must present the information requested as legislative procedures.

Article 10. Litigation.

The dispute, related directly or indirectly with foreign investment (investment case) can be resolved between the parties through consultation. In cases where the parties do not find the agreed solution, the dispute will be considered by the Economic Court of the Republic of Uzbekistan or by arbitration in accordance with the regulations and procedures treaties (agreements and conventions) regulation of investment disputes, including the Republic of Uzbekistan is a member.

Parts of the investment dispute, by mutually acceptable agreement can choose the body concerned and the arbitral tribunal of investment disputes.

Disputes of foreign investors, not related to investments in the territory of the Republic of Uzbekistan, shall be decided in accordance а the legislation of the Republic of Uzbekistan, а except other procedures under the Treaty, in accordance with the international human rights standards.

Article 11. Responsibilities of infringement of the legislation on the guarantees and safeguards the rights of investors.

In case of violation of the legislation on these guarantees and investors rights protection measures are entitled to receive adequate compensation for damages incurred. In case of adoption of normative acts by the administrative authorities and local government authorities violate the rights of foreign investors, as well as cases of interference in the economic activity of foreign investors, compensation will be made by the judicial authorities. Administrative authorities and local authorities authorities who have violated the law on guarantees and rights of foreign investors, will be prosecuted according to established procedures.

Article 12. Conflict positions.

In the case of non-conformity between this Act and other legislative acts or treaties of the Republic of Uzbekistan priority is given to the most favorable positions for foreign investors.

Article 13. Application of this Act to previous investments.

This Law applies to previous foreign investment in Uzbekistan only in the most favorable areas for foreign investors.

The President of the Republic of Uzbekistan
Mr. I. Karimov
Tashkent April 30th 1998