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New Initiatives for the Advancement of E-Commerce in 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.
Vakhidov & Partners - February 6 2025

Regulation on conducting post-marketing surveillance of pharmaceutical products has been approved.

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.  
Vakhidov & Partners - December 17 2024
Press Releases

Insurance Case in Uzbekistan

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.  
DIGESTS Global Law Firm - September 13 2024

Digital payments in Uzbekistan: legal reforms and global implications

Uzbekistan is rapidly developing the digital payments sector, which is conditioned by significant legislative reforms and government initiatives aimed at creating a cashless economy. These changes are long-term prospects for both local and international stakeholders. Legislative reforms In recent years, Uzbekistan has implemented several key legislative measures to improve the digital payments ecosystem. The Law "On Payments and Payment Systems" (2019) provides a comprehensive legal framework for payment service providers, paying special attention to consumer safety and protection. The National Bank's strategy for the Development of digital Banking Services (2020) also creates the basis for a reliable digital financial infrastructure. Government initiatives A significant stage was the introduction of the National Payment System in 2023, which increased the volume of non-cash transactions by 35%. The Digital Uzbekistan 2030 initiative supports this growth by creating a single data center for financial transactions, ensuring efficient and secure payment processing. With the development of high technologies and improved access to the global Internet, digital payments have become more relevant and accessible. In 2023, the number of users of mobile banking applications increased by 28%, with non-cash payments accounting for 45% of all financial transactions. Collaboration between banks and fintech companies is also gaining momentum, offering integrated solutions that combine traditional banking with digital innovation. Despite significant progress, challenges remain, such as cybersecurity and financial inclusion. In 2022, 18 cyber attacks on financial institutions were identified, which highlighted the need for reliable security measures. To improve financial accessibility, the government has launched a digital literacy program, educating more than 10,000 rural residents by the end of 2023. Global implications Modernizing Uzbekistan's role in the digital payments system and striving to create a secure, inclusive and efficient digital payments ecosystem provide comfortable conditions for international investors and for doing business in the country. DIGESTS Global Law Firm is ready to help clients navigate these legal and regulatory landscapes by offering expert advice on digital payments in Uzbekistan. For more information, visit our website www.digests.uz .  
DIGESTS Global Law Firm - August 9 2024