Legal aspects of establishment of SEZ in Uzbekistan

1
Legal aspects of establishment of SEZ in
Uzbekistan

• Ilhom Bektemirov, Lead specialist of Law
  Department of MFERIT
• November 20, 2007
• Tashkent city

2
Current legislative base

• Law On Free Economic Zones dated April 25,
  1996
• Resolution of President dated June 26, 2005
  number PP-136 On organization of the activities
  of the Ministry of foreign economic relations,
  investments and trade of the Republic of
  Uzbekistan.

3
Previous experience in SEZ

• Creation of special open economic zones on
  international tourism in Samarkand, Bukhara,
  Khiva and Tashkent through
• - introduction of simplified methods customs
  regulations for foreign tourists and transit
  tourists in airports and railway stations of
  these cities
• - tax incentives for new touristic organizations
  and enterprises in these cities
• - foundation of inter-ministerial board on
  development of tourism at Cabinet of Ministers
• Presidential Decree No. UP-1162 dated 2 June
  1995

4
The Law of the Republic of Uzbekistan on Free
Economic Zones

• Free economic zone is a special territory with
  defined administrative borders and with special
  legal regime established with the aim of
  attraction of national and foreign investments,
  new technology and managerial experience for
  accelerating of social and economic development
  of the zone (article 1 of the Law of the Republic
  of Uzbekistan on free economic zones)
• Free economic zones are established upon
  decision of Oliy Majlis after initiative by
  Cabinet of Ministers (Article 3)
• Status and borders of the free economic zones
  and its period are defined by Oliy Majlis for
  each SEZ specifically

5
Types of free economic zones in Uzbekistan
6
Reasons of lack of implementation of the Law On
free economic zones

• Absence of effective mechanisms of its
  implementation (by-laws)
• Conceptual basis of the Law does not correspond
  with present requirements (lack of transparency
  of mechanisms of establishment and regulation,
  absence of the Government body responsible for
  forming of required policy for development of
  SEZs)

7
Enhancing legal base for SEZs

• Major goal of new law draft On special
  economic zones is development of normative act
  of direct action with effective mechanisms of
  establishment, functioning and administration of
  SEZ.
• Adoption of new Law will entail
• Abolishment of Law On free economic zones
• Adoption of necessary by-laws for realization of
  Law including procedures for development and
  submission of applications for establishment of
  SEZ, procedures for granting of incentives, etc.

8
Enhancing legal base for SEZs

• Creation of SEZ will require amendments to the
  legislative acts in the filed of foreign
  exchange, tax, customs, immigration legislation
  as well as legislation on foreign economic
  activity, etc.

9
Main positions of draft of Law On Special
Economic Zones

• Special economic zone is the part of the
  territory of Uzbekistan with clearly defined
  borders and special legal regime which
  establishes more favorable conditions for
  entrepreneurship and other economic activities
• Special economic zones will be established with
  the aim of development of the sectors of economy
  of Uzbekistan and separate territories of
  Uzbekistan, production of new types of products,
  development of transport infrastructure,
  services, stimulation of economic cooperation
  with foreign countries.
• The following types of SEZ can be created in
  Uzbekistan
• ?) industrial special economic zones
• b) innovative SEZs
• c) free trade zones
• d) service SEZs
• e) integrated SEZ.

10
Main positions of draft of Law On Special
Economic Zones

• Within SEZ it is prohibited to
• ?) extract precious metals, ores and
  hydrocarbons
• ?) production and trading of weapons and defense
  technology
• ?) production and trading splitting materials,
  poisons, explosive, psychotropic materials and
  drugs.
• The resident of the SEZ is a commercial
  organization or individual entrepreneur
  registered according to the legislation of
  Uzbekistan