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PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of May 5, 2020 No. UP-5989

About urgent measures for support of the textile and sewing and knitted industry

For the purpose of mitigation of negative impact of world economic crisis in connection with coronavirus pandemic on development of the textile and sewing and knitted industry:

1. Determine that:

the starting price of cotton fiber of national production of basic quality is determined by the seller proceeding from value of the quotation of the future of the New York Mercantile Exchange for the closest month of delivery;

the term during which carrying out final settlements on the cotton fiber realized to the domestic textile enterprises at the exchange biddings for national currency till April 1, 2020 is performed is prolonged from 90 to 150 days.

2. Exempt for up to January 1, 2022 from payment of customs duties the imported raw materials and materials according to appendix.

3. Determine that the simplified procedure for compensation of the value added tax according to which the tax amount on value added which is subject to payment (paid) on actually received goods (services) used for the exported textile and sewing and knitted goods (services), except for yarn and fiber is accepted to offsetting regardless of the amount of the currency earnings which arrived into accounts of the company of the textile and sewing and knitted industry in commercial bank of the Republic of Uzbekistan and is subject to return based on the application of the exporter submitted in accordance with the established procedure is effective from May 1 to December 31, 2020.

At the same time compensated tax amount on value added or its part if the currency earnings or its part do not arrive into accounts of the exporter in commercial banks of the Republic of Uzbekistan within hundred eighty calendar days from the date of release of goods under customs regime of export, and also the amount of illegal offsetting of the value added tax revealed when conducting cameral tax audit of justification of the tax amount on value added declared to compensation are subject to return to the Government budget of the Republic of Uzbekistan within 5 days with charge of penalty fee.

The simplified procedure for compensation of the value added tax established by this Item extends to the companies of the textile and sewing and knitted industry on condition of implementation of commodity export by them within the last 12 months, and also lack of overdue receivables at them on the exported goods in the amount of more than 10 thousand dollars of the USA. At the same time receivables are recognized overdue if the currency earnings does not arrive into accounts of the exporter in commercial banks of the Republic of Uzbekistan in case of the expiration of hundred eighty calendar days from the date of release of goods under customs regime of export.

4. To the Cabinet of Ministers of the Republic of Uzbekistan in two weeks to approve structures of the interdepartmental working groups on:

to the operational solution of questions of logistics and transportation of raw materials, materials, finished goods, and also production personnel of the companies of the textile and sewing and knitted industry - headed by the Minister of Transport E. Ganiyev;

to development and implementation of measures for decrease in cost and increase in competitiveness of the made textile and sewing and knitted products - headed by the Minister of Finance T. Ishmetov and the first deputy chairman of the State Tax Committee M. Mirzayev;

to search of the new perspective foreign markets and stimulation of export of domestic textile and sewing and knitted production - headed by the first deputy minister of investments and foreign trade A. Voitov;

to development of design and collections of clothes and their implementation at the companies of industry - headed by the chairman of Uztekstilprom Association I. Haydarov.

5. To the ministry of investments and foreign trade of the Republic of Uzbekistan and Uztekstilprom Association:

in a month to carry out detailed studying of export delivery contracts of textile and sewing and knitted products regarding perspectives of their execution in the conditions of global quarantine restrictions and to render comprehensive assistance in the conclusion of new export contracts instead of unpromising, first of all with partners from the countries mitigating quarantine measures;

in two-month time to hold negotiations with representatives of the world brands specializing in finished export-oriented sewing and knitted goods regarding creation of their productions in the Republic of Uzbekistan and forming of large orders on tailoring of finished goods, including on capacities of operating plants of the republic;

together with the Uzstandart Agency to provide with assistance of international the organizations by the companies of industry of the modern international certificates recognized in the USA and Europe for annually approved lists;

together with the Ministry of Foreign Affairs to involve leading experts in the field of production of sewing and knitted products from the countries of the European Union, Turkey, Korea, India and other countries as advisers for reforming of this sphere at the expense of means of the Agency on promotion of export under the Ministry of investments and foreign trade.

6. To the Ministry of Economic Development and reducings poverty of the Republic of Uzbekistan together with Uztekstilprom Association and commercial banks:

carry out stress tests of activities of large enterprises of the textile industry regarding their financial stability;

by results of stress testing to develop and make in the Cabinet of Ministers of the Republic of Uzbekistan offers on performance improvement, financial performance and competitiveness of the companies of the textile and sewing and knitted industry, and also the development program of industry taking into account providing competitiveness of the domestic textile and sewing and knitted industry;

in coordination with the Ministry of investments and foreign trade in two-month time to make offers on development of large regional textile and sewing clusters with placement in them export-oriented productions on release of finished sewing and knitted goods taking into account creation of complex of infrastructure (certification, standardization, logistics, etc.).

7. To provide to the Cabinet of Ministers of the Republic of Uzbekistan till September 1, 2020 approval of investment projects on creation, including placement in the territory of large regional textile and sewing clusters, productions on release of finished sewing and knitted goods and the semifinished products demanded in the foreign markets with high value added and attraction of world brands for 2021 - 2025.

At the same time each new sewing and knitted production shall be oriented, as a rule, to sales of products of the known international brands and creation at least one thousand workplaces.

8. Determine that:

a) the investment projects realized in 2020 - 2025 and also providing the textile and sewing and knitted companies with current assets, are financed by means of credit lines of Fund of reconstruction and development of the Republic of Uzbekistan in the amount of 300 million US dollars, the credits of commercial banks, borrowed funds of the international financial institutions and credit lines of the foreign banks open for the textile and sewing and knitted industry, including way:

financings of new investment projects;

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