PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of October 27, 2020 No. UP-6096

About measures for the accelerated reforming of the companies with participation of the state and privatization of the state assets

In recent years in the country system reforms on creation of the favorable investment climate, protection of the rights and legitimate interests of owners of private property are undertaken.

Along with it delay of transition to market mechanisms of some industries and large enterprises in which the share of the state remains interferes with establishing production of new types of competitive products, implementation of advanced technologies, work performance improvement, creation of new workplaces with active attraction of private equity.

For the purpose of the accelerated implementation at the companies with participation of the state of the modern methods of management oriented to the consumer, the open, transparent and market principles, increase in the income due to reduction of cost, creation of ampler opportunities for participation in process of reforms of private equity, reducing participation of the state in economy and further improvement of competitive environment:

1. Take into consideration that the created working groups headed by the Prime Minister of the Republic of Uzbekistan completely study activities about three thousand companies with participation of the state, offers on cardinal reducing share of the companies with participation of the state in economy and to increase in efficiency of their activities are developed.

Approve:

The list of the large state enterprises and economic associations which are subject to transformation according to appendix No. 1;

The list of the companies with participation of the state into whom corporate management and financial audit take root raises operating efficiency, according to appendix No. 2;

The list of the state assets exposed on the public biddings by means of address programs of preprivatization preparation and increase in investment appeal according to appendix No. 3;

The list of the companies which state block of shares (shares) completely is implemented to private sector by means of the public biddings, according to appendix No. 4;

The list of the immovable objects of state-owned property realized to private sector according to appendix No. 5.

2. Form in structure of central office of the Ministry of Finance Department on transformation of large enterprises with participation of the state (further - Department) with the total extreme number of managerial personnel of 24 established posts. Create these established posts due to reducing on 12 established posts according to financial bodies and bodies of the State Tax Service.

Determine the main objectives of Department at the companies with participation of the state specified in appendix No. 1 to this Decree:

the organization of realization by the Ministry of Finance of powers and functions of the shareholder (the participant, the owner) on behalf of the state;

till April 1, 2021 - preparation of financial statements of the companies for 2019-2020 on the basis of International accounting standards (IFRS) and introduction on approval into the Cabinet of Ministers of the schedule of receipt of the international credit ratings;

till April 1, 2021 - development for each company of strategy of financial improvement, increase in operating efficiency, and also medium-term and long-term development with involvement of the authoritative international consulting organizations on competitive basis;

till July 1, 2021 - implementation of the system of modern corporate management providing carrying out audit of purchases and management systems, and also forming of services "system of compliance" (komplayens) and anti-corruption;

till July 1, 2021 - completion by qualified international specialists at least 30 percent of structure of the supervisory boards and at least three executive positions in board of the company by active attraction on the basis of international contest of foreign specialists of this sphere (including from among compatriots) in the supervisory boards and boards of the companies.

3. To the Ministry of Finance concerning the companies with participation of the state specified in appendix No. 1 to this Decree, the Agency on management of the state assets (further - the Agency) concerning the companies with participation of the state specified in appendix No. 2 to this Decree:

till January 1, 2021 - together with the State committee on geology and mineral resources to approve the list and "road maps" of fields (the state inventories) which are subject to revaluation according to international standards;

till February 1, 2021 to develop the budget statement of the companies for 2021;

till July 1, 2021 to provide development of three-year business plans (the current activities, investment projects and specific sources of their financing, including at the expense of means of the international financial markets, and also financial model);

till July 1, 2021 to carry out inventory count of all investment projects of the companies, to take measures for suspension of not begun projects and projects by which financial sources are not determined.

To the Cabinet of Ministers (D. Kuchkarov) till January 1, 2021 to approve "road maps" on implementation of actions, provided by this Item by each company specified in appendices No. No. 1 and 2 to this Decree.

4. To the Ministry of Economic Development and reducings poverty, to the Ministry of Finance, Antimonopoly Committee, anti-corruption Agency and Agency:

till December 1, 2020 to carry out inventory count of the privileges and preferences exerting impact on competitive environment, to introduce the draft of the resolution on their cancellation to Administration of the President of the Republic of Uzbekistan;

along with carrying out process of transformation of the companies specified in appendices No. No. 1 and 2 to this Decree to develop the actions plan on complete transition to the principles of the market relations, forming of competitive environment and attraction of private sector to field of activity of data of the companies;

till January 1, 2021 together with the Ministry of Agriculture critically to review activities of Uzagroservice and Uzagrokimyokhimoya joint-stock companies, to make offers on the organization of their activities on the basis of the market principles and to private sector development in this industry.

5. Provide to the Ministry of Finance regarding the questions connected with activities of Department and to the Agency the following additional powers:

attraction on competitive basis of the consulting, audit, headhunter and other companies and experts conducting at the international level, and also the conclusion of contracts with them;

the organization of project offices, coordination and financial provision (budgetary funds, means of the companies with participation of the state, grants and borrowed funds of international financial institutions) their activities.

6. State commission on holding tenders in case of sale of state-owned property (A. Aripov) on each state asset exposed on the public biddings within address programs of preprivatization preparation and increase in investment appeal, according to appendix No. 3 to this Decree, to provide:

till November 15, 2020 - forming of working groups;

till February 1, 2021 - involvement of the consulting organizations for privatization and increase in investment appeal and development of "road maps" on realization of these works;

till July 1, 2021 - development of address programs of preprivatization preparation and increase in investment appeal of the companies.

7. To the Cabinet of Ministers (A. Ramatov), to the Ministry of construction (B. Zakirov, Sh. Hidoyatov) and the Agency (S. Bekenov) to carry out repeated inventory count of the project and research organizations with participation of the state specified in appendix No. 3 to this Decree to two-month time, to approve "road maps" on preparation them to privatization, realization to leading organizations in the project and research and construction sphere, and also privatization of data of the companies.

8. Approve the list of persons responsible for the effective organization of complete exposure to the public biddings of the state blocks of shares (shares) specified in appendix No. 4 to this Decree according to appendix No. 6.

9. Approve updated structure of State commission on holding tenders in case of sale of state-owned property according to appendix No. 7.

10. State commission on holding tenders in case of sale of state-owned property (A. Aripov):

a) together with the Chairman of the board of Ministers of the Republic of Karakalpakstan, hokimama of areas and the city of Tashkent to charge:

acceptance of necessary measures for acquaintance of domestic and foreign investors with the state assets offered for sale in regions;

uninterrupted providing with networks external infrastructure of the state assets which are subject to realization;

creation of conditions for work at full capacity and implementation of effective activities of the companies during the post-privatization period;

acceptance of other measures necessary for attracting investors;

b) if the cost of the state blocks of shares (shares) pro rata to their amount of participation in net assets of the companies specified in appendix No. 4 to this Decree does not exceed 100 million sum, to regularly expose them on the public biddings according to the procedure of exception at the cost equal to pro rata share of net assets (or at par value if net assets there is less authorized capital);

c) provide exposure by the Agency to the public biddings of the block of shares (shares) of the companies and real estate units specified in appendices No. No. 4 and 5 to this Decree since November 1, 2020;

d) confer the following additional powers:

determination of conditions and forms of realization of the state assets which are subject to realization based on resolutions of the President of the Republic of Uzbekistan and the Cabinet of Ministers of the Republic of Uzbekistan;

decision making about privatizations of real estate units and the state blocks of shares (shares) and the state companies created in subsequent, determination of conditions of their realization, type of the biddings and the starting price at the public biddings.

11. Determine that the state blocks of shares (shares) of the companies specified in appendix No. 4 to this Decree:

are put up for sale by single lot;

the cost which is not exceeding 100 million sum exposed on the public biddings at the cost equal to pro rata share of their net assets (if the amount of net assets is less than the authorized capital - at par value), in case of their not realization within three months, are repeatedly put up for sale as follows: shares - at the starting price of "1 bags", blocks of shares - on the basis of the principle "1 share - one lot for 1 bags".

12. Establish procedure according to which:

practice of realization of the state objects on "zero" redemption value and exposure them on the public biddings at the starting price of "1 bags" with adoption of investment and social obligations is cancelled;

the state unitary enterprises will be reorganized into economic societies with implementation of their state block of shares (share);

by reorganization of the state unitary enterprises, privatizeable, in economic societies their authorized capital is determined without carrying out inventory count and assessment on the basis of data of the last balance sheet provided in tax authorities by net assets value, in case of negative indicators of net assets - in the amount of the authorized capital of the company;

buyers of the state assets can make payment on the terms of payment by installments of payments according to the procedure, established by the legislation;

to the buyers who partially made payments according to the schedule within purchase and sale agreements of the state share with payment by installments condition before implementation of complete payment the certificate on ownership "without the order right" with the right of participation in management of society is issued and receipt of dividends it is proportional to the paid part of acquired share in the form approved by the Cabinet of Ministers, except as specified sales of the state share to the society;

the state warrant for the property right "without the order right" before complete payment under the agreement is issued to the buyers who partially made payments within purchase and sale agreements of immovable objects of state-owned property;

in case of realization of the state assets with investment obligations the investments brought by the investor in the form of foreign currency cash are enlisted into the separate account of the company.

13. To the agency together with the Ministry of Economic Development and reducings poverty, the Ministry of Finance and the State Tax Committee till December 1, 2021 to introduce the draft of the resolution on enhancement of management system and step-by-step privatization of the markets and malls providing to the Cabinet of Ministers:

creation of managing companies on pre-sale preparation of the markets and malls under the Agency and its territorial administrations, proceeding from the importance of the markets and malls;

reduction in modern look, preserving at the level of sanitary and hygienic requirements, forming of the infrastructure necessary for activities of the markets and malls having the state share in the authorized capital taking into account the best foreign practices;

providing legitimate rights and interests of owners of private property, and also immunity of private property in the markets and in malls.

14. To the ministry of investments and foreign trade (S. Umurzakov, L. Kudratov, Sh. Vafayev) together with the Agency:

a) on the blocks of shares (shares) of the companies and real estate objects realized according to this Decree:

realize package of measures for involvement of domestic and international investors before exposure them on the public biddings;

together with the Ministry of Foreign Affairs on regular basis to hold meetings, dialogues and the presentations ("Road Show") for involvement of potential investors;

organize address works for involvement of the potential foreign investors having the best practices, in the companies with participation of the state, specified in appendix No. 3 to this Decree;

b) till February 1, 2021 on the basis of studying of the best foreign practices to make in the Cabinet of Ministers offers on implementation of external management in activities of special economic zones, and also their step-by-step privatization.

15. To the agency to bring in the Cabinet of Ministers:

together with the Ministry of Foreign Affairs, the Ministry of investments and foreign trade till June 1, 2021 - the offer on effective operation of the objects of state-owned property of the Republic of Uzbekistan which are located abroad, including their realization, transfer to lease or trust management;

together with the Ministry of Economic Development and reducings poverty and the Ministry of Finance, the relevant ministries, departments and bodies of economic board in three-months time after carrying out complete inventory of non-core assets of the companies and commercial banks with the prevailing share of the state - offers on their realization through the public biddings.

16. To the Cabinet of Ministers in two weeks to approve:

the list of the companies with participation of the state reorganized into organizations;

the list of the companies with participation of the state reorganized into branches;

the list of the companies in which participation of the state remains;

the list of the unpromising, idle, unprofitable and low-profitable enterprises with participation of the state concerning which the liquidation procedure or bankruptcies is initiated.

17. To provide to the agency together with the Antimonopoly Committee development and approval of measures for ensuring transparency of process of the public auction held on United electronic market place of "E-ijro auksion", complete elimination of subjective approach and creating favorable conditions for the buyers providing:

till January 1, 2021 - approval of single procedure for standardization of trade procedures on United electronic market place and start on its basis of the advanced software integrated with state bodies;

since January 1, 2021 - registration of results of all biddings by use of QR code;

carrying out repeated biddings for realization of immovable objects of state-owned property and the state share frequency once each 10 calendar days;

acceptance of proposals of buyers since the moment of the announcement of lots at auction;

the conclusion of purchase and sale agreements with the single participant if the request which is drawn up in accordance with the terms of realization of the state assets is provided only by one applicant, except for the state share and immovable objects of state-owned property exposed on realization at the starting price of "1 bags".

18. To the agency together with the Agency of information and mass communications, National broadcasting company of Uzbekistan, the Ministry of development of information technologies and communications, the Ministry of investments and foreign trade, the Ministry of Economic Development and reducings poverty to approve and provide implementation of the media plan directed to broad promotion and illumination of essence and contents of this Decree among subjects of entrepreneurship and the population in a month.

19. Together with the Prosecutor General's Office to provide to the representative for protection of the rights and legitimate interests of subjects of entrepreneurship in case of the President of the Republic of Uzbekistan (Business ombudsman) protection of the rights and legitimate interests of the investors acquiring the state block of shares (shares) including minority shareholders, to take the severe measures established by the legislation in case of identification of the circumstances interfering their participation in governing bodies of society.

20. To the Cabinet of Ministers:

in a month to submit for approval the strategy of management and reforming of the companies with participation of the state in 2020 - 2025;

till December 1, 2021 to develop and introduce in accordance with the established procedure in Legislative house of Oliy Majlis the bill of the Republic of Uzbekistan "About management of state-owned property" and till March 1, 2022 - the bill of the Republic of Uzbekistan "About privatization";

till December 1, 2023 to carry out inventory count of acts of the legislation on privatization, to approve updated regulations on privatization with their unification.

21. To the agency together with the interested ministries and departments in three-months time to make in the Cabinet of Ministers offers on the changes and amendments in the legislation following from this Decree.

22. To impose control of execution of this Decree on the Prime Minister of the Republic of Uzbekistan A. N. Aripov, the adviser to the President of the Republic of Uzbekistan R. A. Gulyamov and the deputy prime minister of the Republic of Uzbekistan D. A. Kuchkarov.

 

Appendix No. 1

to the Presidential decree of the Republic of Uzbekistan of October 27, 2020 No. UP-6096

The list of the large state enterprises and economic associations which are subject to transformation

№	№	INN	Name	Legal form	Region	State share (%)
I		Companies of metal industry (1 unit)
1.	1.	201204514	JSC Navoiysky MMC	JOINT-STOCK COMPANY	Navoiy region	100,0
II		Companies of oil and gas industry (3 units)
2.	1.	200837914	JSC Uzbekneftgaz	JOINT-STOCK COMPANY	Tashkent	100,0
3.	2.	200626188	JSC Uztransgaz	JOINT-STOCK COMPANY	Tashkent	99,5
4.	3.	306605769	JSC Hududgaztajminot	JOINT-STOCK COMPANY	Tashkent	100,0
III		Companies of energy industry (4 units)
5.	1.	306347741	JSC Natsionalnye elektricheskiye seti Uzbekistana	JOINT-STOCK COMPANY	Tashkent	100,0
6.	2.	306350099	JSC Regionalnye elektricheskiye seti	JOINT-STOCK COMPANY	Tashkent	100,0

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