PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of August 12, 2024 No. UP-109

About measures for the accelerated market development of factoring services

For the purpose of further increase in opportunities of providing going concern of subjects of small and medium business by development in the country of instruments of financing of business activity on the basis of movable assets:

1. Take into consideration that by the Central bank together with the International Finance Corporation on the basis of the Model law on factoring of the International institute on unification of private law (UNIDROIT) the bill aimed at market development of factoring services in Uzbekistan is drafted.

2. Agree with the offer of the Central bank on formation of the factoring organizations performing activities of financing under concession of monetary claim (further - factoring).

Determine that activities of the factoring organization are performed after passing in the Central bank of the accounting registration which is carried out by means of entering into the register as non-bank credit institution.

3. Determine that since January 1, 2025:

a) it is allowed:

implementation of factoring foreign currency transactions if partner of the client is the nonresident;

resell to credit institutions (refactoring) the monetary claims acquired under agreements of factoring;

b) the responsibility for violation of prohibition on concession of monetary claim is cancelled;

c) for the purpose of providing priority of requirements of the yielded rights of notification about concession of monetary claim are registered in the mortgage register;

d) it is not allowed to change currency of monetary commitment and the country of payment without the consent of the debtor.

To the Cabinet of Ministers to introduce the relevant bill to Legislative house of Oliy Majlis of the Republic of Uzbekistan proceeding from the requirements provided by Items 2 and 3 of this Decree in a month.

4. Approve the offer of the Central bank on implementation of the Electronic platform of factoring services (further - the Factoring platform).

Provide the following opportunities in factoring platform:

introduction by subjects of entrepreneurship of information and documents on monetary claims for use of factoring services;

automation of process of financing by implementation of check of authenticity of the documents which are the basis of monetary claims and also ensuring operational information collection about debtors and its analysis in real time;

provision of convenient, bystry and safe technological infrastructure for rendering factoring services by credit institutions to participants of supply chain.

5. For the purpose of creation on factoring platform of opportunities of check of authenticity of monetary claims, their registration, assessment of solvency of the debtor and implementation of factoring, in particular international:

a) following together with the Central bank and the Ministry of digital technologies to provide implementation of integration and establishing exchange of information with the Factoring platform by means of interdepartmental integration platform of the Electronic Government system:

To the Tax Committee - databases of electronic invoices, systems of electronic commodity-transport waybills and the electronic database of taxpayers with possibility of receipt of the financial reporting of legal entities;

To the ministry of investments, the industry and trade and to Customs committee - the Single electronic information system of the foreign trade transactions (further - EEISVO).

At the same time to determine need of integration of information systems and databases of other ministries and departments with the Factoring platform at the request of the Central bank;

b) Provide to Central Bank connection of credit institutions to the Factoring platform and rendering digital factoring services by means of this platform;

c) to provide to the ministries and departments performing functions of the shareholder (the participant, the founder) at the companies in which authorized capital the state share constitutes 50 percent and more connection of these companies to the Factoring platform and placement on platform of invoices under the agreements signed by carrying out the tender or selection of the best offers, and also providing payment deferral.

6. Determine that requirements to safety, cyber security and carrying out IT audit of information systems of the electronic factoring platforms created by persons which are not credit institutions are established by the Central bank.

7. For the purpose of promoting and development of factoring services, development of industry standards, strengthening of ties between participants of the market of factoring to support the initiative of commercial banks and microfinancial organizations about creation of National association of factoring (further - Association).

To provide to Central Bank together with Association taking measures to factoring development, and also the solution of industry questions within powers with carrying out the analysis of recent trends in the domestic and international markets.

To render the ministry of investments, industry and trade together with Chamber of Commerce and Industry, the international financial institutions development assistance of international cooperation in the sphere of factoring, and also establishment of communications with the leading foreign banks and factoring companies.

8. Determine that for the purpose of creation of opportunities for broad application of factoring when implementing the foreign trade transactions:

a) since January 1, 2025 based on the agreement on acquisition of receivables under the export contract:

if the credit institutions providing factoring services (further - financial agents), are residents, data on them are entered as the receiver of currency means under the export contract and for these financial agents passes obligation on ensuring execution of the requirement about repatriation of assets into EEISVO;

if financial agents are nonresidents, the obligation on ensuring execution of the requirement about repatriation of assets remains behind the exporter. At the same time in case of cash receipt under export contracts from the financial nonresident agent based on the agreement on acquisition of receivables the requirement about repatriation of assets is considered fulfilled;

the award (discount) in the amount of no more than 10 percent from the amount of monetary claim withheld by financial agents for the rendered services is not considered as receivables;

b) by provision by the financial agent of money in national currency at the expense of the monetary claims of the exporter to the nonresident (debtor) in foreign currency following from the export contract the operating procedure for the tax benefits provided for exporters remains.

9. Approve the "Road map" of market development of factoring services according to appendix providing:

the organization of short-term training courses for increase in knowledge and professional skills in the field of factoring services of employees of commercial banks and the microfinancial organizations, implementation of measures for promoting of factoring services;

implementation by Chamber of Commerce and Industry of explanatory works on increase in awareness of subjects of entrepreneurship on factoring services and benefits of factoring;

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