Approved by Board of the Central bank of the Republic of Uzbekistan on February 20, 1999 No. 294 (the protocol No. 3)

Regulations on procedure for crediting of investment projects in freely convertible currency

This Provision is developed according to Articles 7 and 40 of the Law of the Republic of Uzbekistan "About the Central bank of the Republic of Uzbekistan", the Law of the Republic of Uzbekistan "About currency control", the Presidential decree of the Republic of Uzbekistan of December 13, 1996 "About additional measures for stimulation of development and investing activities of the companies with foreign investments" and determines procedure for crediting of investment projects by authorized banks in freely convertible currency (in subsequent - foreign currency).

I. General provisions

1. Authorized banks according to the Charters and the rights granted to them in licenses of the Central bank of the Republic of Uzbekistan for carrying out currency transactions perform crediting in foreign currency of the companies and organizations - legal entities (in subsequent referred to as with borrowers) under implementable investment projects.

2. Borrowers possess bank loan in foreign currency on the terms of strict observance of the principles of crediting: security, special-purpose character, urgency, recoverability, the paid nature also bear responsibility for effective use of the credits. In cases of violation of terms for crediting measures of economic impact are applied to them.

3. Foreign currency loans are granted by authorized banks for financing of the investment projects connected with import of the equipment, materials, samples of the new products, other material values and technologies intended mainly for the expansion of production and improvement of goods quality exported, and also used in economy of the Republic of Uzbekistan.

4. Foreign currency loans are granted on commercial terms which are determined in the credit agreements signed by bank with the borrower with collection of percent in foreign currency.

In case of the solution of questions of provision to borrowers of foreign currency loans special attention is paid to availability of sources of their repayment, proceeding from the basic principle - currency self-sufficiency of the credited actions.

5. Foreign currency loans are granted by authorized banks at the expense of own and attracted credit resources, with observance established by the Central bank of the Republic of Uzbekistan of economic standard rates on foreign currency transactions.

6. Authorized banks independently establish interest rates for the issued credits.

On the credits which are not extinguished in the terms stipulated in the credit agreement the raised interest rate is established.

In case of loan granting in foreign currency authorized banks can charge from the borrower the fee for the obligation with unused in the terms of part of granted loan established by the agreement.

7. The decision on loan granting in foreign currency is made by Credit committee of authorized bank or its deputy for the prepared conclusion of the relevant division of bank.

8. The borrower shall provide timely installation and commissioning of the equipment acquired for the credit account in foreign currency, finishing production capacity of the equipment and other indicators to project, target and effective use of the credit.

II. Procedure for loan granting in foreign currency

9. For receipt of the credit the borrower addresses to authorized bank with the motivated petition.

10. The petition of the borrower and documents attached to it shall contain the following information:

a) the purpose of receipt of the credit, the amount and term for which the credit is necessary;

b) the characteristic of the goods which are purchased abroad, the country in which it will be acquired, payment currency, cost, and in case of equipment procurement - data on providing with necessary raw materials;

c) the feasibility statement on the credited action, its currency self-sufficiency;

d) the engineering design or the complex working schedule for the entire period of construction, adjusting and mastering of production facilities;

e) calculation of term of use and loan repayment;

e) ensuring loan repayment, including bail bonds.

11. In necessary cases authorized banks can demand from borrowers the additional data concerning use and loan repayment, efficiency of use of the import equipment, the expected markets of finished goods.

12. In case of the solution of question of loan granting special attention is paid on availability of sources and guarantees of loan repayment, timeliness of accomplishment by the borrower of obligations to authorized bank on earlier loans.

13. In case of loan granting under guarantee of other companies and organizations the authorized bank needs to receive from the bank serving garantodatel, the notice on acceptance of guarantee to execution.

14. On each granted loan the authorized bank processes case in which are stored: copy of the credit agreement, copy of contracts, and also all documents and correspondence on this credit.

15. Loan accounts are opened based on orders of bank at which the mode of each account is determined.

Transactions on granted loan are made by bank based on contracts and payment documents according to the procedure, established by the Central bank of the Republic of Uzbekistan.

III. Procedure for repayment of foreign currency loans

16. Debt repayment on the credit is made according to the order (to the statement on the translation) the borrower from its on-demand deposit account in foreign currency.

In case of debt repayment on the credit first of all the amount of interests on credit is collected.

In the cases provided by the current legislation debt repayment by converting of amount-based means in freely convertible currency in the domestic foreign exchange market is allowed.

17. In case of default of debt on the credit in the terms stipulated in the credit agreement, the credit it is considered overdue.

The bank has the right to prolong the credit agreement at discretion in case of default of debt on the credit at the scheduled time for the reasons which are not depending on the borrower (natural disasters, equipment delay in delivery, etc.).

18. Authorized banks have the right, in case of debt default at the scheduled time, to write off outstanding credit amount from the on-demand deposit account in foreign currency of the borrower, in the procedure established by the legislation.

In case of shortcoming or lack of means on the on-demand deposit account of the borrower the credit amount is written off from the on-demand deposit account in foreign currency of garantodatel or measures to execution of bail bonds in the procedure established by the legislation are taken.

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