LAW OF THE REPUBLIC OF UZBEKISTAN

of April 14, 1999 No. 756-I

About leasing

Article 1. Legislation on leasing

The legislation on leasing governs the relations arising when implementing leasing and consists of this Law and other acts of the legislation.

If the international treaty of the Republic of Uzbekistan establishes other rules, than those which are stipulated by the legislation the Republic of Uzbekistan about leasing then are applied rules of the international treaty.

Article 2. Concept of leasing

Leasing - special type of finance lease in case of which one party (lessor) at the request of other party (leasing recipient) acquires at the third party (seller) in property the property (object of leasing) caused by the agreement of leasing and presents him to the leasing recipient for a fee on the conditions determined by such contract in ownership and use for the term exceeding twelve months. At the same time the agreement of leasing shall answer one of the following requirements:

upon termination of the term of the agreement of leasing object of leasing carries over the leasing recipient;

the term of the agreement of leasing exceeds 80 percent of service life of object of leasing or residual cost of object of leasing upon termination of the agreement of leasing makes less than 20 percent of its original cost;

upon termination of the term of the agreement of leasing the leasing recipient has repurchase right of object of leasing at the price below market value of object of leasing for date of realization of this right;

the current discounted value of leasing payments for the period of the agreement of leasing exceeds ninety percent of current value of object of leasing at the time of transfer in leasing. The current discounted value is determined according to the legislation on financial accounting.

Leasing is performed on tripartite (the seller - the lessor - the leasing recipient) or bilateral (the lessor - the leasing recipient) to the agreement of leasing.

In case of the conclusion of the bilateral agreement of leasing between the lessor and the seller the sale and purchase agreement of object of leasing is in addition signed.

Article 3. Objects of leasing

Any not used things, including the companies, property complexes, buildings, constructions, the equipment, vehicles and other personal and real estate used for business activity can be objects of leasing.

The parcels of land and other natural objects, and also other property withdrawn from circulation cannot be objects of leasing or transferable is limited.

Article 4. Subjects of leasing

Subjects of leasing are the lessor, the leasing recipient and the seller.

The lessor person acquiring object of leasing in property for the purpose of its subsequent transfer to the leasing recipient under the agreement of leasing is recognized.

The leasing recipient person acquiring object of leasing in the ownership and use under the agreement of leasing is recognized.

The seller person at whom the lessor acquires object of leasing is recognized.

Concerning specific object of leasing combination in one face of the creditor of the lessor and the leasing recipient is not allowed in case object of leasing is acquired for the credit account (loan) of the leasing recipient.

Article 5. Leasing forms

Leasing can be performed as in direct form at which there are all three subjects of leasing, and at returnable form in case of which the leasing recipient and the seller act in one person.

Article 6. Subleasing

The leasing recipient has the right to hand over the object of leasing received under the agreement of leasing in temporary ownership and use in subleasing to the third party from written consent of the lessor, remaining before it responsible for the agreement of leasing. At the same time in the agreement of subleasing of provision of this Law are applied in the attitude towards the sublessor, the subleasing recipient and the seller respectively as to the lessor, the leasing recipient and the seller.

The duration of the agreement of subleasing cannot exceed the duration of the agreement of leasing.

Article 7. Accounting and registration of object of leasing

Object of leasing is considered on balance at the leasing recipient.

The objects of leasing requiring registration in state bodies are registered addressed to the lessor or the leasing recipient according to the procedure, established by the legislation.

Article 8. Leasing activities

Leasing activities - type of investing activities on acquisition by the lessor of object of leasing at the expense of own and (or) raised funds and transfer to his leasing recipient under the agreement of leasing.

Article 9. Agreement of leasing

The agreement of leasing is signed in writing according to the procedure, established by the legislation.

The agreement of leasing is subject to the notarial certificate:

upon the demand of one of agreement parties;

in cases when object of leasing is the property, transactions with which according to the law require the notarial certificate, except for agreements on leasing in case of real estate acquisition and vehicles in the primary market.

Essential terms of the contract of leasing are:

description of object of leasing (quantity, quality, list, contractual project cost of leasing and other parameters) and specifying of general sum of money of the agreement;

the obligations of the parties connected with acquisition and transfer of object of leasing;

procedure for transfer of object of leasing, including procedure for delivery, installation and introduction of object of leasing to operation;

conditions, sizes, terms and payment procedure of leasing payments;

obligations of the Parties on use, storage, content and repair of object of leasing;

duration of the agreement;

specifying of the party responsible for the choice of the seller and object of leasing.

By agreement of the parties the agreement of leasing can include the following conditions:

procedure and terms of the redemption of object of leasing;

change and agreement cancelation of leasing;

insurance of object of leasing;

force majeur circumstances;

rendering additional services by the lessor without which use of object of leasing is impossible;

procedure subjects of leasing of control of observance of terms of the contract of leasing.

The agreement of leasing can include also other conditions according to the legislation.

Article 10. Change and agreement cancelation of leasing

Change and agreement cancelation of leasing are possible by agreement of the parties if other is not stipulated by the legislation or the agreement.

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