Document from CIS Legislation database © 2003-2021 SojuzPravoInform LLC

LAW OF THE REPUBLIC OF UZBEKISTAN

of December 7, 2001 No. 312-II

About production sharing agreements

(as amended on 12-10-2021)
Article 1. Purpose of this Law

The purpose of this Law is regulation of the relations arising in the course of the conclusion, execution and the termination of production sharing agreements when implementing investments into searches, investigation of fields and mining in the territory of the Republic of Uzbekistan.

Article 2. Legislation on production sharing agreements

The legislation on production sharing agreements 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 production sharing agreements then are applied rules of the international treaty.

Article 3. Production sharing agreement

The production sharing agreement (further - the agreement) is the agreement according to which the Republic of Uzbekistan provides to the foreign investor (further - the investor) on paid basis and for certain term exclusive rights on searches, investigation of fields and mining on the subsoil plot specified in the agreement and on conducting the works connected with it, and the investor shall perform carrying out the specified works at own expense and on the risk.

The following shall be provided in the agreement:

description of the investment project and duration of the agreement;

procedure for provision to the investor of subsoil plots in use;

rights and obligations of the Parties;

bodies of joint management of execution of the agreement;

conditions of performance of works, development of working programs and budgets;

procedure for accounting;

conditions of the taxation and payment of other payments;

procedure for cost recovery and condition of the Section of products;

procedure for export of share of the investor;

independence of the investor in question of pricing on the share of profitable products belonging to it;

procedure for control of execution of the agreement;

procedure for the dispute resolution;

procedure for cancellation of the agreement.

The agreement may contain also other provisions following from nature of the agreement.

The regulations on possibility of restriction, suspension or termination of right to use by the investor by the provided subsoil plots shall be provided in the agreement in case of threat of ecological safety and other force majeur circumstances.

Article 4. Agreement parties

Agreement parties (further - the parties) are:

The Republic of Uzbekistan (further - the state) on behalf of which in the agreement the Cabinet of Ministers of the Republic of Uzbekistan or the body authorized by it acts;

the investor performing investment of own, loan or raised funds (property and (or) property rights) in searches, investigation of fields and mining.

Article 5. The subsoil plots provided for use on the terms of the Section of products

Subsoil plots, right to use by which it is granted on the terms of the Section of products are determined by the Cabinet of Ministers of the Republic of Uzbekistan.

For use on the terms of the Section of products perspective subsoil plots where there are no proved inventories of minerals yet, requiring for conducting exploration works of big financial resources, attraction of advanced technologies and the equipment are provided.

Subsoil plots of the reconnoitered mineral deposits join in agreements in cases:

lack of financial and technical capabilities for development of the reconnoitered large-scale deposits of minerals due to which development maintenance of level of production of minerals, necessary for economic safety of the country, and also for construction of facilities of their transportation is provided;

need of attraction of special advanced technologies of development of the minerals, hardly removable, but considerable on inventory quantity, which are in difficult mining-and-geological conditions and the developed fields which are residual for;

need of decrease in level of technological losses of minerals, and also prevention of possible negative social-and-ecological effects.

Article 6. Conditions of provision of subsoil plots in use under the agreement

Subsoil plots for use on the terms of the Section of products are provided in use on the basis of the public biddings, except the cases provided by this Article.

Entry conditions of the public biddings are developed on the basis of the preliminary technical and economic calculations executed according to the decision of the state bodies responsible for carrying out the public biddings.

The procedure for carrying out the public biddings is determined by the Cabinet of Ministers of the Republic of Uzbekistan.

Agreements can be signed on the decision of the Cabinet of Ministers of the Republic of Uzbekistan without carrying out the public biddings by direct negotiations if:

the announced public biddings are acknowledged cancelled in connection with participation in them only of one investor. In this case the agreement can be signed with this investor;

the investor is subsoil user for searches, investigation of fields and mining according to the legislation to the introduction of this Law in force. At the same time the agreement on this subsoil plot is signed with the specified subsoil user or with other legal entity created with participation of this user;

negotiations with the investor on preparation of draft agreements were begun to the introduction of this Law in force.

In exceptional cases according to the decision of the Cabinet of Ministers of the Republic of Uzbekistan agreements can be signed without carrying out the public biddings on the basis of direct negotiations with the strategic potential investor.

For participation in the public biddings or direct negotiations with the government potential investors submit the documents determined respectively by conditions of the public biddings and requirements of body authorized to conduct negotiations on behalf of the government. At the same time the following documents are without fail submitted:

the activity list on searches, investigation and operation of fields in which the investor took part for the last three years;

year balances and reports on financial results for the last three years.

Article 7. Authorized state body and authorized company

Authorized state body is the state body to which the Cabinet of Ministers of the Republic of Uzbekistan assigns the following functions:

organization of preparation of the preliminary feasibility statement on the investment project;

the organization of preparation and carrying out the public biddings on right to use by the subsoil plot;

negotiation with the investor for agreement signature;

preparation of the draft agreement;

the organization of representative office of the state in managing committee.

By the Cabinet of Ministers of the Republic of Uzbekistan other functions also can be assigned to authorized state body.

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