LAW OF THE REPUBLIC OF UZBEKISTAN

of April 30, 1998 No. 611-I

About guarantees and measures of protection of the rights of foreign investors

Article 1. Purpose and tasks of the Law

This law establishes guarantees and measures of protection of the rights of the foreign investors performing investing activities in the territory of the Republic of Uzbekistan.

The main objectives of this law are:

forming of package of measures for guarantees and protection of the rights of foreign investors;

determination of conditions of provision of additional guarantees and measures of protection for separate categories of foreign investors and foreign investments.

Article 2. Legislation on guarantees and measures of protection of the rights of foreign investors

The relations connected with provision and implementation of guarantees and measures of protection of the rights of foreign investors are regulated by this Law, the Law of the Republic of Uzbekistan "About foreign investments" 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 about guarantees and measures of protection of the rights of foreign investors then are applied rules of the international treaty.

Article 3. Guarantees of the rights of foreign investors

The state guarantees and protects the rights of the foreign investors performing investing activities in the territory of the Republic of Uzbekistan.

Discrimination against foreign investors in connection with their nationality, the residence, religion, the venue of economic activity, and also depending on country of source of investors or investments taking into account ensuring implementation of international treaties of the Republic of Uzbekistan is not allowed.

Acts of the legislation, including departmental regulations, have no retroactive force in cases if their execution causes damage to the foreign investor or foreign investments.

If the subsequent legislation of the Republic of Uzbekistan worsens investment conditions, the legislation existing for date of investment is applied to foreign investors within ten years from the moment of investment. The foreign investor has the right at discretion to apply those provisions of the new legislation which improve conditions of its investment.

As deterioration in conditions of investment are considered modification and amendments in the legislation, and also adoption of the new acts of the legislation of the Republic of Uzbekistan providing:

increase in the size (rate) in tax on income gained in the form of the dividends paid to the foreign investor;

introduction of the additional requirements complicating the procedure of repatriation or reducing the size of the income (profit) of the foreign investor translated out of limits of the Republic of Uzbekistan, except as specified suspensions of repatriation of means of the foreign investor by authorized state body on the terms of non-discriminatory application of acts of the legislation in cases of insolvency and bankruptcy of the company with foreign investments or protection of the rights of the creditors, crimes or administrative offenses made by the foreign investor physical person or other need of suspension of such repatriation according to the judicial or arbitral decision;

introduction of quantitative restrictions on amounts of implementation of investment and other additional requirements by the amount of investments, including in the form of increase in the minimum size of foreign investments in the companies with foreign investments;

increase in the size (rate) in the income tax according to income gained in the form of the dividends paid to the foreign investor;

introduction of supplementary procedures of registration and prolongation of visas of foreign investors - physical persons, and also other additional requirements on implementation of foreign investments.

The procedure for application of provisions of parts four and the fifth this Article is determined by the Cabinet of Ministers of the Republic of Uzbekistan.

All agreements on foreign investments, first of all private, regarding providing unconditional guarantees of their accomplishment are under control of the relevant organs authorized by the government of the Republic of Uzbekistan.

State bodies and public authorities on places have no right to interfere with the economic activity of foreign investors performed according to the legislation of the Republic of Uzbekistan.

If when using the warrants of law state bodies and public authorities on places will find violations by the foreign investor of the legislation, they can take only those measures on which they are authorized and which are directly connected with elimination of specific violation. State bodies or public authorities on places cannot use the violation availability fact as the basis for intervention or restriction of other legal activities of the foreign investor.

This Article does not extend to acceptance, amendment or cancellation of acts of the legislation which are directly connected with ensuring protection of the interests of homeland security of the Republic of Uzbekistan determined according to the commonly accepted principles of international law.

Article 4. The additional guarantees and measures of protection provided to foreign investors

By the legislation, along with general guarantees and measures of protection of foreign investors, the additional guarantees and measures of protection including providing unconditional accomplishment by partners of the obligations to foreign investors can be provided.

Additional guarantees and measures of protection can be provided to foreign investors in each case in case of investment:

in the priority industries providing sustained economic growth, progressive structural changes of national economy;

in implementation of high modern technologies and development of high technology productions;

in the priority projects providing strengthening and expansion of the export potential of the republic, its integration into world economic communications;

in projects in the field of small business which implementation is directed to conversion of raw materials and materials, production of consumer goods and services, employment of the population.

Additional guarantees and measures of protection to foreign investors can include provision of a guarantee for the Government of the Republic of Uzbekistan, rendering assistance in financing of investment projects, creation of the special tax and payment regime, implementation of the state monitoring of projects implementation providing external engineering and communication networks and other measures according to the legislation.

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