11:45 / 15.09.2021
Regulation of contractual relations to change in Uzbekistan

On September 14, President Shavkat Mirziyoyev signed a decree “On measures to radically improve contractual relations”.

Photo: Shutterstock

The document approved the proposal of the Ministry of Justice, the Ministry of Economic Development and Poverty Reduction and the Antimonopoly Committee to abolish from December 1, 2021:

- a ban on the acceptance by commercial banks of payments for products supplied (work performed, services rendered) at the expense of third parties;
- requirements for the mandatory establishment of advance payment in contracts for the supply of goods (performance of work, provision of services) concluded by economic entities with a state share of 50% or more;
- requirements for the mandatory establishment of an advance in contracts concluded between producers of agricultural and livestock products and procurement organizations.

It is noted that the advance payment, provided for by the third and fourth paragraphs of the above point, are determined by agreement of the parties to the contract.

The procedure is also established according to which, starting from January 1, 2022:

a) the property put up for sale at an electronic online auction during the execution of judicial acts and acts of other bodies will be transferred to the winner of the auction without debts and with the bans lifted, at the expense of the funds received from its sale. In case of insufficient funds received from the sale of property, the obligation to pay the debt remains with its previous owner – the debtor.

The amount of the deposit is subject to return within 3 working days from the date of the appeal of the winner of the auction in cases of non-acceptance of the property by the winner of the auction on the following grounds:

- inconsistency of the property sold at the auction, the declared technical characteristics of the auction object;
- transfer of property to the possession of third parties prior to its sale at the auction and the establishment of this circumstance after the end of the auction;

b) a party to the contract who has accepted from the other party full or partial fulfillment of obligations under the contract or otherwise confirmed the validity of the contract is not entitled to further demand the recognition of this contract as invalid if such a requirement contradicts the principle of good faith.

c) anti-corruption clauses are mandatory established in contracts related to public procurement concluded by economic entities.

In case of non-observance of anti-corruption clauses by the party to the contract and the persons involved by it (subcontractors, agents and other persons controlled by the parties), the other party has the right to suspend, terminate the contract unilaterally and demand compensation for losses.

d) in case of non-payment by legal entities and individual entrepreneurs of arrears on tax and customs payments, tax or customs authorities send to the bank an order to freeze funds on the payer’s accounts in an amount equal to the debt amount, and then collect them after 30 calendar days with notification of this very payer. When the payer appeals this order to the court within thirty calendar days from the receipt of the notification, the withdrawal or non-withdrawal of funds from the client’s accounts is carried out in accordance with the court decision.

The practice of approving model contracts by regulatory legal acts is also canceled, except for cases when the law expressly provides for the approval of model contracts that are binding on the parties.

The document approved the proposal of the Ministry of Justice, the Ministry for the Development of Information Technologies and Communications, the Central Bank and the Chamber of Commerce and Industry to introduce an “escrow” system in the sale and purchase of products through electronic trading platforms in the field of e-commerce and the conclusion of transactions in other areas.

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