Procedure for organizing cotton and textile clusters approved 

The Regulation was developed in accordance with the presidential decree “On measures to regulate the activities of cotton and textile clusters,” Norma reports.

The creation of a cotton-textile cluster is carried out by a resolution of the Cabinet of Ministers on the basis of the conclusion of the republican commission. At the same time, the provision of a land plot to a cotton-textile cluster on the basis of a lease right is carried out on the basis of an applicant’s application in the manner prescribed by legislative acts.

When creating cotton-textile clusters, preference is given to an applicant who has a capacity of its own processing (at least yarn) of at least 50% of the produced or purchased raw cotton.

Based on the resolution of the Cabinet of Ministers on the creation of a cotton-textile cluster, a four-way agreement is concluded between the Ministry of Agriculture, the Association of Cotton-Textile Clusters of Uzbekistan, the Council of Ministers of Karakalpakstan or the regional khokimiyat, respectively, and the applicant for the creation of a cotton-textile cluster for a period of 30 years.

Moreover, if the applicant is an enterprise with foreign investment or a foreign legal entity, then the quadripartite agreement is concluded for a period of up to 25 years.

The adopted regulation indicates:

• Forms of cotton-textile clusters created for growing raw cotton or purchasing products from farms and other economic entities producing raw cotton;
• A set of documents submitted by the applicant to the center of public services together with an application for the organization of a cotton-textile cluster and the procedure for their consideration;
• The procedure for concluding a quadripartite agreement on the launch of a cotton-textile cluster;
• The rights and obligations established for the cotton-textile cluster and its members;
• Rights and obligations established for producers of raw cotton on the basis of a futures contract in order to establish relationships between suppliers and the cotton-textile cluster in accordance with market principles;
• The procedure for monitoring compliance by the cotton-textile cluster with obligations under agreements and the effectiveness of its activities;
• The procedure for terminating a quadripartite agreement in the event of default by the cotton-textile cluster.

All cotton and textile clusters in one region (in Karakalpakstan or the corresponding region) are allowed to carry out activities with farms on a contractual basis and farms – to voluntarily conclude futures contracts with these clusters for the supply of raw cotton.