Uzbekistan tightens oversight of shared construction with new criminal provisions

The Ministry of Justice has presented a draft law on shared construction. The document is aimed at strengthening regulation in the sector and introducing escrow accounts.

The draft law also provides for the introduction of criminal liability for violations of requirements governing shared construction and the conditions for raising funds. To this end, it is proposed to supplement the Criminal Code with Article 188–2.

The article will address the “attraction of shared capital for construction in a manner not provided for by law.” In particular, it would apply to cases where a shared construction agreement is concluded without being registered in the state register of real estate rights.

For a first violation, the law provides for a fine of 300–400 base calculation value (BCV), equivalent to UZS 123.6–164.8 million, or restriction or deprivation of liberty for a term of one to three years.

In the event of a repeat offense, actions committed by a group of persons acting in prior collusion, or cases involving a large amount of damage, a fine of 400–600 BCV (UZS 164.8–247.2 million) may be imposed, along with restriction or deprivation of liberty for three to five years and deprivation of certain rights.

If the damage is deemed “especially large,” the offender would face imprisonment for five to seven years. The same penalty is provided for violations of shared construction laws committed by an organized group or in its interests.

Liability will not apply to individuals who committed a violation for the first time and compensated for the damage in accordance with the law within 30 days of its detection.

It is also proposed to add Article 99–1 to the Code of Administrative Responsibility. This provision would establish liability for specially authorized organizations in the shared construction sector for failure to disclose information.

The fine for officials who fail to post information in the Unified Information System for Housing Construction would amount to 70 BCV, or UZS 28.84 million. Introducing unlawful amendments to project documentation for shared construction facilities would be punishable by a fine of 100 BCV, or UZS 41.2 million.

The draft law is available for review on the regulatory legal acts discussion portal.