Business Ombudsman proposes new law to regulate financial penalties for legal entities

By defining clear conditions and procedures for penalties, the bill ensures that financial sanctions do not lead to the closure of an organization or undermine its financial stability. The scope of the proposed law is specifically limited to administrative-legal measures against legal entities and does not cover criminal or administrative fines levied against individuals, nor penalties arising from civil law contracts.

Tiered enforcement and mitigating factors

The draft law categorizes violations as insignificant, significant, gross, or repetitive, requiring regulatory bodies to weigh these distinctions before imposing a fine. For insignificant violations committed for the first time, the bill allows regulators to issue a warning rather than a financial penalty. Furthermore, if a company identifies and rectifies a violation voluntarily before a decision is made, no fine will be applied.

Mitigating factors play a substantial role in the new proposal. Admitting a violation, the absence of material damage, and the presence of an effective internal compliance system will all be considered when determining the final penalty amount. Conversely, the law identifies several authorized bodies empowered to apply these fines within their respective sectors, including the Central Bank, the Competition Committee, the Tax Committee, and the Customs Committee, among others.

Flexible payment options and compensation for errors

To ease the financial burden on businesses, the bill introduces a 50% discount for companies that admit their guilt and pay the fine voluntarily within one month. Alternatively, businesses may opt for an installment plan, allowing them to pay the penalty in equal shares over a six-month period.

The draft law also strengthens the rights of companies to contest sanctions. Businesses have ten working days to submit objections before a case is heard, and they retain the right to appeal through higher authorities or the court system. In a significant move to ensure accountability among regulators, if a fine is found to be illegal or unfounded and subsequently overturned, the legal entity will be entitled to a full refund plus a 20% compensation fee paid from the state budget or extra-budgetary funds.

Addressing existing grievances

The necessity for such a law is highlighted by recent statistics from the Business Ombudsman's office. Between 2024–2025, the office received 269 complaints from entrepreneurs regarding financial penalties. To date, intervention by the Ombudsman has led to the cancellation of 79 penalty decisions, saving businesses approximately UZS 20.6 billion.

Public discussion on the draft law will remain open until May 28, allowing stakeholders to submit comments and suggestions before the bill moves forward in the legislative process.