14 October 2019

The new version of the Law on Currency Regulation is approved

The Senate of the Oliy Majlis of Uzbekistan at the 23rd plenary meeting approved the new version of the Law on Currency Regulation. This regulatory act is aimed at regulating relations in the field of foreign exchange transactions.

            In the new edition, in contrast to the previous one, the concept of “Asset repatriation on foreign trade operations” is introduced.

            According to the document, this concept includes the fulfillment of obligations of a non-resident partially or completely by:

* receipt of funds or goods (performance of works, provision of services) under the obligations of a non-resident;

* termination of a non-resident’s obligation by setting-off similar counterclaims;

* termination of a non-resident’s obligation by replacing the original obligation existing between them with another obligation between the same parties,

providing for a different subject or method of execution;

* receipt of insurance payment.

            In addition, residents of the Republic of Uzbekistan now have the right to open accounts and deposits in foreign currency not only in banks of Uzbekistan, but also in foreign countries.

            Legal entities, which are residents of the Republic of Uzbekistan, earlier could open and use accounts in banks outside Uzbekistan with the permission of the Central Bank, now it is necessary to have the decisions of the President or the government, or this should be specified in international treaties, which provide for the purpose of using accounts in banks abroad.

            Moreover, if foreign companies decide to open and use a Bank account on the territory of Uzbekistan, it will be compulsory for them to carry out activities in the territory of the country.

            In cases of a threat to the economic security of the country, the Cabinet of Ministers, in coordination with the Central Bank, may impose restrictions on foreign exchange transactions. But their validity period cannot exceed more than one year.

            The restriction on the maximum cash outflows in foreign and national currency is established by law in an amount equal to 100 million soums.