Chapter

UZBEKISTAN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Uzbekistan is the Uzbek sum.
Exchange rate structure
UnitaryThere were three exchange rates: (1) the official exchange rate, (2) the exchange rate prevailing on the Uzbek Republican Currency Exchange, and (3) the over-the-counter exchange rate. Effective May 1, 2000, the multiple exchange rate system was unified. Purchases and sales of foreign exchange are effected at the exchange rate established on the basis of supply and demand conditions on the domestic foreign exchange market.
Classification
Managed floating with no preannounced path for the exchange rateThe official rate is fixed by the Central Bank of Uzbekistan (CBU) on a weekly basis, taking into account current rates in the exchange and over-the-counter currency markets. Exchange rates for currencies that are not traded are determined from cross rates in the international market.
Exchange taxEffective January 15, 1999, Uzbekistan introduced a 5% tax on purchases of foreign exchange. The following purchases of foreign exchange are exempt from this tax: those effected from budgetary resources, those used for repayment of principal and interest on credits in foreign currency guaranteed by the government, and those authorized by banks for subsequent sale on the domestic foreign exchange market.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which Uzbekistan maintains bilateral payment agreements are effected in accordance with the terms of the agreements. Transactions with other countries are settled in convertible currencies.
Payment arrangements
Bilateral payment arrangements
OperativeUzbekistan maintains agreements with Russia and Ukraine.
InoperativeAgreements with Belarus, Indonesia, the Islamic Republic of Iran, Kazakhstan, Latvia, Malaysia, and Moldova are inoperative.
Regional arrangementsYes.
Clearing agreementsThese are effected on the basis of intergovernmental agreements.
Administration of controlTransactions in foreign currency are administered by the CBU and authorized banks. The primary responsibilities of the Ministry of Foreign Economic Relations (MFER) are to regulate foreign economic activities and to represent Uzbekistan in foreign economic interests; to attract foreign investments and provide for their effective use; to develop foreign economic relations; and to certify imports and exports. The MFER implements external trade policy through the issuance of licenses and quotas. The Ministry of Justice registers enterprises with foreign investments.
International security restrictionsNo.
Payment arrears
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeYes.
Controls on external tradeGold is imported and exported on the basis of licenses issued by the MFER.
Controls on exports and imports of banknotes
On exports
Domestic currencyn.r.
Foreign currencyForeign exchange not exceeding the equivalent of $1,500 may be exported without restriction. The export of amounts in excess of this requires confirmation that the foreign exchange was held in an account at an authorized bank that has a general license to operate in foreign exchange.
On imports
Domestic currencyn.r.
Foreign currencyIndividuals may import up to $10,000 in banknotes without restriction. Imports of foreign banknotes above that amount are subject to a customs charge of 1% of the amount in excess of $10,000.
Resident Accounts
Foreign exchange accounts permittedFollowing the simplification of procedures for the opening of foreign exchange accounts for small- and medium-size businesses on March 4, 2000, all enterprises, regardless of ownership, were allowed to open accounts in domestic and foreign currencies at various banks, beginning June 1, 2000.







Individuals are permitted to open bearer foreign exchange accounts.
Held domesticallyYes.
Held abroadThe CBU may approve the opening of accounts abroad by individuals and legal entities that are residents of the Republic of Uzbekistan. CBU approval is not required for accounts opened by resident individuals during temporary stays abroad.
Accounts in domestic currency convertible into foreign currencyImporters must present a preregistered contract before they may purchase foreign exchange.
Nonresident Accounts
Foreign exchange accounts permittedThe opening, with prior CBU approval, of bearer foreign exchange accounts is allowed.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Approval requiredImporters must present a preregistered contract before they may purchase foreign exchange.
Blocked accountsDe facto local currency accounts of importers may be blocked (with the consent of the latter) by banks while awaiting conversion.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionPreshipment inspection is performed at the importers’ request as an alternative to ex ante registration of import contracts.
Letters of creditYes.
Import licenses used as exchange licensesAll imports are subject to prior contract registration except imports from the importers’ own source of foreign exchange.
OtherYes.
Import licenses and other nontariff measuresImports of medicines require import licenses from the Ministry of Health; imports of weapons, precious metals, uranium, and other radioactive substances require import licenses from the MFER; imports of foreign movies and videos require import licenses from the Ministry of Cultural Affairs.
Negative listThe importation of publications, manuscripts, video and audio equipment, and photographs aimed at undermining state and social order are prohibited.
Licenses with quotasYes.
Other nontariff measuresTenders are held for imports of major food items (e.g., sugar and wheat).
Import taxes and/or tariffsThe average tariff rate is 29%; the rate on most consumer goods is 30%. The minimum import duty is 3%. In addition, excise taxes ranging from 20% to 35% apply to 20 groups of imported consumer goods. A 20% charge is applied to imports of goods bought in duty-free shops in excess of $1,000. Goods shipped in by shuttle traders are subject to a charge of 50% of the value in excess of $1,000. The rate for goods sent to individuals is 50% without application of limits established for duty-free imports.
Taxes collected through the exchange systemThere is a 5% tax on the purchase of foreign exchange to effect imports, except in the case of the acquisition of foreign exchange using budget resources.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsEffective January 1, 1999, proceeds in foreign currencies from nontraditional exports of goods and services are subject to a 50% surrender requirement to authorized banks at the over-the-counter bid rate.







Proceeds in foreign currencies from centralized exports, including gold, are subject to a 100% surrender requirement to the CBU at the over-the-counter foreign exchange market purchase rate.
Financing requirementsGoods may be exported provided that a prepayment has been made, an LC has been opened, or a foreign bank guarantee has been obtained.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
Export licensesExports of weapons, precious metals, uranium, and other radioactive substances require licenses from the MFER; exports of research data require licenses from the State Committee on Science and Technology; and exports of works of art require licenses from the Ministry of Cultural Affairs.
With quotasExportation of crude oil, gas condensate, lint and cotton fiber, and ferrous metals is subject to export licensing in the amount of established quotas. Exports of sugar, alcohol, vegetable oil, wheat and flour products, meat and poultry, tea, raw hides and skins, dried milk, and antiques are prohibited.
Export taxes
Other export taxesEnterprises producing and exporting goods to CIS countries in freely convertible currencies are exempt from VAT and excises. Excise taxes apply to exports of certain types of goods. An excise tax is applicable to alcoholic and nonalcoholic beverages, construction materials, and cigarettes exported by trading companies.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wagesn.r.
Credit card use abroad
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsSurrender requirements also apply to proceeds from exports of services.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesn.r.
On money market instrumentsn.r.
On collective investment securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsn.r.
Controls on credit operationsAll credit operations are subject to controls.
Controls on direct investment
Outward direct investmentEnterprises established abroad with the participation of Uzbek investors must be registered with the MFER.
Inward direct investmentEnterprises may establish joint ventures as foreign direct investment upon registration with the Ministry of Justice. Foreign equity capital participation is allowed up to 100%. A foreign participation of at least 30% is required for access to fiscal incentives.
Controls on liquidation of direct investmentYes.
Controls on real estate transactions
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital movements
Loansn.r.
Gifts, endowments, inheritances, and legaciesn.r.
Settlement of debts abroad by immigrantsn.r.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeBanks are allowed to make loans in foreign currencies, subject to the limit on the foreign currency open position.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidentsn.r.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 15. A 5% tax on purchases of foreign exchange was imposed.
Exports and export proceedsJanuary 1. A surrender requirement of 50% on proceeds from decentralized exports to authorized banks was established for all enterprises, regardless of form of ownership.
Changes During 2000
Exchange arrangementMay 1. The multiple exchange rate system was unified.
Resident accountsMarch 4. The procedures for opening foreign exchange accounts were simplified for small- and medium-size businesses.
June 1. All enterprises, regardless of ownership, were allowed to open accounts in domestic and foreign currencies at various banks.

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