Annual Report on Exchange Arrangements and Exchange Restrictions 2005


International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of February 28, 2005)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: October 15, 2003.
Exchange Arrangement
CurrencyThe currency of Uzbekistan is the Uzbek sum.
Exchange rate structureUnitary.
Managed floating with no predetermined path for the exchange rateThe Central Bank of Uzbekistan (CBU) fixes the official rate on a weekly basis. Exchange rates are fixed relative to the dollar. Exchange rates for other currencies are determined from their cross-rates vis-à-vis the dollar in the international market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currency
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsThe use of foreign exchange for settlements and payments within Uzbekistan is prohibited, except for operations set forth in the Law on Foreign Exchange Regulation.
Payments arrangementsNo.
Administration of controlThe foreign exchange control authorities are the CBU, the MOF, the State Tax Committee, and the State Customs Committee. The Agency for Foreign Economic Relations (AFER) has the following main tasks: regulating foreign economic activities; protecting the economic interests of Uzbekistan in these activities; attracting foreign investments and providing for their effective use; developing trade, economic, and financial cooperation with foreign states and international institutions; creating conditions to improve the competitiveness of the national economy and its integration with the global economic system; and developing export potential. The Ministry of Justice registers enterprises engaged in foreign investment.
International security restrictionsNo.
Payments arrearsNo.
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 AFER.
Controls on exports and imports of banknotesEffective March 1, 2004, resident and nonresident natural persons are permitted to import and export domestic currency in an amount not exceeding 50 times the minimum wage; larger amounts require CBU permission. CBU permission is required for authorized banks to import or export domestic banknotes; imports and exports by other juridical persons are prohibited.
On exports
Domestic currencyYes.
Foreign currencyResidents may export foreign currency up to the equivalent of $2,000 without restriction; amounts in excess of $2,000 up to $5,000 with a certificate from an authorized bank; and amounts in excess of $5,000 with CBU permission. Nonresidents may export foreign currency up to the amount imported and declared to customs; exports in excess of this amount require documents from the CBU and an authorized bank confirming the right to export foreign currency.
On imports
Domestic currencyImports by residents and nonresidents are permitted up to an amount not exceeding 50 times the minimum wage.
Resident Accounts
Foreign exchange accounts permittedAll enterprises, regardless of the form of ownership, are allowed to open accounts in domestic and foreign currencies at various domestic banks. Individuals are also permitted to open foreign exchange accounts. Resident individuals may transfer abroad without restriction foreign currency on the basis of invoices, bills, and other documentary evidence. Transfers of foreign currency from accounts of individuals to accounts of individuals abroad may be effected up to the equivalent of $5,000 on a single transaction.
Held domesticallyYes.
Held abroadThe opening and use of foreign currency accounts abroad must comply with CBU procedures. Resident individuals, diplomatic and other representative offices of the Republic of Uzbekistan, and representative offices of Uzbek organizations abroad not engaging in business or other commercial activity may maintain such accounts only for the period of stay or activity abroad, after which the accounts must be closed and the balances repatriated.
Approval requiredYes.
Accounts in domestic currency held abroadResident legal entities may open these accounts according to CBU procedures.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be opened by nonresident individuals temporarily in Uzbekistan, diplomatic and other official representatives of foreign states, international organizations, and representative offices of foreign organizations that do not engage in economic or commercial activities.
Domestic currency accountsThe regulations governing foreign exchange accounts apply.
Convertible into foreign currencyYes.
Blocked accountsBalances in accounts of importers may be reserved (with their consent) by banks in amounts sufficient for anticipated purchases of foreign exchange.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrior to the conversion of funds, the AFER evaluates import contracts that are (1) financed by the budget, (2) financed by credits or loans mobilized by or guaranteed by the government, or (3) entered into by entities that are more than 50% state owned and are not secured by their own foreign exchange resources. All contracts must be registered with the foreign exchange control division in the territorial offices of the State Customs Committee within seven days after application is made to an authorized bank. Certain consumer goods require health and quality certification. This certification is performed by the state agency Uzstandart.
Preshipment inspectionImporters are entitled at their discretion to engage consulting firms for evaluation of contracts and execution of preshipment inspections or to apply to the AFER for evaluation of contracts based on the established procedure without a preshipment inspection. Preshipment inspection is mandatory for imports of meat and edible meat by-products; dairy products; oils, seeds, and fruits; alcoholic and nonalcoholic beverages; tobacco products; equipment, mechanical devices, and electrical machinery; and equipment imported for the implementation of projects of the Republic of Uzbekistan Investment Program under contracts exceeding the equivalent of $10,000 in total value.
Letters of creditDocumentary LCs are used in import settlements.
Import licenses and other nontariff measuresImports of medicines require import licenses from the Ministry of Health. Imports of weapons, precious metals and stones, uranium, and other radioactive substances require import licenses from the AFER. Imports of foreign movies, videos, and audio recordings require import licenses from the Ministry of Cultural Affairs and Sports. Imports of ozone-depleting substances require a permit from the State Environmental Protection Committee. Individuals importing goods for commercial purposes must be registered as individual entrepreneurs without establishment of legal entity and be authorized to engage in export-import operations and retail trade.
Foreign citizens must obtain a permit from the Ministry of Labor and Social Protection of the Population to engage in retail trade.
Positive listA positive list of consumer goods is maintained.
Negative listImports of the following are prohibited: printed matter, manuscripts, plates, drawings, photographs, photographic film, negatives, movies, video or audio products, phonograph records, and audio materials aimed at undermining state and social order; violating the country’s territorial integrity, political independence, or state sovereignty; or promoting war, terrorism, violence, national exclusivity, religious hatred, or racism and various forms thereof; and materials with pornographic content.
Other nontariff measuresTenders are held for imports of major food items (e.g., sugar and wheat). The Ministry of Health holds open tenders for imports of medicines needed to provide emergency medical assistance, and for imports of medicines for state needs. Closed tenders are held for imports of vaccines, serums, anesthetics, and narcotics.
Quantitative limits apply to imports of specific consumer goods by natural persons for personal use.
Import taxes and/or tariffsThe simple average customs tariff rate is 14.6% and the weighted average tariff rate is about 16.6%, based on total import volume, or 2.03%, based on total import volume, excluding duty-free items. Effective January 7, 2004, ad valorem customs duty rates are applied at four levels: zero, 5%, 10%, and 30% (previously, three levels applied: zero, 10%, and 30%) of the customs value. The zero level applies to listed machines, tools, processing equipment, computer hardware accessories and software, and timber and timber products (Cabinet Ministers Resolution No. 4). Of the 1,994 food group subheadings of the Foreign Economic Activity Commodity Nomenclature (at the nine-digit level), the zero rate applies to 1,011 subheadings, the 10% rate to 62, and the 30% rate to 750. One hundred subheadings (alcoholic and nonalcoholic beverages) are subject to combined duty rates. In addition, an excise tax of between 5% and 140% is levied on 54 product groups. A VAT of 20% is levied on all imported goods, excluding the following: (1) goods imported by individuals within limits for duty-free imports; (2) goods imported to provide assistance in the case of natural disasters, armed conflicts, accidents, or mishaps; to provide humanitarian aid and technical assistance; and for charitable purposes under the auspices of states, governments, and international institutions; (3) equipment and materials (products and services) imported by legal entities or by nonresidents with loans and grants from international and foreign governmental financial and economic organizations under treaties or agreements; and (4) pharmaceuticals and medical products. Effective March 12, 2004, this list was expanded to include supplies and technical equipment for the following: (1) investment projects financed with foreign credits guaranteed by the government; (2) newly constructed and renovated enterprises producing consumer goods or approved projects for building new or refurbishing operational plants, subject to verification by an authorized bank; (3) foreign investments as part of their authorized capital investments; (4) projects for the establishment of new production lines and modernization or retooling of existing production lines; (5) enterprises being privatized; (6) budget-supported organizations; and (7) the production of children’s shoes.
A levy amounting to 0.2% of customs value is collected for customs clearance of imported goods.
A special procedure applies for the collection of customs charges from natural persons. All payments of customs tariffs and fees, VAT (excluding excise duties) are paid in the form of a unified customs charge of 40% for food and 70% for nonfood items.
A customs fee of 20% is collected on imports of nonfood consumer goods produced in third countries and reexported for commercial activities by individuals and legal entities from countries bordering Uzbekistan.
State import monopolyImports of essential food products aimed at meeting public and state needs are effected by the Uzbeksavdo joint-stock company.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsFifty percent of proceeds in foreign currencies from exports of nontraditional goods and services must be surrendered to authorized banks (prior to the unification of the exchange market, this was effected at the over-the-counter market exchange rate). Microfirms and small enterprises are allowed to retain foreign currency proceeds from exports of their products and services.
Proceeds in foreign exchange from centralized exports of cotton fiber must be surrendered in full to the CBU. The foreign exchange proceeds of the following enterprises are exempted from mandatory surrender for a period of five years from the time of registration: (1) enterprises with foreign investments specializing in the production of consumer goods, where the share of foreign capital in authorized capital exceeds 50%; and (2) microfirms and small enterprises of their own products.
Financing requirementsSmall enterprises may export their products and services for cash foreign currency through a bank, with the proceeds credited to their accounts in accordance with the established procedure. Economic entities may export goods and services for convertible currencies without prepayment or the opening of an LC, provided that there is a guarantee from the buyer’s bank or an insurance policy protecting export contracts against political and commercial risk. Enterprises are allowed to export their goods on a consignment basis to their trading houses abroad, provided that foreign exchange proceeds are received within 180 days.
Documentation requirements
Letters of creditYes.
Export licensesExports of weapons, precious metals, uranium, and other radioactive materials require licenses from the AFER. Exports of listed animals and plants require licenses from the AFER that are issued on the basis of a permit from the State Environmental Protection Committee. Professional activities abroad by Uzbek citizens require a permit from the Ministry of Labor and Social Protection of the Population. Exports of scientific research products require licenses from the Center for Science and Technology under the Cabinet of Ministers, and exports of works of art require licenses from the Ministry of Cultural Affairs and Sports. Exports of antiques and works of art, livestock and poultry, meat, raw hides, scrap metal, waste of nonferrous metal, silkworm cocoons and raw silk, sugar, vegetable oil, wheat, and milling industry products are prohibited.
With quotasExports of crude oil, gas condensate, linen and cotton yarn, and ferrous metals are subject to export licensing within the limits of established quotas. Exports of sugar, vegetable oil, wheat and milling industry products, meat and poultry, raw hides, powdered milk, antiques, scrap and waste of nonferrous metals, silkworm cocoons, and raw silk are prohibited.
Export taxesA customs processing fee of 0.2% of customs value applies to exports.
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 travelPer diem limits apply to business travel allowances.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wagesNonresident individuals may convert wages received in domestic currency. Wages paid in foreign exchange may be remitted to accounts held abroad.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
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 requirementsProceeds from exports of services are subject to the same surrender requirements as those applying to proceeds from exports of goods.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
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 nonresidentsThe placement of securities of foreign issuers in Uzbekistan is based on annual quotas assigned by the Cabinet of Ministers, in accordance with the Law on Securities and the Stock Market.
Purchase abroad by residentsThese transactions are governed by the statute “On the Procedure for the Admission, Registration, and Placement of Securities of Foreign Issuers on the Territory of the Republic of Uzbekistan and of Uzbek Issuers Abroad.”
Sale or issue abroad by residentsYes.
On collective investment securitiesControls apply to all these transactions.
Controls on derivatives and other instrumentsn.r.
Controls on credit operationsAll credit and guarantee operations are subject to controls. Borrowings guaranteed by the government must be registered with the MOF; other borrowings must be registered with the CBU.
Controls on direct investmentThere are no restrictions on attracting foreign investment or on exercising foreign ownership. Similarly, foreign investments may be repatriated freely.
Outward direct investmentInvestors may establish enterprises abroad upon decision of the legal entity’s top management body. The AFER must be notified of the registration of an enterprise abroad.
Inward direct investmentInvestors may establish foreign investment enterprises (FIEs), which are a form of direct investment, after their registration with the Ministry of Justice and its regional offices. Enterprises may acquire FIE status subject to the following conditions: (1) the authorized capital of the enterprise must be at least the equivalent of $150,000; (2) one of the participants in the enterprise must be a foreign legal entity; and (3) the share of foreign investment must be at least 30% of the enterprise’s authorized capital.
Controls on liquidation of direct investmentThe Ministry of Justice and its regional offices monitor the FIEs’ compliance with their statutory obligations and the procedures for their registration and liquidation.
Controls on real estate transactions
Purchase locally by nonresidentsThe procedures for nonresidents’ acquisition and sale of real estate are established by the cabinet of ministers.
Sale locally by nonresidentsThe procedures relating to local purchases by nonresidents apply.
Controls on personal capital transactions
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 exchangeThese transactions are subject to the limit on the open foreign exchange position.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsEffective February 1, 2005, reserve requirements apply to deposits of legal entities in domestic or foreign currency. Previously, reserve requirements applied only to such deposits in domestic currency.
Liquid asset requirementsYes.
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 2004
Arrangements for payments and receiptsMarch 1. Resident and nonresident individuals were permitted to import and export domestic banknotes up to the equivalent of 50 times the minimum wage; larger amounts required CBU permission. CBU permission was required for import or export of domestic banknotes. Other legal entities were prohibited from conducting such transactions.
Imports and import paymentsJanuary 7. The number of ad valorem customs rates was increased to four (zero, 5%, 10%, and 30%) from three (zero, 10%, and 30%), with the zero rate being applicable to listed machines, tools, and processing equipment.
March 12. The list of imports on which the VAT does not apply was expanded to include supplies and technical equipments for some projects.
Changes During 2005
Capital transactions
Provisions specific to commercial banks and other credit institutionsFebruary 1. Reserve requirements applied to both domestic and foreign currency deposits of legal entities.

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