Public-Private Partnership

Annual Report for Members 2019

Dear Members and Friends, Uzbekistan’s plans for wide-spread privatization and pro- motion of the local capital market. It has been an exciting and challenging year with a steady This issue features Public-Private-Partnerships stream of changes accompanied by new laws, rules and (PPPs), and we think you will find the articles and in- regulations designed to stimulate and promote innova- terviews to be of interest as they portray the oppor- tion, new foreign direct investment, education, tourism, tunities PPPs present for the private sector. regional development and re-integration with the world The New Year promises to be just as busy and dyna economy. mic, and we wish all of you the very best for the Holiday The leading International Financial Institutions (IFIs) Season and the advent of a prosperous year ahead. are once again at the forefront of new ways to stimulate development while also supporting the Government of The Editorial Board

WWW.AMCHAM.UZ 1 Feature Public Private Partnerships Advantages and Disadvantages

The prospect of Public Private Partnerships (PPPs) in owned enterprises are expected to be self-sustaining and Uzbekistan is very exciting as it opens up a wide array of even profitable, many are not. A PPP will be expected to be opportunities for private investors in areas that have tra- profitable and to return dividends to its shareholders. ditionally been reserved for state-owned enterprises and The structure and composition of a PPP may take many the public sector. forms and/or shapes, including: In most countries, PPPs have traditionally been in infra- PP Build-Own-Transfer (BOT)—where one party builds the structure-related projects, such as highways, airports, rail- facility, one or both own it, and after an agreed-upon roads, bridges; and in utilities, including power generation, period of time, it reverts/transfers to one of the parties, water, wastewater, and recycling facilities. More recent PPPs namely the State. have included renewable energy based on wind, solar and PP Design-Build-Own (DBO)—where one of the parties wave facilities. (probably the private investor) designs and builds the In assessing the merits and advantages of a PPP, we can facility, which is then transferred into a PPP where both start with the fact that it opens-up areas and sectors of the private investor and the State are joint owners. the Uzbek economy that have been heretofore off-limits PP Design-Build-Finance-Own-Maintain (DBFOM)— a more and reserved for the public sector. It also provides a new complicated structure where one party designs and opportunity for financial institutions—both public and pri- builds the facility that is financed by one and/or both, vate—to finance such projects, as well as for manufacturers, owned by both, and maintained/operated by one of the contractors and service providers to sell goods and servic- parties. es to entities that will operate independently of public bu- The above examples show just some of the variants or reaucracy. forms a PPP can have. However, several questions remain The overall advantages of PPPs are many and the advent and need to be considered: of PPPs in Uzbekistan is certain to attract both local and fo PP Which of the parties is responsible for the financing, or reign investors. However, let us not forget that while state- will both be responsible?

2 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN PP Will the PPP be self-standing in that there is no implic- pected to provide? In many such cases there will be a need it State guarantee? for an appraisal, which would have to be in accordance with PP Will the PPP be able to draw on credits from the interna- pre-agreed terms and conditions. tional financial institutions (IFIs) such as the World Bank, While we have discussed profits, we must also discuss Asian Development Bank, and Asian Infrastructure and losses and how those are shared. The same is true for capi- Investment Bank? tal expenditures once the PPP is established and operating. All of these questions are critical issues that need to be Who carries what risk and/or obligation? All of these ques- understood and addressed from the very beginning. If the tions are part of the discussions and agreements prior to PPP can use such credits from the IFIs, it will be a very attrac- the formal establishment of the PPP. tive incentive/inducement for private investors, as the terms In general terms, the State brings access to assets and/ and conditions of IFI loans are generally far more attractive or opportunities that have not been available to private in- than those provided by private sector financial sources. vestors and sources of credit, whereas the private investor While reviewing the finances of a PPP, we must keep in brings a combination of money, access to credit, manage- mind that the private partner is in business to make a prof- rial experience, technology, and marketing. it, and this needs to be clearly understood. Many PPPs have Private investors also recognize that government prior- failed because they had not fully dealt with this from the ities may change causing disruptions that could affect the beginning. Let us cite as an example: a PPP that is providing PPP. This could in turn require renegotiation of the basic pre- a product or service for the public good, such as an elec- cepts of the PPP, something to which many foreign investors tric utility. The State intends to supply electricity to industry are averse. However, should this happen, or should it be nec- and the general public at a cost that is reasonable and af- essary, the PPP should have clear rules for disengagement fordable. The private inves- or exit of either party. A good tor may share that same in- example of this would be a If the PPP can use credits from IFIs, it will be a very at- tent, but they want to do so PPP utility where one par- tractive incentive/inducement for private investors, as while earning a profit. Here ty (usually the private inves- the terms of IFIs loans are generally more attractive than is where the State interests tors) wants to raise tariffs those provided by private sector financial sources and those of the private in- while the other (namely the vestor may differ. State) wants to contain any The same could apply to a PPP that operates a toll road. increase and may go so far as to impose a cap or ceiling on The State wants to up-grade infrastructure and improve con- any increase even if it means operating the PPP at a loss. This ditions for commercial and personal transport, and would would certainly create an issue for the private investors. A largely be satisfied if the PPP was self-sustaining, while the suitable way of dealing with such situations needs to be es- private investor will want to earn a profit so that the PPP can tablished and built into the PPP agreements. pay a dividend. These are fundamental differences that need When well structured, a PPP can bring a string of advantag- careful consideration and agreement if the PPP is to succeed. es ranging from higher quality, timely completion, risk transfer, The expectations of each party for return on investment (ROI) capital access, and revenue—especially in countries where must be understood and accepted from the very beginning. PPPs have operated lotteries, casinos, and parking garages. Another area of opportunity is those situations where In Uzbekistan, an area with great opportunity is health- the State has an existing facility or object that would lend it- care, where PPPs could function in a number of ways from self to a PPP. Examples of this are hospitals, rail lines, or fac- asset management and delivery of specialized medical ser- tories. In the case of Greece, the port of Piraeus was turned vices, to forms of healthcare insurance providers. into a modified PPP with a Chinese investor. In these sit- As private investors in PPPs are certain to be looking for an uations, the State leases the asset to the private investor, adequate return in their investment, they are also interested who then operates it (with upgrades and improvements), in setting or determining a method and/or means of exiting— earning a profit that is then shared with the State under an be it by a sale-back to the public sector partner, sale to an- agreed-upon formula. In such cases it is usual for both par- other investor, or by taking the PPP public by means of a pub- ties to agree to a term length of 10, 15, 20 or more years, af- lic offering and listing on the stock exchange. All of these are ter which the asset returns to State control. certainly possible for a well-managed, successful PPP. From the above we can see that one of the more com- In summary, PPPs are an excellent opportunity for the plicated aspects of PPPs deals with how revenues and prof- Government of Uzbekistan to attract non-traditional sourc- its are distributed and/or shared. This also correlates with es of private investment. Key to a successful PPP is to as- the investment of each of the parties, be it equity or debt. sure from the very beginning that the objectives of each of Who provides what/which and how much? As the state may the parties—public and private—are mutually understood contribute an existing asset—such as an airport—what is the and agreed upon, resulting in an alignment that will contin- value and how much equity will the private partner be ex- ue throughout the life of the PPP.

WWW.AMCHAM.UZ 3 Feature Public-Private Partnership Strategy Overview Eldor Mannopov, Fayoziddin Kamalov, Dentons Tashkent

Introduction which entails public-private partnership. This article offers a brief overview of PPP regulations in Uzbekistan based on Uzbekistan is currently facing a number of unresolved so- the law “On Public-Private Partnership” signed by President cio-economic issues that have left a high financial burden on of the Republic of Uzbekistan Shavkat Mirziyoyev on May the government. To this end, the government of Uzbekistan 10, 2019. sees great opportunities in promoting private investment in various forms within the public infrastructure. One such I. Overview form of participation is public-private partnership (PPP). Referred to in the Strategy of Action for Five Priority Areas It is important to determine what PPP is before proceeding of Development of the Republic of Uzbekistan for 2017– further on its regulation in Uzbekistan. The term PPP may be 2021, PPP is seen as a necessary tool for reforming the state associated in the popular consciousness with any form of management system, improving the social protection sys- interaction between the state and business to address so- tem and deregulating the economy. One of the reasons the cial and economic issues. However, in a narrow sense, as a PPP framework is attractive is the fact that the government term of art, public-private partnership is defined by the law can retain control over a facility, as well as the implementa- as a “legally arranged cooperation of public partner and pri- tion of the project and provision of the public service, while vate partner for a definite period based on pooling their re- using the private partner’s experience and effective man- sources for implementation of a public-private partnership agement methods and technologies. These factors ensure project.” The definition of PPP provided in the law lacks one lower project implementation costs and higher socio-eco- important aspect, which should be implied in any PPP proj- nomic benefits when compared to investment-based lease ect—distribution of risks. The latter involves, on the one hand, or privatization. transfer of more risks to the private partner as compared Indeed, public-private partnership is a flexible legal in- with the transfer of risks in public procurement of goods, strument, which allows the implementation of projects in work or services, and on the other hand, transfer of consid- various spheres of public infrastructure. The most recent erably fewer risks as compared with investment-based lease example is the 100-megawatt utility-scale solar plant in the and, certainly, privatization. The rationale behind such dis- Navoi region implemented under the Scaling Solar program, tribution of risks is that a certain risk may be allocated to the party with the best ability to handle it. In the absence of this aspect, other forms and types of public-private interaction that are not directly excluded from the scope of the law, such as privatization agreements, investment agreements, lease agreements, as well as public-law forms of interaction, including agreements on subsidies, special economic zones, and other special investment regimes, fall under the definition of PPP. The law provides that the following may be PPP facilities: property, property complexes, public infrastructure, works (services), and innovations. At the same time, the law does not expressly stipulate that PPP facilities should serve a certain public purpose or provide certain benefits for the society. In this regard, it is to be borne in mind that PPP is a mechanism for developing public and municipal

4 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN infrastructure and not an instrument of state support for by-laws or policies and guidelines developed by the PPP private commercial projects. Currently, the lack of regula- Agency. The importance of this stage cannot be overval- tory restrictions on the scope of acceptable PPP facilities ued, as success of a PPP project largely depends on proper may amount to a high risk of abuse cases resulting from ex- preparation, which includes identifying all potential issues ercise of granted rights, exemptions, budgetary funds, and and risks for the whole life of the project, determining and real estate for construction of private facilities that are not considering the interests of all project stakeholders, and public infrastructure. preparing informed technical and operational decisions. Importantly, the Republic of Uzbekistan is defined as the The structuring of PPP project commences after con- public partner, represented by state bodies and other orga- cept approval by various bodies depending on the total val- nizations, authorized by the Cabinet of Ministers, as well as ue of the potential PPP project. Thus, the concept should their associations. This effectively means that the state it- be approved by: self is responsible for proper performance of the PPP agree- PP a relevant government authority—if the total project va ment executed by relevant ministries, authorities and state- lue is up to 1 million USD; owned enterprises. In turn, commercial entities registered PP a relevant government authority by agreement with the in Uzbekistan or abroad and their associations may act as PPP Agency—if the total project value ranges from 1 mil- a private partner. At the same time, the law (as distinct from, lion to 10 million USD inclusive; for example, a similar law in Kazakhstan) does not expressly PP the Cabinet of Ministers—if the total project value ex- envisage application of institutional PPP mechanisms, i. e. in- ceeds 10 million USD. corporation of special purpose vehicles by the public part- The structuring and drafting phase of the PPP process ner and private investor for the purposes of implementation cycle is crystalized in the tender documentation developed of a PPP project. by the public partner and approved by the PPP Agency. Notably, the tender documentation will specify the loca- II. Development of a PPP project tion of the PPP facility, its main technical and economic in- dicators, the project’s timeline, and a draft PPP agreement. Currently under the law, the PPP process cycle may be di- vided into four stages: 2. Selection of private partner

1. PPP project initiation The law provides for a tender as the principal mechanism for the selection of a private partner. The tender may be a The PPP project may be initiated by the public partner or single-stage process (PPP project value < 1 million USD) or private party (legal entity or sole entrepreneur). The con- two-stage process (PPP project value > 1 million USD). In cept of the PPP project is the principal document at the ini- addition, the law allows for the execution of the PPP agree- tiation stage, regardless of whether the PPP project is initi- ment without tendering, based on direct negotiations, in ated by the public or private party. The concept of the PPP cases: project is developed by the initiator and contains a descrip- PP of ensuring the defense capability and security of the tion, costs, specifications and rationale for the implemen- state; tation of the PPP project. PP where a certain person has exclusive rights to the re- When a private person initiates the project, the con- sults of intellectual activity, other exclusive rights, land, cept should be submitted to the potential public partner, another real estate object and other property, which is which further decides on the implementation of the project an indispensable condition for the implementation of based on such a concept. The law does not define any ap- the project; praisal criteria for the concept and does not provide mech- PP of enactment of the relevant decree or resolution of the anisms for the feasibility study of the project. These activ- president. ities are usually carried out at the stage of preparation and Direct negotiations are also possible in cases where the approval of the project concept and are necessary to refine project concept proposed by the private initiator and ap- the project’s scope, assess the economic efficiency of the proved by the relevant government authority remains “un- project, its technical and commercial feasibility (which in- claimed” by other potential private partners. Otherwise, the cludes bankability), socio-economic effects, environmen- public partner holds a tender and reimburses the private tal impact, and price affordability for the public sector. partner for the costs associated with preparing the PPP Moreover, it remains unclear how the public partner will project. Thus, the law does not provide for any benefits to decide on the implementation of the project without con- the promoter of the PPP project, but merely envisages the ducting cost and benefit analysis and ensuring that the proj- reimbursement of its costs related to the PPP project de- ect offers adequate value for taxpayer money. It is expect- velopment up to an amount not exceeding one percent of ed that these aspects will be covered in the subsequent the project’s total value.

WWW.AMCHAM.UZ 5 Feature

3. Execution of a PPP agreement in accordance with current legislation. Based on this provision, it can be concluded that parties to PPP agreements A PPP agreement between a public and private partner have access to both judicial and arbitral methods for re- is concluded for a period of between three and 49 years. solving disputes. The law lists the mandatory data and provisions to be contained in the PPP agreement, the grounds and procedure 4. Monitoring for its termination or amendment, the procedure for transferring property and land to a private partner, as well as the The PPP Agency monitors the implementation of the PPP procedure for transferring ownership of the PPP facility. agreement by both private and public partners. To this end, At the same time, the law provides that the PPP agree- the private partner should provide the agency with access ment should be signed by the winner of the tender. to the PPP facilities, and the public partner should provide This provision effectively means that the law restricts a report to the agency on the implementation of the PPP the use of special purpose vehicles, i. e. the company in- project every six months. The mechanisms for the moni- corporated by the bidder (or consortium), which will exe- toring of PPP agreement by the parties thereof is not cov- cute and perform the PPP agreement in case of winning ered by the law and, therefore, should be expressly stipu- the tender. Such restriction contradicts the fundamen- lated in the PPP agreement itself. tals of project finance, which is predominantly chosen by the investors as financing mechanism for PPP projects. III. Financing and funding of PPP projects Alternatively, the tender participants may be forced to in- corporate special purpose vehicles before submitting the The law provides that lenders for a PPP project may exer- tender proposal, which entails bearing all associated costs cise their rights by becoming a party to the PPP agreement. without their further reimbursement in case of failure. This approach is unusual and contradicts international best Interestingly, the law does not contain mandatory rules practices, whereby the lenders conclude direct agree- prescribing that PPP agreements should be governed ex- ments with the participants of the project. A lender’s par- clusively by Uzbek law. At the same time, the law establish- ticipation in the PPP agreement is fraught with risk assump- es that disputes in the field of PPP are subject to resolution tions for the lenders to the extent that it may be disadvan-

PPP process cycle

6 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN

tageous for the bankability of the projects. Furthermore, Concerning funding, the law does not limit the payment the law does not stipulate the procedure for lenders to en- mechanism for PPP projects and allows both availability ter into a PPP agreement, which results in the additional risk payments and volume payments. of legal uncertainty for the lenders. At the same time, the law expressly stipulates that the IV. Transparency and monitoring private partner may provide any kind of security to its cred- itors, including those related to the rights and assets of The law provides for the PPP Agency to establish a public- the PPP project. However disconcerting, the law expressly available registry of PPP projects containing information ly prohibits transfer of the land plot allocated for the proj- on ongoing PPP projects. Moreover, the law establishes that ect to the third parties, which does not comply with the in- the concepts of PPP projects, information on the criteria ternational best practices of PPP project implementation for selecting a private partner, the main provisions of the and may result in the increased cost to the public sector. PPP agreements, as well as other information, should be Usually, parties to a PPP agreement specify the possibili- published on the websites of the PPP Agency and the pub- ty of transferring a land plot, PPP facility or other proper- lic partner. ty into the possession and use of third parties if it does not contradict the objectives of the project and does not cre- Conclusion ate obstacles to the normal operation of the infrastructure facility. In addition, a PPP agreement may require that con- Enactment of the law is a logical step in the context of the sent of the public partner or authorized body is needed for interest of the Republic of Uzbekistan in the development such a transfer to occur. However, a complete ban on sub- of PPP for improving public infrastructure. In order for letting and other transfers of a land plot to third parties will such capital-intensive infrastructure projects to be sus- lead to an unjustified reduction in the sources of financing tainable it is necessary for the state to have unambiguous for the project and, accordingly, inefficient management of and harmonized legislation in this sphere, which should the land plot or assumption of a part of the project financ- include all essential guarantees for investors and banks, ing risks by a public partner. as well as a stable economic and political situation in the In addition to the private partner’s equity capital and fi- region and in the country as a whole. However, even with nancing provided by the lenders, the private partner may such legislation in place, the human factor remains deci- receive financial support in the form of subsidies, budget sive. In this regard, the private partner’s experience, qual- loans, loans, grants, credit lines, government guarantees, ifications and reputation, and the public partner’s quali- tax benefits, and other kinds of benefits. fied project team are crucial.

WWW.AMCHAM.UZ 7 Invitations Exhibitions IN UZBEKISTAN FIRST half 2020

Date Exhibition Organizers Venue

25–28/02 BuildTech 2020 Iteca Exhibitions Uzexpocentre

25–28/02 UzBuild Tashkent 2020 Iteca Exhibitions Uzexpocentre

11–13/03 AgroWorld Uzbekistan 2020 Iteca Exhibitions Uzexpocentre

01–03/04 UzFood 2020 Iteca Exhibitions Uzexpocentre

09–10/04 Market of Metals of the Central Metal Supply and Sales City Palace Hotel Asia 2020 21–23/04 Stomatology Uzbekistan 2020 Iteca Exhibitions Uzexpocentre

21–23/04 AptekaExpo Central Asia / Iteca Exhibitions Uzexpocentre TechPharm 2020 21–23/04 TIHE 2020 Iteca Exhibitions Uzexpocentre

29/04– MebelExpo Uzbekistan 2020 Iteca Exhibitions Uzexpocentre 01/05 13–15/05 Power Uzbekistan 2020 Iteca Exhibitions Uzexpocentre

13–15/05 Oil & Gas Uzbekistan—OGU 2020 Iteca Exhibitions Uzexpocentre

27–29/05 AgroExpo Uzbekistan / Agrotech JSC “Uzexpocentre”, IFWexpo Uzexpocentre Expo 2020 Heidelberg GmbH 11–13/06 BeautyExpo Uzbekistan 2020 EXPO POSITION Youth Creativity Palace

13–15/06 KinderExpo Uzbekistan 2020 EXPO POSITION Youth Creativity Palace

8 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN Interview Cindy Malvicini, Asian Development Bank

The law “On Public-Private Part lowing its new 5-year development The requirement to follow a compet- nership” was adopted by the strategy. The government’s approach itive bidding procedure in PPP proj- Uzbeki stan Legislative Chamber includes fostering Public-Private ects will help increase competition on April 26, 2019 and approved by Partnerships (PPPs) in the country. in developing infrastructure. The PPP Senate on May 3, 2019. The law es- PPPs are viewed by the authorities as law aims to increase transparency, tablishes the procedures for the a viable option to attract investments fairness, and competition among in- development of public-private to various sectors of the economy as vestors, guides government agencies partnership (PPP), provides finan- such investments can play an impor- that prefer to use PPP approach, and cial support mechanisms, and sti tant role to fill in the large infrastruc- allows the public to get good value for mulates for rights and obligations ture investment gap in Uzbekistan. the money. However, due to its nov- of the participants. It is expected The benefits of partnering with the elty, the law may still require further that implementation of the PPP private sector are clear. The private amendments once it is tested in spe- Law and the introduction of the sector is often considered to pro- cific PPP projects. This is an important PPP Agency (a one-stop shop for vide greater efficiency than the public and very positive step toward a mar- investors) will simplify the proce- sector, when managing infrastructure ket-oriented economy. dure and enable more vigorous in- projects and delivering infrastructure vestment in public infrastructure. services. By investing in new technolo- The law also says that the private International Finance Insti tu gies, bringing innovative solutions, and investor can initiate the PPP project tions (IFIs) were heavily involved encouraging more transparent orga- and come to the government with a in the development of the PPP nizational structures, the private sec- proposal. How does this work? concept in Uzbekistan. To learn tor has the potential to improve oper- more, AmCham Executive Director ational efficiency as well as asset and That is correct. We are aware of several Tatyana Bystrushkina interviewed service quality. private investors that submitted PPP Cindy Malvicini, Country Director ADB encourages project financing project proposals to the government. of the Asian Development Bank’s in cooperation with the private sec- Such project proposals are called “un- Uzbekistan Resident Mission (ADB). tor in all its core operations and start- solicited proposals.” The PPP law now ed engaging with the government sets the rules for review of such “unso- We know that ADB was involved in by providing technical assistance licited proposals.” supporting PPP development in to build capacity in PPP area. ADB is Now, once the government re- Uzbekistan. With regard to the new working with the PPP Development ceives the unsolicited proposal, its PPP Law adopted in May, could you Agency (PPPDA) since its inception to authorized agency will review the pro- please tell us more about how the strengthen the agency’s capacity and posal. If the proposal is acceptable, new law and procedures are ex- help to develop an adequate legal and the project concept is put in the pub- pected to impact potential inves- regulatory framework for PPPs. lic domain for review. Other private tors and make investing in projects With the adoption of PPP Law in sector entities are invited to express in Uzbekistan attractive? 2019, the authorities have signaled their interests for such PPP project. In to the private sector their willingness cases of interest by other private en- In the last two years, the Government to allow private sector participation tities the PPP project will go through of Uzbekistan expressed its desire to in key sectors and their openness to competitive process to test the open its economy and encouraged design, tender and finance infrastruc- price. This process is called a “Swiss investment by the private sector fol- ture projects using a PPP approach. Challenge.” Upon receiving bids, the

WWW.AMCHAM.UZ 9 Interview

experience in supporting its develop- Management Unit Head, where she ing member countries’ governments managed policy dialogue; designed in improving the enabling environment and managed infrastructure projects for PPPs, i. e., policy, legal and regulato- in irrigation, integrated water resourc- ry, institutional and financial environ- es management, and flood management for PPPs, as well as advising spe- ment; and led climate change pro- cific PPP projects. gramming for several countries. She Now, ADB is helping the govern- began her career at ADB as the Head ment in developing a strong legal of the Information and Disclosure and regulatory framework. The PPP Unit in the Department of External Development Agency (PPPDA) is Relations (now called the Depart tasked by the government to facilitate ment of Communications). and coordinate the PPP project de- Before joining ADB, Ms. Malvicini velopment process, including project Ms. Cindy Malvicini is a Count worked for the New York State Water screening, reviewing feasibility studies ry Director of the Asian Deve Resources Institute from 1992–1995, as well as drafting tender documents lopment Bank’s Uzbekistan Re facilitating agreements between up- and PPP contracts. Staffed with both sident Mission. stream watershed communities and public and private sector profession- Ms. Malvicini leads ADB opera- New York City. She also worked for als, PPPDA also supports the line min- tions in Uzbekistan and supervis- Cornell University’s administration istries to identify and develop a PPP es the development and imple- as a Change Management Advisor project pipeline and bring the projects mentation of the bank’s Country from 1996–1999, and conducted to public tender. Operations Business Plan for 2019– research in the Philippines as part ADB is the lead partner for PPPDA 2021 and the Country Partnership of the Conservation Farming for and works with the agency to devel- Strategy. The plan and strategy aim the Tropical Uplands Program from op its technical capacity to under- to support the country’s long-term 1994–2003. Ms. Malvicini was a con- take the above tasks successfully. We development needs through infra- sultant with ADB from 2001–2005 have a technical assistance grant of structure investment, human capi- working on core bank policies, such 1.3 million USD for this initiative. ADB tal and private sector development, as ADB’s first Environment Policy, helped to bring an experience pro- and improved regional integration framework for ADB—Government— fessional as advisor to PPPDA. He is and social inclusion. NGO cooperation, and the bank’s a former Head of Bangladesh PPP Ms. Malvicini, a national of the Public Communications Policy. Development Center and works to- United States, joined ADB in 2005 Ms. Malvicini graduated from gether with the staff of PPPDA, line and has held numerous lead posi- Cornell University in New York in ministries, and MOF to build PPPDA’s tions in operations and communica- 2000 and Wheaton Graduate operations and develop the pipe- tions. From 2007 to 2014, she worked School in Illinois in 1988. She has line of PPP projects. The objective is as a Water Resource Specialist in master’s degrees in agriculture (wa- to build PPP capacity in the govern- ADB’s South Asia Department, and ter resources management) and in- ment. Our technical assistance also until 2017, she served as Project tercultural studies. supports the development of a dedicated web-portal for PPPDA that provides relevant information to pro- original proponent is given an oppor- Uzbekistan we have been working with spective investors. tunity to match the lower-bid price of the government to improve the legal In addition, ADB is providing sup- the competitor. If the original project and regulatory framework in energy, port to build the key pillars of a PPP- proponent does not match the lowest transport, urban services and other enabling environment. ADB is en- bid, then the project is awarded to the sectors. We believe that the private gaged by the government to provide project proponent with a lower price. sector may provide greater efficiency technical advisory services to evalu- than the public sector when managing ate soundness and bankability of po- Tell us about ADB’s role in the de- infrastructure projects and delivering tential PPP projects. These projects velopment of the PPP concept in infrastructure services. will serve as model PPP projects that, Uzbekistan? Our dialogue with the government in addition to attracting private sector on PPPs started in 2018 given our sup- participation, are expected to build ADB supports private sector devel- port to reforms in key infrastructure the capacity of the government to car- opment in its member countries. In sectors. ADB also has had successful ry out such projects on its own.

10 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN Through its Asia-Pacific Project gains through better collections and ties, this project has a number of is- Preparation Facility (AP3F), ADB pro- reduction of non-revenue water loss- sues to overcome. District hearing is vided sizeable grant funds to Uzbe es. More details will be provided once very dependent on the quality of in- kistan to develop four PPP projects ADB’s transaction team will finalize its frastructure (gas supply), delivery net- and support to the PPPDA (7.2 million due diligence. work and collections. Making evalua- USD). In preparation of PPP projects, tions and analysis on how to reduce ADB’s PPP team engages specialists Should we expect an increase in losses within the network, and then to advise government in undertaking tariffs because of operator service deciding how to cover the costs of re- detailed technical, financial, legal, so- fees? habilitation is critical. Our transaction cial, environmental analysis / due dili- advisory team started its operation. gence of prospective PPP projects to We do not know yet since much will At the moment we can cannot say if ensure that they are properly struc- depend on the results of due dili- the private operator will be carrying tured and attract substantial private gence exercise and decisions taken the investment cost or whether oth- sector interest. The overall objective by the government based on detailed er cheaper sources of financing will be is to crowd-in private sector partici- studies. We expect efficiency gains available. The detailed feasibility anal- pation and benefit from its capacity and loss reduction to improve the sit- ysis of the project is ongoing. to bring finance and technical exper- uation. 4. Solid waste management tise through a transparent and com- 2. 1 GWatt ADB Uzbekistan Solar projects in Tashkent and Bekabad petitive process. Program. According to government, it cities. The project will assist the gov- plans to build 5 GWatt of solar power ernment to define the optimal proj- Tell us about the ADB’s involvement capacity by 2030. ADB and other IFIs ect structure under the which the solid in PPP projects. are proactively supporting the govern- waste management services in the two ment in developing PPP projects in the cities can be developed on PPP basis. ADB: Currently, ADB entered into solar energy sector. You have heard of The scope of work includes the devel- transaction advisory services agree- the IFC Scaling Solar Program. ADB is opment of a project definition report ments with the government to deliver also working to support 1 GW capacity covering potential demand, cost es- the following projects: over coming years. The project activ- timates, revenue generation capacity, 1. Water supply and wastewater ities already started with the transac- economic viability and so on. The study management projects in Samarkand, tion advisory team focusing on piloting will assess the various ways in which the Bukhara, Qarshi and Namangan cities; 100 to 150 MWatt in the Sherabad so- private sector could be involved in this 2. ADB Uzbekistan Solar Program lar project. We expect many interna- project, evaluating the composition of for 1 GW, with an initial pilot project for tional bidders for this project in 2020. the waste produced by the population 100–150 MW in Sherabad district of and industry to understand its com- Surkhandarya; With current electricity prices for mercial attractiveness, areas for re- 3. District Heating Project in Tash consumers, which are subsidized forms and need for legislative or other kent City; by the GoU, how financially feasible changes required for the private sec- 4. Solid waste management pro- it is for private investors to join in the tor to work in this sector. ADB is work- jects in Tashkent and Bekabad cities. PPP in the solar sector? ing with the State Committee of the Our PPP team is also looking into Republic of Uzbekistan on Ecology and other projects in other sectors. Let’s We are not expecting subsidies in so- Environment Protection. As you can briefly talk about the projects: lar PPPs. The price will be determined see, it is a complex project and there- 1. Water supply and wastewa- through competitive bidding. Currently, fore requires very thorough analysis. ter management project in Samar the trend in solar energy market is that In conclusion, there is a great de- kand, Bukhara, Qarshi and Naman it is competitive with other sources of mand for PPPs in Uzbekistan. The gan cities. The transaction advisory electricity, so there is no need to sub- overall aim of the government and team is assessing the opportunities sidize. Again, many aspects of the pro- IFIs is to support a conducive environ- to improve the existing water supply ject will be clear once the detailed due ment for private sector to feel com- and wastewater management infra- diligence is completed by the team fortable in investing into country’s structure, which is highly deteriorated and discussed with the government infrastructure using PPP approach and heavily subsidized by the govern- agencies. With an increase in the sup- among others. ment. The main idea is for the private ply side, the cost of electricity will like- Thank you. sector to improve the management of ly not increase. the existing sectors, introduce innova- 3. Tashkent City District Hea Interviewed by tive approaches and bring efficiency ting Project. Similarly to water utili- Tatyana Bystrushkina

WWW.AMCHAM.UZ 11 Interview Zafar Khashimov, International Finance corporation

We know that IFC was involved in the fied legislative framework for pro- ernment officials with a clear set of drafting of the PPP Law adopted in curing and implementing such proj- rules and steps that can be followed May. Could you please tell us more ects. What this means in practice is to efficiently procure such projects about how the adoption of PPP Law that investors can largely refer to a through private financing. By im- and procedures is expected to im- single piece of legislation to under- proving the certainty and effective- pact potential investors and make stand the process of implementing ness of the legislative framework for investing in projects in Uzbekistan and awarding PPP projects, rather both parties, the newly enacted law attractive? than having to analyze many differ- should enable speedier and more ent laws which may overlap, conflict, extensive private investment in the A Public-Private Partnership (PPP) or be irrelevant. country’s infrastructure, helping describes essentially a public infra- From an investor’s point of view, the government better meet the in- structure project (e. g., road, pow- the PPP Law significantly reduc- creasing need for public infrastruc- er plant, airport etc.) that is fund- es any legal risks related to invest- ture services. ed through private (i. e., non-gov- ing in an infrastructure project in However, we live in a dynamic time ernment) financing. The purpose Uzbekistan. From the government’s where things often change quickly. of the PPP Law is to establish a uni- point of view, the law provides gov- Since the law was adopted, we have

12 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN encountered new challenges when starting to implement PPP projects. gage and housing lending as well as Those have yet to be resolved, de- introducing PPP in agricultural and spite the help of investors and inter- health sectors. national organizations. We hope to Since 2010 he has been work- be given the opportunity to propose ing as a Country Officer responsi- amendments to the adopted law in ble for the coordination of both in- the future with a view to further im- vestment and advisory portfolios of proving and polishing it. IFC Uzbekistan. Education: Tashkent State Uni Tell us about IFC’s involvement in versity, Faculty of Applied Mathe PPP projects in Uzbekistan. matics and Mechanics; Tashkent State Economic University, Faculty IFC’s support for the Uzbekistan gov- of International Currency/Credit ernment’s ongoing reforms aims to Zafar Khashimov—Country Relations. increase the role of the private sector Officer, Uzbekistan Work experience: Prior to join- in the economy. By bringing our glob- In IFC: 17 years. Zafar joined IFC ing IFC, Zafar worked in various ex- al experience in PPPs, we help iden- in 2002 for advisory programs in ecutive and managerial positions tify, structure, and procure PPP proj- Uzbekistan and Central Asia. His at the National Bank for Foreign ects in the country transparently and experience covers such areas as Economic Activities of Uzbekistan competitively, to support the govern- the development of Leasing sec- (NBU). ment’s priorities in infrastructure and tor, business enabling environment Marital status: Married, has two the renewable energy and health sec- and the primary market of mort- kids. tors, particularly. As we know, the government aims to develop the renewable en- watt of solar photovoltaic plant pow- participants from the Uzbek gov- ergy sector to diversify the coun- er in Uzbekistan, providing the coun- ernment have taken and passed the try’s energy mix and attract private try with an abundance of clean, sus- APMG Foundation level exam and investment. To this end, Uzbekistan tainable power. IFC is now planning to take them has become the fifth country—and We also help build the capacity of to the next two levels of training in the first outside Africa—to join the the PPP Agency and line ministries’ 2020. World Bank Group’s Scaling Solar staff in managing and implement- IFC is also helping policy makers program. Since 2018, together with ing critical infrastructure projects by boost access to high-quality health the World Bank, we’ve been advising organizing sectoral PPP workshops care services through well-struc- the government on how to open up and PPP training programs certified tured PPP projects. As a transac- the power sector to private invest- by APMG (APM Group) International, tion advisor, IFC is currently advising ment by implementing the first ever a multinational accreditation body. the government on a PPP to attract competitive PPP solar project in the The latter is an initiative by several private investors to finance, equip, country. Why? Because our experi- major development finance institu- maintain, and operate several he- ence around the world has shown us tions: the Asian Development Bank, modialysis centers across the coun- that private companies—with their European Bank for Reconstruction try. The aim is to help raise the life capital and their expertise—can help and Development, Inter-American expectancy and health status of pa- revolutionize the way power is gener- Development Bank, Islamic Deve tients at the terminal stage of renal ated in developing countries. lopment Bank, and the World Bank failure by using modern treatment While it’s early, we have started Group. standards and ensuring high quali- to see the massive potential here in It gives professionals in infra- ty services. Uzbekistan. Under a pilot program, structure sectors around the world We have many other PPP projects the government is now seeking pri- a shared understanding and lan- in the pipeline. We believe PPP will be- vate sector partners for a 100-mega- guage for structuring and managing come an important tool to attract in- watt photovoltaic plant in the Navoi PPP projects. The capacity building vestment in Uzbekistan by providing region. Eleven companies have al- events have been a joint effort of IFC better infrastructure solutions and in- ready been prequalified. And this is with the Swiss State Secretariat for creasing the efficiency of the govern- just the first step. We believe the pri- Economic Affairs and the Austrian ment’s investments in the renewable vate sector can help create 1 giga- Ministry of Finance. Twenty-three energy and health sectors.

WWW.AMCHAM.UZ 13 Join Amcham family WELCOME ABOARD

suring the efficient allocation and Before coming to the State spending of foreign aid budgets av- Department, Mr. Rosenblum eraging over 1 billion USD annually. spent six years as Senior Program His office provided strategic guid- Coordinator at the Free Trade Union ance and oversight for all U. S. foreign Institute (FTUI) of the AFL-CIO. assistance to more than 30 coun- FTUI conducted educational pro- tries in the former Soviet Union, grams and provided technical assis- the Western Balkans, and Central tance to labor unions in the former Europe. He and his team coordinat- Soviet Union and Eastern Europe. Mr. ed the efforts of more than a dozen Rosenblum managed the operation U. S. government agencies support- of field offices in Moscow, Kyiv, and ing economic reform, the develop- Warsaw. While working for FTUI, Mr. ment of democratic institutions and Rosenblum also served as a public rule of law, building the capacity of spokesman for the AFL-CIO on the law-enforcement and other securi- labor movement in the former Soviet ty-sector institutions, and relieving Union, and social problems associ- human suffering through humanitar- ated with the transition to a market ian aid. He also served as the prima- economy. ry U. S. government liaison with oth- During 1985–89, Mr. Rosenblum er international donors, including the worked as a legislative assistant to European Union and multilateral de- Senator Carl Levin (D-Michigan), Daniel N. Rosenblum, velopment banks. where he advised the Senator on Ambassador of the United During 1997–2008, Mr. Rosenb foreign policy, human rights, judicia- States to Uzbekistan lum held a variety of other positions ry, trade, and transportation issues. in the Assistance Coordinator’s of- He was deeply involved in legislative During 2014–2018, Mr. Rosenblum fice, including Deputy Coordinator, efforts around the U. S.-Canada Free was Deputy Assistant Secretary for Director of the Eurasia Division, Trade Agreement, and helped the Central Asia at the U. S. Department and Special Advisor for Economic Senator promote the interests of his of State. Working within the State Programs. He played the lead role constituents in a wide range of areas, Department’s Bureau for South and in developing economic initiatives including the competitiveness of the Central Asian Affairs, Mr. Rosenblum for several regions of Russia; served American automotive industry, scru- oversaw U. S. policy towards and dip- as the State Department liaison to tinizing judicial nominations, protect- lomatic relations with the five Central 10 U. S.-backed investment funds op- ing veterans’ benefits, and defending Asian states: Kazakhstan, the Kyrgyz erating in the region; and was instru- international human rights. Republic, Tajikistan, Turkmenistan, mental in designing and implement- Mr. Rosenblum has a BA in History and Uzbeki stan. ing large packages of assistance from Yale University and an MA in During 2008–2014, Mr. Rosenb for Ukraine, Georgia and the Kyrgyz Soviet Studies and International lum was Coordinator of U. S. Assis Republic following internal upheav- Economics from the Johns Hopkins tance to Europe, Eurasia, and Cent als, and for Kosovo following its dec- School of Advanced International ral Asia. He was responsible for en- laration of independence. Studies.

14 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN ing for the Department of State, he worked for the Department of Energy at Los Alamos National Laboratory’s Technology Com m e r c i a l i z a t i o n O f fi c e and served two years in the Peace Corps in Romania. He is married with a wife and two children.

Andrey Pushkarev is the Finance Bill Kralovec is the new director of Director of the British American the Tashkent International School Tobacco Uzbekistan since early 2019. (TIS) and arrived in Tashkent in July. Originally from Moscow, graduate of Rus He comes to TIS from Osaka, Japan, sian Economic Academy Andrey built spending 5 years as the head of the most of his career in the home country. Osaka International School of Kwansei After a few years of professional adven- Gakuin. Bill has worked in international tures in non-governmental sector, jour schools for 27 years and includes posts nalism and IT he ended up with most re- in Serbia, Venezuela, Bolivia, Colombia Marco Fien was recently appointed cent 15 years of experience in Finance in and Australia. He has degrees from General Manager of Hilton Tashkent FMCG businesses. Prior to Uzbekistan Adrian College (Michigan, USA) and City. The 258 room Hilton Hotel is part Andrey worked in BAT Moscow office in the College of New Jersey (USA). His of the brand new mixed-use Tashkent various finance roles. wife Nadia is a teacher at the school City development, encompassing and their three children attend TIS. A-class offices, an extensive shop- The American educator has interests ping complex, public entertainment in sustainability education and building spheres and upscale residences. links with the local community to sup- Marco began his career in his na- port service learning for TIS students. tive city Hamburg, Germany and has over the past 36 years worked in senior leadership roles in Western and Eastern Europe as well as the Middle East, Russia and Central Asia. The opening of the 5* Hilton Hotel follows recent project preparations and con- Danil Krivosheyev is a country man- versions for Marriott International in ager for Antal Uzbekistan. He is re- Istanbul, Turkey and Saransk, Russia cruitment professional and HR con- for which Marco has been responsible. sultant with wide expertise among Given the dynamic and fast evolv- Talent Management, Organizational ing market conditions in Uzbekistan Development and Team Management. Eric Salzman has worked for the U. S. at present, Marco’s primary focus is For last 9 years he is performing various Department of State since 2003, on talent development. His team of HR projects in Central Asia, Caucasus serving in Jamaica, Poland, Hungary, international experts in culinary, fi- and Mongolia. He has joined Antal more Romania, Ukraine, Tajikistan, and nance, service, systems and hotel ad- than 3 years ago, during this time he has Washington DC. He is currently the ministration establish and train young worked in Kazakhstan and Russia, deliv- Lead Economic and Commercial team members on Hilton standards ering executive search and HR consult- Officer at the U. S. Embassy in Tash and work side by side to deliver tru- ing services for the clients from FMCG, kent, succeeding Larry Wright. ly memorable experiences to guests Pharmaceutical, Mining and Energy, He earned a BA in International from all over the globe. B2B vendors, local corporate. Before Relations from the University of True to his motto “Aspire not HR consulting and recruitment Danil California at Davis in 1996 and an to have more, but to be more” he has worked for P&G, ABN AMRO and MA in International Management leads his team with courage towards Ericson, performing various task. Also from Thunderbird, the American the opening of the fabulous Hilton he is Msc in Applied Mathematics and Graduate School of International Tashkent City planned for December SHRM certified professional. Management, in 2001. Prior to work- 2019.

WWW.AMCHAM.UZ 15 AmCham events Working lunch with Ambassador Daniel Rosenblum

US Ambassador to Uzbekistan Daniel Ambassador Daniel Rosenblum as- Rosenblum met with the Board of signment started in May 2019. From Directors (BOD) of the American July 2014 until July 2018, Mr. Rosenblum Chamber of Commerce in Uzbe served as Deputy Assistant Secretary kistan. During the two hours meet- in the State Department’s Bureau of ing Ambassador Rosenblum learned South and Central Asian Affairs. His re- about work of AmCham in Uzbeki sponsibilities included managing U. S. stan—an association of international policy and diplomatic relations with the business that unites almost 120 multi- five Central Asian states: Kazakhstan, national and local companies in Uzbe the Kyrgyz Republic, Tajikistan, Turk kistan. The 9-member board is divers, meni stan and Uzbekistan. and includes citizens from: USA, Uzbe It was agreed that US Embassy and kistan, Netherlands, and Ukraine. The AmCham Uzbekistan will continue to of the investment climate and promo- expertise of AmCham BOD is broad work in economic sector on promot- tion of regional cooperation. and covers F&B, banking, tourism and ing the reforms in the sector of trade Ambassador Rosenblum will ad- hospitality, tax and audit, advisory and liberalization, private sector and en- dress broader AmCham community telecommunication sectors. terprise development, improvement before the end of the year. Stay tuned.

16 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN First US Certified Trade Mission to Uzbekistan Organizers: US Commercial Service, AmCham Uzbekistan, US Embassy in Tashkent

AmCham members participated in bassy and international organiza- of Education along with representa- the CTM: tions; tives of the ministry of energy; 1. Business to Business ses- 3. Reception on behalf of the 4. Networking reception hosted sions (B2B)—all AmCham members government of Uzbekistan—Pla by Daniel Rosenblum, US Ambas sa could receive 30 minutes individu- tinum and Gold members were in- dor to Uzbekistan—Platinum and Gold al appointments with participants of vited to a networking event hosted members could informally socialize the CTM upon preliminary request; by the Uzbek government where Uz with CTM participants, Uzbek govern- 2. Business Round Table— bek government was represented at a ment and Senate representatives. Platinum and Gold members were highest level, including the Minister of As a result, within three days, over invited to share their views on doing Health, Minister of Higher and Secon 250 people participated in over business in Uzbekistan with partici- dary specialized education, Minister of 100 B2B and B2G meetings, round ta- pants of the CTM members, US em- foreign investment and trade, Minister bles and other networking events.

WWW.AMCHAM.UZ 17 Committee News Members of AmCham Uzbekistan support children with cancer

The American Chamber of The evening began with a cocktail and individuals. In addition to the cor- Commerce in Uzbekistan and Hyatt reception featuring Jazzirama, a pop- porate sponsorship packages, mem- Regency Tashkent teamed up to cre- ular jazz group in Tashkent. The ball it- bers actively participated in the auc- ate the first-ever Charity Ball to sup- self was opened by a theatrical perfor- tion organized by Hashar Week. Suna port children with cancer on October mance of “Oscar et la Dame Rose” by Park, foundet of the Hasher Week 16. The red-carpet event sponsored Marian Turpisheva and Olga Volodina, project, ran the auction of paintings by Hyatt Regency and the AmCham Ilkhom Theatre Honored Artists of donated by several famous Uzbek Corporate Responsibility Committee, the Republic of Uzbekistan. The pro- painters, including Akmal Nur, Bobur attracted more than 300 guests at gram also featured the talents of two Ismailov, Tatiana Fadeeva, Ahmada the hotel. outstanding singers, Sayyora and Sobitova and Muhayo Aliyeva. The In total, more than 316 million UZS Shadisha. highlight of the auction was the fi- was raised through ticket sales and All performers and service provid- nal painting, titled “Save the Aral Sea,” an auction. All funds went directly to ers contributed in kind by participat- created by a girl with limited abilities. the Ezgu Amal Fund, the first officially ing in the event’s program. This painting received the highest bids registered fund in Uzbekistan to treat Special thanks are also given to of the evening. children with cancer. The results of the the socially responsible members of ball exceeded all expectations, thanks AmCham who joined the noble call to Hyatt Regency, the general sponsor to the active participation of our many support children with cancer. Support of the first-ever Charity Ball and an AmCham members. came forward from both corporations AmCham Platinum member, is a lead-

18 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN ing global hospitality company. Hyatt is in the business of caring for people so they can be their best. Care is at the heart of Hyatt’s being. This purpose guides every aspect of the business, from how they care for associates and guests, and the communities that they are a part of, to our planet— which we all have borrowed from the future generations and not inherited from our ancestors. Hyatt Regency is committed to each aspect of this responsibility. Enriching the communities that we call home is critical.

Silverleafe International, LLC (AmCham Silver member) is a member Agesa to remodel the offic- Fund through pro bono legal compe- Memphis, Tennessee incorporated es and workshops for the Uzbekistan tence and expertise. In addition, Prae company working in the agricultural society of invalid women. TIC pro- Legal Uzbekistan has already incor- sector of Uzbekistan. As a part of its vides support to low-income families porated corporate social responsi- CSR strategy, Silverleafe International in the mahala where TIHES is locat- bility into the firm’s overall policy and is bringing to Uzbekistan St. Jude ed. TIC also supports the Society of conduct of activities. Particularly, the Children Research Hospital, an interna- the Blind and the Kibray medical chil- firm sees the acute need in support- tional charity organization that treats dren’s home. TIC has provided medical ing the young generation in the pur- children with cancer and other seri- checks for the students at School 52. suance of their education and in their ous diseases in more than 70 coun- future becoming. Therefore, it regu- tries. Thanks to Silverleafe, Uzbekistan Prae Legal Uzbekistan (AmCham larly supports the most talented and was included in the list of priority coun- Bronze member) participated in the committed students who express a tries for St Jude starting from 2019. Charity Ball through its purchase of great desire in their own professional From now on, in the framework of its one of the masterpieces on auction development. Due to this, Prae Legal International Outreach Program, St. and through its modest contribution Uzbekistan paid the tuition fees of one Jude’s knowledge, technology and or- in support of the children with cancer. of its interns studying at Westminster ganizational skills will be transferred The firm also supports the Ezgu Amal International University in Tashkent. to Uzbekistan. St Jude’s constant research and development, improvement of technologies, and the attrac- tion of the best professionals have en- abled St. Jude to increase survival rate from 4 percent to 94 percent in 2019. Please visit https://www.stjude.org/

Tashkent International Clinic (AmCham Non-profit member), participated in the Charity Ball as a corporate sponsor to contribute to the treatment of children with cancer. The Tashkent International Clinic (TIC), a division of the Tashkent International Health and Education Service, is making corporate social responsibility a priority. TIC is involved with a variety of corporate social responsibility activities as part of their work in healthcare. Recently TIC partnered with AmCham

WWW.AMCHAM.UZ 19 Committee News Tax and Accounting Committee series of seminars

Tax and Accounting Committee organized series of semi- October 30th seminar members received consultations on nars for members to address issues related to the chang- Corporate Income tax and related issues. es in the tax legislation of Uzbekistan. Special thanks go to British-American Tobacco In particular, two half day seminars on October 11 and Uzbekistan—AmCham Platinum member for hosting sem- November 15 were dedicated to the Value Added Tax. On inars in the office in Tashkent.

20 Business Connections • Annual Report for Members 2019

AmCham events

Bobir Karimov, First Deputy Chairman Antimonopoly Committee of the Republic of Bobir Karimov and Hugo Minderhoud. Uzbekistan.

Monthly Meeting of private property and competi- time and energy. For example, cur- on September 26, 2019 tion,” started Karimov in the meet- rently 75 types of licenses exist in ing. “Following the adherence of the market, and more than 200 per- The September monthly meet- Uzbekistan to a liberal econom- missions are required to obtain ing of the American Chamber ic path, the State Antimonopoly those licenses. of Commerce in Uzbekistan Committee was created and reports The objectives of the commit- (AmCham) featured Bobir directly to the Prime Minister and tee are to create equal conditions Karimov, First Deputy Chairman President.” for all market participants, reduce Antimonopoly Committee of the Inherited from the previous eco- state participation in the econom- Republic of Uzbekistan. Educated nomic system, the number of mo- ic entities and funds, and simpli- in the United Kingdom, Mr. Karimov nopolies in Uzbekistan has reached fy the licensing procedures, among is an experienced lawyer who has 217, said Karimov. More than 80 per- others. worked in both the public and pri- cent of the state subsidies from the The 2019–2023 strategy of the vate sectors of Uzbekistan. budget went to support state mo- committee is to stimulate the growth “The task of governments in the nopolies. In addition, market partic- of the small-business share in the developing markets is to find a bal- ipants are burdened with bureau- GDP by 59.7 percent, increase net ance between the development cratic procedures that consume foreign direct investment inflows to

Participants of event. Mukhammadali Makhmudov (Legalmax), Tatyana Bystrushkina (AmCham), Bobir Karimov, Dr. Sicha Singsomboon.

22 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN

Sabina Abdurakhmanova (Brunel), Members of AmCham Uzbekistan at Monthly Meeting in October. Dr. Sicha Singsomboon. the GDP by 4 percent, reduce the Monthly Meeting ment, corporate governance and re- proportion of monopoly products on October 10, 2019 gional trade. The measures are the re- and services in the GDP by 7 percent, sult of various challenges, such as the grow the number of market partici- Mr. Jurabek Mirzamahmudov, First growing energy demand and supply pants by 25 percent, and reduce the Deputy Minister of Energy and mismatch, diversification of the ener- state’s share in the banking sector by General Director of Uzatom, was gy mix, and adherence to the ratified 50 percent. the key presenter at the October Paris Climate Change Agreement. Questions from the AmCham meeting of the American Chamber The measures include a series of audience centered around the an- of Commerce in Uzbekistan. Mr. massive reforms, starting with the cre- nounced privatization program and Mirzamahmudov presented on ation of the Ministry of Energy and the the lobby of local producers to e- “Energy Sector Reform in Uzbekistan.” reorganization of Uzbekenergo into introduce import duties, among According to Mr. Mirzamahmudov, three joint-stock companies—Thermal others. Participants discussed the ministry recently designed its Power Plants, National Electric Grids, many more issues directly with 2030 strategy power sector reform and Regional Electric Grids. These re- Mr. Karimov during the reception that includes institutional and pow- forms are aimed at the separation of that followed the official part of the er sector reform, private-public part- the regulator and generation, trans- evening. nership, renewable energy develop- mission and distribution of electricity.

Bahodir Tangirov and Ahmet Canli Jurabek Mirzamahmudov (First Deputy Minister of Energy “Uzatom” Agency) and (Unilever). Yuliya Sarkisyan (General Electric Company).

WWW.AMCHAM.UZ 23 AmCham events

Jurabek Mirzamahmudov (First Deputy Tatyana Bystrushkina (AmCham), Shadab Khan (Coca Cola). Minister of Energy “Uzatom” Agency).

Liberalization of the energy prices and development of the public- private partnership projects with the assistance of IFIs has attracted private investors to the power sector, especially to the solar energy sector, Mr. Mirzamahmudov reported. Thus, French Total Eren will invest 150 million EUR into a 100 Mb station in Samarkand. After his presentation, Mr. Jurabek Mirzamahmudov answered numerous questions from members of AmCham. Following the Q&A session, members had the opportunity to discuss recent developments informally Sabina Abdurakhmanova (Brunel), Cenk KÖZ (Nokia) during the reception.

Arsen Pogosov (Aggreko), Filippo Sardor Saidrasulov (British Embassy in Tashkent), Ferhat Esen (World Bank). Fontanesi (Brunel).

24 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN Discussions CAREC Investment Forum in Tashkent

Tatyana Bystrushkina, Executive signing of a declaration by nine ener- Director, AmCham Uzbekistan joined gy ministers of the region. This histor- the private sector development panel ic declaration is designed to acceler- discussion of the “Energy Investment ate liberalization of regional energy Forum, Central Asia Regional market, greater private sector partic- Economic Cooperation (CAREC), ipation and investment, commitment ADB” on September 21–23, 2019 in to RE and advanced regional cooper- Tashkent, Uzbekistan. AmCham vot- ation as a result. The group also en- ing members were participating in the dorsed a new CAREC Energy Strategy conference. for the next 10 years that will provide The headliner of the CAREC Energy the roadmap to reach the region’s goal Ministers’ Dialogue in Tashkent was of a secure energy future.

WWW.AMCHAM.UZ 25 AmCham events

May 23, 2019 at Wyndham Tashkent Sponsor— KINSTELLAR law firm

Members of AmCham Uzbekistan at Business Mixer in May.

Muborak Kambarova (Kinstellar Joel Benjamin, Muborak Kambarova (Kinstellar Tashkent). Tashkent) and Nodira Yadgarova (TIC).

Gregory Gleason with a guest. Puneet Tandon (Hyatt Regency Tashkent), Anvar Azamov (Ernst &Young), Yodgor Gafurov (Pro Logistic Services SIA).

26 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN

September 13, 2019 at Radisson Blu Sponsor—PwC

Sukhrob Azimov, PWC. Members of AmCham Uzbekistan at Business Mixer in September.

Hugo Minderhoud (AmCham President). Igor Fedorov and Anna Martusevich (Hyatt Regency Tashkent).

Ruslan Daminov and Kamila Khayalieva Guests at Business Mixer in September. (Global Translation Services).

WWW.AMCHAM.UZ 27 AmCham events

October 18, 2019 at Wyndham Tashkent Sponsor—Comfort Technologies

Nikita Zabegalin, Numon Khodjaev (Hilton Tashkent City) and Otabek Mukhammadiev Zukhra Nazhmetdinova (Comfort Techno (PWC) logies) and Hugo Minderhoud (AmCham).

Lou Manev (General Motors) and Tatyana Bystrushkina (AmCham Uzbekistan). Zukhra Nazhmetdinova (Comfort Technologies).

Shukhrat Azimov (AMBiT) and Malika Abduganieva (CJ-ICM). Murod Makhmudov (Mercury Service).

28 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN

November 29, 2019 at 1991 Café–Restaurant Sponsor—SADAF Stomatologiya

Rovshan Dalimov (Sadaf Stomatologiya). Tatyana Bystrushkina (AmCham Uzbekistan), Jalol Nosirov (Ministry of Culture), Lola Mirzaeva (Hilton Tashkent City) and a guest.

Dale Henry and Jean Henry (Oasis). Rezida Fatkalislamova (Hilton Tashkent City), Firuza Tatybaeva (Agrico BV NL), Lola Mirzaeva (Hilton Tashkent City).

Dilya Fazilova (Embassy of Italy) and Lola Members of AmCham Uzbekistan at Business Mixer in November. Umarova (FIDP Project).

WWW.AMCHAM.UZ 29 Dialogue with the government Round Table on September 17, 2019

Voting members of AmCham in FDIs currently exist:—stability and pre- Uzbekistan participated in the dictability of reforms, which includes round table “Investment Bottle complex and constantly changing necks: Insti tutional Constraints to legislation with particular bottleneck Foreign Direct Investment” organi of tax reform (VAT, overall high taxes) zed by USAID Competitiveness, among others, lack of strategic vision Trade, and Jobs Activity in Central in the sphere of FDIs, urgency of finan- Asia (CTJ) in collaboration with the cial and banking sector reform, includ- Senate Committee on Internatio ing availability of credits and high internal Relations, Foreign Economic est rates, rule of law, private property Rela tions, Foreign Investments rights protection among others. and Tourism. Government does a lot to address Mr. Hugo Minderhoud presented raised issues. Thus, the Ministry of results of the AmCham study for IMF Investment and Trade is drafting a on the «Perception of reforms by for- law “On foreign Investment” while the eign investors» and talked about ur- Ministry of Economy is working on the gency of banking sector reform. strategy of investment development. Presenters referred to many inde- We looking forward to a continued pendent studies, came to the conclu- policy dialogue with the government of Hugo Minderhoud (AmCham President) sion that the following impediments to Uzbekistan.

30 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN Foreign Investors’ Council Interim Session on November 20, 2019

Hugo Minderhoud, President of the The Council was created in ac- est level. Thus, it will include CEOs American Chamber of Commerce in cordance with the Decree of the and executives of main investors, Uzbekistan presented Investors’ views President #4519 dated November banks, IFIs and other structures and on further development of banking 13, 2019 and supported by the Cabinet of Ministers and Advisers to sector in Uzbekistan at the interim European Bank for Reconstruction the President. session of the newly established Fo and Development (EBRD). Main aim It is expected that the Council reign Investors’ Council (FIC). The in- of the Council is creation of the favor- will meet at least once a year for terim session was organized by the able investment climate in the coun- Plenary Session and minimum two Ministry of Investment and Foreign try by fruitful public-private dialogue times a year for interim sessions. Trade (MIFT) and chaired by the Mi at the highest level. Implementation of the decisions will nister Sardor Umurzakov and Bruno The Council is designed to bring be regularly monitored. Balvabera (managing Director, EBRD). the public-private dialogue at a high-

WWW.AMCHAM.UZ 31 WELCOME ABOARD New members

Unilever is a British—Dutch transnational Antal’s client base covers almost all industry sectors, in- consumer goods company co-head- cluding FMCG, IT & telecoms, retail, pharmaceuticals/health- quarte—red in London, United Kingdom care, construction & real estate, financial services, heavy and Rotterdam, Netherlands. Its prod- equipment and machinery, natural resources, automotive, ucts include food and beverages, clean- logistics, transportation and agriculture. Antal consultants ing agents, beauty products, and person- help candidates to find their ideal jobs in a broad range of al care products. Unilever owns over disciplines such as finance and accountancy, HR, sales, IT, 400 brands (Domestos, Cif, Axe, Dove, Rexona, Elidor, Clear, marketing, PR, supply chain/logistics, e-commerce, admin Lipton, Calve etc.) and many more.

The first office in the CIS was opened in CIS Education Group is an international ed- 1994. Today business in the CIS repre- ucational network accredited by Cambrid sents an important part of Antal ge Assessment International Education International, which has about 1,000 em- (branch of University of Cambridge, Great ployees in more than 145 offices around Britain). The school prepares graduates with the world. In May 2019 the office in Cambridge IGCSE and Cambridge Inter Tashkent was opened. Antal successfully places candidates national diplomas of AS & A levels which are across the length of Russia, from Kaliningrad to Kamchatka, recognized by universities of USA, Great Britain, Australia, as well as throughout the CIS, particularly in Kazakhstan and Canada and other countries (total of 140 universities). Uzbekistan. CIS International School Tashkent is located on the terri- Today there are approximately150 consultants in Antal tory of the «Cambridge Residence» residential complex. CIS CIS working in four offices in Moscow, St. Petersburg, Almaty Tashkent is designed for 500 children and prepares graduates and Tashkent. with a state diploma and Cambridge IGCSE and Cambridge

Tatyana Bystrushkina (AmCham Uzbekistan) and Emre Ruslan Galimzyanov and Zarmina Ruzieva (CIS Tashkent). Yusufoglu (Unilever).

32 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN International AS & A Level diplomas. There is a Kindergarten As Procter & Gamble Company, one of for 200 children on campus. The school accepts children the leading consumer goods companies from 2 to 15 years old throughout the calendar year. CIS in the world, we operate for more than Tashkent is currently a candidate for Cambridge International 180 years. Procter & Gamble Turkey, Assessment. We offer full programmes for our International Caucasus and Central Asian Republics, (English) and National programmes. the management and production hub for 8 countries including Caucasus and Central Asia region is Brunel is an international service provider passionately serving region’s women and men for more specializing in project management, re- than 32 years of sustainable business with 16 globally lead- cruitment and personnel provision in the ing brands by creating approximately 2,500 jobs, operating oil and gas sector. We provide highly qualified specialists and in two world class production centers and one distribution whole project teams in the areas of Exploration, Design, center based in Turkey. Construction, Start-Up, Commissioning, HSE, Procurement, P&G re-opened to Uzbekistan market as of 2019 and Process technology, QA/QC, Project Management. Brunel is currently, in Uzbekistan, P&G indirectly creates more than a supplier of key Oil & Gas operators, EPCs and subcontrac- 250 jobs via its distributor and agencies. tors in Upstream, Midstream and Downstream. Brunel is a public, financially independent company listed on the Hilton—is a leading company in the hospi- Amsterdam Stock Exchange. It allows our customers and our tality industry with 17 brands and consultants to have confidence that they are supported by 5,700 properties in more than 115 coun- a financially reliable and stable partner and can fully concen- tries. Luxurious hotel located in the terri- trate on their projects. tory of International Business Center Brunel UBK aims to bring in Uzbekistan the most valuable “Tashkent City” with 80 hectares of business centers, shop- professionals and to help the locals to develop. Our team has ping & entertainment centers, residential and park areas in already established relations with the main players in renew- the center of Tashkent. able energy, gas and several industrial sectors. We closely Hotel offers first-class service and such comfortabilities work with our partners in preparing tender, recruiting or out- as elegant Serenity Spa with 5 treatment rooms, including staffing personnel. Brunel UBK has the intention to become VIP room with Jacuzzi, world-class Fitness Centre, Izakaya a point of reference in HR in Uzbekistan. Pan Asian Bar & Restaurant on the rooftop, indoor swim- ming pool, luxurious and stylish 258 guestrooms including The UP Event team is a creative group 8 Presidential Suites, 40 Corner Suites, 10 Long Stay Suites consisting of young, ambitious, but nev- and spacious 2,453 sq. m (26,404 sq. ft) event facilities with ertheless having many years of experi- a Grand Ballroom with an adjacent terrace and 5 multifunc- ence in organizing events, people. In work with each client tional meeting rooms. our team always with the maximum return approaches to Hilton Tashkent City located just 7 kilometers the decision of any question, thereby granting unique and (4.35 miles) far from International Airport and 5 kilometers high-quality service. The key to the success of your event (3,1 miles) from Train station, which will ensure convenient is detailed planning, preparation and creative approach. stay at our hotel.

Rezida Fatkalislamova and Marco Fien (Hilton Tashkent City). Tatyana Bystrushkina (AmCham Uzbekistan) Filippo Fontanesi (Brunel UBK LLC)

WWW.AMCHAM.UZ 33 WELCOME ABOARD

Mars makes many great products. We ble energy sales to governments and their utilities across provide chocolate, quality pet foods, the globe. SkyPower maintains an unwavering commit- nutritious family foods, as well as tasty ment to combat climate change while working in unison gum and confections. We operate more than 420 fac- with local communities to provide access to clean and tories and offices in 80 countries. We have more than affordable renewable energy, generating a brighter fu- 100,000 Associates, thousands of suppliers and mil- ture for all. lions of consumers worldwide. Whether it’s the simple pleasure of savoring the world’s best-loved chocolate In Uzbekistan, The Legal Entity of MEDOL and confectionery, or the warmth that a healthy pet was registered in the form of FE, “Medical brings to your family, Mars is the company behind many Online Services” LLC in 2010. We are an of the enduring brands Uzbekistan citizens have come official distributor and the partner of the world renown to know and trust. These brands are Confectionery— companies, leaders in the field of high medical technolo- SNICKERS®, M&MS®, TWIX®, MARS®, BOUNTY®, gies, manufacturers of medical equipment and devices, MILKY WAY®, ORBIT®, SKITTLES®; Pet Nutrition— such as Johnson & Johnson, Aesculap/BBraun Group, WHISKAS®, SHEBA®, KITEKAT®, CATSAN®, Getinge, Ortho Clinical Diagnostics, Radiometer, BD, PEDIGREE®, CHAPPI®. Medtronic and other famous companies. Dynamically developing company aims to bring high- SkyPower is the largest and one of the er medical innovations in development and modern- most successful developers and owners ization of the healthcare system of the Republic of of utility-scale solar energy projects in the Uzbekistan. world. With roots dating back more than 16 years, Our aim is to build transparent long-term business, to SkyPower’s global team possesses a vast track record of benefit our society by helping to the medical communi- over 1,300 years of combined experience in power and ty in introduction and localization of higher medical tech- large infrastructure projects. nologies. By implementation of innovative technologies in Our experienced and accomplished team has built, as- Uzbekistan, we have the opportunity to help even more pa- sembled and acquired an extensive pipeline of over 25 GW tients to live a full and joyful life. worldwide—some of which were recently announced in bi- lateral agreements, and other contract awards, to be built Since its establishment in 2017 by found- in the Middle East, Africa, South East and Central Asia, over ers with government job background, the next five years. “Brokers Group” LLC has been rendering Through a dedicated team of employees, consultants, such services as business consulting and customs clear- partners and advisors working out of 36 international lo- ance. Also we are exporting fresh and dried fruits, and im- cations, SkyPower develops, finances, builds and oper- porting agricultural and building material goods as feed ates projects from initial green field stages through to wheat, soybean meal, vegetable oil, beverages, rice, ce- commercial operation, and in various stages of devel- ment, bitumen, bleaching earth and others. Annual turno- opment, construction and operation, in aggregate, rep- ver of the company exceed 500,000 USD. Staff of compa- resent USD Billions of dollars’ worth of long-term renewa- ny is 16 qualified skilled persons.

The “Olmaliq Metall Konstruksiya” (OMK) is in metal construction business for more than 45 years, and remains among regional leading plants. OMK is well known in the market for its high-quality products: it manufactures metal vertical tanks with capacity up to 10 000 c.m and related products for various industries to store oil and gas products, fuel, other non-aggressive liquids, water, as well as water towers, equipment for tanks, etc. Quality and high standards of OMK’s work are proved by all required licenses granted by the Uzbek national control bodies. The company has introduced Quality management system according to ISO standards. OMK has a wide customer base with Tatyana Bystrushkina (AmCham Uzbekistan) and Lev Gavrish Jarqurgon, Bukhara and Fergana Oil Refineries among (Unique Present Media Holding). them.

34 Business Connections • Annual Report for Members 2019

Legislations Changes into legislation

On 2 September 2019, the Draft Tax Certain provisions of the Decree PP Other changes related to specific Code of the Republic of Uzbekistan 5837 have become effective from 1 taxes. (New Tax Code) was released for October 2019 while others to be in- public discussions. New Tax Code cluded in New Tax Code and enforced DECREE 5837 was developed by the Ministry of accordingly. Finance and State Tax Committee of In this issue, we have summarised Effective 1 October 2019, VAT rate is the Republic of Uzbekistan in collab- the most notable changes, including decreased from 20% to 15 %. oration with International Monetary the following: The excise tax rates for goods pro- Fund, World Bank, as well as interna- PP Changes to rates for value-added duced and services rendered in Uzbe tional and national experts. tax (VAT), excise tax, corporate in- kistan are generally increased. Few ex- Generally, it is aimed at harmoni- come tax (CIT) and unified social amples are displayed in the table 1. zation of tax system by reducing the payment (USP); Effective 1 January 2020, CIT rate number of taxes and obligatory pay- PP ‘Risk-based’ bank account suspen- is increased from 12 to 15%. USP (i.e. ments, introduction of internationally sion procedure; employer’s social contribution) is re- common tax concepts (such as con- PP Detailed transfer pricing regula- duced from 25 to 12% for entities with trolled foreign corporations, thin cap- tions; state participation thereby aligning the italisation, transfer pricing) and provi- PP Controlled foreign corporation rate with the one applicable to other sion of more detailed guidance on tax- rules; taxpayers. ation, as described further. PP Thin capitalization rules; Simplified VAT regime for certain New Tax Code is expected to be- PP Introduction of beneficial owner- taxpayers introduced in 2019 for 2 come effective as of 1 January 2020. ship concept; years is to be abolished as of 1 January Besides, a Presidential Decree PP Consolidated group of taxpayers; 2020 due to its inefficiency and lack of #УП-5837 “On measures on further PP Taxation of ‘e-services’ provided by interest from taxpayers. improvement of the tax policy of the non-residents; Existing procedure on suspension Republic of Uzbekistan” was issued on PP Amendment into tax residency def- of banking operations is to be abol- 26 September 2019 (Decree 5837). inition; ished. The revised procedure should

Table 1

Type of goods / services Old rate New rate

UZS 117,900 per 1,000 pcs and 4% of the UZS 141,500 per 1,000 pcs and 9% of the Cigarettes customs value customs value

Mobiles services 15% 20%

Petrochemicals, e.g. gasoline AI-91/ AI-92/ AI-93 UZS 35,343 per ton UZS 250,000 per ton

Natural gas (incl. for export) 15% 20%

Polyethylene granules 25% 30%

36 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN be based on “risk-analysis” method PP goods traded on global commod- TP methods with suspension period not exceeding ity exchanges that fall within com- 30 days. Previously, suspension could modity groups such as non-fer- New Tax Code outlines the follow- be carried out for indefinite period. rous metals, precious metals and ing five methods, similar to those stones, natural gas, mineral fertiliz- used in the international TP prac- DRAFT TAX CODE ers, cotton fibre and yarn, or tice (i.e. based on the OECD Transfer PP transactions where one of the par- Pricing Guidelines for Multinational Below we provide brief comments ties is registered in tax haven juris- Enterprises and Tax Administrations) on the expected changes as per the diction. to analyse the arm’s length nature of New Tax Code. We note that the the controlled transactions: draft may undergo revisions before Related parties 1. comparable uncontrolled price it gets enforced in 2020. Our com- (CUP), ments are based on the version of the Under New Tax Code legal entities / in- 2. resale price, draft released for public discussion in dividuals are considered to be related 3. cost plus, September 2019. in the following cases: 4. transactional net margin, PP indirect/direct share participation 5. profit split. TRANSFER PRICING of one legal entity / individual in an- If necessary, a combination of other legal entity exceeds 20%; two or more methods may be used. New Tax Code introduces elaborate PP legal entities where one party has Nevertheless, the CUP should be a pri- transfer pricing (TP) provisions, in- more than a 20% direct or indirect ority when analysing the arm’s length cluding definition of related parties, participation in each of these entities; nature of the controlled transactions. controlled transactions, pricing meth- PP legal entity and individual autho- ods, documentation and reporting re- rized to appoint sole executive TP compliance quirements, pricing agreements etc. body / 50% of the collective executive body or Board of Directors of The taxpayer should report on con- Controlled transactions this legal entity. trolled transactions not later than the PP legal entities in which not less than date of filing of annual financial reports TP rules apply to both transactions be- 50% of the collective executive for the year when controlled transac- tween Uzbekistan residents as well as body is appointed by the same in- tions took place. cross-border ones. dividual Tax authorities may request tax- Generally, transactions between PP legal entities in which not less than payer to provide documentation on Uzbek resident related parties are 50% of the collective executive a particular transaction or group of viewed as controlled if the amount of body are the same individuals; similar transactions. Such documen- annual turnover between such par- PP legal entity and individual acting as tation may include a document or set ties exceeds UZS 5 bln. (approx. USD its sole executive body; of documents prepared in a free for- 530k) per calendar year. PP legal entities in which the same indi- mat that contains certain informa- Local related party transactions vidual is a sole executive body; tion, e.g. list of parties involved in the may also be viewed as controlled if the PP legal entities and individuals if the transaction, description of the trans- turnover exceeds a lower threshold of chain of direct participation of the action, applied pricing method, pay- UZS 500 mln. (approx. USD 50k) and entities in each other exceed 50%; ment terms, functions of parties etc. the following criteria is met: PP individuals if one of them is subor- Tax authorities cannot request such PP one of the parties is participant of dinate employee; documentation until 1 June of the year special economic zone/ uses spe- PP individual, his/her spouse, par- following the calendar year when the cial tax regime, or ents (including foster), parents of controlled transaction took place. PP at least one of the parties is exempt spouse, children (including ad- from taxation, or opted), brothers and sisters (with Penalty PP subject of the concerned transac- complete and incomplete kinship), tion is a mineral resource, envisag- brothers and sisters of spouse, Liability for underpayment of taxes as ing ad valorem tax rate. guardian and ward. a result of applying non-market prices As for cross-border transactions, For determination of participation in controllable transactions may result controlled transactions include op- share in the legal entity, shares of in- in a penalty of 40% of underpaid tax. erations between related parties, as dividual, his/her spouse, parents etc. Moreover, non- provision of the report well as operations (including those be- (mentioned above) may be jointly con- on controlled transactions or provi- tween non-related parties) involving: sidered. sion of such report with incorrect in-

WWW.AMCHAM.UZ 37 Legislations formation results in a fine of UZS 500k Eligible entities and structures For individuals, participating inter- (currently, around USD 50). est is calculated jointly with their fam- A foreign legal entity (or other struc- ily members. Advance Pricing Agreement ture) is deemed to be a CFC if it meets the following criteria: Definition of ‘control’ Taxpayers qualified as ‘large taxpay- PP it is not considered to be an Uzbek ers’ are eligible to apply to tax author- resident for tax purposes, and The definition of ‘control’ is rather broad ities for ‘advance pricing agreement’ PP it is controlled by a legal entity or an and may be interpreted to mean that (APA). APAs may be valid for the pe- individual considered an Uzbek tax control exists even when the percent- riod of up to 3 years and may be ex- resident. age of a shareholding (interest) is less tended for additional two years upon than the thresholds noted above, but if taxpayer’s request. Definition of ‘controlling person’ there is explicit or implicit ability to influ- ence the decisions of the CFC’s manage- CONTROLLED FOREIGN A controlling person of a foreign com- ment in respect of distribution of profits. CORPORATIONS (CFC) pany is defined as: PP legal entity or individual whose di- CFC profit calculation Generally, CFC rules are applica- rect and/or indirect participat- ble to individuals and legal entities, ing interest in a foreign company is The retained income of a CFC shall be Uzbekistan tax residents, owning or more than 25%, or viewed as income of the Uzbek control- controlling foreign legal entities and/ PP legal entity or individual who directly ling person(s) and included into taxable or structures. The main purpose of or indirectly owns more than 10% base of such persons for corporate in- the new CFC rules is to tax undistrib- of a foreign company where Uzbek come tax or personal income tax pur- uted profits of foreign companies and tax residents hold a direct or indirect poses in proportion to their interest(s) structures like trusts, foundations etc. interest(s) in excess of 50%. in the CFC.

38 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN Please note that income of CFC in- PP failure to provide notification or diary functions in respect of said included into taxable base of controlling provision of incorrect information come in the interests of another per- person only if the amount of such in- on participation in foreign legal en- son/entity, without performing any come exceeds UZS 300 mln. (approx. tities – results in a fine of UZS 5 mln. other functions and taking no risks, USD 32,000). (approx. USD 530) per each legal directly or indirectly paying such in- entity. come (fully or partially) to this other Exemptions person. THIN CAPITALIZATION New Tax Code provides that profits CONSOLIDATED GROUP earned by the following types of com- New Tax Code introduces regulations OF TAXPAYERS panies (or other structures) are ex- on deductibility of taxpayer's interest empt from CFC taxation in Uzbekistan: expense on controllable debt from a New Tax Code provides an opportuni- PP Non-commercial organisations foreign participant. Controllable liabil- ty to form a consolidated group of tax- that do not distribute profits in the ity is defined as liability owed to: payers, which may comprise of two or country of incorporation. PP foreign legal entity or individual that more Uzbek legal entities. The taxpay- PP Companies that qualify as ‘ac- is not considered as Uzbek tax res- ers should meet the ‘ownership’ crite- tive companies’ or ‘active foreign ident with a direct/indirect owner- ria, i.e. participation share of one le- holding companies’ as defined by ship of 25% of shares in the charter gal entity in the charter capital of oth- the New Tax Code (provided such capital of the taxpayer; er legal entity(ies) should comprise at company is not located in in an off- PP other related entity of this foreign least 90%. Furthermore, legal entities shore jurisdiction). participant; should not be undergoing liquidation PP Companies residents in jurisdic- PP other persons for which the above- or bankruptcy processes, and their net tions that have a tax treaty with mentioned persons act as guaran- assets should be higher than the char- Uzbekistan and that pay tax at an tors or otherwise undertake re- ter capital. effective rate equal to or higher sponsibility to ensure the repay- Moreover, all legal entities forming than the applicable Uzbek corpo- ment of this taxpayer's debt. consolidated group of taxpayers shall rate income tax rate. The deductibility limitations ap- satisfy other criteria related to turn- PP Banks and insurance companies ply if the amount of debt exceeds the over, taxes paid and assets value. The operating in tax treaty jurisdictions. amount of equity by 3 times (13 times advantages of applying this regime for banks and leasing companies). may include, without limitation, abil- Reporting requirements There is a specific mechanism for de- ity of filing one set of reports for the termining the deductibility limits. group; offsetting profits of one group There are notifications that should be company against losses of another submitted to the Uzbekistan tax au- BENEFICIAL OWNERSHIP group company. thorities, if a taxpayer has a foreign company or structure subject to CFC New Tax Code introduces a beneficial ‘E-SERVICES’ PROVIDED rules. owner concept. BY NON-RESIDENTS Thus, a beneficial owner of income Penalty paid by a legal entity shall be a person Foreign legal entities that supply e-ser- having the right to independently use vices to individuals whereby the place New Tax Code envisages the following and (or) control (dispose of) such in- of supply is considered Uzbekistan, liability for breaching CFC-related reg- come, or a person in whose interests are subject to VAT in Uzbekistan. In ulations: another person is entitled to control such a case, the foreign service pro- PP tax underpayment due to failure (dispose of) such income. It is not im- vider is liable for registering for VAT to include CFC’s income into the portant, whether this right arose due purposes in Uzbekistan. taxable base may result in a fine to direct and (or) indirect participation Taxable base shall comprise actu- of 20% of unpaid tax amount, but in this legal entity, or control over it, or al sales price of such services inclu- not less than UZS 10 mln. (approx. due to other circumstances. sive of VAT. USD 1k); A foreign person/entity is not rec- There is an extensive list of e-ser- PP failure to provide notification with- ognized as beneficial owner of in- vices covered by these provisions, in- in the established deadlines or pro- come from sources in Uzbekistan if cluding, without limitation: vision of incorrect information on such person/ entity has limited pow- PP rights to use software (including CFCs results in a fine of UZS 10 mln. ers with respect to control (disposing online games), databases, updates (approx. USD 1k) per each CFC; of) such income, performs interme- and add-ons;

WWW.AMCHAM.UZ 39 Legislations

PP rights to use e-books and other access this information through AMENDMENT INTO TAX publications, educational mate- Internet; RESIDENCY DEFINITION rials, pictures, musical composi- PP provision of domain names and tions with /without text, audio-vi- hosting; The list of legal entities considered tax sual products through Internet; PP automatic search and data process- residents of Uzbekistan is amended to PP advertising services on the Internet; ing services such as stock exchange include: PP intermediary services (e.g. tech- reports or automatic translation; PP foreign legal entities which are nical, organizational, information- PP services related to search of infor- considered as Uzbek tax residents al etc.) between buyers and sellers mation on potential buyers, provi- based on the tax treaty provisions on the Internet such as marketplac- sion of access to search engines. (residents only for the purposes of es or auctions; PP New Tax Code also provides the list application of tax treaties); PP administration and maintenance of services which are not treated as PP foreign legal entities the place of of e-resources in the Internet, pro- e-services: effective management of which is vision of access or opportunity to PP sale of goods or services ordered Uzbekistan, unless otherwise pro- modify such resources to other via Internet whereby delivery of ser- vided by relevant tax treaty. Internet users; vice/goods is performed offline (i.e. Uzbekistan shall be viewed as place PP automatic remote maintenance of not through the Internet); of effective management of foreign le- software as well as administration PP sale of software (including games) gal entity if one of the following condi- of information systems and sites in and databases on physical medium; tions is satisfied: the Internet; PP consulting services provided by PP executive body of such entity reg- PP storage and processing of informa- email; ularly exercises its functions from tion, if the information provider can PP Internet access services. Uzbekistan;

40 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN PP top executives of the entity mainly contracts with aggregate duration of set) is introduced in lieu of tax pref- manage the activities of foreign le- activities exceeding 183 days, it should erences provided previously for gal entity from Uzbekistan. register with tax authorities within 30 new technological equipment, i.e. The above being said, certain func- calendar days after start of activities reduction in taxable base by the tions, including strategic planning, bud- or conclusion of the contract that trig- expenses on its purchase (but not geting, preparation and compilation of gers excess in PE threshold. However, exceeding 30% of taxable profits); consolidated financial and manage- such aggregation may conflict the PP list of non-deductible expenses is ment reports, analysis of activities, inter- concept of separate projects. expanded to include, without limi- nal audit and internal controls, approval tation, expenses related to income of standards and policies etc. should not CHANGES TO SPECIFIC TAXES exempt from taxation, taxes and result in recognition of Uzbekistan as ef- obligatory payments to state bud- fective place of management. Value added tax get (except for corporate income tax) accrued in and paid in excess PERMANENT ESTABLISHMENT PP foreign legal entities carrying out ac- of amounts established by law, cost CHANGES tivities in Uzbekistan via permanent of goods and services transferred establishment become VAT payers. free of charge, and others; Certain changes are introduced with Moreover, certain categories of tax- PP ‘7% rule’ implying that taxable base respect to permanent establish- payers, including agricultural pro- for the purposes of calculation of ments (PE). ducers, law firms may also be sub- corporate income tax of PE can- Currently, activities performed un- ject to VAT; not be less than 7% of the total cost, der personnel provision agreements do PP VAT refund is extended to any ex- was abolished; not lead to PE provided that second- cess of input VAT over output VAT PP period for carry-forward of tax ed personnel act exclusively on behalf (currently, refund is only envisaged losses was extended from 5 to 10 and in the interest of host entity. New in relation to zero-rated turnover); years. The gross amount of losses Tax Code additionally specifies that (i) PP input VAT related to purchase of to be accounted for in each follow- the provider of personnel should not fixed and intangible assets is ful- ing year cannot exceed 60% of tax- bear any responsibility for the results of ly recoverable at acquisition (cur- able income (profits) of the current the work of seconded personnel, and rently, offset is provided in equal year (previously, 50%). (ii) profit margin of personnel provider instalments within 12 months for should not exceed 10% of total cost re- fixed and intangible assets, and 36 lated to provision of personnel. months – for immovable property); © 2019 PwC. All rights reserved. Not for further distribution without the permission of Furthermore, if activities of a for- PP simplified VAT regime introduced in PwC. “PwC” refers to the network of mem- eign legal entity constitute two or 2019 is abolished; ber firms of Pricewaterhouse Coopers more PEs subject to registration in PP reporting and payment deadlines International Limited (PwCIL), or, as the the same tax inspectorate, such ac- have been changed. context requires, individual member firms tivity may be performed through a sin- of the PwC network. Each member firm is a separate legal entity and does not act as gle PE. This rule does not apply to con- Corporate income tax agent of PwCIL or any other member firm. struction sites, installation objects etc. PwCIL does not provide any services to cli- The list of documents required for PP definition of justified expenses is ents. PwCIL is not responsible or liable for registration of PE of foreign legal enti- introduced and definition of ‘doc- the acts or omissions of any of its member ty is supplemented by document con- umented expenses’ is clarified; firms nor can it control the exercise of their professional judgment or bind them in any firming state registration of the foreign PP mechanism to tax interest income way. No member firm is responsible or li- legal entity in the country of incorpo- at the level of recipient – tax resi- able for the acts or omissions of any other ration, notarized copies of permits or dents in Uzbekistan - is introduced, member firm nor can it control the exer- licenses. Also, original or notarized except for non-commercial and cise of another member firm’s profession- copies of the registration documents budget organisations (currently, al judgment or bind another member firm or PwCIL in any way. should be filed, along with their trans- withheld at the source of payment); The material contained in this alert is lation into Russian or Uzbek. PP advance payments are abolished, provided for general information purpos- If a foreign legal entity concludes except for large taxpayers with a es only and does not contain a compre- a contract for a term exceeding 183 taxable income threshold of UZS 5 hensive analysis of each item described. calendar days, it should file PE regis- billion per annum; Before taking (or not taking) any action, readers should seek professional advice tration application within 30 calendar PP investment deduction on depre- specific to their situation. No liability is ac- days after start of activities. Also, if a ciable assets in the amount of 5% cepted for acts or omissions taken in reli- foreign legal entity concluded several and 10% (depending of type of as- ance upon the contents of this alert.

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Preparation of recommendations (white papers) to drive policy in certain areas !

Advocacy and lobbing !

Eligible to be elected to BOD ! !

Eligible to vote at General Assembly ! !

1 complementary half-page advertisement in Business Connections per year ! ! Company name, profile and logo listed in annual members directory, brochure, and website ! !

Company name and profile listed in annual members directory, brochure, and website ! ! !

Eligible to be selected to position of committee chair ! ! !

Access to GoU contacts/ Regular Dialogue ! ! !

Regional Business Contacts ! ! !

E-newsletter Advertising ! ! !

Eligible to participate in AmCham committees ! ! ! ! Access to resource library with market reports, white papers, board and committee minutes, etc. ! ! ! ! Eligible for AmCham’s US visa referral program ! ! ! !

Access to all other events / services of normal membership ! ! ! ! Number of delegates allowed to participate at regular AmCham events 3 3 2 1

Business and Social networking ! ! ! !

Reliable market information ! ! ! !

Sponsorship opportunities (with the aim to promote your company) ! ! ! !

Member 2 Member Discount Program ! ! ! !

Company name listed in annual AmCham members directory, brochure, and website ! ! ! !

Weekly E-newsletters & information on Tenders ! ! ! ! Participants in the Trade Missions 3 3 2 1

42 Business Connections • Annual Report for Members 2019 APPLICATION FOR CHAMBER MEMBERSHIP

Chamber Membership Categories

Membership Category Qualifications Annual Dues

Platinum Annual worldwide revenues of $100m and USD 4,000 above Gold Annual worldwide revenues less than $100m USD 3,000 and more than $5m oting Members oting

V Annual worldwide revenues less than $5m USD 1,500

Silver Annual worldwide revenues less than $100m USD 1,000

Bronze Annual worldwide revenues less than $5m USD 800

Non-profit Registered as a non-profit organization USD 800 on-voting members on-voting

N Non-resident Organization with no local representation/ USD 1,500 registration in Uzbekistan

All categories give the member access to a full range of services and benefits including business development function, the committee network, and all publications.

Non-voting members may not vote or sit on the Board of Directors.

1. please indicate the category of membership for which you are applying: Membership is per calendar year. Enrollment is prorated by the number of months remaining in the calendar year.

Type of membership Annual Dues Type of membership Annual Dues G Platinum USD 4,000 G Bronze USD 800 G Gold USD 3,000 G Non-profit USD 800 G Gold USD 1,500 G Non-resident USD 1,500 G Silver USD 1,000

2. I/We agree, if accepted, to be bound by the Chamber’s rules and regulations, and to pay the appropriate annual dues:

Name of company

Address

Tel. Fax E-mail

Head of firm in Uzbekistan:

Name Title / Position Representatives (voting if American Company)

(first alternate)

(second alternate)

3. Nationality of parent company:

G US G Uzbekistan G Other (please specify)

Place and Date of Incorporation

4. Type of company in Uzbekistan:

G Manufacturing facility G Sales/Representative office G Service facility

Brief description of activity:

Addresses of branches or other offices in Uzbekistan:

Specify relationship with firm in the USA (if any): branch, subsidiary, affiliate, joint venture, sales offices. Give US name, complete address, telephone and fax number:

5. Annual revenue:

G less than USD 100,000 G USD 100,000–500,000 G USD 500,000–1,000,000

Prepared by Date

Signature of applicant

Important notice: Information found on this application is for internal AmCham use only and will be handled as business confidential. Your personal freight forwarder: Air cargo, Sea freight, Truck Shipments, Railway Shipments, Oversized Freight, Project Logistics Dinner Buffet and Sunday Brunch in Turkuaz restaurant A la carte menu in Opera café Sabina Izmaylova Sales manager Nigina Tel.: +998 (78) 120-3845 F&B Coordinator Mob.: +998 (90) 175-0024 Tel.: +998 (78) 120-3700 Email: [email protected] Mob.: +998 (94) 660-8584

Household goods Moving and ERP, CRM, HCM, Project Management Software, BI, Cargo Logistics services SCM, DQ, MDM, Budget Planning and Forecasting, DWH Atabek Alimdjanov Country manager Tel.: +998 (90) 168-0089 Tel.: +998 (71) 235-1843 Email: [email protected] Fax: +998 (71) 235-7390 Email: [email protected] Wyndham Tashkent Hotel Turksib Magistral Ltd

Discount: 15% Discount: 10 % for full services. Date this service is valid: 2019/06/01 Date this service is valid: 2020/12/31

Pinvin-Invest LLC Move One Logistics

Discount: up to 30% Discount: 7% discount for moving and Date this service is valid: 2020/12/01 5% for logistics services Date this service is valid: 2020/06/31 AMCHAM UZBEKISTAN JV Indorama Kokand Textile LLC Deepak Raina, 712538325 Membership List IDEMIA Pierre-Paul Antheunissens, 712385970 JP Morgan Chase Bank N.A. Uzbekistan Tokhir Sultanov, 712391726 Silverleafe International LLC Dan Patterson Unique Present Arsen Dlyanchev, 781508484 Winncom Technologies Khurshidkhudja Isokhudjaev, Platinum Member KPMG Audit LLC 781500837 BAT Uzbekistan Sanjarbek Saidov, 781477744 Igor Kolesnikov, 781205555 Kinstellar Business Services S.á.r.l. Bronze Member CNH Industrial Joel Benjamin, 781506222 Action Group LLC Edu-Action Alisher Tangribergenov, 781207450 OLSOFT Umid Ishmukhamedov, 781488686 Coca-Cola Evgeniy Olevskiy, 712563291 AFS-Research Company Shadab Khan Olmaliq Metall Konstruksiya Yuliya Bakhmatch, 781209611 Ernst & Young Azad Sharapov AGA Group Corporation Anvar Azamov, 781406482 Perspektiva Stroy Invest LLC Representative office General Motors International Ugur Akin, 712335097 Maksud Khudayberdiev, 712321531 Janos Jendruszak S.Verenin’s Legal Group AGESSA TECHNOLOGY GROUP Hyatt Regency Tashkent Sergey Verenin, 781501506 Murat Aksahin, 712077474 Puneet Tandon, 712071234 Transcontinental JV LLC Agrico BV NL Hilton Tashkent City Janna Popkova, 781203838 Feruza Tatybaeva, 712568484 Marco Fien Wyndham Tashkent Hotel Antal International Tashkent PwC Ismail Kalinci, 781203700 Xususiy Bandlik Agentligi Otabek Muhammadiev, 781206101 WCH Service bureau Dinara Jafarova, 944104417 Sky Power Services Alexander Tulupov, 712543621 BROKERS GROUP entral Asia Christopher Andrew, 712541464 Sherzod Abidov, 712389920 Silver Member Business Leasing UNITEL LLC Air Astana in Uzbekistan Olga Nikolau, 781203040 Sergey Afonin Yevgeniy Krutov, 781403002 Carolina Technologies, Ltd. Brunel UBK LLC Alexander Veksler, 712814362 Gold Member Filippo Fontanesi, 712051204 Comfort Technologies Office AKTE LLC CIS International School Zukhra Nazhmetdinova, 909964116 Hugo Minderhoud, 712522402 Cari Bates, 712096669 CJ ICM FZco BNZ Industrial Support LLC Centil Law Firm Ravshan Fazilov, 712540019 Brian Quigley, 712544128 Zafar Malikov, 781204778 Davinci Solutions LLC Central Asia Seed Company Deloitte va Touche LLC Anna Efimova, 711132390 Azizkhan Akhmedov, 712919353 Erkin Ayupov, 781204445 Dentons Tashkent Crowe TAC PEPSICO Eldor Mannopov, 781503105 Vera Bell, 712359245 Aidar Turmukhamedov, 712814609 Education Standard Consulting Daewoo Pack Co, Ltd. Grata International Law Firm Group Kim Jong Ho, 712950573 Bakhodir Jabborov, 712302422 Elena Sergeeva, 712687544 Hotel International Tashkent General Electric Company GOR Investment LTD Sardor Malikov, 781207000 Saidolim Artikov, 712050281 Martin Dunkan Burgess, 712894555 Hotel Radisson Blu Tashkent GROSS INSURANCE LLC Globalink Logistics Group Akmal Muratkulov, 781204900 Abduaziz Abdusattorov, 712322305 Shabir Firdous, 781299900 Infranet Asia LLC Ingo-Uzbekistan Insurance Global Translation Service Lenur Mambetov, 712440803 Bakhtiyor Gaybullaev, 781509999 Ruslan Daminov, 781209523

WWW.AMCHAM.UZ 45 Membership List

Grant Thornton Zudlik Trans Besan Besin Sanayi ve Ticaret Nematulla Karimov, 712304543 Daniyar Yusupov, 712333146 Anonim Sirketi Branch in Holos Ltd. Azerbaijan Republic Khalmurat Manaev, 712527185 Non-Profit–Non-Voting Ahmet Canli, +994 (12) 488-1042 HR Capital Consulting (HRC) AMBiT Bureau Veritas Aziz Kurbanov, 712310307 Hikmat Abdurakhmanov, 712699339 Turgay Karaagac, 781507127 Iberiasia Tour The British School of Tashkent Dow Europe GmbH Farkhod Sabirov, 712676946 Adrian Macaulay, 712626020 Representative office Legalmax Law Firm Canadian Consulate Arthur Eritspokhov, +7 (495) 663- Mukhammadali Makhmudov, Eldor Mannopov, 712521005 7984 781508360 OSCE Mars Kazakhstan LLP LEGATE law firm Hans-Ullrich Ihm, 981400468 Pavel Salikhov, +7 (727) 258-8005 Nigora Avazmukhamedova, Tashkent International School Oracle Nederland B.V. 712440020 Bill Kralovec, 712919670 Stanislav Nikishkin, +7 (495) 641-1400 Kosta Legal Law Firm Tashkent International Clinic Procter & Gamble Turkey, Azizbek Akhmadjonov, 712090240 Matthew Kuschel, 712910142 Caucasus and Central Asia Marvel Business Corporation LLC Tankut Turnaoglu, +902(16) 463-8000 Nematjon Askarov Honorary Members TMF Rus Ltd. Mega Prodex LLC ADB Samuli Pesu, +7 (495) 777-0085 Dilshod Turdiev., 712500093 Cindy Malvicini, 781401920 TEXTRON RUS Medical Online Services LLC IMF Resident Representative Alexandr Jabenko, +7 (495) 782-2189 Farkhod Abdullaev, 712766253 Galina Kostina, 712334243 Mercury Service Events & Travel UNDP Non-resident–Non-Profit Management LLC Helena Fraser, 781203450 Dr. Gregory Gleason Murod Makhmudov, 712357771 World Bank Country Office / IFC Ministry of Defense Adviser M&M Militzer & Muench Hideki Mori, 712385950 Uzbek Academy of Armed Forces, Khurshid Kasimdjanov, 781400003 IFC (90) 370-0186 Move One Logistics Zafar Khashimov, 781202454 Atabek Alimdjanov, 712351843 Individual MULTIVAC EXPORT AG Non-Resident Ilkhom Khodjakulov, Mirzakhid Mirzaitdinov, 712375702 Aggreko Eurasia Limited Liability +49 (175) 997-3902 Oasis FES LLC Arsen Pogosov, 977051713 Benjamin Schneider Dale Henry, 951428240 PETOŠEVIĆ LLC Djakhangir Aripov, 781206514 Prae Legal Uzbekistan Davron Ahmadov, 712545999 Pinvin Invest Khilola Muminova, 953405525 RB ASIA Doniyor Islamov, 712442032 SAMARKAND BEAUTY SOAP Khwaja Zia Ahmed, 712620012 Softline International Aybek Arifdjanov, 781204909 Sitara International Ltd. Shiraz Poonja, 712814148 Stomatologiya Budushego Zafar Usmanov, 712322022 Turksib Magistral Jean Aydarov, 781203865 UHY Tashkent LLC Audit organization Sarvarkhon Karimov, 2092247 Oraz Abdurazakov and Arsen Dlyanchev (Unique Present)

46 Business Connections • Annual Report for Members 2019 AMCHAM UZBEKISTAN

Chairs of AmCham Committees 2019

Corporate & Social Responsibility Committee Tax & Accounting Committee

Nodira Yadgarova Shakhnoza Sattikulova Corporate & Social Responsibility Commit Tax and Accounting Committee meets on tee meets to review and discuss the ways a regular basis bringing together a dynamic in which the business community can group of senior professionals from the lead- best serve its many stakeholders including auditing companies, multinationals, and ing those in need. tax specialists

Intellectual Property Rights Committee Tourism & Hospitality Industry Committee

Mukhammadali Makhmudov Puneet Tandon The Intellectual Property Rights (IPR) Tourism & Hospitality Committee brings Committee is created to work closely with together on a regular basis the many mem- the government of Uzbekistan on providing bers in the hotel—tourism sector, with the recommendations, assisting in drafting leg- focus being on how to improve service, islation etc. to improve IPR practices in Uzbekistan and deal with issues and contribute to the sector's growing attract investment. importance.

Membership Committee Digital Transformation Committee

Shabad Khan Omon Muminov Membership Committee looks to not just Digital Transformation Committee is crea attract new candidates for membership in ted to help members to get acquainted AmCham but also how to best serve the with the latest digital and technological existing members. trends.

Corporate Governance Committee Human Resource Committee

Farrukh Abdullakhanov Danil Krivosheyev Increasing awareness of Governance, Risk, To unite community of the HR professionals and Compliance instruments and meth- and executives among Amcham members, ods, benchmarks and trends in the sphere in order to develop best practice of peo- of anticorruption and bribery, risk manage- ple management in Uzbekistan and facil- ment, and corporate governance. itate labor regulations.

Corporate Law Committee Trade & Investment Committee

Olesia Kirilovskaya Vera Bell The Legal Committee is dedicated to es- Trade and Investment Committee meets tablish a platform to address regulatory and engages with the major issues faced and legal issues affecting the investment by local and foreign investors as well as climate in Uzbekistan. The Legal Commit those dealing with commercial matters. tee also aims to provide members with the opportunity to keep up to date with the key changes and developments in the legislation.

WWW.AMCHAM.UZ 47 Business Connections is semi-annual and annual reports BOARD OF DIRECTORS 2019 for members that are published 2 times a year for American Chamber of Commerce in Uzbekistan. Executive Director Tatyana Bystrushkina Editorial Board Donald Nicholson II Hugo Minderhoud Tatyana Bystrushkina Julia Bakhmatch President: Vice-President: Treasurer: Jean Henry Hugo Minderhoud Shadab Khan Vera Bell Angie Cairns AKTE LLC Coca-Cola Uzbekistan Crowe Horwath Int. Igor Fedorov Diyorbek Baymatov Contributing Authors Donald Nicholson II Tatyana Bystrushkina Julia Bakhmatch Eldor Manopov Fayoziddin Kamalov Address: 4B, Afrosiab Str., 100031 Tashkent, Uzbekistan Secretary: Otabek Mukhammadiev Anvar Azamov Phone: +998 (78) 140-0877 Igor Kolesnikov PwC Ernst & Young Fax: +998 (78) 140-0977 UzBAT Email: [email protected] Website: www.amcham.uz The AmCham Uzbekistan and authors declare that they have compiled this document care- fully and to the best of their knowledge. However, no war- ranty or representation is made to the accuracy of complete- ness of the information contained in this document. The Joel Benjamin Puneet Tandon Eric Salzman AmCham Uzbekistan and au- Kinstellar Business Hyatt Regency Tashkent Ex-Officio BOD member thors assume no liability what- Services S.á.r.l. U. S. Embassy in Tashkent soever for any damage resulting from the use of this document or its contents. This bi-annual free-of- charge advertising bulletin is not considered to be a subject of mass communication and may be distributed free of charge without registration among limited number of entities and individuals. Printed by CLOSSA Uzbekistan, Tashkent 100015 Executive Director: President Emeritus: 93, Avliyo-Ota street Tatyana Bystrushkina Donald Nicholson II SEAF-SME Investment Tel: +998 (71) 2813998 Management

48 Business Connections • Annual Report for Members 2019