SECOND 2013

Pharmaceutical issue

AMCHAM UZBEKISTAN

Dear Members and Friends,

The year is coming to a close and while its gone fast, it has been a busy one for AmCham. Our membership activities—monthly meetings, mixers and committees, have had record attendance with increased participation from members and represen­ tatives from other entities and organizations with whom we collaborate on a reg­ ular basis. This out-reach benefits AmCham members and we plan to expand it even further in 2014. The AmCham website has been redesigned and we encourage everyone to ac­ cess and use it on a regular basis. AmCham’s executive director and our business advisor have been very busy including trips to Washington, DC and other countries in the region as part of our plan to integrate AmCham UZ even further into the international network of busi­ ness people working together. We take great pride in our ties and close collabora­ tion with the U.S. Embassy, and our financial position is strong with membership continuing to rise. As we approach yearend your Editorial Board thanks each of you for your con­ tinuing support. AmCham has big plans for the New Year, including a move to new office facilities, and changes to our operating policies that will result in added mem­ bership benefits and greater inclusion for our full membership. Our best wishes for the Holiday Season and the New Year,

The Editorial Board

WWW.AMCHAM.UZ 1 Invitations

EXHIBITIONS 2014

www.afs-research.com

Date Exhibition Organizers Short description

25–28 February 2014 The 15th Uzbek ITE UZBEKISTAN Since its launch in 2000, UzBuild has brought together the largest International Exhi­ producers of building and interior materials, tools and equipment. bi­tion “Construc­ ­ It is held in a b2b format, which allows business relations to flourish. tion, Interior De­sign, Directors of leading companies, importers and distributors visit the Heating and Ven­ti­la­ event every year, taking advantage of the chance to discover a wide tion—UzBuild 2014” range of construction products and make new partnerships.

25–28 February 2014 3nd Uzbek International ITE UZBEKISTAN MebelExpo Uzbekistan is Uzbekistan’s only international exhibi­ Exhibition “Heating, tion dedicated to the furniture and woodworking industry. Every year, V e n ­t i ­lation, Air-con ­d i ­ MebelExpo Uzbekistan presents advanced solutions for furniture tioning, Water Supp­ly, production. It is a business discussion centre for furniture produc­ Sanitary, Environ­men­ ers and sellers, suppliers and distributors of equipment, tools, fittings, tal Technology, Swim­ parts and materials, and specialists in interior design. ming Pool and Re­ne­ wable Energies—Aqua- Therm Tashkent 2014”

25–27 March 2014 The 6th International IEG UZBEKISTAN The purpose of the exhibition is the attraction of the leading interna­ specialized exhibition tional and domestic companies, which work in the field of produc­ “UzMetalMashExpo— tion and deliveries of industrial equipment, rolled metal product and Metallugy. Metal pro­ metal structures, enterprises of ferrous and nonferrous metallurgy. cessing. Machinery” Participation in the exhibition is the advanced method of the demon­ will be held in the stration of new materials, technologies and equipment, excellent possi­ frame of 5th Interna­ tio­­ bility for establishing of business connections and step to the new and nal Industrial Forum promising market ofUzbekistanand entire Central-Asian region.

25–27 March 2014 The 6th International IEG UZBEKISTAN Exhibition is organized with the purpose, to attract the leading interna­ Specialized Exhibition tional and domestic companies, which work in the sphere of produc­ “UzSpecTechExpo” tion and deliveries of construction, highway, municipal engineering and equipment. Participation in the exhibition is the one of the advanced method of the demonstration of new materials and technologies in the sphere of municipal construction, highway building, and the solution of problems by the improvement of roadside territory and roads. This is excellent possibility for establishing of business contacts; enter to the new and emerging market ofUzbekistanand Central-Asian region.

25–27 March 2014 The 5th International IEG UZBEKISTAN The exhibition is organized with the aim to attract the leading interna­ Specialized Exhibition tional and domestic companies, operating in sphere of production and “UzMiningExpo—Equip­ supplying of industrial equipment and technologies for mining industry. ment and technolo­ Participation in the exhibition is advanced method of demonstration gies for mining and of new materials, technologies and equipment, an excellent opportuni­ minerals processing” ty for establishment of business relations, consolidation of companies’ positions in Uzbekistan’s market and Central Asia region in the hole.

25–27 March 2014 The 4th International IEG UZBEKISTAN The exhibition will show the range of equipment and new approach­ Specialized Exhibition es to security, such as: technical means to ensure safety in industrial, “UzSecureExpo” alarm systems for fire and smoke, the equipment to provide integrat­ ed security, fire trucks, walkie-talkie.

25–27 March 2014 The 2nd International IEG UZBEKISTAN Exhibition is organized with the official support: Ministry of Specialized Exhibition Emergency Situations of the Republic of Uzbekistan, Chamber of “UzAutomationExpo” Commerce of the Republic of Uzbekistan, General Directorate of Fire Safety of MIA of the Republic of Uzbekistan, State Committee of the Republic of Uzbekistan on Geology and Mineral Resources, SIC “Uzavtoyul”, SIC “Uzkimyosanoat”.

2 Business Connections • 2’2013 AMCHAM UZBEKISTAN

Date Exhibition Organizers Short description

02–04 April 2014 The 14th Uzbek Inter­na­ IEG UZBEKISTAN Food Industry—WorldFood UzbekistanWorldFood Uzbekistan is the tional Exhibition “Food country’s largest food exhibition and an ideal professional meeting Industry—WorldFood place for the 5,000 industry figures who visit every year: suppliers, Uzbekistan” producers, traders, and big names in the domestic and internation­ al food industry.

02–04 April 2014 The 9th Uzbek Inter­na­ IEG UZBEKISTAN AgroWorld Uzbekistan, being held alongside WorldFood Uzbekistan tio­nal Exhibition “Agri­ is one of the top market international events, which is organised and cul­tu­re—AgroWorld carried out in cooperation with the Ministry of Agriculture and Water Uzbekistan” Resources of the Republic of Uzbekistan, Association of Farmers of the Republic of Uzbekistan and other Government Associations and Embassies of foreign countries. The exhibition’s mission is to provide a platform for efficient communication between agrar­ ians and leaders of processing equipment and agricultural ma­ chinery sectors, as well as related industries experts and govern­ ment bodies. Participation in AgroWorld Uzbekistan is a strong mar­ keting tool for presenting your products and competitiveness, for studying market demand and extending business contacts. Make Connections Interact with industry experts all in one place Make lasting professional contacts Learn about new business opportuni­ ties firsthand

02–04 April 2014 Uzbek International ITE UZBEKISTAN The co-location of Ipack Uzbekistan 2013 and Machinery Central Asia Exhibition “Packaging. is an ideal solution for producers of packaging, packaging equipment Tare. Printing—Ipack and packaging materials that is aimed at meeting the needs of indus­ Uzbekistan” trial companies. Taking part in Ipack Uzbekistan 2013 will help you to hold encouraging business negotiations, sign promising contracts, and gain a large number of new clients. Ipack Uzbekistan 2013 is part of a series of packaging event organised by ITE, including RosUPack and SibPack in Russia, Paperex and Paper+ in India, KazUPack in Kazakhstan, and Ipack Turkey.

16–18 April 2014 The 19th Uzbek Inter­ ITE UZBEKISTAN For the past 19 years Uzbekistan’s main medical exhibition 200 ex­ na­tional Exhibition hibitors (2013) 21 countries (2013) 9,498 professional visitors (2013) “Health­care—TIHE” 58% of exhibitors regularly take part in the event, including global leaders of medical production and developers of new diagnosis and treatment technology 75% of exhibitors recognise the effective­ ness of the event (2013) The only medical exhibition in Uzbekistan approved by UFI, the Global Association of the Exhibition Industry A place for professional meetings and discussions between govern­ ment representatives, producers of medical equipment and sup­ plies, scientists and practising doctors Countries represented by ex­ hibitors TIHE 2013: Austria, Belarus, Belgium, UK, Hungary, Germany, India, Italy, Kazakhstan, China, South Korea, Cuba, Pakistan, Poland, Russia, Slovakia, Turkey, Uzbekistan, Ukraine, Czech Republic, Switzerland

16–18 April 2014 The 9th Central Asian ITE UZBEKISTAN 10th Uzbekistan International Dental Congress will discuss a num­ In­ter­national Spe­cia­ ber of key industry’s questions. The seminars and workshops in­ li­sed Exhibition “Phar­ cluded in the Exhibition & Congress programme will raise a num­ m a ­c e u ­t i cal­ Industry—­ ber of theoretical and practical issues that in recent years have AptekaExpo Uz­be­ki­ seen new positive results, and provide the opportunity to improve stan” the professionalism of specialists. For further details on partici­ pation with Stand at the Exhibition, Presentation, Conference and Seminars organization, Advertisement in the Official Catalogue, etc. please contact us to confirm your participation and prelim­ inary space reservation. We hope that our proposal is interest­ ing for you and you will include Stomatology Uzbekistan in your Exhibitions Schedule for 2014.

16–18 April 2014 The 10th Uzbek Inter­na­ ITE UZBEKISTAN 10th Uzbekistan International Dental Congress will discuss a num­ tio­nal Exhibition “Sto­ ber of key industry’s questions. The seminars and workshops in­ ma­tology Uzbe­kistan” cluded in the Exhibition & Congress programme will raise a num­ ber of theoretical and practical issues that in recent years have seen new positive results, and provide the opportunity to improve the professionalism of specialists. For further details on partici­ pation with Stand at the Exhibition, Presentation, Conference and Seminars organization, Advertisement in the Official Catalogue, etc. please contact us to confirm your participation and prelim­ inary space reservation. We hope that our proposal is interest­ ing for you and you will include Stomatology Uzbekistan in your Exhibitions Schedule for 2014.

WWW.AMCHAM.UZ 3 Invitations

International Buyer Program 2014 Trade Show Schedule

Exhibition Date City Web site 2014 International CES® (Consumer Electronics Show) January 7–10 Las Vegas, NV cesweb.org

Shooting Hunting Outdoor Trade Show and Conference January 14–17 Las Vegas, NV shotshow.org

World of Concrete® 2014 January 21–24 Las Vegas, NV worldofconcrete.com

DistribuTECH® Conference and Exhibition January 28–30 San Antonio, TX distributech.com

International Production & Processing Expo January 28–30 Atlanta, GA ippexpo.com

NAHB International Builders’ Show® 2014 February 4–6 Las Vegas, NV buildersshow.com

Progressive Insurance® Miami International Boat Show® February 13–17 Miami, FL miamiboatshow.com

CONEXPO-CON/AGG® 2014 March 4–8 Las Vegas, NV conexpoconagg.com

Natural Products Expo West/Engredea 2014 March 6–9 Anaheim, CA expowest.com

International Home + Housewares Show 2014 March 15–18 Chicago, IL housewares.org

WasteExpo 2014 April 1–3 Atlanta, GA wasteexpo.com

The 2014 NAB Show® April 7–10 Las Vegas, NV nabshow.com

2014 Offshore Technology Conference May 5–8 Houston, TX otcnet.org

The National Restaurant Association Restaurant, Hotel-Motel May 17–20 Chicago, IL show.restaurant.org Show (NRA Show) 2014

InfoComm International® 2014 June 18–20 Las Vegas, NV infocommshow.org

2014 International Franchise Expo June 19–21 New York, NY ifeinfo.com

Fancy Food Show (Summer) 2014 June/July (TBD) New York, NY specialtyfood.com

2014 Annual Meeting and Clinical Laboratory Expo of the July 27–31 Chicago, IL aacc.org American Association for Clinical Chemistry

MAGIC Marketplace (Summer) 2014 August 17–20 Las Vegas, NV magiconline.com

International Woodworking Machinery & Furniture Supply Fair August 20–23 Atlanta, GA iwfatlanta.com

Farm Progress Show August 26–28 Boone, IA farmprogressshow.com

WEFTEC® Water Environment Federation Technical Exhibition September 27–October 1 New Orleans, LA weftec.org and Conference 2014

PACK EXPO International 2014 November 2–5 Chicago, IL packexpo.com

American Film Market® November 5–12 Santa Monica, CA americanfilmmarket.com

Greater New York Dental Meeting November 28– New York, NY gnydm.com December 3

POWER-GEN® International December 9–11 Orlando, FL power-gen.com

4 Business Connections • 2’2013

FEATURE

Healthcare and the Pharmaceutical Industry in Uzbekistan

With a total population of 30 million need, but as we witness in many coun­ of their basic diet and are directly at risk that is young and growing, Uzbekistan tries, budgetary constraints prevail. for severe complications in later age. faces a series of healthcare challeng­ As a former Soviet republic, Uz­be­ki­ An adequate supply of pharmaceu­ es as two primary groups—those un­ stan provides what would be known in ticals is extremely important, and while der five years of age and those over 60— the West as socialized medicine from efforts are being made by the GOU to continue to expand. cradle to grave, with the State being the assure that deficiencies are properly Both groups require increasing primary provider at little or no cost to dealt with, there are major impediments amounts of the public sector health­ the recipient/patient. However, in real­ that will be covered later in this report. care budget, with the excess falling ity the quality of care in the state facil­ According to recent reports, there to the private sector and the growing ities has not kept pace with the grow­ are 1,450 medical facilities in Uz­be­ki­ number of private clinics and practi­ ing need, and private services and pay­ stan with each region having its own tioners. This growing market addresses ments are now the accepted norm. central hospital and a national network the expanding need for improved ma­ In addition to the provision of basic of 155 district hospitals. While many are ternal child healthcare and long-term healthcare services, there is an acute adequately supplied, others use out­ care for the elderly. need for preventative care designed to dated and poorly maintained equip­ In addition to the basic healthcare treat early stage diabetes, cancer, renal ment. Laboratories and testing facili­ infrastructure of hospitals, poli-clin­ diseases, and the wide range of coro­ ties face the same issues, namely in­ ics, laboratories, blood banks and nary and other ailments related to an adequately-trained staff and a limit­ teaching/training schools and facul­ aging population. ed supply of materials. ties, there is a need for related equip­ A good example of this is the early on­ The two main GOU players in the ment, devices, supplies/disposables set of osteoporosis amongst younger healthcare/pharmaceutical sector are and pharmaceuticals. The government child-bearing women who have not been Uzpharmsanoat, which acts as a clear­ of Uzbekistan (GOU) recognizes the counseled on the need for modification ing house/partner for all sector-related activities, and Dori-Darmon, which both imports and manufactures a range of pharmaceutical products that are then sold through its own network of phar­ macies, as well as by private drugstores. With more than 8,000 pharmacies/ drugstores throughout the country, the market would appear to be well supplied; however, there is concern that certain essential drugs/medicines are often ei­ ther not available or not affordable. It is difficult to design an accurate map of the healthcare sector given the fact that GOU statistics often re­ flect only those products and servic­ es that have been supplied or provid­ ed through state-affiliated institutions and/or facilities. Private practitioners and private clinics are growing expo­

6 Business Connections • 2’2013 AMCHAM UZBEKISTAN nentially and the GOU has yet to design a system that adequately reports the nature of the treatment and the pre­ scribed remedies. Whereas most of the Western world can access the likes of IMS Health, the international research and consultan­ cy company that reports on pharma­ ceutical products and their prescribed usage, Uzbekistan lacks such a report­ ing system so the usage and prescribed illnesses being treated are unknown. What is generally accepted is that prescription medicines are generally sold over-the-counter (OTC) and a sig­ nificant amount of product enters the country illegally and may be of question­ able origin and/or quality. Total estimates for the Uzbek pharmaceutical market vary but a recent GOU figure of $700 mil­ of pharmaceuticals, generic drugs are able, care must be taken that certain lion has been cited, with some $150 mil­ cheaper versions of patented prod­ drugs, oncology treatments in particu­ lion of this being manufactured locally. ucts, but there is a need to verify the lar, are made in limited quantities in ex­ In this respect, it can also be men­ quality and dosage strength as these pensive and carefully-controlled envi­ tioned that local manufacture usually are often compromised. ronments that would not be econom­ depends on imported inputs (ingredi­ New improved devices are also wel­ ical to replicate. Therefore, any such ents and raw materials), making it dif­ come as they provide better and fast­ program to substitute imports should ficult to get a clear picture of the actu­ er diagnostics and treatments; how­ be designed in close collaboration with al local content. ever, not only are they expensive but the appropriate international health or­ With more than 150 local compa­ they require careful upkeep and repair. ganizations and foreign pharmaceuti­ nies producing more than 1,300 dif­ As with most imported goods and/ cal companies themselves. ferent drugs and medical products, or components, there is the need for While Uzbekistan does not face a de­ the GOU is in the process of coming currency conversion, which is often mographic pyramid where the work­ to terms with a number of issues rang­ delayed or withheld, resulting in high­ force is in the process of being outnum­ ing from patent infringements and in­ er costs as buyers resort to alterna­ bered by retirees and pensioners (as in tellectual property rights to certifica­ tive solutions. The consumer is the ul­ Russia, where the birth rate is below re­ tion insofar as GMP (good manufac­ timate loser, as they must pay the high­ placement level), it must nevertheless turing practices), GLP (good laborato­ er price for the corresponding drugs take into account the demographic ry practices), and non-clinical testing/ and/or services. This is an important transition taking place as a result of the certification for veterinary medicines. issue where pharmaceuticals should large number of Uzbeks working abroad It is of interest to note that in neigh­ be treated separately insofar as prior­ who are not contributing their share to­ boring Kazakhstan, with a population ity for foreign exchange, which would in wards the social services. less than half that of Uzbekistan, the to­ turn allow for lower costs and greater As AmCham, we take great inter­ tal value of imported pharmaceuticals assurances of quality products. est in all aspects of healthcare, as it is given as being $600 million or roughly Looking ahead it is very clear that is something that affects us profes­ $42 per capita, whereas in Uzbekistan the opportunities for healthcare-relat­ sionally as business people and as in­ the equivalent per capita figure would ed services are wide-ranging and good. dividuals and family members. We rec­ be $18.33. When compared by interna­ Health insurance is a good example in ognize and support the need for pre­ tional standards, these are very low, but that it is still embryonic with limited pro­ ventative medicine, improved diag­ again it’s important to mention that the vision and/or acceptance. As private nostics and affordable healthcare for official statistics are incomplete and providers and practitioners grow and everyone. do not accurately portray the market. pay-for-service is acknowledged and We are equally supportive of the ef­ Modern medicine and healthcare recognized, the market will be ready for forts of the GOU to improve, modern­ services are complex and capital in­ the varied forms of health insurance. ize and make healthcare services read­ tensive, which means that alternative While the GOU’s efforts to localize ily available to every man, woman and solutions are often sought. In the case pharmaceutical production are laud­ child in Uzbekistan. #

WWW.AMCHAM.UZ 7 Regional news

Uzbekistan Delegation Participates in Pack Expo 2013

One of the world’s largest internation­ International Business Travel, businesses can also present their work al exhibitions of packaging technolo­ a company specializing in business at trade show business meetings and gies, Pack Expo, is held every two years tourism, organized for a business del­ conferences. alternately in Chicago and Las Vegas. egation from Uzbekistan to participate Under this program, the delegation These two cities are the center of the in Pack Expo2013 based on the inter­ to the United States was able to par­ largest exhibition and exposition in the est and needs of the market. ticipate in Pack Expo International, the United States. Over the 55 years of its The company works with the sup­ international exhibition of packaging existence, the Pack Expo show has be­ port of the International Association of and processing equipment; Retech come a popular business platform, pro­ Business and Technology (AMBiT) and 2012, the conference and exhibition viding a unique opportunity to build ef­ successfully promotes the American on the technology of renewable ener­ fective working relationships between International Buyer Program (IBP) in gy sources; International Woodworking professionals in the packaging sector. Uzbekistan. Participation in the IBP is, Machinery Furniture Supply Fair, an in­ Pack Expo 2013 can rightly be consid­ first of all, to share experiences and ternational exhibition of the woodwork­ ered the starting point for each partic­ network with other Uzbek businesses ing industry; and World of Concrete, an ipant in the packaging market to imple­ through participation in major industry international building exhibition. ment its goals, objectives and planning trade shows and conferences. Preparing for the Pack Expo 2013 of future activities. Every year the num­ Participation in such events pro­ trip was approached very seriously. ber of new entrants is about 20 percent, vides interaction with potential interna­ In the initial stages, a meeting with en­ which is due to the processes occur­ tional buyers, sales representatives and trepreneurs was held on August 21 at ring in the market, the types and range business partners that promote the ex­ the U.S. Embassy in Tashkent and at­ of changes, and the direction and pace port of products recommended by the tended by Mr. Abdurakhmanov, chair­ of future development. U.S. Commercial Service. The program man of AMBiT, and Mr. Kasymov, CEO of This area of the industry also enjoys has clear benefits for American com­ International Business Travel, as well as a great interest among entrepreneurs panies that are able to present their representatives of the Uzbek Ministry from Uzbekistan, especially in the de­ goods to foreign buyers without hav­ of Commerce and the U.S. Association veloping food and light industries. ing to travel abroad. In turn, Uzbekistan of Packaging Materials. U.S. Ambassador to Uzbekistan, Mr. George Krol, opened the meeting. Krol’s speech highlighted the econom­ ic potential of Uzbekistan, focusing on the goals and objectives of the bilater­ al event, which provided a bridge be­ tween American and Uzbek business­ men. In particular, Krol positively de­ scribed the pace of economic devel­ opment in Uzbekistan, highlighting the considerable mineral and human re­ sources, as well as denoting the stra­ tegic sectors of bilateral cooperation. Regarding small business, the ambas­ sador pointed out the untapped poten­ tial in the field of food processing, pack­

8 Business Connections • 2’2013 AMCHAM UZBEKISTAN aging, processing of agricultural products, During the exhibition, two compa­ senting the latest designs in packaging building materials, and other areas. nies among the delegation expressed equipment, auxiliary technologies and During the embassy event, repre­ a strong interest in certain types of the raw materials for use with vacuum sentatives from Uzbekistan were able equipment. One business, Za­farhon packaging. The exhibition center itself to communicate directly with their OOO, and its representative, Mr. Sa­li­ was a very large-scale scene with the American counterparts. The Uzbek kho­va Validzhon, held several meetings action taking place in several pavilions. businessmen were able to ask ques­ with producers of technologies for ver­ Poker rooms were provided for the tions and receive contact details tical packaging. Mr. Norbanus Bahodyr, convenience of separate meetings and from 15 American companies. The head of Khorazm Kafolat Savdo, also conferences, where people could dis­ Association of Producers of Packaging held a series of meetings with producers cuss in detail the issues of coopera­ Materials also expressed a willingness of technologies for vacuum packaging. tion and contracting. In addition to the to meet with the Uzbek delegates dur­ Further negotiations are current­ some of the largest U.S. companies, ex­ ing the Pack Expo 2013 event in the ly underway with the company Ulma hibitors included packaging compa­ United States. This opportunity allowed Videojet, a vertical packaging technolo­ nies from Germany, France, Italy, Korea for the direct contact with U.S. exhib­ gy, as well as Amerivacs vacuum pack­ and China. itors at Pack Expo 2013 and a chance aging technology. All the Uzbek participants left with to further discuss questions about the A preliminary agreement for the pur­ a positive impression of the event and exhibition and identify potential proj­ chase of packaging equipment was al­ primary business contacts with repre­ ects for future cooperation. so signed. The products include Matrix, sentatives from American businesses. Pack Expo 2013 was held on Sep­ a vertical packaging machines, Ulma, These types of exhibitions are be­ tember 19–26. The Uzbek delegation a vacuum thermoforming machine, coming more popular among Uzbek consisted of 25 industry representa­ and Videojet, an apparatus for adding businessmen. Familiarization with the tives from all over the country, includ­ packaging details and dates. latest developments in the packaging ing Almerro Group LLC, Sarchashma- In general, the participation of the industry and the acquisition of mod­ Oromo OOO, Lazzat-Sifat Company, Uzbek delegation at the exhibition ern equipment will certainly contrib­ Zafarhon OO, Tehenergoremmash, and was productive and successful. The ute to improving the competitiveness many others. trip was educational in nature, pre­ of products in Uzbekistan. #

Representatives tors to Uzbekistan were among the topics of discussion. from AmCham Uzbekistan Visit Bystrushkina and Lund also met Washington, D.C. with the U.S. Chamber of Com­mer­ce and partners on regional work, in­clu­ ding the U.S.–Turk­me­ni­stan Busi­ness Tatyana Bystrushkina, executive direc­ Treasury, the U.S. Exim Bank, the Inter­ Coun­cil and the U.S.–Ka­zakh Business tor of the American Chamber of Com­ na­tional Trade Administration, and oth­ Council. merce in Uzbekistan, and Mi­cah Lund, ers. An increase of bi-lateral trade and Meetings with international organi­ EMDAP/USAID business advisor, visi­ the attraction of more American inves­ zations were also included in their visit. ted Washington, D.C. in September. Bystrushkina and Lund partici­pa­ted in the Annual American-Uz­bek Bu­si­ ness Forum and the celebra­ ­tion of the 20th anniversary of the estab­lishment of the American-Uz­bek Cham­ber of Commerce. They also at­tended oth­ er related events, inclu­ding the cele­ bration of Uz­be­ki­stan’s independence, which was held on Sep­tember 5 at the Reagan Building. The AmCham team also had a se­ ries of meetings with U.S. governmen­tal agencies, such as the U.S. Trade Rep­re­ sen­tative, OPIC, the U.S. Department of

WWW.AMCHAM.UZ 9 Committees News second half 2013

Trade and Investment Committee Update

On August 22, British American To­ bacco­ (BAT) Uzbekistan hosted the Trade & Investment Committee of the American Chamber of Commerce in America at the BAT corporate office. The meeting was attended by mem­ bers of both AmCham and the diplo­ matic community. Alisher Bekkulbekov, head of corpo­ rate relations and affairs for BAT, began the meeting by introducing BAT to the group. He outlined that BAT has been working in Uzbekistan for more than 19 years and has risen to become the largest private sector employer in the rently under way. These touched on tee was also enthusiastic, sharing his country with around 1,600 full-time empowerment, sustainable agricul­ plans for the newly-formed commit­ workers and another 700 seasonal ture, civic life, access to clean drink­ tee over the coming months. employees. ing water, scholarships, cultural aware­ Before closing, attendees dis­ The company maintains three facili­ ness, and alternative energy solutions cussed possible topics for Tatyana ties in Uzbekistan—the Tashkent office, for medical facilities. Bystrushkina, executive director of a leaf growing and processing operation Following the presentation, partic­ AmCham, and Micah Lund, econom­ in Urgut, and a factory in Samarkand. ipants asked several questions per­ ic advisor, to raise while visiting the The Urgut operation occupies 7.5 hect­ taining to BAT’s strategy and plans U.S./Uzbekistan Business Forum in are of land and yielded 9,350 met­ moving forward. Bekkulbekov was Washington, D.C., hosted by AUCC. ric tons of fermented tobacco from optimistic about BAT’s overall op­ A motion was given to comment at farmers in 2012. Export markets for erations and expressed his opinion the forum on some of the improve­ this tobacco include Russia, Ukraine, that conditions for conducting op­ ments that have been made in the in­ Germany, Poland, Italy, Netherlands, erations had improved compared to vestment climate over the past year. Malaysia and Serbia. past years. Improvements identified were: The Samarkand factory, in turn, Attendees also heard from the $$ The recent lift on prepayment re­ produces around 9.8 billion cigarettes chairman of the legal and agriculture quirements on exports for SMEs per year, mostly for sale in the Uzbek subcommittees, who updated the $$ The Surgil Project Financing deal market. group on their own activities. Nodir reached in May 2012 Bekkulbekov also informed the Yuldashev from the AmCham legal $$ UzBAT receives consistently good group that UzBAT conducts extensive committee, said he was happy to re­ support from GOU via the Food Corporate and Social Responsibility port that a recent presidential decree Industry Association when problems activities in Uzbekistan. Within this was given to abolish the 100 percent related to land use and utilities arise sphere, he highlighted 10 different prepayment rule for SME exporters. To date, the Trade and Investment projects recently undertaken or cur­ Dale Henry of the agriculture commit­ Committee has met at three different

10 Business Connections • 2’2013 AMCHAM UZBEKISTAN

AmCham member offices—Carlsberg, ers, brokers, consumers and regula­ Horticulture, which was held in Tash­ Anglesey Food and BAT. Future meet­ tors—so they can understand and play kent November 20–22. ing are planned at other member lo­ their critical role with enthusiasm and Follow the fresh news of this event cations. The idea behind rotating the synergistic cooperation in the midst of and its successes at our subcommit­ meetings is to give members a chance an environment which is profitable or tee webpage on the AmCham website, to be involved in the discussion and beneficial for all. www.amcham.uz. to showcase their operations to the The preliminary mission includes The subcommittee meets the committee. being a connection point (business to last Tuesday of each month at the If you are interested in hosting the business and personal relationships), AmCham office from 2:00–3:30 pm. All T&I Committee in the future or would an information clearinghouse (pre­ AmCham members with interest in this like to have more information about serving institutional memory and de­ sector are invited to join us. The inputs AmCham’s T&I Committee, please veloping briefs) and a problem-solving of non-AmCham members involved in contact the AmCham office. forum (working on critical issues where working groups is also welcome. our AmCham voice might be heard). Committee Report The subcommittee assisted Expo­ Welcome new chair of AmCham Agriculture & Food Processing Con­tact LLC to recruit foreign exhi­ Tourism and Hospitality bitors­ and practitioners for its Inter­ Industry Committee The Agriculture and Food Processing na­tional Exhibition and Pra­c­titio­ ­ subcommittee under the Trade ner Seminars on Apiculture and Profile: Jasmina Popin and Investment Committee of the Jasmina Popin has worked as an ad­ American Chamber of Commerce in visor for the Deutsche Gesellschaft Uzbekistan began its activities with für Internationale Zusammenarbeit a kickoff meeting attended by 14 peo­ (GIZ) GmbH since 2009. GIZ is a fed­ ple on August 27. Enthusiasm ran high eral public company with offices in as we brainstormed about the pur­ 130 countries around the world. Most pose of the subcommittee with the of GIZ’s work is commissioned by the assistance of Bill Stapleton, business German Federal Ministry for Economic consultant from the United States. Cooperation and Development (BMZ). The Uzbekistan horticulture sec­ GIZ also operates on behalf of other tor has been growing rapidly—as evi­ German ministries and public and pri­ denced by a 21 percent growth in land vate bodies in Germany and abroad. allocated to vegetable, fruit, grape, berry and nut crops. The preliminary vision of the subcommittee includes focusing on assisting all parties in the horticulture value chain—trainers, fi­ nanciers, producers, suppliers and service providers, processors, ship­ pers, distributors, wholesalers, retail­

For more than 20 years, GIZ has imple­ mented projects commissioned by the German Federal Ministry for Economic Cooperation and Development in the fields of health, economic devel­ opment and protection of resourc­ es. In 1992 a GIZ country office was opened in Tashkent. Additional offic­

WWW.AMCHAM.UZ 11 AMCHAM UZBEKISTAN es exist in Andijan, Surkhandarya and Thank you to all the Elves in Tashkent After the typhoon hit the Philippines Karakalpakstan. who volunteered this year to make the in November, students at TIS came to­ Jasmina’s advisory work has in­ Angel Program a success. Many of you gether to help raise awareness and sup­ cluded providing advice on tourism have participated for several years in port. The Girl Scouts Cadette troop and topics relating to trade facilita­ a row, bringing a smile to the faces of (grades 6–8), organized and held tion. She is responsible for planning young children who would otherwise a bake sale in late November for the and implementing strategic interven­ not celebrate the holiday season. typhoon relief effort. Other projects tions with private and public sector are also being planned at the school stakeholders as well as internation­ Students Helping Students to help the Philippines. al organizations. The students at Tashkent International Prior to taking her assignment in School have been active with several Providing Needed Items Uzbekistan, Jasmina worked for the service learning projects designed to Employees at PWC continue their ef­ United Nations Industrial Development raise their awareness of the needs of forts to help local children and fami­ Organization (UNIDO) in Vienna at others while giving them a way to pro­ lies in need. On September 1, in cel­ Fairtrade International. She also worked vide necessary assistance. ebration of the independence of with the United Nations Development One group of students in the high Uzbekistan, PWC employees donat­ Programme (UNDP) in Bosnia and school grades has been regularly vol­ ed 50 food packets to families in the Herzegovina, as well as in the private unteering at the SOS Village in Tashkent, Invalid Society. The packets included sector in Serbia. playing with the children and organiz­ butter and sugar. Jasmina holds a double Master’s ing games. Once a month, the employees also Degree in international relations and The school also has two Make donate funds needed to purchase fem­ international environmental law from a Difference groups, one in elementa­ inine supplies for the young girls living at Macquarie University in Australia. ry and one in secondary. The elemen­ the Akkurgon Internat. This program has A native-English and Serbo-Croation tary group has partnered with an or­ been on-going for more than two years. speaker, Jasmina also has an excellent phanage in Kibray and regularly visits This fall, at the start of the school command of Russian and German and the children and brings fruit and other year, PWC donated watercolor paints a working knowledge of French, Czech items they need. and sketch albums to the students at and the Slovak languages. The secondary MAD group recent­ School 52 to assist with their art program. ly went to a local school and donated If you or your business have a CSR Committee Report—Corporate two computers for their educational project you would like to share with the and Social Responsibility program. Weekly the MAD group also larger AmCham community, please hosts local students on the TIS cam­ contact Ludmilla Park at PWC, CSR Member businesses and individuals of pus for English classes. committee chairman. # the American Chamber of Commerce in Uzbekistan continue to offer assis­ tance to local groups through their Corporate and Social Responsibility programs.

Angel Program Every year, dozens of individuals and businesses in Tashkent participate in the Angel Program, organized by A Child A Smile, which provides holiday gifts and clothing for underprivileged and special-needs children in the area. Under the Angel Program, around 100 children write letters to Santa, ask­ ing for a special wish/present. Dozens of volunteers from the local and interna­ tional community then take the letters and provide the gifts for the children. These ‘elves’ work behind the scenes, making sure each child receives his/her wish from Santa.

12 Business Connections • 2’2013

Cooperation with Uzbek Chamber

Inclusive Business Models as an Instrument of Corporate Social Responsibility in Uzbekistan

In recent years, the Chamber of Com­ jobs, generates revenue for the public $$ Commercially viable, profitable pro­ merce and Industry of Uzbekistan, in sector, and creates and maintains the jects; partnership with the United Nations infrastructure. $$ those that involve low income popu­ Development Programme (UNDP) in The Chamber of Commerce and lations such as households, youth and Uzbekistan has been implementing Industry of Uzbekistan (CCIU) is the women; a new initiative titled “Growing Inclusive largest business support institution $$ sustainability; and Markets.” The initiative seeks to identi­ with offices in every district of the $$ producing a positive impact on hu­ fy and support promising and innova­ country. It is mandated by law to pro­ man development. tive business models that involve vul­ mote the rights and interests of the pri­ The development of inclusive busi­ nerable parts of the population into the vate sector and facilitate the creation ness projects in Uzbekistan is an im­ supply chains of large and small enter­ of a favorable business environment. portant step in the implementation of prises as consumers, suppliers or em­ The concept of inclusive business a holistic concept of a social welfare ployees. This is part of a global initiative, models is based on the idea that the system by reducing social risks for the implemented by the UNDP in partner­ private sector is essential for socio- poor and vulnerable parts of the pop­ ship with other organizations in differ­ economic development and has the ulation. They also contribute to active ent parts of the world. potential to make a significant contri­ employment policy and promote part­ A growing and healthy private sec­ bution to human development and to nerships between private sector com­ tor is a key factor for sustainable eco­ integrate the low income population in­ panies, local communities, NGOs and nomic development and is a source to the value chain as producers, busi­ educational institutions. of wealth and competitiveness for the ness owners, employees and consum­ In the past two years, the Chamber country. The private sector delivers im­ ers. Inclusive business models are usu­ of Commerce and Industry of Uzbe­ portant goods and services, provides ally characterized by: ki­stan, with support of the UNDP’s “Business Forum of Uzbekistan” (Phase II) Project, has achieved good results in identifying and supporting inclusive business projects in the regions. This can be illustrated by the following suc­ cess cases: 1. Improving solid waste management in the Yangiyul district of Tashkent region $$ Improving access to services for the majority of local households and organ­ izations. It is expected that access to waste collection services will increase from less than 20 percent of district population to almost 60 percent; $$ Ensure timely collection and dispos­ al of approximately 80 percent of all sol­ id waste generated in the Yangiyul area; $$ Establishment of the necessary le­ gal framework for the introduction of the public-private partnership model;

14 Business Connections • 2’2013 AMCHAM UZBEKISTAN

$$ Involvement of the private operator to provide solid waste collection servic­ es at affordable tariff rates. 2. Creating a milk collection center in the Kasansay district of Namangan region on the basis of the “Chashmai Safed” farm, winner of the national con­ test “Tashabbus” in the nomination “The Best Farm of the Year.” The main objec­ tive of the project is the creation of a sta­ ble source of income for the rural popu­ lation with involvement of private com­ panies and creating new jobs. The main objectives of the project included: $$ Providing access to milk collection services for rural households who can sell raw milk on a daily basis at the mar­ ket price; $$ Provision of veterinary and other related services to households to in­ crease milk produce; $$ The possibility of replicating the business model in other regions and assist in the transfer of know-how to ilar operation in the Namangan region the transfer of know-how to interest­ other interested entrepreneurs. that will purchase milk from local farm­ ed farmers and entrepreneurs. With a new partnership with SASOL, ers and households and provide them 3. Construction and operation of so­ the Chamber of Commerce and with a constant source of income. lar-heated greenhouses in the select­ Industry in Uzbekistan and the UNDP Last but not least, SASOL will help ed regions as demonstration sites. The was recently launched to support com­ a waste management company in main purpose of this project is to raise munity development through inclusive Tashkent region improve the quality of energy efficiency of greenhouses and business models. solid waste collection services provid­ create a stable source of income for Through this partnership, SASOL will ed to social sector institutions, ensuring rural households. The project seeks contribute $135,000 USD in funding the cleanliness of its premises and re­ to address the following tasks: to support the sustainability of three ducing negative impacts on the health $$ Test the possibility of building so­ development initiatives undertak­ of its community. lar-heated greenhouses within a small en by the joint UNDP-CCI “Business Future cooperation and coordina­ budget (up to 10 million soum per Forum of Uzbekistan” (Phase II) proj­ tion between SASOL, CCI and UNDP 0.2 ha); ect since January 2011. These initia­ will support the continued adoption $$ Reduce dependence on traditional tives have demonstrated how entre­ of inclusive business models through­ energy sources, especially in the cold preneurs and small business, using in­ out Uzbekistan, assist entrepreneurs in season; clusive business models and receiving supporting community development, $$ Provide households and farmers financial support and working in direct and expand alternative income sourc­ a source of income during the “off-sea­ partnership with beneficiaries, can ac­ es for vulnerable population groups in son” (cold period); celerate local development. rural areas. $$ Create new jobs. The financial assistance provide by This partnership serves as an exam­ All of these projects have been im­ SASOL will support the expansion of ple of how the private sector can be in­ plemented in partnership with the pri­ three targeted inclusive businesses. volved in creating new jobs and in en­ vate sector companies and farmers SASOL’s assistance will firstly increase suring the speedy achievement of the who take responsibility for the suc­ the number of workplaces available at UN’s eight Millennium Development cessful implementation of the proj­ a social enterprise in the Khorezm re­ Goals by the 2015 deadline. # ects and provide funding and work­ gion that teaches traditional handicraft ing capital. The role of the Chamber of techniques and provides jobs for pre­ Narzullo Oblomurodov Commerce and Industry of Uzbekistan viously-unemployed women. Project Manager and the UNDP is to develop a business Secondly, its assistance will help es­ Business forum of Uzbekistan model, provide expertise and partial tablish a milk collection center in the UNDP/Chamber of Commerce and funding of the project cost, as well as Tashkent region, modeled after a sim­ Industry of Uzbekistan

WWW.AMCHAM.UZ 15 AMCHAM UZBEKISTAN

Frederick Darby, Amir Mineral and Oskars Kastens, NDI. Erin M. Cole, USAID Uzbekistan

AmCham Vision 2020 Presented Following Nicholson’s talk, Micah Each goal was accompanied by at Interim General Assembly Lund, business advisor to AmCham, several recommended action points. The American Chamber of Com­merce presented his initial findings from sev­ One such recommendation was to in Uzbekistan hosted its Interim General eral months of interviews and research create additional value and incentives Assembly on July 11 at the Inter­na­tional related to AmCham’s history, board tied to voting membership in order Hotel Tashkent. Don Ni­cholson,­ presi­ and membership sentiments and staff to encourage both current and new dent of AmCham, opened the meet­ activities. The speech highlighted four members to upgrade their member­ ing by updating members on recent primary goals for AmCham leading up ship status and gain more from great­ AmCham events and the progress the to 2020: er involvement. organization has made in 2013. This in­ 1. Strengthen the organization’s net­ The assembly determined that cluded the work being done to improve work and networking opportunities for this action point, which introduces the AmCham website, cooperation with members. new membership categories such as the U.S. Department of Commerce dur­ 2. Assume a greater role in coopera­ Platinum, Gold, Silver and Bronze, could ing the visit of Matthew Murray, deputy as­ tion and advocacy with the government be voted on at the General Assembly sistant secretary for Europe and Eurasia, of Uzbekistan. in December. the formation of a new committee on 3. Foster a membership that is fully en­ For more information about commercial law, and an upcoming trip gaged in AmCham’s success. AmCham Vision 2020 and/or to re­ by Tatyana Bystrushkina, executive di­ 4. Become more effective at sharing ceive a copy of the presentation, con­ rector of AmCham, to Washington, D.C. and retaining knowledge. tact the AmCham office.

John Etcheverry, U. S. Embassy Hugo Minderhoud hands over Certificate of Appreciation to Zoya Tuchkova

16 Business Connections • 2’2013 AMCHAM UZBEKISTAN

tions and obtaining finance. It is no sur­ prise, therefore, that the UK attracts more international investment projects than anywhere else in Europe’. Ambassador Edgar then explained in detail about trade and investment re­ lations between the UK and Uzbekistan. The trade turnover between two coun­ tries was over USD 206 million in 2012. These figures could be much better however, and as the Ambassador not­ ed, there is huge unrealized potential in bilateral trade relations. The UK is already a significant source of foreign investment in Uzbekistan, Ambassador Edgar stressed. There Anvar Rasulev, Ansher H. E. George Edgar are dozens of companies with British capital operating in diverse sectors of Britain Open for Business: UK. The country’s open and interna­ the Uzbek economy including Tethys Her Majesty’s Ambassador tionally focused economy is one of the (oil production), Rio Tinto (mining), speaks at the American Chamber largest and most sophisticated in the Deloitte and SNR Denton (consulting of Commerce Monthly Meeting world. The UK offers an attractive loca­ and legal services), GlaxoSmithKleine Her Majesty’s Ambassador, George tion for businesses with easy access to (pharmaceuticals), Carlsberg (brew­ Edgar, was the honorary speaker of customers, product innovators, suppli­ ing firm), British American Tobacco the month at AmCham’s first meet­ ers and business partners. (tobacco industry), ITE (exhibi­ ing since the summer break and deliv­ ‘We are one of the top ten manufac­ tions), WorleyParsons (engineer­ ered a speech on the subject of Uzbek- turers in the world and have the largest ing), Wakefield Inspection Services British trade and investment relations. industries in Europe for Life Sciences, (inspection services), Nationwide More than 60 AmCham members and ICT and the Creative Industries. The Technologies (fertilizer production), guests, including foreign and local en­ UK is home to three of the top five the British School of Tashkent and oth­ trepreneurs, diplomats, representatives globally ranked universities, including ers. Many of them have been working of international organizations, business Cambridge, ranked number one and in the local market for years, are rec­ consultants and academics attended offers a strong skills base. According ognized leaders in their field and have the British Ambassador’s presentation. to the World Bank, the UK is the best excellent business reputations among Ambassador Edgar started with an major location for ‘ease of doing busi­ Uzbek customers. introduction to the business climate ness’ in Europe in terms of setting up The UK priority, Ambassador Edgar and investment opportunities in the and running a business, labour regula­ said, is to develop bilateral trade rela­

Honeywell visiting team Alexey Fegetsyn, Pwc

WWW.AMCHAM.UZ 17 AMCHAM UZBEKISTAN

Angie Cairns Kuschel, Matthew Kuschel, TIS Donald Nicholson II, AmCham President tions and work with the Government than 200 British companies and orga­ finance, banking and insurance. I hope of Uzbekistan to create advanta­ nizations are UBTIC members. There is that the 20th session of UBTIC, sched­ geous business conditions which will no membership fee and any compa­ uled to be held in London in November attract more British companies to in­ ny registered in the UK may join UBTIC. will take business links between Britain vest in the country. The Embassy’s In conclusion, Ambassador Edgar and Uzbekistan to a new level and lead Commercial Section stands ready to commented: ‘Uzbekistan has great eco­ to the conclusion of mutually benefi­ assist British companies already oper­ nomic potential and a number of com­ cial contracts’. ating in Uzbekistan and can help advise petitive advantages that are attractive to new UK businesses on the Uzbek mar­ foreign investors. With its key geostrate­ October Monthly ket. Co-chaired by H. E. Elyor Ganiev, gic position, skilled workforce, the largest Meeting at AmCham Minister of Foreign Economic Relations, domestic market in Central Asia, wealth His Excellency Yuri Sterk, ambassa­ Investment and Trade from the Uzbek of raw materials and low operating costs, dor of the European Union Delegation side and Mr Peter Lilley MP from the the country could have a remarkable fu­ to Uzbekistan, addressed the mem­ British side, the Uzbek-British Trade & ture. I am convinced there are emerg­ bership of the American Chamber Industry Council (UBTIC), established ing opportunities for British companies of Commerce in Uzbekistan at the in 1994, is also a key partner for pro­ here, in diverse sectors of the Uzbek monthly meeting on October 24. Nearly moting bilateral trade and economic economy such as oil and gas, mining, every seat in the Club Lounge Room at relations. UBTIC holds annual alternate energy, engineering, construction, ed­ the International Hotel of Tashkent was sessions in London and Tashkent. More ucation, pharmaceuticals, agriculture, full for the event.

Furkat Salimov, Namuna-Diyor and Dale Henry, Oasis FES Mirpayoz Mirsaatov and a guest

18 Business Connections • 2’2013 AMCHAM UZBEKISTAN

Sevil Lapidus, Baker Tilly Tashkent and H. E. Yuri Sterk Paul Wakefield, CNH France and Pim guests Sterckx, Gosselin Worldwide Moving The meeting started with a brief pre­ trade has been low, he explained, the Business Mixer on June 7, 2013 sentation by Donald Nicholson II, presi­ EU collectively is Uzbekistan’s fourth “Globalink Logistics Group” a long- dent of AmCham, in which he introduced largest source of imports and fifth larg­ standing member of AmCham in Uz­ a new tradition for AmCham monthly est trading partner overall. He noted be­kistan sponsored wonderful sum­ meetings. At each gathering, up to two that there is significant room for scal­ mer event. On June 7, 2013 Globalink AmCham members will be invited to give ing up trade and that the EU looks for­ Logistics Group sponsored AmCham a brief introduction of their company’s ward to strengthening its relationship Business Mixer to gather its clients activities and services before the main with Uzbekistan in this regard. and friends and to wish everybody speaker gives his/her presentation. The meeting ended with Anton enjoyable summer season. Globalink The idea behind this practice, Reshetnikov, technical director of Logistics Group is one of the long- Nicholson explained, is to allow mem­ Atlantik-Trade, presenting his compa­ stan­ding members of AmCham. bers a chance to better understand ny to the audience. Atlantik specializes That has been the member of the what each business offers and to facil­ in building security systems for a wide as­sociation since 2000. Globalink is itate more business-to-business con­ range of buildings and facilities. This a leader of worldwide freight forwar­ nections. was the first opportunity for the busi­ ding, project logistics and move man­ Following Nicholson’s presentation, ness intro segment of the AmCham agement services. A team of profes­ Ambassador Sterk spoke about EU- monthly meetings. sionals in every office in 65 coun­ Uzbekistan trade and economic rela­ Both presentations are available by tries of the world will be happy to pro­ tions. While historically EU-Uzbekistan request from the AmCham office. vide corporate and personal servic­

Alexander Antonov, the Honoray Consul of Canada in Uzbekistan and guests from Manaev Khalmurat and Akhmed Canadian Embassy in Moscow Khalilov, Holos

WWW.AMCHAM.UZ 19 AMCHAM UZBEKISTAN

the start of the event. Elfranco van Loggerenberg, head of Sasol Synfuels International, briefed participants on the GTL project and passed the floor to James Vaughn, general director of Oltin Yo’l GTL JV. As the biggest foreign investor in Uzbekistan, Sasol Synfuels International, in partnership with the Uzbekneftegaz National Company, is implementing a gas to liquid (GTL) project at the Shurtan Gaz Chemical complex. Participants of the mixer were then invited to enjoy the delicious food, mu­ sic by a famous Tashkent band, and the atmosphere of the last warm evening Tatyana Bystrushkina, AmCham, Khalid Farooq, Globalink, Juergen Spendel, GMPT open June Business Mixer in Tashkent. es. Juergen Spendel, AmCham Vice- ness mixer on Friday, September 27. October Business Mixer President welcomed participants of Sponsored by a dedicated AmCham The October Business Mixer of the the event. In its remarks he thanked member, Sasol Synfuels International, Ame­rican Chamber of Commerce Khalid Farooq, general manager and the mixer was held at the Garden Bar in Uz­bekistan was held in the Crystal his dedicated team for being loyal at the Dedeman Silk Road Hotel, one Ballroom of the International Hotel member of Amcham in Uzbekistan of the best outdoor gathering places in in Tashkent on Tuesday, October 22. and for sponsoring this event. Khalid Tashkent. The Dedeman is also a long- INGO Uzbekistan, a member of Farooq took the floor afterwards. standing AmCham member. AmCham, sponsored the event and He invited participants enjoy food, The September event was a tremen­ took the opportunity to hold a press drinks and summer atmosphere of dous success among the internation­ conference marking the organization’s the one of the best outdoor venues al business community of Uzbekistan. five-year anniversary in Uzbekistan. in Tashkent—The Green garden of the The evening brought together a large Prior to opening a local office in 2008, Radisson Blu Hotel Tashkent. group of people from the business INGO Uzbekistan’s parent company, community, diplomatic corps and in­ INGOSSTRAH, had representation in Business Mixer ternational organizations to socialize Uzbekistan from 2003. INGOSSTRAH on September 27 and renew contacts after a long sum­ sent representatives from its offices The American Chamber of Com­mer­ mer break. throughout the CIS countries to attend ‑ce in Uzbekistan stepped into the AmCham President Donald Nichol­ the Tashkent event in October to mark second part of the year with a busi­ son II welcomed participants at the special occasion.

James Vaughn, Oltin Yo`l GTL JV Elfranco van Loggerenberg, Sasol Representatives of INGO CIS Synfuels International

20 Business Connections • 2’2013 AMCHAM UZBEKISTAN

Rustam Turaev, INGO Uzbekistan Zia Akhmed, Sitara International Shiraz Poonja, Sitara International

Following the press conference, Business Mixer ment dental clinics in Tashkent. Founded INGO Uzbekistan gave a brief pre­ on November 22, 2013 in 1988, Stomatologiya Budushego is the sentation in the main ballroom. Members of the American Chamber first private dental clinic in Uzbekistan. Representatives talked about INGO’s of Commerce of Uzbekistan, visit­ Today there are four clinics throughout service offerings and how grateful they ing guests and all other participants at Tashkent. Clients enjoy high quality ser­ are to be working in Uzbekistan. Donald the November Business Mixer will eas­ vices from a team of the most profes­ Nicholson II, AmCham president, al­ ily remember this event until next year. sional doctors in this sphere. Tatyana so presented INGO with a certificate Stomatologiya Budushego, sponsor of Bystrushkina and Jurgen Spendel opened marking their five-year anniversary as the mixer, is famous for organizing out­ the evening and introduced Mr. Mirzaev a member of AmCham. standing receptions that are remem­ Abdufarrukh Abdusolamovich, founder The event was well attended with bered for a long time. This was the last of the clinic. Participants then watched a more than 100 guests. A string quar­ AmCham business mixer for 2013 and movie about the clinic and the services tet played music while guests en­ was held in the famous restaurant 12 it provides clients. Little souvenirs were joyed an immaculate buffet, com­ Chairs. Guests were offered delicious given to participants from the sponsor. plete with desserts and drinks. food in abundance, jolly music and a fes­ The evening was especially warm Several guests commented that this tive pre-Christmas atmosphere. and hospitable. We are sure that mem­ business mixer stood out as one of Stomatologiya Budushego has been bers will remember this evening until their favorites of all time. Well done, a member of AmCham since 2008 and late January when AmCham organizes INGO Uzbekistan! is known by its network of premium seg­ its next social gathering.

Alexander Ilyashenko and Alexander Abdufarrukh Mirzaev, “Stomatologiya Budushego”, Tatyana Bystrushkina, Homyakov, INGO CIS AmCham, Juergen Spendel, GMPT

WWW.AMCHAM.UZ 21 AmCham news

Join AmCham family

spent as director at the American International School of Bamako, Mali. This is David’s first position at a school in Central Asia. Before becoming an educator, he was a volunteer with the U.S. Peace Corps in Burkina Faso, West Africa. He also helped spearhead the co-founding of Saudi Arabia’s first Habitat for Humanity chapter while working as the profes­ sional development coordinator and technology coordina­ tor at the Dhahran High School in Saudi Arabia. Tashkent International School is an International Baccalaureate World School offering all three IB pro­ grammes—the Primary Years Programme for pre­ school through grade 5, the Middle Years Programme for grades 6 through 10, and the college preparatory Diploma Programme for grades 11 and 12. The school is currently expanding to enhance the TIS Design Technology Program and meet growing enrollment with the construction of a new Art & Design Building on the beautiful, wooded 5-hectare campus. The new building will open in August 2014. Plans are also in place for the con­ struction of a new elementary building in the next two years. TIS is a not-for-profit, independent co-educational day school with 500 students from 45 countries in preschool through grade 12. The school is also recognized as a fully New Director Joins Staff adequate educational institution for students in kindergar­ of Tashkent International School ten through grade 12 by the U.S. State Department Office of David G. Henry took the post of director at Tashkent Overseas Schools for U.S. Foreign Service families. International School in July 2013. He is joined in Tashkent by his wife, Maria Ramilo, grade 3 teacher, and their three General Manager of Dedeman Silk Road Tashkent daughters, Maguiña, grade 10, Caroline, grade 8, and Ana Mr. Cemal Hosgul Sofia, grade 5. Cemal Hosgul has been appointed as General Manager of Originally from California, David Henry holds a Bachelor’s Dedeman Silk Road Tashkent Hotel starting from August 2013. degree in computer engineering, a Master’s of Education de­ A native of the Republic of Turkey, Cemal has a gradua­ gree in International Development Education from Howard tion of Tourism Industry from Gazi University-Ankara, Turkey. University in Washington, D.C., and a Master’s degree in Cemal began his career as a Front Office Clerk at Dilson Educational Leadership. Hotel, Istanbul (Turkey) in 1990. Then he moved to The Before joining the TIS community, David was director at Marmara Hotel in 1991 as a Front Office Clerk. From 1992 Lucaya International School in the Bahamas. Overall, he to1994 he worked as a Front Office Clerk in Hilton Izmir Hotel, brings with him two decades of international education ex­ Turkey and then he was transferred to Hilton Istanbul Hotel, perience, including various teaching positions and admin­ Turkey. In 1994, Cemal moved to U.S.A. where he completed istrative roles. David considers his most rewarding experi­ Marketing & Management Certificate Programs at the Bay ence as an educator thus far to be the four-plus years he State College as well as completing Business English pro­

22 Business Connections • 2’2013 AMCHAM UZBEKISTAN gram at the Harvard University in Boston/Massachusetts. both will be teaching in the primary campus. Jennifer will be During his studies Cemal held Office Manager Role in Karat leading Year 1 and Abigail will be supporting Year 2 in her role Imports Company too. Between 1997 and 2004 Cemal as Teaching Assistant. served as Assistant Front Office Manager at Hilton Istanbul David holds a First Class honors degree in Education Hotel, Turkey. During his tenure, Cemal had been appoint­ from the University of Liverpool in the United Kingdom and ed as support manager for Opening of Hilton Sofia Hotel, joins the school from our highly successful sister school Bulgaria, for Front Office Department Operations in 2001. in Kuala Lumpur, Malaysia where he was Head of Middle In 2004, Cemal joined Hot&Crusty Bakery Line Company School. (NY based) at Istanbul, Turkey as a Regional Production Manager, David has been with the British Schools Foundation for being responsible for production unit openings in various cities the past four years. Before that David was Deputy Head of of Turkey (Istanbul, Izmir, Antalya, Ankara, and Bursa). The British School in Cairo, Egypt for two years and prior to Cemal appointed as General Manager of Kaya Hotel, this worked for the highly prestigious Doha English Speaking Uchisar-Nevsehir, Turkey in 2006 to rebrand the hotel from School in Qatar.

French Chain Club-Med. In 2007, Cemal obtained position In addition to welcoming David, we are also proud to an­ of Director of Front Office in Conrad Hotel Istanbul, Turkey. nounce the opening of our new campus. From 2008 to 2011 he served as Front Office Manager at Purpose built for our students we welcome the ad­ Hilton Istanbul. Having completing 2 years Worldwide Shine dition of spacious air conditioned classrooms, indoor Management Program besides his duty in Hilton Istanbul he and outdoor sports areas, a beautiful open space which had been appointed as General Manager position of Hilton includes our new library and Computing center and Garden Inn Istanbul Golden Horn Hotel, Turkey where he a 200 seat theatre. opened the hotel from the construction phase. For more information, contact Arofat Maradjapova, head Cemal as a hotel professional who has 23 years of ex­ of Admissions and Marketing at admissions@britishschool. perience in his field, keeping in mind 16 years of that with­ uz, tel: +998 (90) 955-4205 in the Hilton Worldwide surely has a lot to provide to Uzbek The new campus of the British school of Tashkent is sit­ Tourism and Tashkent. uated in 10 minutes walking distance from the current one at Mirzo-Ulugbek district, Sairam street, 30A bldg. We fol­ New Headmaster of the British School low the National Curriculum for England and cater for chil­ of Tashkent Mr. David Kirkham dren from Pre nursery to Year 6. Part of the British Schools The British School of Tashkent is delighted to announce the Foundation the organization currently charters ten schools appointment of Mr. David Kirkham as the new Headmaster. serving expatriate communities in China, Russia, Malaysia, David is joined by his wife Jennifer and daughter Abigail who Philippines, Spain, Uzbekistan, and Brazil. #

WWW.AMCHAM.UZ 23 Member profile

International Certification System Group LLC

Name of Business : Issuing International Certificate AmCham Category : NON-VOTING CORPORATE B partner of ACS Registrars of United kingdom certification body AmCham Member : 2012

ICS Group provides a range of expert and cost effective registration / certification services designed to optimize busi­ ness opportunities. These incorporate: ISO 9001, ISO 14001, ISO 27001, OHSAS 18001, PAS 43/NHSS 17/NHSS 17b Quality Management, Environmental Management, Information Security, Safety & Health and Vehicle Recovery standards.

The certificate of ACS Registrars of United kingdom (ICS Group) Accredit by UKAS organization. The United Kingdom Accreditation Service is the sole UK accreditation body recognized by the UK government and also fully recognized by EU member state Governments to assess organizations that provide certification. As the UK is a primary member of the EU, only UKAS Accreditation or a similar EU based accreditation body can guarantee your accreditation will be recognized by European Union Member State Governments Commerce and Industry.

ACS Registrars issued 32,000 certificates in mentioned filed in whole the word.

Since 2013 ICS Group as a partner of ACS Registrars of UK began to issue of GMP certificate for Drug Manufacturing of UZEBKISTAN based EU and FDA requirements such as Remedy Group and NOVOPHARMA plus.

As an important point ICS GROUP got local accreditation from standardization, metrology & certification of Uzbekistan agency on 27 August 2013 for issuing management systems certificate in Uzbekistan as well.

Contact Information Address : Istiqbol 34, Tashkent, Uzbekistan Telephone : +998 (71) 236-2341 Fax : +998 (71) 236-2341 Email : [email protected] Website : www.acsregistrars.com Leader : Mr.Bakhteyor Suvanov Contact person : Dr. Shervin Mirzadeh, Chairman

24 Business Connections • 2’2013 AMCHAM UZBEKISTAN

LATEST CHANGES

List of documents required curred before arrival to the customs Law No. 355 amended the Law of for customs clearance of territory of the Republic of Uzbekistan the Republic of Uzbekistan No. 279- goods has been amended for the purposes of determination of I “On Accounting” dated 30 August The Resolution of the Ministry of Foreign the customs value of the import goods, 1996 in order to formalize the norm Economic Relations, Investment and when exemptions are applicable to the established by Presidential Decree Trade (MFERIT), the Ministry of Finance customs duties. No. UP-4354 dated 24 August 2011 and the State Customs Committee of Comments: The amendments are in the Law. the Republic of Uzbekistan No. 428-7 introduced to bring the List into line According to this norm, when a busi­ dated 11 October 2013 amends the list with the amendments to the customs ness entity makes payments for goods of documents submitted to Customs laws and regulations made in May and (works, services) by a corporate card authorities for customs declaration of September 2013. via terminals, the checks are recog­ imported/exported goods. nized as the primary accounting doc­ According to the amendments the Law of the Republic of uments. importer shall submit the Opinion of the Uzbekistan “On introduction Comments: These measures are MFERIT on import contracts instead of amendments and additions, taken to officially recognize check pay­ of the Certificate on registration of the as well as the abolishment of ments as primary accounting docu­ contract with the MFERIT now for cus­ certain legislative acts of the ments which have been already used toms clearance of the goods import­ Republic of Uzbekistan” No. 355 in practice by business entities. ed for free circulation (import regime). dated 7 October 2013 The updated List requires submis­ Check payment via terminal will offi­ Amendments to the Tax Code sion of export freight declarations and cially be recognized as an accounting 1. Late payment interest (for failing to other documents confirming cost in­ document. pay taxes on time) has been decreased from 0.05% to 0.033% for each day of delay. 2. The size of the fine for engaging in activities without a license has been amended: $$ in the old version the size of the fine was set as the amount of “net prof­ its from the activities for the period of activities without a license or oth­ er required documents, but not less than fifty times the minimum month­ ly wage”; $$ in the new version the business en­ tity engaged in activities without a li­ cense or other required documents will be liable in due course. Comments: In new edition of the Tax Code the consequences of engaging in activities without license or other re­ quired documents are unclear.

WWW.AMCHAM.UZ 25 AMCHAM UZBEKISTAN

administrative responsibility for the of­ ficials of business entities (manufactur­ ers) has been introduced.

Amendments regarding regulation of employment of population Amendments to the Law On employ­ ment of population, Labor Code and Code on administrative responsibility in relation with the guarantees of employ­ ment of certain categories of individuals. $$ an employer must employ repre­ sentatives of certain categories of per­ sons referred to him/her by the local employment authorities in the frame­ work of the established minimum num­ ber of vacancies; $$ additional employment guarantees are provided to the following catego­ ries: graduates of special secondary Amendments to the Priority of business entities’ rights professional schools, as well as state Customs Code In addition to the Customs Code the scholarships recipients University grad­ 1. All the inherent contradictions and principle of priority of business enti­ uates; dismissed from active military ambiguities of customs law arising in ties’ rights has been introduced to the service in the Armed Forces of the connection with business activities following legislative acts: Republic of Uzbekistan; discharged shall be interpreted in favor of the busi­ $$ Law of the Republic of Uzbekistan from prisons or compulsory measures ness entity. On state control of business activity of medical treatment; human traffick­ 2. The amendments define the terms No. 717-I dated 24 December 1998; and ing victims and others; of customs control after the customs $$ Code of Civil Procedure of the $$ administrative fine for failure to ex­ clearance of goods and customs du­ Republic of Uzbekistan. ecute resolutions of the local employ­ ties accruals. In accordance with the principle all ment authorities regarding creation of $$ the amendments establish that inherent contradictions and ambiguities vacancies for the individuals in need the deadline of the customs control of laws and regulations arising in connec­ of social protection as well as for re­ after the customs clearance of goods tion with business activities shall be in­ fusal to employ said individuals is es­ is three years from the date of customs terpreted in favor of the business entity. tablished in amount from 3 to 10 MMW. clearance of goods. Comments: We note that the Tax $$ the amendments establish that the Code of the Republic of Uzbekistan Uzbekistan outlines conditions deadline for the customs duties accru­ contains this principle as well. for acknowledging business als of goods after the customs clear­ entity as dominant in the market ance is one year after the customs Amendments to the Code on Resolution of the Cabinet of Ministers of clearance of goods. Administrative Responsibility the Republic of Uzbekistan No. 230 of 3. Late payment interest (for failing $$ maximum amount of the fine for 20 August 2013 approved the Regulation to pay customs charges on time) has a repeated violation of accounting rules on procedure of determining dominant been decreased from 0.05% to 0.033% by the officials of business entities that position of a business entity or a group for each day of delay. caused understatement of taxes has of person in goods or financial market Please note that the above changes been raised from 15 to 20 minimum and on the State registrar of business took effect from 8 October 2013. monthly wages (MMW = 91530 UZS = entities, holding dominant position in Comments: Earlier, customs con­ approximately 42 USD); goods and financial markets. trol after the customs clearance $$ maximum amount of the fine ap­ The Law “On competition” (ZRU- of goods was not limited in time. As plied to the officials of organizations 319 dated 6 January 2012) has changed well as in the previous edition of the and enterprises for carrying out activ­ principles of determining dominant po­ Customs Code the term of customs ities without licenses and permits has sition and set clear criteria for dominant duties accruals of goods after the cus­ been raised from 15 to 20 MMW; position in the markets (Article 6 of the toms clearance of goods also was not $$ economic sanctions for sale of un­ Law). Earlier, the entities with market limited in time. certified goods has been abolished and share of 65% or higher would be con­

26 Business Connections • 2’2013 AMCHAM UZBEKISTAN sidered as domination in the market, entities has listed the transactions sub­ Comments: New National Ac­coun­ but the law decreased threshold to ject to approval of the anti-monopoly ting Standard No. 20 is introduced to 50%. The business entities with mar­ authority. The Regulation has been ap­ simplify and enhance the reporting ket share between 35% and 50% can proved by the Resolution of the Cabinet of small enterprises which compris­ be also considered as dominant play­ of Ministers on 20 August 2013. es significant part of the business in ers in the market if the business entity is The Regulation applies to: Uzbekistan. stably present in the market for at least $$ acquisition of shares in the char­ one year; depending on relative size of ter capital (authorized capital) or oth­ The list of goods prohibited shares owned by other business enti­ er proprietary rights of the business en­ for export was updated ties (competitors); and depending on tity by an investor through one or more From 1 September 2013 the export the possibility of entering for new busi­ transactions; from the Republic of Uzbekistan of ness entities into the market. $$ increasing charter capital (authorized waste and secondary raw materials The State Committee of the capital) by investing shares or assets of of polyethylene terephthalate (PET) Republic of Uzbekistan for privatization, the business entity into the charter capi­ is prohibited. demonopolization and development of tal (authorized capital) as the way of pay­ Waste, parings and scrap of PET are competition will determine dominant ment for the purchased shares; added to the List of goods and prod­ position of the entities in the market. $$ increasing initial charter capital ucts prohibited for export, approved The dominant position will be deter­ (authorized capital) by increasing the by the Decree of the President No. UP- mined in three stages. amount of shares of the founder of the 1871 dated 10 October 1997. These A dominant position of the product open joint stock company through the measures are taken for the purposes in the relevant market is determined if issuance of additional shares or in case of further development of t PET pro­ the market share is: of a limited liability company—increase duction. Starting from September the a) 50% or more; in share fraction; export of PET materials will be possi­ b) from 35 to 50% within one year or $$ transfer of shares of the entity in the ble only on the basis of a presidential more share of business entity or group form of a gift, payment of the debt; or governmental decision. of companies is constantly in this range; $$ acquisition of shares by an individu­ Control of illegal export of PET ma­ or there are no other entities or groups al if the individual prior to the transac­ terials from the Republic of Uzbekistan of companies with a market share more tion (subject to preliminary consent) has is entrusted to the State Customs than 20% on the market. owned shares of other business entities. Committee. A business entity or group of com­ Comments: The list of goods and panies which brought into the mar­ Accounting procedure for products prohibited for export include ket a certain type of financial services, small business is simplified the following 11 goods: which had no analogues in the relevant Order of the Minister of Finance has ap­ $$ Grains: wheat, rye, barley, oats, rice, market for 2 years from the beginning proved the new National Accounting corn, buckwheat; of its provision shall not be considered Standards (NAS No. 20) “Simplified ac­ $$ Bakery products (except self-made as a dominant position in the market. counting procedures for small business­ confectionery, cakes and biscuits); The entities, found to be dominant es”. $$ Flour; players in the market, will be included The document establishes that the re­ $$ Livestock, poultry; to the state registrar of the business quirements of the new NAS No. 20 apply $$ Meat and edible meat offal, edible entities holding dominant position in to all small businesses, except of individ­ offal of poultry; goods or financial markets. ual entrepreneurs and farmers. Moreover, $$ Sugar; Comments: The document was new NAS No. 20 applies to credit and in­ $$ Antiquities (paintings, sculptures, adopted for further improvement of surance companies, investment funds etc.), representing a significant artistic, state regulation of competition in the and other financial institutions qualifying historical, scientific or cultural value; commodity and financial markets of considered small businesses. $$ Vegetable oils; the Republic. In accordance with the new NAS $$ Raw hides and skins (including non- No. 20, managers shall be entitled to standard), furs, including karakul (in­ Transactions requiring outsource third-party organization— cluding non-standard); preliminary approval of the specialized accounting firms for ac­ $$ Waste and scrap of non-ferrous anti-monopoly authority counting and reporting. metals; Regulation on procedure for review and In the NAS No. 20 details the pro­ Silkworm cocoons suitable for reel­ preliminary approval of transactions re­ cedure of accounting of enterprises in ing, non-woven raw silk, silk waste (in­ lated to acquisition of shares (stakes) a simple or combined form depending cluding cocoons unsuitable for reel­ in charter capital (authorized capital) on the production and management ing, yarn waste and cocoon loosened and other proprietary rights of business requirements. waste). #

WWW.AMCHAM.UZ 27 Legislation

Changes in tax Legislation

Amendments to number with payments of monthly equal instal­ Customs Code of legislative documents ments from the date of decision on col­ Additional charge of the customs By virtue of the Law of the Republic of lection of tax. payments could be made only with­ Uzbekistan No. ЗРУ-355 of 7 October Frequency of the planned tax au­ in one year from the date of release 2013 a number of amendments to the dits of the private banks and other fi­ of goods. Moreover, legal entities can legislation were introduced. The most nancial institutions should not exceed submit written request to customs notable amendments are as follows. one time in every five years. authorities to use the deferral of pay­ Rate for calculation of the late pay­ ment of additionally charged cus­ Tax Code ment interest (LPI) has been changed toms payments and financial sanc­ Deferral on payment of taxes, oth­ from 0.05% to 0.033% per day. Change tions. Deferral is provided for the peri­ er obligatory payments and financial of the rate brings the Tax Code in line od of six month with payment by equal sanctions accrued in the result of tax with the Decree of the President of the monthly instalments. audit may now be applied regardless Republic of Uzbekistan No. УП-4354 of of the amount due. Earlier the deferral 24 August 2011 which have provided for Administrative Code could have been applied only if the ag­ reduction in the rate. Fines charged on individuals and au­ gregate amount of such payments ex­ Income of individuals paid for cotton thorised personnel for certain types ceeded 20% of current assets. Deferral picking is included in the list of income of violations have been increased. is provided for a period of six month exempt from personal income tax. Moreover, quite a few articles were supplemented by provisions envisaging penalties for repeated violations in the areas of taxation, employment, antimo­ nopoly, social protection of disabled, securities and exchange activities, li­ cencing and many others. Following are some examples of the amendments: $$ Maximum fine for repeated violation of the order of cash transactions and payment discipline applied to the au­ thorised personnel has been increased from 15 to 20 minimum monthly wag­ es (MMW). $$ Similarly, maximum fine for carrying out activity subject to licencing with­ out licence charged on authorised per­ sonnel has been increased from 15 to 20 MMW. $$ New fine in the amount ranging from 50 to 100 MMW was introduced for production, manufacturing, pur­ chase, storage, transportation and sale of poor quality and counterfeited drugs and other medical products.

28 Business Connections • 2’2013 AMCHAM UZBEKISTAN

Law on accounting Receipts from payment terminal is­ sued for transactions carried out us­ ing corporate plastic cards are includ­ ed into the list of primary supporting documents.

Labour Code List of individuals not subject to proba­ tion period was amended to include graduates of specialised secondary in­ stitutions, professional educational insti­ tutions and higher education institutions starting their work for the first time with­ in three years from the graduation date. Another change to the Labour Code provides that the total duration of unpaid leave shall not exceed three months within a twelve month period.

Interpretation of unavoidable contradictions and ambiguities Number of legal acts has been changed to include similar provisions stating that all unavoidable contradic­ tions and ambiguities shall be treated in favour of business entity. In particular the following acts have been amended: of daily subsistence allowances (DSA) for Thus, foreign currency proceeds $$ Law “On state control of econom­ business trips outside of Uzbekistan have from export operations should be col­ ic entities”, been revised. Examples of the amend­ lected within: $$ Customs Code, and ed norms are as follows: $$ 180 days from the actual date of ex­ $$ The Economic Procedural Code. $$ DSA norm to Spain was increased port—for small business and private- from USD 35 to EUR 40. entrepreneurs engaged in the export Amendments to order on cal­cu­ $$ DSA norm to Japan was changed of goods in foreign currency without la­tion of late payment­ interest from 10,000 yen to USD 100. 100% prepayment, letter of credit or Regulation of State Tax Committee $$ DSA norm to Russia was increased bank guarantee (export insurance pol­ No. ПП-1724-1 of 23 September 2013 from USD 10 to USD 25 (except for icy should be available). (Regulation) introduced amendments to Moscow and St. Petersburg where $$ 90 days from the actual date of ex­ the Order on calculation of LPI in relation norms are USD 35). port—for the following state owned com­ to taxes and other obligatory payments. panies carrying out centralized export $$ The Regulation extends scope of the Amendments to the currency “Uzmarkazimpeks”, “Uz­prommash­ ­im­ Order to include individuals. Previously control legislation peks”, “Mar ­k a z ­s a ­n o a t ­e x ­p o r t ”, “ U z ­i n ­t e r ­i m ­ only legal entities were covered. Following amendments were intro­ pex”, “Uzvneshtrans”, “Urta Osiyo Trans”. $$ Base for calculation of LPI is amended duced to the Decree of the Cabinet If foreign currency is not collected to include financial sanctions in addition of Ministers No. 245 of 29 June 2013 within established terms, the export­ to taxes and other obligatory payments. (Decree 245) in part related to collec­ ed goods should be returned to the $$ LPI rate has been changed to tion of proceeds from export of goods. seller. # 0.033% in line with the amendment to the Tax Code. Legal Disclaimer: The material contained in this alert is provided for general information purposes only and does not contain a com­ prehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice speci­ fic to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert. Revised norms of allowances © 2012 PwC. All rights reserved. Not for further distribution without the permission of PwC. "PwC" refers to the network of member By the order of the Minister of Finance firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not No. 89 of 19 September 2013 registered provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it con­ by the Ministry of Justice under No. 932- trol the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omis­ sions of any other member firm nor can it control the exercise of another member firm's professional judgment or bind another 2 of 23 September 2013, statutory norms member firm or PwCIL in any way.

WWW.AMCHAM.UZ 29 Legislation

Uzbekistan: Review of macroeconomic indicators, 2013

Macroeconomic indicators January–June 2013

Billion SUM in % for January–June

Gross domestic product 50432,3 108,0

Industrial output 28493,9 108,2

Agricultural production 12943,2 107,3

Investment in fixed assets 12080,6 110,5

Construction work 6291,8 116,1

Transportation of goods, mln. tn 629,6 104,5

Freight turnover, mln. tn-km 40471,3 104,0

Passengers, million 3302,4 104,0

Passenger turnover, mln. pass.-km 43681,5 106,6

Retail turnover 20664,7 114,6

Paid services 7955,7 111,0

Report alert

The gross domestic product (GDP) of Uzbekistan in January–December 2012 amounted to 96.589 thrillion SUM, or grew by 8.2%. According to the State Statistics Committee, the growth of industrial production by 7.7% to 50.731 thrillion SUM. In the reporting period, the volume of agricultural production increased by 7% in 2012—up to 24.37 thrillion. SUM Investment in fixed assets reached 22.067 thrillion SUM or increased by 11.6%. Retail trade turnover of Uzbekistan in 2012 amounted to 36.918 trillion. SUM or increased by 13.9% compared with 2011. The volume of paid services to the population of Uzbekistan in the reporting period amounted to 13.754 thrillion SUM, which is 14.3% more compared to 2011.

How to Contact Us

Call to our office: +998 (71) 234-9611/12 Write to us: [email protected] Or request on our web site: www.afs-research.com

30 Business Connections • 2’2013 AMCHAM UZBEKISTAN

APPLICATION FOR CHAMBER MEMBERSHIP

Chamber Membership Categories

1. Membership with the right to vote:

Corporate A open to all companies with revenues in excess of $100.0 million

Corporate B open to all companies with revenues in excess of $ 5.0 million but less than $ 100.0 million

Corporate C open to all companies with revenues below $5.0 million

2.Membership with no right to vote - open to all companies:

Non-Voting Corporate A open to all companies with revenue in excess of $ 5.0 million

Non-Voting Corporate B open to all companies with revenue below $ 5.0 million

Non-profit-non-voting Non-voting non-profit membership is open to any duly authorized accredited non-profit

Non-resident organization with no authorized representative 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 cal­ endar 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 Corporate A USD 4,000 G Non-voting Corporate B USD 500 G Corporate B USD 3,000 G Non-voting non-profit USD 500 G Corporate C USD 1,500 G Non-resident USD 500 G Non-voting Corporate A USD 1,000

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

Name of company

Address

Tel. Fax E-mail

Head of firm in Uzbekistan:

Name Title / Position

WWW.AMCHAM.UZ 31 AMCHAM UZBEKISTAN

Representatives:

(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. Please indicate the approximate amount invested into the economy in Uzbekistan:

G USD 1,000–10,000 G USD 100,000– 1,000,000 G USD10,000– 100,000 G More than USD 1 million

6. Number of employees in Uzbekistan at all locations:

G less than 20 G less than 50 G 50–100

7. Annual revenue:

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

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.

32 Business Connections • 2’2013 AMCHAM UZBEKISTAN

FAYSEL Construction Logistics Yuksel Adana, 255-5216 Membership List Grata Law Firm Bobur Karimov, 140-0405 Hotel Dedeman Silk Road Tashkent Cemal Hosgul, 120-3700 Hotel International Tashkent Bekhzod Zufarov, 120-7000 HRG Uzbekistan (Radius Travel LLC) Farkhad Rasulev, 120-9009 Ingo-Uzbekistan Insurance CORPORATE A OLSOFT Company BAT Uzbekistan Evgeniy Olevskiy, 256-3291 Rustam Turaev, 150-9999 Mark Filimontsev, 120-5555 SEAF- SME Investment JP Morgan Chase Bank N.A. CNH France S.A. Management Uzbekistan Paul Wakefield, 120-7450 Donald Nicholson II, 239-1680 Tokhir Sultanov, 140-3770 Ernst & Young Transcontinental JV LLC MAXAM Anvar Azamov, 140-6482 Janna Popkova, 120-3838 Jose Maria Casas, 140-5700 GM Powertrain Uzbekistan WCH Service bureau Ram Dis Ticaret Juergen Spendel, 140-5540 Alexander Tulupov, 254-3621 Lyubov Belokon, 252-6779, 252-6781 NUKEM SEP Nestle Uzbekistan Atabek Yuldashev, 281-5224 NON-VOTING CORPORATE A Philipp Gorbunov, 140-0600 PwC Ansher Holding Limited Alexey Fegetsyn, 120-6101, 120-6823 Nazim Kabilov, 268-9970, 286-1924/26 NON-VOTING CORPORATE B Sasol Synfuels International Air Astana in Uzbekistan Abris Distribution Inc. Elfranco van Loggerenberg, Yevgeniy Krutov, 140-3002 Denis Khegay, 140-5300 238-9450 Bechtel International Systems AFS-Research Company Ucell David Bjorkbom, 120-4425 Aleksey Kirilov, 234-9611/12 Osman Turan, 180-0000 Carlsberg Uzbekistan Ahlers International John Gillan, 140-9999 Diana Tomena, 252-7120, 252-1776 CORPORATE B Colibri Law Firm Aleks Treyding LLC (Granart) Avialeasing Aviation Company Zafar Malikov, 120-4778 Natalya Demasova, 120-5560 Igor Smirnov, 120-4950, 120-4952 Deloitte va Touche LLC Ancora Consulting Service Central Asia Seed Company Nasiba Nasretdinova, 120-4445 Oleg Daminov, 150-4436 Azizkhan Akhmedov, 291-0073 Everest Impex Plus LLC Anglesey Food Colgate–Palmolive Mukhtor Umarov, 250-2113 Zafar Khashimov, 140-1414 Jacques Martin, 252-3014 Po`latqurilma JSC Azad Sharapov, 254-1409 Tethys Uzbekistan B.V. Bakhrom Salakhitdinov, 237-5485

CORPORATE C AKTE LLC Hugo Minderhoud, 252-2402 Amir-Mineral MChJ Frederick Darby, 232-2032 “Bo'stonlig Sut” JV Jamilya Askarova, 120-4965 Daewoo Pack Co, Ltd. Jang Cheon Ho, 295-0573 InterConcepts Inc. Charles L. Rudd, 239-1491, 239-1302

WWW.AMCHAM.UZ 33 AMCHAM UZBEKISTAN

Grant Thornton Sogda Tour Ltd. Nematulla Karimov, 234-4632 Saad Al-Haire, 268-1070 Holos Ltd. Stomatologiya Budushego Khalmurat Manaev, 252-7185/86 Usmanov Zafar, 232-2022 HR Capital Consulting (HRC) Sushen Medicamentos Pvt Ltd. Kurbanov Aziz, 150-4230 Bharat Shah, 150-0214 JV Indorama Kokand Textile LLC Taurus Energy Limited Deepak Raina, 253-8325 Edo Veenstra, 354-3005 International Caravan Travel Uztex Chirchik JV LLC Service Co.Ltd. Jean-Claude Beaujean, 150-6904 Gulnora Khurramova, 237-1241 UzNek Info Xizmati Zokir Askarov, 244-3377 Alisher Yusupov, 150-1178 Winncom Technologies Corp. International Certificate System Myatejnikov Leonid, 150-3939 Group LLC Dr. Shervin Mirzadeh, 232-0932 NON-PROFIT NON-VOTING Imeon Logistics Group Ltd. British School of Tashkent David O`Connor, 140-9944 David Kirkham, 262-6020 “Isakov and Partners” Law Firm Canadian Consulate Atlantik Trade Yokubjon Isakov, 351-1232 Alexander Antonov, 120-7270 Farkhad Yusupov, 140-4868 SE “Ishan Group” JETRO Audit-As Khwaja Zia Ahmed, 262-0012 Toru Suehiro, 120-5591 Vera Bell, 230-6319 KN Ibrakom FZco Language Link Baker Tilly Tashkent Riza Tosun, 254-0019 John Curran, 235-9201 Guzal Islamova, 150-1512 Legalmax Law Firm National Democratic Institute for CafeJUM Mukhmmadali Makhmudov, 212-4732 International Affairs Kamil Khodjaev, 120-6189 Marvel Juice Oskars Kastens, 255-9099 Carolina Technologies, Ltd. Maksud Khudayberdiev, 305-1300 OSCE Alexander Veksler, 281-4362/63/64 Medicare György Szabo, 140-0468/69/70 Caspian Projects Muhammad Faiq Shah, 120-3782 Tashkent International School Support Network Mega Prodex LLC David Henry, 291-9671/72/70/67 Dmitri Bordovski, 256-0183 Normukhamedov M., 246-1611 Chamber Invest Group M&M Militzer & Muench Uzbekistan HONORARY MEMBERS Hikmat Abdurakhmanov, 269-9339 Khurshid Kasimjanov, 140-0003 ADB Classic International Miran International China Kazuhiko Higuchi, 140-1920 Abdulla Usmanov, 276-0223 M. V. Ganesh, 232-3000 UNDP Compass Consulting Move One Logistics Stefan Priesner, 120-3450, 120-3451 Ulugbek Hojiahmedov, 255-4693 Atabek Alimdjanov, 235-7390 World Bank Country Office/IFC Dentons Namuna-Diyor Private scientific in- Takuya Kamata, 238-5950, 238-5928 Marla Valdez, 120-6946, 255-6070 dustrial enterprise IMF Resident Representative Office Donaev Management Consulting Furkat Salimov, 255-3278 Galina Kostina, 233-4243 Bakhodir Donaev, 239-1183 Neftgazkipavtomatika Education Standard Consulting Tojiev Ruzimurat, 238-9340 NON-RESIDENT Group Oasis FES LLC National Bank of Pakistan Elena Sergeeva, 268-7544 Dale Henry, 237-5315 Dildora Yuldasheva, 237-1991 Elan Express LLC Prom Audit Ltd. Dr. Gregory Gleason Denis Sautov, 150-2550, 233-4999 Farkhad Makhmudov, 233-0152 University of New Mexico, FMN Logistics Real Info LLC 49 (8821), 750-2526 Zunnun Yuldashev, 129-0055 Alisher Niyazov, 148-3223 Thomson Reuters Globalink Logistics Group Renaissance Tour International Michail Borisiewicz, 651-7142 Khalid Farooq, 129-9900 Adolat Nasirova, 274-1290 Global Translation Service Samarkand Airways JV LLC INDIVIDUAL Ruslan Daminov, 914-7627, 921-9163 Aleksander Shevchenko, 120-3046 Angie Cairns Kuschel, 930-0261 Gosselin World Wide Moving Sitara International Ltd. Ilkhom Khodjakulov, 281-3080 Pim Sterckx, 186-6233 Khadim Poonja Nathoo, 281-4148 Jamshid Miralimov, 237-1024

34 Business Connections • 2’2013 AMCHAM UZBEKISTAN

Chairs of AmCham Committees in 2013

Tax & Accounting Trade & Investment Tourism & Hospitality Committee Committee Industry Committee

Stanislav Zukal Guzal Islamova Micah Lund Jasmina Popin

Corporate & Social Natural resources The Membership Responsibility Committee subcommittee Committee

Ludmila Park Angie Cairns Kuschel Frederick Darby Alisher Niyazov

WWW.AMCHAM.UZ 35 AMCHAM UZBEKISTAN

Business Connections is publis­ hed 2 times a year for American Board Chamber of Commerce in Uzbe­ kistan. Copyright 2013. of directors All rights reserved. 2013 Executive Director: Tatyana Bystrushkina President: Editorial Staff: Donald Nicholson II Donald Nicholson II, Hugo SEAF-SME Minderhoud, Tatyana Investment Bystrushkina, Lyubov Belokon, Management Ludmila Park, Angie Cairns Kuschel, Alexey Kirilov, Micah Lund

Contributing Authors: Donald Nicholson II, Tatyana Bystrushkina, Angie Cairns Kuschel, Ludmila Park, Micah Lund, Narzullo Oblomurodov

Address: 2, Afrosiab Street, Tashkent, Uzbekistan, 100031 Vice-President: Treasurer: Secretary: Phone: +998 (71) 140–0877 Juergen Spendel Hugo Minderhoud Atabek Yuldashev Fax: +998 (71) 140–0977 General Motors AKTE LLC NUKEM, Inc. E-mail: Powertrain [email protected] Website: www.amcham.uz

The AmCham Uzbekistan and authors declare that they have compiled this document careful­ ly and to the best of their knowl­ edge. However, no warranty or representation is made to the ac­ curacy of completeness of the in­ formation contained in this doc­ ument. The AmCham Uzbekistan and authors assume no liability Bakhrom Elfranco Alexey Fegetsyn whatsoever for any damage re­ Salakhitdinov van Loggerenberg PwC sulting from the use of this doc­ Tethys Uzbekistan B.V. Sasol Synfuels International ument or its contents. This free-of-charge advertis­ ing bulletin is not considered to be a subject of mass communi­ cation and may be distributed free of charge without registra­ tion among limited number of en­ tities and individuals.

Designer: [email protected]

Printed by Print Media Frederick Darby Mirpayoz Mirsaatov Tatyana Bystrushkina Uzbekistan, Tashkent Amir Mineral MChJ OLSOFT Executive Director 32, Uzbekistan Ovozi street Tel.: +998 (71) 233-0321 Fax: + 998 (71) 232-2566

36 Business Connections • 2’2013