The Law of the Republic of Uzbekistan "On Privatization of State Property" (February 14, 2024, LRU-907) was adopted by the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan on September 5, 2023 and approved by the Senate of the Oliy Majlis on November 24, 2023.

The previous Law "On denationalization and privatization" adopted in 1991 did not meet today's requirements, and this Law was amended and supplemented more than 20 times, making it obsolete.

The previous Law did not provide for privatization methods widely used abroad (in practice 2 methods: auction, tender), requirements of openness and transparency, as well as clear authorities of state bodies in the field of privatization.

For reference: The world experience uses from 4 to 10 methods of privatization, including Germany (6), Czech Republic (7) and Poland (10).

In this regard, the Law "On denationalization and privatization" (21 articles) is abolished and a new Law "On privatization of state property" (9 chapters, 45 articles) is enacted.

When drafting the new law, international experience in this field was considered, in particular, proposals of the World Bank, European Bank for Reconstruction and Development, Asian Development Bank, Indecon Consulting Company, KPMG Company, Polish experts and a number of other qualified consultants were taken into account.

The Law provides for the following basic norms:

1. The State Assets Management Agency (hereinafter - UzSAMA) is an authorized state body in the sphere of privatization of state property.

State property privatization programs are developed by UzSAMA on the basis of proposals of state bodies, local self-government bodies, as well as physical and non-state legal entities.

Privatization programs are developed by UzSAMA and approved by the following:

a) Republican property by the President of the Republic of Uzbekistan (large state enterprises) and the Cabinet of Ministers (other republican property);

b) municipal property:

• privatization programs of SUEs, state institutions and state shares in the authorized fund (authorized capital) of business entities - by Jokargy Kenes of the Republic of Karakalpakstan, national deputies, Kengashes of regions and Tashkent city, in coordination with the Chairman of the Council of Ministers of the Republic of Karakalpakstan, khokims of regions and Tashkent city;
• real estate objects - by the Chairman of the Council of Ministers of the Republic of Karakalpakstan, khokims of regions and the city of Tashkent, in coordination with the Jokargy Kenes of the Republic of Karakalpakstan, national deputies, Kengashes of regions and the city of Tashkent.

2. There are 8 methods of privatization, such as electronic online auction, competitive bidding, stock exchange, public invitation to negotiate, competitive dialogue, contribution of real estate, share and enterprise to the charter fund of another company, as well as leasing of enterprise with the condition of subsequent sale.

3. It is determined that when privatizing state property, applicants may not be individuals whose participation in the process of privatization of state property is prohibited by law, whose participation may lead to unfair competition, as well as individuals affiliated with them.

4. The process of putting state property up for auction is simplified. In particular:

a) the requirement for inventory of state property by a working group consisting of representatives of state bodies has been abolished, and this task has been assigned to the head of the enterprise for state shares and the balance holder for real estate;

b) it is established that when putting state property on online auctions and on the stock exchange, or when it is evaluated by subsidiaries of audit companies with international reputation, operating in the Republic of Uzbekistan, the evaluation report is not subject to mandatory expertise;

5. Standards aimed at ensuring openness and transparency of the privatization process are being implemented.

• Information on the implementation of the privatization program and the stages of the sales process for each state asset will be published on the website.
• At least once a year, UzSAMA reports to the President and the Cabinet of Ministers of the Republic of Uzbekistan, upon request to the Chambers of the Oliy Majlis, and the territorial departments of UzSAMA report annually to the territorial Kengashes of national deputies.

6. In order to ensure the inviolability of privatized state property, it is established that sold state property cannot be returned to the previous owner in kind on the basis of a court decision, and its market value will be reimbursed at the expense of the Fund under UzSAMA.

The adoption of this law will serve as an important legal basis for deepening the processes of privatization of state property, attraction of investments in certain state property, implementation of new projects on the basis of inefficiently operating objects of state property, as well as will contribute to the harmonization of legislation in the field of privatization of state property.

The Law will come into force three months after its official publication.