suspension of all regular flights between Uzbekistan and the rest of the world;
suspension of entry into the territory of the Republic of Uzbekistan through all border points of citizens of foreign states (stateless persons) and passenger transport;
suspension of business activities of all entertainment facilities;
suspension of all types of public events;
suspension of educational processes in all educational institutions.

From 00:01 a.m. on March 24, 2020, the Government introduced extra measures for preventing the spread of coronavirus infection (hereinafter referred to as the “Quarantine Regime”). In accordance with it the following measures are taken:

equipment of entry and exit points to markets (shopping centers) with thermal imagers, antiseptics and presence of specialists;
compulsory disinfection of all vehicles and goods arriving in the Republic from abroad and other regions;
reception of individuals and provision of public services in government institutions remotely (online);
closure of all markets (shopping centers), with the exception of dekhkan markets in the city of Tashkent, Nukus and Regional Centers;

Until October 1, 2020 (1) the deadline for conducting an audit for 2019 by legal entities subject to a mandatory auditing is extended; (2) annual general meetings of shareholders following the results of 2019 can be postponed; (3) drugstores can wholesale their in-house medicines, medical devices and other products; and (4) entrepreneurs that are forced to suspend their activities during Quarantine Regime are except from paying rental payments for the use of state property. The requirement for a mandatory annual audit of LLCs with assets of more than 100,000 BCA is introduced based on the results of 2020.

During the Quarantine Regime, the limitation period is suspended (Art. 156 of the Civil Code), if the former is introduced or continued to operate in the last 6 months of the limitation period. At the same time, when it is impossible to carry out procedural actions in connection with the introduction of Quarantine Regime, the courts must extend and restore procedural terms (deadlines) as missed for valid reasons.

Court orders which (1) did not enter into legal force before the introduction of, which (2) are rendered during Quarantine Regime and (3) are not appealed are to be enforced after the Quarantine Regime is lifted.

Below we analyze the impact of government decisions on doing business.

1. AMENDMENTS TO LEGISLATION CONCERNING COVID-19

At the time of writing of this memorandum the following laws and regulations were adopted to combat against coronavirus infection:

The Law of the Republic of Uzbekistan of 26.03.2020, No. LRU-613 “On Introduction of Changes and Additions to the Criminal, Code of Criminal Procedure of the Republic of Uzbekistan and the Code of the Republic of Uzbekistan on Administrative Responsibility”;
Decree of the President of the Republic of Uzbekistan dated 19.03.2020, No. UP-5969 “On Urgent measures for Mitigating the Negative Impact of Coronavirus Pandemic and the Global Crisis Phenomena on the Sectors of the Economy”;
Decree of the President of the Republic of Uzbekistan dated 26.03.2020 No. PP-4649 “On Additional Measures to Prevent the Wide Spread of Coronavirus Infection in the Republic of Uzbekistan”;
Decree of the President of the Republic of Uzbekistan dated 27.03.2020, No. PP-4662 “On Additional Measures for Ensuring the Needs of the Population in the Medicinal Means, Products of Medical Purpose, Medical Equipment and the Goods of the First Necessity”;
Decree of the President of the Republic of Uzbekistan dated 15.04.2020 No. PP-4679 “on Measures to Ensure Stability of the State Budget of the Republic of Uzbekistan and Timely Financing of Priority Measures during the Coronavirus pandemic”;
Decree of the President of the Republic of Uzbekistan dated 27.04.2020 “On Additional Measures to Support the Population and Businesses during the Coronavirus Pandemic”;
Decree of the President of the Republic of Uzbekistan dated 04.03.2020 No. UP-5978 “On Additional Measures to Support the Population, Sectors of the Economy and Business Entities During the Coronavirus Pandemic”;
Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 23.03.2020 No. 176 “On Additional Measures to Prevent the Spread of Coronavirus Infection”;
Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of 25.02. 2011 g. № 49 “On the regulation import finished medicinal agents and products medical purposes”;
Decree of the Minister of Employment and Labor Relations of the Republic of Uzbekistan dated 25.03.2020, No. 9-2020/5 “On Approval of the Regulation on the Interim Procedure of the Transfer of Employees to Work in Remote Mode of Operation, According to a Flexible Schedule of Work or at Home in a Period of Quarantine”, registered by the Ministry of Justice of the Republic of Uzbekistan of 28.03.2020, No. 3228;
Resolution of the Plenum of the Supreme Court of the Republic of Uzbekistan dated 28.04.2020 No. 08 “On some Issues of the Application by the Courts of Legislation in Connection with the Introduction in the Republic of Uzbekistan of Measures to Prevent the Spread of Сoronavirus Infection (COVID-19)”.

1.1. Creation of the Republican Commission for Combating the Coronavirus

Special Republican Commission on the Preparation of the Program of Measures for the Prevention of the Importation and Spread of New Types of Coronavirus in the Republic of Uzbekistan (hereinafter – “the Republican Commission“) is formed in accordance with the Order of the President dated 29.01.2020, No. P-5537. The Commission has the following rights:

to control the spread of coronavirus infection in all organizations, regardless of legal form;
to decide on introduction of Quarantine Regime and quarantine activities in localities;
to require reports from organizations, regardless of legal form, on sanitary-hygienic, anti-epidemic and other measures taken to prevent coronavirus infection;
on bringing officials (officers) to administrative or criminal liability in the presence of guilt in the spread of coronavirus infection.

The Head of the Republican Commission is the Prime Minister. The period and conditions of quarantine are determined by the decisions of the Special Republican Commission on the preparation of the Program of measures to prevent the import and spread of coronavirus in the Republic of Uzbekistan and are valid until its official cancellation.

1.2. Creation of the Anti-Crisis Commission

On the basis of the Presidential Decree date 19.03.2020, No. UP-5969, the Republican Anti-Crisis Commission (hereinafter referred to as the “Anti-Crisis Commission“) was formed. The main task of the Anti-Crisis Commission is to resolve issues and ensure the work of economic sectors, social support of the population during the period of counteracting the spread of coronavirus infection. The territorial headquarters of the Anti-Crisis Commission are headed by the Chairman of the Council of Ministers of the Republic of Karakalpakstan, khokims of regions, districts and cities respectively. The Prime Minister is also the head of the Anti-Crisis Commission.

1.3. Creation of the Anti-Crisis Fund and the Provision of Financial Support from the State Budget

The amount of funds of the Anti-Crisis Fund is 10 trillion Soums (approx. US$1,050,000,000). This year, the Government will attract external loans from institutional investors in the amount of up to US$1,000,000,000.

These funds will be directed to:

repayment of loans attracted under the state guarantee of the Republic of Uzbekistan;
partial compensation of costs of entrepreneurs engaged in foreign trade; and
provision of interest-free budget loans to local budgets.

Additionally, the following investment projects involving construction, reconstruction and repair will also be financed:

infrastructure facilities of small industrial zones, localities, public roads;
water supply and sanitation, irrigation and land reclamation facilities;
health facilities, comprehensive schools and other social facilities;
other facilities that provide increased economic activity and employment, including mortgage lending.

The Commission on the Development of the Export Potential of Regions and Sectors will provide subsidies for the compensation of part of the transport costs of exporters.

The Ministry of Finance will provide monthly compensation from the Anti-Crisis Fund to local budgets for shortfalls in connection with the provision of deferrals (instalments) for the payment of property tax, land tax and tax for the use of water resources. The Ministry of Finance will also introduce Bill on Amendments and Additions to the Law on the State Budget for 2020 and Other Legislative Acts.

In order to reduce costs from the budget, the Cabinet of Ministers (1) can optimize the costs of local budgets and (2) transfer individual costs to the second half of this year. In this regard, the priority areas for stability and optimization of budget expenditures are:

implementation of measures to counteract the spread of COVID-19 and of important social expenses;
transfer of irrelevant projects and expenses to subsequent periods based on the level of importance;
considering social orientation of projects while reducing budget expenses;
making payments on internal and external sovereign obligations;
increasing the responsibility of budget allocators.

The Cabinet of Ministers is authorized to reduce the costs of extrabudgetary funds of state administration bodies, courts and prosecutors’ offices, ministries and departments and direct those savings to the republican budget. Moreover, the State Assets Management Agency, the Ministry of Economic Development and the Ministry of Finance will take the following measures of:

revision of the business plan to optimize costs and change by the supervisory boards of the parameters of the approved investment programs;
sending to the State budget dividends accrued to the state’s share on net profit received in 2019, including those received in 2020;

These days, the Cabinet of Ministers was supposed to elaborate a draft resolution on the postponement of the implementation of certain projects, as well as a critical review of investment projects implemented at the expense of the Reconstruction and Development Fund, for which construction and installation work had not begun.

2. FORCE MAJEURE

According to UP-5969, the Ministry of Investment and Foreign Trade (hereinafter “MIFT”) and the Chamber of Commerce and Industry of the Republic of Uzbekistan (hereinafter “CCI”) issue certificates of force majeure upon requests from entrepreneurs. The MIFT published a message that the business is switching to force majeure mode. The CCI also confirmed the onset of force majeure events.

In the legislation of the Republic of Uzbekistan, the doctrine of force-majeure is present in three acts:

Art.333 (3) of Civil Code (hereinafter – the “CC”);
Art.14 of Customs Code (hereinafter – “CtC”);
Para.2 of the Regulation on the Procedure for Confirming Force Majeure Circumstances, approved by Resolution of CMRU dated 15.02.2005 No. 63 (hereinafter – “RCM No. 63”).

All other cases of exemption from liability in the event of force majeure are indicated in our special Table. When resolving the issue of liability for breach of obligations, the reasons for the breach should be established and if it is established, then the courts are to deny the lawsuit.

2.1. Exemption from Civil Liability

In accordance with Art. 333 (3) CC, in case of non-performance or improper performance of its obligations, the entrepreneur is liable for damages, payment of penalites, etc., unless he proves that proper performance was impossible due to force majeure (extraordinary and unavoidable circumstances under these conditions), unless otherwise provided by law or contract. This rule (“…unless otherwise”) of the Civil Code gives entrepreneurs the right not to use force majeure as an exemption from liability in their contracts, but only if otherwise is not specified by law. First of all, such a law is the Civil Code itself, which has the following rules that exempt the non-performing or improperly performing party from (contractual or non-contractual) liability:

the seller is responsible for the shortcomings of a product with a quality guarantee, if he does not prove that such shortcomings arose in the product after it was transferred to the buyer due to force majeure (Art.409 (2));
the carrier and the consigner are exempted from liability if the failure or late delivery of vehicles or non-use of vehicles occurred due to force majeure or other circumstances of a spontaneous nature, as well as military operations (Art.719 (2));
for a delay in the departure of the vehicle for the carriage of a passenger or a delay in the arrival of such a vehicle to the destination, with the exception of transportation in city and suburban communications, the carrier pays the passenger a penalty in the form of a fine, if he does not prove that the delay was due to force majeure or other circumstances that are not dependent on the carrier (Art.720 (1));
the trustee is liable for the damages incurred unless he proves that these losses occurred due to force majeure or the actions of the beneficiary or the founder of the trust management (Art.852 (2));
the professional keeper is responsible for the loss, shortage or damage to the stored object, unless he proves that the loss, shortage or damage to the object occurred as a result of force majeure (Art.899 (2));
the hotel is responsible as a custodian, without any special agreement, for the loss, shortage or damage to objects brought into the hotel by the person living in it, except when the loss, shortage or damage occurred due to force majeure, the properties of the thing itself or through the fault of the resident persons accompanying him or his visitors (Art.899 (1));
legal entities and individuals whose activities are associated with increased danger to others (transport organizations, industrial enterprises, construction sites, vehicle owners, etc.) are obliged to compensate for the damage caused by the source of increased danger, unless they prove that the damage arose as a result of force majeure or intent of the victim (Art.999 (1)).

Secondly, in addition to the above-mentioned articles of Civil Code, legislation and judicial practice provides for a number of cases when an entrepreneur:

is exempted from liability in accordance with special legislative acts (laws, transport charters and codes, rules for the provision of certain services, etc.);
has the right to postpone the fulfillment of obligations to a later date (for example, to have extra delivery time of goods during force majeure);
cannot recover the mortgaged property, if the obligation by the mortgagor has not been fulfilled for reasons related to force majeure.

2.2. Exemption from Fines on Export Operations

The legislation indicates cases where the occurrence of force majeure circumstances relieves the exporter of the obligation to pay a fine (para. 4 of RMC dated 29.07.2000 No. 245).

In accordance with the legislation, within 120 days (in some cases – 180 days), the entrepreneurs shall ensure the receipt of foreign currency earnings on the exported goods or the return import of the goods. At the expiration of this period, overdue receivables for export operations are formed. Exporters who delayed the receipt of foreign currency earnings from abroad, as well as importers who did not ensure the import of goods into the “import” mode after the expiration of the above periods, shall pay a fine:

in the amount of 10% of the sum of these non-received funds or goods (works, services) – if a delay is up to 180 days;
additionally in the amount of 20% of the sum of these non-received funds or goods (works, services) – if a delay is from 180 to 365 days;
additionally in the amount of 70% of the sum of these non-received funds or goods (works, services) – if a delay is more than 365 days.

In the event of force majeure circumstances, the period of receipt of foreign currency earnings is extended for the period of force majeure, confirmed by the authorized body of the relevant state (See: para. 4 (b) of the RCM dated June 29.06.2000 No. 245, para. 1 (g) of the Presidential Decree dated 03.11.2017 No. PP-3351 and para. 5 (2) of RCM dated 09.08.2005, No. 189). However, the application of these penalties for overdue receivables for export operations is suspended until October 1, 2020 (paragraph 1 of clause 8 of UP-5969).

2.3. Exemption from Public Procurement Procedures

When concluding contracts for government needs, State customer selects counterparties using one of the following procurement procedures:

an electronic store;
reverse auction;
competition;
tender;
public procurement from a single supplier (natural monopoly or supplier of unique goods, works and services).

However, the State customer may conclude a direct contract, without carrying out procurement procedures (with the publication of this fact on http://xarid.uz/dxarid/deals?auction=Adver), if these products are present in the special List of products which can be bought through direct contracts (Presidential Decree dated 27.09. 2018 No. PP-3953). This List includes goods (work, services) to eliminate the consequences of force majeure and man-made disasters (para.15). Similar provisions apply when purchasing raw materials, components and equipment for State needs in the event of an urgent need for goods necessary to eliminate the consequences of force majeure as agreed with the Ministry of Finance (paragraph 5-1 (8) of the RCM dated 21.11.2000 No. 456).

According to Presidential Decree No. UP-5969, during the period of the Quarantine Regime, the Ministry of Health and the Agency for the Development of the Pharmaceutical Industry are allowed to conclude direct contracts by selecting the best offers in relation to:

medicines;
medical devices;
medical technology; and
materials and substances used for their production.

2.3.1. Exemption from carrying out procurement procedures when providing private medical services

In accordance with Presidential Decree No. PP-4649, private medical organizations may provide medical services to those infected by coronavirus until September 1, 2020 based on the agreements concluded with the Ministry of Health. In order to conclude an agreement, the Ministry of Health defines private medical organizations without conducting procurement procedures.

2.4. Procedure for Confirmation of Force Majeure in Foreign Trade Agreements

According to RCM No. 63, the MIFT has the authority to confirm force majeure that occurred on the territory of the Republic of Uzbekistan only in accordance with the terms of foreign trade contracts and international treaties (for example, CISG). A party who has suffered from force majeure may directly (or through the CCI) apply to the MIFT for a certificate confirming the onset of force majeure. In order to obtain this certificate, it is necessary to submit a written application indicating the circumstances of force majeure, and enclose the following documents:

duly certified copies of contracts and specifications thereto;
information on the volume of fulfilled obligations under the contract;
a copy of the document on the payment of stamp duty.

For each contract, you shall obtain a separate certificate. The certificate is usually issued within 20 business days from the date of application. However, Presidential Decree No. UP-5969 reduced this period to one business day from the date of appeal (para. 22).

2.5. Changing the Term of Payment of Taxes

The payment term can be changed in the form of a deferment or payment by installment of the existing or future tax debt (including interests and penalties) with a one-off or phased payment respectively (Art. 97 of Tax Code). The total period of deferment (installment plan) shall not exceed one year and in individual cases – up to two years in the following in the following cases:

local government authorities in accordance with RCM dated 25.11.2019 No. 951 – in relation to tax for the use of water resources, property tax and land tax; and
by the Cabinet of Ministers – in respect of all nine types of taxes, even if:
a criminal case for violating tax legislation (or a bankruptcy case) has been brought against the taxpayer-applicant;
there are sufficient reasons that this person will hide his earnings or is going to leave the Republic of Uzbekistan for permanent residence in other states; or
within three years before the application was submitted, the conditions of the previously granted deferment or installment plan were violated.

Suffering damage as a result of force majeure is the basis for granting a deferment or installment plan for payment of tax for an amount not exceeding the value of the net assets of a legal entity without charging interest on this amount of debt (Art. 100 of Tax Code).

The authorized bodies for making decisions on changing the term for paying taxes are the Cabinet of Ministers, the tax committee, the customs committee and local government bodies. According to Presidential Decree No. UP-5969, local government bodies are obliged to provide entrepreneurs with deferment or installment plan on payment of tax for the use of water resources, property tax and land tax. At the same time, the deferment (installment plan) is carried out on the basis of a taxpayer statement and the conclusion of the Ministry of Finance without providing additional documents (para. 7 (3)).

3. RESPONSIBILITY DURING THE QUARANTINE

3.1. Administrative responsibility

Prior to recent amendments, the Code of Administrative Liability (hereinafter “CAdL”) provided for liability for failure to take measures in the event of an accident and force majeure stipulated by Art. 224 CtC, which states that the carrier is required, inter alia, to take measures for the safety of the goods and the vehicle.

The following were added to the CAdL: (1) a compulsory medical measure in the form of treatment or quarantine and (2) a fine for being in public without a mask and breaking quarantine rules in the amount of up to 5 BCA (approx. US$117) and from 20 to 30 BCA ( approx. US$468 and US$700 respectively).

3.2. Criminal liability

The Law of March 26, 2020 No. LRU-613 introduced liability for the dissemination of untrue information on the spread of quarantine and other infections dangerous to humans in the context of the emergence and spread of quarantine and other infections dangerous for humans. The commission of this act is punishable by:

a fine of up to 200 BCA (approximately US $ 4,700); or
compulsory community service up to 300 hours; or
correctional labor up to 2 years.

If such information was disseminated in the media (including the Internet), then such an act shall be punishable by:

a fine of 200 to 400 BCA (approximately US $ 9,400); or
compulsory community service from 300 to 350 hours; or
correctional labor from 2 to 3 years; or
restriction of liberty up to 3 years; or
imprisonment of up to 3 years (Art. 244-5 of Criminal Code).

In addition, violation of sanitary laws or epidemic control rules shall be punishable by:

a fine of 50 to 100 BCA; or
deprivation of a certain right up to 5 years; or
correctional labor up to 2 years; or
restriction of freedom from 1 year to 3 years; or
imprisonment of up to 5 years.

The same act that caused the death of a person shall be punishable by:

correctional labor from 2 to 3 years; or
restriction of liberty from 3 to 5 years;
or imprisonment from 5 to 7 years.

The same act, which resulted in human casualties, shall be punishable by deprivation of liberty from seven to ten years (257-1 of the Criminal Code).

4. INCENTIVES

In accordance with the Tax Code (hereinafter – the “Tax Code”) tax benefits are provided exclusively to the Tax Code. With the exception of VAT, excise tax and subsoil use tax, tax incentives may be granted by Presidential decisions only in the form of a reduction in the established tax rate, but not more than 50% and for a period not exceeding 3 years.

4.1. Tax and customs benefits for entrepreneurs

According to Presidential Decree No. UP-5969:

tax rates for the use of water resources for irrigation of farmland are reduced in 2020 by 50 % of the established rates;
from April 1 to July 1, 2020:
the accrual and payment of tourist (hotel) tax is suspended;
for individual entrepreneurs, the minimum amount of social tax is reduced to 50% of monthly income tax;
the amount of deductions for wholesalers of alcoholic beverages is reduced from 5 to 3%;
fees for the right to retail alcohol products for public catering enterprises are reduced by 25% of the established amounts.

Tax authorities do not charge interest on property tax, land tax and tax for the use of water resources to economic entities experiencing temporary difficulties, and also do not take measures to enforce collection of tax debt. Starting from the second quarter of this year the amount of advance payments on profit tax is calculated based on an expected volumes without taking into account the results of the previous year. When providing a loan (financial assistance) without interest, income determined for tax purposes on the basis of the refinancing rate (basic rate) is not taxable. The amount of interest income on leasing is not included in the total income when calculating income tax.

In accordance with Presidential Decree No. PP-4662, during the period of the Quarantine Regime, the Republican Commission has the right:

to provide for up to 3 months VAT exemptions for certain goods included in the List of Medicines and Medical Devices, the Import of which Does Not Apply to VAT Exemptions (RCM No. 49 of 25.02.2011);
to reduce to 0 % the rates of customs duties and excise tax for up to 3 months when importing certain types of essential goods with the formation of their list.

Until the end of this year:

tourism and aviation industry are exempt from paying land and property tax. They will only pay social tax at a reduced rate of 1 %;
VAT payers with the monthly turnover of no more than 1 billion Soums and using electronic invoices, can calculate and pay VAT quarterly;
increased rates in relation to unused production areas, non-residential buildings of property and land taxes are suspended.

The Government also suspends the calculation of a fixed amount of personal income tax and social tax paid by individual entrepreneurs who were forced to stop their activities for the period of Quarantine Regime.

Until October 1 of this year, small enterprises and individual entrepreneurs who suspended their activities or whose revenue reduced by 50 % or more compared to the first quarter of this year have the right to interest-free deferment (instalment plan) of the following taxes:

turnover tax, property tax, land tax, water tax – with instalment plan of 12 months;
social tax – with instalment plan of 6 months.

From April 1, 2020, the Customs Committee implements the mechanism for customs clearance of imported food products in an expedited manner, including until the goods arrive in the territory of Uzbekistan. Also Customs Committee, as an exception, organizes “green” corridors for the necessary goods, for which customs duties are not levied, namely:

medicines;
medical devices;
medical technology; and
materials and substances used for their production.

Until October 1, gratuitous transfer to charitable organizations (Mahalla, Kindness and Support, Uzbekistan Mekhr-Shavkat va Salomatlik), as well as to individuals in need of social support (by special lists) of:

monetary funds and goods (services) are deducted when calculating corporate income tax;
goods (services) are exempt from VAT; and
such gratuitous assistance is not considered as income of individuals.

Until the end of this year zero customs duty rates and excise tax are applied for the importation of essential commodities. Goods and materials necessary for the construction and functioning of medical and quarantine institutions of counteracting COVID-19 are exempted from customs duties, including VAT. Importation of rapid tests for the detection of COVID-19 are also free from customs duties.

From now on, entrepreneurs can export goods without a guarantee payment with the existing overdue receivables up to 10% of the total export of goods for the reporting year and carry out one-time operations for the import of technological equipment and raw materials in exchange for paying off overdue receivables from foreign trade operations.

4.1.2. Tax benefits for individuals

From April 1, 2020 incomes of individuals from charitable organizations are exempt from taxation. The individual declaration of income of individuals for 2019 is extended until August 1, 2020. The deadline for the payment of property tax and land tax of individuals is extended until October 15, 2020. Moreover, individuals are entitled to an interest-free deferral of payment of tax on personal income received from rental payments. The amount of material assistance not subject to personal income tax paid to an employee increases from 4.22 to 7.5 times the minimum wage. From May 1, 2020, pensions are paid to working pensioners directly by the extrabudgetary Pension Fund under the Ministry of Finance. Amounts of pensioners’ pension arrears as of April 20, 2020 are debited.

4.2. Preferential terms for the payment of loans

Until October 1, 2020 the Government introduced moratorium to bankruptcy of enterprises faced with financial difficulties due to countering COVID-19 measures. Until October 1, 2020 commercial banks will provide a deferral in the payment of loans in a total amount of 5 trillion Soums (without charging penalties) made available to:

tour operators;
hotel business entities;
transport and logistics companies; and
other tourism enterprises; and
business entities that have encountered financial difficulties due to the imposition of restrictions on foreign trade.

Banks will also provide loans to entrepreneurs to replenish working capital, including to saturate the consumer market with essential goods. Until October 1, 2020, the State Fund for Support of Entrepreneurship provides:

guarantee in the amount of up to 75 % of the debt, but not more than 10 billion Soums for credits for working capital replenishment opened to business entities;
compensation for interest expenses on credits for working capital replenishment with an interest rate not exceeding 1.75 times the basic rate of the Central Bank.
the procedure for compensation by the State Fund for the Support of Entrepreneurship of interest costs on loans from commercial banks also extends to existing loan agreements of business entities.

The Reconstruction and Development Fund extends a maturity date of resources allocated to commercial banks for refinancing loans for which a deferred payment has been granted. The Anti-crisis Commission will extend the deadlines of investment obligations not fulfilled due to restrictive measures introduced to counteract COVID-19.

The Central Bank will provide commercial banks with additional 2.6 trillion Soums of liquidity by easing requirements for mandatory reserves and introducing a special mechanism for providing 2 trillion Soums liquidity for up to 3 years.

the Central Bank also delayed 7.9 trillion Soums debt on loans of legal entities. The volume of additionally restructured payments on loans of organizations that faced financial difficulties in connection with COVID-19 amounted to 7 trillion Soums and the volume of prolonged payments on loans to individuals and individual entrepreneurs payable in the next 6 months of 2020 is 4.7 trillion Soums.

The Government recommended the Central Bank to simplify procedures for the provision of deferred payments on loans to entrepreneurs and legal entities which faced financial difficulties by commercial banks and for the non-application of penalties for overdue because of Quarantine Regime. The provision by commercial banks until October 1, 2020 of deferred payments on loans to those who faced financial difficulties. It is worth mentioning that the amount of interest accrued and deferred by commercial banks on loans is not included in the total income when calculating income tax of the deferment period.

5. LABOR ACTIVITY

5.1. Transfer to Remote (Online) Labor

In accordance with the Quarantine Regime, employers are required to send employees on vacation or take measures to transfer to a remote (online) mode of employment.

Employers shall:

observe the admission of visitors only with a medical mask and the use of medical devices;
measure the temperature of employees at workplaces and immediately bring information about high-temperature employees to health authorities;
take measures to inform people who have come into contact with an employee who has been infected with coronavirus infection and to disinfect places where the infected person has been staying;
assist employees in complying with quarantine requirements.

The Government automatically prolongs payment of childcare benefits and material assistance, the term of which ends in March – June of this year. Anti-Crisis Fund covers the costs associated with this prolongation.

During the Quarantine Period the List of Basic Foodstuffs and Hygiene Products for Free Provision of Lonely Elderly and Disabled People Who Need Outside Care is supplemented with sets of disposable masks, antiseptics and antibacterial soap.

The Anti-Crisis Commission will create conditions for employees who continue working in production by ensuring that sanitary-epidemiological control services. Healthcare institutions will be continuously monitoring those employees.

5.2. Remote Transfer Procedure

In accordance with the Regulation (MJ reg. 3228 of 03/28/2020), the employer, having issued an appropriate order, can transfer the employee to:

working at distance;
flexible working hours; or
work at home.

The basis for the adoption of the relevant order is the introduction of amendments the labor contracts with the employee. Working at Distance is a method of fulfilling labor obligations by an employee, in accordance with an employment contract, outside a permanent place of work (territory or facility) under direct or indirect control of the employer.

5.3. Sanitary rules for labor during a pandemic

State control over compliance with the Sanitary Rules is carried out by the Bodies of State Sanitary Supervision of the Republic of Uzbekistan. Employers should implement prevention the spread of COVID-19 in the working places in the following aspects:

prevention of the introduction of infection into the organization;
prevention of the spread of COVID-19 among the employees;
implementation of organizational and technical measures to prevent infection of workers;
other organizational preventive measures.

As part of preventive measures, employers are recommended to do the following actions:

organization of a daily entrance filter before the start of a work shift with a check of the body temperature.
clarification of the health condition of the employees and of the persons with whom they live.
keeping of a record of persons suspended from work due to symptoms of a viral infection.
organization of disinfection barriers at the entrance to the organization.
restricting access to the organization of persons not related to its activities.
introduction of electronic interaction, as well as the use of telephone communications to transmit information.
termination of any public events.
providing workers with a stock of disposable masks.
conducting daily wet cleaning of office premises and public places.
disinfection of all contact surfaces every 2-4 hours.
ensuring the organization of not less than five-day supply of detergents and disinfectants, personal protective equipment for respiratory organs (masks, respirators), gloves.
organization of regular ventilation of workrooms.
organization of providing employees with a centralized food supply using disposable tableware, in order to limit the movement of workers during breaks.

Anti-Crisis Measures: Mitigating Economic Consequences of COVID -19

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