Annex No. 1 to the Resolution of the Board of the Central Bank of Uzbekistan, registered by MJ №3281 31.08.2020 “Rules of Carrying out Foreign Currency Transactions in the Republic of Uzbekistan”;

Regulation approved by the Board of the Central Bank of the Republic of Uzbekistan, registered by the MJ No. 2536 dated 17.12.13 “On the Procedure for Conducting Certain Currency Transactions”.

Currency policy is an inherent part of the general economic policy of the state, aimed at strengthening the monetary and financial position of the country, maintaining its solvency and creditworthiness at a high level, ensuring the receipt of currency from abroad for foreign economic turnover, countering capital flight abroad, attracting foreign capital and strengthening the national currency and etc. Currency regulation and currency control contribute to the solution of these tasks, and are the most important areas of state activity. In this article, we will describe the main and most important aspects of currency regulation in Uzbekistan.

2. Currency exchange procedure

2.1. For business entities

Business entities for the exchange of foreign currency (sale or purchase) must fill out an application with the following information:

name of the client;
type of currency and amount;
the rate of purchase or sale.

In case of purchase of foreign currency, additional information is also provided:

purpose of buying foreign currency;
documents certifying foreign exchange transactions.

Such an application is filled in either in person at the bank itself, or electronically via a remote service system (for example, through the Apelsin app).

In addition, in the following cases, banks are also entitled to request additional documents to the above-mentioned ones:

when servicing loans and leases in foreign currency;
when buying foreign currency for the purpose of repatriation of profits, dividends and other income of foreign investors.

The application is considered by the bank no later than the next banking business day after the day of acceptance. Based on the results of the review, a conclusion is approved on the satisfaction of the application or on its justified rejection. In addition, the application is also approved by the corresponding Deputy Chairman of the bank’s Management Board.

For the purchase and sale of foreign currency, by agreement of the parties, a contract can be drawn up, both on paper and in electronic form. To transfer the purchased foreign currency to the client’s name, a special account is opened by the bank.

Funds credited to special currency accounts are spent only for the purposes specified in the application.

It is important to note that if the settlement of the applications is not completed within 2 banking business days, the agreement is considered canceled.

If the currency funds purchased by the bank’s client are not used within 7 banking business days from the date of crediting to the client’s special currency account, they must be sold again to the commercial bank no later than the next banking business day after the end of this period (on the 8th business day).

Previously debited from a special account and not used foreign currency, as well as returned for other reasons, within 3 banking working days, is subject to resale to a commercial bank, or re-transfer for the purposes specified in the application. In this case, the resale of foreign currency may not be carried out at the exchange rate of the currency exchange on the day of sale.

2.2. For individuals

Currency transactions with individuals are carried out without restrictions.

The sale of foreign currency to non – resident individuals is carried out when the non-resident provides documents that confirm the receipt of funds in the national currency to the territory of the Republic of Uzbekistan from legal sources. At the same time, non-residents will be able to buy currency for an amount not exceeding the amount specified in the documents.

It is important to keep in mind that the bank MAY REFUSE TO ACCEPT unsuitable banknotes, but ONLY in the following cases:

if the banknote is divided into pieces, including when gluing;
if the original color has changed or the color has gone out;
if the banknote is burned through;
if more than 50 percent of one of the main signs indicating that it is a legal tender is filled with oil, paint or ink;
if the banknote has been exposed to chemical reagents;
if there is a certain degree of intentional damage, the image (drawing, portrait) is changed, the nominal value is changed, and the protective threads are removed if there are large volumes of records;
if the banknote has an obvious printed error, for example, there is no watermark or security threads or they are located inappropriately, also when the image is not fully printed or over-stretched;
if the geometric size of the banknote has changed by 3 mm or more;
if the image of the banknote does not allow you to determine whether it is badly damaged or dirty;
if the banknote has significantly lost its hardness and has become soft.

Banknotes with the following signs of damage are LEGAL and shall be accepted:

if the banknote has glued gaps that do not exceed a quarter of the width (height) of the banknote;
if there are glued corners or parts (no more than 1 cm2), as well as torn corners or parts, but clearly related to this banknote;
if the image of the banknote is thin and dirty, however, this does not interfere with the authentication of the banknote and does not overlap more than 50% of one of the main characteristics;
if there are small spots, inscriptions, stamp marks (with the exception of stamps confirming that the banknote is liquidated, falsified or exemplary, if the stamp mark is more than two pieces) and they do not overlap more than 50% of one of the main characteristics, and does not prevent the identification of the authenticity of the banknote;
if the banknote has no more than 2 holes with a diameter not exceeding 1 mm, and which do not interfere with determining the authenticity of the banknote and do not cover more than 50% of one of the main characteristics;

If the above norms are exceeded, the bank also has the right not to accept banknotes.

In addition, it is important to note that banknotes withdrawn from circulation after the date of publication by the issuing bank of the relevant foreign state and having stamps confirming the termination, forgery of the banknote, are also considered unfit for payment.

The bank’s employees are required to provide relevant information regarding currency exchange when performing currency exchange operations.

3. International currency transactions carried out without restrictions

International currency transactions are divided into current international transactions and capital movement transactions. Understanding and knowing which transactions relate to current international transactions and capital movements is very important, since in the first case there are no restrictions on the conduct of transactions, and in the second case there are.

Current international transactions include:

all payments to be paid in connection with the conduct of foreign trade, other current activities, including services (works);
payments payable in the form of interest and other income, including on bank deposits, loans, leasing, as well as in the form of net income from other investments;
payment of the amount during the repayment period of the loan (loan) in an amount not exceeding twice the amount of the part of the debt received, calculated as the ratio of the debt to the number of repayment periods specified in the contract;
non-commercial transfers.

Non-commercial transfers include:

transfers between individuals in the amount of up to the equivalent of one hundred million soums;
payment for goods (services, works) for personal needs;
payment of salaries, scholarships, pensions, alimony;
payment of expenses related to the secondment of employees outside the Republic of Uzbekistan;
payment for training, medical treatment and tourism;
payment for the maintenance of diplomatic and other missions of the Republic of Uzbekistan in foreign countries, as well as permanent missions of the Republic of Uzbekistan to interstate or intergovernmental organizations;
payments related to notarial and investigative actions, as well as payment of the state fee in connection with the consideration of cases in the courts;
payments of funds based on court decisions, arbitration, as well as investigative and other law enforcement agencies;
payments for participation in international congresses, symposiums, conferences, sports and cultural events, as well as in other international meetings, exhibitions and fairs, excluding investment and material costs;
payments related to the burial of the deceased;
payment of royalties, payment of patent fees and payment of obligations under license agreements in the field of intellectual property;
contributions to international non-profit organizations.

4. Foreign exchange transactions with capital movements

Transactions with capital movements include all international monetary transactions that are not current, including:

implementation of investment activities, including replenishment of working capital by residents of their branches located outside the territory of the Republic of Uzbekistan;
receipt and provision of loans( loans), implementation of leasing operations;
purchase and sale of real estate;
raising of funds from foreign countries and placement of funds to accounts and deposits in foreign countries;
purchase or sale of a fully exclusive right to intellectual property.

The following operations are performed only in the presence of resolutions of the President of the Republic of Uzbekistan, the Cabinet of Ministers or international agreements of the Republic of Uzbekistan:

(1) Investment activity in the amount exceeding US$10,000 – transfer of funds from residents’ accounts in banks of the Republic of Uzbekistan to the formation (or equity participation) of enterprises abroad, replenishment of their branches abroad with working capital;

(2) Provision by residents of the Republic of Uzbekistan of loans and money, loans in the form of goods (services) and leasing to non-residents;

(3) Transfer of funds from the accounts of residents of the Republic of Uzbekistan in commercial banks of the Republic of Uzbekistan to foreign accounts (deposits) and purchase of real estate.

It is important to note that agreements on raising funds from abroad that are not guaranteed by the RUz are registered with the Central Bank through commercial banks. Registration is carried out by providing commercial banks with information about these contracts to the Central Bank in the order of notification within 5 days after the acceptance of the contracts from the client.

5. Currency Reservation: the legality of the use

If before the introduction of the new version of the Law on Currency Regulation, the use of the currency reservation was legal (but it was a controversial issue), now with the introduction of the new version of this Law, currency reservation are definitely a violation of the law, with the exception of some cases listed below. Namely, according to article 9 of the Law on Currency Regulation, it is not allowed to link prices for goods sold (works, services) on the territory of the Republic of Uzbekistan to foreign currencies and conventional units. Rates and prices for the goods shall be determined exclusively in Soums.

5.1. Exceptions

However, an addition was introduced to the above-mentioned Law at the beginning of 2021, according to which, in exceptional cases, the linking of prices for goods sold to foreign currency and conventional units on the territory of the Republic of Uzbekistan is allowed. Namely, in cases of projects carried out with the participation of foreign investment, attracted under public-private partnership agreements and investment agreements with the Government of the Republic of Uzbekistan, on the basis of decisions of the President of the Republic of Uzbekistan.

6. Foreign currency accounts

Foreign currency may be credited to the foreign currency accounts of legal entities of the Republic of Uzbekistan and individual entrepreneurs for domestic and international transactions.

6.1. Representative offices

Funds held in foreign currency of non-resident representative offices may be used by the order of the account holder:

for money transfer into foreign non-resident (who has established the representative office) accounts;
for making non-commercial money transfers abroad;
to pay the bank commission on transactions in foreign currency, expenses related to secondment of employees outside the Republic of Uzbekistan (including in cash);
for sale through commercial banks in the territory of the Republic of Uzbekistan.

6.2. Permanent establishments

Funds in the foreign currency accounts of permanent establishments of non-residents may be used by the order of the account holder:

for transfer to foreign accounts of a non-resident who has established the permanent establishment;
to pay the bank commission on transactions in foreign currency, expenses related to secondment of employees outside the Republic of Uzbekistan (including in cash);
for sale on the domestic foreign exchange market;
for current international operations.

6.3. Accounts outside the Republic of Uzbekistan

Legal entities of the Republic of Uzbekistan may open accounts outside the Republic of Uzbekistan on the basis of decisions of the President or the Government of the Republic of Uzbekistan or international agreements. The use of foreign accounts is allowed only for the purposes provided for in the above-mentioned regulatory documents. In the case of opening an account abroad, legal entities of the Republic of Uzbekistan must provide the tax service at the place of registration, as well as the commercial bank serving the main account, with information on opening (closing) accounts and changing account details, as well as on the balances and turnover on these accounts, by the 25th day of the month following the reporting quarter.

Currency Regulation in Uzbekistan

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