Uzbekistan is moving towards WTO
Uzbekistan took initial steps towards joining the WTO at the end of 2018 by establishing a special department to manage the accession process. Most recently, it was announced that the country aims to become a member of the organization by 2026 before the WTO Summit in Cameroon. Now we see a key practical step - the adoption of Presidential Decree No.85 “On further measures to accelerate market reforms and harmonization of national legislation of the Republic of Uzbekistan with the agreements of the World Trade Organization”, which focuses on accelerating market reforms and aligning national legislation with WTO agreements.
Among the measures outlined, many are expected to have an impact on public companies and the country’s economy as a whole. Overall, these measures are anticipated to have a positive impact.
For example, starting January 1, 2025, the monopoly rights of certain companies for specific activities will be abolished. This includes the collection of ferrous metal scrap for Uzmetkombinat JSC (UZMK) and non-ferrous metal scrap for Uzvtortsvetmet JSC (UIRM). This change will be accompanied by the introduction of licenses for these activities to enhance transparency and increase state control over unofficial collectors. According to the published comments of Uzmetkombinat JSC, the share of scrap collection at monopoly prices was less than a third of the company’s total collection, i.e. less than 20% of the total market collection, and therefore this will not have a significant impact on the cost of scrap collection;
Similarly, other changes include the following measures:
• removal of export guarantees and insurance for Uztrade JSC's export of flour, wheat, and agricultural products to trading houses;
• abolition of the export monopoly of chemical products and import of raw materials and equipment for the enterprises of Uzkimyosanoat JSC by the company Uzkimyoimpex LLC
• abolition of Uzgaztrade JSC's monopoly on natural gas imports and exports from July 1, 2026, as well as the import and export of electricity for Uzenergosotish JSC, is canceled with the introduction of corresponding licensing requirements.
One of the most important decisions that can affect the quality of Internet connection will be allowing telecom operators to directly connect to the international Internet channel, whereas now they are forced to connect through Uzbektelecom JSC (UZTL). The loss of income from these services for the company may lead to a decrease in revenue, because they accounted for about 10% of the company's total revenue, although this share fell against the backdrop of growth in other business segments.
The ban on exporting copper in cathodes and rolls purchased through open trading on commodity exchanges will also be lifted from 2026.
Additionally, discounts and benefits on railway tariffs for imports and exports will be phased out by 2030, which is expected to positively impact the income of Uzbekistan Temir Yollari JSC and Uztemiryulcontainer JSC (UTYK).
Proposals are being made to regulate the import of ethyl alcohol produced by five local producers, including JSC Biokimyo (BIOK), and to harmonize excise taxes on tobacco, sugar, and alcoholic beverages.
To promote competition in the domestic market, discounts and preferences on local goods during government tenders will be abolished. This is intended to level the playing field between local and imported goods.
Furthermore, public procurement payments will be made through the Treasury of the Ministry of Economy and Finance to enhance transparency. The recent transfer of the Financial Monitoring Inspectorate from the Ministry department to the Prosecutor General's office may partially compensate for changes in control over public fund expenditure.
Avesta Investment Group
Postal address: 100015, Tashkent, Shakhrisabzskaya st., 22
Tel: +998 (71) 207-9070
E-mail: info@avestagroup.com
Internet: http://www.avestagroup.com
Among the measures outlined, many are expected to have an impact on public companies and the country’s economy as a whole. Overall, these measures are anticipated to have a positive impact.
For example, starting January 1, 2025, the monopoly rights of certain companies for specific activities will be abolished. This includes the collection of ferrous metal scrap for Uzmetkombinat JSC (UZMK) and non-ferrous metal scrap for Uzvtortsvetmet JSC (UIRM). This change will be accompanied by the introduction of licenses for these activities to enhance transparency and increase state control over unofficial collectors. According to the published comments of Uzmetkombinat JSC, the share of scrap collection at monopoly prices was less than a third of the company’s total collection, i.e. less than 20% of the total market collection, and therefore this will not have a significant impact on the cost of scrap collection;
Similarly, other changes include the following measures:
• removal of export guarantees and insurance for Uztrade JSC's export of flour, wheat, and agricultural products to trading houses;
• abolition of the export monopoly of chemical products and import of raw materials and equipment for the enterprises of Uzkimyosanoat JSC by the company Uzkimyoimpex LLC
• abolition of Uzgaztrade JSC's monopoly on natural gas imports and exports from July 1, 2026, as well as the import and export of electricity for Uzenergosotish JSC, is canceled with the introduction of corresponding licensing requirements.
One of the most important decisions that can affect the quality of Internet connection will be allowing telecom operators to directly connect to the international Internet channel, whereas now they are forced to connect through Uzbektelecom JSC (UZTL). The loss of income from these services for the company may lead to a decrease in revenue, because they accounted for about 10% of the company's total revenue, although this share fell against the backdrop of growth in other business segments.
The ban on exporting copper in cathodes and rolls purchased through open trading on commodity exchanges will also be lifted from 2026.
Additionally, discounts and benefits on railway tariffs for imports and exports will be phased out by 2030, which is expected to positively impact the income of Uzbekistan Temir Yollari JSC and Uztemiryulcontainer JSC (UTYK).
Proposals are being made to regulate the import of ethyl alcohol produced by five local producers, including JSC Biokimyo (BIOK), and to harmonize excise taxes on tobacco, sugar, and alcoholic beverages.
To promote competition in the domestic market, discounts and preferences on local goods during government tenders will be abolished. This is intended to level the playing field between local and imported goods.
Furthermore, public procurement payments will be made through the Treasury of the Ministry of Economy and Finance to enhance transparency. The recent transfer of the Financial Monitoring Inspectorate from the Ministry department to the Prosecutor General's office may partially compensate for changes in control over public fund expenditure.
Avesta Investment Group
Postal address: 100015, Tashkent, Shakhrisabzskaya st., 22
Tel: +998 (71) 207-9070
E-mail: info@avestagroup.com
Internet: http://www.avestagroup.com
