Clarification on Amendments and Additions No. 1948-12 to the Guidance on Opening Bank Accounts in Banks of the Republic of Uzbekistan

Clarification on Amendments and Additions No. 1948-12 to the Guidance on Opening Bank Accounts in Banks of the Republic of Uzbekistan (Registration No. 1948, April 27, 2009)

Based on Resolution No. 4/5-c of the Board of Directors of the Central Bank of the Republic of Uzbekistan dated March 4, 2017, the next 12th amendments and additions were made to the Guidance on Opening Bank Accounts in Banks of the Republic of Uzbekistan (Registration No. 1948, April 27, 2009), and it was registered with the Ministry of Justice of the Republic of Uzbekistan under Registration No. 1948-12 on March 24, 2017.

As is known, in accordance with Resolution No. 357 of the Cabinet of Ministers of the Republic of Uzbekistan dated August 20, 2003, "On Fundamental Improvement of the System of Registration Procedures for Organizing Business Activity," the approved "Regulation on the Procedure for State Registration, Accounting, and Formalization of Permissive Documents for Business Entities" served as the legal basis for the Guidance on Opening Bank Accounts in Banks of the Republic of Uzbekistan (Registration No. 1948, April 27, 2009). In particular, Paragraph 57 of this Regulation listed the documents to be submitted by the business entity to the bank for opening an account at the bank.

Currently, Article 31 of the Law of the Republic of Uzbekistan "On Banks and Banking Activity" establishes that banks must comply with the procedure for opening accounts for customers established by the Central Bank.

Based on Part Two of Article 16 of the Law of the Republic of Uzbekistan "On Normative Legal Acts," a normative legal act must conform to normative legal acts with higher legal force relative to it. Therefore, in accordance with Resolution No. 312 of the Cabinet of Ministers of the Republic of Uzbekistan dated November 25, 2013, Paragraph 57 of the Cabinet of Ministers' Regulation "On the Procedure for State Registration, Accounting, and Formalization of Permissive Documents for Business Entities" (Registration No. 357, August 20, 2003) was stated in the following wording, adapted to the norms established in Article 31 of the Law "On Banks and Banking Activity": "57. Opening of bank account numbers is carried out in the manner established by the Central Bank of the Republic of Uzbekistan."

Based on the amendments introduced into the above legislative acts, the words "Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 357 dated August 20, 2003 'On Fundamental Improvement of the System of Registration Procedures for Organizing Business Activity'" were removed from the preamble of Guidance No. 1948.

The word “in it” was removed from the sixth paragraph of paragraph 1 of the Instruction, and its wording was corrected in substance.

It is well known that in the early years of independence, customers had the right to open only one deposit account in one bank until it was demanded. Since this measure began to hinder the free activity of entrepreneurs, in accordance with Resolution No. 24 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 1999, “On Reform Measures in the Banking System,” legal entities were granted the right to open bank accounts in several banks. Later, the requirements regarding the right of legal and physical persons, in particular business entities, to independently choose banks for settlement and cash services and to open bank accounts in one or several banks were reflected in Article 775 of the Civil Code of the Republic of Uzbekistan and Article 31 of the Law “On Banks and Banking Activity.” Naturally, these norms were also included in paragraph 3 of Instruction No. 1948.

In accordance with Resolution No. PQ-1245 of the President of the Republic of Uzbekistan dated December 22, 2009, “On the Main Macroeconomic Indicators and State Budget Parameters of the Republic of Uzbekistan for 2010,” a procedure was introduced for wholesale trade enterprises to pay a single tax with the inclusion of advance payments. This requires temporary tax control over the advance payments made by wholesale trade enterprises, which are single tax payers engaged in this activity. To ensure the implementation of this Resolution, paragraph 3 of Instruction No. 1948 was supplemented with a second paragraph stating that wholesale trade enterprises must open basic and secondary deposit accounts in national currency in branches of commercial banks located in the district or city where the state tax authority, in which they are registered as taxpayers, is located.

Currently, the exchange of information regarding customers' bank accounts has been established between the Central Bank and the State Tax Committee. Specifically, paragraph 9 of this Instruction stipulates that accounts are opened for customers on the same day, and information is transmitted to the State Tax Committee of the Republic of Uzbekistan through the National Information Database of Bank Depositors. In addition, in accordance with paragraph 2.3 of the “Procedure for Using Information from the National Information Database of Bank Depositors for Automated Registration of Taxpayers for Tax Purposes” (registration number 614, January 30, 1999), changes in the NIDBD data are sent daily to the State Tax Committee's mailbox. Currently, all information regarding the customer's bank accounts at the Central Bank and their movements is available at the State Tax Committee.

Based on the above legal and technological changes, it was deemed appropriate to abolish the second paragraph of paragraph 3 of Instruction No. 1948, which established the requirement for wholesale trade enterprises to open basic and secondary deposit accounts in national currency in branches of commercial banks located in the district or city where the state tax authority, in which they are registered as taxpayers, is located.

Our government is creating new facilities and privileges to develop private entrepreneurship and small business. In particular, consistent measures are being implemented to fundamentally improve the procedure for state registration and accounting of business entities. Specifically, Resolution No. PQ-2646 of the Cabinet of Ministers of the Republic of Uzbekistan dated October 28, 2016, “On Fundamental Improvement of the Procedure for State Registration and Accounting of Business Entities,” established the task of gradually developing and introducing an automated system for state registration and accounting of business entities, and starting from April 1, 2017, conducting state registration and accounting of business entities through the System in the Internet network integrated with the Single Portal of State Interactive Services of the Republic of Uzbekistan around the clock.

In addition, in accordance with paragraph 19 of Annex 1 to Resolution No. 66 of the Cabinet of Ministers of the Republic of Uzbekistan dated February 9, 2017, “On Measures to Implement Resolution No. PQ-2646 of the President of the Republic of Uzbekistan dated October 28, 2016, ‘On Improving the System of State Registration and Accounting of Business Entities,’” it was established that after state registration, a business entity must apply to banks to open bank account numbers in the manner established by legislation, and it is not required to submit copies of the certificate of state registration, original copies and copies of founding documents for opening bank account numbers.

Based on the above resolutions adopted by our government in this regard, necessary amendments were made to the paragraphs of Instruction No. 1948 that specifically establish the procedure for business entities to open accounts in banks. Specifically, paragraph 12 of it is stated in the following wording:

“12. The following documents are submitted to the bank by resident legal entities, individual entrepreneurs, and peasant farms that are subjects of entrepreneurial activity for opening deposit accounts in national currency until they are demanded: a) an application for opening an account in the form provided in Annex 2 to this Instruction; b) two sheets with sample signatures and a seal impression in the form provided in Annex 3 to this Instruction; c) a document confirming the identity of the person authorized to sign payment documents on behalf of the customer (passport or a document replacing it). After the original of the identity document is shown, a copy is made by the bank.”

Thus, the requirements to submit a copy of the certificate of state registration issued by the state tax authority at the place of residence for individual entrepreneurs importing goods intended for commercial activity from abroad (paragraph b of paragraph 12 of the old wording of Instruction No. 1948), a copy of the certificate of state registration (paragraph v of paragraph 12), and copies of founding documents (founding agreement, charter) and copies of amendments and additions made to them, as well as notarized copies of founding documents and amendments/additions for enterprises with foreign investments and other enterprises with foreign capital (paragraph d of paragraph 12) for resident legal entities that are subjects of entrepreneurial activity, have been abolished.

The above amendments to paragraph 12 of Instruction No. 1948 necessitated corresponding amendments to paragraph 10 of this Instruction, which lists the documents kept in the customer's legal file. While paragraph 10 of the old wording of this Instruction applied to all bank customers, the new wording divides this paragraph into two paragraphs.

According to its first paragraph, copies of the bank account agreement serving as the basis for opening an account for subjects of entrepreneurial activity, including enterprises with foreign investments and other enterprises with foreign capital, and amendments made to it, canceled sample signatures and sheets with seal impressions, as well as copies of documents confirming the identity of the person authorized to sign payment documents on behalf of the customer (passport or a document replacing it) are kept in their legal file. Banks obtain the information necessary for opening accounts for subjects of entrepreneurial activity and identifying them in the manner established by legislation from the “Automated System for State Registration and Accounting of Business Entities.”

The second paragraph of this clause establishes that documents serving as the basis for opening accounts for resident legal entities that are not subjects of entrepreneurial activity, recipients of funds from the budget, representative offices and branches of resident legal entities, and non-resident legal entities that are not subjects of entrepreneurial activity (foreign diplomatic and other official representative offices enjoying immunity and diplomatic privileges, international organizations and their branches, as well as representative offices of foreign organizations in the Republic of Uzbekistan that do not engage in economic or other commercial activity) are kept in the customer's legal file. These include copies of the bank account agreement and amendments made to it, copies of founding documents (founding agreement, charter) and amendments/additions made to them, a copy of the notice sent to the bank that opened the main account regarding the opening of secondary accounts, canceled sample signatures and sheets with seal impressions, and copies of documents confirming the identity of the person authorized to sign payment documents on behalf of the customer (passport or a document replacing it).

A fair question arises! Where do banks obtain the information necessary to identify customers in accordance with the “Regulation on the National Information Database of Bank Depositors of the Republic of Uzbekistan and the Procedure for Assigning a Unique Number to Customers and Maintaining a Register of Bank Accounts” (registration number 1863, September 27, 2008) and the “Internal Control Rules for Combating the Legalization of Proceeds from Criminal Activity and Financing of Terrorism in Commercial Banks” (registration number 2528, November 21, 2013)?

The answer to this question is given in the last sentence of the first paragraph of paragraph 10 of Instruction No. 1948. According to it, banks obtain the information necessary for opening accounts for subjects of entrepreneurial activity and identifying them in the manner established by legislation from the “Automated System for State Registration and Accounting of Business Entities.”

The “Automated System for State Registration and Accounting of Business Entities” was developed by the Central Bank and the Chamber of Commerce and Industry to ensure the implementation of Resolution No. 66 of the Cabinet of Ministers of the Republic of Uzbekistan dated February 8, 2017, “On Measures to Implement Resolution No. PQ-2646 of the President of the Republic of Uzbekistan dated October 28, 2016, ‘On Improving the System of State Registration and Accounting of Business Entities.’”

Taking the opportunity, we believe it is necessary to dwell on what information banks can obtain from the “Automated System for State Registration and Accounting of Business Entities” to identify business entities.

For clarity, we have listed in Table 1 the list of detailed information that can be obtained from this system. Here, we have indicated in separate columns the list of detailed information about business entities operating without forming a legal entity and business entities operating with the formation of a legal entity.

Table 1 |No. |List of detailed information to be obtained about business entities operating without legal entity status | |List of detailed information to be obtained about business entities operating with legal entity status | | |Code of the bank branch sending the request | |Code of the bank branch sending the request | | |Subject's TIN | |Subject's TIN | | |Customer Code (NIDBD) | |Customer Code (NIDBD) | | |Subject Confirmation Code | |Subject Confirmation Code | | |Response Code | |Response Code | | |Response Explanation | |Response Explanation | | |Subject TIN | |Subject's TIN | | |Individual's Personal Identification Number | | | | |Residency Code | | | | |Citizen's Country Code | |Country Code | | |Gender Code | | | | |Date of Birth | | | | |Country of Birth Code | | | | |Place of Birth Name | | | | |Subject Code | |Subject Code | | |Subject's Surname | |Subject's Name | | |Subject's First Name | |Abbreviation of Subject's Name | | |Subject's Middle Name | | | | |Region Code of Subject's Address | |Region Code of Subject's Address | | |District Code of Subject's Address | |District Code of Subject's Address | | |Subject's Address Code (SOATO) | |Subject's Address Code (SOATO) | | |Postal Index of Subject's Address | |Postal Index of Subject's Address | | |Subject's Postal Address | |Subject's Postal Address | | |Temporary Residence Address | |Temporary Residence Address | | |Telephone | |Telephone | | |Fax | |Fax | | |E-Mail | |E-Mail | | |Mobile Phone | |Mobile Phone | | |DSI Code | |DSI Code | | |Region Code of the Registering Authority | |Region Code of the Registering Authority | | |District Code of the Registering Authority | |District Code of the Registering Authority | | |Date of Registration | |Date of Registration | | |End of (patent) term | |End of (patent) term | | |Registering Authority | |Registering Authority | | |Number of Registration Document | |Number of Registration Document | | |Ownership Form Code | |Ownership Form Code | | |Organizational-Legal Form Code | |Organizational-Legal Form Code | | |Activity Type Code | |IFUT Code | | | | |Legal Entity Code (OKPO) | | |Region Code where Activity is Conducted | |Region Code where Activity is Conducted | | |District Code where Activity is Conducted | |District Code where Activity is Conducted | | |Postal Address of Place where Activity is Conducted | |Postal Address of Place where Activity is Conducted | | | | |TIN of Higher-Level Organization | | | | |Director F.I.O. | | | | |Code of Document Type Confirming Director's Identity | | | | |Series of Document Confirming Director's Identity | | | | |Number of Document Confirming Director's Identity | | | | |Date of Issue of Document Confirming Director's Identity | | | | |Issuer of Document Confirming Director's Identity | | | | |Validity Period of Document Confirming Director's Identity | | | | |(Director) Citizen's Country Code | | | | |Director's Date of Birth | | | | |Director's Country of Birth Code | | | | |Director's Place of Birth | | | | |Postal Address of Director's Residence | | | | |Accountant F.I.O. | | | | |Code of Document Type Confirming Accountant's Identity | | | | |Series of Document Confirming Accountant's Identity | | | | |Number of Document Confirming Accountant's Identity | | | | |Date of Issue of Document Confirming Accountant's Identity | | | | |Issuer of Document Confirming Accountant's Identity | | | | |Validity Period of Document Confirming Accountant's Identity | | | | |(Accountant) Citizen's Country Code | | | | |Accountant's Date of Birth | | | | |Accountant's Country of Birth Code | | | | |Accountant's Place of Birth | | | | |Postal Address of Accountant's Residence | | | | |Information on Authorized Capital | | | | |Founder Subject Code | | | | |Founder's Share in Authorized Capital (%) | | | | |Date of Founder's Registration | | | | |Founder's Name (First Name) | | | | |Founder's TIN | | | | |Founder's Country Code | | | | |Founder's OKPO | | | | |Founder's Legal Address | | | | |Code of Document Type Confirming Founder's Identity | | | | |Series of Document Confirming Founder's Identity |

| | | | Number of document confirming the identity of the founder | | | | | Date of issue of the document confirming the identity of the founder 1 | | | | | Issuer of the document confirming the identity of the founder 1 | | | | | Validity period of the document confirming the identity of the founder 1 |

As can be seen from the data in the table, banks can have sufficient information from the "Automated System for State Registration and Accounting of Business Entities" to identify their clients who are business entities. Moreover, data from this system is obtained automatically and its round-the-clock operation is ensured. Also, the procedure for connecting to and using this System, as well as the definitions of abbreviations used in it, are available. We remind you that, in addition to the above-mentioned "Automated System for State Registration and Accounting of Business Entities", based on the Resolution of the Cabinet of Ministers of November 25, 2013, No. 312 "On Measures to Introduce the Mechanism for State Registration of Business Entities via the Internet Network", the Instruction "On the Procedure for Working in the Automated Information System for Registration and Identification of Legal Entities 'Reg-System'" (registration number 2594, June 12, 2014) was approved. As specified in paragraph 22 of Instruction No. 2594, banks may obtain information about a legal entity from the Unified State Register of Enterprises and Organizations (UTER) by entering the Main Code of the Enterprise/Organization (KTUT) or the Taxpayer Identification Number (TIN) of the legal entity being requested in real-time mode on the official website of the State Statistics Committee www.stat.uz. The round-the-clock operation of this system is ensured by the State Statistics Committee.

Based on the above requirements and in accordance with paragraph 11 of the Annex to the Decree of the President of the Republic of Uzbekistan dated January 31, 2017, No. PF-4940 "On Recognizing Certain Documents of the President of the Republic of Uzbekistan as Invalid", the second sub-paragraph of paragraph 39 of Instruction No. 1948 is adapted to paragraph 10 of this document, i.e., the words "Notarized copies of amendments and additions made to the charter documents of enterprises with foreign investments and other enterprises with foreign capital participation are required" are removed from it. In addition, the first sub-paragraph of paragraph 36 of Instruction No. 1948 is supplemented with the words "For information", "For certificates" after the word "Archive", and the second appendix is supplemented with the words "(if a seal is present)" after the abbreviation "M.U.".

Central Bank of the Republic of Uzbekistan

Deputy Director of the Department of Accounting, Reporting and State Budget Cash Execution

M. D. Marpatov

Tel: 212-61-08