On Measures for Organizing the Activities of the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan

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11.08.2018

09.04.2018

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Document lost its force 17.01.2020

Of the Cabinet of Ministers of the Republic of Uzbekistan

resolution

On Measures for Organizing the Activities of the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan

This resolution has lost its force based on Resolution No. 28 dated January 16, 2020 of the Cabinet of Ministers of the Republic of Uzbekistan "On Approval of the Regulations on the Agency for the Development of Small Business and Entrepreneurship under the Ministry of Economy and Industry of the Republic of Uzbekistan and on the State Fund for Supporting Entrepreneurial Activity".

In order to implement Resolution No. PQ-3225 dated August 17, 2017 of the President of the Republic of Uzbekistan "On Establishing the State Fund for Supporting the Development of Entrepreneurial Activity", the Cabinet of Ministers resolves:

1. Approve the Regulation on the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan in accordance with the Appendix.

2. Accept for information that the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan shall be located on the basis of the right of gratuitous use at Tashkent city, Karatosh street, house 1 (7th floor). ((2) clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

3. Ministries and departments shall coordinate their adopted normative legal documents within one month in accordance with this resolution.

4. Control over the implementation of this resolution shall be entrusted to Deputy Prime Minister of the Republic of Uzbekistan J.A. Kuchkarov.

Prime Minister of the Republic of Uzbekistan A. ARIPPOV

Tashkent city,

September 8, 2017,

No. 704

APPENDIX

to Resolution No. 704 of the Cabinet of Ministers of the Republic of Uzbekistan dated September 8, 2017

REGULATION

on the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan

Chapter 1. General Provisions

1. This Regulation defines the tasks and areas of activity of the State Fund for Supporting the Development of Entrepreneurial Activity under the Cabinet of Ministers of the Republic of Uzbekistan (hereinafter referred to as the Fund), the procedure for managing it, as well as the procedure for forming and using the Fund's funds, in accordance with Resolution No. PQ-3225 dated August 17, 2017 of the President of the Republic of Uzbekistan "On Establishing the State Fund for Supporting the Development of Entrepreneurial Activity".

The Fund reports to the Cabinet of Ministers of the Republic of Uzbekistan in its activities.

2. In its activities, the Fund complies with the Constitution and laws of the Republic of Uzbekistan, resolutions of the Chambers of the Oliy Majlis of the Republic of Uzbekistan, decrees, resolutions and orders of the President of the Republic of Uzbekistan, resolutions and orders of the Cabinet of Ministers, this Regulation, as well as other legislative acts.

3. The Fund is a legal entity in the form of a state institution, having an independent balance sheet, treasury account numbers in the Treasury of the Ministry of Finance of the Republic of Uzbekistan, and a stamp depicting the State Emblem of the Republic of Uzbekistan with its name written in the state language.

4. Location (postal address) of the Fund: Tashkent city, Karatosh street, house 1. ((4) clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

5. The following main concepts are used in this Regulation:

projects — interrelated complex measures and works carried out in advance defined timeframes in the following areas for the purpose of economic, social and other benefits;

projects related to the development of agriculture, primarily construction of modern high-efficiency greenhouses, animal husbandry, poultry farming, fishery, rabbit breeding, beekeeping, viticulture and horticulture, including intensive gardens;

projects related to the processing of agricultural products, infrastructure for storing fruit and vegetable products, and organization of logistics centers related to transportation of these products;

projects for landscaping and repair of common-use areas in multi-apartment buildings by joint stock companies of private housing owners and management companies; ((5) fifth sub-clause of this clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

projects in areas determined by the Council for Management of the State Fund for Supporting the Development of Entrepreneurial Activity of Entrepreneurial Activity, as well as projects initiated by the Union of Youth of Uzbekistan; ((5) sixth sub-clause of this clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

credit — credit, including preferential credit and microcredit used by commercial banks to finance projects of small business entities;

compensation — partial coverage of interest expenses on commercial bank loans;

guarantee — a guarantee agreement imposing liability on the commercial bank (lender) for the performance by small business entities (debtors) of their obligations under the credit to the Fund.

Chapter 2. Main Tasks and Areas of Activity of the Fund

6. Providing financial assistance to small business entities in the following forms is considered the main task of the Fund: See previous version. ((6) sub-clause 'a' issued based on Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

b) acting as guarantor for credits of small business entities amounting to up to 50 percent of the commercial bank loan volume, but not exceeding 2 billion UZS; ((6) sub-clause 'b' amended by Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

b1) acting as guarantor for credits of small business entities amounting to up to 50 percent of the commercial bank loan volume, but not exceeding 5 billion UZS, for organizing intensive gardens and greenhouse farms; ((6) clause supplemented with sub-clause 'b1' based on Resolution No. 874 dated October 16, 2019 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 16.10.2019, No. 09/19/874/3919)

c) providing compensation in the following equivalents for covering interest expenses on commercial bank loans: ((6) sub-clause 'c' first sub-clause amended by Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

in the amount of 5 percentage points, for amounts not exceeding 8 billion UZS in national currency, at an interest rate not exceeding 1.5 times the refinancing rate; ((6) sub-clause 'c' second sub-clause amended by Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

in national currency, for amounts not exceeding 8 billion UZS, at an interest rate not exceeding 1.5 times the refinancing rate, for projects indicated in Resolution No. PQ-2844 dated March 17, 2017 of the President of the Republic of Uzbekistan "On Further Simplification of Measures for Distributing Microcredits to Business Entities and Broad Layers of the Population" and Decree No. PF-5386 dated March 29, 2018 of the President of the Republic of Uzbekistan "On the Program 'Clean Village'" — in the amount of 8 percentage points; ((6) sub-clause 'c' supplemented with third sub-clause based on Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

for national currency amounts not exceeding 8 billion UZS — for preferential credits distributed from accumulated pension system funds, for implementing projects initiated by young entrepreneurs based on recommendations of the Union of Youth of Uzbekistan — in the amount of 3 percent rate for covering bank expenses; ((6) sub-clause 'c' fourth sub-clause amended by Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

for foreign currency amounts not exceeding 8 billion UZS in equivalent — 40 percent of the interest rate established by commercial banks, but not more than 3 percent. ((6) sub-clause 'c' fifth sub-clause amended by Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

for foreign currency — 50 percent of the established interest rate for currency credits distributed from credit lines of international financial institutions for constructing greenhouses, creating intensive gardens and building coolers until September 5, 2017. ((6) sub-clause 'c' supplemented with sub-clause based on Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

7. Financial assistance is provided to the Fund according to the scheme attached as Appendix 1 to this Regulation.

8. The Fund carries out its activities in the following main areas:

assisting in conducting state policy in the field of supporting the development of small business, expanding the use of financial services and granting credits, including simplifying conditions for granting credits to socially significant projects and areas;

participating in the implementation of state, sectoral and regional programs, projects and events that create opportunities for job creation through the development of small business;

supporting innovative activities of small business entities, encouraging the creation of new types of products and production, as well as assisting in introducing effective new technologies into production activities;

organizing the implementation of comprehensive scientific and practical research on issues of improving support for the development of small business in the republic together with research institutions.

Chapter 3. Management of the Fund

9. The Fund Management Council is the highest body of Fund management, and its composition is approved by the resolution of the President of the Republic of Uzbekistan. ((9) clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

10. The Fund Management Council:

develops proposals for priority sectors of production and directions of small business for which the Fund provides financial assistance and submits them to the Cabinet of Ministers of the Republic of Uzbekistan for approval;

approves annual forecasts of income and expenses of the Fund;

establishes restricted parameters for investing free funds of the Fund in deposits of commercial banks and other financial assets;

exercises control over the activities of the Executive Directorate of the Fund, including timely adoption of decisions on providing financial assistance to small business entities and targeted allocation of funds;

regularly hears reports from the Head of the Fund on the use of Fund funds, as well as from representatives of interested ministries, departments and other organizations on the efficiency of ongoing operations and results of provided resources, Fund and other sector guarantees and compensations;

selects an auditing organization for annual audit of the Fund, including regarding targeted use of its funds;

submits proposals to the Cabinet of Ministers of the Republic of Uzbekistan on increasing the authorized capital of the Fund.

11. The Executive Directorate is the executive body of the Fund, and its composition is approved by the resolution of the President of the Republic of Uzbekistan.

12. The Executive Directorate of the Fund:

officially manages the current activities of the Fund;

reviews documents received from commercial banks and makes decisions within its authority on providing guarantees and compensations by the Fund; ((12) third sub-clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

forms annual forecasts of Fund income and expenses in connection with the main parameters of the State Budget of the Republic of Uzbekistan for the upcoming year and submits them to the Council for approval in the established procedure;

develops proposals for expanding sources of forming Fund funds and submits them to the Council for consideration;

takes practical measures to attract additional necessary funds for timely and efficient fulfillment of tasks assigned to the Fund;

ensures accounting of Fund income and expenses and reporting on their execution, and submits them to the Council for approval; See previous version. ((12) eighth sub-clause issued based on Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

systematically monitors the targeted and efficient use of Fund funds;

financially supports small business entities in the established procedure.

Deposits of idle funds of the Fund in deposits of commercial banks and other financial assets are placed within parameters established by the Council in the established procedure. ((12) clause supplemented with sub-clause based on Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

13. The Executive Director is the head of the Executive Directorate of the Fund and is equated in status to a Deputy Minister in terms of labor remuneration conditions, medical and transport services.

The Executive Director of the Fund:

organizes the activities of the Executive Directorate of the Fund in accordance with the tasks and functions assigned to the Fund and is personally responsible for it;

organizes filling the Executive Directorate of the Fund with highly qualified specialists in asset management, business, including analysis, examination and financing of projects related to various directions of entrepreneurship, within the established number of employees;

represents the interests of the Fund in international and foreign organizations;

signs labor, economic, credit and other contracts on behalf of the Fund, including contracts on providing guarantees and compensations and placing deposits in commercial banks. ((13) sixth sub-clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

14. The Executive Directorate is funded based on the expense estimate approved by the Council from Fund funds. ((14) clause amended by Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

15. For the purpose of motivating employees and strengthening the material and technical base of the Fund, an Extra-budgetary Development and Material Motivation Fund is established, and its Regulation is approved in coordination with the Council. ((15) clause amended by Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

16. Labor remuneration and motivation conditions established for employees of state management bodies are introduced for employees of the Executive Directorate of the Fund.

17. Salaries of Fund employees consist of position salary, bonuses, supplements and surcharges, incentive payments, as well as additional material motivation funds envisaged in legislative acts and the regulation on the Extra-budgetary Development and Material Motivation Fund.

18. Four limits are allocated for the Fund to perform assigned tasks, including two service vehicles and two special light vehicles for storage.

Chapter 4. Formation and Use of Fund Funds

19. Fund funds are formed from the following sources:

initial capital of the Fund formed from membership fees of organizations indicated in Appendix 1 to Resolution No. PQ-3225 dated August 17, 2017 of the President of the Republic of Uzbekistan "On Establishing the State Fund for Supporting the Development of Entrepreneurial Activity", upon subsequent liquidation of the Guarantee Fund of Small Industrial Zones in Tashkent city and the Guarantee Fund for the Development of Small Business, in the form of respective monetary funds amounting to 50 million US dollars and 100 billion UZS;

funds within the framework of annually approved allocations for these purposes from the State Budget of the Republic of Uzbekistan, and in 2017 — 100 billion UZS for forming the resource base of the Fund;

the part of net profit of the Central Bank of the Republic of Uzbekistan directed to the State Budget of the Republic of Uzbekistan annually;

credits (debts) and grants attracted from international financial institutions, foreign government organizations and other donors for performing tasks assigned to the Fund;

income of the Fund, including from placing deposits, issuing guarantees, as well as other sources not contradictory to legislative acts.

20. Fund funds are accumulated in a special account opened in "Mikrokreditbank" Joint Stock Commercial Bank (hereinafter referred to as the special account).

Funds in foreign currency are transferred to special currency accounts opened by the Fund in commercial banks of the Republic of Uzbekistan in the established procedure.

21. From Fund funds: See previous version. ((21) second sub-clause issued based on Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

payments related to guarantees provided for borrowers' credits to commercial banks are paid;

used for partial coverage of interest expenses on commercial bank loans.

Material and technical support of Fund activities, purchase of fixed assets and intangible assets, carrying out operational expenses established by the Council, including labor remuneration and payments equated to labor remuneration, and incentive-type payments. ((21) clause supplemented with sub-clause based on Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

22. Strictly defined directions are used for utilizing Fund funds allocated for financing purposes specified in Clause 21 of this Regulation. ((22) clause amended by Resolution No. 26 dated January 15, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578) See previous version. ((Chapter 5 lost its force based on Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045))

Chapter 6. Procedure for Providing, Suspending, Canceling and Restoring Compensation

35. Fund compensations for covering interest expenses on commercial bank loans:

are provided for nationally distributed amounts not exceeding 8 billion UZS, at an interest rate not exceeding 1.5 times the refinancing rate — in the amount of 5 percentage points;

are provided for nationally distributed amounts not exceeding 8 billion UZS, at an interest rate not exceeding 1.5 times the refinancing rate, for projects implemented in districts indicated in Appendix 2 to Resolution No. PQ-2844 dated March 17, 2017 of the President of the Republic of Uzbekistan "On Further Simplification of Measures for Distributing Microcredits to Business Entities and Broad Layers of the Population", as well as under the "Clean Village" program approved by Decree No. PF-5386 dated March 29, 2018 of the President of the Republic of Uzbekistan — in the amount of 8 percentage points;

are provided for national currency amounts not exceeding 8 billion UZS, for preferential credits distributed from accumulated pension system funds, for implementing projects initiated by young entrepreneurs based on recommendations of the Union of Youth of Uzbekistan — in the amount of 3 percent rate for covering bank expenses;

are provided for foreign currency distributed amounts not exceeding 8 billion UZS in equivalent, 40 percent of the interest rate established by commercial banks, but no more than 3 percent;

are provided for foreign currency — 50 percent of the established interest rate for currency credits distributed from credit lines of international financial institutions for constructing greenhouses, creating intensive gardens and building coolers until September 5, 2017. ((35) clause amended by Resolution No. 644 dated August 10, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 11.08.2018, No. 09/18/644/1691)

36. Commercial banks distributing credits at an interest rate not exceeding 1.5 times the refinancing rate in national currency, as well as credits in foreign currency in the procedure established by legislative acts, are considered recipients of Fund compensations. ((36) clause amended by Resolution No. 273 dated April 6, 2018 of the Cabinet of Ministers of the Republic of Uzbekistan — National Database of Legislation of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

37. If the refinancing rate changes, the amount of distributed compensation remains unchanged at the level recorded on the day the credit was formalized.

38. Fund compensation is not provided for credits envisaging the following:

repayment of previously obtained credits or any other debts;

production of alcoholic beverages and tobacco products;

formation of working capital of trading-intermediary organizations and public catering enterprises;

financing construction of trade objects and public catering objects;

organizing gambling and other games based on risk, as well as purchasing equipment for other purposes.

In addition, the Fund's compensation:

is not provided to individuals and legal entities with a poor credit history, specifically those with overdue debts on commercial bank loans;

to individuals and legal entities with overdue debts on payments to the budget;

(The ninth subparagraph of paragraph 38 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045) See previous edition. (The tenth subparagraph of paragraph 38 was issued in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

The restrictions indicated in the fourth and fifth subparagraphs of this paragraph do not apply to projects initiated by the Union of Youth of Uzbekistan.

(Parenthetical 38 was supplemented with a subparagraph in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

39. Acceptance of documents for obtaining a loan and consideration of applications, as well as granting loans to small business entities in accordance with the requirements of this Regulation, are carried out in accordance with the procedures established by legislation and the internal credit policy of commercial banks.

40. If the branch of a commercial bank makes a positive decision on the issue of credit allocation, it sends its conclusion to the head office. If the bank makes a negative decision on granting a loan, a written response indicating the reasonable grounds for rejection is sent to the small business entity.

41. Applications regarding the provision of compensation for currency loans allocated until September 5, 2017, for the construction of greenhouses, creation of intensive orchards, and construction of refrigerators by business entities from the credit lines of international financial institutions are accepted by the branch of a commercial bank and submitted to the main commercial bank within one day for subsequent submission to the Fund.

(Parenthetical 401 was introduced in accordance with Resolution No. 644 of the Cabinet of Ministers of the Republic of Uzbekistan dated August 10, 2018 — National Database of Legislation, 11.08.2018, 09/18/644/1691)

41. Upon receiving documents from the branch, the main commercial bank reviews them within 2 (two) working days, prepares summarized information on the required compensation amount, and sends it to the Fund for consideration and inclusion of the allocated loans in the category of compensable loans.

(Parenthetical 41 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

411. Responsibility for the completeness of submitted documents, the correctness of their consideration, the granting of preferential loans, and the entire process of granting preferential loans and receiving compensation for them is placed on the heads of commercial banks.

(Parenthetical 411 was introduced in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

42. The Fund reviews documents received from main commercial banks for compensation for loans, including their compliance with the projects specified in this Regulation, within 3 (three) working days.

(Parenthetical 42 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

43. The Executive Directorate of the Fund makes a decision on providing or refusing compensation to cover interest expenses on bank loans based on the results of reviewing the received documents.

Compensation for covering interest expenses on bank loans is provided in accordance with the priority directions of entrepreneurial activity and interest rates approved by the Council.

(The second subparagraph of paragraph 43 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

44. The Fund notifies the main commercial bank within 1 (one) working day about the decision made on providing compensation (or, in case of refusal, indicating the reasonable grounds) and subsequently informs the bank branch and the applicant — the small business entity — with a list of documents attached.

(Parenthetical 44 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

45. Upon receiving a positive decision, the main commercial bank immediately notifies the bank branch. At the same time, the authorized person at the head bank signs a tripartite agreement on the provision of compensation between the bank, the Fund, and the borrower, and sends it to the bank branch for signature by the authorized representative of the small business entity within 1 (one) working day.

(Parenthetical 45 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

46. Upon receiving a notification from the head bank, the branch of a commercial bank concludes a loan agreement between the bank and the small business entity within one working day. The authorized representative issues the agreement concluded between the bank, the Fund, and the small business entity on the provision of compensation based on this loan agreement to the small business entity for signature at the bank branch.

The tripartite agreement specifies the preferential interest rate of the Fund for interest expenses on bank loans and the amount of compensation.

The branch of the bank allocates a loan to the small business entity in accordance with the bank's credit policy.

A copy of the loan agreement concluded between the bank and the small business entity, as well as the loan repayment schedule, is sent to the Fund.

47. If the Fund refuses to provide compensation, the main commercial bank immediately notifies the bank branch. Upon receiving a notification that compensation for loans has been refused, the bank branch informs the small business entity about the refusal to allocate a loan.

In this case, the bank branch offers the small business entity to conclude a loan agreement under market conditions in the generally established order.

(Parenthetical 47 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

48. Commercial banks, based on concluded loan agreements, must notify the Fund no later than the 15th of each month about the necessity of transferring the compensation amount specified in the agreement.

49. Commercial banks in the established order:

Keep separate balance sheet accounts for loans allocated by terms and types of borrowers under "Short-term loans granted with the assistance of the State Fund for Supporting Entrepreneurship Activities" 12800 and "Long-term loans granted with the assistance of the State Fund for Supporting Entrepreneurship Activities" 14400 in accordance with this Regulation;

Keep separate balance sheet accounts for accrued interest to be covered from the subsidies of the State Fund for Supporting Entrepreneurship Activities "Receipt of accrued interest to be covered from the subsidies of the State Fund for Supporting Entrepreneurship Activities" 16325 in accordance with the agreement on the provision of compensation.

(Parenthetical 49 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

50. A part of the interest expenses on commercial bank loans is covered by the Fund no later than the 20th of each month, based on the bank's notification.

(The first subparagraph of paragraph 50 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

In this case, the Fund executes the payment from the personal account based on the officially оформленный payment order within 3 (three) working days after receiving the notification.

(The second subparagraph of paragraph 50 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

51. The Fund's compensation is transferred in one go to the bank's "Customer Accounts" 29801 transit account number for several loan agreements based on the bank register, in accordance with the agreement on the provision of compensation.

In this case, funds received into the "Customer Accounts" 29801 transit account number are automatically transferred to the account "Receipt of accrued interest to be covered from the subsidies of the State Fund for Supporting Entrepreneurship Activities" 16300.

(Parenthetical 51 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

52. In cases where borrowers return the loan after the due date, the amount of allocated compensation must not exceed the amount specified in the approved repayment schedule.

53. The Fund suspends the provision of compensation for commercial bank loans in the following cases:

if the loan with covered interest expenses is used for purposes other than intended;

if the borrower fails to fulfill obligations to make payments to the bank in accordance with the payment schedule for 3 (three) consecutive months;

if the funds in the borrower's bank account are seized;

if unreliable or incorrect information is found in the documents submitted by small business entities and/or commercial banks.

(The fifth subparagraph of paragraph 53 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

54. Commercial banks monitor the activities of borrowers, including on-site monitoring, to identify the cases envisaged in paragraph 53 of this Regulation.

(Parenthetical 54 was introduced in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

55. If the cases envisaged in paragraph 53 of this Regulation are identified, the commercial bank notifies the Fund within 3 (three) working days to suspend the provision of compensation.

(Parenthetical 55 was introduced in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

56. Upon receiving a notification from the commercial bank, the Fund makes a decision to suspend the provision of compensation within 3 (three) working days and sends a written notification to the bank indicating the reasons for suspension.

(Parenthetical 56 was introduced in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

57. If the reasons for suspension under paragraph 53 of this Regulation are eliminated, the provision of compensation for the borrower's loan is allowed to be restored.

(Parenthetical 57 was introduced in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

58. A decision on the complete cessation of compensating a part of the borrower's interest expenses is made by the Executive Directorate of the Fund. If the Executive Directorate makes a decision to completely stop compensation, the Fund unilaterally terminates the agreement on the provision of compensation in accordance with current legislation and contract terms, and notifies the bank about this.

59. The following are grounds for stopping compensation:

if the borrower fully repays the loan under the bank loan agreement;

if the Executive Directorate of the Fund makes a decision to stop compensation;

if the agreement on the provision of compensation is terminated at the initiative of the borrower.

60. In cases where compensation for loans is stopped and terminated early in accordance with the decisions of the Executive Directorate of the Fund, commercial banks recover the amount of compensation for a part of interest expenses from the borrower, and these conditions must be agreed upon in the loan agreement.

(Parenthetical 60 was amended in accordance with Resolution No. 644 of the Cabinet of Ministers of the Republic of Uzbekistan dated August 10, 2018 — National Database of Legislation, 11.08.2018, 09/18/644/1691)

Chapter 7. Conditions and procedures for considering the provision of guarantees by the Fund for commercial bank loans to small business entities

61. The Fund's guarantee is provided to small business entities for commercial bank loans in an amount up to 50 percent of the loan volume, but not exceeding 2 billion.

(Parenthetical 61 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

611. The Fund's guarantee is provided to small business entities for commercial bank loans for organizing intensive orchards and greenhouse farms in an amount up to 50 percent of the loan volume, but not exceeding 5 billion sum.

(Parenthetical 611 was introduced in accordance with Resolution No. 874 of the Cabinet of Ministers of the Republic of Uzbekistan dated October 16, 2019 — National Database of Legislation, 16.10.2019, 09/19/874/3919)

62. The Fund's services for providing guarantees are paid. A one-time intermediary fee in the amount of 1 (one) percent of the guarantee sum in national currency is collected from small business entities for the provision of the Fund's guarantee.

(Parenthetical 62 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

63. Only the following small business entities may receive the Fund's guarantee in accordance with this Regulation:

(The first subparagraph of paragraph 63 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

Registered and operating within the territory of the Republic of Uzbekistan;

Not in the liquidation stage;

Not declared bankrupt;

Having no overdue debts on previously obtained loans and tax payments;

Having submitted the necessary documents in accordance with paragraph 66 of this Regulation;

(The sixth subparagraph of paragraph 63 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

Complying with other requirements established in this Regulation.

64. The Fund's guarantee is provided to small business entities if they meet the following conditions:

If small business entities participate in the project with a share of not less than 25 percent (excluding family business entities);

(The second subparagraph of paragraph 64 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

If the loans provided under the Fund's guarantee are targeted;

If there are no cases of failure to repay previously granted loans on time in accordance with the terms of the loan agreement, as well as violation of the terms of the agreement on providing bank guarantees.

65. The Fund's guarantee is not provided for projects involving:

Repayment of previously obtained loans or any other debts;

Production of alcoholic beverages and tobacco products;

Formation of working capital for trading intermediary organizations and general catering enterprises;

Financing the construction of trade objects and general catering facilities;

Organizing gambling and other games based on risk, as well as purchasing equipment for other purposes.

In addition, the Fund's guarantee is not provided to:

Individuals and legal entities with a poor credit history, specifically those with overdue debts on commercial bank loans;

Individuals and legal entities with overdue debts on mandatory payments for the budget, as well as for electricity supply, gas supply, and other utility payments;

Legal entities with overdue creditor and debtor debts.

66. A small business entity applies to the branch of a commercial bank with an application indicating the purpose of obtaining a Fund's guarantee to obtain a loan for financing the project.

The following documents are attached to the small business entity's application:

A business plan (technical and economic justification) showing the forecast of funds entering the borrower's bank account for the project being implemented (cash flow);

The accounting balance (Form No. 1) submitted by the borrower to the relevant state tax inspection for the last reporting period, as well as comparative documents on debt no older than 90 days, and a report on financial results (Form No. 2) — except for newly established legal entities, individual entrepreneurs operating without establishing a legal entity, and farm households;

Information on the collateral presented as security for the loan;

Documents envisaged in agreements concluded between commercial banks and international financial institutions on the allocation of funds for loans (only for loans granted from the accounts of these specified institutions).

67. After reviewing the application and the complete set of documents, the branch of a commercial bank:

Checks the completeness of the submitted documents. If documents are not submitted in full, the bank branch requests the missing information (document) from the small business entity within one day;

Reviews the submitted documents and evaluates the financial and economic efficiency of the project in accordance with the procedures established by legislation and internal credit policy.

If a positive decision on loan allocation is made, the bank branch sends its conclusion with the small business entity's application for the Fund's guarantee to the main commercial bank and informs the small business entity about this.

In case the bank makes a negative decision on granting a loan, a written response indicating the reasonable grounds for rejection is sent to the small business entity.

68. Upon receiving documents from the branch, the main commercial bank reviews and prepares necessary documents and summarized information on them within 2 (two) working days and sends them to the Fund for the provision of the Fund's guarantee for loans allocated to borrowers.

(Parenthetical 68 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

69. Upon receiving the set of documents sent by the main commercial bank for obtaining a Fund's guarantee, the Executive Directorate of the Fund within 5 (five) working days:

Checks the submitted documents. The Fund, if necessary, requests missing information (documents) from the head bank within 1 (one) working day;

Checks the summarized information envisaged in paragraph 68 of this Regulation for compliance with the conditions of this Regulation;

If the application for a guarantee is approved, notifies the bank about the positive decision.

(The fourth subparagraph of paragraph 69 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

70. If the documents do not meet the requirements for obtaining a guarantee, the Fund sends a notification to the main commercial bank within 2 (two) working days about the decision made, returns the submitted documents, and indicates the reasonable grounds in writing.

(Parenthetical 70 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

71. Once the application for obtaining a guarantee is approved, the main commercial bank within 3 (three) working days:

(The first subparagraph of paragraph 71 was amended in accordance with Resolution No. 26 of the Cabinet of Ministers of the Republic of Uzbekistan dated January 15, 2018 — National Database of Legislation, 17.01.2018, 09/18/26/0578)

Concludes a loan agreement between the bank branch and the borrower;

Concludes a guarantee agreement between the Fund, the lending bank, and the borrower.

In this case, the Fund's Executive Director signs the guarantee agreement on behalf of the Fund. A copy of the loan agreement concluded between the bank and the borrower, as well as the loan repayment schedule, is sent to the Fund.

72. The obligations of the commercial bank to the Fund regarding the provided guarantees are terminated in the following cases:

When the principal debt and interest on the loan are fully repaid in the amount of the provided guarantee;

When payments are made by the Fund under the guarantee;

(The third subparagraph of paragraph 72 was amended in accordance with Resolution No. 273 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 6, 2018 — National Database of Legislation, 09.04.2018, 09/18/273/1045)

If the borrower transfers loan funds to another subject without the written permission of the Fund;

In other cases envisaged by legislation.

73. The Fund has the right to cover the partial or full volume of the guarantee portfolio through insurance. In this case, expenses for coverage through insurance are carried out from the Fund's funds.

74. Compensation and guarantee are not provided to one person simultaneously.

75. A person who has received compensation or a guarantee has the right to re-apply to the Fund after repaying the current debt on the loan.

Chapter 8. Procedure for the Fund to fulfill obligations on provided guarantees

76. When the borrower repays the loan and minimizes their obligations on the loan as much as possible, they are first released (excluded from security) proportionally to the amount repaid on the loan from the Fund's guarantee. In this case, property presented as security for the allocated loan by the borrower is released from collateral after the Fund's security is fully covered.

77. If the borrower fails to fulfill obligations related to timely payment of the principal debt and accrued interest within the deadlines specified in the loan agreement, or fails to fulfill them appropriately, or if obligations are not fulfilled within a period not exceeding ten working days, the bank places written demands on them in the order established by legislation.

78. Starting from the date (and accordingly from the date of non-performance) when the borrower failed to fulfill its obligations under the credit agreement, the bank is obliged to take all reasonable and possible measures in the arising situation to collect from the borrower the unpaid amount of the principal debt under the credit, to collect interest from it, and to fulfill other obligations provided for in the credit agreement, including:

withdrawing funds from the entrepreneur's account without their consent;

collecting the pledged property and making claims regarding security (except for the Fund's guarantee).

79. After the expiration of deadlines and after all necessary procedures specified in paragraph 78 of this Regulation have been carried out, if the debt amount to the bank as specified in the credit agreement is not repaid, the bank makes claims to the Fund with the following details recorded:

(Paragraph 79, first subparagraph, in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

details of the guarantee contract (date of conclusion, number, name of the borrower for whom the bank and the Fund are guarantors);

details of the credit contract secured by the guarantee contract (date of conclusion, number, etc.);

the volume of claims divided into the principal debt under the credit and calculated interest;

calculation of the Fund's financial liability under the guarantee contract based on the actual volume of responsibility arising from the borrower's unfulfilled contractual obligations;

payment requisites indicating the account number to which funds payable by the Fund to the bank should be transferred;

deadlines for satisfying the bank's claims.

80. The claim must be signed by the authorized representative of the head commercial bank and certified with the bank seal.

81. The following are attached to this claim:

a copy of the document confirming the authority of the person signing the claim (objection);

the calculated debt of the borrower and the calculated volume of the Fund's financial liability;

copies of documents confirming the borrower's indebtedness to the bank;

a copy of the claim (objection) sent by the bank to the borrower;

a reference on the work performed regarding copies of documents confirming that the commercial bank has taken measures against the borrower specified in paragraph 78 of this Regulation and carried out relevant actions.

(The sixth subparagraph of paragraph 81 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

All documents listed in the bank's claim (objection) against the Fund must be certified by the authorized representative of the head commercial bank and strengthened with the bank seal.

82. The Fund reviews the submitted claim for its compliance with the given guarantee and the attached documents. The review is carried out within the deadlines provided for in the guarantee contract.

83. In cases where the claims and attached documents do not comply with the terms of the guarantee contract, the Fund has the right to refuse to fulfill the request to pay the guarantee sum to the commercial bank.

(The first subparagraph of paragraph 83 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 273 dated April 6, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

In case objections are raised, the Fund sends a letter to the bank specifying all existing objections within 3 (three) working days starting from the date the claim was received.

(The second subparagraph of paragraph 83 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

84. If no objections are raised, the Fund must transfer funds to the account indicated by the bank. Based on the bank's claims and in accordance with the guarantee contract, the Fund pays funds to the bank in an amount not exceeding the sum of obligations specified in the guarantee contract for the unpaid part of the credit.

85. The Fund's obligations are considered fulfilled at the moment it transfers funds to the bank.

86. After making payments under the guarantee, the Fund has the right to demand reimbursement of expenses from the borrower from its other liquid assets on a regress basis, including through court proceedings, jointly with the bank.

Chapter 9. Accounting, reporting, and control over the use of Fund funds

87. The Executive Directorate of the Fund accounts for the receipt of funds into the Fund and their expenditure in the manner established by legislation, and prepares reports on them.

88. The bank submits reports to the Fund regarding the use of its funds no later than the 5th day of the month following the reporting month.

89. The Executive Directorate submits reports to the Council every quarter regarding the use of Fund funds.

(Parenthesis 89 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578)

90. Upon completion of the financial year, the Executive Directorate submits information to the Cabinet of Ministers of the Republic of Uzbekistan by February 1 of the following year regarding actual paid compensations and payments under guarantees for borrowers during the financial reporting year.

(Parenthesis 90 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 273 dated April 6, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

91. The Executive Directorate, banks, and state financial control bodies necessarily check compliance with the conditions, purposes, and procedures for submitting compensations and making payments under guarantees for borrowers as established by this Regulation.

(Parenthesis 91 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 273 dated April 6, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

92. The Fund has the right to request information from the Credit Bureau and the Central Bank of the Republic of Uzbekistan regarding the borrower's credit history, as well as from the State Tax Committee of the Republic of Uzbekistan regarding indebtedness for payments to the budget.

93. The Main Directorate of State Financial Control of the Ministry of Finance of the Republic of Uzbekistan checks the targeted use of Fund funds at least once per quarter in the established manner.

94. The Central Bank of the Republic of Uzbekistan regularly studies on-site the reliability of information regarding calculations carried out in determining the amount of compensations and payments under the issued guarantees, but at least once per quarter.

(Parenthesis 94 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 273 dated April 6, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 09.04.2018, No. 09/18/273/1045)

Chapter 10. Final Provisions

95. Persons guilty of violating the requirements of this Regulation are liable in accordance with the legislation.

96. Disputes arising in the implementation of this Regulation are resolved in the manner established by legislation, including in court proceedings.

97. The Fund is liquidated in the manner provided for by legislation.

Regulation on the State Fund for Supporting the Development of Entrepreneurship under the Cabinet of Ministers of the Republic of Uzbekistan

APPENDIX 1

SCHEME for providing financial assistance by the State Fund for Supporting the Development of Entrepreneurship

(Appendix 1 in the edition of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578) See previous edition. (Appendix 2 lost its force based on the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 26 dated January 15, 2018 — National Database of Legislative Acts of the Republic of Uzbekistan, 17.01.2018, No. 09/18/26/0578) (Collected Legislation of the Republic of Uzbekistan, 2017, No. 37, Article 991; National Database of Legislative Acts, 17.01.2018, No. 09/18/26/0578, 09.04.2018, No. 09/18/273/1045, 11.08.2018, No. 09/18/644/1691; 16.10.2019, No. 09/19/874/3919)