On Measures for the Rapid Development of the Factoring Services Market

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[ OKOZ: 1. 03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.14.00 Contract for Financing in Exchange for Waiver of Monetary Claim in Favor of Another Person (Factoring); 2. 07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.23.00.00 Other Credit Institutions / 07.23.03.00 Other Credit Organizations] [ TSZ: 1. Finance / Banks and other credit institutions. Credits] Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element Decree of the President of the Republic of Uzbekistan Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element On Measures for the Rapid Development of the Factoring Services Market Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element In order to further increase the opportunities to ensure the continuity of the activities of small and medium business entities by developing instruments based on movable assets for financing entrepreneurial activities in our country: Send suggestions for the document Listen to audio Get reference from document element

1. It is accepted for information that the Central Bank, together with the International Finance Corporation, has developed a draft law aimed at developing the factoring services market in Uzbekistan based on the UNIDROIT Model Law on Factoring. [ OKOZ:

03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.14.00 Contract for Financing in Exchange for Waiver of Monetary Claim in Favor of Another Person (Factoring)] Send suggestions for the document Listen to audio Get reference from document element 2. Consent is given to the proposal of the Central Bank regarding the establishment of factoring organizations carrying out the activity of financing in exchange for waiver of monetary claims (hereinafter referred to as factoring). Send suggestions for the document Listen to audio Get reference from document element It is established that the activity of a factoring organization shall be carried out after registration in the register of non-bank credit institutions with the Central Bank. [ OKOZ: 1. 03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.14.00 Contract for Financing in Exchange for Waiver of Monetary Claim in Favor of Another Person (Factoring); 2. 07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.27.00.00 Regulation of Currency and Currency Control / 07.27.04.00 Settlements and Payments in Foreign Currency] Send suggestions for the document Listen to audio Get reference from document element 3. It is established that, starting from January 1, 2025: Send suggestions for the document Listen to audio Get reference from document element a) the following are permitted: Send suggestions for the document Listen to audio Get reference from document element conducting factoring operations in foreign currency when the client's counterparty is a non-resident; Send suggestions for the document Listen to audio Get reference from document element reselling purchased monetary claims under factoring contracts by credit institutions (refactoring); Send suggestions for the document Listen to audio Get reference from document element b) liability for violating the prohibition on waiver of monetary claims in favor of another person is abolished; Send suggestions for the document Listen to audio Get reference from document element c) notifications regarding the waiver of monetary claims are registered in the pledge registry to ensure the priority of claims to waived rights; Send suggestions for the document Listen to audio Get reference from document element d) the currency of the monetary obligation and the country where the payment is made cannot be changed without the consent of the debtor. Send suggestions for the document Listen to audio Get reference from document element The Cabinet of Ministers shall, within one month, submit a draft law to the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan, taking into account the requirements provided for in paragraphs 2 and 3 of this Decree. [ OKOZ: 1. 03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.14.00 Contract for Financing in Exchange for Waiver of Monetary Claim in Favor of Another Person (Factoring)] Send suggestions for the document Listen to audio Get reference from document element 4. The proposal of the Central Bank regarding the introduction of the Electronic Platform for Factoring Services (hereinafter referred to as the Factoring Platform) is approved. Send suggestions for the document Listen to audio Get reference from document element The Factoring Platform shall provide the following opportunities: Send suggestions for the document Listen to audio Get reference from document element entering information and documents regarding monetary claims by business entities for using factoring services; Send suggestions for the document Listen to audio Get reference from document element automating the financing process by verifying the authenticity of documents forming the basis of the monetary claim, as well as by promptly collecting information about debtors and ensuring their analysis in real-time; Send suggestions for the document Listen to audio Get reference from document element providing a convenient, fast, and secure technological infrastructure for credit institutions to provide factoring services to supply chain participants. [ OKOZ: 1. 02.00.00.00 Fundamentals of State Management / 02.03.00.00 Republican State Management Bodies and Economic Management Bodies / 02.03.02.00 Ministries; 2. 03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.14.00 Contract for Financing in Exchange for Waiver of Monetary Claim in Favor of Another Person (Factoring); 3. 12.00.00.00 Information and Information Provision / 12.01.00.00 General Rules of the Information and Information Provision Sector] Send suggestions for the document Listen to audio Get reference from document element 5. In order to verify the authenticity of monetary claims on the Factoring Platform, register them, assess the debtor's solvency, and create opportunities for implementing factoring, including international factoring: Send suggestions for the document Listen to audio Get reference from document element a) the following shall ensure integration into the Factoring Platform and the establishment of information exchange through the interdepartmental integration platform of the "Electronic Government" system together with the Central Bank and the Ministry of Digital Technologies: Send suggestions for the document Listen to audio Get reference from document element the Committee of Tax Affairs — the electronic database of electronic invoices, the electronic cargo waybill system, and the electronic database of taxpayers with the opportunity to receive financial reports of legal entities; Send suggestions for the document Listen to audio Get reference from document element the Ministry of Investments, Industry and Trade and the Customs Committee — the Unified Electronic Information System of Foreign Trade Operations (hereinafter referred to as UEIS FTO). Send suggestions for the document Listen to audio Get reference from document element In this regard, it is established that the integration of information systems and databases of other ministries and departments into the Factoring Platform upon request of the Central Bank is necessary; Send suggestions for the document Listen to audio Get reference from document element b) the Central Bank shall ensure that credit institutions connect to the Factoring Platform and launch the provision of digital factoring services through this platform; Send suggestions for the document Listen to audio Get reference from document element c) ministries and departments performing the functions of a shareholder (participant, founder) in enterprises with a state share in the authorized capital of 50 percent and above shall ensure the connection of these enterprises to the Factoring Platform and the continuous placement of invoices for contracts concluded through tenders and best offers selection, as well as contracts with deferred payment, on the platform. Send suggestions for the document Listen to audio Get reference from document element 6. It is established that the requirements for the information system security, cybersecurity, and IT auditing of factoring electronic platforms organized by persons who are not credit institutions shall be established by the Central Bank. Send suggestions for the document Listen to audio Get reference from document element 7. The initiative to establish the National Factoring Association (hereinafter referred to as the Association) to popularize and develop factoring services by commercial banks and microfinance organizations, develop industry standards, and strengthen connections between factoring market participants is supported. Send suggestions for the document Listen to audio Get reference from document element The Central Bank, together with the Association, shall ensure the analysis of the latest trends in local and international markets, the adoption of measures to develop factoring, and the resolution of issues within the scope of its authority. Send suggestions for the document Listen to audio Get reference from document element The Ministry of Investments, Industry and Trade shall assist in developing international cooperation in the field of factoring and establishing relations with leading foreign banks and factoring companies together with the Chamber of Commerce and Industry and international financial institutions. [ OKOZ: 1. 03.00.00.00 Civil Legislation / 03.11.00.00 Specific Types of Obligations / 03.11.17.00 Settlements (also see 07.21.03.00) / 03.11.17.01 General Rules. Receivables and Payables] Send suggestions for the document Listen to audio Get reference from document element 8. It is established that, in order to create opportunities for the wide use of factoring in foreign trade operations: Send suggestions for the document Listen to audio Get reference from document element a) starting from January 1, 2025, on the basis of a contract for the purchase of debtor receivables under an export contract: Send suggestions for the document Listen to audio Get reference from document element if the credit institutions providing factoring services (hereinafter referred to as financial agents) are residents, information about them is entered into the UEIS FTO as the recipient of currency funds under the export contract, and the obligation to ensure compliance with the requirement for asset repatriation passes to these financial agents; Send suggestions for the document Listen to audio Get reference from document element if the financial agents are non-residents, the obligation to ensure compliance with the requirement for asset repatriation remains with the exporter. In this case, when funds arrive from a non-resident financial agent on the basis of a contract for the purchase of debtor receivables under export contracts, the requirement for asset repatriation is considered fulfilled; Send suggestions for the document Listen to audio Get reference from document element the reward (discount) withheld by financial agents for the services provided, in an amount not exceeding 10 percent of the monetary claim amount, is not accounted for as a debtor receivable; Send suggestions for the document Listen to audio Get reference from document element b) when a resident financial agent provides monetary funds in national currency in exchange for foreign currency monetary claims arising from the export contract against the exporter's non-resident (debtor), the existing procedure for tax benefits provided for exporters is preserved. Send suggestions for the document Listen to audio Get reference from document element 9. The "Roadmap" for the Development of the Factoring Services Market, which provides for the following, is approved in accordance with the Appendix: Send suggestions for the document Listen to audio Get reference from document element organizing short-term training courses to improve the knowledge and professional skills of employees of commercial banks and microfinance organizations regarding factoring services, and implementing measures to popularize factoring services; Send suggestions for the document Listen to audio Get reference from document element the Chamber of Commerce and Industry shall conduct explanatory work to increase the awareness of business entities about factoring services and the advantages of factoring; Send suggestions for the document Listen to audio Get reference from document element the Central Bank shall provide explanations to credit institutions on accounting for factoring operations, registration in the pledge registry, working on the Factoring Platform, and continuously publish an analysis of the state of the factoring market; Send suggestions for the document Listen to audio Get reference from document element the Chamber of Commerce and Industry, the Ministry of Investments, Industry and Trade, and the Customs Committee shall develop guidelines for registering international factoring operations in the UEIS FTO and establish cooperation with foreign banks and factoring companies. Send suggestions for the document Listen to audio Get reference from document element 10. The following main target indicators for the development of the factoring services market are established: Send suggestions for the document Listen to audio Get reference from document element increasing the volume of factoring services by 10 times over 3 years; Send suggestions for the document Listen to audio Get reference from document element reaching a share of factoring services provided by banks with a state share of 3 percent in the total volume of financing by the end of 2026. Send suggestions for the document Listen to audio Get reference from document element 11. The Central Bank, together with interested ministries and departments, shall submit proposals to the Cabinet of Ministers within two months regarding amendments and additions to legislative documents arising from this Decree. Send suggestions for the document Listen to audio Get reference from document element 12. Control over the implementation of this Decree is entrusted to the Prime Minister of the Republic of Uzbekistan A.N. Aripov and the Chairman of the Central Bank M.B. Nurmuratov. Send suggestions for the document Listen to audio Get reference from document element President of the Republic of Uzbekistan Sh. MIRZIYOYEV Send suggestions for the document Listen to audio Get reference from document element Tashkent city, Send suggestions for the document Listen to audio Get reference from document element August 12, 2024, Send suggestions for the document Listen to audio Get reference from document element PF-109 Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element Appendix to the Decree of the President of the Republic of Uzbekistan dated August 12, 2024, PF-109 Send suggestions for the document Listen to audio Get reference from document element Roadmap for the Development of the Factoring Services Market Send suggestions for the document Listen to audio Get reference from document element Send suggestions for the document Listen to audio Get reference from document element

No.

Name of Measures

Implementation Mechanism

Implementation Deadline

Responsible Executors

Improving the legal basis for the factoring services market in Uzbekistan

Submission of a draft law "On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan Regarding the Development of Relations for Financing in Exchange for Waiver of Monetary Claims in Favor of Another Person (Factoring)" to the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan. It includes:

permitting factoring operations in foreign currency when the client's counterparty is a non-resident;

permitting credit institutions to resell monetary claims purchased under factoring contracts (refactoring);

abolishing liability for violating the prohibition on waiver of monetary claims in favor of another person;

registering notifications regarding the waiver of monetary claims in the pledge registry to ensure the priority of claims to waived rights;

establishing that the currency of the monetary obligation and the country where the payment is made cannot be changed without the consent of the debtor;

granting the Central Bank the authority to establish requirements for the information system security and IT auditing of factoring electronic platforms organized by persons who are not credit institutions, and to exercise control over their implementation;

reflecting other criteria and norms for organizing the activity of a factoring organization and developing factoring services.

September 2024

Cabinet of Ministers

Introduction of the Electronic Platform for Factoring Services (hereinafter referred to as the Factoring Platform)

1. Development of a technical specification for the introduction of the Factoring Platform in cooperation with the International Finance Corporation.

December 2024

Central Bank

(Saidullaev)

2. Selection of developers for the Factoring Platform and commencement of platform development.

February 2025

3. Launch of the Factoring Platform.

August – December 2025

4. Integration of the following electronic platforms and systems into the Factoring Platform:

The electronic database of electronic invoices, the electronic cargo waybill system, and the electronic database of taxpayers with the opportunity to receive financial reports of legal entities;

The Unified Electronic Information System of Foreign Trade Operations.

August 2025

Committee of Tax Affairs

(Kudbiev) ,

Ministry of Investments, Industry and Trade

(Kudratov) ,

Customs Committee

(Mavlonov),

Central Bank

(Saidullaev) ,

Ministry of Digital Technologies

(Shermatov)

5. Ensuring the connection of enterprises with a state share in the authorized capital of 50 percent and above to the Factoring Platform, and the continuous placement of invoices for contracts concluded through tenders and best offers selection, as well as contracts with deferred payment, on the platform.

August 2025

Agency for Management of State Assets

(Ortikov) ,

Ministry of Economy and Finance

(Mustafaev) ,

ministries and departments

6. Ensuring that credit institutions connect to the Factoring Platform and launch the provision of digital factoring services through this platform.

August 2025

Central Bank

(Saidullaev)

7. Continuous provision of explanations to credit institutions on carrying out operations on the Factoring Electronic Platform.

permanent

Central Bank

(Saidullaev)

Introduction of minimum requirements for electronic platforms providing factoring services

1. Development of requirements for the information system security and IT auditing of factoring electronic platforms organized by persons who are not credit institutions, in cooperation with the International Finance Corporation.

2. Approval of the developed requirements by the Central Bank Board.

Within one month after the adoption of the Law in paragraph 1

Central Bank

(Turdaliyev)

Creating opportunities for the wide use of factoring in foreign trade operations

Submission of a draft Government Resolution to the Cabinet of Ministers regarding the improvement of the Unified Electronic Information System of Foreign Trade Operations (hereinafter referred to as UEIS FTO). The draft Resolution provides for:

if financial agents are residents, information about them is entered into the UEIS FTO as the recipient of currency funds under the export contract, and the obligation to ensure compliance with the requirement for asset repatriation passes to these financial agents;

if financial agents are non-residents, the obligation to ensure compliance with the requirement for asset repatriation remains with the exporter. In this case, when funds arrive from a non-resident financial agent on the basis of a contract for the purchase of debtor receivables under export contracts, the requirement for asset repatriation is considered fulfilled;

the reward (discount) withheld by financial agents for the services provided, in an amount not exceeding 10 percent of the monetary claim amount, is not accounted for as a debtor receivable.

October 2024

Ministry of Investments, Industry and Trade

(Kudratov) ,

Customs Committee

(Mavlonov) ,

Central Bank

(Abubakirov)

Development of International Factoring

1. Development and publication on official websites of guidelines for credit institutions and business entities on registering international factoring operations in the UEIS FTO.

January 2025

Chamber of Commerce and Industry

(Vahobov) ,

Ministry of Investments, Industry and Trade

(Kudratov),

Customs Committee

(Mavlonov)

2. Conducting negotiations, establishing cooperation, and attracting foreign banks and factoring companies in countries with high foreign trade turnover with Uzbekistan.

2024-2025

3. Development of mechanisms for assessing the reliability of entrepreneurs who are residents of countries with high foreign trade turnover with Uzbekistan, primarily China, Russia, and Kazakhstan, in order to mitigate risks in international factoring.

August 2025

Training and Qualification Enhancement of Employees of Credit Institutions Providing Factoring Services

1. Approval of a schedule for organizing short-term training courses to improve the knowledge and professional skills of credit institution employees regarding factoring services.

September 2024

Central Bank

(Saidullaev) ,

2. Organization of short-term training courses for credit institution employees. Involving foreign consultants with experience in the field.

2024-2025, according to the schedule

Commercial banks, microfinance and factoring organizations,

Uzbekistan Bankers Association

Expansion of the Volume of Factoring Services in Commercial Banks

1. Appointment of a Vice Chairman responsible for the development of factoring in banks with a state share.

September 2024

"Uzmilliybank" JSC

(Mirsatov) ,

AT "Halk Banki"

(Atabaev) ,

"Agrobank" ATB

(Mamatqulov) ,

"Microcredit-bank" ATB

(Butaev) ,

"Asaka Bank" JSC

(Tulyaganov) ,

"Uzsanoatqurilish-bank" ATB

(Akbarjonov) ,

"Turonbank" ATB

(Mirzaev) ,

ATB "Bank for Business Development"

(Annaklichev) ,

AT "Aloma Bank"

(Irisbekova)

2. Implementation of marketing and other measures to popularize factoring services.

September 2024, permanent

3. Establishment of factoring organizations with the participation of leading foreign partners in the factoring field, under the auspices of banks with a state share.

Ensuring the involvement of qualified foreign partners in the activity of factoring organizations.

2024-2025

4. Reaching a share of factoring services provided by banks with a state share of 3 percent in the total volume of financing. Setting quarterly target indicators for banks.

December 2026

Analysis and Explanations of the Factoring Market

1. Continuous publication of an analysis of the state of the factoring market. Including:

discount rates used by factoring market participants;

sectors in which factoring services are provided;

recommendations for eliminating risks arising in the provision of factoring services.

Starting from April 2025, quarterly

Central Bank

(Turdaliyev)

2. Continuous provision of explanations to credit institutions on accounting for factoring operations, registration in the pledge registry, and carrying out operations on the Factoring Platform.

permanent

Widespread Implementation of Digital Solutions for Factoring

1. Launching the allocation of grants within the framework of state scientific programs for financing startup and IT projects in the field of factoring.

January 2025

Innovation Development Agency

(Rajabbaev)

2. Submitting proposals to the Government on introducing mechanisms to encourage the development of startup projects in the field of electronic factoring by "IT-park" residents.

January 2025

Ministry of Digital Technologies

(Shermatov)

Popularizing the use of factoring services among business entities

1. Approving the schedule for organizing seminars and roundtables aimed at increasing awareness of business entities about factoring services and explaining the advantages of factoring in financing business activities.

September 2024

Chamber of Commerce and Industry

(Vahobov) ,

Central Bank

(Turdaliyev) ,

industry associations

2. Conducting seminars and roundtables based on the schedule.

Permanent

Increasing the awareness of market participants and state bodies regarding issues related to directing enforcement against pledged movable property

1. Establishing mutual cooperation between the Supreme Court and the Central Bank on improving the system of directing enforcement against pledged property, including movable property.

October 2024

Supreme Court

(Islamov) ,

Central Bank

(Nurmuratov)

2. Creating the opportunity to search for decisions on claim cases related to financing based on movable property collateral considered by courts on the "public.sud.uz" web page.

November 2024

Supreme Court

(Islamov)

3. Generalizing the practice of considering disputes related to financing based on movable property collateral in economic courts and developing proposals for eliminating problems.

By March 1 every year

4. Identifying problems in directing enforcement against pledged movable property and developing proposals for their elimination, and submitting them to the Central Bank and the Cabinet of Ministers.

December 2025

Compulsory Execution Bureau

(Egamberdiev)

(National Database of Legislation, August 14, 2024, No. 06/24/109/0613)