On Measures to Accelerate the Development of the Factoring Services Market

Decree of the President of the Republic of Uzbekistan

On Measures to Accelerate the Development of the Factoring Services Market

In order to further increase the opportunities for ensuring the continuity of activities of small and medium-sized business entities by developing in the country tools for financing business activities based on movable assets:

1. Take note 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 Model Law on Factoring of the International Institute for the Unification of Private Law (UNIDROIT).

2. Agree with the proposal of the Central Bank on the formation of factoring organizations carrying out factoring financing activities (hereinafter referred to as factoring).

It is determined that the activities of a factoring organization are carried out after passing accounting registration at the Central Bank, conducted by entering into the registry as a non-bank credit organization.

3. Establish that, starting from January 1, 2025:

a) it is permitted:

• to carry out factoring operations in foreign currency, if the client's counterparty is a non-resident;
• for credit organizations to resell (refactor) monetary claims acquired under factoring contracts;

b) liability for violation of the prohibition on the assignment of a monetary claim is abolished;

c) in order to ensure the priority of claims on assigned rights, notifications of the assignment of a monetary claim are registered in the pledge registry;

d) it is not allowed to change the currency of the monetary obligation and the country of payment without the consent of the debtor.

The Cabinet of Ministers is to submit the corresponding draft law to the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan within one month, based on the requirements provided for in paragraphs 2 and 3 of this Decree.

4. Approve the proposal of the Central Bank on the implementation of the Electronic Factoring Services Platform (hereinafter referred to as the Factoring Platform).

Provide the following capabilities in the factoring platform:

• entry by business entities of information and documents regarding monetary claims for the use of factoring services;
• automation of the financing process by verifying the authenticity of documents serving as the basis for monetary claims, as well as ensuring the rapid collection of information about debtors and its analysis in real-time;
• provision of a convenient, fast, and secure technological infrastructure for credit organizations to provide factoring services to supply chain participants.

5. In order to create on the factoring platform the capabilities for verifying the authenticity of monetary claims, their registration, assessing the debtor's solvency, and carrying out factoring, in particular international:

a) the following, together with the Central Bank and the Ministry of Digital Technologies, are to ensure the integration and establishment of information exchange with the Factoring Platform via the interdepartmental integration platform of the "Electronic Government" system:

• the Tax Committee — databases of electronic invoices, the system of electronic cargo transport waybills, and the electronic database of taxpayers with the ability to obtain financial reporting of legal entities;
• the Ministry of Investments, Industry and Trade and the Customs Committee — the Unified Electronic Information System of Foreign Trade Operations (hereinafter referred to as UEISFO).

At the same time, determine the necessity of integrating the information systems and databases of other ministries and departments with the Factoring Platform upon request by the Central Bank;

b) the Central Bank is to ensure the connection of credit organizations to the Factoring Platform and the provision of digital factoring services via this platform;

c) ministries and departments exercising the functions of a shareholder (participant, founder) at enterprises where the state share in the charter capital is 50 percent or more are to ensure the connection of these enterprises to the Factoring Platform and the posting of invoices on the platform for contracts concluded through tender or selection of the best offers, as well as those providing for a payment deferral.

6. Determine that the requirements for security, cybersecurity, and conducting IT audits of information systems of electronic factoring platforms created by persons who are not credit organizations are established by the Central Bank.

7. In order to popularize and develop factoring services, develop industry standards, and strengthen ties between factoring market participants, support the initiative of commercial banks and microfinance organizations on the creation of the National Factoring Association (hereinafter referred to as the Association).

The Central Bank, together with the Association, is to ensure the adoption of measures to develop factoring, as well as the resolution of industry issues within its powers, with the analysis of the latest trends in the domestic and international markets.

The Ministry of Investments, Industry and Trade, together with the Chamber of Commerce and Industry and international financial institutions, is to assist in the development of international cooperation in the field of factoring, as well as in establishing ties with leading foreign banks and factoring companies.

8. Establish that, in order to create opportunities for the wide application of factoring in foreign trade operations:

a) starting from January 1, 2025, on the basis of a contract for the acquisition of accounts receivable under an export contract:

• if the credit organizations providing factoring services (hereinafter referred to as financial agents) are residents, information about them is entered into the UEISFO as the recipient of currency funds under the export contract, and the obligation to ensure compliance with the requirement for the repatriation of assets passes to these financial agents;
• if the financial agents are non-residents, the obligation to ensure compliance with the requirement for the repatriation of assets remains with the exporter. At the same time, upon receipt of funds under export contracts from a non-resident financial agent on the basis of a contract for the acquisition of accounts receivable, the requirement for the repatriation of assets is considered fulfilled;
• the premium (discount) in the amount of no more than 10 percent of the sum of the monetary claim, withheld by financial agents for services rendered, is not considered as accounts receivable;

b) when a financial agent provides funds in national currency for the monetary claims of the exporter against a non-resident (debtor) in foreign currency arising from an export contract, the existing order of tax benefits provided for exporters is preserved.

9. Approve the "Roadmap" for the development of the factoring services market according to the Appendix, providing for:

• organization of short-term training courses to improve knowledge and professional skills in the field of factoring services for employees of commercial banks and microfinance organizations, implementation of measures to popularize factoring services;
• carrying out explanatory work by the Chamber of Commerce and Industry to increase the awareness of business entities about factoring services and the advantages of factoring;
• provision by the Central Bank of explanations to credit organizations on accounting for factoring operations, registration in the pledge registry, work on the Factoring Platform, as well as the publication of a review of the state of the factoring market;
• development by the Chamber of Commerce and Industry, the Ministry of Investments, Industry and Trade, and the Customs Committee of guidelines for registering international factoring operations in the UEISFO, and establishing cooperation with foreign banks and factoring companies.

10. Determine as the main target indicators for the development of the factoring services market:

• an increase in the volume of factoring services over 3 years by 10 times;
• bringing the share of factoring services provided by banks with a state share to 3 percent of the total volume of financing by the end of 2026.

11. The Central Bank, together with interested ministries and departments, is to submit to the Cabinet of Ministers proposals on changes and additions to legislative acts arising from this Decree within two months.

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.

President of the Republic of Uzbekistan Sh. MIRZIYOYEV

Tashkent, August 12, 2024, No. UP-109

APPENDIX to the Decree of the President of the Republic of Uzbekistan dated August 12, 2024 No. UP-109

"ROADMAP" for the development of the factoring services market

No.	Name of Measures	Implementation Mechanism	Deadlines	Responsible Executors
1.	Improvement of the legal framework of the factoring services market in Uzbekistan	Submission to the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan of the draft law "On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan Aimed at Developing Relations on Financing under Assignment of Monetary Claims (Factoring)", providing for:<br>- permission to carry out factoring operations in foreign currency if the client's counterparty is a non-resident;<br>- permission for credit organizations to resell (refactor) monetary claims acquired under factoring contracts;<br>- abolition of liability for violation of the prohibition on the assignment of a monetary claim;<br>- registration of notifications of the assignment of a monetary claim in the pledge registry in order to ensure the priority of claims on assigned rights;<br>- determination of the prohibition on changing the currency of the monetary obligation and the country of payment without the consent of the debtor;<br>- provision of authority to the Central Bank to establish requirements for security and conducting IT audits of information systems of factoring electronic platforms created by persons who are not credit organizations, and to supervise their compliance;<br>- organization of the activities of a factoring organization and reflection of other criteria and norms for the development of factoring services.	September 2024	Cabinet of Ministers
2.	Implementation of the electronic platform of factoring services (hereinafter — Factoring Platform)	1. Development together with the International Finance Corporation of a technical assignment for the implementation of the Factoring Platform.<br>2. Selection of developers of the Factoring Platform and start of platform development.<br>3. Launch of the factoring platform.<br>4. Integration into the Factoring Platform of the following electronic platforms and systems:<br>- database of electronic invoices, system of electronic cargo transport waybills, and electronic database of taxpayers with the ability to obtain financial reporting of legal entities;<br>- Unified Electronic Information System of Foreign Trade Operations.<br>5. Ensuring the connection to the Factoring Platform of enterprises where the state share in the charter capital is 50 percent or more, as well as the posting on the platform of invoices for contracts concluded on the basis of tender and selection of the best offers, as well as those providing for a payment deferral.<br>6. Ensuring the connection of credit organizations to the Factoring Platform and the establishment of the provision of digital factoring services through this platform.<br>7. Provision of explanations to credit organizations on issues of carrying out operations on the Electronic Factoring Platform.	December 2024<br>February 2025<br>August — December 2025<br>August 2025<br>August 2025<br>August 2025<br>Constantly	Central Bank<br>(Saidullaev)<br><br>Tax Committee<br>(Kudbiev),<br>Ministry of Investments, Industry and Trade<br>(Kudratov),<br>Customs Committee<br>(Mavlonov),<br>Central Bank<br>(Saidullaev),<br>Ministry of Digital Technologies<br>(Shermatov)<br><br>Agency for the Management of State Assets<br>(Ortikov),<br>Ministry of Economy and Finance<br>(Mustafaev),<br>ministries and departments<br><br>Central Bank<br>(Saidullaev)<br><br>Central Bank<br>(Saidullaev)
3.	Introduction of minimum requirements for electronic platforms providing factoring services	1. Development together with the International Finance Corporation of requirements for the security of information systems and conducting IT audits of factoring electronic platforms created by persons who are not credit organizations.<br>2. Approval of the developed requirements by the Board of the Central Bank.	Within one month after the adoption of the law specified in paragraph 1	Central Bank<br>(Turdaliev)
4.	Creation of opportunities for the wide application of factoring in foreign trade operations	Submission to the Cabinet of Ministers of a draft government decree providing for the improvement of the Unified Electronic Information System of Foreign Trade Operations (hereinafter — UEISFO).<br>In the draft decree, on the basis of a contract for the acquisition of accounts receivable under an export contract, provide for:<br>- if the financial agents are residents, information about them is entered into the UEISFO as the recipient of currency funds under the export contract, and the obligation to ensure compliance with the requirement for the repatriation of assets passes to these financial agents;<br>- if the financial agents are non-residents, the obligation to ensure compliance with the requirement for the repatriation of assets remains with the exporter. At the same time, upon receipt of funds under export contracts from a non-resident financial agent on the basis of a contract for the acquisition of accounts receivable, the requirement for the repatriation of assets is considered fulfilled;<br>- the premium (discount) in the amount of no more than 10 percent of the sum of the monetary claim, withheld by financial agents for services rendered, is not considered as accounts receivable.	October 2024	Ministry of Investments, Industry and Trade<br>(Kudratov),<br>Customs Committee<br>(Mavlonov),<br>Central Bank<br>(Abubakirov)
5.	Development of international factoring	1. Development and posting on official websites of guidelines for registering international factoring operations in the UEISFO by credit organizations and business entities.<br>2. Conducting negotiations, establishing cooperation, and attracting foreign banks and factoring companies from states with which Uzbekistan has high foreign trade turnover.<br>3. In order to contain risks in international factoring, development of mechanisms for assessing the reliability of entrepreneurs who are residents of states having high foreign trade turnover with Uzbekistan, primarily from China, Russia, and Kazakhstan.	January 2025<br>2024-2025<br>August 2025	Chamber of Commerce and Industry<br>(Vakhobov),<br>Ministry of Investments, Industry and Trade<br>(Kudratov),<br>Customs Committee<br>(Mavlonov)<br><br>Agency for Innovative Development<br>(Rajabbaev)
6.	Training and professional development of employees of credit organizations providing factoring services	1. Approval of a schedule for organizing short-term training courses to improve knowledge and professional skills of credit organization employees on issues of factoring services.<br>2. Organization of short-term training courses for training employees of credit organizations. At the same time, attracting foreign consultants with experience in this field.	September 2024<br>2024-2025, according to the schedule	Central Bank<br>(Saidullaev)<br><br>Commercial banks, microfinance and factoring organizations,<br>Association of Banks of Uzbekistan
7.	Expansion of the scale of factoring services in commercial banks	1. Determination in banks with a state share of a Deputy Chairman responsible for the development of factoring.<br>2. Implementation of marketing and other measures to popularize factoring services.<br>3. Creation of factoring organizations at the establishment of state banks with the involvement of advanced foreign partners in the field of factoring.<br>At the same time, ensuring the attraction of qualified foreign partners to the activities of the factoring organization.<br>4. Bringing the share of factoring services provided by banks with a state share to 3 percent of the total volume of financing. At the same time, determining quarterly target indicators for banks.	September 2024<br>September 2024, constantly<br>2024-2025<br>December 2026	JSC "Uzmilliybank"<br>(Mirsatov),<br>JSC "Halk Bank"<br>(Atabaev),<br>JSC "Agrobank"<br>(Mamatkulov),<br>JSC "Microcredit Bank"<br>(Butaev),<br>JSC "Asakabank"<br>(Tulyaganov),<br>JSC "Uzsanoatqurilish Bank"<br>(Akbarjonov),<br>JSC "Turonbank"<br>(Mirzaev),<br>JSC "Business Development Bank"<br>(Annaklichev),<br>JSC "Aloqabank"<br>(Irisbekova)
8.	Conducting analysis of the factoring market and providing explanations	1. Publication of a review of the state of the factoring market, providing for:<br>- discount rates applied by factoring market participants;<br>- spheres in which factoring services have been provided;<br>- recommendations for eliminating risks arising in the provision of factoring services.<br>2. Provision of explanations to credit organizations on issues of accounting for factoring operations, their registration in the pledge registry, as well as carrying out operations on the Factoring Platform.	Quarterly from April 2025<br>Constantly	Central Bank<br>(Turdaliev)
9.	Wide implementation of digital solutions in factoring	1. Establishment of the provision of grants within the framework of state scientific programs for financing startup and IT projects in the field of factoring.<br>2. Submission to the Government of proposals on the implementation of mechanisms for stimulating the development and implementation of startup projects in the field of electronic factoring by residents of "IT-park".	January 2025<br>January 2025	Agency for Innovative Development<br>(Rajabbaev)

Ministry of Digital Technologies

(Shermatov)

Popularization of the use of factoring services among business entities

1. Approval of a schedule for conducting seminars and "round tables" aimed at increasing the awareness of business entities about factoring services and explaining the advantages of factoring in financing business activities.

September 2024

Chamber of Commerce and Industry

(Vakhabov) ,

Central Bank

(Turdaliev) ,

industry associations

2. Conducting seminars and "round tables" based on the schedule plan.

Constantly

Increasing the awareness of market participants and state bodies on issues of enforcing claims on pledged movable property

1. Establishing mutual cooperation between the Supreme Court and the Central Bank to improve the system for enforcing claims on pledged, including movable, property.

October 2024

Supreme Court

(Islamov) ,

Central Bank

(Nurmuratov)

2. Creating the ability to search on the "public.sud.uz" website for decisions on court cases considered related to financing secured by movable property.

November 2024

Supreme Court

(Islamov)

3. Summarizing the practice of resolving disputes related to financing secured by movable property in economic courts and developing proposals to eliminate problems.

Annually by March 1

4. Identifying problems with enforcing claims on pledged movable property, developing proposals to eliminate them, and submitting them to the Central Bank and the Cabinet of Ministers.

December 2025

Bureau of Compulsory Execution

(Egamberdiev)

(National Database of Legislation, 14.08.2024, No. 06/24/109/0613)