Developments in the field of antimonopoly compliance

The government of the Republic of Uzbekistan is carrying out gradual demonopolization of the economy in order to create an effective competitive environment in the commodities and financial markets. To this end, on March 2, 2021, the Cabinet of Ministers adopted Resolution on Measures to Implement the Antimonopoly Compliance System No. 114 (the “Resolution”), which defines how the antimonopoly compliance system will function in Uzbekistan.

What is antimonopoly compliance?

A system of internal organizational measures and procedures aimed at ensuring that business activities comply with competition laws, as well as identifying and preventing violation risks.

Who will be covered by the antimonopoly compliance requirement?

• From January 1, 2021 – as a pilot in government entities, as well as the following companies with state participation:
  • Uzbekistan Airways JSC;
  • Quartz JSC;
  • Asaka JSCB;
  • UzAuto Motors JSC;
  • Uztransgaz JSC;
  • Navoiazot JSC;
  • Thermal Power Stations JSC;
  • National Electric Networks of Uzbekistan JSC;
  • Kizilkumcement JSC

• From January 1, 2022 – in natural monopolies, companies with a dominant position on a commodity or financial market, as well as corporate customers[1] whose average annual revenue from the sale of goods over the past 3 years exceeds 30 billion soums (approximately USD 2,857,000).

How will the government manage the antimonopoly compliance system?

The Resolution approved the regulations and the roadmap governing the implementation and functioning of the antimonopoly compliance system.

• The creation and evaluation of the effectiveness of the antimonopoly compliance system is carried out:
  • In a government entity – by its chief officer;
  • In a local executive body – by a khokim;
  • In a company – by its executive body or supervisory board.

• To ensure the functioning of the antimonopoly compliance system, the covered entity appoints an authorized person or a department (the "Authorized Person"). In companies, the duties of the Authorized Person may be assigned to the internal audit service.

• The main responsibilities of the Authorized Person are:
  • Monitoring the entity’s violations of antimonopoly legislation;
  • Analyzing the relevant materials, developing measures aimed at eliminating the identified shortcomings;
  • Developing internal rules for establishing an antimonopoly compliance system;
  • Coordinating interaction with other departments on issues related to functioning of the antimonopoly compliance system;
  • Exchanging information with the antimonopoly authority – the Antimonopoly Committee of Uzbekistan (the “Antimonopoly Committee”) and its territorial divisions on antimonopoly law violations;
  • Developing and ensuring the implementation of an annual roadmap aimed at mitigating the risk of violating antimonopoly legislation;
  • Identifying conflicts of interest that may create competitive constraints in the entity’s activities.
  • Evaluating achievement of the key performance indicators of the antimonopoly compliance system in the covered entity followed by preparation of an annual antimonopoly report, which includes:

− The results of the assessment identifying the risks of violation of antimonopoly legislation and steps to mitigate them;

− Information on the achievement of the key performance indicators of the antimonopoly compliance system.

This antimonopoly report is published on the official website of the covered entity and must be sent to the Antimonopoly Committee within 3 days.

• The Antimonopoly Committee will develop key performance indicators to assess the effectiveness of the antimonopoly compliance system in the covered entities by April 2021. In addition, by 1 January 2022 the Antimonopoly Committee will develop a methodology for calculating the key performance indicators for evaluating the effectiveness of the antimonopoly compliance function in the covered entities.

 

[1] Corporate customers include state-owned legal entities, legal entities with a state share of at least 50% in the charter capital, and legal entities with a predominant state share in the legal entity that owns 50% of the charter capital