Uzbekistan has introduced a special regime for regulating crypto assets


background
On April 28 of the current year, the Presidential Decree No. 121 dated April 27, 2022 “On the introduction of amendments and additions, as well as the invalidation of certain acts of the President of the Republic of Uzbekistan” entered into force. According to this by-law, amendments are introduced to the following regulatory legal acts:

• Decree of the President of the Republic of Uzbekistan dated July 24, 2017 No. UP-5120 “On measures to implementation of project management system in the Republic of Uzbekistan”;

· Decree of the President of the Republic of Uzbekistan dated July 27, 2017 No. PP-3150 “On measures to organization the activities of the National Agency of Project Management under the President of the Republic of Uzbekistan”.

By Decree of the President of the Republic of Uzbekistan No. UP-121 dated April 27, 2022, the National Agency of Project Management under the President of the Republic of Uzbekistan was transformed into the National Agency of Perspective Projects of the Republic of Uzbekistan.

Priority tasks and activities of the National Agency of Perspective Projects of the Republic of Uzbekistan have been determined, they are:

• development and implementation of a unified state policy in the field of circulation of crypto assets;

• ensuring the respect for the rights and legitimate interests of investors in the field of circulation of crypto assets;

• participation in the development and implementation of measures to counteract the legalization of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction in the field of crypto assets circulation;

• initiation and assistance in the promotion of projects for the implementation of distributed data registry technology and other latest technologies in public administration and various socio-economic areas.

The Decree also established that the National Agency of Perspective Projects of the Republic of Uzbekistan is the authorized body for the development of the sphere of circulation of crypto assets, licensing and permitting procedures in this area. Specialized Laboratory for testing and studying innovative technologies in the field of crypto assets circulation will operate in the structure of the National Agency of Perspective Projects of the Republic of Uzbekistan.

It must also be noted that the National Agency of Perspective Projects of the Republic of Uzbekistan has the right to sell, under direct contracts, to non-residents of the Republic of Uzbekistan, crypto assets received as charitable donations, grants and loans, also turned into state revenue by a court decision, at the rate set on the day of sale on the national crypto exchange.

The National Agency of Perspective Projects of the Republic of Uzbekistan performs mandatory verification of the sources of origin of crypto assets received by it as charitable donations, grants and loans.

Another innovation is that the National Agency of Perspective Projects of the Republic of Uzbekistan establishes a Special regulation regime in the sphere of crypto assets circulation (Special regulatory “sandbox regime”), which provides for the creation of special organizational and legal conditions for legal entities implementing technologies in the sphere of crypto assets circulation.

As part of the implementation of pilot projects in the Special regulatory “sandbox regime”:

• are exempted from paying all types of taxes and mandatory contributions to state trust funds, as well as customs payments (except for customs fees) for equipment imported for their own needs, components, parts, assemblies, technological documentation, software not produced in the Republic of Uzbekistan, according to the lists approved in the prescribed manner;

• income in the form of remuneration received by employees under employment contracts with participants in the Special regulatory “sandbox regime” is subject to personal income tax at a flat rate of 7.5% and is not included in the total annual income of individuals determined for tax purposes.

The National Agency of Perspective Projects of the Republic of Uzbekistan, in fulfilling the tasks assigned to it, interacts with state agencies and other organizations, including through business correspondence, organizing events and concluding framework agreements.

The National Agency of Perspective Projects of the Republic of Uzbekistan conducts inspections of compliance with licensing and permitting requirements and conditions in the field of crypto-assets, applies penalties in the prescribed manner, including for non-compliance with the requirements of legislative acts on combating the legalization of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction.

It also mentions the mandatory coordination with the National Agency of Perspective Projects of the Republic of Uzbekistan of draft regulatory legal acts on issues within the scope of activities of the National Agency of Perspective Projects of the Republic of Uzbekistan.

Finally, this Decree provides for a new Regulation on the National Agency of Perspective Projects of the Republic of Uzbekistan.