Competition Legislation and Institutions

competition policy enforcement body in Uzbekistan was established for the first time in 1992, as the Department of Antimonopoly and Pricing Policies of the Ministry of the Finance. The function of this body was to oversee the observance of anti-monopoly provisions in Uzbekistan.1996, the Department was transformed into the Committee on Demonopolisation and Competition Development of the Ministry of Finance, and for the first time it was given the status of a legal entity, though it still remained under the jurisdiction of the Ministry of Finance. At the same time, the Committee was given additional functions, and empowered to implement the observance of the requirements on consumer rights protection legislation, natural monopolies, and advertising.to the existing legislative framework for competition and regulatory policy were highlighted as a priority area for reform by the Anti-Monopoly Committee (AMC). With the assistance of international experts, the AMC identified several areas where amendments or new legislation were needed, including: demonopolisation in commodity markets; anti-collusion measures; shareholder and property rights protection; rate-setting for regulated utility monopolies; false advertising; and consumer rights protection.Law of the Republic of Uzbekistan on Competition and Restriction of Monopolistic Activities in the Market was adopted in 1996. This Law determines organisational and legal bases for the prevention, restriction, and suppression of monopolistic activity and unfair competition, and is directed towards providing conditions for the formation and effective functioning of a competitive market within a liberalised economy.conditions for free market competition⁴ are yet to flourish in Uzbekistan. Dense regulation of the economy, a legacy of the Soviet system, was reduced somewhat, but basic free market competition exists in only a few areas, for example, through the development of micro-enterprises and joint ventures. However, there is an extensive informal economy (black economy) that includes all sectors. The State continues to control and shape the economy in all strategic sectors, especially raw materials and agriculture.of large industrial enterprises, the demonopolisation of a number of industries and the cotton market, and the liberalisation of foreign trade policies are moving ahead very slowly. One of the most important preconditions for a market economy reform policy, the convertibility of the Uzbek currency (the Soum), has been announced frequently; but it has only been implemented in certain segments. All banks are in the State sector, or heavily regulated by the Government, and a capital market does not exist.Frameworkhas made substantial progress, since the beginning of reforms, to develop an institutional framework for all commercial activities and to promote the establishment of a competitive business environment in the country. The development of the framework is still in progress. As of now, it includes, amongst other measures and actions:

•         The establishment of the AMC;of a programme entitled ‘The Concept of Overseeing compliance is within the remit of the State Committee, which also considers cases of legal infringements, issues appropriate decisions, provides the violators with the ‘cease and desist’ orders, and initiates cases/investigations, and appeals to the Court when it is appropriate.Department of Analysis of Commodity Markets and Anti-monopoly Regulations - This Department’s main functions include:compliance with antimonopoly legislation and the reorganisation of undertakings which are either natural monopolies, or those with a dominant position in financial and product markets, including during the process of privatisation and breaking up of state

•         State Anti-monopoly Policy’, which formulates the main objectives of the Government’s competition and regulatory policy;

•         Enactment of several laws, such as the laws ‘On Competition and Restriction of Monopoly Activity in Commodity Markets’, ‘On the Limitation of Monopolistic Activity ’, ‘On Natural Monopolies ’, ‘On Protection of Consumers’ Rights, ’ and ‘On Advertising. ’

The central objectives of the Government’s competition and regulatory reform programme - implemented by the AMC - are: to develop competition and entrepreneurship in Uzbekistan’s economy; to regulate the activities of monopoly enterprises; to prevent abuse by firms with dominant market positions; to enforce sanctions on firms who engage in unfair competition; and to protect consumer rights. The emerging institutional framework and policy objectives are generally consistent with international practice.State Antimonopoly Committeestructure of the State Antimonopoly Committee is as follows:Regional Divisions of the Committee - Regional Divisions of the State Committee of the Republic of Uzbekistan on Demonopolisation and Competition Development are the bodies, which carry out the implementation of policies in the spheres of competition development, limitation of anticompetitive behaviour, regulation of the activity of natural monopolies, consumer rights’ protection, and advertising, in various regions of the Republic.Department of Methodology and Coordination of Activities of Antimonopoly Bodies - This Department conducts organisational, methodological and information dissemination work on the issues of demonopolisation and competition development, antimonopoly legislation, legislation on consumer rights’ protection, natural monopolies, and advertising.Department of Enforcement of Compliance with Legislation on Competition - This Department supervises the compliance with anti-monopoly legislation, legislation on natural monopolies, and other normative acts.

•         enterprises;

•         Coordinating development of demonopolisation programmes;

•         Developing practical measures aimed at the stimulation of business activity in monopolised industries and product markets;

•         Supporting free competition; overseeing compliance with antimonopoly legislation in acquisitions of more than 35 percent of a company’s stock; and

•         Overseeing transactions by natural monopolies.

The Department of Monitoring the Economic Reforms in Capital Construction Sector - This Department is in charge of overseeing compliance with anti-monopoly legislation; supervision of meeting the requirements of resolutions and instructions of the Cabinet of Ministers of the Republic of Uzbekistan; minutes of the Economic Panel of the Cabinet of Ministers; and other normative acts targeting budget disbursement in construction as well as in production of construction materials.addition, Uzbekistan has a Press Centre and an Antimonopoly Policy Improvement Centre. The Antimonopoly Policy Improvement Centre was established with the view of strengthening the practical orientation of research and development in the sphere of anti-monopoly legislation and legislation on consumer rights protection. It helps in increasing the knowledge of specialists in the sphere of international practice of anti-monopoly regulation; and in creating a modern system of training and retraining of personnel in the sphere of antimonopoly policy.Business Practicesof the primary instruments, by which the Anti-Monopoly Committee implements competition policy, is through its Register of Monopoly Enterprises. This policy instrument is common for many other CIS countries as well.6 Uzbek enterprises that are considered as ‘dominant’ - defined by statute as generally having a market share of at least 65 percent, and under certain conditions, a market share of at least 35 percent - are listed on the Antimonopoly Committee Register. Therefore, they must declare their prices and profits for AMC’s approval.regulatory and licensing barriers are the continuation of the Soviet ‘system of permissions,’ whereby one must obtain approval from the authorities to embark on even the smallest task. Although Central Asian governments are vocal in their support and praise for the open and free market system, businesses have to seek permission from the Government at every step of operations.‘permissive’ entrepreneurial climate, characterised In addition, registered monopolies, once they agree with their input suppliers and output buyers on volumes, delivery times, and other conditions and prices, must register the transaction terms with the AMC along with their expected profits. In certain cases - typically for infrastructure (utility) monopolies - the AMC directly determines prices and profits.