Overview of the Law of the Republic of Uzbekistan "On Conflict of Interest"

On June 1, 2023, the Senate approved the Law "On Conflict of Interest," and on June 5, 2024, the President of the Republic of Uzbekistan signed the law, followed by its official publication. The law will come into force six months after its official publication, providing time for organizations to adapt and implement necessary changes.

The law is aimed at regulating relationships related to conflicts of interest in state bodies, state institutions, state unitary enterprises, state target funds, as well as in joint-stock companies with a state share of 50% or more. The law also applies to legal entities in which state bodies or organizations have a cumulative share of 50% or more in the authorized capital, particularly in the sphere of public procurement.

Analysis of the Law

The law defines a conflict of interest as a situation in which an employee's personal interest affects or may affect the proper performance of their official duties, creating a real or potential conflict of interest with the rights and legitimate interests of citizens, organizations, society, or the state. Personal interest includes any benefit or advantage that an employee or related persons may obtain.

The main principles of the law include legality, prioritization of the legitimate interests of citizens, organizations, companies, and the state, openness and transparency, objectivity, and intolerance towards corruption. Employees are obliged to perform their official duties conscientiously and avoid personal interests that may affect their work. In the event of a real conflict of interest, the employee must notify immediately their supervisor or a special unit.

The law provides for various measures to resolve conflicts of interest, including employee transfer, voluntary recusal, revision of job responsibilities, and ensuring collegial control. State bodies are required to ensure objectivity and confidentiality in considering such cases.

For failure to report a conflict of interest and failure to take measures to resolve it, fines ranging from three to fifteen base calculation units are provided. Transactions concluded with a conflict of interest are recognized as invalid, and the resulting profit is turned over to the state revenue.

Conclusions and Impact on Business

The new law significantly strengthens control over conflicts of interest in state and private organizations with a state share. This increases transparency and reduces the risk of corruption, which positively affects the business environment and trust in state bodies. The adoption of the Law "On Conflict of Interest" is an important step in increasing transparency and preventing corruption in Uzbekistan. Organizations should carefully study the requirements of the law and implement the necessary measures for compliance, which will positively affect their reputation and management efficiency.

 

Date: June 7, 2024

Author: SETTLE administration