Economic Concentration in Uzbekistan: Procedure for Obtaining Prior Consent

On May 1, 2024, the Regulation approved by Resolution No. 256 of the Cabinet of Ministers of the Republic of Uzbekistan came into force, which details the procedure for obtaining prior consent from the antimonopoly authority for transactions leading to economic concentration. This document has become an important tool for ensuring transparency in major transactions and protecting the competitive environment.

What is Economic Concentration?

This term refers to transactions and actions that may result in the dominance of an economic entity or group of persons in a goods or financial market. These include, in particular:

• acquisition of more than 25% of the voting shares of a joint-stock company (JSC) or more than one-third of the shares in a limited liability company (LLC);
• merger or consolidation of companies;
• other actions capable of significantly affecting the competitive environment.

When is Consent Required?

Consent is required if:

• the value of assets or annual revenue of one of the parties exceeds 250,000 basic calculation units (BCU);
• the aggregate indicators of the participants in the transaction exceed 500,000 BCU.

Exemptions apply, for example, to transactions approved by the President of the Republic of Uzbekistan, internal reorganizations without changes in ownership shares, and the acquisition of shares for resale by investment intermediaries.

Who Issues the Consent?

Competence is divided between:

• The Committee for the Development of Competition and Protection of Consumer Rights – for transactions of interregional or international nature;
• Territorial bodies of the Committee – for transactions within one region.

 

Is Prior Consent Required for Economic Concentration?

Situation	Is Consent Required?	Conditions
Transaction by decision of the President of the Republic of Uzbekistan	No	State enterprises, share packages with their participation
Creation of a new economic entity	No	Capital formation by founders
Buyback of own shares (stakes)	No	The company redeems its own shares/stakes
Change of legal form	No	Charter capital does not change
Acquisition of shares for resale	No	Investment intermediaries
Acquisition by an individual of shares/stakes when holding <25%	No	Did not hold more than 25% of capital before transaction
Merger or consolidation of companies	Yes	If threshold BCU values are exceeded
Acquisition of >25% of voting shares of a JSC	Yes	If threshold BCU values are exceeded
Acquisition of >1/3 of shares in an LLC	Yes	If threshold BCU values are exceeded

Threshold Values:

• Assets/revenue of one participant > 250,000 BCU, or total assets/revenue of all participants > 500,000 BCU.

 

Control Procedure for Economic Concentration

Situation	Who Reviews	Note
Transaction between companies operating in several regions or nationwide	Committee for the Development of Competition and Protection of Consumer Rights (Central Office)	—
Participants of transaction are in different regions	Committee for the Development of Competition and Protection of Consumer Rights	Interregional transactions
Acquisition of shares (stakes) by non-residents (individuals or legal entities)	Committee for the Development of Competition and Protection of Consumer Rights	Including foreign investors
Transaction between participants whose activities are limited to one region	Territorial body of the Committee	Regional level
Trading of securities	Trading organizers	Must notify investors of the need to obtain consent

 

Indicators of “Group of Persons” and Examples

Indicator	Description	Example
Ownership of shares/stakes	Direct or indirect ownership of shares/stakes in another entity	Company A owns 40% of Company B
Common founders	Overlapping founders in several companies	One person established two firms operating in the same market
Joint management	Participation in management bodies or control via agreements	Director of Company A is a board member of Company B
Ownership of property rights	Control via patents, licenses, or asset rights	Company A owns a trademark used by Company B
Joint activity agreements	Agreements affecting strategy or operating conditions	Companies sign a joint sales agreement
Single beneficiary	One ultimate owner controls several companies	Individual owns controlling stakes of two competing firms

Note: Even without direct shareholding, a combination of indirect links may lead to recognition as a "group of persons".

 

Procedure and Form for Submitting an Application for Prior Consent

The Regulation No. 256 (effective May 1, 2024) clearly regulates how companies and investors must apply for prior consent from the antimonopoly authority when planning transactions that may affect competition. This process now has transparent stages, standardized forms, and clear requirements for documentation.

When to Submit an Application

If the planned transaction (merger, consolidation, acquisition of a significant share package) falls under the conditions established by the Regulation, the application must be submitted before concluding the transaction. This is a mandatory requirement to prevent concentrations that could restrict competition.

Where and How to Submit

Applicants have two options:

• In person – through Public Service Centers.
• Online – through the Unified Portal of Interactive Public Services (E-Gov Portal), which is especially convenient for foreign participants and large corporations.

Required Attachments

• For non-resident individuals – copy of passport.
• For non-resident legal entities – copy of registration certificate.
• Information on activities, products, production, and sales volumes for the past two years.
• Financial and statistical reports for the last two years (with confirmation of submission to relevant authorities; statistical reports are not required for foreign entities).
• Information on the group of persons and grounds for affiliation.
• Data on beneficial owners holding more than 25% of capital.

Special provisions:

• If reporting deadlines have not yet come, previous year’s data may be submitted.
• Commercial secrecy is not a reason for refusal – information is transmitted according to law.
• Each share/stake acquisition transaction requires a separate application (except mergers/consolidations).

Withdrawal of the Application

The applicant may withdraw the application at any stage by submitting a petition. In this case, the application is left unconsidered, but fees paid are non-refundable.

Grounds for Returning Without Consideration

If required documents or data are not submitted and no reasons are provided, the antimonopoly authority notifies the applicant within two days and returns the application.

 

Sample Calculation of Fees for Prior Consent

Transaction Type	Fee Rate	BCU Value (example)	Amount Payable	Note
Merger or consolidation	20 × BCU	340,000 UZS	6,800,000 UZS	Single application per transaction
Acquisition of >25% JSC shares	15 × BCU	340,000 UZS	5,100,000 UZS	Separate application for each transaction
Acquisition of >1/3 LLC shares	15 × BCU	340,000 UZS	5,100,000 UZS	Paid by each applicant
Other forms (as decided by authority)	10 × BCU	340,000 UZS	3,400,000 UZS	E.g. acquisition of property rights
Several applications	—	—	Sum per each	Cannot be combined in one payment order

Note: Stated rates and BCU values are illustrative. Current data must be checked against Cabinet of Ministers and Ministry of Finance acts.

 

Stages and Results of Application Review

Stage	Antimonopoly Authority’s Actions	Timeframe	Possible Outcome
1. Receipt and registration	Verification of completeness and correctness	1–2 days	Accepted for review or returned
2. Initial analysis	Compliance check with Regulation and Law “On Competition”	Within total review period	—
3. Request for additional info	Applicant is asked for missing data	Usually up to 10 days for reply	Failure to respond → return
4. Competition impact analysis	Market research, participant shares, risk analysis	—	—
5. Decision-making	Preparation of reasoned opinion	Within total review period	Approval / Conditional approval / Refusal
6. Notification	Written or electronic notification	Immediately after decision	Applicant receives final result
7. Appeal	Filing complaint or going to court	As per law	Decision may be overturned or changed

 

Liability for Failure to Obtain Prior Consent

Obtaining prior consent is a key element of economic concentration control. Lack of consent in cases where it is mandatory constitutes a legal violation with serious consequences.

Nature of Violation

• Completing a merger, consolidation, or acquisition of significant shares without consent.
• Other actions leading to concentration bypassing procedure.
• Submitting knowingly false information in the application.

Possible Consequences

• Transaction declared void by court.
• Administrative fines for participants.
• Obligation to eliminate effects of concentration (e.g., sell assets/shares).
• Refusal of consent for future transactions in case of repeated violations.

How Violations Are Detected

The antimonopoly authority:

• Monitors markets and major transactions.
• Receives data from state bodies, trading organizers, market participants.
• Responds to complaints from third parties.

How to Avoid Violations

• Check the need for consent before starting negotiations.
• Consult with the authority in case of doubt.
• Observe deadlines and documentation requirements.
• Do not conceal shareholding or corporate ties.

Conclusion: Failure to obtain consent can result not only in fines but also in complete loss of the transaction’s results. It is safer to prepare documents properly and submit them on time than to resolve legal conflicts later.