Starting from January 1, 2020,  the new requirements for importing goods will come into force in Uzbekistan.

The innovations will affect more than a hundred enterprises of Kazakhstan that annually export more than 400 Kazakh goods to Uzbekistan.

On September 19,2019, the official website of the Republic of Uzbekistan website dedicated to discussing draft regulations of the documents of the Republic of Uzbekistan (https://regulation.gov.uz/ru/document/8037) published a draft Resolution of the Cabinet of Ministers "On additional measures to protect consumer rights and improve the assessment of conformity of consumer products, as well as creating favorable conditions for businesses" (hereinafter - the Draft Regulation).

The Draft Resolution contains a number of new norms and requirements to be observed when importing goods to Uzbekistan. The list of goods subject to the new requirements consists of 102 items of goods with an indication of codes of the Nomenclature of Goods for Foreign Trade.

The key requirement is that starting from next year it is prohibited to sell products in Uzbekistan that are not marked with the national mark of conformity of the Republic of Uzbekistan. In other words, each package of imported products (food and consumer goods) must have a new mark in the Uzbek language. It is not allowed to use adhesive stickers (slide 1).

Business concerns are that the new requirements for goods have not been officially announced to Kazakhstan. The stage of adoption of the draft Resolution is still unknown, and there is no information on the requirements for affixing a special national mark of conformity of the Republic of Uzbekistan on the packaging, the requirements for the design of the mark and the procedure for passing the necessary tests to obtain it.

According to Dana Zhunusova, Deputy Chairman of the Board of the National Chamber of Entrepreneurs, Uzbekistan may introduce requirements that are different from those of the EAEU or the CIS. For example, the expiration dates of imported products should be justified by the manufacturers with the results of tests conducted in laboratories recognized in the Republic of Uzbekistan.

In addition, Uzbekistan plans to ban the importation of second-hand cars, tires, spare parts for cars, electrical appliances, and products of the textile and light industry. This ban will primarily affect individuals and the mechanism for administering this requirement is still unclear (slide 2).

Kazakhstani products with signs Bio, Halal, Eco, Environmentally friendly product, GMO-free, Organic may also be affected. After the adoption of the draft Resolution, such products may be used in Uzbekistan only when these inscriptions are confirmed by the relevant authorized bodies of the Republic of Uzbekistan. Again, there are no official documents on the conditions of confirmation of such labeling.

The barrier to entering the Uzbek market can also be the requirement to sell household appliances only to the official dealers of the manufacturer's plant and with the mandatory presence of at least one service center in the Republic of Karakalpakstan, regions, and Tashkent. There are a narrowing and monopolization of the market for the sale of household appliances.

At the regular meeting of the Project Office for the Development of the Economy of Simple Things, Import Substitution and Export (hereinafter referred to as the Project Office) this issue was considered in detail.

According to Dana Zhunusova, the discussion of the draft Resolution at the site of the Project Office allowed to simultaneously bring information on innovations and potential risks to the state authorities and regions.

Along with the draft Resolution, on October 2,2019, the Decree of the President of the Republic of Uzbekistan was adopted, according to which an excise tax on imported sugar in the amount of 20% (Nomenclature of Goods for Foreign Trade code 1701 99) was introduced, the excise tax rate on imported water is doubled and the preferential rate of 20% of the customs value is canceled; it is applied to imported passenger cars (Nomenclature of Goods for Foreign Trade codes 8703 22, 8703 23, 8703 23, 8703 23 194 0, 8703 24, 8703 31, 8703 32, 8703 33) that are not older than 2 years, the cost of which is equivalent to 40,000 USD.

An increase in excise rates on these goods could lead to a decrease in exports of Kazakhstan to Uzbekistan next year. The high excise tax rates in Uzbekistan are one of the limiting factors for the growth of exports of Kazakhstan.

According to the Chamber, it is necessary to work with the Uzbek side on the issue of providing a transition period to meet the new requirements for the supply of goods to Uzbekistan for exporters of Kazakhstan. Both sides should hold talks on reducing excise tax rates on priority for the supply of Kazakh goods.