Uzbekistan Adopts a Law on Conflicts of Interest

Scope of application

Law of 5 June 2024 No. ZRU-931 “On Conflicts of Interest” (Ўзбекистон Республикасининг қонуни манфаатлар тўқнашуви тўғрисида) is applicable to the administrative and managerial personnel carrying out their professional (service) activities based on an employment contract or either elected or appointed to their positions (hereinafter, officials) in:

Public and local government bodies;
Public entities;
State unitary enterprises;
State trust funds;
Joint-stock companies with the state share of their statutory fund (authorized capital) amounting to or exceeding 50%.

The provisions of the Law also concern the following subjects, but only with regard to public procurement:

Legal persons the statutory fund (authorized capital) of which is constituted by 50% or more by the above-listed public bodies (organizations);
Legal persons the statutory fund (authorized capital) of which is constituted by 50% or more by the organizations indicated in item one.

Definition of a conflict of interest

As per the Law, a conflict of interest is a situation where personal interest (either direct or indirect) influences or can influence proper exercise of professional (service) duties by an official and where a contradiction between personal interest and rights, legitimate interests of citizens, organizations, society or the state occurs (a real conflict of interest) or can occur (a potential conflict of interest).

Personal interest is any benefit (advantage) that an official or his/her associates can get as a result of direct or indirect decision-making by him/her or other sort of participation in the process.

The persons related to officials are:

Close relatives, i.e. parents, siblings, children, spouses, as well as parents, siblings and children of spouses;
A legal person the stocks or shares in statutory fund (authorized capital) of which are owned by the official and/or his/her close relatives;
A legal person where the official and/or his/her close relatives have managerial positions or are members of the governing body.

Responsibilities of officials

Under the Law, officials must:

Avoid situations of personal interest that leads or can lead to a conflict of interest in the exercise of professional (service) activities;
Not force his/her direct subordinates or other employees to acts (omissions) in his/her personal interest either directly or indirectly;
Inform about a real conflict of interest his/her direct superior or the division of internal anti-corruption control and/or staff division (hereinafter, the dedicated division) in the following cases:

If close relatives of the official are recruited and are directly subordinate to him/her or his/her associates are employed by the official under a civil law contract;
The official is engaged in decision-making on the issues concerning his/her associates;
A close relative of the official is an official responsible for control procedures in the legal person controlled by the official or the legal person is related to the official;
The official becomes aware of any other real conflicts of interest.

The notification should contain the following information:

Family name, name, patronymic, position and personal identification number of the natural person-official;
Family name, name, patronymic, personal identification number of a natural person who is a close relative of the official (if applicable) or the name and the individual tax number of a person related to the official with whom there is a conflict of interest;
Information on a real conflict of interest;
Information on the measures taken to manage the conflict of interest.

Upon the submission of the notification, the superior must provide information on the measures taken within his/her capacity to manage the conflict of interest to the dedicated division within one working day; upon the submission of the notification to the dedicated division, it submits the information to the ethics commission within three days to consider whether the measures taken are sufficient (adequate).

4. Submit information on a potential conflict of interest upon recruitment, movement to a different job, and in the event of change of personal data. This information shall contain:

Family name, name, patronymic of the official, his/her personal identity number of a natural person, information on the position he/she holds;
Family names, names and patronymics of his/her close relatives, their personal identity numbers of natural persons (if applicable), as well as information on their jobs and positions held;
Name of the joint-stock company the shareholders of which are the official and/or his/her close relatives and his/her individual tax payer number;
Name of the legal person the founder (participant), member of the governing body of which are close relatives of the official and his/her individual tax payer number.

Officials are also obliged to notify about:

Job offers of an organization (its structural unit) under control of the body (organization) where the official carries out labour (service) activity;
Conflict-of-interest situations of other officials which he/she is aware of.

Responsibilities of associates

Under the Law, the associates of officials must:

Prevent conflicts of interest;
Submit declarations of potential conflicts of interest that should contain:

Family name, name, patronymic, personal identification number of a natural person or the name and the identification number of a taxpayer of a legal person that are the persons related to the official;
Family name, name and patronymic, position of the official;
Information on kinship with the official or relation of a legal person to the official.

Other restrictions and prohibitions

The Law establishes a number of restrictions and prohibitions related to conflicts of interest for officials and their associates.

In particular, officials are prohibited from:

Getting personal advantage as a result of abuse of office;
Concealing personal information or provide knowingly false or inaccurate information in the conflict-of-interest notification;
Having a part-time job in the organizations one of which is subordinate or controlled by the other;
Being a founder (shareholder, participant) of commercial organizations except for the ownership of up to 10% of freely traded shares of joint-stock companies;
Owning stocks and shares in the statutory fund (authorized capital) of a business entity controlled by the body (organization) where the official carries out his/her professional (service) activities, as well as being a member of the governing body of the entity;
Participating as a representative in examination of the cases concerning the official or his/her associates by the body (organization) where the official carries out his/her professional activities;
Participating in the acquisition or rental of property of the organization where the official carries out his/her professional (service) activities; this restriction is applicable also to the official’s associates.

Within two years after the termination, a former official can be recruited by the organizations (their structural divisions) with regard to which the official exercised control, either directly or indirectly, when in office only with the consent of the dedicated division.

Detection of conflicts of interest

As per the Law, detection of conflicts of interest can be executed through the analysis of information obtained from the following sources:

Declarations of a potential conflict of interest;
Information on the tender documentation of bidders of public procurement, minutes of the meetings of the procurement commission, the contracts concluded;
Tips of natural or legal persons about a real and/or potential conflict of interest in the activities of an official;
Lists of affiliated persons and beneficial owners of commercial organizations;
Acquisition modules of entrepreneurs in the Single Portal of Interactive Public Services of the Republic of Uzbekistan;
Information system “Registrar Single Electronic Archive”;
Interagency hardware and software complex “Single National Labour System”;
Central Securities Depositary;
Submissions made in the outcome of analysis conducted by an authorised public body;
Mass media publications.

Conflict-of-interest management

Under the Law, the following measures can be taken to manage conflicts of interest:

Movement of the individual directly subordinate to the manager with regard to whom the conflict of interest occurred to a different manager;
Voluntary recusal or forced removal of the official from participation in the activities of a collegial body in the course of which a conflict of interest can occur;
Revision of the professional functions (duties) of the official;
Restrictions on the use of information and documents of the public body (organisation) that can result in a conflict of interest by the official;
Provision of collegial control of individual decision-making by the official;
Suggestions of the official with regard to how to eliminate his/her personal interest;
Voluntary renunciation by the official of the personal benefit contradicting the interest of the public body (organisation) where he/she carries out his/her professional (service) activities;
In the event that the measures to eliminate personal interest of the official cannot be taken, he/she is to be moved to a different position equivalent to the previous one or his/her employment contract is to be terminated on general grounds with the official’s consent.

Liability measures

The Law also contains liability measures for a failure to comply with the established requirements, in particular:

Failure to report a conflict of interest is punished by a fine raging between three and five base calculating amounts (from 1.02 million to 1.7 million UZS or roughly between 81 and 136 USD);
Repeated failure to report a conflict of interest within a year after the imposition of an administrative penalty, failure to manage a conflict of interest that came to the official’s knowledge is subject to a fine between five and ten base calculating amounts (from 1.7 million to 3.4 million UZS or from 136 to 271 USD);
Repeated failure to adopt measures to manage a conflict of interest within a year after the imposition of an administrative penalty is punished by a fine between ten and 15 base calculating amounts (from 3.4 million to 5.1 million UZS or between 271 and 407 USD);
Failure to report a conflict of interest and adopt measures to manage it in the field of public procurement is punished by a fine ranging between 20 and 30 base calculating amounts (from 6.8 million to 10.2 million UZS or roughly from 542 to 813 USD).

Powers to manage conflicts of interest

In order to implement the provisions of the Law, the following powers are entrusted with the Anti-Corruption Agency (Коррупцияга қарши курашиш агентлиги):

Coordinate and analyse the activities of public bodies (organisations) in the area of conflict-of-interest management;
In the event that the circumstances indicating conflicts of interest are detected, suggest that the public bodies (organisations) terminate the transaction, change or cancel the decision and/or other document, or file a lawsuit in a court to annul them;
Approve standard forms of the Register of Conflicts of Interest, notifications of real conflicts of interest and declarations of potential conflicts of interest;
Prepare and publish guidance for public bodies (organisations) on how to manage conflicts of interest;
Oversee the process of reparation of damage to the interests of citizens, organisations, society or the state inflicted by conflicts of interest;
Implement capacity-building initiatives for the employees of dedicated divisions;
Prepare the protocols on administrative offences associated with the failure to comply with the legal provisions on conflicts of interest to submit them to a court;
Analyse the information and materials related to conflicts of interest submitted by public bodies (organisations).

The bodies (organisations) subject to the Law must:

Implement the systems of notification of officials about real conflicts of interest and define the internal procedure for preventing conflicts of interest;
Compile the Register of Conflicts of Interest;
Undertake activities to manage conflicts of interest and ensure that the ethics commissions and the dedicated divisions are operable;
Ensure that the verification procedures with regard to the detected facts of conflicts of interest are impartial and that the ethics commissions consider their outcomes;
Ensure that the decisions and transactions made in conflict-of-interest situations are revisited or cancelled, or file lawsuits to a court to annul such decisions and transactions;
Adopt measures to reward the employees that lead by example in preventing their conflicts of interest;
Adopt measures to repair the damage inflicted to citizens, organisations, society or the state by conflicts of interest and to rebuild public trust in the respective body (organisation).

Under the Law, the dedicated divisions:

Process the declarations of potential conflicts of interest and notifications about real conflicts of interest, provide an opinion on the presence (absence) of a conflict of interest and make subsequent suggestions to the ethics commission;
Collect and consider the reports of natural and legal persons about real and/or potential conflicts of interest of officials;
Conduct verifications with regard to the officials who violate the requirements of the Law;
Carry out awareness-raising activities on how to prevent conflicts of interest among officials;
Analyse conflict-of-interest cases detected in public bodies (organisations), summarize this information and formulate proposals on how to improve the regulatory measures;
Publish annual reports on compliance with the requirements of the Law in public bodies (organisations) on their official websites.

The ethics commissions have the following obligations:

Adopt measures to ensure that officials respect the requirements established by the Law;
Consider whether the measures adopted to manage conflicts of interest are sufficient (correct);
Exercise collegial control over the cases of real conflicts of interest;
Based on the outcome of verifications, issue opinions on the presence (absence) of the requirements established by the Law;
Submit proposals on how to hold the officials who do not report their conflicts of interest, submit knowingly false or inaccurate information or conceal this information liable to the head of a public body (organisation).

The Law will enter into force on 6 December 2024.