Uzbekistan to amend legislation regarding offshore companies

Uzbekistan has developed a draft law on amendments and additions to the Tax Code regarding the companies established by the country’s residents in offshore zones.

This remark was made by Uzbekistan’s Prosecutor-General Ikhtiyor Abdullayev, who was addressing the plenary session of the Eurasian Group on combating Money laundering and financing of terrorism (EAG) last week.

EAG is an FATF-style regional body, established in 2004. It is currently an associate member of the FATF.

Abdullayev noted the Tax Code will include a concept of “controlled foreign companies” to, i.e. the companies established by residents of Uzbekistan in offshore zones, as well as the norm, according to which taxpayers involved in such companies will be required to provide relevant information to the tax authorities.

“Thanks to this, another barrier will be created against the accumulation of profits in offshore zones, legalization of money laundering and financing terrorism from offshore zones,” Abdullayev said. “Uzbekistan gradually implements international standards and requirements in the national practice of combating money laundering and financing terrorism”.

Today the international practice shows that terrorist organizations quickly adapt to changing conditions, and find new ways of financing their activities. Such a trend requires the international community to take adequate and timely measures, apply common efforts as to find reliable barriers against them.

Being an active participant of this policy, Uzbekistan adopted the law ‘On countering legalization of revenues received from criminal activity and financing terrorism’.

In 2009 this law was adopted in a new edition, taking into account international standards. Another important document was President Islam Karimov’s decree “On measures to strengthen the fight against crimes in the financial-economic and tax fields, money laundering” adopted on April 21, 2006.

Uzbekistan also established a special authorized state body — Department for combating tax, currency crimes and money laundering under General Prosecutor’s Office. Several departments on financial analysis, operational and investigative activities and inquiry are included in its structure.

The department is able to receive reports on suspicious financial transactions, conduct operative investigation and open a criminal case.