Uzbekistan: Legal Framework For Privatization Of Non-Agricultural Land In Uzbekistan

Last Updated: 23 August 2019
Article by Eldor Mannopov and Bobur Shamsiev

The President of Uzbekistan signed the Law No. ZRU-522 "On privatization of non-agricultural land plots" (hereinafter – "ZRU-522") on August 13, 2019. Development of this law has been envisaged by the Decree of the President No. UP-5623 "On measures to fundamentally improve the processes of urbanization" of January 10, 2019. ZRU-522 will come into force on March 1, 2020.

Introduction of private land ownership is an important milestone in the liberalization of the economy and the promotion of sustainable urbanization in Uzbekistan. Progressive reforms of Uzbekistan in this field have been welcomed by the international community. The World Bank's Europe and Central Asia Economic Update states that privatization of non-agricultural land in Uzbekistan, together with other market reforms, is critical to economic transformation and to sustaining growth and job creation in the country.1

Targets of privatization

According to the Land Code of Uzbekistan, agricultural land is land provided for agricultural needs or designated for such purposes. Agricultural land includes irrigated and rain-fed lands, croplands, lands with hayfields, permanent grassland, permanent crops and vineyards.2 Land plots that do not fall under the concept of agricultural land are considered as non-agricultural land plots. Transfer of land plots from the category of agricultural to non-agricultural lands can be carried out in case of change of their main designated purpose.

In accordance with ZRU-522, the following types of land plots can be a subject to privatization:

  • land plots on which the buildings, structures and industrial infrastructure facilities belonging to legal entities are located, as well as the land adjacent to them to the extent necessary to carry out production activities;
  • land plots provided to citizens of Uzbekistan for individual housing construction and maintenance of a residential house;
  • free land plots;
  • land plots provıded to the Urban Development Fund under the Ministry of Economy and Industry.

At the same time, the following land plots cannot be privatized:

  • land plots located in territories that do not have approved and published layout plans;
  • land plots with mineral deposits, strategic state property that cannot be a subject to privatization. The list of such land plots is determined in accordance with the legislation;
  • land plots that are part of the lands designated for environmental, recreational, recreational and historical-cultural purposes, as well as lands of forest and water funds, public lands of cities and towns (e.g. squares, streets, roads, boulevards);
  • land plots infected with hazardous substances and susceptible to biogenic contamination;
  • land plots provided to residents of free economic and small industrial zones.

Forms, principles and subjects of privatization

Land privatization can be carried out in the following ways:

  • buyout by legal entities and individuals of land plots that are under permanent use (possession) or inherited for lifetime possession;
  • purchase through an electronic auction.

Privatization is based on the principles of legality, voluntariness (the law prohibits coercion in privatization), the fee-based principle, the unity of privatized land plots and immovable property located on them as well as the principles of openness and transparency (free access to information on privatization).

ZRU-552 states that the right to privatize land plots is granted to individuals – citizens of Uzbekistan and legal entities – that are resident in Uzbekistan. Foreign citizens, stateless persons and legal entities that are non-residents of Uzbekistan do not have the right to land privatization.

Land plots with immovable property

Privatization of land plots with immovable property is carried out through buyout under the following procedure:

1. Submission of application to state services centers or the single portal of interactive state services

By a resident legal entity – in relation to land plots on which the buildings, structures and industrial infrastructure facilities belonging to legal entities are located, as well as the land adjacent to them to the extent necessary to carry out production activities:

By a citizen of Uzbekistan – in relation to land plots provided to citizens of Uzbekistan for individual housing construction and maintenance of a residential house.

2. Processing of applications

By the Commission for revision of land plots provision (selling) matters – within 10 business days.

3.* In case of a positive conclusion — payment for the land plot

By the applicant within 10 business days upon receipt of notification on the conclusion.

4. Decision on privatization

By khokim (mayor) of a district (city) – within 10 business days upon payment by the applicant.

* ZRU-552 contains an exhaustive list of grounds for refusing privatization:

  1. Absence of grounds for privatization;
  2. Outstanding court proceedings in relation to the target land plots;
  3. Prohibition or arrest imposed on immovable located on the target land plots;
  4. Approved master plans of residential areas as well as acts of authorized state bodies onwithdrawal of the land plots for state and public needs and on construction of infrastructure facilities that were adopted prior to the application for privatization and that directly prevent privatization;
  5. Inaccurate, controversial or distorted information in the application for privatization;
  6. Non-payment or incomplete payment for the target land plot in a timely manner.

Free land plots

Free land plots privatization is carried out through an electronic auction under the following procedure:

1. Determination of free land plots in accordance with the master plans of residential areas

By local state authorities.

2. Application to participate in the electronic auction

By a resident legal entity – to carry out entrepreneurial and urban planning activities;

citizen of Uzbekistan – for individual housing construction and maintenance of a residential house as well as to carry out entrepreneurial and urban planning activities.

3. Payment for the land plot

Value of the free land plot is determined pursuant to results of the conducted online auction.

The starting price is set as equal to the market price of the land plot at the time of its placing in the auction.

Legal status of privatized land plots

ZRU-552 recognizes privatized land plots as private property and the object of civil transactions. Meanwhile, foreign citizens, stateless persons and non-resident legal entities are not entitled to acquire privatized land plots unless otherwise provided by the Land Code and international agreements of Uzbekistan.

Seizure of the privatized land plot is allowed only in the case of:

  • foreclosure proceedings in relation to the land plot;
  • nationalization;
  • requisition – exclusively for protection of rights and legitimate interests of citizens in cases of natural disasters, accidents, epidemics and other extraordinary circumstances;
  • confiscation – by court decision under the circumstances specified by criminal procedural law.

Testing the procedure of land plot privatization

In accordance with the Decree of the President No. UP-57803, a legal experiment for testing the procedure of non-agricultural land privatization will be carried out in Syrdarya region of Uzbekistan before ZRU-552 comes into effect.

The main tasks of the legal experiment are as follows:

  • measuring effectiveness of the procedure of non-agricultural land privatization;
  • evaluating effectiveness of practical application of land privatization mechanisms;
  • monitoring powers of state authorities exercising public administration of land privatization;
  • improving the business environment, protecting rights and legitimate interests of citizens during land privatization.

The progress of the implementation of the legal experiment will be published in the mass media. Proposals for further enhancement of provisions of ZRU-552 will be submitted to the Legislative Chamber of Oliy Majlis (Parliament) of Uzbekistan based on the results of the experiment.

Footnote

1 World Bank. 2019. Europe and Central Asia Economic Update, Spring 2019 : Financial Inclusion. Washington, DC: World Bank.

2 Article 8, Land Code.

3 Decree of the President of Uzbekistan "On additional measures to enhance protection of private property and guarantees of ownership rights, fundamentally improve organization of works in support of entrepreneurial initiatives as well as expand access of entrepreneurs to financial resources and production infrastructure" dated 13.08.2019.

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