The Foreign Investors Council (FIC) held a productive meeting on November 2, 2023, to deliberate on the new draft of the Investment Law. This meeting was a comprehensive effort involving representatives from various ministries, agencies, and the Organization for Economic Co-operation and Development (OECD) as part of the OECD Eurasia Competitiveness Programme.
The discussion centred around the Draft Investment Law, which is expected to receive governmental approval by the end of 2023. This law is set to significantly improve protections for foreign investors in Uzbekistan and simplify the handling of investor-state disputes.
Key observations and areas for Improvement
- The Draft law offers strong protections for foreign investors, including Fair and Equitable Treatment (FET) and Full Protection and Security (FPS), protections that are not usually included in national investment laws.
- A sophisticated system for managing investor-state disputes has been proposed, which provides state consent in advance to international arbitration, governed by well-known rules such as the UNCITRAL Rules and the ICSID Convention.
- A new entity, the Foreign Investors Council, has been proposed to help resolve disputes and advocate for legislative improvements to enhance the business environment. However, its structure requires wider representation to include various stakeholder interests, ensuring alignment with Sustainable Development Goals (SDGs).
Despite these positive inclusions, the Council identified potential areas for improvement:
- There is a need for more detail on the roles and responsibilities of investment promotion and the functioning of the relevant Agency.
- The Draft law could be enhanced by including articles that emphasize corporate governance and corporate social responsibility to ensure a comprehensive investment approach.
Future steps: towards an inclusive investment environment
The Foreign Investors Council and OECD are dedicated to building a legislative framework that not only encourages a favourable investment climate but also aligns with international best practices and sustainable development principles.
This consultation marks a significant step in Uzbekistan’s journey towards creating an inclusive and sustainable environment for foreign investment. Future steps will involve a thorough review by the OECD. The insights from the OECD will be crucial in developing by laws that support the practical implementation of the Investment Law, thereby strengthening Uzbekistan’s position as an attractive investment destination.
The Foreign Investors Council serves as an essential platform for dialogue between the government of Uzbekistan and the international business community. It aims to improve the investment landscape and facilitate sustainable economic growth.
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