Uzbekistan publishes draft Law on Financial Penalties for public consultation

30 May 2026

A draft Law on Financial Penalties was published for public consultation from 13 to 28 May 2026. If enacted, it will establish for the first time a single statutory framework governing the imposition of financial sanctions on legal entities across all regulatory sectors in Uzbekistan. The law is authored by the Business Ombudsman under the President of Uzbekistan and represents a significant step toward more structured, predictable and rights-based enforcement.

What the law covers

The draft applies to all legal entities operating in Uzbekistan, including branches and representative offices of foreign companies. It covers financial penalties imposed by authorised state bodies across all sectors, with the exception of criminal fines, administrative fines under the Administrative Liability Code, contractual penalties, and penalties regulated by sector-specific legislation where those sector rules take precedence. Where sector-specific legislation applies, the general principles, procedural requirements and legal guarantees set out in this law remain binding in all cases.

Core principles binding on all enforcement bodies

The draft establishes a set of principles that all authorised bodies must follow when imposing financial penalties:

• Legality: penalties may only be imposed in cases and by procedures expressly provided for in legislation
• Proportionality: the size of a penalty must correspond to the nature, severity and consequences of the violation, with excessive measures prohibited
• Prohibition on double penalties: a legal entity cannot be fined twice for the same violation, whether by one or multiple authorised bodies
• Due process: the legal entity must be informed of the violation, given the opportunity to submit explanations and objections, and notified of its right to appeal
• Reliability of evidence: penalties may only be imposed on the basis of lawfully obtained evidence; decisions based on unlawfully obtained evidence are prohibited

Penalty categories and calibration

The draft introduces a four-tier classification of violations:

• Minor: first-time, remediable, no material harm. No financial penalty, written warning only
• Significant: no material harm but risk of harm or negative economic consequences
• Gross: material harm caused, serious risk to public safety, health or environment, or wilful non-compliance with lawful instructions
• Repeat: same violation committed within one year of a penalty decision becoming enforceable

Penalty amounts must take into account the size and financial position of the business, distinguishing between micro, small, medium and large enterprises. A financial penalty must not result in the complete and unjustified termination of a legal entity's lawful business activity.

Key procedural protections for businesses

The draft introduces a set of procedural rights that are particularly relevant for international companies:

• Before a penalty decision is issued, the business must be fully informed of the applicable penalty, the relevant legal norms, the procedure and its rights
• The business has ten working days from the date the violation report is drawn up to submit written explanations or objections
• The case must be reviewed with the participation of the company's representative, with at least two working days' notice of the hearing date
• Every decision must be in writing, stating the specific legal basis, the penalty amount and calculation, and the procedure and timeline for appeal
• A penalty decision that is not registered in the unified electronic registry with a digital signature is invalid and unenforceable

Voluntary compliance incentives

The draft includes two voluntary payment options that reduce the overall penalty burden:

• Pay 50% of the penalty within one month and be released from the remaining 50%
• Pay in six equal monthly instalments, with the instalment schedule activated automatically upon payment of the first instalment within one month of the decision

Appeal rights

A legal entity may appeal a penalty decision within ten working days, either directly to a court or to the supervisory body of the authority that issued the decision. Filing an appeal with a supervisory body does not limit the right to also file in court. Upon court acceptance of an appeal, the relevant authority is automatically notified and enforcement of the penalty may be suspended.

Unlawful enforcement and redress

If a penalty is found to have been unlawfully imposed, the full amount must be returned within fifteen days. For each calendar day of delayed return, interest accrues at one three-hundredth of the Central Bank base rate. If the unlawful decision was caused by wilful or grossly negligent conduct of an official, the amounts paid including interest may be recovered from that official by way of recourse.

What this means for your business

The draft law addresses some of the most persistent complaints of international businesses operating in Uzbekistan: disproportionate penalties, inconsistent application across sectors, lack of procedural transparency, and limited recourse. If enacted in its current form, it would give legal entities a clearer, more predictable enforcement framework and enforceable procedural rights at every stage from inspection to appeal.

The public consultation closed on 28 May 2026. The timeline for parliamentary consideration has not yet been announced. Companies with operations in Uzbekistan should monitor the legislative progress of this draft closely, as the final text may differ from the consultation version. The list of authorised bodies and applicable penalty ranges set out in the annex to the draft covers thirteen regulatory bodies spanning tax, customs, competition, environment, financial services, technical regulation, and telecommunications.