Protection of property rights in Uzbekistan – recent reforms and challenges

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It is well-known fact that private property is one of the key drivers of the development of the state's economy and its prosperity. In this regard, the state pays special attention to ensure the guarantee of the property rights and create favorable legal environment that can provide inviolability of these rights.

As other nations, Uzbekistan has also faced the challenges in protection of physical property rights for long period of its development. Hence, the country has started very decisive reforms in order to overcome challenges that touch upon legal protection of ownership for last five years.

I. Legal protection of property rights, as well as last notable reforms in this area

As it was mentioned that Uzbekistan considers protection of property rights as one of the essential elements of economic transformation in the country and has very actively taken a number of measures to reform this sphere for last five years.

Firstly, the Constitution of the Republic of Uzbekistan is the basic guarantor of property rights and it states that private property is inviolable and protected by the state. An owner, at his discretion, shall possess, use and dispose of his property.

Besides that, there are other legal basis including Civil Code[1], the Law “On Property in the Republic of Uzbekistan”[2], “On the Protection of Private Property and Guarantees of Owners' Rights”[3] to provide guaranties of property rights.

Last five years, new legal acts have been adopted in order to strengthen the protection of property rights in our country, including

– the Decree of the President of the Republic of Uzbekistan dated July 27, 2018 “On measures to further improve the system of protection of the rights and legitimate interests of business entities”[4];

– the Resolution of the President of the Republic of Uzbekistan dated August 3, 2019 "On additional measures to ensure the unconditional guarantee of property rights of citizens and businesses"[5];

– the Decree of the Cabinet of Ministers dated November 16, 2019 “Additional measures on ensuring guarantees of property rights of individuals and legal entities and improving the procedure for withdrawal and compensation of land plots”[6].

In 2018, according to the Decree of the President[7], a unique nationwide action was held to recognize the ownership rights of unauthorized residential buildings of individuals.

As a result, according to the data of the State Services Agency, about 930,000 applications for recognition of property rights were received from citizens, of which about 620,000 were satisfied.

The Government continuously pays profound attention to the protection of property rights by adopting new additional legal instruments, directed to the inviolability of property rights and implementation of foreign best experience in Uzbekistan too.

This year, Uzbekistan has also stepped into a new stage of property rights development by adopting the Law “On privatization of non-agricultural land plots”[8] dated September 30, 2021 in new edition.

This document enshrined norms, designed to the transparent procedures of privatization of land plots and land plots will privatized by purchasing land owned by the right of life tenure or an electronic online auction.

The new edition of the law has been amended with the following provisions:

– local government bodies were deprived the rights of taking decisions on privatization;

– list of land plots, which are not subject to privatization, was finalized;

– nationalization (transfer of privatized land for a certain payment to the state) has been abolished;

– grounds for refusal to privatize land plots were clearly defined.

Generally, the new edition of the was developed in terms of best foreign experience and recent global trends, directed to protection of property rights in relation to land plots.

These active reforms are being reflected and assessed by the following international ratings and indices:

– Uzbekistan took 114th place in the Economic Freedom Index 2020[9], improving its rating by 26 positions from the previous result, especially the lasting grows are seen in the indicator of Property rights (9.3 growth);

– Uzbekistan also moved up 7 positions in the annual rating of the World Bank Group, Doing Business 2020[10] (assessment of business regulation) from 76 to 69 place among 190 countries of the world, though this ranking was stopped later.

Understanding that the private sector will be the key driver for economic growth in Uzbekistan the government will go forward to introduce new reforms to ensure protection of property rights.

II. Existence of liability for the violation of physical property rights

In Uzbekistan. there are legal bases, providing the strict liability for violation of people’s property rights in Uzbekistan and they are enshrined in the Code of Administrative Responsibility[11] and the Criminal Code[12] of the Republic of Uzbekistan.

– the Article 241¹ of the Code of Administrative Responsibility provides liability of an official or a state body as an amount of a fine of up to 80 basic calculated values for violation property rights.

If such an illegal action is repeatedly committed by the same official or it causes major damage, the Article 192¹ of the Criminal Code considers criminal liability in the form of imprisonment for up to 7 years with deprivation of a certain right.

Also, the Criminal Code provides the punishments for extortion, robbery, fraud, theft, deliberate destruction or damage to property and others rights. The sanctions for such crimes are very harsh, for example, theft (the article 169) is punishable by imprisonment up to 15 years, robbery (the article 166) up to 20 years of prison.

Even though there is an exact and strict liability for violation of people’s property rights in Uzbekistan by the government bodies and officials, as a result of active urbanization, land acquisition for public needs, as well as the demolition of facilities located on the confiscated land plot, has become a topical and burning issue for last years.

This problem has caused people’s dissatisfaction with the local government bodies.

Possibly, this issue also negatively affected the positions of Uzbekistan in the Rule of Law Index in terms of sub indicator “No expropriation without adequate compensation”. For instance, score of Uzbekistan has worsened into 0,04 points in the framework of this sub indicator in comparison with previous years[13].

This issue demanded to take inadequate and prompt legal measures by the Government on order to resolve protests among the population.

As a result, the Resolution of Cabinet of Ministers of the Republic of Uzbekistan was adopted to reform the procedure for land acquisition and compensation of owners of real estate located on the seized land on November 16, 2019 and it was directed to eliminate aforementioned problems.

However, these issues still need to be addressed at the legislative level to strengthen the property rights of individuals and legal entities in the seizure of land for public needs in Uzbekistan.

Taking into account these facts, the Government has started to work out the draft law of Uzbekistan to reinforce strong regulation of procedures on land acquisition for public needs to be paid fair, full and prompt compensation.

Main objective of this draft law is to establish exact payment of fair, full and prompt compensation for land acquisition for public needs to individuals and legal entities as an owner or permanent or temporary user of this land.

III. Ensuring the protection of citizens
from criminal encroachments

Law enforcement and other competent bodies are clearly tasked by relevant legal documents to ensure protection of property rights and their inviolability in Uzbekistan.

In particular, the General Prosecutor's Office and the Commissioner for Protection of Rights and Legitimate Interests of Entrepreneurs under the President of the Republic of Uzbekistan are assigned to take prompt measures in case of owner’s property rights violation, including unlawful restriction and (or) deprivation of property rights, unjustified transfer of property rights to the owner on unconditional terms, as well as establish systematic control (control) over the inadmissibility of seizure of property or forcing the owner to relinquish the right of personal property.

Additionally, they also take necessary measures to prevent abuses and violations by officials in this field.

As an example, it can be shown that the General Prosecutor’s Office launched the “YER NAZORATI (land control)” Telegram bot[14], with the help of which people can report violations of land legislation - illegal construction, unauthorized seizure and useless use of land.

Besides that, the General Prosecutor’s Office have initiated criminal cases against 558 officials in case of plundering more than 120 thousand hectares of land for last two years.

In case of violation of property rights, people can freely apply to law enforcement bodies, which immediately take measures to restore their violated rights in accordance with the established legislation.

It is worthy to mention that the activities of the Ministry of Justice of the Republic of Uzbekistan to ensure the protection of property rights. In 2019, the Ministry of Justice developed the Regulation[15] on the procedure for providing compensation for the seizure of land plots.

According to the Document, the seizure of land is allowed only with the consent of the owner or in agreement with the user and the tenant on the basis of decisions of the President, the Cabinet of Ministers, the Jokargy Kenes of the Republic of Karakalpakstan (supreme state representative body of power) and the Kengashes of People's Deputies (representative authorities).

The procedure for taking land and providing compensation includes the following:

- open discussion of the issue of the planned withdrawal with the participation of initiators, owners and the media. At the same time, the announcement of the upcoming discussion is posted on the official websites of khokimiyats (local administration) and in the media;

- Jokargy Kenes and Kengashes of People's Deputies consider all the benefits and costs of withdrawal. Only if there are sufficient resources to compensate for damage to the owners, a decision on withdrawal is made;

- a decree on demolition by local authorities is issued only if there is a positive conclusion of the justice authorities. In addition, an agreement on the provision of compensation is concluded between the initiator of the land acquisition and the owner of the real estate, is subject to mandatory notarization. It prescribes the amount and type of compensation, payment terms and other conditions. Demolition is allowed only after the owner has been provided with the full amount of compensation.

Assessment of the demolished property is carried out by appraisal organizations at the expense of the initiator of the demolition.

In addition, the act establishes an exhaustive list of cases in which a land plot can be seized by the government.

Due to the adopted act, the cases of seizure of land plots were decreased at 13 times.

IV. The quality of the judicial protection of private property

The decisive role belongs to courts to ensure the adequacy and effective protection of property rights. The courts and the entire judicial system must ensure the correct enforcement of legal acts governing property relations. And the task of any state, including the Republic of Uzbekistan, is to create an effective, modern judicial system to solve the problems of ensuring the rights and freedoms of citizens.

In this context, the reform of the judicial system is one of the most important directions of state policy. This issue has always been and continues to receive special attention. Thus, the Action Strategy for five priority areas of development of the Republic of Uzbekistan in 2017-2021, as one of the main directions for further development, provides for the modernization of the judicial system.

On December 7, 2020, the President signed the Decree “On measures to ensure the true independence of judges and improve the efficiency of preventing corruption in the judicial system”. The document defined the main measures of state policy in these areas.

In terms of the implementation of the state policy of improving the activities of courts in the field of protecting the rights and interests of citizens and legal entities, special importance is attached to judicial protection of property rights.

A very indicative example of the special attention of the judiciary to the protection of property rights is a number of Resolutions of the Plenums of the Supreme Economic Court, the Supreme Court of the Republic. The most significant is the Resolution of the Plenum of the Supreme Economic Court of the Republic of Uzbekistan (as amended on May 19, 2018, No. 17) "On some issues of the application of legislation by economic courts when considering cases on the recognition of property rights", which explains:

“When considering cases on the recognition of property rights, the courts must strictly follow the Constitution of the Republic of Uzbekistan, the Civil Code of the Republic of Uzbekistan (hereinafter referred to as the Civil Code), the Economic Procedure Code of the Republic of Uzbekistan (hereinafter referred to as the EPC), the Law of the Republic of Uzbekistan “On property in the Republic of Uzbekistan”, as well as other regulatory legal acts.

Article 19 of the Constitution of the Republic of Uzbekistan proclaims that "the rights and freedoms of citizens enshrined in the Constitution are inviolable, and no one has the right to deprive or restrict them without a court."

According to the article 10 of Civil Code protection of civil rights is carried out in accordance with the jurisdiction of cases established by procedural legislation or an agreement, a court, an economic court or an arbitration court. This provision applies equally to the protection of property rights.

According to Article 54 of the Constitution and Article 164 of the Civil Code, the right of ownership is the right of a person to own, use and dispose of the property belonging to him at his own discretion and in his own interests, as well as to demand the elimination of any violations of his property rights, no matter who they come from.

The main, most effective method of protection is judicial one, which has to be provided to the subject of civil legal relations as a result of going to court with a claim for the protection of his violated or disputed property rights.

In conclusion, we think that Uzbekistan is working to eliminate existing problems, which endanger inviolability of property rights and by introducing new reforms, directed to enhance legal bases of the protection of human rights, ensure the inevitability of private property, in short, provide prosperity of a rule of law in the country on the basis of democratic principles.