On further perfection of the Valuation Organizations' Activity and enhancing their responsibility for the quality of rendered services

It shall be noted that the necessary legislation basis for performance of Valuation Activity in the Republic has been created, economic stimuli for its active development provided and the procedure of licenses' issuance substantially simplified.  

At the same time the practical activity performed by Valuation Organizations does not satisfy the increased nowadays requirements.  In the number of cases Valuation Works are being performed formally and on the low professional level, due responsibility by Valuation Organizations for objectivity of Valuation of the real cost of the sites subject to privatization and quality of the services rendered is not provided.  

In accordance with the Law of the Republic of Uzbekistan "On Valuation Activity" and with the aim of further development of the Independent Valuation System, rise of professional level and quality of Valuation Services, application of effective methods of regulation of Valuation Organizations' activity, strengthening their responsibility  for the results and objectivity of Valuation Works being performed:

1. To recognize as unsatisfactory the work being performed by the State Property Committee of the Republic of Uzbekistan in the field of providing the activity of Valuation Organizations, first of all, concerning the issues of elaboration and application of standards and other normative documents regulating Valuation Activity, control over its objectivity and quality of the Valuation Works done.

2. It shall be established that starting from July 1, 2008 Valuation Activity shall be performed exclusively by legal entities.

It shall be determined that Valuation Organizations performing:

Movable Property Valuation, excluding the Securities, Shares, Intellectual Property and other Intangible Assets - shall be possessing the Charter Capital being equal to the size of not less than 1500-fold of the minimum wage, and having not less than two Staff Appraisers;

Real Estate Valuation, excluding Enterprises as a Property Complex, - shall be possessing the Charter Capital being equal to the size of not less than 2000-fold of the minimum wage, and having not less than three Staff Appraisers;

Business Valuation (of an Enterprise as a Property Complex,  all kinds of Tangible and Intangible Assets) -  shall be possessing the Charter Capital being equal to the size of not less than 2500-fold of the minimum wage, and having not less than four Staff Appraisers.

3. To approve the Regulations on Valuation Organizations and Appraisers in accordance with the Appendix to the present Resolution.

Acting Valuation Organizations during the period till September 1, 2008 shall provide bringing into conformity the sizes of their Charter Capital and execution of binding requirements on arrangement of their activity and licensing terms, established by  the Regulations on Valuation Organizations and Appraisers.

4. Cabinet of Ministers of the Republic of Karakalpakstan, Hokimiyats of the Regions and the City of Tashkent, the State Property Committee of the Republic of Uzbekistan shall:

till September 1, 2008  carry out in established order re-registration and issuance of licenses of the latest pattern for performance  of Valuation Activity for the acting Valuation Organizations fully conforming to the requirements and terms of  the Regulations on Valuation Organizations and Appraisers;

in cooperation with the State Tax Committee undertake measures on cessation starting from September 1, 2008, in established order,  of the activity of Valuation Organizations not conforming to the requirements and terms of  the Regulations on Valuation Organizations and Appraisers.

5. The State Property Committee of the Republic of Uzbekistan shall:

in cooperation with the Ministry of Justice of the Republic of Uzbekistan within the two months period present in established order to the Cabinet of Ministers of the Republic of Uzbekistan proposals on the order of arrangement of Expert Evaluation to be done over trustworthiness of Valuation Reports with foreseeing creation of the Expert Commission on Performance of Expert Evaluation over the Valuation materials related to the Sites subject to Valuation in disputable cases upon the requests made by court bodies;

undertake measures on perfection the procedures on conducting the Qualification Exams for getting Appraiser Qualification Certificates with providing transparency and objectiveness of such exams.

6. The State Property Committee, the Ministry of Justice of the Republic of Uzbekistan in cooperation with the ministries and institutions concerned shall within one month period:

present to the Cabinet of Ministers proposals on amendments and addenda arising from the present Resolution to be entered into Legislation;

provide bringing the normative acts of the ministries and institutions into conformity with the present Resolution.

7. Control over implementation of the present Resolution shall be entrusted upon the First Deputy Prime Minister Azimov R. S.

President of the Republic of Uzbekistan                           I. Karimov                               

Appendix

to the Resolution by the President of the Republic of Uzbekistan

dated April 24, 2008, No PP-843

The Regulations on Valuation Organizations and Appraisers

I. General Provisions

1. The present Regulations have been elaborated in accordance with the Laws of the Republic of Uzbekistan "On the Valuation Activity", "On Licensing the certain kinds of Activity" and thus determines the status, tasks, rights, duties and responsibilities of the organizations performing Valuation Activity (further referred to as the "Valuation Organizations").

2.  Valuation Activity is understood being the activity of a Valuation Organization aimed at defining the cost of a Valuation Object.

3. A Valuation Organization is a Legal Entity possessing the License for performance of Valuation Activity, the stamp reflecting its name, independent accounting balance and bank accounts.

4. An Appraiser is being a natural person possessing an Appraiser's Qualification Certificate.

An Appraiser may be engaged by a Valuation Organization for performance of Valuation if he or she is a staff member of a Valuation Organization or is engaged in way of conclusion of an agreement of a Civil Legislation nature between him or her and a Valuation Organization.

5. Valuation Organizations in process of their activity follow the Constitution of the Republic of Uzbekistan, Laws of the Republic of Uzbekistan. Resolutions and other acts of the Oliy Majlis of the Republic of Uzbekistan, Decrees, Resolutions and Orders by the President of the Republic of Uzbekistan, Resolutions and Orders by the Cabinet of Ministers of the Republic of Uzbekistan, other normative acts as well as the present Regulation.

6. State-owned Unitary Enterprises and Institutions created by the Cabinet of Ministers of the Republic of Uzbekistan are entitled to carry out Valuation Activity without possessing the according license provided the performance of Valuation Activity is foreseen within their Foundation Documents. This rule does not liberate the said enterprises and institutions from observance of the License Requirements and Conditions as well as other requirements related to performance of licensed kinds of activity foreseen by Legislation.

II. The Main Tasks of Valuation Organizations

7. The Main Tasks of Valuation Organizations are as follows:

Definition, in accordance with the Legislation, of a Cost of a Valuation Object;

providing  trustworthiness of Valuation Reports;

carrying out the control over observance of Legislation on Valuation Activity by Appraisers and creation of necessary conditions aimed at rising their professional level.

III. Rights and Duties of Valuation Organizations

8. Valuation Organizations possess the following Rights to:

apply independently Valuation Methods in order established by Legislation;

require from a Customer to provide their access to documentation during Valuation process related to a Site, get explanations and additional information needed for Valuation performance;

request from third parties information necessary for Valuation performance related to a Site. In case if refusal to present the said information substantially influences the trustworthiness of Valuation, an Appraiser shall indicate that at his or her Valuation Report;

engage in the established order Appraisers and other specialists into participation in performance of Site's Valuation;

refuse from performance of Valuation in cases when a Customer violates agreement terms, has not provided presentation of necessary information on a Site subject to Valuation or did not provide work conditions as stipulated by an agreement;

enter into membership of the Appraisers' Professional Unions;

render the following kinds of professional services accompanying Valuation Activity:

Expert Evaluation in view of trustworthiness of a Valuation Report;

Elaboration and analysis of Investment Projects, preparation of Business Plans;

Automation of Valuation Process and application of Information Technologies;

Performance of scientific research works in the field of Valuation Activity and dissemination of their results.

Valuation Organizations are not allowed to render services not foreseen by the present Regulations.

Valuation Organizations may possess other rights in accordance with the Legislation and particular agreements concluded on render of Valuation Services as well.

9. Valuation Organizations are obliged to:

observe in process of their Valuation Activity the License Requirements and  Conditions established by Legislation;  

present at a Customer's request prior to conclusion of an Agreement on Performance of Valuation Works their License for the Right to Perform Valuation Activity, an Appraiser's (Appraisers') Qualification Certificate (s);

inform a Customer on impossibility of their participation in performance of Valuation in consequence of occurrence of circumstances established by Legislation preventing the conduct of  objective Valuation;

present at a Customer's request the information on legal requirements regulating Valuation activity;

provide safety of the documents received in process of conduct of Valuation;

inform a Property Owner and (or) a Customer about facts of losses inflicted by its officials and other staff members  as well as other law violations discovered during the process of Property Valuation;

provide storage at their Valuation Organization within the three years period of the copies of Valuation Reports  prepared upon the results of Valuation Works done;

provide confidentiality of information received from a Customer in course of Valuation conduct;

provide Appraisers' passing through annual Advanced Training Courses;

at a requests made by Appraisers' Professional Unions present information  for the purpose of rating evaluation of Valuation Organizations;

Valuation Organizations may bear other obligations in accordance with the Legislation and particular agreements concluded on render of Valuation Services as well.

10. Appraisers may participate as specialists in the inspections conducted by controlling or law enforcement bodies and other actions only on basis of agreements concluded between Valuation Organizations and controlling or law enforcement bodies.

IV. Qualification Requirements addressed to an Appraiser

11. An Appraiser's Qualification Certificate provides the right of a natural person to conduct Valuation in case he or she is a staff member of a Valuation organization or if a Valuation Organization has concluded with him or her an agreement of the Civil Legislation nature.  

12. An Appraiser's Qualification Certificate shall be issued by the State Property Committee of the Republic of Uzbekistan under condition of an applicant's successful passage through a Qualification Exam.

Arrangement, way of conduct and formalizing results of a Qualification Exam are determined by the Regulations approved by the State Property Committee of the Republic of Uzbekistan.

13. An applicant for receiving an Appraiser's Qualification Certificate shall meet the following requirements:

a) possession of the highest economic, legal or technical education, with a record of service as an Appraiser or an Appraiser's Assistant being not less than one year out of the recent five years;

or possession of the higher education with a record of service as an Appraiser or  Appraiser's Assistant for Property Valuation being not less than two year out of the recent five years.

At that higher education or academic degree obtained in foreign countries are to be taken into consideration only in case if those are recognized in established order  being equal to the education obtained in the Republic of Uzbekistan.

b) possession of a Certificate on having passed through special training at Appraisers' Training Centers in accordance with the program approved in established order by the State Property Committee with taking into consideration suggestions made by  Appraisers' Professional Unions, provided that the period between graduation and application dates does not exceed one year.

Applicants possessing International Appraiser's Certificates are allowed to pass through Qualification Exam without having gone through special training at their Appraisers' Training Centers.

14. Appraiser's Qualification Certificate is issued for five year period and its validity may be prolonged  for each consequent five years.

15. Each Appraiser possessing a Qualification Certificate is obliged to pass annually, starting from the year being the next after the year of issue of his or her Qualification Certificate,  through Advanced Training Courses with the volume of not less than 40 hours in accordance with programs approved in established order by the State Property Committee with taking into consideration suggestions made by  Appraisers' Professional Unions.

16. For issue (passage through Qualification Exam) and the Qualification Certificate's validity period prolongation an applicant (Appraiser) shall pay the due at size equal to one minimum wage. For re-legalizing and issue of a duplicate fee shall be paid at size of 50 percent of minimum wage.  

The above mentioned revenues shall be transferred to the special bank account of the State Property Committee of the Republic of Uzbekistan and used for covering the expenses related to arrangement of Qualification Exams and issuance of Appraisers' Qualification Certificates.

17. An Appraiser's Assistant may be a natural person not possessing an Appraiser's Qualification Certificate and carrying out tasks laid by an Appraiser related to Valuation conduct, without the right of signing a Valuation Report or any other official document connected with Valuation conduct.

Work conditions for an Appraiser's Assistant are determined by a contract concluded with a Valuation Organization in order established by Legislation.

An Appraiser's Assistant bears responsibility stipulated by Legislation for divulgence of confidential data received by him or her in course of Valuation conduct.

Work period as an Appraiser's Assistant shall be included into a record of service required for getting an Appraiser's Qualification Certificate.

V. Arrangement of Valuation Organizations' Activity

18. Valuation Organizations are independent in their activity and may be created and perform activity in any organizational and legal form excluding an Open-type Joint Stock Company form. An Appraiser (Appraisers) is (are) allowed to act as founders in respect of only one Valuation Organization.

Performance of Valuation by the State Power and Governance Bodies is forbidden if Legislation does not set this issue otherwise.

Valuation Organizations are not allowed to be created by Ministries, State Committees, institutions and other bodies of State and Economic Governance except the cases stipulated by Legislation.

19. Head of a Valuation Organization shall possess an Appraiser's Qualification Certificate.

20. Valuation Organizations performing:

Movable Property Valuation, excluding the Securities, Shares, Intellectual Property and other Intangible Assets - shall be possessing the Charter Capital being equal to the size of not less than 1500-fold of the minimum wage, and having not less than two Staff Appraisers;

Real Estate Valuation, excluding Enterprises as a Property Complex, - shall be possessing the Charter Capital being equal to the size of not less than 2000-fold of the minimum wage, and having not less than three Staff Appraisers;

Business Valuation (of an Enterprise as a Property Complex,  all kinds of Tangible and Intangible Assets) -  shall be possessing the Charter Capital being equal to the size of not less than 2500-fold of the minimum wage, and having not less than four Staff Appraisers.

At that not less than 30 percent of a Charter Capital shall be contributed in form of monetary means. 

21. State registration of Valuation Organizations is done by the Inspections for Registration of Entrepreneurship Subjects by the city and district Hokimiyats (local administration bodies) in order established by Legislation.

22. Valuation Organizations conduct Valuation Activity on basis of an Agreement concluded on Render of Valuation Services at binding presence of an Insurance Policy for their Civil Responsibility.

23. Results of a Valuation done are to be shaped into (formalized by) a Valuation Report. A Valuation Report shall be signed page-by-page by an Appraiser (Appraisers) executing Valuation, got approved by the Head of a Valuation Organization and verified by a seal of that organization.

In case Valuation has been performed by several Appraisers, the work done by them in process of Valuation Report's preparation shall be indicated at that report.

24. Valuation Organizations shall engage into conduct of Valuation Works the Staff Appraisers on basis of a Labor Agreement (Contract).

Valuation Organizations may also involve into conduct of Valuation Works other Valuation Organizations, Appraisers and Specialists with whom a Valuation Organization has concluded an Agreement of a Civil Legislation nature.

VI. License Requirements and Conditions addressed to Valuation Organizations

25. License Requirements and Conditions set in process of performance of Valuation Activity are as follows:

observance of the Law of the Republic of Uzbekistan "On Valuation Activity", requirements of National Standards on Property Valuation in the Republic of Uzbekistan as well as other Legislative Acts;

presence, by the moment of issue of a License, of a completely formed Charter Capital at size stipulated by the present Regulations;

presence of an Insurance Policy for Civil Responsibility

performing Activity stipulated by the present Regulations exclusively;

performance of Valuation Activity by an Appraiser within only a single Valuation Organization. At that Valuation Activity  is allowed to be performed by an Appraiser at another Valuation  Organization only after termination, completion or expiration of a Labor Agreement (Contract) or an Agreement of a Civil Legislation nature concluded by a Valuation Organization where he or she used to perform Valuation Activity;

presence among a Valuation Organization's staff members of the Appraisers stipulated by the present Regulations;

in-time and qualitative execution of contract obligations related to conduct of Valuation;

appointment of only an Appraiser to the post of the Head of a Valuation Organization;

assurance of independence during the process of conduct of Valuation Activity  in order established by Legislation on Valuation Activity;

composition of a trustworthy Valuation Report by a person (persons) possessing an Appraiser's Qualification Certificate;

presence at a Valuation Organization of the approved Internal Rules for Control over the Quality of the Works Done by their Appraisers;

informing a License Issuing Body within the 10 days period since the date of State registration on  any changes entered into their name or location (postal address);

submitting once in a half-year the data on Valuation Activity to the State Property Committee in established form as well as any other information at the State Property Committee's request related to conduct of Valuation;

26. Suspension, cessation or annulment of validity of a License possessed by a Valuation Organization shall be carried out in order established by Legislation;

27. The below cases are considered as a single rough violation  of License Requirements and Conditions presenting basis for cessation in the established order validity of a License possessed by a Valuation Organizations:

composition of an unreliable Valuation Report causing material damage to an Owner and (or) a Customer;

composition of an unreliable Expert's Report;

divulgence of confidential information obtained during performance of Valuation Works without permission by Property Owner or a Customer, excluding cases stipulated by Legislation;

lack of independence at performance of Valuation Activity in order established by Legislation on Valuation Activity;

evasion from inspections on observance of License Requirements and Conditions conducted by the State Property Committee of the Republic of Uzbekistan;

absence of an Insurance Policy for Civil Responsibility in course of performance of Valuation Activity;

performance of kinds of activity not stipulated by the present Regulations.

VII. Cessation and annulment of Appraisers' Qualification Certificates' validity

28. The below cases are considered as basis for cessation of an Appraiser's Qualification Certificate's validity:

application made by an Appraiser;

systematic or a single rough violation of legal requirements in course of performance of Valuation Activity;

an Appraiser's placing at third parties' disposal of the data obtained in process of Valuation without permission by a Property Owner or a Customer, excluding the cases stipulated by the Legislation;

a Court Decision entered into force and foreseeing penalty in form of deprivation of right to occupy certain posts or engage in a certain activity in sphere of financial and economic relations;

a Court Decision on recognizing in established order a citizen as incapable or partially capable.

29. Qualification Certificate's validity shall be cancelled starting from the date of decision made on its cessation.

In case of cessation of validity of a Valuation Organization's License by reason of violations done and foreseen by Legislation, starting from the date of decision made on cessation of a License, validity of Qualification Certificates of the Head and an Appraiser who allowed occurrence of violations causing cessation  a Valuation Organization License's validity shall also be cancelled.

30. The below cases are considered as a single rough violation of License Requirements and Conditions presenting basis for cessation in established order of an Appraiser's Qualification Certificate's validity:

lack of independence at performance of Valuation Activity in order established by Legislation on Valuation Activity;

composition of an unreliable Valuation or Expert's Report;

divulgence without permission by Property Owner or a Customer of confidential information obtained during performance of Valuation Works, excluding cases foreseen by Legislation;

an Appraiser's participation as a specialist in inspections and other events conducted by controlling or  law enforcement bodies without an appropriate permission (order) issued by a Valuation Organization where he or she is a staff member or with which he or she has concluded an Agreement of a Civil Legislation nature.

31. An Appraiser's Qualification Certificate shall be annulled in the following cases:

at a court's recognition of illegality of a decision made by a specially authorized State body on issuance of a Qualification Certificate;

fact of getting a Certificate with the use of forged documents.

Decision on annulment of a Qualification Certificate enters into force since the date of issue of an Appraiser's Qualification Certificate.

32. Appraisers with their Qualification Certificates' validity abrogated or cancelled by reason of a Law violation made, are not allowed to pass exams for repeated receipt of a Qualification Certificate for the three years' period since the moment of cancellation of their Qualification Certificates.

33. Decision on validity cessation or cancellation of an Appraiser's Qualification Certificate shall be motivated and is subject to publication through the mass media.

34. Decision by the specially authorized State body on validity cessation or cancellation of an Appraiser's Qualification Certificate may be appealed at a court in the order established by Legislation.

VIII. Responsibility to be born by Valuation Organizations and Appraisers

35. Valuation Organizations shall bear responsibility foreseen by Legislation before a Customer of Valuation Works for damage caused by him or her in consequence of  an unauthentic Valuation Report's composition.

36. Losses, including loss of missed profit caused to a Customer of Valuation Works as a result of low-quality or undue conduct of Valuation are subject to compensation by a Valuation Organization in order established by Legislation.

37. An Appraiser in accordance with Legislation bears responsibility before a Valuation Organization for losses caused as a result of low quality Valuation performed, divulgence of commercial secret and other acts causing losses for a Valuation Organization.

IX. Challengeability of the data contained by a Valuation Report

38. In case of a need to check trustworthiness of a Valuation Report prepared by a Valuation Organization in order established by Legislation, Expert Evaluation over a given Valuation Report may be performed by another Valuation Organization on contractual basis.

A Valuation Organization performing Expert Evaluation is to express their impartial opinion on trustworthiness of a given Valuation Report without performing repeated (own) Valuation and without  issuance of their own conclusion indicating Cost of a Valuation Object.

Engagement of a Valuation Organization for performance of Expert Evaluation over a Valuation Report previously prepared by the same Valuation Organization is not allowed.  

39. In case of disagreement with a received Expert Evaluation on part of a Customer who ordered it to be performed related to a Valuation Report, such a dispute is to be solved in way of court procedure.

40. An Experts Commission shall be created in order established by Legislation to carry out Expert Evaluation over materials on Valuation of an Object in disputable cases upon requests made by court bodies. 

Experts Commission's conclusion on Expert Evaluation done over Valuation materials with the aim to determine trustworthiness of a given Valuation Report as well as Expert Evaluation made by a Valuation Organization on a given Valuation Report shall be adopted exclusively at a court request in order established by Legislation. In case a court considers a Valuation Report as unreliable, a court is entitled to require from the Expert Commission their conclusion on Cost of a Valuation Object as well.  

X. Control over observance of License Requirements and Conditions by Valuation Organizations

41. Checking observance of License Requirements and Conditions by Valuation Organizations is performed by the State Property Committee of the Republic of Uzbekistan not more often than once in each three years in order established by Legislation.

42. Reorganization and liquidation of a Valuation Organization are to be carried out in order established by Legislation.