Uzbekistan implements the consistent work to increase export potential and provide comprehensive support to exporting enterprises. Under the global economic crisis caused by the COVID-19 pandemic, one of the most important priorities is to further stimulate the export by business entities.

The Export Promotion Agency under the Ministry of Investment and Foreign Trade is the authority responsible for the implementation of measures supporting domestic exporters. It provides compensations for the expenses of exporters for participation in international exhibitions and fairs, promotion of national products and brands in foreign markets, as well as the introduction of international standards and obtaining of international certificates.

Besides, exporters can apply to the Agency and receive compensation to cover up to 50% of the costs for transportation of products to export markets, as well as compensation for insurance premiums if the exporter uses insurance services as collateral.

The Decree of the President of the Republic of Uzbekistan on Measures to Further Expand Financial Support for Exports approved on October 21 this year is the follow-up of the measures taken in the country to stimulate exports.

The document provides for a number of additional privileges for exporters. Particularly, it approves new preferences related to compensations and guarantees provided to exporting enterprises by the State Fund for the Entrepreneurship Support.

First, if prior to this day, compensations to cover interest expenses on pre-export credits of commercial banks were provided exclusively to exporters - manufacturers, now, according to the Decree, this preference will also involve exporters whose main business is an intermediate trade.

Second, heretofore, the compensations covering the interest expenses of exporters on loans from commercial banks involved loans with an interest rate not exceeding 1.5 times the refinancing rate, and only in terms exceeding the refinancing rate. Now, compensation to cover interest costs will be provided regardless of the interest rate and the size of the loan set by commercial banks.

Third, the amount of the guarantee provided for loans from commercial banks to replenish working capital (up to 50% of the loan amount) was increased from UZS 4 billion to UZS 8 billion.

Forth, to date, the exporter could not re-use the privilege to receive compensation and guarantee if there was a debt on a previously allocated loan for which compensation was provided. Currently, compensation and guarantees to cover interest expenses on additional loans will be provided with a favorable credit history despite the existing obligations on previous loans. While, the fee charged on the guarantees provided will be reduced from 1 to 0.5 percent.

It worth noting that the approval of the Decree also expands the functions and powers of the Export Promotion Agency, as a state institution supporting domestic exporters. From now, the Agency will be authorized to meet challenges on provision of funds to commercial banks to provide loans for pre-export financing and trade operations related to exports, as well as to raise funds from international financial institutions, foreign government financial organizations, foreign banks and financial companies for pre-export financing.

With this in mind, the Export Promotion Agency will create the Export Support Fund. Its funds will be used to introduce the mechanism to allocate financial resources to commercial banks for their services rendering to finance export trade operations. Uzbekistan Fund for Reconstruction and Development allocates USD 100 million to build the funding base up and start the Fund's operation.

The creation of the Fund is an important stage to build the integrated National System of Export Support up with operating elements also including the Export Promotion Agency and the Uzbekinvest National Export-Import Insurance Company.

Besides provision of compensations, subsidies and financing, functions of the system also include practical assistance to domestic exporters in a search for a foreign purchaser and support of negotiations until the stage of export contract conclusion, as well as systematic interaction with ministries and departments of the republic, local authorities to promote national export products abroad, exporters' access to information on export support measures, available benefits and preferences, tasks and functions of authorized government authorities.

A distinctive advantage of the National System of Export Support is the ability to provide comprehensive support to exporters on a 'one-contact' principle. This can significantly reduce time and material costs when resolving a wide range of issues they face in their activities.