Uzbekistan

No updated information is available beyond the GI Index 2013 about officially endorsed procedures of disposal of military assets and the proceeds resulting thereof has been found to be available.
The two articles by independent experts refer to theft of military equipment as a widespread phenomenon.

In the absence of information about officially planned and endorsed disposal of assets, no information about instruments for public scrutiny and accountability can be found. There was also no information regarding assessments of assets lost to theft.

No official source discloses the annual state budget of Uzbekistan in its entirety. The Ministry of Finance provides summary information, which does not include the MoD budget. Estimates about the military budget of Uzbekistan can be obtained from third-party sources only. This data does not allow for estimates about spendings on secret items obtained under these circumstances.

Parliament adopts the annual budget law. Both chambers of the parliament have a Committee on Defence and Security, and on Budget and Economic Reforms. In the absence of detailed information on planned or past activities of the committees, along with the absence of detailed information on the state budget, it is difficult to establish how the process of defence budget scrutiny is regulated and whether there is detailed, extensive, and timely provision of relevant information.

I cannot prove a negative, but there is certainly no available evidence to support a higher score than 0.

The Accounting Chamber does not have its own website, making it again difficult to duly assess the quality of external audit. The legal framework for the Accounting Chamber does not provide for any restrictions or exemptions for auditing defence expenditures on defence. The Budget Code also does not exclude defence and security expenditure from being audited by the Accounting Chamber. This is to say that in theory the Accounting Chamber could do external auditing of military / defence expenditure. In practice, however, no evidence for this can found in the annual summary information about Parliament hearings of AC annual reports. No evidence to support a higher score.

The use of extra-budgetary funds (EBF) in the public finance architecture of Uzbekistan is permitted (Budget Code, Art. 44) There exist at least 9 EBFs - School Education Fund, Pension Fund, Employment Fund, Road Fund, Special Account for the State Property, Children’s Sports Fund, Land Reclamation Fund, Book Fund, Fund for Reconstruction and Development) (PEFA). For eight of these 9 EBF accurate revenue and expenditure accounts appear to exist, less clear is the status of the biggest fund, the Fund for Reconstruction and Development.

Based on this information, it might be theoretically possible that military / defence expenditures be financed ‘through the back door’ by using any of these EBF. No reliable information about the relation between military expenditure and EBF can, however, be concluded.

Score 0 has been selected given the overall secrecy in the sector and the strong likelihood that off-budget expenditures exist.

It is possible that off-budget military expenditure exists. The use of extra-budgetary funds (EBF) in the public finance architecture of Uzbekistan is permitted (Budget Code, Art. 44). For eight EBF accurate revenue and expenditure accounts appear to exist (namely, the School Education Fund, Pension Fund, Employment Fund, Road Fund, Special Account for the State Property, Children’s Sports Fund, Land Reclamation Fund, Book Fund - PEFA). Less clear is the status of the biggest fund, the Fund for Reconstruction and Development. Information about military expenditure in general (on-budget as well as off-budget) is not available in detail. Therefore, it is not possible to assess whether there are off-budget military expenditures. There is also no evidence to ascertain whether or not off-budget military expenditure involves illicit economic activity.

The Law “On protection of state secrets” develops in some detail the procedure of classifying information or secret objects - the decisions for this are made exclusively by the executive branch of government, parliamentary control is not provided for. The Law also says that the list of items that are classified is to be reviewed every five years, and that owners of information which has been classified can challenge such decision in court.

No information about individual cases was found. It appears unlikely that information about a particular case of classifying information will be made public (as this might already be seen as a violation of the classified character of this specific case). Regulations for classifying information are provided for by law and, hence, the score of 2 is appropriate.

Aggregated Information about the number of State-owned Enterprises (SOE) is publicly available, a comprehensive and detailed breakdown of beneficial ownership or any other form of preferential control by defence and security organisations is not available. Internet research returns some anecdotal evidence for SOE related to the MoD of Uzbekistan which are, e.g., involved in the implementation of a military-technical cooperation agreement between the Russian Federation and Uzbekistan which, for example, had been formally agreed between the two countries for the period 2010 - 2012.

In general terms, the government holds shares in about 795 holding companies (JSCs) accounting for over 3,000 commercial businesses or SOE. Oversight of SOEs is the responsibility of the State Property Committee of the MOF. All SOEs report twice a year to the State Property Committee in MOF, indicating revenues/expenditures, balance sheet and business plans. Reporting information is used in compiling a coefficient of bankruptcy (a requirement of the Ministry of Justice). Audited Financial Statements are issued annually. (PEFA, p 23)

Military-owned businesses can not be clearly and systematically identified in Uzbekistan. Reporting requirements for State-owned Enterprises in general are reasonably well developed. (PEFA) MoD-related SOE exist, but there is no comprehensive inventory. SOE reporting requirements might be assumed to also apply for MoD-related SOE.

Response to Peer Reviewer: Agree, there is no evidence that military-owned businesses are subject to any scrutiny or auditing processes.

There is sufficient information about illicit personal enrichment of top level individuals at the National Security Service (please see Q 16). No such information is available for individuals at other defence institutions (e.g., the MoD), although illicit personal enrichment can be assumed to take place in other government institutions including MoD also. To which extent such illicit personal enrichment is a result of kickbacks or embezzlement of public funds rather than of systematic &quoute;business activities&quoute; (by, e.g. re-selling equipment or supplies to third parties) is not possible to estimate. Illegal re-selling of military equipment has been reported by Volkov (Deutsche Welle, 2010)

The President and government of Uzbekistan in public speeches in recent years frequently and clearly stressed the need for anti-corruption efforts to accelerate in the country. This is also followed by action, i.e., arrest and prosecution of several high-ranking officials, trainings and awareness-raising activities for public servants (e.g. of the General Prosecutor’s Office). Despite this, the researcher did not find any single item of referencing the defence sector in relation to anti-corruption efforts. Whilst frequent reference is made to overall morale and values as an important element of developing the Uzbek Army, more explicit terminology like corruption, transparency, accountability is not used. In speeches and reports aimed at explaining the governments anti-corruption efforts, reference is made to anti-corruption as a condition for development of business, investment and, as a result, overall welfare, no explicit reference to extend anti-corruption efforts to also cover the defence sector could be found.

Prosecution of corrupt activities by officials, including higher-level ones, continues to be reported in the media. This includes high-level cases as the arrests of ,e.g., the Khokims (Head of regional administrations) of Samarkand region, and of the Mayor of Tashkent together with 16 other civil servants of the city administration, who were arrested and sentenced on charges of corruption in 2011. In total, a number of almost 1400 cases of corruption-related charges against public officials were recorded in the period between 2008 and 2010. With the exception of one minor case, where a Head of a regional conscription office was arrested for bribery, these cases, however, so far do not relate to personnel of defence and security institutions.

Response to Peer Reviewer: I can partly agree to the comments made by Peer Reviewer 1 ('partly' because a Mayor of the country's capital, or Heads of regional administrations are hardly 'low-level junior officials'). There is good reason to assume that the reported cases have also a political motivation. But it would not be accurate to state that there were &quoute;no formal measures in place for personnel found to have taken part in forms of bribery and corruption&quoute;. Hence, the score of 2 was selected.

Prosecutor offices and also other state agencies (e.g., customs office) have hot lines which can be used to report on corruption where anyone can report on the occurrence of bribery and the punishment of those found guilty is in accordance with the Criminal Code. There is, however, no information on how many cases were handled as a result of such reporting. There is also no evidence of the existence of legislation or mechanisms applicable to military and official personnel that aims at the facilitation of corruption reporting. The OECD recommended to the government of Uzbekistan to adopt regulations on the protection of whistleblowers. Unless there are specific laws stating that civilian whistleblowing services (such as the Prosecutor's hotline) do not apply to the military it should be assumed that these informal provisions also apply to the defence and security establishment.

In 2012 a ‘Public Council at the Ministry of Defence’ was established. This Public Council consists of representatives of public life and organsiations (CSO / GONGO, media outlets, artists, sportsmen, etc..). Its tasks and mandate comprise to inspect all aspects of military life (conscription, army,..), to support MoD / government in the lawmaking process, and to render general support to enhance ideology, morale and intellectual potential of the people serving in the armed forces. No information is available whether this Council can be used for whistleblowing purposes, and whether this is encouraged, and effective. The score has been selected on the basis of the lack of legal and institutionalised mechanisms for whistleblower protection.

Government organisations are progressing in adopting Codes of Ethics for their staff. For example, the OECD states in its 2012 monitoring report that 'Codes of conduct and internal anti-corruption measures exist in various institutions and for various professions. The code of ethics for prosecutors contains norms to prevent conflict of interest, including possibility to report about a conflict of interest to superior, there is a provision on liability, however, without specific sanctions. There is a code of conduct in the
Ministry of Justice, a code of honour in Ministry of Interior, rules of ethics of tax services. There are rules on ethics for judges elaborated in 1997, updated in 2002 and a new code is planned to be adopted in 2012. Recently, on 3 November 2011 a Code of Honour of Officials of Customs Services was adopted, which also contains some norms to prevent conflict of interest and corruption, but there is no prohibition to take gifts or a procedure how to act in case of conflict of interest or sanctions.

No information about any other systematic procedures or routines in excess of such Codes of Ethics / Codes of Conduct has been found.

Response to Peer Reviewer 1: I am of the opinion that the number of Ethic Codes adopted recently should be taken as a sign that &quoute;There may be special attention paid to personnel in sensitive positions...&quoute;, instead of &quoute;...no evidence that special attention is paid..&quoute;. The 'revolving door' is just one of several corruption risks related to personnel in sensitive positions. Whilst this may not be specifically covered, other corruption risks are (e.g., conflict of interest whilst in service). Hence, I see no good reason for a score of 0 being more appropriate than a score of 1.

No official data on staff numbers in the armed forces of Uzbekistan is available.
Unofficial sources estimate the number of military personnel to amount 68,000 in total, the bifurcation of which is of 45,000 ground forces, 17,000 Air Force, and 6,000 special (‘rapid response’) forces and National Guard. No further information about civilian staff in MoD is available. This is a higher figure thatn earlier sources indicate (e.g., sources quoted in the GI 2013 are in the range of 50,000 to 55,000 soldiers)

Response to Peer Reviewer 2: I do not agree, mainly for two reasons:
i) unofficial sources appear to give different numbers (68,000 - Sokolov, 2013 vs. 50..50,000 as in GI 2013)
ii) there is no information whatsoever about the number of civilian personnel. Score maintained.

While there is information available from official sources (legal acts) about allowances which are paid to military servicemen for certain social security needs (especially for living and housing needs), no information about pay rates is disclosed. As with the number of personnel, there are some unofficial data available, without these sources, however, disclosing their sources which makes verification or update of this data impossible. Equally, no information on pay rates for civilian personnel is available (which applies for civil servants pay rates in general)

There is no recent evidence that payments for civilian and military personnel in defence and security structures were delayed. Rather, joining the military is reported to be aimed for by many young men, especially from rural areas, because of the fact that salaries be paid on time. However there are considerable shortcomings in the clarity and transparency of the payment system.

Uzbekistan has not adopted an individual law regulating civil service or more broadly state or public service. The current legal framework does not provide for a legal obligation to conduct a competition for recruitment in public service. In accordance with Article 72 of the Labour Code of Uzbekistan, vacancies may be filled by means of competitive selection - this is, however, not a requirement. In the absence of a general civil service law, individual legislation specifies terms of service for individual government institutions. The Decree “About approving the regulation on military service by the citizens of the Republic of Uzbekistan” of 2006 regulates the appointment of military personnel. The procedure varies and depends on the level of appointment. Military personnel at middle and top management level is appointed by the President of Uzbekistan. CVs of appointed personnel are rarely disclosed. As with top-level appointments in other state institutions the need for balancing the interests of the different regional and ethnic clans will be of significant importance when taking such decisions.

The OECD in its 2012 Monitoring Report recommended to the Uzbek government to adopt legislation which will introduce a system of transparent, merit-based competitive recruitment, appointment and promotion in the civil services.

No information directly related to this question was found. Official sources do, however, repeatedly and extensively refer to comprehensive modernisation of the armed forces (see President Karimov's annual speeches at the anniversary day of the Uzbek Army). Experts quoted in independent sources do at least not deny that the Uzbek army and other security forces function effectively.

Response to Peer Reviewer 1: Agree, there is no publicly available indication of any formal processes, boards or oversight of the promotions process.

Formally, personnel for the Uzbek armed forces is recruited both, by conscription, alongside with voluntary (contractual) service.

Official statements (interview with the Minister of Defence 2012), and also independent sources suggest that more people chose to join the Army than vacancies need to be filled. This leads to a situation where, indeed, bribes are reportedly being paid to secure a place in the Army, rather than to avoid conscription. (material benefits for serving in the Army are considered attractive, especially if compared to living conditions in rural areas). Apart from the anecdotal evidence of individual officers of conscription offices being sentenced for bribery, no information about a systematic anti-corruption policy has been found.

There is no evidence of specific mechanisms to prevent bribery in conscription - such cases are treated according to the provisions of the Criminal Code (Art 210 and following) [source added]. Enforcement appears to be limited to anecdotal evidence (no more detailed information to state otherwise available)

No specific information whether bribery is used to secure preferred postings was found nor of policies against this. It is assumed that the situation with regard to corruption for securing preferred postings will be similar to the situation with regard to corruption used to secure a place in the Army.

No reference to the phenomenon of 'ghost soldiers' has been found. At the same time, no official statistics about the number of staff in military and security services is available (at least not in the public domain).
The general lack of transparency and accountability in the defence sector of Uzbekistan makes it, however, likely that the phenomenon may occur.

There is no information about the structure of the defence / security organizations available.
These chains of command as well as chains of payment are not subject to public disclosure, and it is also believed that there are ample opportunities for senior managers to ''adjust&quoute; individual payments if deemed necessary. Score 1 was awarded in line with the lack of clarity but likelihood that chains of command and chains of payment may not be separate.

Based on the information available, there is no such Code of Conduct that is accepted on a government level and applicable to all military and civilian personnel. Uzbekistan has, however, made some progress in adopting Codes of Conduct for several government institutions individually. According to the cited OECD report (p.40), 'There is a code of conduct in the Ministry of Justice, a code of honour in Ministry of Interior, rules of ethics of tax services. There are rules on ethics for judges elaborated in 1997, updated in 2002 and a Code of Ethics for judges has been adopted in 2012. Many codes of conduct contain rules restricting accepting of gifts and other benefits and also include sanctions.

In 2011, a Code of Honour of Officials of Customs Services was adopted, which also contain some norms to prevent conflict of interest and corruption, but there is no prohibition to take gifts or a procedure how to act in case of conflict of interest or sanctions'. Decision of the Cabinet of Ministers No. 103 adopted on 6 March 2003 lists public officials that are forbidden to undertake business activities (including officials in state bodies and law enforcement bodies and senior employees in public bodies, if their work is related to business activities or their control). Also, a Code of Ethics for judges has been adopted.

Thus in the final analysis a Code of Conduct is not publicly available, which makes a final assessment of their content not possible; and the ones in force do not apply specifically to the Military.

Response to Peer Reviewer 1: Agreed but those standards relating to bribery are specified in legislation, albeit not in a separate Code of Conduct. Scoring maintained.

As mentioned in the previous question, there is no Code of Conduct although there are some standards against bribery in legislation. Apart from the anecdotal evidence about officials found guilty of corruption, no comprehensive information about prosecuted cases of corruption in defence is publicly available.

The Prosecution Office reported on investigated cases of corruption to the OECD (2012 monitoring report): &quoute;Corruption-related offences prosecuted are: Article 167 on Theft by appropriation or misuse; Article 205 on Misuse of authority or office; Article 206 on Excess of power or functions; Article 207 on Negligence in office; Article 208 on Failure to act in office; Article 209 on Forgery in office; Article 210 on Receiving a bribe; Article 211 on Giving a bribe; and Article 212 on Intermediation in bribery. The number of corruption-related cases sent to courts in Uzbekistan in 2009 was 4338, in 2010 - 4845 and 2247 in 6 months of 2011. It appears that most of the cases are in regard to 'Theft by appropriation or misuse' (Article 167) and not bribery.&quoute;

No information is available about anti-corruption training delivered to civilian or military staff of the MoD, or the Security Service.

For other civil servants, anti-corruption training for public officials is the most actively used anti-corruption measure. Such training has been delivered to staff of the Prosecutor’s Office, including participants from the Military Prosecutor, the Judiciary, the State Tax Committee, Ministry of Interior, Ministry of Health and Ministry of Education, The State Property Committee and likely other government institutions.

Anti-corruption trainings were often delivered with the support and involvement of donor-financed projects. Such donor-supported trainings are not of regular nature. For training to become a regular exercise, it would need to become included in the curricula of national training academies for the respective institutions. This information is, again, difficult to obtain from public sources. Some information is available about anti-corruption issues being included in regular training conducted in the State Custom Service. 515 customs officials followed their regular education, advanced and in service training in the 2010 - 2011 academic year in the Higher Military Customs Institute.

Except for anecdotal evidence of sanctions enforced, no policy specific to the defence sector for addressing corruption cases in the defence sector, and for making such cases public, appears to be in place.

The Prosecution Office reported on investigated cases of corruption to the OECD, without specifying by sector / government agency affected (2012 monitoring report): &quoute;Corruption-related offences prosecuted are: Article 167 on Theft by appropriation or misuse; Article 205 on Misuse of authority or office; Article 206 on Excess of power or functions; Article 207 on Negligence in office; Article 208 on Failure to act in office; Article 209 on Forgery in office; Article 210 on Receiving a bribe; Article 211 on Giving a bribe; and Article 212 on Intermediation in bribery. The number of corruption-related cases sent to courts in Uzbekistan in 2009 was 4338, in 2010 - 4845 and 2247 in 6 months of 2011. It appears that most of the cases are in regard to 'Theft by appropriation or misuse' (Article 167) and not bribery.&quoute;

There is no publicly available information about attempted prosecutions that have been suppressed or inappropriately sanctioned. However, as mentioned in Question 35, sanctions appear to be weak and inconsistently enforced.

Articles 210 (bribe-taking) and 211 (bribe-giving) of the Criminal Code render bribery &quoute;for performance or nonperformance of certain action, which the official must or could have officially performed, in the interests of the person giving a bribe&quoute; a criminal act.

An Uzbek blogger argues that many facilitation payments result from lengthy bureaucratic procedures and a widespread mentality to offer facilitation payments to speed up procedures during, or after the process has been completed.

No information specific to detection and punishment of corruption cases in the form of facilitation payments, as opposed to other forms of corruption, have been reported in the OECD reports (2012 monitoring report): &quoute;Corruption-related offences prosecuted are: Article 167 on Theft by appropriation or misuse; Article 205 on Misuse of authority or office; Article 206 on Excess of power or functions; Article 207 on Negligence in office; Article 208 on Failure to act in office; Article 209 on Forgery in office; Article 210 on Receiving a bribe; Article 211 on Giving a bribe; and Article 212 on Intermediation in bribery. The number of corruption-related cases sent to courts in Uzbekistan in 2009 was 4338, in 2010 - 4845 and 2247 in 6 months of 2011. It appears that most of the cases are in regard to 'Theft by appropriation or misuse' (Article 167) and not bribery.&quoute;

A significant loophole for facilitation payments related to defence-related procurement might be in the fact that limited competitive bidding is allowed for military and defence needs (PEFA , p 36)

Response to Peer Reviewer 1: Comments reworked and scoring adjusted down to 2 in line with comments.

The military doctrine of Uzbekistan does not provide for the Uzbek army to become involved in international operations, including peace-keeping missions. Practice shows that such operations have, indeed, not taken place and are likely not to be expected in the foreseeable future. &quoute;Operations&quoute; would, therefore remain confined to defending the country in case of foreign attacks. Anti-corruption is not explicitly referred to in legislation and public debate surrounding the armed forces of Uzbekistan.

There is no information available specifically related to training for commanders of the armed forces.

No information has been found about corruption risk monitoring during deployment in the Uzbek army. Given the lack of recognition of corruption as a strategic issue in operations, it is unlikely that such professionals are deployed.

No evidence suggesting that there are guidelines, and staff training, on addressing corruption risks in contracting whilst on deployed operations or peacekeeping missions could be found.

There is no information available about private military contractors being used in Uzbekistan. In light of the overall situation in the country with a great part of political, economic and public activities being controlled by the state, any use of private military contractors appears highly unlikely. This impression is supported by a ban on private enterprises providing guard and security services which came into force on 01 February 2014. Where private firms have business relations with armed forces, these are rather to supply non-military goods (food products, construction materials, consumer goods) to the US Army operations in Afghanistan (likely also to other country's armed forces)

Response to Peer Reviewer 2: A repeated internet-research has returned no hints as to the existence of PMC in Uzbekistan. The military doctrine of Uzbekistan does not provide for the use of PMC; these are, however, also not explicitly ruled out. GI 2013 has at that time also stated that PMCs are not employed in Uzbekistan. This ban is only in relation to employment by businesses and individuals, however.

In general terms, defence and security procurement is subject to the legal framework regulating all public procurement in Uzbekistan. This legal framework for public procurement is currently being thoroughly reformed. Recommendations of the OECD Anti-Corruption network are being taken into account, and a draft legislation is being discussed with the participation of UNDP and World bank experts. The draft laws are, however, not publicly available (and were not shared upon request).

Current legislation provides for the open tender as the default method for an estimated cost more than US$100,000. According to the Cabinet of Minister’s Resolution No 456, Article 17, “closed”, limited competitive bidding is allowed with prior approval from the Cabinet of Ministers. The PEFA report states that &quoute;the assessment team understands that limited tenders are allowed for military and defence needs only.&quoute; The PEFA score for “Competition, value for money and controls in procurement” is D (from A - best - to D - worst -)

The procurement cycle process is not disclosed. Government regulations on procurement are valid for every government organisation and state owned legal entity, including in the defence and military sector. Exemptions are, however, possible &quoute;if other (Cabinet of Minister's) decisions apply.&quoute; De facto this means that procurement data for the defence sector is closed. In general, all the data in this area are restricted, and data to analyze the proportion of competitive and direct contracts is not available.&quoute;

There are general oversight mechanisms in place. According to the OECD report there is a government commission on public procurement which controls the use of public resources in public procurement. This report further notes that, the accounting chamber is tasked with auditing the use of competitive procedures. The Ministry of Finance's Control-Revision Division has also established a unit for controlling procurement procedures.

However, it is difficult to ascertain based on publicly available information whether these mechanisms apply to military and defence procurement. Further, searches within the public domain found no reports or findings published by the unit for controlling procurement procedures which is indicative of a lack of transparency of the mechanisms.

There is no information about the defence budget and / or acquisition planning, neither is there information available about actual purchases, nor does the SIPRI Arms Database provide any details on arms purchases. Some information about defence purchases can be guessed from sources at the supplier's side, especially in the context of the IASF-forces' withdrawal from Afghanistan. In this context, the U.S., U.K., Germany have announced to hand over some - mostly non-lethal - equipment to the Uzbek army. Next to information about supplies from western countries there is information about agreements which Uzbekistan has reached with Russia about military supplies. All this information is more concerned about the strategic impact of equipping the Uzbek army with NATO-compatible equipment vs. Russian equipment, and does not go into detail about the type, or the value of the equipment purchased.

Art. 30 of the Resolution of the Cabinet of Ministers On Measures to Improve Normative-Legal Basis for the Organisation of Public Procurement of April 2011 specifies general requirements for companies that wish to participate in public procurement tenders. These comprise that firms must not be bankrupt, in liquidation or reorganisation; must have been established earlier than 6 months prior to the tender; must not be subject to ongoing legal disputes with the contracting authority. No requirements as to the implementation of compliance programmes are mentioned, nor are any other anti-corruption requirements.

A 'national defence and security strategy' in a format which would allow for detailed procurement planning or otherwise identification of priority sectors for adapting the defence and security to the challenges faced, is not publicly available. In public statements there is a frequent reference to the need to 'modernize' the armed forces, without elaborating on details. The current 'window of opportunity' when large amounts of equipment are becoming available due to the withdrawal of the ISAF forces from Afghanistan suggests that there is likely a substantial degree of 'opportunistic procurement'.

At the time of writing, the MoD had published a number of tenders for civilian equipment (mainly construction material) on the government tender page. For detailed information about quantities of purchased goods the individual tender documents need to be individually obtained from the contracting authority (against a fee). Based on the design of the (public) tender details it can be assumed that the contracting authority is competent enough to draft technically sound tender documentation which contains clear requirements. This judgement can be made in relation to the civilian goods to be procured only.

For procurement of military equipment, a different situation prevails. As explained earlier, Uzbekistan currently faces a fortunate situation where military equipment can be obtained on favourable conditions as a result of the withdrawal of the ISAF forces. This will result in a significant opportunity for opportunistic procurement.

No information about the share of single-sourced vs. open-tender procurement in total defence procurement is available.

Whilst an open tender is the legal default method for an estimated cost more than US$100,000, according to the Cabinet of Minister’s Resolution No 456, Article 17, “closed”, limited competitive bidding is allowed with prior approval from the Cabinet of Ministers. The [PEFA] team understands that limited tenders are allowed for military and defence needs only. (PEFA)

Thus, the law provides for competition ‘in principle’ but there are many exemptions which are likely to be a large majority.

Procurement of goods and services up to a contract value of 100,000 USD equivalent since 2011 is executed by applying e-procurement technology and methodology. For procurements exceeding 100,000 the composition of the tender boards is regulated by the corresponding legal acts. In such cases, tender commissions are required to include representatives of the Ministry of Finance, Ministry of Foreign Economic Relations, Investments and Trade, and other government agencies.

No information about default auditing of public procurement was found. Bidders can complain to the administrative ministries, State Committee of Architecture and Construction, and Economic Courts. However, the administrative arrangements do not substitute for independent complaint review mechanisms available in many countries. There is a call center with a telephone number in the Commodities Exchange for anyone to complain regarding any procurement. This call center is not exclusive to the bidders. As there is no data available on the number of complaints received and how these complaints were resolved, credibility of the complaint handling by these institutions could not be verified. (PEFA)

The Law 'On Competition' defines actions that would limit competition, including collusion. No further information about enforcement, or specific examples of cases of collusion have been found. There is no available information on sanctions being applied. Given the weak regulation and oversight in the sector, the number of sanctions being applied is probably low.

According to the OECD's 2012 report, &quoute;223 seminars have been conducted on public procurement in 2011 and included issues on corruption prevention&quoute;. Due to the scarcity of information specific to the MoD, it is not possible to assess to which extent MoD procurement staff were involved in these trainings. It is also difficult to ascertain whether the MoD procurement staff is organized into a professional staff departments. However, procurement systems in all government departments are being modernized and there is no reason to assume that defence sector organisations are exempt from this modernization. It is assumed that this modernization will include a certain basic training beyond just familiarization of the new technology.

It must also be noted that whilst a reform of the overall procurement system and legal framework, along with training for public procurement officials, has received quite some attention in the recent past, the security and defence sector is largely exempt from the provisions regulating public procurement.

Response to Peer Reviewer: agreed with comments, scoring adjusted to 1 from 2.

The current arrangement for administrative review of bidders’ complaints is detailed in Resolution # 302. Bidders can complain to the administrative ministries, State Committee of Architecture and Construction, and Economic Courts. However, the administrative arrangements do not substitute for independent complaint review mechanisms available in many countries. There is a call center with a telephone number in the Commodities Exchange for anyone to complain regarding any procurement. This call center is not exclusive to the bidders. As there is no data available on the number of complaints received and how these complaints were resolved, credibility of the complaint handling by these institutions could not be verified. Data on resolution of procurement complaints is not available in the public domain. (PEFA).

Formal mechanisms are in place - but no information about the use and acceptance of these mechanisms, including of possible harmful implications can be made which makes scoring according to the suggested indicators difficult.

As discussed in question 36, Prosecutor offices and also other state agencies (e.g., customs office) have hot lines which can be used to report on corruption where anyone can report on the occurrence of bribery and the punishment of those found guilty is in accordance with the Criminal Code. There is, however, no information on how many cases were handled as a result of such reporting. There is also no evidence of the existence of legislation or mechanisms applicable to military and official personnel that aims at the facilitation of corruption reporting. The OECD recommended to the government of Uzbekistan to adopt regulations on the protection of whistleblowers. Unless there are specific laws stating that civilian whistleblowing services (such as the Prosecutor's hotline) do not apply to the military it should be assumed that these provisions also apply to the defence and security establishment. In 2012 a ‘Public Council at the Ministry of Defence’ was established. This Public Council consists of representatives of public life and organisations (CSO / GONGO, media outlets, artists, sportsmen, etc..). Its tasks and mandate comprise to inspect all aspects of military life (conscription, army,..), to support MoD / government in the lawmaking process, and to render general support to enhance ideology, morale and intellectual potential of the people serving in the armed forces. No information is available whether this Council can be used for whistleblowing purposes, and whether this is encouraged, and effective.

Uzbekistan has a register/black list of non-compliant suppliers, which was shown to the OECD monitoring team according to this report. Suppliers that have not complied with the contractual obligations are entered in this black list, as well as those refusing to conclude the contract after they have been announced as winners in the tenders. Cabinet of Ministers Regulation No. 456, Article 30, which regulate these restrictions, does not contain restriction to suppliers with a corruptive record. Enterprises in this register are not allowed to participate in tenders for 6 months. (OECD 2012) This list is publicly available on the government tender portal (http://www.uzex.uz/ru/government/unfairsuppliers)

In addition, the Criminal Code of Uzbekistan contains articles providing for sanctions for corruption-related offences and economic crime, including monetary fines and imprisonment.

No comprehensive data beyond anecdotal evidence reported in the media is available (reported cases do not relate to corruption in procurement) and accordingly, a mid-level score has been awarded.

There is no available information as to whether or not the government imposes due diligence or auditing requirements on offset contracts. Additional research in English- and Russian-language websites (lenta.ru, and through the search engine yandex.ru) does not reveal any information about offset contracts in UZB. Given the recent increase in military spending, a reasoned assumption that offset contracts do take place can be made.

There is no evidence to suggest offset contracts exist in Uzbekistan, but none that suggests they do not. Given the recent increase in military spending, a reasoned assumption that offset contracts do take place can be made.

There is no evidence as to whether offset contracts are subject to the same level of competition regulation as the main contract. Given the recent increase in military spending, a reasoned assumption that offset contracts do take place can be made. However, there is no information regarding the level of competition.

No information related to agents and intermediaries in procurement could be found. Internet research (&quoute;yellow pages&quoute; websites) showed that companies are offering services to facilitate customs procedures. The activities of customs agents does not appear to be clearly regulated by a legal framework.

A score of 0 seems appropriate as it can be assumed that agents and intermediaries are being used, but no information about any regulation of their activities was found.

No information about public procurement beyond the tender announcement stage is published. A report by SIPRI states that in 2012, Uzbekistan supplied 2 AEW&C aircraft to India as, &quoute;Part of $800 m deal; ordered via Israel and Russia; fitted with Israeli Phalcon AEW system in Israel; selected but contract not yet signed.&quoute; However no further information on arms sales/purchases or offsets is available.

Analysis of related internet sources did not reveal any information about regulations, or requirements towards the status of sub-contractors.

There is likely a substantial degree of 'opportunistic procurement' driven in particular by the current 'window of opportunity' when large amounts of equipment are becoming available due to the withdrawal of the ISAF forces from Afghanistan. Next to information about supplies from western countries there is information about agreements about military supplies which Uzbekistan has reached with Russia, India and Israel. All this information suggests the Uzbek government is opportunistic and also concerned about the strategic impact of equipping the Uzbek army with NATO-compatible equipment vs. Russian equipment rather than the bulk of evidence suggesting that purchases are driven by the political influence of seller nations.