NAPP Proposes Fines for Unlicensed Foreign Crypto Service Providers
Uzbekistan's NAPP has drafted regulations introducing fines for foreign crypto service providers operating illegally or violating crypto market regulations.
Tashkent, Uzbekistan (UzDaily.uz) – Uzbekistan's National Agency for Perspective Projects (NAPP) has put forth a proposal to levy financial penalties against foreign entities operating without proper authorization that provide crypto-asset services to individuals residing in Uzbekistan.
This regulatory framework was developed in line with presidential decrees issued on July 27, 2017, which outlined NAPP's operational structure, and on July 3, 2018, which focused on advancing the digital economy and the crypto-asset sector.
Under the proposed system, fines would be denominated in the national currency, with the proceeds split evenly between the state budget and NAPP's own accounts. It is stipulated that paying a fine would not absolve a foreign company of any other legal responsibilities under existing crypto-asset legislation.
The most substantial penalty suggested is 25,000 base calculation values (BCVs) for engaging in crypto-asset activities within Uzbekistan without the necessary license.
A fine of 15,000 BCVs is proposed for infractions related to the storage and processing of personal data, as well as for non-compliance with laws designed to combat money laundering, terrorist financing, and the funding of weapons of mass destruction proliferation.
Breaches of advertising regulations pertaining to crypto-assets would incur a fine of 10,000 BCVs.
According to the draft, the director or a deputy director of NAPP would be responsible for making decisions on imposing fines. These decisions would be based on recommendations from a specialized working commission, comprising an odd number of agency employees. When evaluating cases, the commission would take into account factors such as the frequency and duration of the violations, their impact on participants in the crypto-asset market, and any corrective actions already undertaken by the foreign company.
The draft also outlines limitation periods for imposing fines: no later than six months after the discovery of a violation, and no later than three years after the violation occurred.
Following a decision, NAPP would issue an official notification to the company within three working days, detailing the fine amount and payment instructions. Companies would have 15 days from receiving this notice to make the payment. Should payment not be received, the agency intends to pursue compulsory enforcement through legal channels.
The proposal also grants foreign companies the right to contest NAPP's decisions. Appeals can be submitted to the agency's Appeals Council within 15 days of receiving the notice, or directly to a court.
The Appeals Council would be mandated to review complaints within 15 days, and the deadline for fine payment would be suspended during the appeal process.
Furthermore, the draft permits NAPP to disseminate information through the media regarding identified violations and the fines imposed on foreign companies.