Tashkent, Uzbekistan (UzDaily.com) — During the fifth plenary session of the Senate of the Oliy Majlis of the Republic of Uzbekistan, senators reviewed and approved the Law "On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan in Connection with the Further Improvement of the Creditor Claims Satisfaction System Secured by Collateral." The new law is designed to strengthen creditors’ rights and streamline the process of debt collection through collateralized assets.

The law establishes the priority right of creditors to satisfy their claims using pledged assets. Even if an asset is confiscated from the pledgor due to a criminal offense or other legal violations, the pledgee retains the right to recover the outstanding debt from the collateral.

Collateralized assets will be sold at market value. Furthermore, if the outstanding debt is less than 15% of the collateral’s value, the asset will not be subject to seizure. This measure aims to reduce unnecessary costs and simplify the debt settlement process.

The initial sale price of collateralized property at auction will be determined by a court decision, ensuring transparency and fairness in the sale process.

State judicial enforcement officers are required to notify creditors, including banks and other lending institutions, of their right to retain the collateral for a price 25% lower than the initial auction price if the property remains unsold after multiple auction attempts or through trading organizations.

The adoption of this law is intended to protect creditors’ interests, enhance the extrajudicial sale mechanism for collateralized assets, and simplify debt recovery procedures. It is also expected to reduce the proportion of non-performing assets in the loan portfolios of banks and other financial institutions, contributing to the stability of the country’s financial sector.

Following discussions, the Senate unanimously approved the law. Its implementation will help boost confidence in the credit system and create more favorable conditions for Uzbekistan’s economic development.