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Newsletter Central Asia and the Caucasus April 2022

Armenia, Russia to expand and develop bilateral trade and Investment. Both countries are members of the Eurasian Economic Union (EAEU), including Belarus, Kazakhstan, and Kyrgyzstan. It was recognized that further diversification of trade categories of trade, progressive growth of volumes, cooperation in joint production, and the active implementation of the mechanisms of the EAEU was stressed.
Azerbaijan has been ranked the third-largest natural gas supplier to the Italian markets thanks to the Trans Adriatic Pipeline (TAP). TAP consortium revealed the pipeline was about to reach a maximum of its transportation volume of 33 million cubic meters per day or about 12 billion cubic meters (bcm) annually, of which 10.5 bcm will be destined for Italy.

Azerbaijan reached a new milestone in natural gas production at Shah Deniz, the country’s most extensive offshore field in the Caspian Sea. A total of 163.97 billion cubic meters of gas and 36.94 million tons of condensate have been extracted at the Shah Deniz field since it began operations in 2006. A total of 32 wells have been drilled in the area, of which 19 are currently operated. Since its launch in 2006, Shah Deniz has supplied over 96 bcm of gas through the South Caucasus Pipeline to foreign markets.
Despite its small size and population, Georgia has become a popular spot for cryptocurrency mining thanks to its cheap electricity, the absence of legislative restrictions and attractive tax incentives. This combination of factors has engaged not only GeorGeorgian citizens who want to try their hand at cryptocurrency mining. Individuals in Georgia are exempt from income tax on any profits received from the sale of cryptocurrencies. In contrast, the sale of cryptocurrencies or their exchange for lari (the national currency) or another currency is not subject to value-added tax (VAT), 18%.
The Kazakh Industry and Infrastructure Development Ministry built a pool of 700 investment projects in the manufacturing industry to import substitution and export end products. The Minister communicated that 165 investment projects would be considered this year; the rest, 498, will be launched between 2023 and 2026.

Russia's Alfa-Bank and Kazakh bank CenterCredit have reached an agreement on the sale of Alfa-Bank (Kazakhstan). The Russian bank said in a statement that CenterCredit would buy 100% of shares in the subsidiary.

Masdar, one of the world’s leading renewable energy companies, announced today that it had signed a Memorandum of Understanding (MoU) with the Kyrgyz Republic’s Ministry of Energy to explore the development of renewable energy opportunities in the Central Asian nation and support Kyrgyzstan’s clean-energy objectives. Kyrgyzstan targets reducing greenhouse gas emissions by as much as 44 percent by 2030 and achieving carbon neutrality by 2050.

Kyrgyzstan has become the latest member of the World Bank’s investor-state dispute settlement body, citing a desire to make the country more appealing to international investment. Kyrgyzstan has ratified its membership of the International Centre for Settlement of Investment Disputes (ICSID), the arbitration center of the World Bank, 27 years after signing the ICSID Convention.

Tajikistan’s economic growth is projected to slow in 2022 because of the severe spillover from the expected economic downturn in the Russian Federation. Still, it is expected to recover slightly in 2023, says a new Asian Development Bank (ADB) report. After a robust economic rebound to 9.2% in 2021 from 4.5% in 2020, Tajikistan’s gross domestic product (GDP) growth is forecast to slow to 2% this year, according to the Asian Development Outlook (ADO) 2022, ADB’s annual flagship economic publication. Growth is expected to rise to 3% in 2023, driven by gains in industry and emergency assistance from development partners to support consumption.

A new plant for the production of carbon black was built in the Mary Region of Turkmenistan. The capacity of the new output allows producing 3,000 tons of carbon black per year. The complex includes an administrative building, a production workshop, and a laboratory.

Privatization and de-monopolization in Uzbekistan. The President of the Republic of Uzbekistan, Shavkat Mirziyoyev, signed a Decree in which goals are set extensively with specific timeframes for taking measures in a number of key areas of the country's economic development to create favourable conditions for the development of the private sector, as well as measures to accelerate the process of privatization, the fight against corruption and de-monopolization. The Decree involves specific sectors or matters such as cancellation of benefits and exclusive rights, auto industry reform, aviation and railways, new opportunities for public-private partnership and non-residents/residents, and real estate. By clicking here, you will be redirected to the legal alert prepared by our Central Asia Partner, Centil Law Firm.

Customs clearance of cars with large engines and hybrids will become cheaper. By a presidential decree, importing foreign cars with an engine capacity of more than 3 liters and hybrid vehicles to Uzbekistan will become more affordable.