Deep dive: subsoil and mining licensing in Uzbekistan under the Law on Competition (LRU-850, 2023)

Deep in the administrative sequence of obtaining a subsoil use right in Uzbekistan sits an obligation that foreign mining investors frequently overlook until it is almost too late to satisfy it without delaying their licence: competition clearance under Uzbekistan's Law on Competition (LRU-850, adopted in 2023). Advising inbound investors on Uzbek regulatory matters over recent years has made one pattern familiar — the assumption that competition law is something to address after mining operations are established, not before the subsoil use agreement is signed. Under LRU-850, that sequencing can be costly. This analysis sets out the regulatory framework that governs subsoil and mining licensing in Uzbekistan, examines the specific obligations that LRU-850 imposes on investors acquiring or consolidating subsoil use rights, identifies the procedural steps a foreign company must complete, and draws out the practical considerations most relevant to in-house counsel managing a first or second entry into the Uzbek market.

The foundational instrument governing subsoil use in Uzbekistan is the Law on Subsoil (adopted in 2002 and substantially amended since), which establishes the classification of mineral deposits, the types of subsoil use rights, and the competent state authority for their grant. The principal licensing authority is the State Committee on Geology and Mineral Resources — commonly referred to by its Russian-language abbreviation, Goskomgeologiya — which retains authority to grant, suspend, and revoke licences for geological study, exploration, and extraction of solid minerals, hydrocarbons, and associated resources.

Subsoil use rights in Uzbekistan take two principal forms: a licence for geological exploration and a licence for extraction. In most commercially significant mining projects, a foreign investor must first secure an exploration licence, demonstrate a viable deposit through a state-approved geological reserve assessment, and then convert or separately apply for an extraction licence. The two-stage structure is not merely procedural formality — the exploration licence creates vested rights that condition the later extraction grant, and Uzbek law provides specific protections for the holder of an exploration licence against third-party extraction applications over the same subsoil plot during the licence term.

Foreign legal entities and foreign nationals may hold subsoil use licences in Uzbekistan, subject to the general foreign investment framework and any sector-specific restrictions applicable to strategically important deposits. Strategically classified deposits — typically large hydrocarbon fields and significant gold, uranium, and copper reserves — are subject to additional approval requirements, which may include Presidential decree or Cabinet of Ministers resolution. Investors in this category should expect a parallel approval pathway that runs alongside, but is not part of, the standard Goskomgeologiya licensing procedure.

The Law on Competition (LRU-850, 2023) is Uzbekistan's primary antitrust statute, establishing the framework for the prohibition of anti-competitive agreements, the control of market dominance, and the regulation of economic concentration. Its relevance to subsoil and mining licensing arises from two distinct mechanisms.

First, LRU-850 applies to transactions involving the acquisition of shares, assets, or control over entities that hold subsoil use rights, where the transaction meets the statutory thresholds for economic concentration review. The Antimonopoly Committee of Uzbekistan is competent to review such transactions and may impose conditions, require structural remedies, or prohibit a transaction that would result in the creation or strengthening of a dominant position in a relevant market. The definition of the relevant market for this purpose extends beyond product or service markets to encompass markets defined by the geographic scope of the subsoil use right, particularly where a single investor seeks to consolidate rights over multiple adjacent or functionally connected deposits.

Second, LRU-850 imposes obligations on entities that hold a dominant position in a relevant market — a concept that includes holders of subsoil use rights where those rights confer a material structural advantage in the extraction or supply of a given mineral. The statute contains a rebuttable presumption of dominance where a single entity controls a defined share of the relevant market, and the Antimonopoly Committee has discretion to make individual dominance determinations in resource markets on the basis of structural analysis rather than market-share thresholds alone. For a foreign investor acquiring rights over a significant Uzbek mineral deposit, dominance status may follow from the licence grant itself, not from subsequent commercial conduct.

"The intersection of subsoil licensing and competition control under LRU-850 is the point at which foreign investors most consistently underestimate their compliance exposure in Uzbekistan." — Nodira Yusupova, Contributing Regional Analyst — Uzbekistan · Foreign Investment and Market Entry

The practical consequence is that a foreign investor may need to obtain Antimonopoly Committee clearance both before and after the subsoil licence is granted — before, if the acquisition of the licensed entity triggers the economic concentration thresholds; after, if the licence grant itself triggers a dominance notification obligation. Both requirements arise under LRU-850 and operate independently of the Goskomgeologiya licensing process.

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LRU-850 establishes quantitative thresholds for mandatory pre-transaction notification to the Antimonopoly Committee in transactions involving economic concentration. These thresholds take into account the aggregate asset value of the parties and their Uzbekistan-connected turnover. Transactions falling below the thresholds are not exempt from competition scrutiny if the Antimonopoly Committee has reason to believe the transaction may substantially restrict competition — a ground that is invoked with particular frequency in resource sector transactions where deposit size, rather than turnover history, is the economically relevant measure.

The threshold calculation requires careful attention to group-level consolidation. A foreign investor acquiring a newly licensed Uzbek mining entity through a holding structure must aggregate the relevant financial indicators at group level, including any affiliates operating in Uzbekistan or holding Uzbek-connected assets. Investors who have previously acquired other CIS-region assets — including through Russian or Kazakh holding companies — should expect that those assets will be included in the threshold calculation to the extent they are commercially active in or connected to Uzbekistan markets. Cross-border structuring that fragments the transaction across multiple jurisdictions does not eliminate the notification obligation if the Uzbek-connected thresholds are met at group level.

For investors entering Uzbekistan from or through Russia, it is worth noting that Uzbekistan is a member of the CIS but not of the Eurasian Economic Union (EAEU). The EAEU's supranational competition framework, administered by the Eurasian Economic Commission, does not extend to Uzbekistan. LRU-850 is therefore the sole applicable competition instrument, and Uzbek-specific filing is required even for transactions that have already cleared EAEU competition review in connection with Russian or Kazakh group entities.

A foreign company seeking a subsoil use right in Uzbekistan that also gives rise to competition obligations under LRU-850 must navigate a sequenced, multi-authority process. The following describes the standard pathway for a solid-minerals extraction project; hydrocarbon projects follow broadly the same logic with additional sector-specific requirements.

The first stage is preliminary engagement with Goskomgeologiya, which involves the identification and reservation of the subsoil plot through a tender procedure or direct negotiation for strategically classified deposits. Tender procedures are governed by Cabinet of Ministers regulations and typically require the submission of a technical and financial qualification package. The tender evaluation criteria include the investor's technical capacity, financial backing, proposed work programme, and — for foreign investors — confirmation of legal capacity to hold rights under Uzbek law.

The second stage, running in parallel where the transaction structure requires it, is economic concentration analysis under LRU-850. The investor must assess, prior to executing any transaction documents, whether the proposed acquisition meets the notification thresholds and, if so, file a pre-transaction notification with the Antimonopoly Committee. Filing requires a description of the parties, the transaction structure, the relevant market definition, and the anticipated competitive effects. The Antimonopoly Committee operates within a defined review period, though this period may be extended for complex transactions or where the Committee requests additional information. Closing, or the execution of the subsoil use agreement with Goskomgeologiya, should not occur until clearance is obtained or the review period expires without objection.

The third stage is the formal licence application to Goskomgeologiya. This requires submission of the investor's legal documents (charter, registration certificate, powers of attorney), proof of financial capacity, a work programme, and — where applicable — evidence of competition clearance or confirmation that no notification obligation arises. Some licence categories also require environmental assessment approvals to be in place before the licence is granted, which introduces a further parallel authority into the sequence.

Following licence grant, the investor must register the subsoil use agreement in the relevant cadastral register and, where the licence creates or confirms a dominant position, file the corresponding notification with the Antimonopoly Committee under the post-licensing dominance notification rules.

Failure to complete the competition notification steps before executing the subsoil use agreement carries material risk. Under LRU-850, a transaction completed in breach of the pre-notification obligation may be declared invalid, and the Antimonopoly Committee has authority to refer the matter to the licensing authority for assessment of whether the licence conditions have been breached. A subsoil use agreement declared invalid for competition law non-compliance does not, of itself, extinguish the underlying licence, but it disrupts the legal basis on which the investor holds and exercises the right — creating a period of operational and legal uncertainty that is difficult and expensive to resolve.

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For investors approaching Uzbekistan from a Russian or wider CIS base — whether through existing corporate groups, joint venture structures, or as foreign creditors taking security over Uzbek mineral assets — several cross-border considerations merit particular attention.

Holding structure and beneficial ownership. Uzbek law requires disclosure of the ultimate beneficial owner of the subsoil licence applicant. Structures that interpose multiple CIS-jurisdiction holding layers between the ultimate investor and the Uzbek entity are permissible but require full transparency at the licensing stage. Goskomgeologiya has discretion to request additional information about the group structure and the source of investment funds. Investors using Russian or Kazakh holding entities should ensure that the group structure documentation is prepared in a form compatible with Uzbek disclosure requirements — which differ in certain respects from the Russian and Kazakh counterparts.

Competition clearance coordination. Where the acquiring group holds assets or market positions in Russia or Kazakhstan that are relevant to the Uzbek mineral market, the LRU-850 analysis must assess whether those positions contribute to dominance in the Uzbek market as defined by the Antimonopoly Committee. This is particularly relevant in markets where Uzbekistan imports processing capacity or distribution infrastructure from or through Russia. The Antimonopoly Committee has, in practice, considered the competitive significance of CIS-region affiliates in its market analyses for resource sector transactions, and investors should not assume that Uzbek market share alone defines the scope of the competition analysis.

Dispute resolution and enforcement. Subsoil use agreements in Uzbekistan typically provide for dispute resolution through Uzbek state courts or, for qualifying international investors, through international arbitration. Foreign investors with existing relationships with Russian arbitration institutions should note that subsoil use agreement disputes may be subject to specific jurisdictional requirements under Uzbek law that limit the scope of the arbitration clause or require Uzbek court involvement for certain categories of licence dispute. Cross-border enforcement of foreign judgments and arbitral awards in Uzbekistan remains a procedurally distinct matter governed by Uzbek civil procedure rules and international treaty obligations, including under the CIS Minsk Convention on Legal Assistance.

Security interests over subsoil use rights. For foreign creditors or investors structuring debt financing against a subsoil use right as collateral, Uzbek law places restrictions on the pledging of subsoil licences. The licence itself cannot ordinarily be transferred or pledged without licensing authority consent. Security structures in mining finance transactions in Uzbekistan therefore typically operate through share pledges over the licence-holding entity — a structure that itself triggers the economic concentration analysis under LRU-850 upon enforcement. Foreign creditors entering this market should obtain legal analysis of both the security structure and the enforcement pathway before the transaction is documented.

Several practical steps reduce the compliance risk materially for foreign investors in Uzbekistan's subsoil sector.

Early-stage competition mapping is essential. Before committing to a tender submission or executing a heads of terms document, the investor's legal team should map the group's existing Uzbek-connected assets and activities and assess whether any transaction threshold is likely to be met. This mapping exercise should be conducted at group level and should include a review of any CIS-connected affiliates whose Uzbek-market activities may be relevant to the threshold calculation. The output of this exercise determines whether pre-transaction filing is required and, if so, the anticipated timeline for Antimonopoly Committee clearance — which should be built into the overall project schedule.

Parallel-track processing reduces overall project timelines. The Goskomgeologiya tender or negotiation process and the LRU-850 competition clearance process can, in most cases, be run in parallel from an early stage. While the subsoil use agreement cannot be signed before competition clearance, much of the tender preparation, geological assessment, and work-programme documentation work can proceed concurrently. Investors who treat these as sequential rather than parallel processes typically experience delays of several months at the point when they are most under pressure to close.

Language and document preparation matters. All filings with Goskomgeologiya and the Antimonopoly Committee are conducted in Uzbek and Russian. Foreign investors whose internal legal teams and principal advisers operate in English will need to account for translation, notarisation, and apostille requirements in the document preparation timeline. Legal opinions and structure charts prepared for other jurisdictions typically require adaptation for the Uzbek regulatory context; documents prepared for Russian or Kazakh regulatory purposes are closer in format but still require jurisdiction-specific review.

Engaging Regulatory & Licensing counsel with specific Uzbekistan experience at an early stage — rather than relying on general CIS or Russian law expertise — is the single most effective way to avoid the sequencing errors that characterise the majority of delayed or complicated Uzbek mining licensing matters.

For investors who are also managing company formation or joint venture structures alongside the licensing process, coordination between the corporate and regulatory workstreams is necessary to ensure that the licence-holding entity is correctly constituted and capitalised before the licence application is submitted. A mismatch between the applicant entity and the intended operational structure is a common source of licence condition issues that can be avoided with early-stage planning.

[CTA: For in-house counsel or regional advisers working on an Uzbekistan subsoil or mining project — whether at the preliminary stage or in the middle of a licensing process — make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76]

• Regulatory & Licensing in Uzbekistan (/jurisdictions/uzbekistan/regulatory-licensing/)
• Company Formation in Uzbekistan (/jurisdictions/uzbekistan/company-formation/)
• Enforcement of Foreign Judgments and Awards in Uzbekistan (/jurisdictions/uzbekistan/enforcement/)
• Cross-border Disputes: Uzbekistan (/jurisdictions/uzbekistan/disputes/)

Q: What is the role of the Antimonopoly Committee in a subsoil licensing transaction in Uzbekistan?

A: The Antimonopoly Committee of Uzbekistan is the competent authority under LRU-850 (2023) for reviewing economic concentration transactions and assessing market dominance. In the subsoil and mining context, its role is twofold. First, it reviews any acquisition of shares, assets, or control over an entity holding subsoil use rights where the transaction meets the statutory financial thresholds — and may impose conditions, require remedies, or prohibit transactions that would substantially restrict competition. Second, it may make an individual dominance determination in respect of a licence holder where the structural characteristics of the mineral market support such a finding, regardless of whether formal thresholds are met. Both functions operate independently of the Goskomgeologiya licensing process, and a foreign investor must account for both in its project timeline.

Q: Does Uzbekistan's competition law apply to foreign investors acquiring Uzbek mining assets through offshore holding structures?

A: Under LRU-850, the relevant trigger for economic concentration review is the Uzbek-connected dimension of the transaction — specifically, whether the parties have assets or turnover in or connected to Uzbekistan that meet the prescribed thresholds. The nationality of the acquiring entity or the jurisdiction of the holding structure does not exempt the transaction from review. Threshold calculations are performed at group level, aggregating all group entities with Uzbek-connected activities. Structures that interpose offshore or CIS-jurisdiction holding companies between the ultimate investor and the Uzbek licence-holding entity do not eliminate the notification obligation if the underlying economic exposure to the Uzbek market is present. Investors using Russian, Kazakh, or Cyprus holding entities should obtain a specific threshold analysis as part of their transaction preparation.

Q: How long does competition clearance take under LRU-850, and can the subsoil use agreement be signed before it is obtained?

A: The Antimonopoly Committee operates within a statutory review period following the submission of a complete pre-transaction notification under LRU-850. This period may be extended where the Committee requests additional information or where the competitive effects analysis requires more detailed market investigation. The subsoil use agreement should not be executed until clearance is obtained or the applicable review period expires without objection. In practice, investors who prepare a thorough and well-evidenced notification filing — including a clear relevant-market definition and competitive-effects analysis — tend to experience shorter review periods than those who file minimally. The parallel-track approach (running Goskomgeologiya tender preparation and competition filing simultaneously) is the standard method for managing this constraint without extending the overall project timeline.

Q: What happens if a foreign investor proceeds with a subsoil licensing transaction without obtaining the required competition clearance?

A: Under LRU-850, a transaction completed without the required pre-notification and clearance may be declared invalid by the Antimonopoly Committee or by a court. In the subsoil context, an invalid transaction affects the legal basis on which the investor holds the subsoil use agreement — the licence itself may survive the invalidity finding, but the investor's ability to exercise the rights conferred by the licence becomes legally uncertain. The Antimonopoly Committee also has authority to refer the matter to Goskomgeologiya for assessment of whether the licence conditions have been breached. Foreign investors who discover a notification gap after closing should seek legal advice promptly: in some circumstances, retrospective notification or voluntary disclosure may be available, but the availability and terms of such remedies are fact-specific and the window for their use is typically limited.

Q: Are there any restrictions on foreign ownership of subsoil use rights in Uzbekistan that operate separately from the competition law framework?

A: Yes. Uzbek legislation classifies certain mineral deposits as strategically significant — a designation that typically applies to large hydrocarbon fields and significant deposits of gold, uranium, copper, and certain other metals. Subsoil use rights over strategically classified deposits are subject to additional approval requirements that operate separately from the standard Goskomgeologiya licensing procedure and from the LRU-850 competition clearance process. These approvals may require involvement at Cabinet of Ministers or Presidential level. In practice, the strategic classification of a deposit is a material factor in transaction planning for any foreign investor, and the approval pathway for strategically classified deposits involves longer timelines and greater government engagement than the standard licensing route. Counsel familiar with the Regulatory & Licensing environment in Uzbekistan should be engaged to advise on deposit classification at the earliest possible stage of project assessment.

Vetrov & Partners is a Russian boutique law firm established in 2009 and recognised by Pravo-300 — Russia's principal legal directory — for eight consecutive years. The firm advises foreign companies and investors on Russian law and, through its network of regional contributing analysts, on cross-border matters connecting Russia with Central Asian and CIS jurisdictions.

The firm's Regulatory & Licensing practice advises foreign companies on licensing frameworks, competition clearance, and market entry across CIS jurisdictions. Uzbekistan-related matters are handled in collaboration with Nodira Yusupova, Contributing Regional Analyst, and relevant local counsel in Tashkent. We are a Russian-qualified law firm. For matters governed by Uzbek law or requiring local admission in Uzbekistan, we collaborate with trusted counsel in the relevant jurisdiction.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

— Nodira Yusupova Contributing Regional Analyst — Uzbekistan · Foreign Investment and Market Entry vetrovpartners.com/contributions/