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Professor Omonboy Okyulov, Honored Lawyer of Uzbekistan                                                         Translator: Laylo Qarshiboyeva

As an introduction, it should be noted that Uzbekistan’s distinguished lawyer, Omonboy Okyulov published his views that the draft Civil Code of Uzbekistan should include the relevant norms of Islamic law for debt and credit agreements with equal distribution of risk and sale agreements. This piece is a translation of his views published in professor Okyulov’s Facebook account in February 2021.

Earlier last year, he also shared with the public his views on Islamic law and its introduction into a new version of the Civil Code of Uzbekistan. Therefore, first, we provide the translation of his 2020 May views, first. Then, a reader may get to know professor Okyulov’s recent and quite detailed views on this topic.


First Facebook post: 24.05.2020

Chapter 37 of the draft Civil Code should provide norms for debt and credit agreements with equal distribution of risk. It is common in Islamic bank loans worldwide that the lender enters into a contract based on both profit and loss. Usury is prohibited for Muslims.  Therefore, the contract’s construction, which corresponds to their beliefs, should be reflected in the new Civil Code.

The draft Civil Code should establish Islamic law rule on the general provisions of contracts for the sale of the defective products and its consequences. It is also advisable to consider the consequences of reversal, the construction of contracts to limit the level of premiums imposed by the seller in wholesale and retail trade.

Second Facebook post: 13.02.2021

It is necessary to create a wide range of constructions of Islamic law contracts in commercial business. In the process of globalization, there is an active movement of goods, works, services, and labor.  Our country’s current legislation creates conditions for the participants of such a movement to ensure economic development.  In particular, the Navoi Free Economic Zone provides an opportunity for foreign investors to apply British law.  The new version of the draft Civil Code also reflects the widespread contractual structure of doing business in the United States and Europe.

Today, in our country, some projects have begun to introduce commercial rules under Muslim law. The President of the Republic of Uzbekistan Shavkat Mirziyoyev, said in his address to the Oliy Majlis on December 29, 2020, that “It is time to create a legal framework for the introduction of Islamic financial services in our country.”  In turn, the Central Bank of the Republic of Uzbekistan has developed a draft Law “On non-bank credit institutions and microfinance activities,” and the media are reporting on the implementation of Islamic financial structures. The Halal mark has entered our daily lives, and a particular part of the population has started to take them into account in public catering and the trade of food.

At the same time, it is no secret that business people and investors who strictly adhere to the rules of Muslim commercial law have shown interest to our country.  In addition, a certain part of the population of our country does not follow the usury(riba) in their daily lives, which is forbidden by Islamic law. However, the current banking and financial legislation is strictly based on interest.  This limits the population’s ability to invest in society freely.

It is noteworthy that the legislation of Central Asian countries, such as Kazakhstan and Kyrgyzstan, provides ample opportunities for applying the constructions of Islamic law contracts. In particular, Chapter 341 of the Civil Code of Kyrgyzstan is devoted to financing on the basis of Islamic principles. It contains more than 40 norms, such as mudoraba, murabaha, musharika, ijara, debt hasan, and exception(istisna’a).

Unfortunately, these constructions were not reflected in the new version of the draft Civil Code, which was announced for public discussion. In our opinion, filling the project (drafting new Civil Code) with these constructions would expand the investment flow in our country and allows a certain part of the middle-aged population to put their savings into the market.

Comments by the translator

Indeed, Professor Okyulov raised a critical issue in his posts.  The introduction of Islamic finance in Uzbekistan as the only alternative and competitive system to the traditional capitalist financial system depends on these issues. It is known that one of the basic principles of Islamic finance is the equal distribution of profits and losses. The provisions of the current Civil Code on debt and credit agreements create a contradiction with this principle. At the same time, there are some inconsistencies in the contracts of sale. As professor Okyulov points out, Uzbekistan’s Islamic financial sector is still relatively undeveloped compared to its Central Asian neighbors, such as Kazakhstan and Kyrgyzstan. However, the country has great potential for development. For this reason, these proposals of professor Okyulov are essential issues that have to be addressed in a new Civil Code for the successful establishment of Islamic finance in Uzbekistan.

Cite as: Omonboy Okyulov, “Suggestions and comments on the draft Civil Code of Uzbekistan: Islamic finance”, Uzbekistan Law Blog, 11.03.2021.