RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/AZE/2
9 April 1999
(99-1430)
Working Party on the
Accession of Azerbaijan
ACCESSION OF THE REPUBLIC OF AZERBAIJAN
Memorandum On The Foreign Trade Regime
In a communication dated 30 June 1997 (WT/AC C/AZE/1), the Government of the Republic
of Azerbaijan applied for accession under Article XII of the Agreement Establishing the World Trade
Organization (WTO).  Having regard to the Decision adopted by the General Council on 31 January
1995, the existing Working Party on the Accession of the Republic of Azerbaijan to the GATT 1947
continued as a WTO Accession Working Party with the following terms of reference:  "To examinethe application of the Government of the Republic of Azerbaijan to accede to the World Trade
Organization under Article XII, and to submit to the General Council recommendations which may
include a draft Protocol of Accession".  The membership is open to all WTO Members indicating
their wish to serve on the Working Party.
In accordance with established procedures (WT/ACC/1), the Secretariat is circulating the
Memorandum on the Foreign Trade Regime of the Republic of Azerbaijan.  The legislation available
in the Secretariat, in electronic formation, is  listed in document WT /ACC/AZE/2/Add.1.  WTO
Members are invited to submit questions on the Memorandum to the Secretariat, in writing, by
21 May  1999 for transmission to the authorities of the Republic of Azerbaijan.
_______________WT/ACC/AZE/2
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TABLE OF CONTENTS
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No
I. INTRODUCTION 1II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 1
1. Economy 1(a) General description (territory population, economic specialization, main
economic indicators)1
(b) Current economic situation 42. Economic Policies 5
(a) Main directions of the economic policies 5(b) Monetary and fiscal policy 8
(c) Foreign exchange, payments system a nd relations with the IMF, application of
foreign exchange control, if any11
(d) Foreign and domestic investment policy 12
(e) Competition policies 12
3. Foreign Trade In Goods and Services 13
4. Domestic Trade in Services Including  Value and Composition of Foreign Direct
Investment15
5. Information On Financial Movements Related to Nationals Working Abroad
(Remittances)15
6. Information on Growth in Trade in Goods and Services Over Recent Years and
forecasts for Years to Come.15
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES16
1. Power of  the Executive,  Legislative and Judicial Branches of Government 16
2. Government Entities Responsible for Making and Implementing Policies
Affecting Foreign Trade19
3. Division of Authority Betw een Central and Sub-Central  Form of  Government 20
4. Any Legislative Programmes or Plan s to Change the Regulatory Régime 20
5. Laws and Legal Acts 21
6. Description of Judicial, Arbitral or Administrative Tribunals or Procedures 21
IV. POLICIES AFFECTING TRADE IN GOODS 21
1. Import Regulation 21(a) Registration requirements for engaging in importing 21
(b) Characteristics of national tariff , cu stoms tariff nomenclature (HS), types of
duties, general description of the custom s tariff structure, application of m.f.n.
tariff rates, tariff preferences21WT/ACC/AZE/2
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(c) Tariff quotas, tariff exemptions 22
(d) Other duties and charges, specifying any charges for services rendered 22
(e) Quantitative import restrictions, in cluding prohibitions, quotas and licensing
systems22
(f) Import licensing procedure 23
(g) Other border measures, e.g. any other schemes that have border effects 23(h) Customs valuation 23
(i) Other customs formalities 23
(j) Pre-shipment inspection 23(k) Application of internal taxes on imports 23
(l) Rules of origin 24
(m) Anti-dumping régime 24(n) Countervailing duty régime 24
(o) Safeguard régime 24
2. Export Regulation 24
(a) Registration requirements for engaging in exporting 24
(b) Customs tariff nomenclature, types of duties, duty rates, weighted averages of
duty rates24
(c) Quantitative export restrictions, in cluding prohibitions, quotas and licensing
system24
(d) Export licensing procedure 25
(e) Other measures, e.g. minimum export prices, voluntary export restrictions,
orderly marketing arrangements25
(f) Export financing, subsidy and promotion policies 25
(g) Export performance requirements 25
(h) Import duty drawback schemes 25
3. Internal Policy Affectin g Foreign Trade in Goods 25
(a) Industrial policy, including subsidy policies 25
(b) Technical regulations and standards, in cluding measures taken at the border with
respect  to imports25
(c) Sanitary and phytosanitary measures, including measures taken with respect to
imports25
(d) Trade-related investment measures 26
(e) State-trading practices 26
(f) Free zones 26(g) Free economic zones 26
(h) Trade-related environmental policies 26
(i) Mixing regulations 26(j) Government-mandated counter-trade and barter 26
(k) Trade agreements leading to country-specific quotas allocation 26
(l) Government procurement practices, including general legal regime and
procedures for tendering, dealing with tenders and award of contracts26
(m) Regulation of  trade in transit 27
4. Policies Affecting Foreign Trade in Agricultural Products 27
(a) Imports 27
(b) Exports 27(c) Export prohibitions and restrictions 27WT/ACC/AZE/2
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(d) Export credits, export credit guarantees or insurance programmes 27
(e) Internal policies 27
5. Policies Affecting Foreign Trade in other Sectors 27
(a) Textiles régime 27
(b) Policies affecting foreign trade in other major sectors 27
V. TRADE-RELATED INTELLECTUAL PROPERTY RÉGIME 28
1. General Introduction 28(a) Intellectual property policy 28
(b) Responsible agencies for policy formulation and implementation 28
(c) Membership in international intellectual property conventions and regional or
bilateral agreements28
(d) Application of national and m.f .n. treatment to foreign nationals 28
(e) Fees and taxes 29
2. Substantive standards of protection of  intellectual property rights, including
procedures for the acquisition and maintenance29
(a) Copyright and related rights, including rights of performers, producers  of
phonograms and broadcasting organizations29
(b) Trademarks, including service marks 29
(c) Geographical indications, incl uding appellations of origin 29
(d) Industrial design 29
(e) Patents 29
(f) Plant variety protection 29(g) Layout designs of integrated circuits
(h) Requirements for undisclosed information, including trade secrets and test data 30
3. Measures on Control Abuse of Intellectual Property Rights 30
4. Enforcement 30
(a) Civil judicial procedures and remedies 30
(b) Provisional measures 30
(c) Any administrative procedures and remedies 30(d) Criminal procedures 30
5. Laws, Decrees, Regulations and Other Legal Acts Relating to the Above 30
6. Statistical Data on Applications for Gr ants of Intellectual Property Rights, as
well as any Statistical Data on Their Enforcement31WT/ACC/AZE/2
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VI. TRADE-RELATED SERVICES RÉGIME 31
1. General 31
2. Policies Affecting Trade in Services 31
(a) Government departments, agencies, pr ofessional associations or other bodies
with authority or a role relevant to the conduct of service activities31
(b) Judicial, arbitral or administrative tr ibunals or procedures providing for the
review of, or remedies in relation to, administrative decisions affecting trade in
services31
(c) Provisions, including those in interna tional agreements, concerning qualification
requirements and procedures, techni cal standards and licensing and/or
registration requirements for the supply of services31
(d) Provisions regulating exclusive services activities and operation of monopolies 32
(e) Provisions relating to safeguard measures as they apply to trade in services 32(f) Provisions relating to international transfers and payments for current
transactions of services32
(g) Provisions relating to capital transactions affecting the supply of services 32
(h) Provisions governing the procurement by  governmental agencies of services 32
(i) Provisions concerning any form of aid, grant, domestic subsidy, tax incentive or
promotion scheme affecting trade in services32
3. Market Access and National Treatment 32
(a) Limitations on the number of service suppliers 32(b) Limitations on the total value of service transactions or assets 32
(c) Limitations on the total number of service operations or on the total quantity of
service output32
(d) Limitations on the total number of natural persons that may be employed in a
particular service sector32
(e) Restrictions on, or requirements of specific types of legal entity through which a
service may be supplied33
(f) Limitations on the participation of foreign capital 33
(g) Measures relating to financial operation which influence national services or
service suppliers33
4. Most-favoured-nation treatment 33
VII. INSTITUTIONAL BASIS FOR TRADE AND ECONOMIC RELATIONS
WITH THIRD COUNTRIES33
1. Bilateral or Plurilateral Agreements Relating to Foreign Trade in Goods and
Trade in Services33
2. Economic Integration:  Customs Un ion and Free Trade Area Agreements 33
3. Labour Markets Integration Agreements 334. Multilateral Economic Cooperation, Membership in the Multilateral Economic
Organizations, Trade-Related Programmes of Other Multilateral Organizations.34WT/ACC/AZE/2
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ANNEXES
Annex 1 Statistics and Publications 35
Annex 2 List of Laws and Legal Acts 46Annex 3 Information on Impor t Licensing Procedures 54
Annex 4 Information on Implementation and Administration of the Customs
Valuation Agreement57
Annex 5 Information on Technical Barriers to Trade 63
Annex 6 Information on State Trading 66
Annex 7 Services Sectoral  Classification List 67
Annex 8 List of Foreign Trade Agreements 76WT/ACC/AZE/2
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I. INTRODUCTION
On 28 May 1918 the Azerbaijan People’s Republic was established, the first Democratic
Republic in the East.  Although the Supreme Council of Paris (Versailles) Conference recognised its
independence, the young Republic did not exist for a long time. As a result of the Bolshevik  coup
d’état  Azerbaijan lost its independence in April of 1920 and became part of the former Soviet Union.
But 70 years later, due to the aspirations and the will of the Azerbaijan nation, Azerbaijan re-emerged
as an independent State. The national liberation movement was at its peak in the late 1980’s, and as a
result of the collapse of the Soviet Union, the Republic of Azerbaijan adopted its Constitutional Act
called the “State Independence of the Republic of Azerbaijan” on 18 November 1991, thereby re-
establishing its independence.
Political instabilities between 1992-1993, which were triggered by domestic and external
factors, did not create a good environment for the development of democracy and a viable market-
based economy. The economy had been devastated by more than 70 years of dramatic misallocation
of natural resources under central planning. From a nother side, the occupation of a large part of the
territory of Azerbaijan by Armenian military forces exacerbated economic and political difficulties
and created massive refugee problems.
In 1993 Mr. Heydar Aliyev, a well-known politician and statesman, returned to his political
position in order to establish the base for both political and economic stability.
The cease-fire, which was attained due to the efforts of Mr. Heydar Aliyev, the President of
the Republic of Azerbaijan in May 1994, played a considerable role in strengthening Azerbaijan
statehood and the development of its economy.
The Republic of Azerbaijan moved fast to gain  international recognition and heralded the
truth about Azerbaijan to the world. The Republic of Azerbaijan, which is a member of the UnitedNations Organisation and other influential international organisations, is an independent State that can
affect the political and economic situation in the world.
The Constitution of Azerbaijan was adopted through the national referendum on 12
November 1995. After this, bases of democratic legislation for political and economic reforms were
laid, and the process of formation increased.
Under the Constitution, the Republic of Azerbaijan is a democratic, legal, secular and unitary
republic.
State power in the Republic of Azerbaijan is based upon the division of power as follows:
- The legislative power is implemented by Milli Mejlis;
- The executive power is empowered by the President of the Republic of Azerbaijan;
- The judicial power is implemented by the law courts.
The leader of the Azerbaijan State, the President of the Republic of Azerbaijan, is elected by
general, equal and direct elections through free, personal and secret balloting, for a period of 5 years.The President nominates and dismisses the Prime Minister through approval of Parliament.
Milli Mejlis, which implements legislative power, is a one Chamber Parliament, consisting of
125 Peoples' Deputies. The deputies are elected through proportional and majority systems through
general, equal and direct elections by free, personal and secret balloting. As a result of the democraticWT/ACC/AZE/2
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election held on 12 November 1995, representatives of 8 political parties receive the mandate of
deputy. The term of office of Milly Mejlis is 5 years.
The judicial power in the Republic of Azerbaij an is implemented by the Constitutional Court,
Supreme Court, Economic Court of the Republic of Azerbaijan, as well as general and otherspecialised courts of the Republic of Azerbaijan.
The legislative, executive and judicial powers collaborate and are independent within their
authorities in accordance with the Constitution.
Once political stability was consolidated, the Government launched an ambitious economic
reform programme supported by financial resources from the International Monetary Fund (IMF), theWorld Bank, and other creditors. A drastic reduction in inflation and resumption of economic growth
prove that macroeconomic conditions have stabilised.
The resumption of economic growth accompanied by a rapid expansion of foreign trade has
prompted the Government of Azerbaijan to seek membership in the WTO.
The objective of the Government’s strategy is reintegration of Azerbaijan’s economy into
international markets. The measures for liberalisation, related to the transition of Azerbaijan to a
market economy, were the reasons for the establishment of the competitive environment.
Past trade policy and exchange regimes have completely changed. National currency is fully
convertible, with some restrictions for capital account transactions.
The laws of the Republic of Azerbaijan provide guarantees for foreign investors. There are
almost no restrictions in Azerbaijan for repatriation of income by foreign investors.
Although much has been done to liberalise foreign trade policies several considerations have
prompted the Government’s decision to seek membership in the WTO. Membership in the WTO
would remove many negative problems from curren t politics, therefore this would enable the
consolidation of liberal economic reforms.
Briefly, we consider the process of accession to the WTO as a catalyst of external sector
reforms in compliance with the Uruguay Round Agreements.
I. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
1. Economy
(a) General description (territory, population, economic specialisation, main economic indicators)
Territory
Azerbaijan occupies the south-eastern part of the Caucasus isthmus, a narrow strip of land
between  Europe and Asia. It is located along 825 kilometre of the Caspian Sea coastal line, andoccupies an area of 86.6 thousand square kilometres. Azerbaijan borders with the Russian Federation
in the north (length of border 390 kilometres), the Armenian Republic in the west (1,009 kilometres),
Republic of Georgia in the north-west (480 kilometres), Turkey in the south-west (12 kilometres) and
the Islamic Republic of Iran in the south (765 kilometres). Almost half of the territory of the country
consists of mountains. There are nine climatic zones ranging from subtropical to highland tundra, withthe temperature amplitude from - 45
o C in highlands to +45oC in plains.WT/ACC/AZE/2
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Population
As of 1 January 1999 the population of the country was 7.7 million people. The population
has increased by 0.9  per cent since 1 January 1998. The urban population amounts to 52.3 per cent of
the total, and the rural population 47.7 per cent. The population is relatively homogenous withAzerbaijanians accounting for 86 per cent. Around 90 ethnic groups including Russians, Tatars, Jews,
Armenians, Lezgins, Kurds, Talishes, Avarians etc., account for the rest of the population.
The average density of population is 83 per one square kilometre. More densely populated
regions are Absheron Peninsula (300 people per one square kilometre), Lenkoran (up to 115 people
per one square kilometre) and other foothill parts of the Republic of Azerbaijan.  The highlands are
sparsely inhabited.
Baku (the capital of the Republic of Azerbaijan) has more than 2 million inhabitants. Other
large cities are Sumgait, Gandja, Nahchivan, Mingechaur, and Ali-Bairamli.
The Most recent general census took place in January 1999.
Economic Specialisation
 Azerbaijan has different industries. As a result of incorrect decisions taken by central
planning regarding the industrial sectors and services in the former soviet republics, industry andagriculture was stagnant.
The most rapidly growing are the construction, retail and wholesale trade and others (mostly
services). Table 1 presents the structure of Gross Domestic Product (GDP).
Table 1: Share of major sectors in GDP (%) in 1995 – 1998
1995 1996 1997 1998
Industry 27.3 25.9 24.8 22.3
Agriculture 25.1 24.7 20.0 20.3
Transport and communication 17.4 10.2 11.9 12.9
Construction   3.7   9.3 13.8 16.4
Trade and public catering  4.8   5.2 5.5 5.7
Other 21.8 24.8 24.0 22.4
Sectors producing energy and energy products are highly important industrial sectors of the
economy, as well as the oil and special machinery building industry; chemical and petrochemical
industry; ferrous and non-ferrous metallurgy indus try; industry of building materials; forestry
industry; light industry; food indu stry and other main industries.
However, by far the most important are the oil extracting and oil processing sectors. Being the
major natural resource, oil contributes 50 per cent of added value generated in industry. Oil and gas
deposits in Azerbaijan are estimated at between 3.5 and 10 billion tons. This is also the sector that has
attracted the largest inflows of foreign investment.
Machinery building complex (including petrochemical machinery building products), radio
electronics, and precision instruments account for almost one fifth of the industrial aggregate output
of Azerbaijan.WT/ACC/AZE/2
Page 4
Agricultural holdings occupy 4 million hectares. Of these holdings only 22  per cent are
located on arable land.
The major used crops are cotton, tobacco, wheat, rice, fruits and vegetables, etc.
Main economic indicators
Main economic indicators show achieved macroeconomic stability. In 1997-1998 GDP
increased in comparison with 1996. The role of foreign trade is also very important for economic
development.
In 1998 the foreign trade turnover was 1.683 billion, an increase of 6.8 per cent in comparison
with 1997, including an increase in imports by 35.6 per cent and decrease in exports by 22.4 per cent.
Foreign experts foresee the economic growth of 7-9 per cent per annum over 1999-2000. The
development of the oil sector and export of energy products together with the increase in investmentfor industry and agriculture will fuel economic growth. Domestic savings remain relatively low.
Investment, however, will be largely financed from external sources rather than from domestic
savings.
(b) Current economic situation
Azerbaijan has begun reaping benefits from the transformation programme launched in 1995.
Thus, it has achieved very impressive results in macroeconomic adjustment: deflation was 2.4  per
cent in 1998 while the annual inflation rate was above 1763 per cent in 1994 and GDP rebounded by
10  per cent.
At present positive changes influence tight monetary and fiscal policies positively, as well as
an increase in FDI (foreign direct investment). The budget deficit in per cent of GDP fell from 13 per
cent in 1994 to 2  per cent in 1998. The budget revenue increased due to better collection of taxes and
an overall increase in economic activity. The State Customs Committee, collectors of duties and
excise taxes, contributed 10.6 per cent to the total budget revenue in 1998. Taxes from foreign firms
rose 2.6 times and are expected to grow.
Although the budget deficit at 2 per cent of the GDP remains relatively high, its financing will
not have an impact on inflation.
The practice inherited from the former period, of financing the budget deficit through credits
from the National Bank of Azerbaijan, has been terminated. Revenue from oil will partly finance thefiscal deficit.
Another sign of “normalisation” is the appreciation of the domestic currency against major
currencies. Domestic currency appreciated by 16 per cent in comparison with the US Dollar between
mid-1996 and mid-1998.
The conducive environment for market economy and existing export policy were the reasons
for appreciation of national currency. The most important foundation for sustainable economic growth
performance relates to the economic reforms of the programme. A foundation for sustainable
economic recovery is private sector development. These reforms have been specially developed in1997-1998.WT/ACC/AZE/2
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The legal base for the voucher privatisation of medium-sized and large enterprises was
established, and this process has been highly accelerated so far. Current procedures necessary for
business activity have been completely changed and simplified.
396.5 billion Manats, which is equal to 101.6 million US Dollars, have been received during
the privatisation process in the course of 1996-1998.
2. Economy
(a) Main directions of the implemented economic policies
In 1995 the Government launched the stabilisation programme. Although macroeconomic
stabilisation has been largely achieved, structural reforms are still in process. The objective is to
establish institutions to support the creation and functioning of competitive markets. The programmecurrently implemented has been established in close cooperation with international financial structures
- International Monetary Fund, World Bank, European Bank of Reconstruction and Development.
The strategy of medium-term economic policy is twofold: acceleration of the transition to a
market economy; and developing the country’s oil re sources without adverse impact on the rest of the
economy. The strategy to address these objectives is based on demand and supply factors.
Corresponding measures will be implemented to encourage domestic savings in order to dampen the
difficulties of domestic demand in the non-oil sector of the economy. Furthermore, restrictions related
to trade activity will be completely removed. At the same time there will be a chance for free
repatriation of the capital account.
One of the perspective goals is the removal of the inherited central planning obstacles for
growth in non-oil sectors of the economy. These include simplification of the tax system,
privatisation, improvement of the banking sector, enforcement of legal protection to private property,
streamlining public administration. These measur es will boost private sector development.
The reduction of the State deficit (including oil capital, contract bonuses and others) to less
than 1 per cent of GDP by 2000 remains the main aim of fiscal policy.
There has also been a change in financing of the budget. Fiscal deficits are now financed by
treasury bills, utilisation of the oil funds, proceeds from privatisation, and disbursements of
programme and project loans from the World Bank and other international creditors.
Monetary policy was subordinated to maintain low levels of inflation. Nominal as well as real
interest rates declined due to lower inflation achievements and the improvement of the financial
sector.
The objectives of current economic policy are:
- improvement of macroeconomic conditions for economic structure and economic
development;
- strengthening the Manat and provision of its full convertibility;
- strengthening and simplifying the tax and payment regime;
- enlarging of reforms in the banking sector;
- strengthening the State’s capacity to deal with corruption in public and private
sectors.WT/ACC/AZE/2
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Tactical and strategic goals of economic policies
Strategic goals of economic policy are accomplished in two major directions: to sustain
current economic growth rates in a non-inflationa ry environment; and to provide balanced economic
development that the growth in oil revenues (after 2000) may trigger. These goals are to be carried out
while simultaneously establishing public foundations for competitive markets.
The development of Azerbaijan’s oil wealth (and the use of its revenues) requires an
appropriate legal and institutional structure.  In order to prevent the State-owned energy enterprises
from participation in commercial activity, new market energy sectors acting in accordance with newly
established marketing principles will be established as will the financial relations between the oilsector and the State.
The goal is to maintain steady economic growth at a minimum of 6 per cent per year, while
simultaneously removing barriers of development in the non-oil sector. Disciplined fiscal and
monetary policies combined with microeconomic liberalisation are regarded as major tools togenerate balanced economic development.
Another strategic objective is to establish a market-based agricultural sector. The 1996 Land
Reform Law has provided a legal basis for individual ownership of land.  The process of approval of
State Statements on rights for land ownership develops rapidly.
Pricing policy
While five years ago around 80 per cent of prices were centrally controlled, now most prices
are determined by interaction of demand and supply. Liberalisation of prices was one of the majormeasures of transition in the 1995.
In 1999, the Government will control prices of services and goods supplied by natural
monopolies in the following industries: electrical power; heating energy; gas; oil and gas
transportation; railway transport; telephone and mail communication services; public utilities; and
housing rent.
Economic development plans
With the exception of political and institutional conditions for the development of
infrastructure and establishing policy conducive to sustained economic development, the Government
does not plan to become involved in development planning.
Privatisation plans
The transfer of property rights from the State to the private sector has been implemented in
order to end the State’ s direct involvement in managing the economy.
The privatisation process is currently implemented in accordance with the “State programme
on State property privatisation.” This was implemented in the Republic of Azerbaijan in 1995-1998,
which was approved by the Law on 29 September 1995, and has been recently ranked first by IMF
among the CIS, in terms of the speed of privatisation process.
In accordance with “State programme on State property privatisation in the Republic of
Azerbaijan in 1995-1998,” State enterprises and ownership are divided into five categories:WT/ACC/AZE/2
Page 7
- the enterprises and units which are prohibited to privatise;
- the enterprises and units which are privatised  by the President’s Decree;
- large enterprises and units which are privatised by the decision of the Cabinet of
Ministers;
- enterprises and units which are privatised upon the decision of the State Property
Committee (SPC) with the agreement of the local authorities; and
- other enterprises and units which are subject to obligatory  privatisation.
Furthermore, the distinction has been made between the privatisation of small SOEs and
medium and large SOEs. In the case of small-scale privatisation, 15 per cent of the enterprise is to be
sold to the workers' collective on preferential terms and 85 per cent through open cash auction,
investment and competitive tendering, and auctions. The first open cash auction in the small-scaleprivatisation programme was conducted in March 1996. Since the beginning of privatisation 27,712
enterprises and units have been privatised.
As for medium and large State-owned enterprises (SOEs), some of them have been
reorganised into joint stock companies before privatisation. The State will retain 25 per cent of sharesin closed-end investment funds. Whereas, the balance is to be allotted as follows: at least 50 per cent
of the shares of enterprises are to be allocated to the State in voucher auctions, 15 per cent go to
employees on preferential terms, and the remaining 10  per cent are sold through open cash auctions.
Large-scale privatisation began with the distribution of privatisation vouchers (shares) in March 1997.
At present the programme of privatisation is being rapidly accomplished.
In 1998, the share of private sector in the GDP was around 55 per cent. The share of the
private sector in agriculture amounted to 95.3 per cent. In 1998 total budget revenues from
privatisation were 141.4 billion Manats (around 36.154 million US Dollars).
Agrarian reforms have been implemented since 1995. The process of transferring the land to
individual entrepreneurship is proceeding rapi dly. Land can be freely purchased and sold.
The privatisation of plots occupied by privatised enterprises began in mid-1998. By 1 January
1999 there were 148 enterprises and units, and plots being privatised contributed to State revenues in
the amount of 3.144 billion Manats (around 812 million US Dollars).
State monopoly over foreign trade of cotton and its products was abolished. All 17 cotton-
cleaning factories have been privatised; among them 14 were privatised by foreign companies and the
remaining three by local enterprises.
There are no measures that would grant exclusivity to one company or marketing enterprise in
foreign trade.
Sectoral priorities
Dealing with competition policy in natural monopoly aspects of the energy sector is a major
issue. This will strengthen the control over the natural monopolies through independent regulation of
the natural monopoly aspects of electricity supply.
 The State takes measures to attract foreign investment through simplifying the relationship
between the energy sector and government and through the certification of energy suppliers.WT/ACC/AZE/2
Page 8
The development of the gas production industry will be carried out under similar conditions,
as were stipulated in oil contracts. There are se veral projects related to the development of onshore
gas fields.
Regional development plans
Despite large regional inequalities, which have existed for decades, the Government does not
have adequate resources to address them directly. Besides, most available resources are absorbed by
reconstruction of war-damaged areas. Resettlement in the liberated areas of the involuntary displaced
persons from the Nagorno-Karabagh region occupied by Armenian military forces is figured among
the Government’s priorities. There are more than  one million displaced people and refugees in
Azerbaijan. Preparations for the reconstruction programme have been in the process since 1996.
Under these circumstances, the emphasis has been on reformation of State finances so the
result is that regions have greater discretion over their finances. Creating a better environment to
upgrade business is another approach that is currently being followed.
(b) Monetary and fiscal policies
Monetary policy has been subordinated to consolidate progress achieved in lowering
inflation. In the framework of a flexible exchange rate regime, pressures toward real exchange
appreciation will not be conducted. Azerbaijan’s National Bank monetary policy instruments will
facilitate a smooth operation of the foreign exchange market. The new role of the State sector - inbringing it in line with transition to a market is underway, with Government continuing to withdraw
from direct involvement in management of production and trade. In this way, the regulatory functions
are strengthened. Significant changes have been implemented in budget planning. The programme of
State sector restructuring is being developed together with the World Bank.
Tax legislation of the Republic of Azerbaijan, which can be adopted soon, will create
favourable conditions for private sector development and attract direct investment in sectors other
than oil extraction. New laws on corporate income tax, personal income tax, value added tax, land tax,
property tax, excises, and road fund tax, etc. have been introduced.
Corporate income tax and taxes on other sources of income
The Law on “Profit Tax of Enterprises and Organisations,“ which was enacted on 24
December 1996 and entered into force on 1 January 1997 sets the following taxes and tax rates:
- corporate income tax – 30 per cent;
- tax on profits from retail sales, public catering and consumer services – 3 per cent
(excluding value added tax);
- dividends and interests – 15 per cent;
- freight tax – 6 per cent;
- copy rights and licenses, rentals, and source of other incomes which is within the
Republic of Azerbaijan – 20 per cent.
Personal income tax (PIT)
Personal income of citizens of the Republic of Azerbaijan, foreign citizens and persons
without citizenship either having or not having permanent residence in the Republic of Azerbaijan are
subject to PIT.WT/ACC/AZE/2
Page 9
Persons who live in the Republic of Azerbaijan at least 183 days per calendar year are
regarded as permanent residents of the Republic of Azerbaijan.
Gross personal income is subject to taxation on a progressive scale from the rate of 12 per
cent to 40 per cent within a calendar year.
The private citizens are subject for tax pay tax rates 2-40 per cent from monthly income and
income from work, based on civil-legal contracts.
Value added tax (VAT)
The rate of VAT is uniform and currently levied at 20 per cent.As for foreign trade operations, there are some exceptions. The list of VAT-free imported
goods is regulated by corresponding legislation.
Land tax
The Land Code of the Republic of Azerbaijan sets taxes on land. Land owners and users
(except lessees) must pay land tax on an annual basis.
According to the Resolution of the Cabinet of Ministers of the Republic of Azerbaijan No. 43
adopted on 14 May 1997 the land tax for 1 hectare is calculated through multiplying the conditional
numbers by 300 Manats. For the calculation of the land tax the table of pricing was approved by the
above mentioned Resolution of the Cabinet of Ministries.
Road fund tax
In accordance with the Law of the Republic of Azerbaijan “On State Road Fund” the
following kinds of taxes are in effect:  fuel and oil tax; tax for use of roads (including individuals and
transportation firms);  purchase of vehicles; and transit tax.
- Tax on sale of fuel and oil is equal to 15 per cent of the total amount of sale less VAT
paid;
- Tax from legal entities for use of roads is paid by enterprises and organisations
independent of property and legal-organisational forms at the rate of 0.05 per cent
(0.3 per cent for transportation firms) of the total revenue from sales;
- Tax from vehicle owners for use of roads is calculated as per power of an engine and
at present it is equal to 110 Manats ($ 0.03 US) per each horse power for private
citizens and 275 Manats for legal entities paid annually;
- Tax on the purchase of vehicles is equal to 2 per cent of sale price;
- Transit tax is paid by legal and private citizens upon entering of the territory of
Azerbaijan.
Extractive tax
Extractive tax is levied on the extraction of natural resources by individual citizens and legal
entities. The Cabinet of Ministers of the Republic of Azerbaijan sets tax rates, which are ad valorem
taxes in relation  to the market value of extracted natural resources. Tax rates vary depending on theWT/ACC/AZE/2
Page 10
resource. Current tax rates are 26 per cent on crude oil;  20 per cent on natural gas;  8 per cent on
mineral water;  and 3 per cent on non-ferrous metals.
Property tax
Property tax is paid by both private citizens and legal entities. Property tax is paid annually.
The taxes are set in relation to a market value of a fixed asset less depreciation. The tax is levied on
buildings and means of transportation.
Tax rates:
- for legal entities:  0.5 per cent of the value of asset;
- for private citizens: 0.1 per cent of the value of a real estate property;
- in the case of a vehicle, from 1.5 per cent to 5 per cent of the official minimal wage
(5,500 Manats) per each horse power depending on the type of a vehicle.
Excises
In accordance with the Law “On Excise Tax” consumer goods are subject to excise tax. Under
existing legislation private citizens and legal entities who/which produce and sell goods, which are
subjects for excise tax, must pay excise tax.
Tax rates vary from 10 per cent to 90 per cent depending on the product.  For a list of
products subject to excise tax and their corresponding rates, see Table 2.
Table 2: Provisional list of the taxable to excise goods and rates of excise
Category of Goods Rate
Ethyl alcohol 90
Liqueurs and vodka products, cognac and strong alcoholic beverages 85
Champagne, yeast 75
Various vines, beer, caviar, delicacy fish products, cupro-nickel products 50
Leather articles, natural fur and articles from it 45
Cut glassware and colour glassware 45
China tableware, plastics products, air-conditioners, carpets and machine-made
carpet articles30
Chocolate 40
Motor car tyres 60
Hand-made carpets and carpet articles 20
Tobacco goods: 1.  
Class I cigarettes 20
Cigarettes of extra quality and I class 40
Class II and III cigarettes with filter 25WT/ACC/AZE/2
Page 11
Category of Goods Rate
Class IV cigarettes, etc. 15
Gasoline 95 65,03
Gasoline 92 65,23
Gasoline 76 65,76
Diesel fuel 29,83
Reactive fuel 39,46
Kerosene 33,46
Articles of precious metals and silver, perfume and cosmetics articles, radio sets,
refrigerators and freezers, car and motorcycle repair services, air tickets selling to
services abroad10
Double taxation
Azerbaijan concluded and approved the Agreement on “Cancellation of double taxation and
elimination of non-payment of taxes” with the following countries (see attachment):
United Kingdom Norway Uzbekistan
Georgia Russian Federation Germany
Kazakhstan Turkey
Proposed:
Pakistan Belarus Belgium
Poland Sweden France
Moldova Netherlands
These Agreements are applied to the entities of the countries, which signed them.Capital and income taxes comprise income and capital taxes, taxes on components of capital
and income, including profits from alienation of movable and immovable property, taxes on salaries
and transfers paid by enterprises.
During tax collection in the Republic of Azerbaijan, the amounts of profit tax for enterprises
and income tax for private citizens, paid out of the Republic of Azerbaijan in accordance with
legislation of foreign countries, are taken into account. These amounts must not exceed the amount of
tax subject to payment in the Republic of Azerbaijan in relation to profit and income obtained abroad.
(c) Foreign exchange and payments system, relations with International Monetary Fund,
application of foreign exchange controls
In the process of transition from the central planning, the foreign exchange rate regime and
payments system have been completely altered.  All measures have been taken to meet obligations of
Article VIII of the IMF Agreement.  Azerbaijan’s exchange arrangements are in compliance with this
Article. This was approved on 25 July 1997 by the National Bank of the Republic of Azerbaijan,
which regulates operations related to currency accounts, and the conditions of conversion, repatriation
and expatriation of assets, invested in economy.  According to the “Rules”:WT/ACC/AZE/2
Page 12
- imports (declared to customs officials) and transfers of foreign currency to the
territory of the Republic of Azerbaijan are carried out without restrictions;
- all currency conversion operations are carried out through authorised banks which
have received the licence of the National Bank for conduct of foreign exchange
operations;
- conversion of foreign currency into Azerbaijan Manats for residents and non-
residents is conducted without restrictions by authorised banks at Baku Inter-bank
Currency Exchange, Inter-bank Currency market,  Currency exchange offices, and
through internal banking conversion by authorised banks;
- Azerbaijan’s National Bank determines the official exchange rate against the US
Dollar daily, so it is equal to the auction rate determined at the Baku Inter-bank
Currency Exchange;
- In the case of domestic investment, any profits gained therefrom may be reinvested in
local currency held in Azerbaijan or converted into foreign currency transferred
without restrictions;
- Azerbaijan has maintained a very intensive and close relationship with the IMF since
joining this organisation in 1992. The IMF has assisted Azerbaijan in restoringmacroeconomic stability and establishing market-supporting institutions. In 1998
from resources provided by the IMF, $331.9 million has been utilised.
(d) Foreign and domestic investment policy
Foreign investors (that is, enterprises or joint ventures with foreign equity capital ownership
exceeding 30 per cent) are entitled to an exemption from duties on imports of assets, purchased from
their equity. Azerbaijan has the policy of “open doors” in relation to foreign investment. The Law
“On Protection of Foreign Investment”, which was adopted on 15 January 1992 provides immunity
for foreign investors against changes in subsequent legal acts (Article 10, Section II) for a period of
10 years. This Law also guarantees foreign investments against nationalisation (Article 11, SectionII).
There are no restrictions for foreign investment, including the bank sector. Foreign
investment is up to 68.8 per cent of the total. In comparison with 1997, the level of foreign investment
in 1998 increased by 12.6 per cent (165 million US Dollars) and reached 1.5 billion US Dollars.
Azerbaijan has the highest level of foreign investment per capita (124 US Dollars and 23.1 per cent of
GDP) among CIS members.
(e) Competition policies
The establishment of competitive markets is one of the main objectives of economic reforms
in Azerbaijan.
The State Committee on Antimonopoly Policy and Support for Entrepreneurship, established
in 1993, is responsible for protecting consumers against monopolistic activity.  Natural monopolies
are also within the competence of the Committee and it has the power to fine companies for illegal
activities.  Any single entity or merger of companies with more than 35 per cent of the market share
are automatically subject to an investigation.WT/ACC/AZE/2
Page 13
The activities of the Committee are determined by the following major laws:
- The Law of the Republic of Azerbaijan “On Antimonopoly Activity”
(4 March 1993);
- The Law of the Republic of Azerbaijan “On Unfair Competition” (2 June 1995);
- The Law of the Republic of Azerbaijan ”On Entrepreneurs Activity”
(15 December 1992);
- The Law of the Republic of Azerbaijan ”On Enterprises” (1 June 1994);
- The Law of the Republic of Azerbaijan ”On Joint Stock Companies”
(24 November 1994);
- The Resolution of the Cabinet of Ministers of the Republic of Azerbaijan
“Regulations for Activity of Natural Monopolistic Subjects of the Republic ofAzerbaijan” (No. 109 of 15 August 1996).
3. Foreign trade in goods and services
With economic recovery underway, both the ex port and import of goods increased between
1995-1998, (Table 3).  Annex 1 gives detailed statistical information on the structure and directions offoreign trade.
Table 3: Foreign trade of Azerbaijan in terms of value, 1995-1998 (in million of US Dollars)
1995 1996 1997 1998
Exports 547 631 781 606
of which: oil products 282 395 452 418
Imports 668 961 794 1077
of which: machines and equipment 123 226 219 348
Oil sector activities determine foreign trade developments in Azerbaijan. The trade balance
deficit was 15 per cent in terms of GDP in 1995, 17 per cent in 1996, 15 per cent in 1997, 11.4 per
cent in 1998. However, if imports linked to oil sect or development are netted out, the trade deficit
would fall 10 per cent of GDP in 1995 to 6 per cent in 1998.
The services account balance was also 5.8 per cent of GDP in 1996, 8.7 per cent in 1997 and
9.9 per cent  in 1998 (384 million US Dollars).
The services account deficit was dominated by oil sector activity: revenues from services in
both transport and construction increased two times from 1996 to 1997 (Table 4).
Table 4:  Receipts and payments, 1995-1998 (in million of US Dollars)
1995 1996 1997 1998
Receipts 172 149 342 252
Payments 312 426 726 532
Services Balance -140 -277 -384 -280WT/ACC/AZE/2
Page 14
Directions of trade
Following the demise of the Soviet Union there has been very significant changes of
Azerbaijan’s foreign trade. The share of CIS countries (former Soviet Republics excluding the Baltic
countries) has decreased.  It fell from 52 per cent in 1993 to 40 per cent in 1996 and increased to 46per cent in 1997 and decreased again to 38 per cent in 1998.  Foreign trade turnover fell from $1.5
billion in 1993 to $1.2 billion dollars in 1995 and then was $1.6 billion in 1996-1997. In 1998 more
than a half of the total foreign trade turnover (1.046 billion US Dollars or 62 per cent) was linked with
non-CISs (Figure 1).
Figure 1:  Azerbaijan's total registered foreign trade
Source:  Azerbaijan State Committee on StatisticsIn 1998 import of goods from non-CIS countries amounted to  $672 million, or 62 per cent of
total import.  Export stood at $374 million, or 62 per cent of total export. Import from CIS countries
totalled 405 million US Dollars or 37 per cent of import, and export to CIS countries were 232 million
US Dollars or 38 per cent of total export.
Today, Russia is still is the principal trading partner of Azerbaijan in the CIS, but its share
became significantly lower than in the early 1990s. In 1998, Azerbaijan’s imports from Russia of
$194 million US Dollars accounted for 18 per cent of the total, while exports of 106 million US
Dollars accounted for 17 per cent of Azerbaijan’s exports.
Decrease of foreign trade with Russia was related with the crisis in August 1998, which
influenced all CIS members, including Azerbaija n. Export of some products from Azerbaijan to
Russia, tobacco, some agricultural and industry products, decreased sharply. In comparison with 1997
export decreased to 41.1 per cent in 1998. As a result, the decrease of export from Russia to
Azerbaijan has influenced domestic consumers negatively. The above-mentioned factors complicated
the financial situation of a number of enterprises.
Despite the Azerbaijan Government’s successful management of financial damages by means
of emergency  measures, it was unable to offset them completely.010203040506070
1993 1994 1995 1996 1997 1998%ROW
Other CIS Countries
RussiaWT/ACC/AZE/2
Page 15
As for other CIS economies, Ukraine supplied 8.6 per cent of Azerbaijan’s imports and
Georgia 2.3 per cent. These two countries accounted respectively for 2 per cent and 12.7 per cent of
Azerbaijan’s exports. Among non-CIS countries Iran (5.2 per cent of the total trade turnover), Turkey
(21 per cent), Germany (3.1 per cent) and UAE (2.9 pe r cent) are Azerbaijan’s most important trading
partners.
Composition of imports and exports
In 1998 the major category of imports remained food, accounting for 16 per cent of total
imports, equipment 32.5 per cent, energy was 3 per ce nt while that of iron and steel amounted to 12
per cent.
On the export side, cotton, minerals, fuel, oil and oil-products make up more than a half of
Azerbaijan’s exports. The biggest items are oil and oil products which generated $418 million dollars
or 72.3 per cent of Azerbaijan’s total export earnings in 1998.
4. Domestic trade in services including value and composition of foreign direct investment
The paid services characterise the changes in domestic trade services sector. Following the
collapse of central planning there was a significant increase in the share of services in Gross Domestic
Product (GDP). The decline of industrial output wa s initially the reason for an increase in services.
The share of services rose to 22 per cent in 1995. There was an increase in paid services by 11
per cent in 1998 in comparison with the previous year.
While there is no reliable data available on the composition of foreign investment in services,
statistics on foreign investments in the non-oil sectors of the economy showed some light. Of $617
million dollars invested during that period, 33 per cent went to industry, 35.5 per cent to agriculture,31.5 per cent to services and infrastructure. Hotels and supermarkets accounted for a large part of
these investments. Furthermore, at present several foreign banks conduct their operations in
Azerbaijan.
5. Information on financial movements relate d to nationals working abroad, remittances,
etc.
The number of Azerbaijan citizens working outside of Azerbaijan is not significant.
Therefore, remittances are negligible and not included in balance-of-payments statistics.
6. Information on growth in trade in goods and services over recent years and forecasts for
years to come
The economic recovery has accompanied expansion in domestic trade in goods and services.
Trade turnover in goods increased by 9.1 per cent in 1998 and is expected to expand (see Table 5).WT/ACC/AZE/2
Page 16
Table 5: Domestic trade in goods and services, 1995-2000
1995 1996 1997 1998 1999 2000
  Goods turnover
  (in billions of Manats) 5,293 7,339 8,481 9,135 12,200 15,000
  Real growth rate (in %) 2.3 14.1 17.3 9.1 12 10
  Paid services  (in billions of Manats) 583 965 1,148 1,350 2,000 2,250
  Real growth rate (in %) -25 16 11 11 10 8
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
The current foreign trade policy framework has shifted from supporting direct State
micromanagement of foreign trade to a market-supporting framework.
The reforms, those already implemented and those envisaged, seek to enhance competition in
domestic markets and promote export-oriented produ ction through removing discrimination against
foreign investors and producers of imported products.
While major pillars and institutions are in place, the development and enforcement of WTO-
consistent policies in all areas covered by the Uruguay Round Agreements is yet to be completed. TheGovernment will fervently strive to remove existing inconsistencies.
1. Power of the executive, legislative and judicial branches of government
In compliance with Article 99 of the Constitution of the Republic of Azerbaijan the President
of the Republic of Azerbaijan implements the executive power.
The President of the Republic of Azerbaijan:1. announces elections to Milli Majlis of the Republic of Azerbaijan;
2. submits the Republic of Azerbaijan State budget of the Republic of Azerbaijan to
Milli Majlis for approval;
3. approves state economic and social programmes;
4. appoints Prime Minister of the Republic of Azerbaijan, dismisses Prime Minister of
the Republic of Azerbaijan with the consent of Milli Majlis of the Republic of
Azerbaijan;
5. appoints and dismisses members of the Cabinet of Ministers of the Republic of
Azerbaijan; whenever necessary takes chair at the meetings of Cabinet of Ministers of
the Republic of Azerbaijan;
6. makes decisions about the resignation of Cabinet of Ministers of the Republic of
Azerbaijan;
7. establishes central and local executive power bodies within the limits of sums allotted
in the State budget of the Republic of Azerbaijan;WT/ACC/AZE/2
Page 17
8. cancels decrees and orders of the Cabinet of Ministers of the Republic of Azerbaijan
and Cabinet of Ministers of Nakhichevan Autonomous Republic, and acts of central
and local executive power bodies;
9. submits proposals to Milli Majlis of the Republic of Azerbaijan about appointment of
judges of Constitutional Court of the Rep ublic of Azerbaijan, Supreme Court of the
Republic of Azerbaijan and Economic Court of the Republic of Azerbaijan; appoints
judges of other courts of the Republic of  Azerbaijan; appoints and dismisses General
procurator of the Republic of Azerbaijan by consent of Milli Majlis of the Republic
of Azerbaijan;
10. submits recommendations to Milli Majlis of the Republic of Azerbaijan about
appointment and dismissal of members of Administration Board of National Bank of
the Republic of Azerbaijan;
11. submits military doctrine of the Republic of Azerbaijan to Milli Majlis of the
Republic of Azerbaijan for approval;
12. appoints and dismisses officers of higher rank to Military Forces of the Republic of
Azerbaijan;
13. forms the executive office of the President of the Republic of Azerbaijan, appoints its
head;
14. appoints and dismisses authorized representatives of the President of the Republic of
Azerbaijan;
15. submits recommendations to Milli Majlis of the Republic of Azerbaijan about
establishment of diplomatic representations of the Republic of Azerbaijan in foreigncountries and under international organisations, appoints and dismisses diplomatic
representatives of the Republic of Azerbaijan in foreign countries and in international
organizations;
16. receives credential papers and letters of recall from diplomatic representatives of
foreign countries;
17. concludes interstate and intergovernmental agreements, presents interstate agreements
to Milli Majlis of the Republic of Azerbaijan for ratification and denunciation; signs
decrees on ratification of international agreements;
18. announces referendum;
19. signs and issues laws;
20. settles questions concerning citizenship;
21. settles questions concerning granting political refuge;
22. grants pardon;
23. gives State awards;
24. assigns higher military and higher special ranks;
25. announces total or partial mobilization and demobilization;
26. takes decisions about calling up citizens of the Republic of Azerbaijan to urgent
military service and transfer to the reserve of soldiers of urgent military service;
27. forms Security Council of the Republic of Azerbaijan;WT/ACC/AZE/2
Page 18
28. submits recommendation to Milli Majlis of the Republic of Azerbaijan about consent
for use of Military Forces of the Republic of Azerbaijan in implementation of duties
other than their normal duties;
29. announces state of emergency and martial law;
30. on consent of Milli Majlis of the Republic of Azerbaijan announces a war and
concludes peace agreements;
31. forms special security bodies within the limits of sums allotted from State budget of
the Republic of Azerbaijan;
32. settles other questions which under the present Constitution do not pertain to the
competence of Milli Majlis of the Republic of Azerbaijan and court bodies of the
Republic of Azerbaijan.
According to Article 81 of the Constitution Milli Mejlis realizes the legislative power.
Milli Mejlis of the Republic of Azerbaijan enacts the constitutional laws, laws and regulations
in term of its competence.
Milli Mejlis of the Republic of Azerbaijan establishes general rules concerning the following
matters:
1. use of rights and liberties of a person and citizen specified in the present Constitution,
state guarantees of these rights and liberties;
2. elections of the President of the Republic of Azerbaijan;
3. elections to Milli Majlis of the Republic of Azerbaijan and status of deputies of M illi
Majlis of the Republic of Azerbaijan;
4. referendum;
5. judicial system and status of judges; procur ator’s office, the bar and notary’s offices;
6. legal proceedings, execution of court verdicts;
7. elections to municipalities and status of municipalities;
8. state of emergency; martial law;
9. State awards;
10. status of private citizens and legal entities;
11. objects of civil law;
12. transactions, civil-legal agreements, representation and inheritance;
13. right of property, including legal regime of State, private and municipal property,
right of intellectual property, other proprietary rights; liability right;
14. family relationships, including guardianship and trusteeship;
15. basis of financial activity - taxes, duties and charges;
16. labour relationships and social maintenance;
17. interpretation of crime and other violations of law; establishment of responsibility for
these acts;
18. defense and military service;WT/ACC/AZE/2
Page 19
19. governmental employment;
20. basis of security;
21. territorial arrangement; regime of State borders;
22. ratification and denunciation of international treaties;
23. communications and transport;
24. statistics; metrology and standards;
25. customs;
26. commerce and stock exchange activity;
27. banking business, accounting, insurance.
In accordance with Article 125 of the Constitution of the Republic of Azerbaijan only Courts
may implement legal procedures and justice.
According to the Law of the Republic of Azerbaijan “On Courts and Judges”, adopted on 10
June 1997, the following are referred to the system of Courts of the Republic of Azerbaijan:
- district (city) courts;
- the Court of the Republic of Azerbaijan on felons;
- military courts;
- military courts of the Republic of Azerbaijan on felons:
- Local economic courts;
- Economic courts for settlement of disputes related to international agreements;
- Supreme Court of the Nachchivan Autonomous Republic;
- Court of Appeal of the Republic of Azerbaijan
- Economic Court of the Republic of Azerbaijan;
- Supreme Court of the Republic of Azerbaijan.
2. Government entities responsible for making and implementing policies affecting foreign
trade
The following Government entities are responsible for making and implementing policies
affecting foreign trade:
- Milli Mejlis of the Republic of Azerbaijan;
- The President of the Republic of Azerbaijan;
- The Cabinet of Ministers of the Republic of Azerbaijan;
- The Ministry of Commerce of the Republic of Azerbaijan;
- The Ministry of Economy of the Republic of Azerbaijan;
- The Ministry of Finance of the Republic of Azerbaijan;
- National Bank of the Republic of Azerbaijan;WT/ACC/AZE/2
Page 20
- State Customs Committee of the Republic of Azerbaijan;
- State Committee on Antimonopoly Policy and Support for Entrepreneurship of the
Republic of Azerbaijan;
- Main State Tax Inspection of the Republic of Azerbaijan.
Implementation of the regime of regulation of trade policy has evolved since the collapse of
central planning.
The Ministry of Commerce is a central body of executive power which implements internal
and foreign trade State policies and management of relations with international trade organisations.
The Ministry of Commerce coordinates the activity of other central executive bodies in the field of
internal and foreign trades in compliance with the existing legislation.
The main responsibilities of the Ministry of Commerce are determined by the Constitution,
Laws of the Republic of Azerbaijan, international agreements, Orders and Decrees of the President,
the Cabinet of Ministers of the Republic of Azerbaij an and the Presidential Decree of the Republic of
Azerbaijan “Regulations about Ministry of Commerce of the Republic of Azerbaijan” No. 626
adopted on 26 July 1997.
The State monopoly on foreign trade was completely removed.The Cabinet of Ministers of the Republic of Azerbaijan sets tariffs with recommendations of
other Government agencies.
3. Division of authority between central and sub-central form of governments
The heads of local executive authorities carries out the executive power in the regions
(districts, cities).
The President of the Republic of Azerbaijan appoints and dismisses the heads of local
executive authorities. The President of the Republic of  Azerbaijan identifies the authorities of local
bodies.
In accordance with Article No. 142 of the Constitution of the Republic of Azerbaijan the
municipalities implement self-government. The municipalities are instituted by the elections. Rules ofelection of municipalities and the status of municipalities are determined by law.
At present the corresponding laws about municipalities are being discussed by Milli Me jlis.
4. Any legislative programmes or plans to change the regulatory regime
The regulatory regime has been under constant change since 1994. Its major objective is, on
the one hand, removing the legacy of Soviet Laws from the legislative framework, and on the other
hand, establishing the legal and regulatory bases of democracy.
Given the complexity of the task, this process is still underway. Along with enforcement, the
legislative norms (“About Police”, “Criminal Code”, ”About Advocacy” and “About Notary”, other
legal drafts), which are now under consideration, the norms mentioned determine the implementation
of democratic measures (election of local bodies, and identification of their status).WT/ACC/AZE/2
Page 21
5. Laws and Legal Acts
The list of the laws and legal acts, documents and other normative-legal decrees, regulating
activity of Customs Authorities, imports, exports, transit, rules on foreign investments, and economic
questions influencing trade in goods and services is shown in Annex 2 of the Memorandum.
6. Description of judicial, arbitral or administrative tribunals or procedures
Judicial power in Azerbaijan is implemented through the Constitutional Court of the Republic
of Azerbaijan, Supreme Court of the Republic of Azerbaijan, Economic Court of the Republic of
Azerbaijan, general or specialised law courts of the Republic of Azerbaijan.
It is implemented through Constitutional, civil and criminal legal proceedings and other forms
of legislation provided for by law.
Judges are independent, they are subordinate only to Constitution and laws of the Republic of
Azerbaijan, and they cannot be replaced during the term of their authority.
The Economic Court of the Republic of Azerbaijan is the highest law court for the settlement
of economic disputes. It carries out control over activity of respective specialised law courts in an
order envisaged by law.
The Judges of Economic Courts of the Republic of Azerbaijan are appointed by Milli Majlis
of the Republic of Azerbaijan on recommendation by  the President of the Republic of Azerbaijan.
IV. POLICIES AFFECTING TRADE IN GOODS
The foreign trade regime has been dramatically liberalised, especially over the last three
years. Export controls were scrapped in 1996, as were export tariffs and the compulsory requirement
to surrender a portion of hard currency earnings at below market exchange rates. Many proceduresrelated to foreign trade operations were simplified. Last but not least, a new streamlined tariff
structure based essentially on two rates was introduced in 1997.
1. Import Regulation.
(a) Registration requirements for engaging in importing
There is no registration requirement to become involved in importing.
(b) Characteristics of national tariff, customs tariff nomenclature (HS), types of duties, general
description of the customs tariff structure, application of m. f. n. tariff  rates, tariff preferences
In 1997 a new two-rate tariff structure was introduced with rates of 15 per cent and 5 per cent.
Thus Azerbaijan has a simple tariff structure of two rates. However, in addition, a number of products
are granted duty free access to Azerbaijan’s domestic markets. The weighted average applied tariffrate was 4 per cent in 1997 - 1998. The main system used for coding purposes is Harmonised
Commodity Description and Coding System (HS).
Although the existing laws allow for the following types of customs duties to be applied ad
valorem  tariff has been applied:
- ad valorem ,  calculated in relation to the customs value (usually invoice);WT/ACC/AZE/2
Page 22
- specific duties, calculated at the fixed cost per unit of goods;
- combined, combining ad valorem  and specific tariffs.
Since January 1st 1997, there are no preferential tariff rates: imports from all sources are
subject to the same tariff. Although Azerbaijan has signed preferential trading agreements with seven
states of the CIS - Georgia, Kazakstan, Moldova,  Russia, Turkmenistan, Uzbekistan and Ukraine -
their trade liberalising provisions have not taken effect.
(c) Tariff quotas, tariff exemptions
There are no tariff quotas in Azerbaijan.
There are three types of tariff exemptions. First, there is a list of products which are exempt
from duties (and VAT as well). Among others these include: seeds; feeds; fertiliser; animals forbreeding; pharmaceutical products; capital equipment; equipment (including spare parts) used in
agriculture; packaged baby food and syringes.
The second type is applied to the property contributed by foreign investors to the equity
capital of the joint ventures established in Azerbaijan.
The third type of tariff exemptions also apply to goods envisaged for official use by the
diplomatic representations and international organisations, humanitarian aid, free technical assistance,
and in-kind contributions of foreign investors to joint ventures established in Azerbaijan.
(d) Other duties and charges, specifying any charges for services rendered
The following ad valorem  customs charges are imposed on exports and imports:
- State enterprises pay an ad valorem  fee of 0.15 per cent of the customs value of goods
but no less than the equivalent of three minimum monthly wages
1 ;
- in-kind contributions to a joint venture are subject to the ad valorem  rate of 0.25 per
cent but no less than the equivalent of two minimum monthly wages;
- exports and imports in barter transactions are subject to the rate of 0.25 per cent but
no less than the equivalent of four minimum monthly wages;
- convertible currency exports and imports are subject to the ad valorem  rate 0.25 per
cent but no less than $5 dollars (or its equivalent converted at the official rate of
Manat);
- goods shipped for further processing are subject to the ad valorem  rate of 0.25 per
cent;
- goods imported or exported under humanitarian aid are not subject to a customs
charge.
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
The import of goods listed in Annex 1 (arms and military equipment, spares required for their
manufacturing, gun powder, explosives, pyrotechnic facilities, nuclear materials and technologies,
facilities and equipment, special non-nuclear materials, radioactive sources, including radioactive
wastes, drugs, chemical poisons, military related scientific-technical information and technology) of
                                                     
1  The minimum monthly wage of 5500 ManatWT/ACC/AZE/2
Page 23
the “Procedures on regulation of import-export transactions in the Republic of Azerbaijan” approved
by the Decree of the Azerbaijan President dated 24 June 1997, will be exclusively carried out in
accordance with the Resolution of Cabinet of Ministers. Otherwise, import of these products is
prohibited.
For the import of chemical elements used for cultivation of plants, medicines used in
veterinary biological preparations and medical preparations, the Ministry of Commerce issues a
licence after consultation with appropriate Government agencies. Otherwise, import of these products
is prohibited.
The import of ethyl (edible) alcohol, alcohol beverages (excluding beer) and tobacco products
are subject to quantitative restrictions. Within quantitative quotas, determined annually by theMinistry of Economy, the Ministry of Commerce is in charge of issuing import licenses. See Annex 3.
(f) Import licensing procedures
Annex 3 of the Memorandum gives details of licensing procedures for imports of ethyl
(edible) alcohol, alcohol beverages and tobacco products.
(g) Other border measures, e.g. any other schemes that have border effects
There are no other border measures.
(h) Customs valuation
The system of customs valuation in Azerbaijan closely follows the principles set in the
Agreement on Implementation of Article VII of GATT.  Valuation is usually based on the transaction
value of the goods subject to adjustments due to th e inclusion of cost insurance and freight charges as
well as VAT (if applicable) and excise tax (if it applies to a product). In case of dispute over accuracy
of the transactions value, one or more of standard GATT valuation options may be used.
Annex 4 provides a detailed description of appropriate order of determination of customs
value (customs valuation) .
(i) Other customs formalities
The importers have to submit the customs declaration on imports accompanied by an invoice
or other proof of the price actually paid, certificate of origin, and a shipment document.
(j) Pre-shipment inspection
The Republic of Azerbaijan does not regularly use pre-shipment inspection services, nor does
it have any legal regulations on pre-shipment inspection. However, in some cases pre-shipment
inspection has been used by private sector importers to meet consumer protection requirements andtechnical standards. Pre-shipment inspectio n for veterinary controls is also used.
(k) Application of internal taxes on imports
The same rules of taxation apply to domestically produced goods as well as imports. There
are no internal taxes levied specifically on imports.WT/ACC/AZE/2
Page 24
(l) Rules of origin
Since Azerbaijan does not have preferential trade agreements and all imports are subject to
the same rules whatever their origins, the origin of imports does not have to be controlled. Certificates
of origin are required mainly for statistical purposes.
The principles and rules for identifying the country of origin embodied in the Law of the
Republic of Azerbaijan “About Customs Tariff” (June 1997) are broadly in line with the Kyoto
Convention. These tests or criteria to assess “sufficiency of transformation” adopted in the Law
include, among others:
- a change in tariff heading;
- determining a list of specific processing operations which do or do not confer upon
the products involved the origin of the country in which the operation was realised;
- the use of the percentage of value-added generated (or the percentage of materials
utilised in transforming the product) in a country.
(m) Anti-dumping regime
Although the existing legislation allows for an anti-dumping undertaking, no mechanism for
applying anti-dumping has been introduced. A draft law has been worked out and it is currently under
approval.
(n) Countervailing duty regime
Azerbaijan has not developed a countervailing duty regime. No countervailing duties have
ever been imposed.
(o) Safeguard regime
There is no special safeguard regime in Azerbaijan.
2. Export Regulation
(a) Registration requirements for engaging in exporting
Except for obtaining the status of a legal entity, there are no special registration requirements
for engaging in export activity.
(b) Customs tariff nomenclature, types of duties, duty rates, weighted averages of duty rates
Customs export duties are not imposed on exported goods regardless of their type.
(c) Quantitative export restrictions, including prohibitions, quotas and licensing system
Exports of goods listed in Annex 1 (arms and military equipment, spares required for their
manufacturing, gun powder, explosives, pyrotechnic facilities, nuclear materials and technologies,facilities and equipment, special non-nuclear materials, radioactive sources, including radioactive
wastes, drugs, chemical poisons, military related scientific-technical information and technology) of
the “Procedures on regulation of import-export transactions in the Republic of Azerbaijan” approved
by the Decree of the Azerbaijan President dated 24 June 1997 will be exclusively carried out inWT/ACC/AZE/2
Page 25
accordance with the Resolution of Cabinet of Ministers. Otherwise, exports of these products are
prohibited.
Exports of goods indicated in the Annex 2 of the “Rules of Regulation of export-import
operations” (steppe animals, wild plants and bones of animals from excavations, raw materials formedicines, poison of snake and bee, as well as poison of scorpions, works of art) are not allowed
unless a special permit is obtained from the Ministry of Commerce. The Ministry is obliged to consult
the decision with appropriate competent Government agencies.
(d) Export licensing procedures
The export of goods and services are not licensed, except as indicated under sub-paragraph
“c” above.
(e) Other measures, e.g. minimum export prices, voluntary export restrictions, orderly marketing
arrangements
There are no such export restricting measures.
(f) Export financing, subsidy and promotion policies
The Government is not involved in promoting export through subsidies. Exporting firms rely
solely on commercial credits.
(g) Export performance requirements
No such requirements exist in the Republic of Azerbaijan.
(h) Import duty drawback schemes
There is no duty-drawback mechanism in Azerbaijan.
3. Internal policies affecting foreign trade in goods
(a) Industrial policy, including subsidy policies
Except for the development of infrastructure, completing privatisation of large State-owned
enterprises and establishing an environment friendly to private sector development, the Government is
not directly involved in shaping the performance of industrial sectors. Enterprises involved in foreign
trade, either export or import, are not subsidised by the State.
(b) Technical regulations and standards, including measures taken at the border with respect to
imports
A certificate of conformity is required for some products. See Annex 5.
(c) Sanitary and phytosanitary measures, including measures taken with respect to imports
The Law “About the Sanitary and Epidemiological Welfare” bans the import of products that
could trigger spreading of infections dangerous to people, animals, plants and food products. At
customs clearance of imported goods, certificates confirming the quality and origin of goods are
required.WT/ACC/AZE/2
Page 26
(d) Trade related investment measures
There are no trade-related investments measures in Azerbaijan.
(e) State-trading practices
There are no governmental or non-governmental enterprises, including marketing boards,
with exclusive rights or privileges in export or import operations.
(f) Free zones
There are no free zones on the territory of the Republic of Azerbaijan. However, the draft law
of the Republic of Azerbaijan “About Free Zones” is under consideration. This Law will determine
the legal and economic ramifications of the establishment of free zones.
(g) Free economic zones
No free economic zones.
(h) Trade-related environmental policies
The Law of the Republic of Azerbaijan “About Na ture Protection and Nature Utilization” is a
cornerstone of Azerbaijan’s environmental policies. In  its present form it has little bearing, if any, on
trade.
(i) Mixing regulations
There are no mixing regulations in the Republic of Azerbaijan.
(j) Government-mandated counter-trade and barter
The Government regulates counter-trade a nd barter through the following measures:
- registration and monitoring of barter operations (the Ministry of Commerce is
responsible);
- requirement that a barter operation is completed within and reception of goods in
equivalent amount is fixed for 90 days.
(k) Trade agreements leading to country-specific quotas allocation
Azerbaijan has not signed such agreements.
(l) Government procurement practices, including general legal regime and  procedures for
tendering, dealing with tenders and awards of contracts.
Government procurement and sourcing policies, regulated by the law “About Tender” of 4
February 1997 and the Decree 524 of the President of the Republic of Azerbaijan (12 December
1996) together with the Provision “About Purchases of  Goods (works, services) by State Enterprises”,
require competitive tendering for all purchases exceeding 250 million Manat (around  $64,000).
The procurement laws seeks to assure transparency of tendering procedures, which are open
to pre-qualified firms, both domestic and foreign.WT/ACC/AZE/2
Page 27
(m) Regulation of trade in transit
The transit of goods can be realised by any public route. Transit is subject to transport charges
which vary according to the size of cargo, type of transportation, etc. Goods in transit between two
customs stations of the Republic of Azerbaijan shoul d be delivered into a customs station of arrival
within terms established by the customs authorities at the point of departure.
4. Policies affecting foreign trade in agricultural products.
As a result of privatisation of State-owned farms and collective farms, the State facilitated the
establishment of ownership in an agricultural infrastructure.  There is no policy influencing prices and
profit, excluding the artificial irrigation system.
(a) Imports
All import procedures described in Section IV 1( b), (c) apply to agricultural imports. No other
border measures are applied to agricultural goods other than the sanitary and phyto-sanitary measures.
(b) Exports
There is no special export regime applicable to agricultural goods and no export subsidy
measures are in place.
(c) Export prohibitions and restrictions
There are no export prohibitions or rest rictions on agricultural products.
(d) Export credits, export credit guarantees or insurance programmes
There are no export credits other than those available from the commercial banks. There is no
system of export credit guarantees and any insurance programmes.
(e) Internal policies
The focus of agricultural policy has been on the change in structure of ownership
(privatisation of Soviet-style collective and State-owned farms) and establishing a system of
technical/informative  aid to generate support to farmers.  There are no explicit subsidies provided to
the agricultural sector. The only source of implicit subsidy is that water usage charges are below full
cost recovery levels.
5. Policies affecting foreign trade in other sectors.
(a) Textiles regime
There is no special textiles regime in place.
(b) Policies affecting foreign trade in other major sectors
Except for the oil sector, the Government is not involved in sector specific policies.WT/ACC/AZE/2
Page 28
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General introduction
An intellectual property framework that has a legal base supported by State policy, is at the
initial stages of development. New laws consistent with minimum standards of intellectual property
protection, as set in the TRIPs Agreement, are yet to be prepared, although some progress has beenmade.
(a) Intellectual property policy
In line with reforms introducing an economic regime based on development of private
entrepreneurship and integration into the intern ational system, the medium-term Government policy
objective is to provide effective legal protection to all types of intellectual property including
trademarks, geographical indicators, industrial designs, layout designs of integrated circuits, copyrightand patent protection.
Azerbaijan has already become party to several international agreements.
(b) Responsible agencies  for policy formulation and implementation
The agencies responsible for formulation and implementation of the policy in the field of the
intellectual property are the State Committee for Science and Technology of the Republic of
Azerbaijan (Patent and Licence Department) and the Agency for Copyright under the Cabinet of
Ministers of the Republic of Azerbaijan.
(c) Membership of international intellectual property conventions and of regional and bilateral
agreements
Since 21 December 1995, the Republic of Azerbaijan has been a participant of the:
- Convention on the World Intellectual Property Organisation  (WIPO);
- Paris Convention for the Protection of Industrial Property;
- Madrid Agreement on the International Registration of Marks;
- Patent Cooperation Treaty (PCT);
- Eurasia Patent Convention.
On 27 November 1998 the Republic of Azerbaijan joined “The Bern Convention on
Protection of Literary Works and Works of Art”.
Azerbaijan has concluded bilateral agreements in the field of protection of the industrial
property with Russian Federation, Moldova, Uzbe kistan, Kazakstan, Kyrgyz Republic and Georgia.
(d) Application of national and m.f.n. treatment to foreign nationals
In accordance with the Law of the Republic of Azerbaijan “About Patents”, adopted on 25
July 1997, the foreign legal and physical persons have the same rights in this field as the citizens of
the Republic of Azerbaijan.WT/ACC/AZE/2
Page 29
(e) Fees and  taxes
The Resolution of the Cabinet of Ministers of the Republic of Azerbaijan No. 286 of 7 June
1993 sets the fees for the juridical actions connected with the receipt of the protection documentation
on the industrial property’s object, keeping them in action, and for committing other actions related to
the industrial property.
Regulation of the issues of the payments and taxes relating  to the copyrights from foreign
persons is implemented in accordance with the Laws of the Republic of Azerbaijan “On Taxes on
profit from the private citizens” (Article 12) and with the Law “On income taxes of enterprises and
organisations”.
2. Substantive standards of protection of intellectual property rights, including procedures
for the acquisition and maintenance
(a) Copyright and related rights, including rights of performers, producers of phonograms and
broadcasting organizations
Personal (non-proprietary) and proprietary (economic) rights of authors are provided in
accordance with  Articles 14 and 15 of the Law of the Republic of Azerbaijan “On copyright andrelated rights”, Article 33 of the same Law of the performer’s rights, Article 34 of the phonograms
producer’s rights, the Article 35 of the ri ghts of the broadcasting organisations.
(b) Trademarks, including official  marks
Trademarks, including official marks are protected by Law “ On trademarks and geographical
indicators” of the Republic of Azerbaijan of 12 June 1998.
(c) Geographical indicators, including appellations of origin
Protection of the geographical indicators, including the name of the place of origin are
regulated by the law “On trademarks and geographical indicators” in accordance with the legislativeprocedure.
(d) Industrial designs
Protection of the industrial drafts shall be made on the basis of the law “On Patents”.
(e) Patents
Protection of the inventions and useful models (patents) shall be made on the basis of the Law
“About Patents”.
(f) Plant variety protection
The regulation of vegetable variety protection is provided in accordance with the Law “About
Nature Protection and Nature Utilization”.
(g) Layout designs of integrated circuits
Legal protection of layout designs of integrated circuits is not currently carried out on the
basis of Law.WT/ACC/AZE/2
Page 30
(h) Requirements on undisclosed information, including trade secrets and test data
Without consent of the proprietor the acquisition and use of test data and information related
with commerce and financial secrets, is prohibited by Article 16 of the Law of the Republic of
Azerbaijan “About Antimonopoly Activities”.
3. Measures on control abuse of intellectual property rights.
In accordance with Article 46 of the Law of the Republic of Azerbaijan “On Copyright and
related rights” competent officials and bodies take appropriate measures to restore violated
intellectual rights and related rights on the basis of the Civil-Procedural and Criminal-Procedural
Codes of the Republic of Azerbaijan.
4. Enforcement
(a) Civil judicial procedures and remedies
The protection of intellectual property rights is carried out through court regulations. Thus,
when considering the relevant cases, the courts can apply the sanctions envisaging the compensation
of the damage caused, return of the property acq uired illegally, and also the compensation amounting
from 100 to 50 per cent of the minimum monthly wage.
(b) Provisional measures
Provisional measures are not applied.
(c) Any administrative procedures and remedies
At present, no special border measures are envisaged.
(d) Criminal procedures
In accordance with the Article 140 of the Criminal Code of the Republic of Azerbaijan,
imprisonment of up to 2 years is for the infringement of copyrights. Penalty sanctions for theinfringement of copyrights are also stipulated by the Code of Administrative Infringements of the
Republic of Azerbaijan.
5. Laws, decrees, regulations and other legal acts relating to the above.
The following are the Laws and legislative acts regulating the issues in the sphere of
intellectual property:
- The Law of the Republic of Azerbaijan “On Patents” of 25 July 1997;
- The Law of the Republic of Azerbaijan “On Copyright and related rights” of
8 October 1996;
- Decree of the President of the Republic of Azerbaijan “On application of the Law of
the Republic of Azerbaijan “On copyright and related rights” of 8 October 1996;
- Resolution of the Cabinet of Ministers of the Republic of Azerbaijan “On issues
related to the application of the Law of the Republic of Azerbaijan “On copyright and
related rights” of 2 May 1997.WT/ACC/AZE/2
Page 31
6. Statistical data on applications and grants of intellectual property rights, as well as any
other statistical data on their enforcement.
Since 1995, 1117 applications for patents have been submitted (31 patents were issued in
1995; 82  in 1996; 79 in 1997 and  96 in 1998).
More than 5 thousand petitions  to re-organise trade marks of the former Soviet Union to the
trade marks of the Republic of Azerbaijan have been submitted, and 2735 applications have been
submitted for  new trademarks (792 trademarks of the Republic of Azerbaijan were registered in
1995, 250 in 1996, 1892 in 1997 and 2152 in 1998).
At present, 2647 trademarks have been recognised at the territory of the Republic of
Azerbaijan through the international bureau of the World Intellectual Property Organisation within the
framework of the Madrid Agreements.
VI. TRADE-RELATED SERVICES REGIME
1. General
One of the main issues connected with the transition to a market economy is the development
and expansion of services, which is becoming actual for many activities Its role is increased in the
GDP and in the foreign trade(see: goods and services). Regulation of the problems connected with the
service provision shall be carried out in accordance with the Law of the Republic of Azerbaijan “On
Entrepreneurial Activity.”
2. Policies affecting Trade in Services
(a) Government departments, agencies, professional  associations or other bodies with authority
or a role relevant to the conduct of service activities
According to the Presidential Decree No. 637 of 4 September 1997 the State issues licenses
for conducting service activities. Depending on the kind of service activity, issuance of a licence maybe conditional upon meeting ecological, sanitary and other relevant standards. State bodies
responsible for issuing the licenses are also responsible for supervising that activity.
(b) Judicial, arbitral or administrative tribunals or procedures providing for the review of, or
remedies in relation to, administrative decisions affecting trade in services
Such procedures are the same as those described in Section III, paragraph 6.
(c) Provisions, including those in international agreements, concerning qualification requirements
and procedures, technical standards and licensing and/or registration requirements for the
supply of services
Annex 7 lists qualification requirements and procedures and refers to the relevant legislation.
Most professional services require a university degree. The most strict requirements are those
related to professional services in finance, health and aviation services.WT/ACC/AZE/2
Page 32
(d) Provisions regulating exclusive services activities and operation of monopolies
The policy of the Republic of Azerbaijan is to promote open competition in service sectors.
The Government does not grant any entity, regardless of ownership, exclusive or monopolistic right to
provide services.
(e) Provisions relating to safeguard measures as they apply to trade in services
Azerbaijan does not have any safeguard measures for trade in services.
(f) Provisions relating to international transfers and payments for current transactions of services
Policies and provisions discussed under Section II. 2 (c) apply to international transfers and
payments for current transactions of services.
(g) Provisions relating to capital transactions  affecting the supply of services
Rules discussed in Section II. 2 (c) apply to capital transactions concerning payments for the
supply of services.
(h) Provisions governing the procurement by governmental agencies of services
Provisions of Government procurement of services are the same as those governing
procurement of goods (Section IV. 3 (1)).
(i) Provisions concerning any form of aid, grant, domestic subsidy, tax incentive or promotion
scheme affecting trade in services
There are no such provisions.
3. Market Access and National Treatment
(a) Limitations on the number of service suppliers
There are no limitations on the number of service suppliers.
(b) Limitations  on the total value of service transactions or assets
There are no such limitations.
(c) Limitations on the total  number of service operations or on the total quantity of service
output
There are no such limitations.
(d) Limitations on the total number of natural persons that may be employed in a particular
service sector
There are no such limitations.WT/ACC/AZE/2
Page 33
(e) Restrictions on, or requirements of specific types of legal entity through which a service may
be supplied
There are no such limitations or requirements.
(f) Limitations  on the participation of foreign capital
There are no such limitations.
(g) Measures relating to financial operation which influence national services or service suppliers
There are no such limitations.
4. Most-Favoured-Nation Treatment
The same principles apply to  foreign suppliers of services, regardless of nationality.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade in goods and services
(Annex 8A refers).
The Republic of Azerbaijan has concluded a number of bilateral agreements on foreign trade
in goods and services including free trade agreem ents with member countries of Commonwealth of
Independent States (CIS).
2. Economic integration, customs union and free-trade area agreements (Annex 8B refers).
Despite the  agreements mentioned above, and a free-trade agreement with all CIS member
states, no exporter from any single country has preferential access to Azerbaijan’s domestic markets.
3. Labour markets integration agreements.
During the last years the Republic of Azerbaijan has concluded a number of agreements with
other countries on interaction and cooperation in the sphere of labour. These include:
- Intergovernmental Agreement with Kyrgyz Republic “On cooperation in labour
activity and social security of labour migrants”;
- Intergovernmental Protocol of Intent with Bakhreyn on the cooperation in the sphere
of labour;
- Communiqué on cooperation with Kuwait on labour issues;
- Agreement on issues of labour migration with the Ministry of Labour and Social
Security of Population of the Turkish Republic.
The work was initiated in preparation for a  “Single Programme of Migration Administration
in the Republic of Azerbaijan” within the UN frameworks.
The registration of  people wishing to work overseas and a data bank is being carried out with
the purpose of exposure to the international labour markets and integration of the national market with
the foreign labour markets.WT/ACC/AZE/2
Page 34
4. Multilateral economic cooperation, membership in the multilateral economic
organizations, trade-related programmes of other multilateral organizations.
After having gained independence, the Republic of Azerbaijan made strong steps towards
entering a number of the largest international organizations.
Up to now our country is a member of the following economic organisations:
- Black Sea Economic Cooperation (BSEC) - 1992
- Organisation of Economic Cooperation - 1992
- World Meteorological Organisation - 1993
- World Veterinarian Organisation - 1995
- International  Civil Aviation Organisation (ICAO) - 1992
- International  Labour Organisation - 1992
- International Maritime Organisation - 1992
- United Nations Industrial Development Organisation (UNIDO) - 1993
- International Telecommunications Union - 1992
- Islamic Fund of Science and Technological Development - 1992
- Islamic Centre of Trade Development - 1992
- Islamic Statistics Centre - 1992
- International Fund for Agricultural Development - 1995
- United Nations Food and Agricultural Organisation (FAO) - 1995
- UN Economic Commission for Europe (UNECE) - 1992
- World Intellectual Property Organisation - 1995
- World Customs Organisation - 1993
- UN Development Programme - 1992
- UN Conference on Trade and Development (UNCTAD) - 1992
- Economic and Social Commission for Asia and Pacific Ocean (UN) - 1993
- The World Bank  -1991
- The International Monetary Fund - 1992
- European Bank of Reconstruction and Development - 1992
The Republic of Azerbaijan has the status of observer in the following organisations:- World Trade Organization - 1997
- European Electric Charter  -1994
- UN Council on Economics and Social Issues - 1992WT/ACC/AZE/2
Page 35
ANNEX 1
STATISTICS AND PUBLICATIONS
I. FOREIGN TRADE STATISTICS FOR GOOD AND SERVICES: RESPONSIBLE
AGENCIES
The National Bank, State Customs Committee and State Statistics Committee are responsible
for collecting and processing foreign trade statistics for goods and services.
II. PUBLICATIONS RELATED TO STATISTICS
Bulletins of the State Statistics Committee  are the main publications containing statistics on
foreign trade of goods and services. They are published monthly. In addition, the State
Statistics Committee publishes the Statistical Yearbook . Besides the official publications of
the departments, relevant information is also published in mass media.
III. STATISTICAL DATA:
(a) Main economic indicators:
(i) Production development
1995 1996 1997 1998
Real GDP (percentage change
on a year earlier)-12.0 1.3 5.8 10,0
Of which
Industry -21.4 -6.7 0.3 2.2
Agriculture -7.2 3.0 -6.9 3.9
Investment in fixed assets 90.0 65.7 58.7 45
(ii) GDP per capita
Measure 1995 1996 1997 1998
Gross Domestic Product Thousand of
Manats 1420 1808 2023 2079
GDP converted at annual
average exchange rate US Dollars 321 421 507 537
Share of State Sector % 66 62 54 45
(iii) State budget in 1998 (in per cent of GDP)
1994 1995 1996 1997 1998
Total Revenue 33.8 17.6 17.6 19.7 14.5
Total Expenditure 45.9 22.4 20.4 21.4 16.6
Fiscal Balance (deficit) -12.1 -4.9 -2.8 -1.7 -2
Domestic financing 12.1 0.3 -0.2 -0.4 5.5WT/ACC/AZE/2
Page 36
The major sources of State budget total revenue:
- Excise − 4.1 per cent
- Royalty tax − 7.4 per cent
- Taxes from foreign economic activity (customs duties and excise taxes on imports) −
10.6 per cent
- Tax on profit − 14.1 per cent
- VAT - 31 per cent
- Personal Income Tax - 17.5 per cent
 Shares of selected sectors in budget expenditure:
 
- education − 21.4 per cent
- Social Protection Fund − 23.3 per cent.
(iv) Production of the basic goods
Units 1995 1996 1997 1998
Amount of industrial
productionBillion Manats 8,865 11,315 12,490 11,638
Rate of growth % 78.6 93.3 100.3 102.2
Amount of non-State sector % 5.5 7.5 14.7 26.4
Production of needed goods
Electric power KWh 16,957 16,704 16440 17,906
Oil extraction Thousand tons 9,161 9,100 9076.8 11,424
Benzene Thousand tons 1,040 1,022 901.5 629.9
Diesel fuel Thousand tons 2,168 2,090 2143.2 2,042.4
Fuel for jet engines Thousand tons 509 525 575.8 695.6
Mazut furnace Thousand tons 4,209 3,957 3868 3,958.6
Steel tubes Thousand tons 9.8 3.1 13 3.1
Aluminum Thousand tons 3.7 0.8 4.7 3.4
Polyethylene Thousand tons 18.8 27.7 15 18.3
Sulfuric acid Thousand tons 24 41 52.5 24.0
Oil equipment:
Metal structures Units 716 486 597 248
Machine tools Pieces 55 47 70 43
Drilling pumps Thousand of
pieces23.8 18 15.8 14.8
Air conditioner Thousand of
pieces64.3 78.8 36.5 9.6
Refrigerator Thousand of
pieces25.2 6.9 0.1 3.4
Kitchen equipment Thousand of
pieces22.2 8.2 5.1 1.2
Cement Thousand tons 192 223 314.7 199.1
Cotton fibre Thousand tons 106.5 73.7 70.3 40.5
Cotton yarn Thousand tons 19.4 13.2 8.1
Cotton cloths Million m2 56.3 23.1 16.5 7.0WT/ACC/AZE/2
Page 37
Units 1995 1996 1997 1998
Carpets and carpet articles Thousand m2 64 42.5 40 34
Canned fruits and vegetables Million of can 87.3 62.6 16.1 11.9
Mineral water Million bottles 1.1 1.05 1.08 55.4
Grape wine Million litres 5 1.4 3.2 65
Brandy Thous. Litres 820 270 370 15
Sparkling wine Million bottles 1.8 1.19 1.34 111
Tobacco (fermented) Thousand tons 13.6 8.14 10.1 4.2
Caviar Tons 3 2.6 2.5
Grain Thousand tons 921.4 1,018.1 1,117.4 947.1
Raw cotton Thousand tons 274 274.3 124.7 112.6
Tea leaves Thousand tons 9.4 3 1.6 1.2
Meat Thousand tons 82 85.5 90.1 0.5
Milk Thousand tons 789 843.3 881.2 724
Freight transport Million tons 40.4 44.3 49.5 50.0
Passenger transport    Billion
passenger per
kilometer6.7 7.4 7.3 804.2
Source: State Statistics Committee
(v) Annual changes in prices
1994 1995 1996 1997 1998
Consumer Price Index
1994-19981664.4 511.7 119.7 103.7 99.2
(vi) (vii) Employment in different sectors
1994 1995 1996 1997 1998
Population 7,420 7,469 7,508 7,565 7.7
Working age population 3,999 4,039 4,059 4,127 4,135
Outside labour force 635 622 468 530 616
Labour force 3,364 3,417 3,591 3,597 3,519
Total Employment 2,851 2,837 2,895 2,900 2,913.5
Industry 374 352 283 257 223
Administration staff of State entities,
cooperatives and public organizations653 599 568 564 67
Agriculture and forestry 895 870 918 964 856
Other 964 1,009 1,126 1,115 1,768
Unemployment, thousand persons 513 580 696 696 42
Registered unemployment rate (%) 15.2 17.0 19.4 19.3 1.43WT/ACC/AZE/2
Page 38
(viii) Balance of Payments (In Millions of US Dollars)
1995 1996 1997 1998
Current Account -318 -811 -915 -945
Trade Balance -275 -549 -566 -739.6
Exports 680 789 808 512
Imports, f.o.b. -955 -1,338 -1,375 -1,251
Services Account -140 -277 -384 -280
Income -13 -52 -9 -1
Compensation of employees -6 -16 -19 -8
Interest payments on public external debt -7 -17 -7
Investment income (net) 0 -19 17 -5.7
Current transfers 111 67 46 76
Official 81 86 55
Private 29 -20 -10
Capital and financial account 318 739 1,008 966
Official medium- and long-term 87 -19 10
Disbursements 116 50 88
Project loans 14 19 53
Programme loans 102 31 35
Amortization -29 -70 -78
Direct and portfolio investment 282 661 1,093
Oil companies 252 487 845
Other 30 174 248
Banking system (net) -42 15 -5
Trade credit and other short term capital -9 82 -90
Errors and omissions 0 21 51
Financing 0 52 -145
Net foreign assets of the Central Bank
(- increase)-16 -24 -145
Central Bank gross reserves -117 -95 -253
IMF 101 71 108
Change in arrears (debt service obligations
to Russia,  mutual claims cancelled in
1997)-76 25 0
Re-scheduling 92 51 0
Gross reserves in weeks of imports 5 8 16
Current account in  per cent of GDP -13.2 -25.5 -23.7
External debt in  per cent of GDP 17.3 16.6 14.5
(ix) Foreign exchange
US Dollar
Month 1995 1996 1997 1998
January 4,270.8 4,442.9 4,097.6 3,891.6
February 4,355.5 4,441.3 4,076.4 3,889.5
March 4,389.9 4,319.8 4,059.1 3,884.4
April 4,397.7 4,367.7 4,029.7 3,864.4
May 4,415.4 4,353.9 4,009.3 3,878.2WT/ACC/AZE/2
Page 39
US Dollar
Month 1995 1996 1997 1998
June 4,441.0 4,347.0 3,992.7 3,872.7
July 4,473.0 4,298.9 3,967.0 3,871.1
August 4,494.6 4,284.3 3,953.6 3,870.0
September 4,455.7 4,226.9 3,936.9 3,869.1
October 4,436.0 4,191.6 3,918.5 3,868.1
November 4,440.0 4,148.7 3,907.6 3,868.8
December 4,440.0 4,122.6 3,893.1 3,888.6
Source: National Bank
(b) Foreign trade statistics:
(i) (ii) (iii) Foreign trade, export and import statistics
Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
01 Live animals 101.3 418.3 234.5 425.7 Na 19.2 na 0.3
02 Meat and edible
meat32,312.4 44,905.8 17,028.5 18,538.4 0.9 207.9 0.6 18.3
03 Fish and
crustaceans,
mollusc and other
aquatic
invertebrates334.7 463.2 407.5 839.1 369.6 262.7 475.0 141.1
04 Dairy products;
other products of
animal origin41,474.4 57,998.9 15,688.8 11,443.3 17.0 525.3 162.7
05 Other products of
animal origin, not
elsewhere specified
or included78.0 18.7 5.6 0.1 172.5 135.8 137.2 114.6
06 Live trees and other
plants2.0 32.6 63.1 80.4 6.4 na 10.2 1.2
07 Edible vegetables
and certain roots
and tubers3,562.5 8,855.3 7,717.1 5,859.2 712.1 778.0 423.3 237.7
08 Edible fruit and
nuts (fresh anddried)4,270.5 5,096.4 2,689.6 3,253.1 10,345.4 2,718.3 11,483.7 11,178.4
09 Coffee, tea, mint
and spices3,551.1 12,850.7 9,055.4 3,533.1 779.2 990.4 2529.9 3492
10 Cereals 20,055.3 43,590.0 23,404.0 56,303.9 Na 149.3 29.0
11 Products of milling
industry19,962.3 64,908.8 43,060.4 28,064.4 Na 22.7 129.8
12 Seeds, fruits and
plants for sowing
and medicinal
purposes102.0 268.3 208.8 327.1 104.2 1,019.5 605.5 1,479.2WT/ACC/AZE/2
Page 40
Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
13 Vegetable saps and
extracts31.4 3.1 24.3 32.8 Na 0.0 Na 44.8
14 Other vegetable
planting
MaterialsNa Na 31.9 4.2 1329.8 283.0 460.2 191.1
15 Animal or vegetable
fats and oils54,484.0 23,613.0 6,334.9 4,881.8 276.9 533.1 5346.0 1623.6
16 Preparations of
meat, of fish3605.0 2,366.8 3,457.6 4,608.4 7.0 444.0 506.8 96.6
17 Sugar and sugar
confectionery50,736.7 71,833.1 27,080.5 15,385.5 60.3 5.9 188.2 49.3
18 Cocoa and cocoa
preparations4158.7 2,437.0 1,280.0 1,713.2 170.8 11.4 45.4 10.0
19 Products from
cereal, flour, starch
of milk; pastry
products9,984.0 11,404.9 7,468.6 5,614.5 204.3 519.3 130.6
20 Processed products
made from
vegetables and
fruits2,891.8 4,906.2 2,045.7 3,265.6 5754.1 5,190.0 5,972.0 3,538.2
21 Miscellaneous
edible preparations1,574.7 2,717.2 5,690.7 2,684.2 72.9 124.7 484.7 392.1
22 Beverages, spirits
and vinegar10,295.4 15,206.6 4,968.5 4,425.7 10,586.9 7365.2 15,535.5 12,394.6
23 Residues and waste
from the food
industries1 77.3 704.3 311.8 97.4 53.2 325.7 619.9
24 Tobacco and
manufactured
tobacco substitutes13,576.8 7,706.6 2,080.3 3,733.4 7,464.1 7,198.9 10,361.4 11115.9
25 Salt; sulfur, stone
and cement11,281.3 18,077.2 17,546.9 22,540.8 1,232.7 2,412.0 2,040.4 874.9
26 Ores, slag and ash 1,495.7 4,091.5 669.4 Na Na 0.3 3.3
27 Mineral fuels,
mineral oils and
products88,055.3 43,441.3 79,166.2 63,058 371,882.4 419,113.8 480,111.4 4,178,454.1
28 Inorganic
chemicals, preciousmetals2,517.2 4,165.5 5,653.7 5,861.8 5,658.0 6255.8 5,461.9 9300
29 Organic chemicals 3,350.3 5,802.3 4,350.0 9,020 8,416.2 11208.7 9265.8 5295
30 Pharmaceutical
products26,897.4 9,914.7 13,073.0 28,865 390.2 244.8 152.4 175.5
31 Fertilizers 4,435.8 3,490.8 2,500.0 6,565.2 1,344.0 134.8 1074.6 178.6
32 Tanning or dyeing
extracts3,058.1 10,139.8 6,842.2 5,914.2 593.0 300.2 335.0 392.6WT/ACC/AZE/2
Page 41
Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
33 Essential oils;
perfumery,cosmetic or toilet
preparations1,402.1 2,531.4 2,240.3 3,521.6 46.3 29.5 43.0 143.6
34 Soap, organic
surface-activeagents6,288.4 7,164.7 4,331.4 6,527.1 1,492.9 1609.1 162.1 524.9
35 Albuminoedal
substances, starch,
glue2,010.6 1,480.9 999.8 909.1 234.6 86.2 176.2 1.2
36 Matches and other
pyrotechnic
products641.7 1,798.1 2,517.0 1,334.2 Na Na 63.1 74.7
37 Photographic or
cinematographic
goods247.3 312.3 875.6 417.4 Na Na Na 12.8
38 Miscellaneous
chemical products10,473.1 14,312.9 12,370.9 10,429 1,455.1 882.1 1,592.6 1,192.6
39 Plastics and articles
thereof4,518.4 12,292.3 13,563.0 14,976.2 10,602.6 23,294.5 17,996.5 8,115
40 Rubber and articles
thereof7,058.3 17,701.2 9,345.4 9,014.7 3,035.9 3,362.4 4,488.4 3,871.1
41 Raw hides (except
fur) and leather2,444.6 1,914.1 2,741.7 1,183.5 1,540.4 5,541.0 8,219.0 3,608
42 Articles of leather 147.8 343.0 185.2 378.3 12.2 1.2 10.9 3.7
43 Furskins and
artificial fur and
manufactures
thereof27.3 Na 1.7 20.2 14.2 4.7 Na
44 Wood and articles
of wood5,084.4 17,395.5 23,622.5 30,695.5 259.7 74.1 246.2 351.2
45 Cork and articles of
corkNa 11.6 36.3 1.6 Na Na 0.2
46 Manufactures of
straw1.0 5.9 12.5 13.8 Na Na 22.3
47 Pulp of wood or of
other
fibrous cellulose
material, waste and
scrap paperNa 169.7 113.0 4.2 40.9 Na 90.9 19.5
48 Paper, paperboard
and articles thereof13,204.3 17,614.9 11,556.0 11,934.6 691.3 165.7 445.4 145.9
49 Printed books and
other products of
the printing industry1,983.3 16,441.7 15,722.6 41,725.5 11.4 667.5 536.4 1,303.9
50 Silk 18.5 5.7 19.4 4.2 768.7 37.5 188.2 1,410.5
51 Wool 286.0 163.3 250.8 334.9 1,280.8 230.4 963.0 105.1
52 Cotton 1138.6 3,734.0 1,977.4 1,099.5 116,834.2 1,627.3 123,292.0 49,334.8WT/ACC/AZE/2
Page 42
Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
53 Other vegetable
textile articles1,423.7 355.7 35.4 14.1 35.7 58,745.4 na 1.9
54 Man-made
filaments310.6 1,343.9 864.2 1,699.1 30.1 38.7 13.9 3.8
55 Man-made staple
fibres1,395.4 570.0 915.6 2,403.2 291.1 13.5 256.5 19.8
56 Wadding, felt non-
woven materials1,013.3 2,551.8 864.5 680.5 22.1 504.5 72.0 5.3
57 Carpets and other
textile floor-
coverings208.2 217.0 650.5 1,970.9 1,138.8 na 1,667.0 1691.6
58 Special woven
fabrics; tufted
textile fabrics; lace;
tapestries;
trimmings;embroidery413.8 85.3 193.2 286.4 3.2 1269.9 na 49.6
59 Impregnated,
coated, covered or
laminated textilefabrics618.0 411.6 1,667.5 1,333.6 41.1 76.3 513.7 3.2
60 Knitted or
crocheted fabrics28.0 12.5 327.1 112.9 4.5 167.9 na 17.2
61 Articles of apparel
and clothing
accessories, knitted
or crocheted717.1 867.0 940.0 1,185.7 2124.6 na 1233.9 376.4
62 Articles of apparel
and clothing
accessories, not
knitted or crocheted1,722.2 2,195.1 1,478.5 2,216.9 1616.3 1164.6 4225.7 712.9
63 Other finished
textile articles2,059.2 3,128.9 2,160.2 2,987.5 358.0 3,154.6 47.0 2,304.8
64 Footwear 1,923.2 2,289.9 2,213.1 2,366 291.5 781.1 370.8 15.0
65 Headgear and parts
thereof6.0 36.3 46.0 68.7 0.0 246.3 48.1 0.2
66 Umbrellas,
walking-sticks,seat-sticks, riding-
crops and parts
thereof2.8 35.2 62.2 114.1 Na 0.3 Na
67 Prepared feathers
and down, artificial
flowers; articles of
human hair1.5 6.5 26.9 21.7 Na Na Na 0.5
68 Articles of stone,
cement and similar
materials3,026.1 7,878.9 6,601.2 15,329.5 89.3 Na 38.7 5.1WT/ACC/AZE/2
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Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
69 Ceramic products 3,277.1 5,561.4 8,399.1 8,084.4 239.0 607.2 12.8 53.2
70 Glass and glassware 1,657.8 5,395.4 6,542.7 8,069.3 1,180.3 120.9 1,366.0 977.5
71 Natural and
cultured pearls,
precious stones,
precious metals and
articles thereof51.0 130.4 125.7 21.5 Na 1,443.7 16.4 0.1
72 Iron and steel 14,125.0 33,491.6 36,270.7 45,536.4 8,166.2 Na 1,614.6 463.6
73 Articles of iron and
steel20,521.5 29,836.5 56,704.2 64,099.3 3,649.9 2,901.2 4,675.3 5,296.1
74 Copper and articles
thereof1,783.1 3,582.7 2,456.9 260.4 1,244.6 1,818.4 1,244.8 547.7
75 Nickel and articles
thereof31.4 317.1 239.8 420.6 12.6 0.1 Na
76 Aluminum and
articles thereof1,848.2 12,346.5 8,432.2 7,561.6 4,342.8 0.0 7,457.7 6,721.8
77 Group reserved for
future use
78 Lead and articles
thereof14.3 28.8 38.8 66.9 9.8 1,255.1 15.8 16.1
79 Zinc and articles
thereof59.4 784.3 62.7 446.3 Na 10.8 100.0
80 Tin and articles
thereofna 0.5 7.5 0.4
81 Other base metals 2.7 135.7 85.6 46.2 35.5 Na 120.0
82 Tools, implements,
cutlery, spoons,
forks of base metal484.7 1,963.2 2,005.9 6,441.3 38.5 26.2 57.9 310.4
83 Miscellaneous
articles of basemetal3,154.1 4,341.7 3,110.5 4,817.5 43.5 100.1 19.3 18.6
84 Nuclear reactors,
boilers, machinery
and mechanical
appliances46,443.1 86,084.2 95,086.7 170,163 28,411.2 17.5 27,978.4 20,665.9
85 Electrical
machinery and
equipment36,440.9 97,907.7 74,237.4 178,112 11,010.4 33,549.0 9,429.5 12,772.2
86 Railway or tramway
locomotives, rolling
stock and parts
thereof1,097.5 2,355.2 4,013.2 2,140.9 1,261.1 10,160.8 Na
87 Vehicles and parts 35,038.7 38,639.9 39,095.6 78,237.3 3,045.8 Na 2,585.5 746.9
88 Aircraft, spacecraft
and parts thereofNa 4,130.5 4,215.3 Na Na 1,429.8 2,034.7
89 Ships, boats and
floating structures478.4 922.6 2,631.0 2,474.2 63.7 4,283.7 Na 234.6WT/ACC/AZE/2
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Import
(Thousand US$)Export
(Thousand US$)Codes and groupnames at the two-digit
HS level 1995 1996 1997 1998 1995 1996 1997 1998
90 Optical,
photographicinstruments, etc.3,888.0 6,638.9 5,019.4 23,278.8 1,821.0 8.0 2,002.5 4,653.0
91 Clocks and watches
and parts thereof471.4 307.5 132.8 184.0 14.4 2,797.3 4.1 4.6
92 Musical instruments Na 4.1 5.0 14.6 Na 1.5 2.3 13.2
94 Furniture;
prefabricated
buildings, bedding,
etc.5,953.3 8,139.3 11,050.3 2,2150 118.7 Na 51.2 190.4
95 Toys, games and
sporting goods571.6 2,283.3 1,193.1 1,192.5 1.5 114.1 13.1 46.3
96 Miscellaneous
manufactured
articles603.9 945.3 1,122.2 2,090.2 70.1 6.0 302.1 22.4
97 Works of art,
collectors’ pieces
and antiques1.9 312.3 83.6 96.4 1.3 20.1 2.0 59.1
Source: State Statistics Committee
(iv) Foreign trade contra agents (in million of US Dollars)
1995 1996 1997 1998
Import
Georgia 189 28.3 36.6 25.2
Iran 80.3 66.0 48.8 42.6
United Arab Emirates 68.7 108.6 41.9 45.6
Russia 88.3 158.4 151.5 193.8
Turkey 140.5 26.3 179.7 220.1
Ukraine 33.5 94.4 85.6 93.0
Export
Georgia 45.3 91.5 133.5 76.9
Iran 186.1 226.1 189.7 44.5
United Arab Emirates 1.6 3.1 1.1 3.0
Russia 100.2 111.4 180.5 105.8
Turkey 26.4 39.0 41.3 135.9
Ukraine 33.6 21.8 32.1 12.0
Import 547.6 605.6 644.7 1077.2
Export 517.3 545.5 596.4 606.2
Balance (+; -) -30.3 -60.1 -48.3 -471.2
Source: State Statistics CommitteeWT/ACC/AZE/2
Page 45
v) Trade by geographic areas (main trade partners)/million US Dollars/
Import Export
1995 1996 1997 1998 1995 1996 1997 1998
TOTAL 667,6 960,6 794,3 1077.2 637,1 631,2 781,3 606.2
CIS countries 228,3 339,8 350,9 404.7 284,7 290,1 378,3 232.2
Other
countries439,3 620,8 443,4 627.5 352,4 341,1 403,0 374.0
Europe 263,3 385,9 308,7 822.9 158,8 108,7 157,2 505.2
Asia 161,9 198,3 110,1 195.8 191,7 230,0 240,7 85.6
America 14,1 24,9 23,9 57.8 1,1 2,2 5,1 15.1
Australia 0,0 11,7 0,2 0.5 0.9 0,2 0,0 0.1
Africa - - - 0.2 - - - 0.2
Source: State Statistics Committee
(c) Government procurement statistics:
The Republic of Azerbaijan does not maintain any government procurement statistics.WT/ACC/AZE/2
Page 46
ANNEX 2
LIST OF LAWS AND LEGAL  ACTS
I. LAWS AND LEGAL ACTS REGULATING THE ACTIVITY OF THE CUSTOMS
AUTHORITIES: RESPONSIBLE AGENCIES
Law on “Customs Tariff” of 26 June1995 State Customs Committee
Law on “Approval of the Customs Code of the Republic of
Azerbaijan” of 10 June1997State Customs Committee
Law on “The Customs Code of the Republic of Azerbaijan” of 10 June
1997State Customs Committee
Decree of the President “On Regulation and Structure of the Customs
Committee” of 27 October 1998Cabinet of Ministers,
State Customs Committee
Resolution of the Cabinet of Ministers “On Custom Fees for Exportand Import Operations in the Republic of Azerbaijan ” of 22 April1998State Customs Committee
Ministry of Finance
II. LAWS AND LEGAL ACTS RELATING TO NON-TARIFF REGULATION OF
IMPORTS, EXPORTS AND TRADE IN TRANSIT, RULES OF ORIGIN:
RESPONSIBLE AGENCIES
Law “About Customs Tariff” of 26 June 1995 State Customs Committee
“Customs Code of the Republic of Azerbaijan”
of 10 July 1997State Customs Committee
The Law “About annulment of the Law of the
Republic of Azerbaijan «About tax on
export »”of 19 August 1998State Customs Committee, Head State Tax
Inspection
Decree of the President “On further
liberalisation of Foreign Trade in the Republic
of Azerbaijan” of 24 June 1997Ministry of Commerce, State Customs
Committee, The Cabinet of Ministries
Resolution of the Cabinet of Ministers  “Onrules for establishment and operating of in-border markets at the frontier posts of the
Republic of Azerbaijan” of  13 February 1995Ministry of Trade, State Customs Committee,
Department of Frontier Troops of the Ministryof National Security, the Cabinet of Ministries
of Nakhichevan Autonomous Republic, local
bodies
Resolution of the Cabinet of Ministers“Application of  “Authorisation system” to the
regulation of international motor transportation
at the territory of the Republic of Azerbaijan”of  14 October 1996State Customs Committee, Ministry of Trade,
Ministry of Foreign Affairs, Ministry of
Internal Affairs, Ministry of the National
Security, Ministry of Finance,“Azeravtonagliyyat” State Concern
Resolution of the Cabinet of Ministers“Approval
“Authorisation system” to the regulation of
international motor transportation at the
territory of the Republic of Azerbaijan” of
10 January 1997State Customs Committee, Ministry of Justice,
Ministry of Commerce, Ministry of Foreign
Affairs, Ministry of Internal Affairs, Ministry
of the National Security, Ministry of Finance,
“Azeravtonagliyyat” State ConcernWT/ACC/AZE/2
Page 47
Regulations of the National Bank of the
Republic of Azerbaijan “On procedures of
import and shipment, export and transfer
foreign currency from the Republic by legalentities and natural persons and non-residents”
of
16 November 1995National Bank
Resolution of the Cabinet of Ministers “On
regulation of motor transport traffic of the
foreign countries involved into the international
transportation at the territory of the Republic of
Azerbaijan” of 13 August 1997State Customs Committee, State Concern
“Azeravtonagliyyat”
Resolution of the Cabinet of Ministers “On
change of the excise rate on fermented tobacco
exported from the Republic of Azerbaijan” of
11 May 1995State Tax Inspection, Ministry of Finance,
Ministry of Agriculture
Resolution of the Cabinet of Ministers “OnExcise Duty for Cars Imported to the Republicof Azerbaijan” of  2 September 1997State Custom Committee, Ministry of Finance
Resolution of the Cabinet of Ministers “On list
of commodities, imported to the Republic of
Azerbaijan, manufactured outside of the CISmembers, which are exempted from the value
added tax, 16 June 1997State Customs Committee, Ministry of Finance,
Head State Tax Inspection, National Bank and
relevant banks
III. LAWS AND REGULATION RELATI NG TO FOREIGN INVESTMENT:
RESPONSIBLE AGENCIES
Law “On protection of the foreign
investments” of 15 January 1992Relevant juridical instances, the Cabinet of
Ministries,  Ministry of Justice
Law “On the investment activity” of
13 January 1995The Cabinet of Ministries
Decree of the President “On permission for the
foreign investors to take part in the
privatisation of cotton-treatment factories”
of 07 July 1997State Committee for Property
Law ”On Grants” of 17 April 1998 The Cabinet of Ministers
IV. OTHER LAWS AND LEGAL ACTS DEALING WITH ECONOMIC ISSUES THAT
AFFECT THE TRADE: RESPONSIBLE AGENCIES
Law “On the essentials of the economical
independence of the Republic of Azerbaijan”
of 25 May 1991The Cabinet of Ministers, ministries,
committees
Law “On property of the Republic ofAzerbaijan”, of 09 November 1991The Cabinet of Ministers, ministries,
committees
Law “On peasantry (farmer) household” of8 April 1992Ministry of Justice, Ministry of AgricultureWT/ACC/AZE/2
Page 48
Law “On procedure of the application of
agreements and conventions of the
International Monetary Fund, International
Bank for Reconstruction and Development andthe related organisations in the Republic of
Azerbaijan” of 19 August 1992The Cabinet of Ministries, Ministry of Finance,
National Bank
Law “ On Securities and stock exchanges”of 24 November 1992Ministry of Finance
Law of 29 August 1995 “On amendments to
the Laws «On Securities and Stock Exchange»
and «Stock Companies» ”Ministry of Finance
Law “On the budget system” of
1 December 1992Head State Tax Inspection, Ministry of
Finance, National Bank
Law “On entrepreneur activity”of 15 December 1992State Committee on Antimonopoly Policy and
Support for Entrepreneurship, Ministry of
Justice
Law “On privatisation of  State-owned
property” of  7 January 1993State Committee for Property
Law “On anti-monopoly activity” of
4 March 1993State Anti-Monopoly Committee and Support
for Entrepreneurship
Law “On statistics” of 18 February 1994 State Committee on Statistics
Law “On Securities” of 14 July 1998 Ministry of Finance
Law “On commodity exchange” of25 May 1994State Committee on Antimonopoly Policy and
Support for Entrepreneurship, Ministry of
Commerce
Law “On currency regulation” of21 October 1994National Bank
Law “On Essentials for the agrarian reform” of
18 February 1995The Cabinet of Ministries, Ministry of
Agriculture
Law “On Reform of collective and State-owned households” of 18 February 1995Ministry of Agriculture
Law “On Land Reform” of 16 July 1996 The Cabinet of Ministries, Committee on Land
Law “On unfair competition” of 2 June 1 995 State Committee on Antimonopoly Policy and
Support for Entrepreneurship
Law “On protection of the consumers rights” of19 September 1995Ministry of Commerce
Law “On cooperation” of 7 February 1996 Ministry of Justice
Law “On the National Bank of the Republic of
Azerbaijan” of 10 June 1996National Bank
Law “On banks and banking activity in the
Republic of Azerbaijan” of 14  June 1996National Bank, Ministry of Justice
Law “On tender” of 11 February 1997 Cabinet of Ministers, ministries, committees
Law “On accession to the Convention of Cargo
Marking” of 22 April 1997State Committee for Metrology and
Standardisation
Law “On insolvency and bankruptcy” of13 June 1997Economic Court
Law “On Patents” of 10 June 1997 State Committee on Science and TechniqueWT/ACC/AZE/2
Page 49
Decree of the President “On transition to the
international systems of accounting and
statistics in the Republic of Azerbaijan” of
11 August 1992State Committee on Statistics
Decree of the President “On recognition of the
national currency of the Republic of Azerbaijan
the only means of payment at the territory ofthe Republic of Azerbaijan” of
11 December 1993National Bank
Decree of the President “On putting into
circulation State privatisation shares (vouchers)in the Republic of Azerbaijan” of
25 March 1996State Committee for Property, Ministry of
Internal Affairs, Ministry of National Security,Ministry of Defence
Decree of the President “On measures for de-
monopolisation and privatisation of bread
stuffs enterprises” of 11 December 1996State Committee for Property, State Committee
for the bread stuffs
Decree of the President “On regulation of
production, storage, import and sale of alcohol
beverages, alcohol (ethyl)  spirit and tobacco
articles” of 20 December 1996Head State Tax Inspection, State Customs
Committee, Ministry of Commerce, Ministry of
Agriculture
Decree of the  President “On additional
measures for regulation of production, storage,
import and sale of alcohol beverages, alcohol
(ethyl)  spirit and tobacco articles” of5 February 1999Head  State Tax Inspection, State Customs
Committee, Ministry of Commerce, Ministry of
Agriculture
Decree of the President “List of  activities
demanding a special permission (licence)” of
4 October 1997Relevant organs of executive power
Decree of the President “On approval of the
Provision “On national deposit system” of14 May 1997State Committee for Property, Ministry of
Finance
Decree of the President “On application of theLaw of the Republic of Azerbaijan on
insolvency and bankruptcy” of 23 June 1997Economic Court
Decree of the President “On approval of the
Programme of governmental support to small
and medium-sized business in the Republic of
Azerbaijan (1997 – 2000)” of 24 July 1997State Committee on Antimonopoly Policy and
Support for Entrepreneurship, Ministry of
Finance
Decree of the President “On regulation of the
State Control over production, financial-credit
activities, services and on prohibition of
unreasonable inspections” of 17 June 1996Head State Tax Inspection, Ministry of
Finance, Ministry of Internal Affairs, National
Bank, Ministry of National Security,
Prosecutor’s Office
Decree of the President “On regulation ofState system of control and elimination of
artificial obstacles for entrepreneurialactivities” of 7 January 1999The Cabinet of Ministers, relevant ministries
and institutions
Decree of the President “On liquidation of theMinistry of Trade and Ministry of Foreign
Economic Relations of the Republic ofAzerbaijan and establishment of  the Ministry
of Commerce” of 24 June 1997The Cabinet of MinistersWT/ACC/AZE/2
Page 50
Decree of the President “On “Charter of
Ministry of Commerce of the Republic of
Azerbaijan” of 26 July 1997Ministry of Commerce
Decree of the President  “About State
Privatisation Options” 14 May 1997State Committee for Property
Decree of the President “About Specialised
cheque investment funds” 14 May 1997State Committee for Property
Decree of the President “On measures for
development of banking reforms” of24 June 1997National Bank, stock-commercial banks
Decree of the President “About Privatisation of
State Health Resorts and Hotel Facilities” of
27 November 1997State Committee for Property
Decree of the President “On measures for de-
monopolisation  and privatisation ofconstruction industry” of 2 December 1997State Committee for Property
Decree of the President “On sale of land plots
occupied by privatised State-owned enterprises
and other facilities ” of 19 December 1997State Committee for Property
Decree of the President “On privatisation of
cotton-cleaning plants of the Ministry of
Agriculture of the Republic of Azerbaijan” of
5 June 1997State Committee for Property, Ministry of
Agriculture
Resolution of the Cabinet of Ministers “Onaccounting of products and monetary assets
gained in result of sale enterprises, associations
and organisations” of 7 December 1993Head State Tax Inspection
Resolution of the Cabinet of Ministers
“Temporary Guideline for duty-free shops and
places of their operation” of 1 November 1994Ministry of  Commerce, State Committee for
Property
Resolution of the Cabinet of Ministers
“Implementation of privatisation” of
8 January 1996State Committee for Property
Resolution of the Cabinet of Ministers “On
regulation of the activity of the natural
monopolists” of 5 August 1996The Cabinet of Ministers
Resolution of the Cabinet of Ministers
“On enterprises, which will not shift  to theletter of credit or preliminary payment
systems” of 25 November 1996National Bank, Ministry of Economy, Ministry
of Finance
Regulations of the National Bank“On rules for providing banks with licenses forimplementation of operations with foreign
currency” of 28 September 1992National Bank
Regulations of the National bank “Instruction
on sale of  foreign currency by the natural
persons, residents and non-residents at the
territory of the Republic of Azerbaijan” of
22 September 1994National BankWT/ACC/AZE/2
Page 51
Regulations of the National bank “Regime of
foreign accounts of residents and non-residents
in the Republic of Azerbaijan in the authorised
banks of the Republic of Azerbaijan” of25 July 1997National Bank
Law “On environment protection and
utilisation” of 25 February 1992State Committee for Ecology and nature
utilisation of the Republic of Azerbaijan
Law “On value added tax” of31 December 1991Head State Tax Inspection, Ministry of Finance
Law “On excises” of 31 December 1991 Head State Tax Inspection
Law “On income tax of private citizens in the
Republic of Azerbaijan” of 24 June 1992Head State Tax Inspection, Ministry of Finance
Law “On State Tax Authority” of 21 July 1992 Head State Tax Inspection
Law “On State Duty” of 24 March 1995 Head State Tax Inspection
Law “On Single Duty” of 28 March 1995 Head State Tax Inspection
Law “On Land Tax” of 24 December 1996 Head State Tax Inspection
Law “On profit tax from enterprises and
organisations” of 24 December 1996Head State Tax Inspection, relevant Authorities
of the Executive power
Resolution of Milli Majlis “On explanation ofsome provisions of the Law of the Republic of
Azerbaijan “On value added tax” of28 June 1994Head State Tax Inspection, Ministry of Finance
Resolution of the Cabinet of Ministers “On
change of the excise rate on some goods” of 25
August 1994Head State Tax Inspection, Ministry of Finance
Resolution of the Cabinet of Ministers of
25 May 1995 “On some amendments to theResolution of the Cabinet of Ministers of the
Republic of Azerbaijan No. 319 of 25 August
1994 “On change of the excise  duty on some
goods”Head State Tax Inspection
Resolution of the Cabinet of Ministers “On
change of  excise rates for non-spirit (non-
alcoholic) drinks and beer” of 25 May 1995Head State Tax Inspection, Ministry of
Agriculture
Resolution of the Cabinet of Ministers “On
rates and payment procedure of the State duty”
of 29 June 1995Ministry of Finance
Resolution of the Cabinet of Ministers “On
change of  excise rates for oil products” of
16 December 1996Ministry of Finance, Ministry of Economy,
State Oil Company of the Republic of
Azerbaijan
Resolution of the Cabinet of Ministers “On listof  excisable goods produced in the Republic ofAzerbaijan and excise rates” of
16 December 1996The Ministry of Agriculture, Head State Tax
Inspection
Instruction of the Head State Tax Inspection“On estimation and payment  of excise” of16 September 1994Head State Tax InspectionWT/ACC/AZE/2
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Instruction of the Head State Tax Inspection
“On application of value added taxes to goods
exported in  the Republic of Azerbaijan” of
3 July 1995Head State Tax Inspection, State Customs
Committee
Law “On sanitary –epidemiological welfare” of
25 February 1992The Ministry of Health
Law “On standardisation” of 16 April 1996 State Committee on  metrology and
standardisation
Law “On copyrights and related rights” of
6 June 1996Agency on protection of copyrights under the
Cabinet of Ministries
Decree of the President “On application of Law
of the Republic of Azerbaijan “On
standardisation” of 8 October 1996State Committee on Metrology and
standardisation
Decree of the President “On application of the
Law of the Republic of Azerbaijan “On
copyrights and related rights” of
8 October 1996Agency on protection of copyrights under the
Cabinet of Ministries
Resolution of the Cabinet of Ministers “Onestablishment of the State fund of official
information related with  State standards,technical provisions, branch standards,
classifiers of technical, economical and social
information, international (regional) and
interstate standards, norms, regulations and
recommendations relating  standardisation,national standards of foreign countries,
international (regional) and interstate contracts
and specific normative documents in the field
of standardisation as well” of  28 March 1997State Committee on Metrology and
Standardisation
Law about “Enterprises” of 1 July 1994 Ministry of Justice
Law “ About Stock Companies” of
12 July 1994Ministry of Justice
The State Programme “About privatisation of
the State property in 1995-1998” of
21 July 1995The Cabinet of Ministries, The State
Committee for Property
Law “On trade marks and geographicalindicators” of 12 June 1998State Committee on Science and Technology
Law ”About  Deposit” of 3 July 1998 The Cabinet of Ministries
Law “About financial-industrial groups” of
23 April 1996Ministry of Justice
V. (a) Existing laws, regulations or administrative guidelines, which significantly affect the
trade in services
Law “On employment in the Republic of
Azerbaijan” of 27 June 1991The Ministry of Labour and Social Security
Law “On pensions” of 23 September1992 Ministry  of Finance, Ministry of Labour and
Social Security, National Bank
Law “On education “ of 7 October 1992 Ministry of EducationWT/ACC/AZE/2
Page 53
Law “On insurance” of 5 January 1993 State Insurance Control
Law “On auditing service” of
16 September 1994Auditing Chamber
Law “On leasing activity” of
29 November 1994State Committee on Property,
Ministry of Economy
Law “On social insurance” of18 February 1997Ministry of Labour and Social Security, State
Fund for Social Protection
Law “ On communication” of20 June 1997Ministry of Communication
Resolution of Milli Majlis “On privatisation
of the State-owned motor transport means” of
24 February 1993State Committee for Property
Resolution of Milli Mejlis “Charter of the
Auditing Chamber” of 19 September 1995Auditing Chamber
Resolution of Milli Majlis “On registration of
auditors and auditing organisations in the
Republic of Azerbaijan” of 12 March 1996Auditing Chamber
Law “On Arbitration Court of the Republic of
Azerbaijan” on 25 February 1992Economic Court
Law “On Economical-Proceeding Code of the
Republic of Azerbaijan” of 25 February 1992Economic Court
Law “On State registration of the legal
entities” of 6 February 1996Ministry of Justice
Law “About Advertising” of 3 October 1997 Executive bodies
Law “About Courts and Judges” of
10 June 1997Supreme Court of the Republic of Azerbaijan
Law “About Constitutional Court” of
21 October 1997Constitutional Court
(b) Publications or information sources concerning modes of general application, if relevant to
the GATS
There are no such publications or sources.
(c) Enquiry points, if any, as prescribed in Article III of GATS
In the Republic of Azerbaijan there are no informational sources as stipulated in the GATS.
However, general information related to the existing market of services is available at the Ministry of
Commerce, Trade-Industrial Chamber, and the State Statistics Committee.WT/ACC/AZE/2
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ANNEX 3
INFORMATION ON IMPORT LICENSING PROCEDURES
I. OUTLINE OF SYSTEMS
Licensing shall be carried out only for the import of alcohol (ethyl) spirit, alcohol beverages
and tobacco substitutes.
II. PURPOSES AND COVERAGE OF LICENSING
Alcohol (ethyl) spirit, alcohol beverages and tobacco substitutes are subject to licensing
regardless of manufacturing or importing country.
The volume of imported goods on each registered licence shall not exceed 5 per cent of the
volume of import of these goods stipulated by the Ministry of Economy.
Rules of licensing of activity on import of these goods have been identified by Resolution of
the Cabinet of Ministers of the Republic of Azerbaijan No. 24 of 22 March 1997 and in accordance
with those the Ministry of Commerce shall provide the issue of licenses.
III. PROCEDURES
Licenses shall be issued for a period of one year on each contract (or analogues transaction
document) depending on the demand of the Republic of Azerbaijan for these goods. Accounting of
forms shall be provided by the Ministry of Finance.
IV. THE RIGHT TO APPLY FOR IMPORT LICENSING
All private citizens and legal entities regardless of the type of property have the right to get a
licence for production and storage of all kinds of alcoholic (ethyl) spirit according to the Rules.
V. THE FOLLOWING DOCUMENTS AND REQUIREMENTS ARE NEEDED FOR
RECEIVING A LICENCE
- Formal application;
- Address of applicant, registration number and date, statistical code and bank’s
requisites;
- The document verifying the registration of importer at the tax inspection;
- Original and copy of the contract with foreign resident or another document verifying
the transaction;
- Document on the payment of licence fee
The licence should contain the following information:- Name, address of the body, address where licence issued, the registration number of
licence, date of issue;
- Address of importer, State registration number and dates, bank’s requisites, statistical
code;
- Name of the country of origin, address of the legal entity;
- Type of operation, form and payment currency (with the indication of relevant code);
- Assignment of goods;WT/ACC/AZE/2
Page 55
- Name of the goods,  nomenclature code of goods in foreign economic activities,
quantity, total cost, unit of measure;
- Number, date of contract and other document, confirming the transaction made with
foreign persons (contracting parties);
- Tally, number, date of issue and validity of licence
Licenses should be registered within 15 days after the date of submission. In the case of a
justified, written refusal of the licence issue the applicant should be informed officially and has a right
to prosecute to the juridical bodies in accordance with the legislation of the Republic of Azerbaijan.
VI. PROVISIONS OF LICENSING
Licenses are issued depending upon the import demand of the country according to each
agreement (in case of lack of the agreement the document certifying the deal) and their validity might
be up to 1 year.
VII. OTHER PROCEDURAL REQUIREMENTS
Licence should be issued on condition that the volume of  production of alcoholic drinks is no
less than 2 thousand decalitres, and the volume of production of tobacco substitutes is no less than 50
million items of cigarettes per year.
For receiving the licence the applicant shall submit to the Ministry of Agriculture the
following:
- Formal application;
- Address of applicant, registration number and date, statistical number and date,
statistical code and bank’s requisites;
- Originals of constituent documents or copies certified by a notary;
- Certificate of registration in the tax body;
- Act of the State body of standardisation and metrology on compliance with the State
standards of equipment, technological process and conditions, applied in production,
storage of produced products;
- Condition of production and storage;
- Act of the territorial body of the Centre of Hygiene and Epidemiology  of the
Ministry of Health on compliance with the sanitary-epidemiological requirements;
- Act of the territorial body of the main Management of fire-prevention protection and
emergency rescue of the Ministry of Internal Affairs on compliance with the
requirements of fire-prevention;
- Act of the territorial body of the State Committee on Ecology and control on nature
utilisation on compliance with the requirements of ecological protection
- Act of the territorial body of the State Committee on control and safety operations,
carrying out in the industry and mountainous control on compliance with the
requirements of  safety;WT/ACC/AZE/2
Page 56
- Accreditation of laboratories of the technological control for production and storage,
carried out in compliance with the State standards on the provision of chemical
analyses;
- Document, certifying the payment of licence price.
It is prohibited to require other documents from the applicant.
The licence shall be registered and included into the register within 15 days from the day of
the document submission. Justified refusal is issued in written form within the same term, and in this
case the applicant shall have a right to prosecute to the Juridical Bodies in accordance with the
Legislation of the Republic of Azerbaijan. The term of licence shall be established on the request of
the applicant, but no less than  2 years.
Retail sale of alcoholic beverages and tobacco substitutes shall be regulated by the
Regulations of retail sale of alcohol (ethyl) spirit, alcohol beverages and tobacco substitutes on the
territory of the Republic of Azerbaijan, which is  approved by Regulation No. 24 of 22 March 1997 of
the Cabinet of Ministers.WT/ACC/AZE/2
Page 57
ANNEX 4
INFORMATION ON IMPLEMENTATION OF THE
CUSTOMS VALUATION AGREEMENT
In order to answer the questions raised in the Outline of Memorandum of Foreign Trade
Regime the customs value of goods and other issues are determined by the articles of the Law “On
Customs Tariff” of the Republic of Azerbaijan and the Resolution of the Cabinet of Ministers “Rules
of application of the customs value of goods imported to and exported from the custom territory of the
Republic of Azerbaijan”.
The customs value of goods – calculation of custom fees, determination of the value of goods
for other custom purposes, including the fines and violation of custom rules is used to identify the
responsibilities in accordance with the legislation of the Republic of Azerbaijan and to implement
custom statistics.
When goods are transmitted through the custom territory of the Republic of Azerbaijan by the
person (declaring) who applied for the declaration, the customs value is identified by principles on
rules for customs valuation, determined by the Rules, and the Agreement on Tariffs and Trade
(GATT, now WTO).
Methods of estimation of customs cost:
- based on a sum of transaction with imported commodities;
- based on a sum of transaction with identical commodities;
- based on a sum of transaction with similar commodities;
- adding costs;
- deducting costs;
- using reserve method.
The most common method of estimation of customs cost of imported commodities is that
based on a sum of transaction with these commodities.
If this method cannot be used, other above-mentioned methods shall be applied in succession,
each of them being used if custom costs can not be established on a basis of the former.
Methods of deduction and adding of customs cost might be used in any order.According to the legislation on declaration of the customs value of goods:
1. Customs cost is declared by the declaring person at the customs of the Republic of Azerbaijan
when commodities are being transported through the customs border of the Republic of
Azerbaijan.
2. Procedure and terms of declaring of commodities being imported to the customs territory and
exported from said territory, including form of customs declaration, are established by the
State Customs Committee of the Republic of Azerbaijan.
3. Customs cost of commodity is determined by the declaring person as specified in this Law.WT/ACC/AZE/2
Page 58
4. Control over the accuracy of the estimation of customs cost is accomplished by customs
authorities of the Republic of Azerbaijan.
Any information given by the declaring person in the declaration - customs cost of
commodity - which is confidential and constitutes a commercial secret might be used by the customsauthorities for the customs estimate.
Customs cost of commodity declared by declaring person, and information related to estimate
of such cost shall be based on reliable data (with indication of quantities) and confirmed by relevant
documents.
When  this data is not available, customs authorities of the Republic of Azerbaijan can apply
for information available (about prices of similar goods, including information from catalogues of
trade companies and other reference books ) by adding the relevant amendments. Should it be
necessary to clarify the customs cost of the comm odity declared by the declaring person, the latter
will have the right to request the customs authorities of the Republic of Azerbaijan to release the
declared commodity for use, against the mortgaged property or guarantee of the authorised bank inaccordance with the legislation of the Republic of Azerbaijan, or he will have to pay the customs duty
for transported commodities according to the customs estimate made by the customs authorities of the
Republic of Azerbaijan.
Costs of clarification of declared customs cost or provision of additional information to tax
authorities of the Republic of Azerbaijan shall be borne by the declaring person.
Nevertheless, prolongation of the term of custom clearing in connection with the customs
estimation shall not be used by declaring person for deferment of payment of duty.
When no data confirming the accuracy of the estimated customs cost of the commodity
declared by the declaring person are available, or if there is some uncertainty in the validity of the
documents presented by the declaring person, the customs authorities of the Republic of Azerbaijan
may themselves estimate the customs cost of the declared commodity, applying methods of estimation
of the customs cost based on the information available (including known prices for identical and
similar commodities).
At the written request of the declaring person, the customs authorities of the Republic of
Azerbaijan must provide, within a 3-month pe riod, written notice explaining why the declared
customs cost cannot be accepted as a basis for estimation of duty.
Should the declaring person disagree with the decision of the customs authorities of the
Republic of Azerbaijan with respect to the customs cost of the commodity, the said decision may be
appealed against, in an order specified by the Customs code of the Republic of Azerbaijan.
The customs cost of commodities imported to the customs territory of the Republic of
Azerbaijan is the cost of the transaction actually paid or subject to payment for the importedcommodity at the moment when the said commodity crosses the customs border of the Republic of
Azerbaijan (to a port or other point of import).
When estimating the customs cost, the following expenditures must be included into the sum
of the transaction if they have not already been included:
(a) the cost of delivery of the commodities to the airport and sea port, or any other point
of import of commodities to the customs territory of the Republic of Azerbaijan:WT/ACC/AZE/2
Page 59
- costs of transportation;
- costs of loading, unloading, handling and transhipment of commodities;
- insurance costs:
b) costs borne by the buyer:
- commission and brokerage fees, except commission for purchase of
commodities;
- cost of containers and reusable tare (if in accordance with Nomenclature of
commodities they are regarded as one whole with the estimated
commodities);
- cost of packing, including cost of packing materials and labour cost on
packing.
c) relevant part of the cost of the following commodities and services which, directly or
indirectly, were provided by the buyer free of charge or at a lower cost, for use in
connection with the production or export sale of commodities being estimated:
- raw stock, materials, parts, semi-finished products and other spare parts being
an integral part of estimated commodities;
- instruments, dyes, models and similar articles used in the production of the
commodities being estimated;
- materials used in the production of the commodities being estimated
(lubricants, fuel, etc.);
- engineering work, experimental-design, product styling, preparation of drafts
and drawings made outside the territory of the Republic of Azerbaijan and
required directly for the production of the estimated commodities.
d) licensing and other payments for use of intellectual property, to be implemented by
the buyer, directly or indirectly;
e) amount of part of direct or indirect profit obtained by the seller as a result of future
re-sale, transfer or use of the estimated commodities in the territory of the Republic of
Azerbaijan.
This method cannot be used for estimation of the customs cost of commodity, if:a) limitations of the buyer’s right for the estimated commodity are envisaged,
except:
- limitations envisaged by legislation of the Republic of Azerbaijan;
- limitations concerning the geographical area of potential re-sale of
commodities;
- limitations which have no significant impact on the cost of
commodities;
b) if the sale and sum of the transaction depend on observance of conditions,
whose impact cannot be accounted for;
c) if the data used by the declaring person when estimating customs cost are not
confirmed by documents, or are not based on reliable (with determined
quantities), true and unbiased information;WT/ACC/AZE/2
Page 60
d) if the parties in transaction depend on each other, except situations where
their interdependency did not influence the cost of the transaction and this
fact has been proved by the declaring person.
Whereas, by interdependent parties we shall mean persons (entities) which possess at least
one of the following indices:
- one of the participants in the transaction is a citizen or official of one of the
participants, is at the same time an official of another participant in the transaction;
- participants in the transaction are joint proprietors of the enterprise;
- participants in the transaction are related by labour relationships;
- one of participants in the transaction is the owner of the share and possesses the
voting share stock in the ownership capital of the other participant, which constitutes
at least five  per cent of the ownership capital;
- both participants in the transaction are under direct or indirect control of the third
legal entity or individual person;
- both participants in the transaction jointly supervise, directly or indirectly, the third
party;
- one of participants in the transaction is under the direct or indirect control of the other
participant;
- participants in the transaction and their officials are close relatives.
When using the method of estimation of customs cost of commodities, based on a cost of
transaction with identical commodities, the said cost is taken into account for conditions specified
below. Whereas, by identical commodities we shall mean those which are not unlike the estimated
ones, including the following parameters:
- physical characteristics;
- quality and market standing;
- country of origin;
- producer.
Any minor differences in outer appearance shall not result in undue refusal to accept
commodities as identical if by all other parameters they correspond to requirements of this paragraph.
Cost of transaction with identical commodities can be taken as a basis for estimation of
customs cost if these commodities:
a) were sold for import to the territory of the Republic of Azerbaijan;b) were imported simultaneously with commodities being estimated, or not earlier than
90 days before their delivery;
c) were imported on the same commercial terms and in about the same volumes as the
estimated commodities.
Should identical commodities be imported in different volumes, or on different commercial
terms, the declaring person shall make the required corrections of their cost, accounting for the said
differences and give justified explanations to the customs authorities as such.
Any customs cost that is estimated based on a sum of transaction with identical commodities
should be corrected, taking into account expenditures specified in Law.WT/ACC/AZE/2
Page 61
The corrections shall be made by the declaring person in accordance with reliable data
confirmed by documents.
If several different costs of transactions with commodities are revealed, the lowest cost will
be taken as a basis for estimation of the customs cost of imported commodities.
When using the method of estimation of the customs cost of commodities based on a sum of
the transaction with similar commodities, the said co st is taken into account for conditions specified in
this article. Whereas, by similar commodities we shall mean those which although different in all
respects, have similar functions with estimated commodities and are commercially interchangeable.
Similarity of commodities is established by their quality, availability of trade-mark, market standing
and country of origin.
When estimating the customs cost based on the sum of the transaction with similar
commodities,  the articles of this Law shall be applied.
When using methods of estimate of the customs cost:a) commodities are not regarded as identical w ith estimated ones or similar to them if
they have not been produced in the same country as the estimated ones;
b) commodities are not regarded as identical or similar to estimated ones if relevant
engineering work, experimental-design, product styling, preparation of drafts and
drawings were accomplished on the territory of the Republic of Azerbaijan.
The estimation of the customs cost according to the method of estimation of the customs cost
based on deduction of costs is carried out in cases, when estimated, identical, similar commoditieswould be sold on the territory of the Republic of Azerbaijan without change of their initial state.
When using the method of estimation of customs cost of the commodities based on the
deduction of costs, the cost of the unit of the comm odity is taken into account as estimated, identical
and similar commodities are sold by the greatest party on the territory of the Republic of Azerbaijan
not later than 90 days from the date of import of estimated commodities to the participant of the
transaction, not being in interdependency with the seller.
The following articles of expenses are deducted from the cost of unit of the commodity:a) expenses for payment of commission fees, remuneration, additional charge to profit
and total expenses in connection with sale in the Republic of Azerbaijan importedcommodities of the same type;
b) sum of import custom taxes, duties, co llections and other payment, subject to
payment in the Republic of Azerbaijan in connection with the import or sale of the
commodities;
c) expenses, incurred in the Republic of Azerbaijan for transportation, loading,
unloading works, insurance.
When no cases of sale of estimated, identical or similar commodities in the same state (as
they were up to the moment of import) are available, on request of the declaring person the cost of
unit of the commodity (having processed, with amendment for added tax and with observance of
provisions of paragraphs 2 and 3 of the present article) may be used.WT/ACC/AZE/2
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When using this method as a basis for the estimation of customs cost of commodities, the unit
price is calculated by way of adding the following costs:
a) cost of materials and expenditures borne by the producer in connection with the
production of estimated commodities;
b) general costs characteristic for import to the Republic of Azerbaijan from the
country-exporter of commodities of same kind, including transportation costs,
insurance to a place of loading, etc.;
c) profits obtained by the exporter as a result of delivery of such commodities to the
Republic of Azerbaijan.
Whenever customs cost of commodities cannot be determined by the declaring person as a
result of successive use of methods specified in this Law, or customs authorities reasonably state that
said methods of estimation of customs cost cannot be used, the customs cost of the estimated
commodities shall be determined in accordance with world practice.
Using the reserve method, customs authorities of the Republic of Azerbaijan can provide
price information in their possession to the declaring person.
When estimating the customs cost of commodity  using the reserve method the following may
be used as a basis:
a) price of commodity at domestic market of the Republic of Azerbaijan;b) price at domestic market of the Republic of Azerbaijan for commodities produced in
the Republic of Azerbaijan;
c) price of commodity shipped from the country-exporter to third countries;d) established at free will or non-clarified price of commodity.Availability of information on customs procedures for the general public is provided by way
of periodical publication. The population is usually informed by three following ways:
1. The Legislative and the Executive powers publish periodical literature and sources of
statistics;
2. The Customs Committee issue a weekly social-politic newspaper “Customs Herald”,
having a circulation of 5000 copies;
3. The independent commercial agencies periodically publish legal acts, laws and codes
in accordance to the needs of the population.
Besides these, there are explanatory broadcasts about customs issues regularly carried on the
radio and television.WT/ACC/AZE/2
Page 63
ANNEX 5
INFORMATION ON
TECHNICAL BARRIERS TO TRADE
Legal Acts and normative documents of the Republic of Azerbaijan are not intended to
establish technical barriers to trade and disrupt trade and do not have provisions which discriminate
the imported goods. The main goals are to ensure safety, health, protection of property of citizens and
the protection of environment.
Law “About Protection of Consumer  Rights” of 19 September 1995
Law “On joining the Convention of cargo marking” of 22 April 1997Law “About Nature Protection and Nature Utilization” of 25 February 1992
Law “On Standardization” of 16 April 1996
Law “About Sanitary Epidemiological Welfare ” of 10 November 1992
The Law of the Republic of Azerbaijan
About Standardization
The present Law establishes legal and economic bases of standardization in the Republic of
Azerbaijan, obligatory for all executive authorities, local self-governing bodies, enterprises,
organisations, entrepreneurs, as well as to public associations. State protection of interests ofconsumers, governmental and economic entities are regulated by the present Law and normative
documents on standardization, which are worked and applied in compliance with it.
Standardization is related to the establishment of norms, regulations & characteristics of
production aimed toward the provision of:
- products (works, services), safety for life, health, property and environment;
- technical, technological and data sharing, as well as mutual replacement of products
(works, services);
- products (works, services) conformity with the available level of science, technique
and technology, increase of their competitiveness;
- precision and unity of measurements;
- economy of all kinds of resources;
- safety of economic entities with consideration of probability of natural and
technology-related disasters, as well as other extraordinary situations;
- provision of consumers with full and reliable information about the assortment and
quality of products (works, services).
Legislation about standardization is composed of the present law and issued in compliance
with it and other legislative acts of the Republic of Azerbaijan.
The standards of construction, staple foods, other consumer goods and products (works,
services) are defined by the laws of the Republic of Azerbaijan.
The organization of works and management of  standardization include elaboration and
application of normative documents on standardization, provision of consumers with full and reliable
information about these documents, development of standardization system, determination of rules for
application of international standards in the Republic of Azerbaijan and branch peculiarities ofWT/ACC/AZE/2
Page 64
standards, carrying out of control measures for adhe ring to standard’s requirements, preparation and
improvement of qualifications of personnel in the field of standardization, financing of mentioned
works and other measures.
The normative documents on standardization, which are defined, elaborated and applied on
the territory of the Republic of Azerbaijan, include:
- State standards of the Republic of Azerbaijan;
- directories of technical, economic and social information;
- branch standards;
- international (regional) and intergovernmental standards, norms, rules and
recommendations applied in the established order;
- technical conditions;
- standards of enterprises;
- standards of scientific-technical, engineering societies and other public associations.
The Law of the Republic of Azerbaijan
On Sanitary- Epidemiological Welfare
The sanitary legislation of the Republic of Azerbaijan regulates public relations in the sphere
of the sanitary-epidemiological welfare of its population, as an indispensable condition for realization
of public rights and interests in protecting and strengthening the health, physical and spiritualdevelopment and active longevity of its people.
The main purpose of the sanitary-epidemiological legislation of the Republic of Azerbaijan
are as follows:
- establishment of the system of rights and duties of Government bodies, public
associations, enterprises, organizations, institutions regardless of subordination and
forms of property of officials and citizens;
- provision of sanitary-epide miological welfare with the purpose of public health
protection from the unfavourable influence of environment, and for strengthening
public health;
- creation of a control system for observance of sanitary norms and rules, hygienic
normative, and also for carrying out sanitary-hygienic and anti-epidemic measures;
- establishment of order of hygienic and epidemiological regulation, preparation of
sanitary norms and rules;
- creation of an economic mechanism for the provision of public sanitary-
epidemiological welfare;
- determination of responsible measures for violation of sanitary norms and rules,
hygienic normative;
- creation of complex measures with legal and organizational character aimed to
guarantee public rights and health protection.
All Government entities, public associations, enterprizes, organizations, institutions
irrespective of their subordination and form of ownership,  officials and citizens, are obliged to follow
the established sanitary norms and rules.WT/ACC/AZE/2
Page 65
The Law of the Republic of Azerbaijan
 On  Protection of Consumer Rights
This Law determines general legislative, economic, social bases and the mechanism for the
creation of fair relations between consumers, provision of equal relations between seller and customerin the process of sale and purchase, in trade and services, as well as protection of consumer rights on
the territory of the Republic of Azerbaijan.
The present law was elaborated on the base of “General Principles for the Protection of
Consumer Interests”, adopted by the UN General Assembly and was directed to bring analogous
relations in the Republic of Azerbaijan into accordance with international practice.WT/ACC/AZE/2
Page 66
ANNEX 6
INFORMATION ON STATE-TRADING
The Government of the Republic of Azerbaijan does not support enterprises covered by the
provisions of Article XVII of GATT 1994.
The Government of the Republic of Azerbaijan does not have any legislative or other acts
which grant privileges to any private or State enterprise for carrying out trade operations.
At the same time, purchases made by the executive power bodies, State enterprises and partly
State-owned enterprises are regulated by the Law of the Republic of Azerbaijan “About Tender” and
the Decree of the President of the Republic of Azerbaijan “On purchases of goods (works, services)
by State (budget) organizations”.  All purchases above 250 million Manats have to go through
tenders. The Cabinet of Ministers of the Republic of Azerbaijan and other bodies of executive power
can carry out tenders on behalf of the Republic of Azerbaijan.WT/ACC/AZE/2
Page 67
ANNEX 7
SERVICES SECTORAL CLASSIFICATION LIST
I. BUSINESS SERVICES1. Professional Services
Type of services Licence Issuing Body Requirements and legal acts
a) Legal Services Ministry of Justice The certificate verifying higher
juridical education is required  for
activities
b) Accounting, auditing and
book keeping servicesAuditing Chamber
Ministry of FinanceThe certificate on special
education is required governed by
the Law on “Auditing Service”,
dated 16 April 1994 and
Resolution of Milli Majlis “On
registration of auditors and
auditing organizations in the
Republic of Azerbaijan”.
c) Taxation Services No No
d) Architectural Services No No
e) Engineering services No No
f) Integrated engineering
servicesNo No
g) Urban planning and
landscape architectural
servicesNo No
h) Medical and dental
servicesMinistry of Health The  certificate on  medical
education, and special medical
space in accordance to the
stipulated norms
i) Veterinary services Veterinary Committee under
the Cabinet of MinistersLaw “On veterinary methods”,
dated 17 June 1994
j) Nurses, midwives,
physiotherapists,
personnel onpsychotherapyAs in point h) As in point h)WT/ACC/AZE/2
Page 68
2. Computers and related services
Type of services Licence Issuing Body Requirements and legal acts
a) Consultation services
related to the installation
of computer hardwareNo No
b) Services on software
provisionNo No
c) Services on information
processingNo No
d) Database services No No
3. Research and Development Services.
Type of services Licence Issuing Body Requirements and legal acts
a) R&D services on natural
sciencesNo No
b) R&D services on social and
humanitarian sciencesNo No
c) Interindustries  R&D
servicesNo No
4. Real Estate Services.
Type of services Licence Issuing Body Requirements and legal acts
a) Related to private or
leased propertyLocal bodies of executive power No
b) On a payment or
contract basisNo No
5. Rental/Leasing  Services without Operators.
Type of services Licence Issuing Body Requirements and legal acts
a) On ships Ministry of Economy No
b) On aircraft Ministry of Economy No
c) On other transportation Ministry of Economy No
d) On other machinery  and
equipmentMinistry of Economy No
6. Other Business Services.
Type of services Licence Issuing Body Requirements and legal acts
a) Advertising services No No
b) Market research and public
opinion polling servicesNo No
c) Management  consulting
servicesNo No
d) Services related to
management –consultingNo NoWT/ACC/AZE/2
Page 69
Type of services Licence Issuing Body Requirements and legal acts
e) Technical testing and analysis
servicesNo No
f) Services to agriculture,
hunting and forestryState Committee on Ecology
and Nature UtilizationLaw “On Protection and Use of
Nature”, dated 25 February 1992
g) Services related to fishing Ministry of Economy
(by industrial way)As in point f
h) Services to mining State Committee on Geology
and mineral resourcesNo
i) Services to manufacturing No No
j) Services to energy
distributionState Concern “Azerenergy” No
k) Placement and supply
services of PersonnelMinistry of Labour and Social
ProtectionThe Law on “Employment of
Population”
l) Investigations and security Ministry of Justice,
Ministry of Internal AffairsNo
m) Scientific and technical
consulting servicesNo No
n) Maintenance and repair of
equipmentNo No
o) Building-cleaning services No No
p) Photographic services No No
q) Packaging services No No
r) Printing, publishing Ministry of Press and mass
mediaLaw “On mass media”
s) Convention services No No
II. COMMUNICATION SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Postal  services No No
2. Courier services No No
  3.    Telecommunication services
        a)  Voice telephone services No
        b)  Others NoLaw "On Communication" dated 20
June 1997
4.     Audiovisual services
        a)   Motion picture and video
              tape production and
              distribution serivcesNo NoWT/ACC/AZE/2
Page 70
         b)  Motion picture
               production servicesLocal bodies of executive power No
          c)  Radio and television Ministry of Press
and mass mediaLaw "On mass media"
of 21 July 1992
Law "On Communication"
of 20 June 1997
          d)   Radio and television                transmission servicesMinistry of Communicaiton The Law "On Communication"
of 20 June 1997
          e)   Sound recording No No
          f)    Others No No
III. CONSTRUCTION AND RELATED ENGINEERING SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. General construction work for
buildingsNo No
2. General construction work for
civil engineeringNo No
3. Installation and assembly work No No
4. Building completion and
finishing workNo No
IV. DISTRIBUTION SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Commission agent’s services No No
2. Wholesale trade services No No
3. Retailing services No No
4. Franchising No No
V. EDUCATIONAL SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Primary education services Ministry of Education Law “On education”, dated
01.10.92
2. Secondary education services
As above mentioned As above mentioned
3. Higher Education services As above mentioned As above mentioned
4. Adult education As above mentioned As above mentioned
VI. ENVIRONMENTAL SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Sewage services No Law “On sanitary-epidemiological
welfare”, dated 10.11.92
2. Refuse disposal services No As above mentioned
3. Sanitation and similar services No As above mentionedWT/ACC/AZE/2
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VII. FINANCIAL SERVICES
1. Insurance and insurance-related services
Regulations of the insurance market on the provision of additional guarantees in the interest
of private citizens and legal entities and social insurance of the population are governed by the Law of
the Republic of Azerbaijan “On Insurance” adopted by Milli Majlis, dated 5. January 1993
In accordance with this Law more than 100 private insurance companies function, and their
activities are licensed by the State Insurance Inspection at the Cabinet of Ministers of the Republic of
Azerbaijan.
The insurance companies render services on insurance of property, authorisation and re-
insurance in accordance with the international standards and legislation of the Republic of Azerbaijan.
 2. Banking and other financial services
Activities of banks and the banking system of the Republic of Azerbaijan are carried out  on
the basis  of the laws of the Republic of Azerbaijan “On National Bank of the Republic of
Azerbaijan”, dated 10 June 1996, “On the bank and banking activity in the Republic of Azerbaijan”,
dated 14 June 1996 and also on  the legal documents of the National Bank of the Republic ofAzerbaijan.
The financial system of the Republic of Azerbaijan plays a significant part in the transition
process to the market economy. During the transition period the system has implemented a number of
very  important functions:
1. The system has strengthened the financial control of State enterprises, which are in
the process of privatisation. The efficient policy has been developed by the
Government, together with State enterprises, for carrying out this task.
2. The new mechanism of supervision and control of borrowers (as well as State and
private) has been developed within the financial system. It allows for the control ofactivities according to contracts concluded.
The enterprises which have been privatised within the frame of the finance system and the
newly-formed class of entrepreneurs, have to be provided by financial services.
The work is proceeding in the field of development of financial services in the private,
effective and stable financial sector, which facilitates to collect savings effectively and to serve the
investments on the whole territory of th e Republic, leading to  economic growth.
Investments
In accordance with the above-mentioned legislative acts, receipt of investments and other
paid-back means from the population shall be made by  the authorised banks within the limits of the
regulated economic normative, established by the National Bank of Azerbaijan.
Crediting
Crediting shall be carried out by the banks according to the Law on “Banks and Banking
System” and on “Pledges” and also within the limits of economic legal documents, established by theWT/ACC/AZE/2
Page 72
National Bank of the Republic of Azerbaijan. There is also a centralised credit auction and an inter-
bank credit market. Their order of work shall be determined by the normative documents of the
National Bank.
Financial leasing
There is a required infrastructure for providing stock activities, but  the organised market of
the State short-dated bonds has only developed now, while the market of corporate securities is not
yet developed. The trade at the exchange of securities may be carried out through  legal entities (credit
and non-credit enterprises) – the members of funded department of Baku inter-bank currency market.
Operations with the State Shorts (SS)
Operations with the State Shorts (SS) shall be carried out through the dealer of SS, who are a
member of the funded department of the exchange. The foreign enterprises, registered at the tax
bodies shall be allowed to conclude a transaction on purchase and sale of SS as at the auctions, so at
the secondary bargaining through the dealers of SS.
The market of futures, forwarders and options
The market of futures, forwarders and options are at the initial stage of development.
Operations with precious metal
Operations with precious metal according to the Law on “Currency Control” are not
prohibited, but an internal market has not formed.
The relations of all participants of the stock ex change related to the SS is governed by the
Law on “Securities and Stock Exchange” and by Decree ¹ 123 of the Cabinet of Ministers of the
Republic of Azerbaijan, dated 17 September 1996.
Deposit services
Some kinds of services, such as management by assets, portfolio management, all forms of
collective invested management, management by the pension funds, deposits of storage and trust
services are not developed in connection due to the lack of development of the corporate market.
Nevertheless at the same time, there is a full legal base on regulation of cheque investment fund and
deposits activity of the independent depository due to achievements of the privatisation process.
Banks carry out the deposit activities within the frame of the bank’s licence.
VII. HEALTH RELATED AND SOCIAL SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Hospital services Ministry of Health No
2. Other Human Health  Services The same as above-mentioned No
3. Social services
More than ten laws, providing social protection to wide sections of the population have been
adopted during the short term:WT/ACC/AZE/2
Page 73
- On pension provision of citizens;
- On social protection of the disabled;
- On vacations;
- On labour protection;
- On consumer budget;
- On indexation of money income and deposits of population;
- On individual trade agreements;
- On collective agreements.
The privileges on payment for transportation and municipal services, allowances, pensions
and compensations are considered for families with minimum salaries, for poverty-stricken families
with children and grants for students. Taking into account that official statistics determine more than
90 per cent of population of the Republic to be on the poverty line (according to the calculations made
by the World Bank it composes 61.5 per cent) including 20.4 per cent above the poverty line, the main
accent in the social policy has been made on provision for indigent and low-protected groups.
The Republic has registered 233,688 refugees and 683,614 forced migrants.  Of these,
108,666 are children under the age of 5 and 357,562 are women who have been allocated in
unacceptable living conditions.  25 per cent of the total number have been placed in camps (there are
6 camps in the Republic of Azerbaijan) which were built by the humanitarian organisations. Only one
quarter of the total number of this population group have been provided with work. More than 80 per
cent have health problems. Refugees and forced migrants receiving the humanitarian aid (5 per cent ofthe total) have been included in the system of State social protection, like any other citizen of the
Republic of Azerbaijan. In addition to payment, they  are also provided with various other allowances.
After examination of the results of the financial position, compensations for unemployed
pensioners and allowances to families with children are paid, instead of consuming subsidies on foodproducts. Therefore the income for the previous quota only, not for the previous year, is taken into the
account. The Law on “Social Insurance”, adopted on 18 February 1997, stipulates the decrease of
allowances for working pensioners and liquidation of provisions for early retirement and extension of
the terms for retirement for 3 more years. Moreover, the Government intends to introduce a system of
individual pension accounts, which will be considered as the first step toward the process of the
development of a multileveled system of pension provision.
IX. TOURISM AND TRAVEL RELATED SERVICES
Currently tourism activity is regulated by the Recommendation Legislative act on “Main
principals of cooperation of CIS States  members in  the tourism sector”, which was adopted by Inter-
Parliament Assembly of the CIS country members in Saint Petersburg on 29 September 1994.
In accordance with the legislature of the Republic of Azerbaijan for carrying out international
tourism activities the licence issued by the Foreign Tourism Council under the Cabinet of Ministers is
required.
X. ENTERTAINMENT, CULTURE AND SPORT SERVICES
Type of services Licence Issuing Body Requirements and legal acts
1. Entertainment services (incl.
Theatre, concerts and circus
services)Ministry of Culture
No
2. News agency services Ministry of Press and mass media Law on “Means of mass media”,
dated 21.07,92WT/ACC/AZE/2
Page 74
Type of services Licence Issuing Body Requirements and legal acts
3. Libraries, archives, museums
and other cultural services Ministry of Culture
No
4. Sports and other
entertainment servicesMinistry of Youth and Sport
No
XI. TRANSPORT SERVICES
1. Maritime Transport Services:
 a) Passenger transportation Caspian Marine Stream-navigation No
 b) Freight transportation As in (a) As in (a)
 c) Rental of vessels with crew No No
 d) Maintenance and repair of vessels No No
 e) Pushing and towing services No No
2. Internal Waterways Transport:
 a) Passenger transportation Caspian Marine stream-navigation No
 b) Freight transportation As in (a) As in (a)
 c) Rental of vessels with crew No No
 d) Maintenance and repair of vessels No No
 e) Pushing and towing services No No
3. Air Transport services:
 a) Passenger transportation State Concern “Azerbaijan Hava
Yollari”“Air Code of the Republic
of Azerbaijan”
 b) Freight transportation As in (a) As in (a)
 c) Rental of aircraft with crew No No
 d) Maintenance and repair of aircraft No No
 e) Supporting  services for air      transportNo No
 f) Space Transport. No No
5. Rail Transport Services:
a) Passenger transportation State Management of Railway No
b) Freight transportation As in (a) As in (a)
c) Pushing and towing services No No
d) Maintenance and repair of rail
transport equipmentNo No
e)    Supporting  services for rail
transport servicesNo NoWT/ACC/AZE/2
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6. Road Transport Services:
a)  Passenger transport:
    - inter city
    - city- State Concern
“Azeravtonagliyat”
- municipal and regional organs
of executive powerNo
No
b) Freight transportation State Concern
“Azeravtonagliyat”No
c) Rental of commercial vehicles with
operator No No
d) Maintenance and repair of road
transport equipment No No
e) Supporting services for road
transport services No No
7. Pipeline Transport:
a) transportation of oil No No
b) Transportation of other goods No No
8. Services auxiliary to all modes of transport:
a) Cargo-handling services No No
b) Storage and warehouse services No No
c) Freight transport agency  services No No
9. Other transport Services No NoWT/ACC/AZE/2
Page 76
ANNEX 8
A. List of Foreign Trade Agreements
I. Bilateral and Multilateral agreements on foreign trade in goods and trade in services:
1. On establishment of Eurasia Union on Coal and Steel, (CIS) 24 September 1993 ( is
not ratified);
2. On control of getting permission for re-export and re-export of goods,  (CIS) 15.04.94
( put into force 18.12.96).
II. Bilateral Agreements on free trade with CIS countries:
1. With Russian Federation –1992;
2. With Ukraine – 1995;
3. With Uzbekistan –1996;
4. With the Republic of Kazakhstan –1997;
5. With Georgia – 1996;
6. With Turkmenistan – 1996;
7. With the Moldova Republic –1995.
III. Other bilateral agreements:
1. On economical cooperation and trade with Poland - 26 August 1997;
2. On civil air transportation with Poland - 26 August 1997;
3. On avoidance of double taxation in export and import of goods (operations, services)
with Kazakhstan - 16 September 1996;
4. On principles of trade-economic cooperation with Georgia 8 March 1996;
5. On of trade navigation  with Georgia - 8 March 1996;
6. On principles of trade-economic relations with the Moldova Republic -
8 September 1995;
7. On trade-economic relations and scientific-technical cooperation with Romania -
2 July 1995;
8. On trade-economic relations with Hungary - 2 September 1993;
9. On trade-economic relations and scientific-technical cooperation with Bulgaria -
June, 1995;
10. On trade –economic cooperation with Turkey  - 2 November 1992;
11. On non-commercial payments with Uzbekistan - 27 May 1996;
12. On mutual establishment of trade representation with the Russian Federation -
30 September 1992;
13. On main principles of trade-economic cooperation with the Russian Federation in
1995;
14. On supplies of the most important products with the Russian Federation in 1996 -
18 January 1996;
15. On trade relations with the United States of America - 12 April 1993 (ratified by Milli
Majlis of the Republic of Azerbaijan 19 April 1995);
16. On trade-economic cooperation with Ukraine - 1995;
17. Joint Statement on Trade-Economic Cooperation with Japan - 26 February 1998WT/ACC/AZE/2
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B. Agreements on Economic Integration, Customs Union and Free Trade Zones
1. On Economic Union of CIS - 24 September 1993;
2. On establishment of free trade zones –15 April 1994 ( put into force on
8 December 1996);
3. On mechanism of assistance for the development of production cooperation of
enterprises and industries and common provisions 23 December 1993 (put into force
15 April 1994);
4. On migration of labour and social protection of labour migrants 15 April 1994 (put
into force 18 December 1996);
5. On cooperation and mutual assistance in the customs issues - 15 April 1994 (put into
force 25 October 1995);
6. Agreement on production, cooperation and commodity turnover on the basis of
mutual supplies in the machine-building industry 9 December 1994 (put into force
18 December 1996).
__________