A Word From Executive Director of AmCham Issue 30 Dear members, Welcome to the 30th edition of IMPACT magazine, Credits dedicated to the "100th anniversary of Azerbaijan Democratic Republic". AmCham Executive Director: This year is remarkable for Azerbaijan and all Natavan Mammadova over the world. We celebrate the centenary of Azerbaijan Democratic Republic (ADR) – the first democratic republic Editor: among Turkic and Muslim world. Hundred years ago, Azerbaijani National Council proclaimed ADR a “fully Aykhan Nasibli sovereign nation consisting of the southern and eastern parts of Transcaucasia under the authority of the Azerbaijani Articles contributed by: people”. Ramiz Garalov Despite of two years of existence, ADR is remembered in the history with equal Sarkhan Babayev suffrage for women, establishment of State University, to be the first modern- Rashid Mammadov type university, which laid a significant foundation for independence of Azerbaijan. Herein, principles of ADR are very much in line with the official agenda of modern Narmina Mamishova Azerbaijan, which is independent, strong and tolerant. As said, “there is no future Yagub Zamanov without a past”. I am glad that we do not forget our nation state building background, David Tsiskaridze but cherish and deepen it. Connecting to the modern day of Azerbaijan, it must be Zaur Akhmedzadeh mentioned that the architecture and vision have been developed by late-President H.E. . This May we commemorate his 95th anniversary! Advertisers: Even more, I truly believe that declaring 2018 as a year of Azerbaijan Democratic Republic by the President of the Republic of Azerbaijan, H.E. , is BP welcomed by every single Azerbaijani. Business community also celebrate this with Azerfon different initiatives. This edition of IMPACT Azerbaijan magazine represents a small, Turkish Airlines but a sincere sign of the appraisal of ADR by the Chamber and I do hope you will PRIVE Steak Gallery enjoy reading it. INCI Group of Companies P&G Best regards, SAZZ Natavan Mammadova Coca Cola ITECA Editor’s Comment Dear friends, dear members. Cover page: This May is full of events, celebration of key achievements. From “Founding Fathers of the It is also an important period in the life of IMPACT Azerbaijan Republic” book, Courtesy of BP magazine. Yes, today we are celebrating the 30th edition, Azerbaijan our anniversary! Over the last 30 editions, this magazine built a foundation Publisher: of proud within the business community of Azerbaijan. This was possible by creation of a platform of discussion and American Chamber of Commerce exchange of ideas, know-how, best practices through in- in Azerbaijan volvement of different stakeholders – including higher level governmental officials and knowledge hub of our member Tel: (+994 12) 497 13 33 companies. Fax: (+994 12) 497 10 91 Bearing in mind the nature of this edition, we have an excellent content covering www.amcham.az ADR from historical, political and philanthropist sides. At the same time, our authors www.impact.az contributed with articles touching to different issues interesting for the business community of Azerbaijan. I appreciate for people who really see and enjoy deep value of this publication. Advertising opportunities: It must be also mentioned that this edition could not be developed without financial Please contact the Editor at support of BP, Azerfon, Turkish Airlines, Prive Steak Gallery, INCI – Group of Com- [email protected] panies, P&G, Coca Cola and SAZZ. Even more, energy and commitment provided by the teams of AmCham and IM- The articles in IMPACT Azerbaijan PACT Azerbaijan are really vivid, from design to finance. Enjoy reading, and happy celebrations! express the opinions of the authors and do not necessarily reflect the Enjoy reading, position of the American Chamber of Aykhan Nasibli Commerce in Azerbaijan contents IN FOCUS 5 18 Presidential - Legal Tech – How it Changes the AmCham Azerbaijan Congratulates Legal Market H.E. ILHAM ALIYEV with Victory!

Yagub Zamanov 6 Senior Legal Consultant, PwC Azerbaijan New composition of the Cabinet of Ministers of the Republic of Azerbaijan 20 Digital Skills “Fueling” Transformation of Digital Economy and Future Development of Eastern Partnership 7 Countries Our Founders, by BP David Tsiskaridze Chairman, International Business and Economic Development Center development & education 8 24 Proudly Celebrating Our Rich Access to World Wide Know-how Governance History & Innovations

Ramiz Garalov Zaur Akmedzadeh. Head of Technology Transfer and Partner, Capital Legal Services Business Incubation Department, High Technology Park of Azerbaijan National Academy of Sciences 10 Independent Azerbaijan as Political AMCHAM AZERBAIJAN Inheritor of ADR Established 25 on May 28, 1918 About Us

Sarkhan Babayev General Director, DET-AL Aluminum 26 13 Business Events Azerbaijan and the United States: From ADR to Modern Times

Rashid Mammadov, Narmina Mamishova 31 AmCham Azerbaijan Committee Highlights member contribution 16 Special interview with Mr. Tod Burwell President and CEO of BAFT, 35 AmCham Legal Update Bankers’ Association for Finance and Trade 43 AmCham Calendar of Events

2 Issue 30 SMELL MORE WITH THE AIRLINE THAT FLIES TO MORE COUNTRIES THAN ANY OTHER

JAPAN

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Presidential Elections in Azerbaijan- AmCham Azerbaijan Congratulates H.E. ILHAM ALIYEV with Victory! confidence in me, I would remain true to the policy of great leader Heydar Aliyev and would continue this policy. I am proud that the people believed me, supported me, and I, in turn, kept my word. In the past 15 years, comprehensive development has been ensured in Azerbaijan. The main condition here is that we are on the path of the great leader. The path he has chosen is the only correct one, and the history of Azerbaijan’s independence clearly demonstrates that. Over the past 15 years, we have made great strides along this way. The Azerbaijani people have lived in the conditions of security and stability. Over these 15 years, very dangerous processes took place in different regions of the world, in our region, in Europe: bloody clashes, wars, civil wars, coups d’etat. In other words, the last 15 years have been very tense in terms of security. Our people have lived in Azerbaijan in the conditions of security. We have eliminated all internal risks, were able to protect, are protecting and I am sure will continue to protect ourselves from external risks. Over these 15 years, the Azerbaijani people have lived in the conditions of stability. And this is the main precondition for our development. We see that when stability is disrupted, there can be no talk of development. When stability is undermined, outside intervention takes place, countries become uncontrollable, fraternal blood is shed, and the future of countries is called into question. The Azerbaijani people and our policies are the guarantors of stability in Azerbaijan. Therefore, the unity of the people and the government is the key precondition for our success. Azerbaijan today is known as a place of stability, an island of stability on a global scale, and this is our great achievement. On April 11, 2018, Presidential elections were held in Over these 15 years, democratic development has progressed Azerbaijan. Incumbent President H.E. Ilham Aliyev was re- rapidly and all freedoms have been guaranteed in Azerbaijan. elected president for a seven-year term. I believe that these 15 years have been very successful in As re-elected President indicated in his inaugural speech, the terms of democratic development. By deepening political presidential election reflects the will of the Azerbaijani people. reforms, we guaranteed all freedoms – the freedom of speech, The Azerbaijani people have given a high assessment the freedom of the press, the freedom of assembly, the of the work done and voted for it. They have given their freedom of political activity. Suffice it to say that 80 per cent votes for development, progress, security, and for our of Azerbaijani citizens are Internet users today. The Internet further development. The election has been held fairly is free in Azerbaijan. So our policy related to democratic and transparently. Opinion polls conducted by local and development is correct and ensures our national interests. international organizations prior to the election and the exit We are doing this not to please anyone, but to further deepen polls conducted by international and local organizations on political reforms in Azerbaijan, so that the Azerbaijani people election day coincide with the official election results. This are always in charge of their own destiny, just as they are in shows again that the election reflects the will and the opinion charge of their destiny now, and the election and its results of our people. confirm this once again. In 2003, in my address to the people on the eve of the *The text has been extracted from the speech of H.E. Ilham presidential election, I said that if the people showed their Aliyev, at the inauguration ceremony (18 April, 2018)

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New composition of the Cabinet of Ministers of the Republic of Azerbaijan

Novruz Ismayil oglu Mammadov - Prime Minister of the Republic of Azerbaijan Yagub Abdulla oglu Eyyubov - First Deputy Prime Minister of the Republic of Azerbaijan Ali Javad oglu Ahmadov - Deputy Prime Minister of the Republic of Azerbaijan Ali Shamil oglu Hasanov - Deputy Prime Minister of the Republic of Azerbaijan Hajibala Ibrahim oglu Abutalibov - Deputy Prime Minister of the Republic of Azerbaijan Ramil Idris oglu Usubov - Minister of Internal Affairs of the Republic of Azerbaijan Mukhtar Bahadur oglu Babayev – Minister of Ecology and Natural Resources of the Republic of Azerbaijan Parviz Ogtay oglu Shahbazov - Minister of Energy of the Republic of Azerbaijan Fikrat Farrukh oglu Mammadov - Minister of Justice of the Republic of Azerbaijan Sahil Rafig oglu Babayev - Minister of Labor and Social Protection of Population of the Republic of Azerbaijan Kamaladdin Fattah oglu Heydarov - Minister of Emergency Situations of the Republic of Azerbaijan Azad Arif oglu Rahimov – Minister of Youth and Sport of the Safar Mammad oglu Mehdiyev – Chairman of the State Republic of Azerbaijan Customs Committee of the Republic of Azerbaijan Elmar Maharram oglu Mammadyarov - Minister of Foreign Tahir Yagub oglu Budagov – Chairman of the State Affairs of the Republic of Azerbaijan Statistical Committee of the Republic of Azerbaijan Shahin Abdulla oglu Mustafayev - Minister of Economy of Samir Rafig oglu Nuriyev – Chairman of the State Committee the Republic of Azerbaijan for Urban Planning and Architecture of the Republic of Inam Imdad oglu Karimov - Minister of Agriculture of the Azerbaijan Republic of Azerbaijan Karam Avaz oglu Hasanov – Chairperson of the State Samir Rauf oglu Sharifov - Minister of Finance of the Committee on Property Issues of the Republic of Azerbaijan Republic of Azerbaijan Rovshan Shukur oglu Rzayev - Chairman of the State Abulfas Mursal oglu Garayev – Minister of Culture of the Committee for Refugee and IDP Affairs of the Republic of Republic of Azerbaijan Azerbaijan Zakir Asgar oglu Hasanov - Minister of Defense of the Vusal Afgan oglu Huseynov – Chief of the State Migration Republic of Azerbaijan Service of the Republic of Azerbaijan Yavar Talib oglu Jamalov – Minister of Defense Industry of Elchin Isaga oglu Guliyev - Chief of the State Border Service the Republic of Azerbaijan of the Republic of Azerbaijan Ramin Namig oglu Guluzade - Minister of Transport, Madat Gazanfar oglu Guliyev - Chief of the State Security Communications and High Technologies of the Republic of Service of the Republic of Azerbaijan Azerbaijan Orkhan Sedyar oglu Sultanov - Chief of the Foreign Ogtay Kazim oglu Shiraliyev – Minister of Healthcare of the Intelligence Service of the Republic of Azerbaijan. Republic of Azerbaijan Arzu Yusif oglu Rehimov - Chief of the State Service for Ceyhun Aziz oglu Bayramov – Minister of Education of the Mobilization and Conscription of the Republic of Azerbaijan Republic of Azerbaijan Goshgar Ilahi oglu Tahmazli – Chairman of Food Safety Mikayil Chingiz oglu Jabbarov - Minister of Taxes of the Agency of the Republic of Azerbaijan Republic of Azerbaijan Fuad Humbat oglu Nagiyev – Chairman of the State Tourism Hijran Kamran qizi Huseynova - Chairperson of the State Agency of the Republic of Azerbaijan Committee for Family, Women and Children Affairs of the Kamran Sultan oglu Imanov – Chairperson of the Intellectual Republic of Azerbaijan Property Agency Fuad Rauf oglu Muradov – Chairman of State Committee on Work with Diaspora Information has been extracted from the web-page of Cabinet Mubariz Gahraman oglu Gurbanli – Chairman of State of Ministers of the Republic of Azerbaijan, 21 April 2018 Committee for Work with Religious Organizations (http://www.cabmin.gov.az/page/post/343/)

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Our Founders, by BP

BP sponsored a first ever, unique and fundamental research book on founders of Azerbaijan Democratic Republic and a documentary which is aimed at shedding more light on the last night and the tragic fall of the republic. The book named ‘Founders of the Republic’ is a result of long and thorough research conducted in the archives of Azerbaijan, , , , and Poland. It includes historical data, facts and episodes from the lives of the 59 founders, as well as information about their short and tragically ceased activities as government and state officials. The author of the book is well-known historian Dr Nasiman Yagublu. The documentary called ‘The last session’ tells about the rise of the Azerbaijan Democratic Republic, desperate but definitive and irreversible battle against enemies – both the Supporting the development and promotion of the Azerbaijan’s army of occupation and its internal patrons. The film also rich cultural heritage is one of the priority areas in BP’s social puts in the foreground the important role that republic’s short, investment portfolio. As Azerbaijan’s long term and reliable tragic but honorable life played in Azerbaijan’s regaining its oil and gas partner, over the past 26 years, BP has remained independence. committed to helping the nation by investing in building local “As Azerbaijan’s long-term and reliable partner, BP has always capabilities, education, development of communities, local supported initiatives and activities to promote the country’s enterprises, sporting potential and a number of other areas. rich cultural heritage and national values. Azerbaijan’s first BP sees all this as an investment in the capacity-building democratic republic is a true national value that we in BP efforts of the country as it aims to build a strong future. wanted to honor by joining the 100th anniversary celebrations This year is no exception. In the light of the centenary of the and sharing the people’s pride”, says Bakhtiyar Aslanbayli, Azerbaijan Democratic Republic BP has made a remarkable BP’s Vice President, Communications, External Affairs, contribution to the celebration of the first democratic republic Strategy and Region. in the East.

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Proudly Celebrating Our Rich Governance History Cultivator”) magazine, opened by famous publicist Hasan Ramiz Garalov Zardabi, which was the first newspaper ever published Partner, Capital Legal Services in . Soon other magazines, such as “Kaspi”, “Molla Nasraddin”, “Irshad”, “Tereggi” followed the suit. Despite the severe censure of tsarist regime and continuous attacks on freedom of thought and speech, newspapers managed to advocate for widespread humanist ideals of the New Age, fought against illiteracy, prejudices and We are on the verge of a great historical event. Azerbaijan serfdom. The years of 1906-1917 were the golden years of is celebrating the Centenary - 100 years of declaration of Azerbaijani journalism which thus contributed to the formation the independence and creation of Azerbaijan Democratic and strengthening of national Spirit. The voice of the longings Republic – the first democratic state in the Middle East, the for the liberty and independence was becoming louder and first secular republic in the Muslim Word, and also one of the louder. first countries in the World which granted women suffrage and All these things had become a great source of anxiety for political rights. the Russian authorities, which undertook the set of severe The declaration of the independence was a milestone and repressions, intimidations and threats against the intellectual a turning point of the entire Azerbaijani history. The date of Elites. Many of the brave men were sentenced and 28 May was written with golden letters in the history of the prosecuted, some of them, including such prominent figures, nation. This historical Event sums up the lifelong cravings as and Ahmad Aghaoglu were forced to and aspirations of Azerbaijani People towards independence, leave their homeland and became refugees. freedom and liberation from the yoke of the . Promising and necessary conditions for creation of an As the National Leader Heydar Aliyev once said, “the independent Azerbaijani State occurred in 1918, shortly after formation of the first democratic state in the Muslim World was October revolution and civil war in Russia. by no means accidental and breeds from the very origins of After summoning an emergency session of Transcaucasian the national character and the intellectual and cultural revival Seim on May 27, Muslim Fraction has created Temporary which took place in the end of 19th century and showed that National Council (“Milli Shura”) which the next day proclaimed even in the times of oppression the nation went on dreaming Independence through a special legislator act. Thus, of its independence and liberation”. Azerbaijan Democratic Republic came into existence. Mid 19th century was a remarkable period for development The first weeks and months of the Independence were of Azerbaijani intellectual and cultural life. Such prominent complicated by the fact of actual occupation of the East thinkers and poets as Mirza Fatali Akhundzade, Mirza Shafi of Azerbaijan by Baku People Commissariat; Soviet Vazeh, , Abbasquluaga Bakikhanov and representative body formed shortly after Mart Genocide Ismayil bey Qutqashinli shaped the foundation of emerging by Armenian dashnaks led by the criminal brigand Stepan national self-consciousness and contributed to the literature Shaumian. Backed by the fraternal support of Turkish forces, and thought of the entire Muslim world. This was also a ADR took back the remaining occupied territories and Baku period of the formation of the national Press. “Akinchi” (“The finally was liberated from dashnaks with help and support

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was a gigantic noteworthy accomplishment of the Republic of Azerbaijan. Azerbaijan Democratic Republic was backing those days, presented a unique example in the Eastern world, as well as, globally that had standards of the best governance, statehood, rule of law, human rights, independent judicial system and democracy that currently majority of the Western countries live up to. Thus, it is a historical example of truly independent and well-functioning independent state that many European countries were able to realize these principles and goals only during the second half of 20th century. Azerbaijani individuals re-establishing state freedom in 1991 made a utilization of the rich statehood conventions of Azerbaijan Democratic Republic and set up the autonomous Azerbaijani state based on this chronicled legacy. The current positive trend of the Republic is continued by the President, H.E. Ilham Aliyev that contributes significantly to of Turks led by Nuru Pasha, who continued to fight against the development of the country at all levels based on the armenians the following years. principles, experiences and practises of the past Azerbaijan Shortly after gaining independence, the new formed Democratic Republic. government embarked on a process of democratization Finally, Azerbaijan Democratic Republic left a wonderful of political life. Serious steps towards creation of liberal follow in the national history of the freedom movement. Inside and inclusive institutions were taken. This transition from 23 months of its reality, the Majority rule the Republic turned absolutism and backwardness of the tsarist regime towards into a reasonable proof of way that even the most frightful a modern and democratic State was crucial and inevitable and harsh frontier administrations were not able annihilate the in order to secure the Independence and prolong the life of thoughts of freedom and autonomous statehood customs of newborn country. These solid achievements showed that the the Azerbaijani nation and country. leaders of the country had not only enough will and strength to implement all their plans, but also, they had a courage to face all the difficulties which usually accompanies such brave steps. The remarkable role played the newly born nation’s Parliament that significantly substantiated the legal and political reforms and processes throughout the country. Inside this short period, the Parliament of the Azerbaijan Democratic Republic had adopted various critical laws and announcements in the soul of the standards put forward in the Declaration of Independence which marked the notable place in the history of the country. The laws and announcements adopted were essentially going for assurance of the nation’s autonomy and regional respectability, the perception of human rights and freedom and formation of the democratic state based on principles of diversity and multiculturalism in view of a law. The main objective of these authoritative exercises was a development of the branches of government that included independent parliament, well-functioning judicial system, well-functioning and well-represented Cabinet of Ministries. Author’s biography With the perspective of bolstering the soul of national rise, Mr. Ramiz Garalov is a Partner at Capital Legal Services, law the Administration and the Parliament, for all time, had been firm. He provides advises to clients on international business giving deliberate consideration to the advancement of science, transactions and he is an expert in international business state-funded institutions and public health services, in spite of law. Ramiz carries considerable practical experience in law working in an extremely tough circumstance. Various auxiliary and business development. Before Capital Legal Services, and secondary schools, including those for the young ladies, he worked as a lawyer for multinational companies operating were opened everywhere throughout the nation. The Law in Azerbaijan. He is fluent in several languages and has on the Establishment of Baku State University received by participated in various prestigious professional development the Parliament on September 1, 1919 merits an exceptional and executive training programs. Ramiz is a graduate of Baku note in this regard. Foundation of the first national university State University, International Law Faculty.

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Independent Azerbaijan as Political Inheritor of ADR Established on May 28, 1918 Sarkhan Babayev Mamed Yusif Djafarov, Khudavat bey Rafibeyov, Akper General Director, Agha Sheykhulislamov, Teymur bey Madjinsky, Samed bey DET-AL Aluminum Mehmandarov, Aliagha Shykhlinsky, Sultan Medjid Ganizade, Khalil bey Khasmamedov, Ahmed bey Papinov, Shafi bey Rustambeyov. The declaration of the Supreme Council of the Republic of Azerbaijan “On the restoration of the state independence of the Republic of Azerbaijan” of August 30, 1991 was also the The National Council of Azerbaijan adopted the Declaration result of the struggle. of Independence on May 28, 1918; thus, restoring many The Supreme Council of the Republic of Azerbaijan on the centuries of the state system of Azerbaijani people. The basis of the Declaration of Independence of the National creation of Azerbaijan Democratic Republic in the centuries- Council of Azerbaijan of May 28, 1918, the democratic old history of Azerbaijan became a significant event and one principles of the Republic of Azerbaijan and the inheritance of the bright pages of the history of our people’s statehood. of traditions and adhering to the declaration of the Supreme The Republic of Azerbaijan which had a full state power on Council of the Republic of Azerbaijan of August 30, 1991 “On its territory carried out the independent foreign and internal the restoration of the state independence of the Republic policy. The institutions peculiar of an independent state that of Azerbaijan” approved the present Constitutional Act and are the parliament, government, army and financial system established the state system, the political and economic were established and acted in the Republic of Azerbaijan. structure of the independent Republic of Azerbaijan. The Republic of Azerbaijan was recognized by a number of The revival of the lost national statehood at the end of the foreign countries and established the diplomatic relations twentieth century confirmed the national-liberty spirit of with them. Then, by disturbing legal norms on April 27-28 of our people in the confusion that exacerbated the historical 1920 without declaring the war, the territory of the Republic conditions in 1920. 27 years ago, on October 18, 1991, with of Azerbaijan occupied, overthrew the legally elected state the adoption of the Constitutional Act on “State Independence bodies and put an end to the independence of the Azerbaijani of the Republic of Azerbaijan”, the beginning of the new stage people. of the history of the Azerbaijani people. Later, in fact, the policy of colonialism was carried out against After restoration of independence in 1991, the Republic of the Republic of Azerbaijan within 70 years. The reserves of Azerbaijan began to realize its sovereign rights in economic Azerbaijan were utilized fully; its national wealth was stolen. field and to implement independent policy. The main directions As noted, Democratic Republic of Azerbaijan survived for only of this policy are organization of the economic system based 23 months in complicated and tense socio-political situations on different types of property, transition to market economy which will always stay in the memory of future generations as and integration into the global economy. one of the brightest pages of our history. Though it was not Economically, the years after the independence can be able to implement fully the measures undertaken in spheres divided into two main periods. The period of 1991-1995 of the state system establishment, economics, culture, was characterized by economic chaos and regression. The education, public health, military policy; yet those measures period after 1996 is known for an increase in macroeconomic implemented played a great role in the history of our country stability and dynamic economic development. and in restoration of the national state system establishment. As the result of far-sighted policy and intensive activities The most important matter is that the Democratic Republic of the , the national leader Heydar of Azerbaijan strengthened our democratic views though it Aliyev, significant results were achieved in the fields of existed within a short period of time. The people of Azerbaijan socio-economic development and integration into the global will always honor the memory of the prominent state officials economic system within a short period of time – in spite of that served to the establishment of that republic as Mamed unfavorable initial conditions. The great achievement was Emin Rasulzade, Alimerdan bey Topchubashev, Fatali that the Azerbaijani model of the state system establishment khan Khoyski, Nasib bey Usubbeyov, Mehdi bey Hadjinsky, and development was established over the past period.

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Azerbaijan had been admitted nearly to of all international institutions, including in 1992 IMF, World Bank, EBRD, Islamic Development Bank, in 1999 Asian Development Bank. The main directions and specifications of social-economic policy strategy, which is continued successfully and improved by the President of the Republic of Azerbaijan, H.E. Ilham Aliyev, is to transit to market economy and to form social, diversified national economy, which possesses ability of self- development and to integrate to world economy. The new stage aims at increasing the competitiveness of the national economy, efficient integration into the world economic systems and ensuring a long-term dynamic socio- economic development in the country. H.E. Ilham Aliyev, the President of the Republic of Azerbaijan, has identified the tasks which are important for achievement of this goal in his economic policy decrees. These particularly concern the strengthening and efficient utilization of the economic potential of Azerbaijan, including development of non-oil Metallurgy is one of most powerful driver of national economy of prosperous Azerbaijan sector (formation of oil-independent national economy in 3,4 and 2,7 times in Azerbaijan in 2003-2013. Azerbaijan), entire and efficient utilization of the potential of Today, the worthy continuation of Heydar Aliyev’s political each and every region in Azerbaijan, the establishment of course, the well-thought strategy of President H.E. Ilham favorable conditions for the opening of numerous workplaces, Aliyev has turned independent Azerbaijan into one of the private business development, increasing the scope, quality developed democracies of the world, the international and target groups of social services, the reduction of poverty, community. The fact that the most influential international etc. organizations in the world spend their events in Azerbaijan, With the purpose of development nonferrous materials industry which has ended with great triumphs today, attracted the in the country, DET-AL Aluminum Complex constructed attention of the international community to our Republic, is in Ganja. DET-AL LLC is leading company engaged in the the fact that our country is not only part of a Muslim world, but nonferrous industry. Successful activities of DET-AL was also a worldwide one. possible to realize due to the stable and developed financial, Author’s biography political, economic situation in the country. Mr. Sarkhan Babayev is the General Director of DET-AL 3-5-year programs were accomplished in 2004-2013 on Aluminum LLC. Mr. Babayev has been in aluminum industry socioeconomic development of regions of Azerbaijan by since 2002. As of 2010, he has been serving as a General presidential decrees and orders in order to implement Director of DET-AL Aluminum. He holds law degree from comprehensive and sustainable measures aimed at economic Azerbaijan State University and an international economy from diversification. GDP and non-oil sector increased respectively the International Minor Business Institution of .

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Azerbaijan and the United States: From ADR to Modern Times Rashid Mammadov Narmina Mamishova Legal and Policy Officer, Public Relations Specialist, American Chamber of Commerce American Chamber of Commerce in Azerbaijan in Azerbaijan

Millions of Azerbaijanis living in Azerbaijan and across the 4. Admission of Azerbaijan as a member of the League of world celebrate May 28, the date of establishment of the Nations; first parliamentary republic in the East – the Azerbaijan 5. Allocation of military aid to Azerbaijan by the United Democratic Republic (“ADR”). States Department of War; and After the disunion of the Transcaucasian Democratic 6. Opening of diplomatic relations between the United States Federative Republic (“TDFR”), on May 28, 1918 Azerbaijan and the Republic of Azerbaijan. was declared a Democratic Republic by Azerbaijani At the suggestion of the British Foreign Secretary, Lord members of the TDFR. Most of the countries had been Curzon, the independence of Azerbaijan was acknowledged informed about the official and legal foundation of the ADR. In de-facto in the assembly of the Supreme Council of the Paris difficult circumstances, the founders of ADR chose the most Peace Conference. The Azerbaijani delegation was hosted advanced and democratic form of government of their time. by the First Secretary of the Ministry, Jules Cambon at the The Declaration of Independence – the policy document of Ministry of Foreign Affairs of France where Cambon handed the new republic – expressed commitment to principles of to Topchubashov the official declaration of the Paris Peace democracy and secular and parliamentary state, and these Conference on the “de facto” recognition of the ADR by principles were followed to the very end. The newly formed Supreme Council. government of the ADR was doing everything possible The recognition of the ADR at the Paris Peace Conference in to eliminate the numerous internal political and economic January, 1920, happened as a result of the great aspiration obstacles that the young independent republic faced after the of the Azerbaijani delegation. With the recognition of proclamation of its independency. In this time, the Azerbaijani Azerbaijan at the level of an international peace conference, delegation to the Paris Peace Conference was aspiring to the diplomatic ties of the young republic expanded. Following receive the support of world community. The Paris Peace this, some countries opened their representative offices in Conference is well-known in history as the meeting of the Baku and some established diplomatic relations with ADR. leaders of the major powers and outstanding politicians of Unfortunately, Azerbaijan’s participation in the system of that time - Winston Churchill, Woodrow Wilson, Lloyd George, international relations was interrupted in April 1920. Georges Clemenceau, Jules Cambon, George Curzon, are After being part of the giant for almost a century some of them who had taken part in the conference. The and after its dissolution in early 1990s, Azerbaijan was once delegation, led by Alimardan bey Topchubashov, left for Paris more unveiled by history. Having declared its independence after holding a number of meetings with the representatives on October 18, 1991, Azerbaijan has gained a substantial of different countries in . The Azerbaijan issue was geostrategic role both in a regional and global context. Located discussed at the Council of Allied Powers on May 2, 1919 for the first time. On 28 May Topchubashov met a member of the US delegation, Henry Morgenthau, during the first half of the day and President Woodrow Wilson during the second half. In these meetings, the government of the USA noted the possibility of channeling U.S. capital into Azerbaijan and providing financial aid to the Azerbaijani government. The memorandum presented to the president of the USA consisted of 6 points: 1. The recognition of Azerbaijan’s independence; 2. The application of Wilson’s fourteen principles to Azerbaijan; 3. Admission of Azerbaijani representatives to the Peace Conference; Azerbaijan delegation in Claridge Hotel in Paris, during Paris Peace conference - 1919

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effectively continued by H.E. President Ilham Aliyev. In the National Security Concept of the Republic of Azerbaijan, approved by his Decree of 23 May 2007, the United States are referred to as Azerbaijan’s strategic partner in the framework of the UN and Euro-Atlantic structures in a great number of spheres and the commitment to strengthening cooperation with NATO, as well as developing political dialogue is emphasized. Notably, as a step to take the responsibility for an even broader security facet in the international community, in 2007 Azerbaijan started its first Individual Partnership Action Plan with NATO as the new PfP mechanism defining the cornerstone of their cooperation. Back in 1994, signing this Partnership for Peace Framework document was regarded as the cornerstone of substantive relations between Azerbaijan President of the Republic of Azerbaijan Heydar Aliyev meeting with US President Bill Clinton - Washington, 1997 and NATO providing for political dialogue, Azerbaijan’s between contesting Russia, and Turkey and providing a participation in NATO-led operations, etc. bridge between Europe and the energy rich Caspian basin, Today, the United States of America and Azerbaijan preserve Azerbaijan has been considered by Washington also as a the rhetoric of high-level dialogue and mutual understanding. “buffer zone to contain the spread of Islamic fundamentalism”. This is largely determined by Azerbaijan’s unique geopolitical Azerbaijan’s strong partnership with the United States has location as a link in a grand transport network connecting the held true ever since the latter recognized its independence East and the West, as well as due to its potential to contribute on December 25, 1991. Less than half a year later, on March further to global and regional energy security as oil and gas 6, 1992, Azerbaijan opened its embassy in Washington, and producer and its role in the fight against extremism and on March 16, 1992, the United States opened its embassy in international terrorism. Economic and commercial relations Baku, the capital of Azerbaijan. are also dynamically developing. Azerbaijan remains one of Despite at those times the overall tendency of U.S. foreign the most significant trade and investment partners of the USA policy in the region was of limited involvement in the post-Soviet space. Together, the two countries work and notwithstanding the Section 907 of the United States to promote the values of mutual respect the ground of which Freedom Support Act making Azerbaijan the only post- had been laid long before – when the Azerbaijani statehood Soviet state not to receive direct aid from the United States embodied in the ADR was given a birth in the beginning of the th government, the United States was proactive in assuring its 20 century. economic positions in Azerbaijan. The principal factor which has made Azerbaijan attractive from the U.S. standpoint Authors’ biography has been the former’s oil and natural gas reserves, and Mr. Rashid Mammadov is a Legal and Policy Officer at the prospects for considerable economic development reinforced American Chamber of Commerce in Azerbaijan (AmCham in Azerbaijan’s energy policy. The historic “Contract of the Azerbaijan). Since his professional career, Mr. Mammadov Century” to develop rich “Azeri – Chirag – Guneshli” deep water has worked in different fields, such as court, migration, human oil fields signed on September 20, 1994 under the leadership rights, construction, banking, education, art and NGOs. At of national leader Heydar Aliyev involved 11 international oil the same time, he delivers lectures and trainings on different companies representing 7 countries including the USA. It law-related subjects at educational institutions. Rashid carries brought significant Western interest to the small Caucasian LL.M. Degree from European University Viadrina in Germany country and tied it to the Euro-Atlantic strategic interests. and a Bachelor Degree at the Law Faculty from the Baku State Being regarded inter alia as a policy success for Washington, University. Mr. Mammadov is an author of several research it was in 1997 that the first oil was produced under the historic pieces on international law. deal. Meanwhile, in 1995 the United States encouraged the building of one small oil pipeline from Azerbaijan to the Ms. Narmina Mamishova is a Public Relations Specialist at Georgian Black Sea Port of Supsa. Importantly, Heydar the American Chamber of Commerce in Azerbaijan (AmCham Aliyev personally participated at the opening ceremony of the Azerbaijan). She earned a Bachelor Degree at the International American Chamber of Commerce in Azerbaijan on December Law Faculty from the Institute of International Relations of Taras 13, 1996. In his welcoming speech he noted: The organized Shevchenko National University of in 2015 (graduated with start of work of the American Chamber of Commerce is a honors). Also, she holds a Master Degree in Arts of Diplomacy distinguished event in the history of the U.S.-Azerbaijani and International Affairs from ADA University. Ms. Mamishova relationship.” Later, in 1997 the first official visit of the head of is an author of several research pieces on international relations newly independent Azerbaijan to the United States took place and world politics, including the thesis on “Strategic hedging as when President Heydar Aliyev visited Washington, D.C. at the a pattern of foreign policy orientation: The case of Azerbaijan’s invitation of President Bill Clinton. behavior vis-a-vis Russia” and a research article on "Central In the context established by his predecessor, the policy Asia and Azerbaijan: Does Islamic Solidarity Matter?" (published encouraging confident partnership with Washington has been in the Caucasus International (CI) Journal).

14 Issue 30 in focus

One Step Towards 5G

Special interview with Chairman of SAZZ, Mr. Jayhun Mollazade

This month we are celebrating 100th Anniversary of ADR. What is the contribution of SAZZ to this historic Anniversary? On the 28 May of 2018 as Azerbaijani Nation is celebrating 100 years Anniversary of ADR, Sazz Wireless Internet company is also launching new wireless service based on TDD-LTE Technology which will improve dramatically quality of service on the market place. SAZZ is the pioneer of FWA (FIXED WIRELESS ACCESS) Network in Azerbaijan utilizing WiMax Technology in the past and TDD-LTE LTE Technology at present. This Technology enables SAZZ to improve the quality of service and gradually move towards 5G network in future. That’s why our slogan is “One step towards 5G”. Our strategic partner and technology BakuTel 2017 - Meeting with HE Robert Sekuta, Ambassador of the USA to Azerbaijan, Ms. Orit Ginzburg, Telrad Networks Vice-President of Sales EMEA and Mr. Jayhun vendor an Israeli corporation Telrad Networks has all the Mollazade, Chairman of SAZZ necessary advanced hardware and software solutions to Secondly we will be able to provide services to the schools and support SAZZ at present and in future via advanced FWA hospitals and other public institutions, as well as commercial technology road map. entities as hotels and restaurants and offer services to tourists We are offering up to 30 mbt speed for individual customers visiting our country by offering them mobile device as LTE/ and special VPN services to corporate customers. MIFI, so they can take it with them when go for a tour and Overall, this technology will put SAZZ on a new path towards walk outside of the hotel. constant improvement of the quality of Wireless broadband Our potential customers will be offered bundle services through continuous upgrade of the technology via software and different modems with embedded WiFi access for enhancement towards 5G in 2020. apartments, villas and offices, as well as MiFi, pocket mobile device for outside use. Given the fact that all our devices have Who will be the main beneficiaries of SAZZ TDD-LTE WIFI ACCESS all our customers can use different gadgets as Network? smartphones laptops and tablets. As I have already mentioned in the previous answer, initially At the end I would like to congratulate our Nation with 100 the individual, SME’s (Small and Medium Entities) and big years of ADR which is big historic achievement and this corporations concentrated in Baku and Absheron. We are Anniversary carries big importance not only for Azerbaijan, also planning to add VOIP to IPTV in our Wireless Broadband but to the entire region and World as the experience of ADR service packages and provide bundle service. was unique! member contribution

Special interview with Mr. Tod Burwell President and CEO of BAFT, Bankers’ Association for Finance and Trade

In which areas do they specifically cooperate? Certainly, some of the retail sector solutions. BAFT specifically looks at trade finance and payments, and we are seeing increasing cooperation there. There is also cooperation in digital identity, which is a core problem to solve in order to fully enable digital banking. Security and fraud are major risks of digital banking, so identity of customers and counterparties must be able to be verified.

In this face of digitalization, one of the important issues is security. How do banks handle this issue? What would be your recommendations? The first recommendation is to educate yourself about the best in class standards. Cybersecurity and fraud are the biggest risks to an institution when moving to digital transactions and threats are always evolving. Companies in different jurisdictions may have the best in class tools for specific needs, so the first step is to become familiar with best in class. The second thing would be to also understand the local government laws and regulations regarding what responsibilities and liabilities banks, technology providers and users of digital solutions have. The private sector tends to be ahead of governments in the space right now, but institutions have to know what their legal and regulatory requirements are. Third, I would suggest studying organizations that have gone through transformations already and learn as much as possible from their experience. In some cases, this may be other banks, in other cases it might be non-banks. Learning The first question is about digitalization in the banking from others can help shorten the cycle, lower the risk, and sector. improve success. Recent studies show that as much as 85% of banks anticipate investing in digital transformation this year. Each bank is Do you think banks and financial institutions can utilize looking at different business opportunities – retail, wholesale, Blockchain technology now? identity, data, etc. What we have seen up to this point is They are utilizing Blockchain technology already. If you look the majority of investment has been in customer facing at the top 50 or 100 banks, I would guess about 90% are deep components, at least the early commercialization of digital in the process or already have completed the deployment of banking. We are starting to see more investments in moving Blockchain applications. platforms to the cloud, utilizing artificial intelligence, building out more APIs to connect different types of applications, Is this going to transform their entire processing and and other types of infrastructure related investments. There institutional framework? are also more instances of banks partnering with FinTech I think it has the potential to transform certain types of companies. Around 3 years ago, banks and FinTech businesses. We are a couple of years into the cycle where companies were still learning each other’s capabilities. proofs of concept have been developed, proven, and in some There was more competition, whereas now there is more cases deployed to handle live transactions. There are very collaboration. few examples where the proofs of concept have been truly

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exchange for goods and services and that may give them greater staying power. The more cryptocurrencies become regulated, the greater their legitimacy as an alternative to fiat currency, although I don’t think they will ever fully replace fiat currency. Certainly not as a reserve currency. Right now we do see some central banks looking to deploy cryptocurrencies, not as a replacement for notes, but an additional type of exchange. I can think of many applications for that.

Lots of young people are moving to the stock market, even with limited knowledge of finance. What should be a starting point for them? I am not an investment advisor. From my own perspective, I am relatively risk averse. My main principle is to not invest in things which I don’t fully understand. There are lots of opportunities in different sectors in different regions. The commercialized, so that is the next phase I expect to see. alternative energy sector seems to be growing universally. This year more will go live into production and we can start to The health care industry is an interesting one that is going see the economic value of these solutions. Based on how this progresses, we can get a better sense of the adoption and degree of transformation.

So, at this moment, it would be difficult to judge the ROI, right? It is too soon. However, most large banks have invested significantly in this new technology, so commercialization expectations are high.

The previous year (2017) was very fruitful for cryptocurrencies – all prices went up. Starting from early January (2018), the situation in cryptocurrency is not good enough. I would like to know how you see the existence of over 1,400 cryptocurrencies in the short and long term. Will they be able to replace the fiat money? I think the volatility in price of cryptocurrency is largely driven by fear of missing out. Lots of investors see this as an through transformation in different geographies, but I’m not opportunity to double their money in a short period of time, but sure which direction this will go. Some companies will do you see volatility going in both directions. My personal view is phenomenally well while some are quite vulnerable to the that there is currently nothing backing a cryptocurrency, so I direction of regulation. I am sure this will continue to evolve. don’t see it as a sustainable investment. There is a potential The technology sector will continue to evolve rapidly, so as for cryptocurrencies to increasingly be used as a means of a sector, I like it. However, once you start to select individual companies, there is a lot of uncertainty. Some companies will grow quickly, some will be bought and many will fail. I also think that we have not gone through a full cycle to fairly evaluate non-bank FinTech companies offering financial services. For example, peer-to-peer and online lending companies have not gone through a full credit cycle, so we have to see how those things play out in down times.

Our guest’s biography Mr. Tod Burwell is the President & Chief Executive Officer of BAFT. Mr. Burwell has almost 30 years of trade, supply chain and cash management experience as a banking practitioner, consultant, and industry executive. Prior to joining BAFT, Mr. Burwell was a Managing Director at JPMorgan Chase and held senior global management roles within their trade finance and logistics management business.

17 member contribution

Legal Tech – How it Changes the Legal Market Yagub Zamanov blockchain as a whole can be used as a backbone to manage Senior Legal Consultant, the entire legal system and reduce costs3. PwC Azerbaijan So, with all these facts, how blockchain can help lawyers? Trust? When a traditional deal is concluded, parties undergo multiple verification processes, mostly verifying each other. The first thing that is being verified is the signing authorities of the parties. To do so, each party needs to gather enough evidence, usually in a form of corporate extracts or other A disruption that has been floating on the global market is documents, confirming these. Even in that case, these starting to approach legal industry. Clients are pushing lawyers documents do not always guarantee that signee is authorized, more than ever, wanting high quality work at a fraction of cost. as we can often see from the local practice4. A lot of factors Repetitive business model that law firms have been applying count in, but mainly disconnection between the civil and continuously throughout years does not work anymore. labor legislation. According to the Law “On State Registry So what is the answer to the modern legal market? Legal and Registration of Legal Entities”5, all corporate changes Tech! According to the Wikipedia, Legal Tech is “the use become effective on the date of their registration. So it means of technology and software to provide legal services”1. that unless a company director is replaced by another in Usually companies promoting legal tech are startups with a the registry, his/her term is effective in the eyes of the State bunch of young bright lawyers and coders that are trying to Registry. In reality, however, it works in a different way. What revolutionize respectable but very conservative legal industry. if the company’s director left and his/her employment contract In this article, I have outlined major innovations existing on has been terminated a long time ago? Does it mean that he is the market right now and explain how they can be beneficial. authorized because his name still appears on the company’s So let’s start: extract or in contrary, he is not because his employment Blockchain. A fancy term that has been used for a couple contract is no longer valid? The legislation is silent on this. of years now by a lot of geeks and tech-heads. However a In addition, it’s often a burdensome process to change the lot of world’s population still struggle to understand what it authorized signee, as it shall be done via filings with the is. To add to the confusion the term is also frequently used relevant governmental physical registry. Blockchain-enabled in conjunction with bitcoin or other cryptocurrencies, which to solution can potentially eliminate the need to do all this by most mean money and quick gains. (i) being a public, web-accessible registry where all changes Blockchain was invented in 2008 by Satoshi Takemoto, an can be made by literally making a couple of clicks (ii) being a unknown person. He outlined principles of this technology in storage of all transactional history of any given entity in any a respective whitepaper2. given territory, including history of corporate changes. One So let’s clarify – what is blockchain? To put it simply, it is a may ask what is so innovative in this? Some of the foreign peer-to-peer network consisting of a chain of digital blocks registries already employ this method. The answer will be with the size of 1mb built subsequently and containing that the entries made to such register cannot be changed or information that is very resistant to any kind of modification. erased at anyone’s will. Once the block is built, it’s built and Before building a block there is a verification process in place it will remain in the network forever. The idea of a “no erase- that authorizes keys generated by the previous block to or-change” registry can also be applied to the area of any match the next one. Each block has size of 1mb and contains property – movable, immovable and intellectual. various transactional data. Because of its decentralization, Smart contracts. Why are the contracts required in the first it’s very hard to shut down its network, if possible at all. place? They are required to formalize commercial or other By being a non-erasable system all transactions that occur relationships between two or more parties. As indicated within the network are automatically displayed in a ledger above, there is simply no trust without a contract. A simple which is public. Any person at any given time can freely commodity sale-purchase contract requires no severe access the given network to verify the transaction. But that’s lawyer input. However, large contracts, such as SPAs, are where the tricky part begins. All transactions are anonymous, usually time and resource consuming documents that require and you can’t verify it unless you know the parties’ IDs. But extreme attention to the details. Companies generally face even when you know it it’s not that easy – often transactions huge legal costs when it comes to outsourcing drafting such are “shuffled” within the network before reaching the final kind of contracts and even then multiple adjustments are destination. usually made during the course of the deal. Some of the leading legal academics propose that the 3. Aaron Wright, Cardozo Law School. Article at Bloomberg Law “How Blockchain Technology Is Transforming the Legal Industry”. 1. https://en.wikipedia.org/wiki/Legal_technology 4. Meaning legal practice in the Republic of Azerbaijan. 2. https://bitcoin.org/bitcoin.pdf 5. As adopted on 12th December 2013 under the number 560-IIQ. Article 9.3.

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The term “smart contract” was firstly coined (no pun intended) analyze it. As a result it compiles a report which has to be by a computer scientist, legal scholar and cryptographer Nick verified or cross-checked by a human lawyer to ensure Szabo6 in his 1996 work7. He has defined smart contracts its accuracy. This same technology is used for creating as “a set of promises, specified in digital form, including Virtual Data Rooms in the first place. protocols within which the parties perform on these promises”. • Voice recognition. Each year lawyers spend hundreds Smart contract does not resemble traditional contracts at all. of hours on transferring their written records onto digital The main idea behind the smart contract is that unlike its sources. A trained AI, by recognizing key phrases can paper “sibling” it has a proactive control over the terms vs. help save time transferring these records. traditional retroactive control. They execute themselves within • Attorney-client privilege. AI can help automatically identify the network only when certain conditions are met, i.e. agreed if a certain document is confidential at the drafting stage payment has been made, etc. and classify it as such. When saved, it will automatically Nevertheless, a blockchain platform called “Ethereum”8 encrypt it. became a pioneer in this area, challenging current situation • Compliance matters. AI is capable of multi-channel by introducing working smart contracts. Again, the whole control of the information flow, even if it is being Ethereum platform operates and relies on blockchain concealed from it. algorithm, meaning that all transactional information will be The biggest obstacle for implementation of AI is the lack of included in a data block. training material for it. It is either confidential or it is being Smart contracts are not to be confused with legally binding categorized in a chaotic way so AI can’t use it properly for contracts because they are currently not enforceable under the purpose of its self-training. Many AI legal startups have any legislation9. However, would you lend money to a to strike deals with major law firms to gain access to the complete stranger? Or would you hire a lawyer to compile a database they have. To solve this, a Harvard Law School contract for a US$5 online subscription? Most people would launched a project called “CaseLaw Access”11. It is designed prefer not to. Smart contracts are designed to reduce legal to unify all US case law in one source, readable for legal AIs. costs associated with a transaction as they require no lawyers It will take some time, but in the end it will provide a solid to compile and can be concluded in minutes. ground for AI to learn on. Artificial intelligence or simply AI has been around for about AI is still in development stage so there might be some hits- a decade now. Many of us have seen the movie “Terminator” and-misses, yet, once polished, it will be an ultimate tool where the plot centers on an AI which sole purpose is to for a number of traditional legal tasks, such as the above- overtake the world. Another example is the recent Facebook mentioned one. development where two AI chat bots invented their own Automated document generation. When the words “lawyer” language and were shut down because of that10. It all sounds and “document” are used interchangeably, it means that the frightening yet it is one of the major successes humanity has document has a lot of text in it and it shall be precisely drafted. achieved within the past century. AI has more impact on the It also usually means that a hefty sum have to be paid to a current state of legal industry than any other innovation. In a legal professional to complete such document. nutshell, it is an artificial brain designed to function like a real Document generation tools are aimed at solving that. brain but which can be programmed or limited in a certain Although these tools use pre-drafted templates, they make way. The main advantage of it is that it can execute tasks a document generation much simpler and faster process. Need lot faster, remember a lot more things and it is always neutral an application to a state authority? An official letter? A simple to external factors in the decision making process. statement of claim? No problem, just boot up your computer, Where it is used now? Strategically oriented firms has already launch a program, enter the necessary data, such as parties’ assessed the value of the AI in the world of legal services and requisites, governing law and press “generate” button. Voila! are using it for automation of routine work. Despite the fact You have a ready-for-execution document in a matter of that AI is frequently associated with the future, it is already minutes (or quicker if you type fast). used in: • Due diligence. It is a complex process consisting of Conclusion different steps. It has been always inevitable not to use Not all of the above can be immediately applied to lawyers to conduct a proper due diligence. With the international or local legal practice. But the fundamentals of invention of the AI you can now complete a standard legal profession are starting to change towards its digitization. LDD process within a couple of hours rather than a So shall we (lawyers) do. couple of weeks. It is now much cheaper too. eDiscovery process heavily relies on Optical Character Recognition Author’s biography technology (OCR) which is able to “read” documents Mr. Yagub Zamanov joined PwC Azerbaijan in 2015 as a in the same way as human and also simultaneously Senior Legal Consultant. Previously he practiced law in the office of an international law firm. His current area of practice 6. https://en.wikipedia.org/wiki/Nick_Szabo is general Corporate Law, M&A and IT. During his time at 7. Smart Contracts: Building Blocks for Digital Markets. Nick Szabo, 1996. http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinter- PwC, he has been involved in a number of high-profile M&A school2006/szabo.best.vwh.net/smart_contracts_2.html projects in Telecom and Finance industries. Yagub holds an 8. https://www.ethereum.org/ 9. As of the date of this article. LL.B from Baku State University. 10. https://www.cnet.com/g00/news/what-happens-when-ai-bots-invent-their-own-language/?i10c.en cReferrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmF6Lw%3D%3D&i10c.ua=1&i10c.dv=14 11. https://lil.law.harvard.edu/projects/caselaw-access-project/

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member contribution

Digital Skills “Fueling” Transformation of Digital Economy and Future Develop- ment of Eastern Partnership Countries

David Tsiskaridze private sector – libraries, finance and banking, e-services Chairman, International Business – hazardous online activities and online propaganda (fake and Economic Development Center news). The principal objective which policy makers and employers should now address are to deliver and communicate current and future requirements to digitalization and digital skills, practices, and policies; equip employees with necessary skills which are compatible with those adopted in Western The digitization of the economy is one of the most important economies. drivers behind the profound transformation of the labor These tasks for policy-makers is to identify technological market and the way people work, which is thought likely to trends that affect the strategic role of leadership in the digital become even more significant in the years to come. This economy and turn it into a digital leadership strategy. This new paradigm represents a major challenge for employers, could be done to share the latest results adopted by the workers and public authorities, and the challenges needs to European commission on demand and supply of digital skills; be fully understood in order to identify the most appropriate support research at universities and design sectorial and policy options to transform them into opportunities for all. regional policies for entrepreneurs and businesses to facilitate Digitization transforms the economy and the workforce: job training in digital skills. Employers require first to join Digital profiles are changing, some jobs are becoming obsolete, skills and digital jobs coalition to be able to exchange the and skills mismatch becomes more visible. Relative to earlier needs and what they can offer to their partners overseas, in industrial revolutions, the digital revolution is unfolding over a particular, through the development of knowledge networks. shorter time period and the adjustment process needs to be Second, engage in knowledge transfers with local and faster. international businesses through, for example, training, As digitization speeds up, the demand for digital skills is coaching, co-design and consultancy where these skills growing in Eastern Partnership countries. Citizens need could be imitated, learned and further adopted as a results of adequate and appropriate digital skills to be empowered in a learning from each other and open innovation. digital economy and society. Third, design and provide educational offerings in the field of Digital skills are key framework condition for the development digital leadership to employees both in-house and via massive of the digital economy and society in Eastern Partnership. A online open courses, such as Coursera, canvas, Futurelern. digital talent pool is crucial for European competitiveness and Taken together, this set of policies and actions may impact on for Europe’s digital society to remain inclusive. Harmonized academia, business, society and the economy. digital skills strategies in the EaP should bring together national authorities, companies, social partners, non-profit What are the new opportunities for businesses in EAP organizations and education providers in joint action to which could be further applied at the workplace? address the growing need for digital skills. In Europe around 37% of labor force participants do not There are lack as many as 756 000 ICT professionals by 2020 have even basic digital skills and companies lack more in EU. Yet youth unemployment is at almost 20%. More than a advanced specialized skills for successful adoption of digital third of the labor force and, more broadly, around 45% of EU technologies2. The situation in EaP is even worse, and the citizens are in effect digitally illiterate1. Markets may offer new problem is that no one has ever measured those lack of skills. opportunities for employment and growth. However, to reap To follow, in Europe 99% of all businesses are small and these rewards it is necessary to address the changes. medium-sized enterprises, accounting 67% of employment The Digital Skills for Digital citizens on building a digitally and 57% of value added. In fact, the most, 93%, are micro inclusive society. What does it mean? It means that each of enterprises, employing less than 10 people3. These firms rely us should reflect on how we use and interact with technology a lot on skills. IN the EaP large firms still employ massive and this may make us more digitally literate. This is our 2. A. Willi Petersen, et al. “ICT and e-business skills and training in Europe”, Cedefop Panorama response to the rapid digitalization of services in public and series; 93 www.cedefop.europa.eu/files/5149_en.pdf 1. M. Curtarelli and V. Gualtieri, et al. “ICT for work: Digital skills in the workplace”, A study pre- 3. Digital Opportunities in Europe – Digital Skills and Jobs Coalition Conference pared for the European Commission by ECORYS and Danish Technological Institute. https://ec.europa.eu/digital-single-market/en/news/digital-opportunities-europe-digital-skills-and- https://ec.europa.eu/digital-single-market/en/news/ict-work-digital-skills-workplace jobs-coalition-conference

20 Issue 30 member contribution

number of people, but digitalization does not become different professionals, with increased female participation, who or not needed if EaP has different economy structure - quite are ready and can take up the growing number of unfilled opposite. vacancies for ICT professionals in EaP. b) Up-skill and re-skill the EaP countries labor force with the Conclusions and Recommendations digital skills they need to remain productive in the jobs they The rapid technological improvements in the last decades have have and to become employable for new ones. helped development of web technologies, brought various c) Modernize our educational and training systems for the new online services and unlocked many new job possibilities. digital age, bring digital skills and competences to all levels of More than ever, digital skills are essential for young people in education and training. order to take advantage of these opportunities and play a key d) Improve the digital skills of all citizens so they play an role in evolution of digital economy. Like reading and writing, active role in modern society, strengthening social inclusion. digital skills are becoming a necessity in everyday life. Build multi-stakeholder partnerships based on effective Furthermore, there is a need for working on improved social dialogue, to increase the availability of digital skills. anticipation of skills needs and on impact of digitization on Policymakers should support digital skills development within jobs. The solutions to our digital skills challenges cannot be multi-stakeholder partnerships. Partnerships are proven implemented by any single country, or by any single group to generate more inclusive and targeted approach to skills of actors in isolation. These require strong cross-European development and training provision that is more responsive and national partnerships, adequate policies and appropriate to labor market needs, in line with vocational programs and funding. They also require strong and sustained commitment qualifications. Digital skills strategy should therefore be the to reverse trends and ensure our citizens and workers are result of a discussion based on effective social dialogue. prepared for the digital revolution. In particular, we need Include digital skills in wider skills strategy. Although it national digital skills strategies for all EaP – also addressing remains crucial to develop a range of specific digital skills the modernization of education – and implementing them which respond to the needs of the digital economy, wider with support of national coalitions. We need to join forces in digital skills for the whole population should be embedded in cross-European coalition to spread the best solutions to the a broader and comprehensive skills strategy in which other common challenges we face, to achieve scale and in doing transversal skills relevant to employers, such as soft skills so have a real impact. These coalitions should connect and and communication skills are also included. Evidence shows improve dialogue among all relevant stakeholders – industry, that the most effective means of improving employability education and training, government, social partners, making and closing skills gaps are more generic measures aimed at use of the best practices to support adequate training improving the capacity of workers to acquire new skills and programs. learn in an evolving economy. Consider diversity and avoid Raise awareness on digital technologies and what digital the ‘one-size fits all’ approach. Employers require different technologies are capable of doing, how they can support types and levels of digital skills according to the sector in each business operation and what IT infrastructure is required which they operate, their size, their market, and the country to sustain these operations. Special attention will be given in which they are based. In designing a digital skills strategy to type of digital technology and understand whether the or any other type of initiative, to help employers to access the technology adopted is likely to fit the business and IT strategy required digital skills, diversity needs to be clearly addressed of the enterprise. through a tailored approach. Campaigns should be implemented to raise awareness both of the importance of the use of digital technologies to support and improve business performance, productivity and internal Author’s biography organization. Most importantly the major focus is on strategic Mr. David Tsiskaridze is a Chairman of International alignment of operations and IT infrastructure as well as IT and Business and Economic Development Center (IBEDC), one business priorities of the firm, which should be strategically of the emerging BSO in Georgia, with eight years managing linked. experience. David has rich consultancy experience as a Expand the availability of digital skills through the education expert in the framework of International projects, including EU and training system, but also prepare experts who can and International and Regional programs (EU Commission, ENPI willing to teach it. Many of those experts are country expats and Black Sea CBC program). He is a coordinator of HDM which want to give back to their communities and will be able working group of EaP CSF. Also, David is professional Auditor to engage with IT and educational communities to visit places and tax expert with 20 years of diversified experience. He is and teach digital skills. currently Managing Partner of audit and consulting company The education and training sector should be supported in Georgia, with significant background in taxation covering to develop and adapt its offer to meet the changing needs the private and public sector, with seven years of working of the digital economy. Training aimed at fostering digital experience as the Tax auditor in the state Tax authorities in competence and digital skills is commonly believed to be the Georgia. most appropriate tool to tackle the digital challenge. Mr. Tsiskaridze is a PhD student from Georgian Technical a) Educate and train more young people for digital professions University and carries MA from Iv. Javakhishvili Tbilisi State so that we can create a large pool of talented young digital University

21 development & education

Private sector matters: Azerbaijan’s Business Community at the Heart of Poverty Eradication Efforts

The Global Goals prominently known as the Sustainable opportunities to improve their bottom line and considerably cut Development Goals (SDGs) are set to change the way the costs while making a social impact. Among these hotspots, world does business. Achieving the SDGs has the potential to reducing food waste in value chains, enabling micro-irrigation unlock USD 12 trillion a year in business value creating more systems, increasing energy efficiency and green chemistry, than 380 million jobs across four key industries –food and providing affordable housing and supporting road safety, to agriculture, cities and urban mobility, energy and materials, name a few, present enormous potential to grow more than health and well-being. This message was reinforced during twice as fast as the global economy. the training workshop organized jointly by UNDP and the United Nations Resident Coordinator and UNDP Resident American Chamber of Commerce (AmCham) in Azerbaijan. Representative in Azerbaijan Ghulam M. Isaczai stressed Bringing together over 20 representatives of the country’s that the country has made tremendous progress towards the vibrant business community, the program aimed at helping sustainability agenda. He noted that the UN stands ready to Azerbaijani companies integrate the SDGs in their business support the Government, the private sector and civil society portfolios. in their collective efforts to reduce the country’s hydrocarbon Putting partnership at the heart of talks on SDG implementation dependency, foster gender mainstreaming, and promote where the private sector is seen as the catalyzer for poverty inclusive socio-economic development and greener growth, reduction and development, UNDP acknowledges that in line with the national development plans. the private sector’s vast innovation potential, creativity, Speaking of the role of the private sector in accelerating technological expertise and investment are essential for the achievement of the SDGs, the Executive Director of success in this area. As countries move forward with laying AmCham Natavan Mammadova specifically emphasized the out their national development plans for the next 12 years, in importance of building a strong market for small and medium line with the 2030 Agenda for Sustainable Development, many enterprises in Azerbaijan and aligning them with sustainability companies around the globe demonstr ate strong interest in vision noting that 90 percent of jobs worldwide are created taking part in this process. Research shows that 92 percent by SMEs. of businesses around the world are aware of the SDGs, while The training workshop for the private sector was organized companies that are planning to take action account for 71 as part of the project on “Supporting the localization of percent of businesses surveyed. Yet oftentimes they do not Sustainable Development Goals and alignment of national know exactly how to integrate the SDGs into business models. development plans to the SDGs”, implemented by the UNDP Tapping into this unmet demand, Director of the UNDP Istanbul in partnership with the National Coordination Council on International Centre for Private Sector in Development Marcos Sustainable Development. Neto, who was facilitating the training, pointed out 60 Global Goal hotspot areas, where businesses can find numerous This article has originally been published by UNDP.

Photo: UNDP Azerbaijan, from the “Azerbaijan through a Foreign Lens” photo contest

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development & education

Access to World Wide Know-how & Innovations Zaur Akmedzadeh China “Sino-Russian Innovative Technopark” from Yantai city Head of Technology Transfer and have created a joint “Azerbaijan-China Centre of Technology Business Incubation Department, Transfer”. The purpose of this centre is the exchange of High Technology Park of Azerbaijan technologies, innovations, ideas, etc. between the two National Academy of Sciences countries, the development of mutually beneficial relations in the sphere of development and the introduction of modern technologies. ANAS HTP continues to develop and improve innovation- Azerbaijan National Academy of Sciences High Technologies oriented new technologies based on modern scientific and Park (ANAS HTP) was established by the order of the technological achievements. In the future, it is aimed at President of the Republic of Azerbaijan H.E. Ilham Aliyev, carrying out scientific research and experimental-design dated November 8, 2016. The purpose of establishing works, implementing their results in industry, service and ANAS HTP is to promote sustainable development of the other spheres. economy, increase competitiveness, expand innovation and Legal entities and individuals who have presented interesting high technologies based modern scientific and technological projects in the field of technologies and innovations after achievements. ANAS HTP is the intersection of science passing through a special procedure can become residents and business. The opportunities created by the ANAS HTP of the ANAS HTP. In accordance with the legislation of the for young entrepreneurs have increased their interest in Republic of Azerbaijan, the following benefits and privileges startups. The Business Incubation Center of the ANAS HTP are granted to residents of the ANAS HTP for a certain period operates to increase the employment of youth, to organize (maximum 7 years): entrepreneurship ideas and to involve young people in 1. Income tax –income obtained from the activity in the park entrepreneurship. The center is composed of teams of young by the physical person carrying out ownership activity without people with innovative thinking and different projects. Herein, establishing legal person (except for income tax deducted the necessary conditions are created for future entrepreneurs from salary); to realize their ideas more efficiently. The youth are using 2. Profit tax – income obtained from activity in the park; the benefits of incubation and acceleration programs for 3. Value added tax – import of technique and technological establishing their businesses. Successful projects are equipment with the purpose of construction of production directed to the real market with support of the Technology units, also scientific-investigation and experiment –constructor Transfer Office, which operates within the ANAS HTP. Thus, works; the process of transformation of innovative thinking into the 4. Property tax – for property in the park; business is carried out in Azerbaijan. 5. Land tax – for lands used within the park territories; ANAS is giving support to the formation of innovative 6. Customs duty – import of technique and technological entrepreneurship through innovative technological equipment with the purpose of construction of production innovations in our country, increasing innovation initiatives units, also scientific-investigation and experiment –constructor in the society and most of all commercialization of science works. since its establishment. ANAS HTP collaborates with all At present 13 residents are registered in the HTP of ANAS. the scientific-research institutes of the Azerbaijan National Among these residents there are both local and foreign Academy of Sciences. The High Technologies Park also companies. collaborates with academics, researchers, experts, different structures which have the same activity not only within the Author’s biography country but also outside our borders, involving them for Dr. Zaur Akhmedzadeh is the Head of Technology Transfer cooperation. High Technologies Park encourages initiatives and Business Incubation Department at High Technology among the youth. Also, gives support to the establishment Park of Azerbaijan National Academy of Sciences. of suitable platform for the development of young ownership Dr. Akhmedzadeh has successfully defended the thesis and initiatives of young leaders intending to establish their (dissertation) for scientific degree of the doctor of philosophy own businesses. ANAS HTP is closely getting acquainted on law. He is the author of articles in the field of international with innovations happening in technology and innovation law. Furthermore, he has graduated from the faculty of the fields in many countries and cooperates with technoparks Italian language and culture of University for foreigners of of different countries, and ANAS HTP has already signed Siena (Italy). Dr. Zaur Akhmedzadeh also began his activity several partnership agreements with such structures. in the literature - he has written and published his first book ANAS HTP together with one of the largest technoparks in named "My Italy".

24 Issue 30 AmCham Azerbaijan About Us The American Chamber of Commerce in Azerbaijan is a private, non-profit business association supporting and promoting the interests of business in Azerbaijan.

Established in 1996, AmCham is composed of over 280 members and associates­ active in every sector of the Azerbaijani­ economy. We represent 80% of all foreign investment, as well as a significant portion of local investment which allows us to promote American, Azerbaijani and multinational corporations. This includes leading companies in Energy, Banking, ICT, Legislative/ Financial Consulting, Professional Services,­ Education, Real Estate Development, Health, Transportation, Travel and Production fields. An active and positive influence in Azerbaijan, we conduct our mission with integrity and respect for the country, observing all local laws and insisting on the highest ethical standards in all relationships and transactions. To apply Membership

Why join? To apply for affiliation with AmCham, There are two types of affiliation with a candidate must submit a written AmCham: Member and Associate. Key member benefit – application in the form adopted by Member status includes voting best networking opportunities in the Board of Directors. Membership privileges and eligibility for Board and Azerbaijan! applications are available at the committee chairmanships in addition AmCham office or on our website at to the privileges granted to Associates. As a member of AmCham, your www.amcham.az The application For affiliation as a Member, a candidate company has access to a vast network form should be completed and sent to must be a legal entity, registered and of business information and contacts in our office with the company registration doing business in Azerbaijan and be Azerbaijan and in the US government, certificate issued by the Ministry of in good standing in the community, as as well as valuable information on US Justice of Azerbaijan. determined by the Board of Directors. businesses across Europe through A candidate meeting the objective and A legal entity, branch or representative ECACC (European Council of American subjective requirements for affiliation office of a legal entity is eligible to Chambers of Commerce) and US with AmCham is accepted as either a be affiliated with AmCham as an Chamber of Commerce. Member or Associate upon receiving Associate, subject to the Board of an affirmative majority vote of the Directors’ determination of good Additional Member Benefits include: Board of Directors and paying the first standing in the community. year’s fee for the candidate’s category Associates are eligible to participate in • Annual Employee Salary Survey of affiliation. various activities; receive our regular • Quarterly Inflation Survey To maintain affiliation with AmCham, publications, including the Membership • AmCham Membership Directory Members and Associates must Directory, Annual National Employee • AmCham Resource Library continue to meet our eligibility Salary Survey and Quarterly Inflation requirements, be in good standing in Survey. Associates, however, are not For more detailed information please the community, and be current with all entitled to vote or serve on our Board visit our website www.amcham.az financial obligations to AmCham. of Directors.

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Business Events Door-Knock Mission of AmCham Azerbaijan to the US On May 14, a delegation of over 10 top-level executives representing U.S. businesses that operate in Azerbaijan departed to Washington, D.C. for the four-day AmCham Azerbaijan Door-Knock Mission - the 1st in the history of the Chamber. Led by AmCham Executive Director, Mrs. Natavan Mammadova, and BP Azerbaijan, Georgia and Turkey Vice President and concurrently as AmCham Board Member, Mr. Bakhtiyar Aslanbayli, the mission became a great success having among its delegates:

• Mr. Bakhtiyar Akhundov, Country Manager at Chevron Khazar Ltd, Azerbaijan • Mr. Mushfig Aliyev, Partner at KPMG Azerbaijan • Mr. Elshad Farzaliyev, Communications Manager, Caucasus and Central Asia Region at The Coca-Cola think tanks, and leaders from the U.S. business community. Company In particular, the first day of the Mission highlighted the meetings with Ambassador of the Republic of Azerbaijan to the USA H.E. Elin Suleymanov, Legislative Assistant to Congressman Larry Bucshon - Mrs. Susey Davis, Director for Europe and Middle East Affairs at the Office of the U.S. Trade Representatives Mr. Jason Buntin and Vice President of the U.S. Chamber of Commerce Mr. Gary Litman. All the meetings proved extremely productive: the counterparts were briefed on AmCham member-companies’ businesses in Azerbaijan and their importance for the United States in terms of taxes paid and jobs created, information on improving business climate in Azerbaijan and new emerging opportunities for foreign investors was also shared. The possible ways of strengthening bilateral economic and trade relations between two countries were also discussed. Another day of the Door-Knock Mission featured the meeting with the Director of Bureau of Energy Resources at the State • Mr. Vugar Samadli, Acting CEO at Branch of Nobel Oil Department Mr. William Silkworth, where the delegates took Ltd in the Republic of Azerbaijan • Mr. Eldar Mamedzadeh, Chief Commercial Officer at Branch of Nobel Oil Ltd in the Republic of Azerbaijan • Mrs. Sevda Khanmammadova, CEO at FedEx Express Licensee of Federal Express Corporation • Mr. Samad Khanmammedli, Sales Manager at FedEx Express Licensee of Federal Express Corporation • Mr. Tahir Gozal, Chairman of the Board of Directors at Cross Caspian Oil and Gas Logistics

The senior-management representatives of John Deere, The Boeing Company, Procter & Gamble, as well as, WCC International joined the mission in the U.S. The Door-Knock Mission was organized with the aim to promote investment in Azerbaijan. With this purpose, within four days AmCham delegates took part in tens of meetings with members of the U.S. Congress, Administration officials,

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developments in the country, path of reforms aimed at improving business climate and very promising newly emerging economic opportunities. The day continued at the State Department meeting with Mr. Scott Ticknor, Acting Special Representative at Commercial and Business Affairs. The delegates exchanged views on a wide range of issues, including the role of the U.S. Government in attracting more American investors to Azerbaijan. In addition, the delegates visited the offices of three Congressmen – Mr. Scott Perry, Mr. John Curtis and Mr. Cuellar. Mr. Curtis and Mr. Cuellar recently visited Azerbaijan and possessed very good knowledge of the country, its economic agenda and priorities. The delegates

an opportunity to brief him and his staff on energy projects implemented in and by Azerbaijan, new pipelines and benefits of these alternative routes, important role Azerbaijan plays in the energy security of the region. Representatives of Oil and Gas sector companies shared their experiences on PSAs and doing business in Azerbaijan for the last 20+

were delighted to hear their high appreciation of AmCham Azerbaijan activities and its role in the Public-Private Dialogue. All the participant company representatives had a chance to share with Congressmen their success stories in the country, positive changes impacting their daily businesses and expectations from U.S. decision-makers. Finally, the mission ended with the Third Trans-Caspian

years. Another important meeting the delegates had was at the Department of Commerce with the Director of the Office for Russia, Ukraine, and Eurasia Mr. Matthew Edwards and his team. Mr. Edwards demonstrated deep knowledge of the economy of Azerbaijan, reforms being implemented in the country and AmCham’s role in the Public-Private Dialogue. Representatives of AmCham member-companies shared their views how the Department of Commerce can contribute to strengthen trade and economic relations between the countries.Further, the delegates had the meeting with Ms. Catherine Fulton, Director for Europe, Africa, and Middle East Division at Foreign Agricultural Service. They learned a lot about the services provided by the Service, their technical Forum which took place at the U.S. Chamber of Commerce assistance and capacity building projects, food safety and where policy and business leaders from the United States forestry services. Another meeting was with Mr. Peter and the Trans-Caspian corridor countries came together Chandler, Chief of Staff to Congresswoman Debbie Dingell. to discuss opportunities and challenges in enhancing their AmCham member-companies’ representatives provided strategic engagement and explore business, trade and him with comprehensive information on recent economic investment opportunities.

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AmCham representatives met Minister reminded the regular meetings between the leadership of the State Customs Committee and the members of the Chamber, Abulfaz Garayev expressing confidence that these useful relations would On March 6, AmCham representatives met Minister of Culture be further strengthened and developed. At the same time, and Tourism of the Republic of Azerbaijan, Mr. Abulfaz discussions were held on a number of issues presented by Garayev. members of the Chamber. The members discussed issues During the meeting, the Minister spoke about the development related to counterfeiting products, parallel import, smuggling, of air transport, the recent work of the government on particularly anti-smuggling measures, issues related to the simplification of visa for tourists, the impact of ASAN visa operation and construction of customs warehouses, problems application on development of tourism sector. Minister arising from customs representation, in particular errors in Garayev mentioned that simplified visa regime plays a big filling of customs declarations, “Green Corridor”, the use of role in increase of the number of tourists visiting our country. issuance system, and the measures taken to address issues. Representatives of the AmCham noted that, on the basis of After the meeting, the guests were introduced to the “Target” the order of the President of the Republic of Azerbaijan on Center and modernization projects of the Customs Committee. establishment of tourism and recreational zones of Khizi- Khachmaz, Guba and Gusar regions will create a strong basis for development of tourism in these regions. At the same time AmCham representatives met the members of the Chamber are interested to organize different Ministry of Labor and Social Protection projects in these regions. Then, discussions were held on implementation of cooperation of Population of Azerbaijan projects in the field of culture and tourism. On April 5, AmCham representatives met with the representatives of Minister of Labor and Social Protection of Population of Azerbaijan. Minister Salim Muslumov indicated importance of active and efficient cooperation with business representatives, highlighted succeesful cooperation with AmCham. As one of the important achievements of the President of Azerbaijan, H.E. Ilham Aliyev’s socioeconomic policy, the Minister underlined that the growth of non-oil sector is continuing as a result of national economy’s diversification: “It is based on this success and at the same time improving the business and investment environment, transparency of the business climate, protection of entrepreneurs, technical, financial and legal complex measure supports lead to positive results. Increase of entrepreneurial activity by 4.3 times over the last 15 years and 80% growth of private sector’s share in the economy have enabled this sector to increase its role in opening new jobs; thus, reaching to 75.4% of labor resources Perspectives of Cooperation with in the country. The share of workers in non-public sector has reached to 41.6% in the country’s economy”. the State Customs Committee was President of AmCham Azerbaijan Nuran Kerimov underlined discussed that they are pleased with the formation of active cooperation On March 14, AmCham representatives met with the State between the Chamber and the Ministry of Labor and Social Customs Committee of the Republic of Azerbaijan. Chairman Protection of Population, as well as organizing joint business of the State Customs Committee, Mr. Aydin Aliyev welcomed meetings that allow constructive dialogue. He underlined the the guests and spoke about the reforms carried out under the importance of reforms in labor and social protection spheres, leadership of H.E. Ilham Aliyev, the development of non-oil including the transition to the electronic registry of labor sector, the growth of export potential, as well as the work done relations, transparency in this field, as well as, social insurance in the field of customs business. Mr. Aydin Aliyev noted that relationships, the creation of new insurance mechanisms for as a result of recent reforms in customs system of Azerbaijan, unemployment, and the improvement of labor legislation. purposeful work was carried out to simplify the registration During the meeting, representatives of business organizations of import-export operations, to increase the number of were informed about the reforms in the field of labor and electronic services, and to conduct customs business in social protection, as well as the new changes applied in accordance with the international standards. He emphasized relevant legislative acts, and their questions were answered. the importance of cooperation with the business entities for They also discussed the work carried out to improve the labor country’s economic security, entrepreneurship development legislation, as well as the proposals on labor legislation within and improvement of the business environment. He also noted the framework of the Monitoring and Recommendation on that cooperation with AmCham is a good example. Mr. Aliyev Business Environment in Azerbaijan (White Paper) prepared by the Chamber.

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Monthly Members Luncheon sized that such kind of visits reflect the decent level of dia- logue between Azerbaijan and the USA at the highest level. 03 May The event proceeded with the member presentations by De- loitte Azerbaijan and Princeps Legem. Afterwards, Mr. Nuran Kerimov, President of AmCham Azer- baijan, invited Dr. Vusal Gasimli to address the members of the Chamber. Dr. Gasimli underlined that the implementation of reforms in Azerbaijan is being performed under the ongo- ing support of the government at the highest level, first of all, the President of the Republic of Azerbaijan, H.E. Ilham Aliyev. He highlighted that Azerbaijan has increased its ranking by 8 positions, reaching 57th place out of 190 countries partici- pating in the “Doing Business 2018” report prepared by the World Bank, based on 10 reform directions criteria. He ex-

On May 3, AmCham Azerbaijan hosted the delegation of high-level U.S. Congress officials at its monthly members’ luncheon. In addition, the Luncheon highlighted the presen- tation of the Special Edition for “Doing Business” Reforms (Azerbaijan Economic Reforms Review) by Dr. Vusal Gasimli, Executive Director of the Center for Analysis of Economic Re-

pressed his confidence that the progress of the reforms being implemented in the country will keep on growing. Further, Mr. Kerimov introduced Mr. Bob Goodlatte, Chair- man of the U.S. House Judiciary Committee, as well as Mr. Henry Cuellar, U.S Representative for Texas’s 28th congres- sional district, to the audience. They briefly spoke about their

forms and Communication. Around 200 participants attended the event, including representatives of diplomatic corps. In the opening remarks, Mrs. Natavan Mammadova, Execu- tive Director of AmCham Azerbaijan, expressed the pleasure to welcome the high-esteemed guests in Baku. She empha-

impressions and experiences from the visit to Azerbaijan. In addition, both expressed the hope that Azerbaijan and the United States will keep on cooperating effectively on many areas of mutual interest for American and Azerbaijani people. Mr. Goodlatte and Mr. Cuellar stressed upon the great poten- tial of such cooperation in fighting against terrorism, creating jobs, and improving Europe’s energy security. Finally, they wished the Luncheon participants and all the people of Azer- baijan prosperity and success.

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28 March On March 28, 2018, AmCham Azerbaijan bid farewell to U.S. Ambassador to the Republic of Azerbaijan, H.E. Robert F. Cekuta at its monthly members’ luncheon. In opening remarks, Mrs. Natavan Mammadova, Executive Director of AmCham Azerbaijan, expressed the appreciation to the U.S. Ambassador for his years of dedicated service in Azerbaijan. She emphasized that H.E. Robert F. Cekuta, who arrived in Baku in February 2015, has made great

underlined the international importance of Azerbaijan as a link in a grand transport network connecting East and West, as well as, its potential to contribute further to global and regional energy security as oil and gas producer and its role in fight against extremism and terrorism. Further, he expressed his hope Azerbaijan will continue to diversify its economy, strengthen the rule of law, and fight against corruption. All this, together with ensuring legal

contributions to the activities of the Chamber, and has been responsive and committed diplomat. The event proceeded with the member presentations by Office Systems and MilCorp Group. Afterwards, H.E. Robert F. Cekuta briefly spoke about his impressions and experiences from 3 years spent in Azerbaijan, and stressed the unique geopolitical location of the country – a source of both challenges and opportunities. He highlighted that Azerbaijan was the first modern Muslim democracy and the first Muslim country to recognize women’s voting rights – an example of Azerbaijan’s tolerance. The Ambassador

protection to businesses, he said, will be helpful in attracting investments and further developing the country’s private sector. At the end of the speech, the Ambassador wished all success to everyone and thanked the Chamber, and particularly Mr. Nuran Kerimov and Mrs. Natavan Mammadova, for their organized and effective cooperation. Finally, in the closing remarks Mr. Kerimov thanked the Ambassador for his efforts to improve every aspect of the U.S. relationship with Azerbaijan and the contribution to the Chamber’s development in particular.

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Committee Highlights Information and Communications Technology Committee Meetings On April 24, AmCham Information and Communications Technology Committee – ICT hosted its regular meeting. Ms. Kamilla Shahbazov, Chairperson of the Committee, opened the meeting and announced the agenda. The discussion was dedicated to the White Paper. Ms. Shahbazov informed about the ready version of the recommendations which is already discussed with the Ministry officials. All topics were shared with participants and they added some ideas regarding to WP. Afterward, Kamilla khanum shared with participants a document which was composed during the meeting with the ministry. They briefly reviewed proposals of the information his speech by giving some examples from the recent cases, and communication technologies in the development of the such as certification of residency, applications for refund and ICT sector. implementation of the reduced rate, beneficial ownership, etc. Then, Ms. Hajiyeva passed the floor to the speakers from KPMG – Ms. Medina Efendiyeva and Mr. Aslan Bagirov, to present challenges and practical aspects of Transfer Pricing in Azerbaijan and concentration on the latest round of TP notification submissions. They provided detailed information about notification submission: technical challenges, transfer pricing: tax legislation- ambiguities and benchmarking study- ambiguities. At the end of the meeting, Ms. Arzu Hajiyeva and Mr. Jeyhun Mamedov thanked everyone for participation. Travel, Hospitality and Tourism Committee Meetings On April 13, AmCham THT Committee hosted its regular

At the end of the meeting, Ms. Kamilla Shahbazov asked the participants to actively contribute to upcoming ICT meetings and thanked everyone for participation. Tax & Customs Committee Meetings On April 30, AmCham Tax & Customs Committee conducted its regular meeting. Ms. Arzu Hajiyeva and Mr. Jeyhun Mamedov, Chairperson and Deputy Chairperson of the Committee opened the meeting by welcoming participants. Afterward, Ms. Hajiyeva introduced guest speaker Mr. Ulvi Yusifov, Senior Tax Manager at EY Azerbaijan. He made a presentation on “Practical aspects of Double Tax Treaties implementation in Azerbaijan: challenges faced by taxpayers in 2017-2018 after the introduction of new Regulations”. Mr. Yusifov briefed information about him and explained meeting. Mr. Farid Isayev, Chairman of the THT Committee, challenges faced by taxpayers in 2017-2018 after the opened the meeting, expressed gratitude to Mr. Husseyn introduction of new regulations. He gave information about Atakishiyev – General Manager of Intourist Hotel, also Vice the most important improvements in the new regulations Chairman of the THT Committee, for hosting the meeting and and compared theory vs. practice. Mr. Yusifov concluded announced the agenda.

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Then, opening remarks were made by Ms. Nigar Arpadarai, and non-governmental partners and facilitate the discussions Head of Marketing and Communications at Baku City Circuit and cooperation, as well as possible coordination between who briefed the Committee members on Grand Prix and recent state agencies and the private sector. news/initiatives. During the speech, Ms. Arpadarai presented Then, participants of the meeting addressed their questions, BCC attitude towards employees and opportunities that the exchanged ideas and looked into challenges in order to company created for them, as well as benefits of Formula 1 upgrade the process in the future. Migration officials replied race for the country and long-term perspectives which event the raised questions in detail and informed that they are brings to us. Ms. Arpadarai informed that it is the third year pleased to accept written suggestions about daily challenges of the event and we can confidentially say that hotels and and problems experienced during work. Also, Mr. Isayev tourism sector started to give us feedbacks on positive sides. reminded that Committee members are welcome to add their Then, participants of the meeting addressed their questions issues to AmCham White Paper 2018. and challenges which they face while buying tickets. Also, she added some details about the report, prepared by PricewaterhouseCoopers (PwC) on behalf of BCC, as a Healthcare & Medical Insurance quantitative evaluation of the economic impact of hosting a Formula 1 Grand Prix in Baku. Committee Meetings On April 16, AmCham Healthcare & Medical Insurance Further discussion was dedicated to the White Paper. Committee hosted its regular meeting. HMI Committee Chair, Mr. Isayev informed about the ready version of the recommendations, which is already discussed with the Ms. Lala Bilandarli opened the meeting and announced the Ministry officials. All topics were shared with participants and agenda. Mr. Atakishiyev added some ideas regarding the document. Then, Ms. Sevinj Hasanova, BMJ Country Implementation Lead was invited to the floor to make a presentation on “The On March 1, AmCham THT Committee hosted its regular Clinical Decision Support (CDS) Training Initiative Project meeting. Mr. Farid Isayev, Chairman of the THT Committee opened the meeting, expressed gratitude to Four Seasons Hotel Baku for hosting the Committee meeting and announced the agenda of the meeting. Then, opening remarks were made by the migration officials, Mr. Vahid Gahramanov, Head of Migration Policy & Legal Support Department and Mr. Ismayil Abdullayev, Head of Department for Regulation of Migration Processes to brief the THT members on recent news/ initiatives and future plans. They delivered a speech on work and temporary residence permit process of foreigners in Azerbaijan: key trends and public prevention measures, challenges and amendments in the process of migration, entrepreneurial activities for individuals and legal entities. The meeting was a good platform to enhance the cooperation between governmental

Azerbaijan”. She informed the audience on British Medical Journal (BMJ), what they are doing, goals, etc. Ms. Hasanova also added CDS Training Initiative Project, BMJ Best Practice & BMJ Learning benefits of the website for users. She concluded her speech with showing some examples regarding the features of the website. Then, Mr. Elnur Mirzezadeh, Vice Chair of the Committee, gave information on the process of AmCham White Paper. He informed about the recommendations which they offered in the paper and added that they are in the last step to finish the whole process.

Human Resources Committee Meetings On May 4, AmCham HR Committee hosted its regular meeting. The HR Committee Chair Ms. Leyla Novruzova opened the meeting and outlined the context of the agenda. Ms. Novruzova updated participants about the ready version

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of the Agenda. She thanked European Azerbaijan School for hosting HR Committee meeting. Then, she invited Mr. Gary Crippin, Director of European Azerbaijan School to the floor. Mr. Crippin talked about the school, highlighted their achievements and goals. Then, Ms. Novruzova updated participants about HR part of the White Paper and thanked Ms. Laura Hamidova from Fireworks, Mr. Matin Asgar from Baku Law Center, Mr. Emin Mahmudov from Bank of Baku and Ms. Shabnam Abilova from Deloitte for their contribution in the process of White Paper. After this, Ms. Hamidova, Vice Chairperson of the HR Committee, invited Mr. Yuriy Zhupikov from Wood to make a presentation on “Digital HR in support of learning and career progression”. He shared why we need to go digital and gave some details on customizing, system re-design process and their approach to digital HR. Later, Ms. Hamidova passed the floor to the speaker from of the White Paper recommendations which is already ARPA (Azerbaijan Accountants and Risk Professionals discussed with the Ministry officials and informed that today’s Association) – Ms. Gulnar Hajiyeva, Certification Director, to meeting was devoted to Legal Clinic so lawyers from different member companies of AmCham would be answering questions in a panel mode. Then, Ms. Novruzova invited Parvin Anvarli, Ruslan Bayramov from Ekvita, Emin Mahmudov from Bank of Baku and Shabnam Abilova from Deloitte & Touche LLC. They conducted an interactive session on the Legal Clinic and answered all questions about labor legislation, such as job vacancy requirements, medical insurance, work standards for disabled people and pregnant women, salaries, bonuses, etc. Participants also asked the lawyers some questions during the session. This was a highly interactive session where presenters were in discussion with the audience and happy to answer all questions related to Labour Legislation. Then, Ms. Novruzova thanked lawyers and also briefed some information about next committee meeting. At the end, the Committee Chair closed the meeting and thanked everyone for participation.

On March 16, AmCham HR Committee hosted its regular meeting at the “European Azerbaijan School” Secondary present “Needs of Professional Accounting Qualifications”. School building. The HR Committee Chair Ms. Leyla She briefed information about the company and explained Novruzova opened the meeting and outlined the context their work process, members, partners and events. She also indicated certification program and exam systems which is provided by ARPA. During the break time, representatives from the European School suggested a small tour in school. Participants get acquainted with facilities which fully support student performances in regular classrooms, as well as specialized subject areas including child-friendly open spaces to run and play. Finally, Ms. Ulviyya Akbar, Project Executive Director of Happy Moments was invited to the floor to make a presentation on “Happy Moments – more than the gift”. Happy Moments is the start-up project and the 1st, the only portal of Azerbaijan with special service, which people can buy as a gift to anyone they wish.

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Corporate Social Responsibility floor to make a presentation on partnership for sustainable development. Mr. Huseynov talked about sustainable Committee Meeting development goals, adoption of the agenda for Sustainable Development, which includes 17 Sustainable Development Goals (SDGs), 169 targets and 230 indicators to end poverty, fight inequality and injustice, and tackle climate change by 2030. He added information about difference with MDGs & SDGs, sustainable development implementation in Azerbaijan, how to raise awareness & advocacy and benefits to the business. At the end of the meeting, Ms. Priyeva thanked everyone for participation and expressed his gratefulness for the fruitful discussion. Legal & Compliance Committee Meeting On May 21, AmCham Legal & Compliance Committee hosted its regular meeting. Mr. Matin Asgar, from Baku Law Center, opened the meeting by welcoming participants and announced the agenda. Then, he introduced guest speaker Mr. Henry Ordower, On May 10, AmCham CSR Committee hosted its regular meeting. Ms. Aynura Piriyeva, CSR Committee Chair welcomed the members of the committee and outlined the agenda. Then Ms. Piriyeva gave the floor to Mr. Maxim Kostenko, Co-owner of Frutino wine brand in Azerbaijan, who delivered a presentation on “Building an e-commerce project in Azerbaijan”. During his speech, he addressed about how a solopreneur with no particular web design skills can set an e-commerce solution from scratch in Azerbaijan, affordability, etc. and mentioned that he spent a half of year to find the best solution on the local market. He shared his journey – a raw diary of an e-commerce realm from finding the best platform for retaining clients. This training was designed to bring a ton of value and as a result, participants would be able to avoid the same mistakes and to proceed directly to the goal via the easiest and the fastest path. Later, Mr. Rashad Huseynov from UN DPI was invited to the

Professor of Law at Saint Louis University School of Law. After introducing himself, Mr. Ordower expressed his gratitude for warm hosting. The discussion was dedicated to equity/ debt issues, tax and legal implications of raising capital by debt vs. public listing for growing businesses or startups. He also addressed issues relating to diversified portfolio, mutual funds, classification of shares, venture capital, etc. He conducted an interactive session so participants could ask their questions relating to tax and legal implications. At the end of the meeting, Mr. Asger thanked everyone for participation.

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AmCham Legal Update

BANKING AND FINANCE Amendments to the Law on Banks Amendments to the Law on Bankruptcy and Insolvency According to the Amendments, banks should give the data New rules on rehabilitation have been added to the Law. on each of borrowers to the centralized credit registry under Under the Amendments, rehabilitation of a debtor shall be Financial Market Supervision Authority (“the Authority”) in carried out in accordance with rehabilitation plan. Debtor shall accordance with the rules defined by the Authority. The rules prepare the rehabilitation plan in 3 months from the date of on protection of bank secrecy defined under the Law are decision on rehabilitation, which is concluded between debtor applicable to the data collecting in centralized credit registry. and creditor, and debtor shall present the plan to meeting of creditors. Rehabilitation plan and amendments thereto shall Amendments to the Law on Currency regulation be held by the decision of meeting of creditors and approved With amendments, the following has been added to the Law: by court. The following legal consequences will occur from • licensed persons on currency transactions should abide the date of holding the decision on launch of rehabilitation by by the requirements defined under the Law on Against court: financing terrorism and legalization of properties and a) By taking into account the rights of the administrator which money amounts acquired by means of criminal activities. are stated in Article 20.4 under the Law, it is prohibited for founders (participants), management and supervision bodies Amendments to the Rules on foreign currency of debtor to use the properties belonging to the debtor and transactions of residents and non-residents of the give orders on the properties; Republic of Azerbaijan b) Execution of court decisions held against the debtor is With amendments, the following has been amended: suspended; • In case there was an advance payment, prolongation c) It is not allowed to all creditors, founders (participants), of submitting customs declarations proving import of members of management and supervision bodies of debtor commodities or documents showing import of services to bring a case before court regarding insolvency; from 180 days to 270 days; d) Withdrawal from bank accounts of debtor regarding • Reimbursement of payment paid to branch or demands of all creditors and indisputable debts, as well representative office by foreign country-based entity by as addressing demands to properties of the debtor are not accident or the remaining out of an amount allocated with allowed. a purpose;

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• Transactions associated with brokerage services of this year related to introduction of a special account, which is residents and non-residents in respect of exporting used to form the labor pension of a compulsory state social commodities to third countries without importing to the insured person (hereinafter, an “insured person”) by means country; of additional funds. In accordance with the Rules in order to • Transactions on supplying of commodities to the foreign transfer funds to a special account, an insured person should country by residents wherein the tenders are being submit an electronic application via the information system performed in accordance with the results of international of the Ministry of Labor and Social Protection of Population tenders; of Azerbaijan. The funds transferred to the special account • Payment of travel expenses of tourists by tourism are used in determination of pension of an insured person. It agencies; should be noted that transfer of funds to a special account is • Payment of transport fares and hotel fees by natural not permitted once the pension is determined. persons with respect to travelling abroad; • Payment of wages to non-residents hired by residents Law “On unemployment insurance” and non-residents in Azerbaijan; The new Law on “Unemployment insurance” (hereinafter, • Payment of awards and other fees to non-residents as a the “Law”) was approved, which will become effective on result of sport competition. 1 January 2018. The Law is aimed to improve the social protection of population and determines legal basis of Refinancing rate reduced from 13% to 11% unemployment insurance. The Law applies to the persons, According to the Decision of the Management Board of the whose employment has been terminated due to liquidation of Central Bank of the Republic of Azerbaijan dated April 10, a state body or legal entity or redundancy. The unemployment 2018, the Management Board of the Central Bank of the insurance is mandatory and insurance contributions should Republic of Azerbaijan decided to reduce the refinancing be calculated monthly and paid at the time of salary payment, rate from 13% to 11%, while the ceiling and the floor of the but not later than 15th of the following month by the insurant interest rate corridor was set at a ± 3% symmetric range to (i.e. employer). The mandatory contributions will be as the refinancing rate effective from 10 April 2018 onward. follows: – 0.5% of the calculated salary fund of the insurant Amendments to the “Volume and Procedure for (payable by the employer); and, provision of information on financial operations carried – 0.5% of the insured person’s salary (payable by the out by individuals and legal entities of foreign states in employee through withholding by the employer). Azerbaijan to the competent authorities of those states” To receive unemployment compensation, the person should On 12 September the Cabinet of Ministers approved the be registered as unemployed with the State Employment Decree on amendments to the “Volume and Procedure for Service under the Ministry of Labor and Social Protection of provision of information on financial operations carried out by Population of Azerbaijan. The amount of compensation will individuals and legal entities of foreign states in Azerbaijan depend on the length of the relevant insurance record, work to the competent authorities of those states” (hereinafter, experience and lost average monthly salary. “Procedure”). Apart from the editorial amendments, the main amendment is alignment of the definition of “financial CUSTOMS institution” with the one defined under Article 13.66 of the Amendments to the electronic services provided by the Tax Code of Azerbaijan. After respective amendments state authorities the definition now includes the institutions carrying out the The Cabinet of Ministers of Azerbaijan amended the Decree on following activities: “Approving the list of electronic services provided by the state • Banking activity; authorities” (hereinafter in this section, the “Amendments”). • Endowment life insurance and/or annuity insurance Under the Amendments the followings have been added to activity; the list of electronic services provided by the State Customs • Depositary activity; Committee of Azerbaijan: • Management of investors’ portfolio; • Payments for customs procedures and operations; • Trading with securities, derivatives, foreign currencies • Provision of information on goods registered at the etc. for or on behalf of clients; customs border checkpoints; • Activity of any legal entity controlled by a person engaged • Issuance of certificates on exemption from import-export in any of the above listed activities. taxes determined under the international agreements concluded by the Republic of Azerbaijan. The Rules on payment of additional funds to special accounts of insured persons Amendments to Resolution of Cabinet of Ministers on The President of Azerbaijan approved the “Rules on payment Rates of customs duty on import-export in the Republic of additional funds to special accounts of insured persons” of Azerbaijan (hereinafter, the “Rules”). The Rules are intended to implement With Amendments, the following is exempted from customs the amendment made to the “Law on Labor pensions” earlier import duty:

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AmCham Azerbaijan

• In accordance with confirming documents of Ministry The rules for state registry of movable property were of Energy of the Republic of Azerbaijan, equipment approved and materials imported to the country in the frame of According to the Decree of the President of the Republic reconstruction of huge oil refineries. of Azerbaijan (“the Decree”) on approval of the “Rules of The Resolution will enter into force after 30 days from 1 May conducting the state registry of movable property” (“Rules”) 2018 and will be in force until 31 December 2021. of the 29 March 2018 these Rules shall regulate the organization, operation, use and protection of information in Rules on currency operations were amended the State Registry. The Registry, as a state information system According to the Resolution of Central Bank of the Republic consists of set of notifications. It shall record the creation of of Azerbaijan “On making amendments to Rules on currency the encumbrance over the movable property, changes in the operations of residents and non-residents in the Republic encumbrance, the termination of the encumbrance and the of Azerbaijan” (“Resolution”) of the 26 February 2018 in objection against it. The registry is organized as an electronic case of advance payment in foreign currency by residents information system and operates continuously. and non-residents for imported goods or services, a custom declaration confirming the import of goods to the country or a The service fee for the usage of the State Registry of document confirming the provision of imported services shall Movable Property has been confirmed be provided to a bank within 270 (two hundred and seventy) According to the Decree of the President of the Republic of days after the payment. Before the amendments, the period Azerbaijan on Approval of “Amount of use of State Register of was 180 (one hundred and eighty) days. Movable Property” of the 29 March 2018 the following service fee is subject to payment for the usage of State Register of E-GOVERNMENT, VISA AND MOVABLE PROPERTY Movable Property: Rules for disclosing acts of state and local self- • For the inclusion of the notice of the encumbrance - AZN regulating bodies was amended 10 (ten); According to the Amendment to the Decree of the President of • For entry of change notification regarding the the Republic of Azerbaijan “On amending Rules on disclosing encumbrance - AZN 6 (six); acts of state and local self-regulating bodies through electronic • For submission of a report on the results of the search on information systems” of February 16, 2018 in addition to all paper carrier - AZN 6 (six). decisions of the Constitutional Court, cassation and appellate courts of the Republic of Azerbaijan, the decisions of CIVIL, CRIMINAL AND ADMINISTRATIVE LEGISLATION administrative-economical courts on economic disputes shall Amendments to Administrative Procedural Code also be published on the websites of those courts no later If an application is submitted to the authority established than one month from the date of such decisions. Decree is under relevant executive power (hereinafter referred to as the effective from 18 February 2018. “Authority”) against its administrative act (or regarding rejection of application) in a period of time which has been defined E-government Development Centre under State Agency under Articles 73.1 and 73.2 of the Law on Administrative for Public Service and Social Innovations (ASAN Proceeding (hereinafter referred to as “Period”), claim period service) was established stated under Articles 38.1 and 38.2 of the Code is suspended: According to the Decree of the President of the Republic till the end of Period intended for appealing against the of Azerbaijan “On development of e-government and shift decision (written response) of the Authority (in case there to digital government” (“Decree”) of the 14 March 2018 was not appeal to the Authority); till the date of submitting the Centre will carry out policy and regulation in the area decision (written response) to applicant, in case of appealing of e-government, ensure the effective management and to the upper Authority against the decision of the Authority. improvement of “E-government” portal, implement measures Competences of the Authorities will be carried out by boards for development of e-government services, including of appeal under central and local executive powers, the Board government to business and business to government of Appeal under the President of the Republic of Azerbaijan e-services and organize E-government portal for state bodies and the President of the Republic of Azerbaijan, respectively. for providing e-services. Code of Administrative Offences was amended ASAN-Visa system had been modified According to the amendments to the Law of the Republic According to the amendment to the Decree of the President of of Azerbaijan “On amending the Code of Administrative the Republic of Azerbaijan on Amendments to the Regulations Offences of the Republic of Azerbaijan” (“Law”) under this on the “ASAN Visa” System Approved by the Decree of Law, individuals shall be fined AZN 300-500, officials – AZN the President of the Republic of Azerbaijan No.1082 of 20 1500-2500 and legal entities – AZN 5000-10000 for the October 2016 of the 5 April 2018 the “ASAN Visa” system will following violations of the legislation: not provide the single entry electronic visa for up to 30 days, • placement of advertisement in an open space without the but the multiple entry electronic visas up to 90 days. relevant permit, technical passport and agreement on granting permit, as well as violation of their of their

38 Issue 30 AmCham Azerbaijan

requirements; to such property either for himself/herself, for related • placement of advertisement in an open space, which persons to a legal entity or other persons; does not comply with the requirements of the Law of • conclusion of unfair deals with respect to shareholders. the Republic of Azerbaijan “On advertising” and other The Amendments also introduce the procedures to be legislative acts; followed by the shareholder of a legal entity owning at least • delayed and incomplete fulfilment of written instructions 5% of shares, in case any of the aforementioned cases and decisions of the relevant authority as part of occur. Moreover, as per the Amendments, any Authorized supervision in the sphere of advertisement. Representative may be dismissed from his/her position In addition, individuals shall be fined AZN 300-500, officials based on the resolution of a general meeting, for the – AZN 1500-2500 and legal entities – AZN 15000-25000 for damages incurred to a legal entity and will not be relieved failure to comply with the written instructions and decisions from an obligation to compensate the damages, regardless of the relevant authority regarding the construction of of imposition of either a criminal or administrative liability. By advertisement facilities. Also, individuals, officials and legal virtue of the Amendments, the audit committees of a Limited entities that construct, install and make constructive changes Liability Company and a Joint Stock Company may now to the advertisement facilities in an open space without consist of the members of their supervisory boards. obtaining the permit shall be fined in the amount of AZN 300- 500, AZN 1500-2500 and AZN 10000-15000 respectively. MISCELLANEOUS Measures regarding licenses and permissions Code of Administrative Offences was amended For the purposes of implementation of the Law on “Licenses According to the Law of the Republic of Azerbaijan “On and permissions” dated 15 March 2016, the President of the amending the Code of Administrative Offences of the Republic Republic of Azerbaijan signed the following Decrees on 23 of Azerbaijan” (“Law”) officials and legal entities that fail to April 2018: take measures on freezing the assets or to fulfil the decision • On “Amendments to the Decree of the President of the of financial monitoring body on freezing the assets since the Republic of Azerbaijan on Certain Measures with respect date when the list of persons subject to the sanction as part to the Licensing Activity (“Decree”); of the combat against the financing of terrorism is published • On “Abolition of the Decree of the President of the in official website of financial monitoring body, shall be fined Republic of Azerbaijan on Certain Issues in Regulation in the amount of AZN 1500-2500 and AZN 15000-25000 of Activity”. respectively. As per the Amendments, addendums to the provisions of the Decree governing issuance, suspension, restoration Amendments to Civil Code and Entrepreneurship annulment of the licenses, as well as The President of the Republic of Azerbaijan has approved certain lists outlining licensing activities and their state duties the law on “Amendments to the Civil Code of the Republic of have been eradicated and are no longer applicable. Azerbaijan” dated 3 April 2018. The Amendments particularly introduce provisions defining liabilities of individuals acting on Approval of Regulations on Board of Appeal behalf or represented in the governing bodies (supervisory Aforementioned Regulations on Boards of Appeal under the board, executive body) of a legal entity (“Authorized President of the Republic of Azerbaijan, of local and central Representative”). Following the Amendments, any Authorized executive authorities have been approved. According to the Representative not fulfilling or improperly fulfilling respective Regulations, persons dealing with commercial activities may obligations in the interests of a legal entity shall bear lodge an appeal against the decisions, actions or non-actions responsibility for the damages inflicted to such legal entity or (which have been held with regard to the person’s commercial its shareholders in the following cases: activities) of local and central executive authorities to those • provision of bonuses to the members of governing state bodies’ Board of Appeal in accordance with rules bodies of a legal entity in the amount disproportionate defined under the Regulations. It might be possible to make to the profit of a legal entity or when such legal entity is an appeal against the decisions, other actions or non-actions operating at loss; to the Board of Appeal under the President which have been • alienation or commissioning of the property of a legal upheld by Boards of Appeal of local and central executive entity with significantly lower terms and conditions than authorities in respect of applications lodged previously. the market conditions; • conclusion of contracts with the related persons to a legal Improving administration in the areas of consumer entity leading to violation of the legislative requirements market supervision, standardization, metrology and or damaging the interests of a legal entity; protection of intellectual property rights • purchase of goods (works, services) by a legal entity on By virtue of the Decree of the President of the Republic of the basis of contracts significantly higher than their real Azerbaijan on “Measures regarding the improvement of value; administration in the areas of consumer market supervision, • acquisition or waste of a legal entity’s property for gaining standardization, metrology and protection of intellectual rights to material and non-material property benefits and property rights” dated 20 April 2018, the State Committee

39 AmCham Azerbaijan

on Standardization, Metrology and Patent (“Committee”) should be placed at the entrance of specially closed has been abolished and the following bodies have been areas; established: State Agency for Antimonopoly and Control • security requirements should be met and fire prevention of Consumer Market of the Republic of Azerbaijan (“State facilities should be installed in special closed places; Agency”’); Agency on Intellectual Property (as a result of • special ashtrays (waste containers) made of metal should merger of Copyright Agency of the Republic of Azerbaijan be placed in special closed areas to collect cigarette butts and the Centre for Patent and Trademarks of the Republic or any part thereof as well as other tobacco products; of Azerbaijan) (“Intellectual Property Agency”). Authorities • special closed areas should meet sanitary and hygienic of the Committee on technical regulation, standardization, standards and regular cleaning should be conducted at metrology, conformity assessment, accreditation and quality these places; management have been transmitted to the State Agency, • ashtrays envisaged for tobacco products and other while authorities on protection of industrial property objects trash cans which can be used for this purpose should be have been allocated to the Intellectual Property Agency. regularly disposed in containers designed for domestic waste and discharged from places where the tobacco is Amendments to the Law on Food products prohibited. With the Amendments, hygiene, veterinary and phytosanitary • specially designated closed areas should be equipped compliance of the activities of persons, who engages in food with ventilation system. products, will be inspected, those persons will be registered in • The ventilation system should meet the following food safety and food products will be expertized. The persons requirements: will be included into state registry on food safety and they • special closed areas should be kept under negative air will be provided with state extraction. Food Safety Agency pressure in comparison with the areas where smoking is will carry out the registration of persons engaging in food prohibited. Mechanical system should operate during all products industry. working hours to create negative air pressure; • air removed by mechanical ventilation system from the Amendments to the Law on Standardization special closed system should not mixed with ventilation The following has been added to the Law: the State Standards and air-conditioning system of other non-smoking places; for food products are only recommended demands and they • mechanical ventilation system should provide change of will be applied voluntarily. Amendment will enter into force air at the special closed areas at least 10 times within from 1 July 2018. an hour; • air removed by means of mechanical system from the Decision of Cabinet of Ministers on Requirements about entrance or exit of the premises, windows and the places special smoking areas with clean air received to ventilation systems should be According to the Requirements, the following requirements discharged up to the level of roof in accordance with the have been defined: engineering-communication requirements of construction a) Requirements concerning specially designated closed facilities. areas for tobacco smoking; b) Requirements concerning specially designated open Specially designed closed areas for tobacco smoking smoking areas. (hereinafter referred to as special closed spaces) are intended Specially designated open spaces for tobacco smoking only for smokers (all kinds of hookahs and electronic cigarettes (hereinafter referred to as “special open places”) are intended are also subject to tobacco products within the scope of these only for smokers (all kinds of hookahs and electronic requirements) and meet the following requirements: cigarettes are also considered as tobacco products within the • special closed areas should be located outside the scope of these requirements) and should meet the following building, away from public places of entrance-exit, public requirements: gathering, leisure and waiting areas; • special open areas for tobacco smoking should be placed • special places should be completely isolated, entrance outside the entrance and exits of the buildings; and exit should be through one door; • “smoking area” sign should be placed in special open • the materials used for the construction and installation of spaces; special closed spaces should be fire-resistant, inner and • special ashtrays (waste containers) made of metal outer surfaces should be resistant to easy washing and should be placed in the special open areas for cigarette cleaning detergents and disinfectants; butts or any part thereof, as well as for other wastes of • special closed areas should be equipped with automatic tobacco products; or self-closing doors that are opened and closed; • it is prohibited to throw away cigarette butts or any part • printed and other educational materials regarding of it, as well as any other wastes of tobacco products tobacco smoking and detriment of tobacco smoking to outside the envisaged areas; health should be placed in areas of special closed places; • compliance of special open areas with the sanitary and • mottos or signs such as “Place specially designated for hygienic standards and regular cleaning works should be tobacco smoking”, “Smoking is harmful for your health” ensured. and “Entrance is prohibited for the persons under 18”

40 Issue 30 AmCham Azerbaijan

Member News & Events the campaign called “For my mom!” and quoted: “For every A company that has at least one product success, a mother has irreplaceable support”. in almost every house in Azerbaijan Another support from the company came to the Azerbaijan National Olympic team in the 2017 Islamic Solidarity Games and shared the joy of our team as a winner in this large-scale event. Today, there is at least one product of Procter & Gamble in almost each house, which encourages the company to continue steadily improving the lives of Azerbaijani consumers. P&G – 20 years in Azerbaijan. Always with the good.

About Procter & Gamble P&G serves about 5 billion consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands, including Pampers®, Tide®, Ariel®, Head & Shoulders®, Always®, Pantene®, Fairy®, Blend-a-med®, Oral-B®, Gillette® and Safeguard®. The P&G community includes operations in approximately 70 countries worldwide. Procter & Gamble (P&G) is celebrating its 20th anniversary For more information, please visit www.pg.com. of presence in Azerbaijan in 2018. Well-known producer of daily consumer goods, which started operating in Azerbaijan in 1998, as general manager of “Procter & Gamble Azerbaijan LLC”, Deger Kurtaslanoglu said: “We see big potential in life’s little moments. Brushing teeth. Washing hair. Showering. Caring for the baby. Cleaning the house. Doing the dishes, and the laundry. We make the products that help make these moments a little easier”. Presenting 15 leading brands to the Azerbaijani consumers, P&G promises to do its best to improve their daily lives and continue these efforts. As a result of the activity of P&G in Azerbaijan, more than 700 people are employed. This figure includes employees of local partners and agencies as well as company’s own employees. Being the largest TV media investor of the country, the company turns its consumers into partners of the regional projects and innovations that it brings to the market. Procter and Gamble continues to introduce value-generating innovations to Azerbaijan. Over the past 20 years, this company has been able to touch and improve lives of our people, also through Corporate Social Responsibility projects. In 1999, program covering 850,000 mothers called “Informed mother -healthy baby” and awareness program covering up to 500,000 teenage school girls (11-13 years old) were launched under the Pampers and Always brand accordingly and these projects are still in progress. Procter and Gamble, which aims to contribute raising healthy generations and supporting sport and athletes at all times, has laid the foundation for a proud partnership with the National Olympic Committee of Azerbaijan, starting supporting our team at the 2012 London Olympic Games. For the same purpose, in 2015, the company became the official partner of the First European Games in Baku with

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customers and reduce potential risks. Furthermore, the latest Workshop on measures to fight against trends and standards in the field of fighting against financing financial crimes in Baku terrorism and money laundering were presented to bankers from Azerbaijan and Georgia, as well as representatives from regulatory authorities. Bankers and compliance specialists also discussed regulatory requirements and recent developments in combatting financial crime with local and international perspectives. “Given the concern of correspondent banking de-risking in Azerbaijan, we hope that this training provides added clarity regarding the compliance expectations of both international regulators and correspondent banks, which may help local banks improve correspondent relationships”, commented Tod Burwell, BAFT President, and CEO. The economy of Azerbaijan is the biggest in the South Caucasus. The grandiose projects, like the Southern Gas Corridor, Baku International Sea Trade Port, North-South, Baku-Tbilisi-Kars railway and many others attract investments Fighting financial crimes has become a worldwide issue from around the world and at the same time, contribute to the nowadays. As various surveys show, 49 percent of companies development of international trade and economies of other in the world somehow faced financial and economic crimes countries. in 2017. In this context, retraining and advancing the As a result, Azerbaijan is becoming a major trade and financial qualifications of employees in financial sector is even more center of the region. Therefore, it has become increasingly important now. important to the stakeholders and participants of the financial Kapital Bank, member of the US Bankers Association for sector to acquire knowledge of the latest trends, best practices Finance and Trade since 2016, hosted one-day training on in combating financial crimes and money laundering. a given topic. Baku was chosen for the training venue along The BAFT seminar, organized with the support of Kapital with London, , Hong Kong, Shanghai, Mumbai and Bank, will make significant contributions to the development Orlando. of skills of Azerbaijani bankers and will support the further The participants of this program learned about the necessary growth of the financial sector, helping to comply with current regulatory requirements for fighting financial crimes, the international standards and supervisory expectations for importance of having an adequate internal organization, the correspondent banking. principle of “three lines of defense” in compliance to identify

42 Issue 30 AmCham Azerbaijan

New to AmCham Regular Members AmCham Calendar of Events M A R T SO L U T I O N S March – May, 2018

March 1 - Travel, Hospitality and Tourism Committee Meeting March 6 - Meeting with the Minister Abulfaz Garayev March 9 - Meeting with the representatives of Financial Market Supervisory Authority (FMSA) March 14 - Meeting with the representatives of the State Customs Committee representatives March 16 - Human Resources Committee Meeting March 28 - Monthly Members Luncheon April 5 - Meeting with the representatives of Ministry of Labor and Social Protection of Population of Azerbaijan April 13 - Travel, Hospitality and Tourism Committee Meeting

April 16 - Healthcare & Medical Insurance Committee Meeting

April 24 - Information and Communications Technology Committee Meeting

April 30 - Tax & Customs Committee Meeting

May 03 - Monthly Members Luncheon

Associate Member May 04 - Human Resources Committee Meeting

May 10 - Corporate Social Responsibility Committee Meeting

May 12 - AmCham Azerbaijan Door-Knock Mission to the US

May 21 - Legal & Compliance Committee Meeting

43 (M2M) Discount Program

ABSHERON HOTEL GROUP SEABAK LLC • 15% SPA • up to 10% on IT Support Services TRAVEL, HOSPITALITY AND LEISURE • 10% Retail/rack price of room • FREE migration to CLOUD.AZ Services • 15% Laundry • up to 5% on IT Equipment, Cartridges and • 15% Food and Beverage (Only Boulevard Software Licensing Hotel) • up to 15% on Internet Services at LandMark and other business centers JW MARRIOTT ABSHERON BAKU • 10% discount on all Food & Beverages – Discount is applicable maximum for 20 people per card. The card cannot be applied for meetings & events held in hotel • 10% discount on all Spa Treatments – The limit is 20 guests per card. Discount does not CHENOT PALACE apply for spa products retail • 20% discount on Chenot Programs (Full INTERNATIONAL BANK OF AZERBAIJAN • 30% discount on Laundry & Cleaning – Board Bio-Light or Detox food is included in • 50% discount on Amex Gold card Discount is applicable for minimum on 3 days the program) • 50% discount on Amex Platinum card service • 15% discount on Room Rates • Free MC World Elite card HYATT REGENCY BAKU EDUCATION • 15% discount on restaurant and bar • 15% discount on laundry and dry cleaning • 20% discount on Spa SHAHDAG TOURISM CENTER treatments at Armaiti Spa • 10% discount on Shahdag Hotel & SPA & Fitness accomodation ADA UNIVERSITY • 10% discount on Zirve Hotel accomodation • 10% on Executive Education Corporate Trainings Programs SHAHDAG SUMMER CAMP INTERNET AND COMMUNICATIONS • 10% discount for kids in summer camp • 20% discount for parents in all restaurants • 30% discount for parents accommodation

FOUR SEASONS HOTEL BAKU • 10% off on Zafferano Restaurant & Bentley`s Bar AZQTEL LLC • 10% off on Jaleh SPA (treatment, gym offer, • 20% discount on SkyPort Wireless Leased Line retail products) BILGAH BEACH HOTEL OTHER • 10% discount on SPA treatments • 10% discount on Food and Beverages (soft only) in outlets

PROFESSIONAL SERVICES THE LANDMARK HOTEL BAKU • 15% discount on Food & Beverages OFFICE SYSTEMS at:Caspian Grill & Terrace (ala carte) Lunch • 10% discount on office chairs & Dinner • 15% discount on hard furniture • Bangkok Noi (ala carte) lunch • 40% discount on office partition • Seto (ala carte) Lunch & Dinner • Salo (ala carte) lunch PASHA INSURANCE • Shin Shin (ala carte) Lunch & Dinner For all employees of AmCham Regular Member • Dolce Pausa (regular menu) Throughout the Companies: day • 15% discount on voluntary insurance of property AUTOSTAR KAUKASUS GMBH AZERBAIJAN • 5% discount on voluntary motor insurance (CASCO) • 10% discount on all services at Mercedez – For individual M2M Card holders: Benz Service Center • 20% discount on voluntary insurance of property • 10% discount on voluntary motor insurance (CASCO) NOVCO Group of Companies HOLIDAY INN BAKU • 20% discount in MyBrands network • 10% Discount on Food and Beverages at Holiday Inn Restaurant Marina 18 and Sagi Bar • 15% Discount on Holiday INN Spa annual subscription (fitness center and swimming pool) SIAR RESEARCH AND CONSULTING GROUP • 10% Discount on “Your Special Day” events ASPI AGRO MMC inclusive Weddings, Engagements, Henna • 10% discount on a number of • 10% discount on beverages in Savalan Parties services and projects Boutique Wine House