Improvements in Judiciary System of

E-Court System with Installation of Business and Artificial Intelligence, Predictive Justice and KPIs Smarter Systems for Dispute Resolution Focus and Commitment – Tools of Success Alternative Dispute Resolution. Main Features 34

A Word From Executive Director of AmCham Issue 34 Dear members, Credits Welcome to another edition of IMPACT Azerbaijan magazine! In our aspiration to support the efforts of the Government on judicial-legal reforms agenda and stay engaged with AmCham Executive Director: its ongoing progress, we decided to dedicate this edition Natavan Mammadova to the “Improvements in Judiciary System of Azerbaijan”. As the largest business association in the country, we Editor: welcome the recent adoption of the Presidential Decree Aykhan Nasibli on Intensifying reforms in Judicial and Legal System and the Law on Mediation. Certainly, both play an important role in accelerating economic development and increasing Articles contributed by: investment attractiveness of the country. Hamad Buamim It is worth mentioning that many of the relevant provisions stipulated in the Decree Deniz Kite Guner were reflected within the White Paper, prepared by AmCham in 2018 and particularly Rashid Mammadov its young but ambitious Legal and Compliance Committee. We are pleased that Sevil Tahirova the addressed issues related to the establishment of an arbitration institute and Fuad Gashamov procedures, improvement of dispute resolution and judicial proceedings (including the enforcement of court rulings), increasing the number of patent agents and many Gumru Eyvazova others have found their gate for further development of the judicial-legal system in Narmin Laijova Azerbaijan. Ruhulla Rahimov We are proud to bring up a good practice of having annual AmCham Conferences Elnur Aliyev on “Ethics and Compliance in Azerbaijan”. Event contributes for raising awareness Sabit Bagirov among the business community about the role of consistent compliance with laws, Emin Hasanov regulations, professional standards and ethical business behavior for strengthening the business environment in the country. Our recent success was the Conference Ziya Qasimov on “Judicial Reforms in Azerbaijan: Public Discussion with AmCham” which Adil Aliyev brought together high-level officials from the Presidential Administration and the Husseyn Atakishiyev Ministry of Justice of Azerbaijan, as well as AmCham members and partners. As a transparent and open business-to-government event, it became a great platform for Advertisers: the representatives of the private sector to get updates on the judicial-legal reforms BP agenda in Azerbaijan. Azerfon To recapitulate, AmCham looks with great optimism at the ongoing reforms which reflect the commitment of the Government of Azerbaijan to create favorable legal Turkish Airlines mechanisms for the effective protection of rights of both local businesses and Gulfstream Distribution foreign investors. Iteca Caspian Best regards, Publisher: Natavan Mammadova American Chamber of Commerce in Azerbaijan Editor’s Comment Dear friends, dear members. Tel: (+994 12) 497 13 33 Welcome to the next edition of IMPACT Azerbaijan magazine! Fax: (+994 12) 497 10 91 Judiciary reforms are very important for improvement www.amcham.az of business climate of the country. These reforms are www.impact.az directly affecting the ranking of Azerbaijan positively in “Doing Business” and other global reports. At the same time, all these changes are leading to a new stage in Advertising opportunities: country’s business conditions and development, as well as Please contact the Editor at facilitating entrepreneurs’ access to the courts. Even more, [email protected] they strengthen effective protection of rights of both local businesses and foreign investors which will also accelerate The articles in IMPACT Azerbaijan the economic development of Azerbaijan. express the opinions of the authors and Within this edition you will be able to read interesting interviews and articles from AmCham members and experts. Also, using this opportunity I would like to thank for do not necessarily reflect the position of our advertisers – Azerfon, Turkish Airlines, BP and Gulfstream Distribution. the American Chamber of Commerce in Azerbaijan Enjoy reading!

Sincerely, Aykhan Nasibli contents IN FOCUS 4 18 E-Court System with Installation of Resolution of Commercial Business and Artificial Intelligence, Disputes in Azerbaijan Predictive Justice and KPIs

Special Interview with Dr. Ramin Gurbanov Gumru Eyvazova President of the European Commission Senior Legal Associate, GRATA International Azerbaijan for the Efficiency of Justice (CEPEJ) 19 7 Specialisation in Judicial System Smarter Systems for Dispute Resolution

Narmin Laijova, Legal consultant, BDO Azerbaijan Hamad Buamim Ruhulla Rahimov, Legal consultant, BDO Azerbaijan President & CEO, Dubai Chamber of Commerce 21 Chairman, ICC World Chambers Federation 10 Key Questions About Mediation in Azerbaijan 9 Mediation and its Benefits for Business Elnur Aliyev Senior associate, BHM Law Firm Rashid Mammadov MEMBER CONTRIBUTION Legal and Policy Officer, AmCham Azerbaijan 25 Convergence of the Business 12 Empowering Societies Through Climate in the EaP Countries Negotiation

Sabit Bagirov President, Entrepreneurship Development Foundation Deniz Kite Guner Founder, Global Mediators & Negotiators 28 Focus and Commitment – 13 Tools of Success Alternative Dispute Resolution. Main Features Emin Hasanov, Solution Division Manager Ziya Qasimov, Volume Distribution Division Manager Sevil Tahirova Adil Aliyev, CEO, Gulfstream Distribution Senior Lawyer, Nobel Oil Services OUR PROUDS 15 30 Litigation Process in Azerbaijan - I Keep Learning and Developing In the Light of Recent Judicial Myself in My Own Field Reforms

Fuad Gashamov Husseyn Atakishiyev Senior Legal Manager, Ekvita General Manager, Six Senses Kaplankaya

2 Issue 34 DISCOVER MORE: EUROPE

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MALTA CYPRUS in focus

E-Court System with Installation of Business and Artificial Intelligence, Predictive Justice and KPIs

Special Interview with Dr. Ramin Gurbanov

President of the European Commission for the Efficiency of Justice (CEPEJ)

idea of the creators reducing the load of the latter should be achieved by improving the efficiency and the quality of the judiciary in the Member States, and the offset of the load on litigation from the supranational to the national level”. For more than 15 years, CEPEJ has been actively engaged in promoting and supporting improvements in the efficiency and quality of justice in Europe. During these years, we have developed a wide range of tools for use by court presidents, senior justice officials and stakeholders in the field of evaluation of judicial systems, quality of justice and judicial timeframes, as well as mediation and enforcement of court decisions. In recent years, in parallel with the evaluation of the judicial systems, the other priority is to provide assistance to member states in proper implementation of the framework of principles that can guide policy makers, legislators and justice professionals in addressing the rapid development of Artificial Intelligence in national judicial processes. With my chairmanship, CEPEJ’s 32nd Plenary Meeting was held recently with the participation of international and european organizations. For the first time, President of the European Court of Human Rights, and other 10 judges of For the first time, as an Azerbaijani you have been this Court were invited to the meeting and took an active part elected to such an important international position - the in the discussions. Improving the efficiency and the quality President of the European Commission for the Efficiency of the judiciary in the Member States, and further proper of Justice (CEPEJ). How can you comment on activities implementation of the CEPEJ tools in national systems of the organization and its impact on judicial reforms were discussed during the meeting. It was stressed out the carried out in the Member States of the Council of necessity of strengthening the co-operation and providing Europe? the references to the CEPEJ guidelines, charters and other I think our readers will be interested to get information about instruments by the judges of the European Court. this institution of the Council of Europe. The European It has to be mentioned that, CEPEJ cooperates with the Commission for the Efficiency of Justice (acronym CEPEJ) Member States in different fields of justice. For example, was established as an analytical, advisory and monitoring the Commission implements the improvement of justice institution of the Council of Europe, specialized in promoting in Azerbaijan, Georgia, Armenia, Spain, Moldova, Turkey, justice in Europe and assistance to the 47 Member States Albania, etc. CEPEJ has contributed to the legal system of in improving the administration of justice and bringing their Azerbaijan and had a direct impact on increasing the number judiciary up to the standards and norms of the Council of judges, creating new courts, drafting the judges’ selection of Europe. The establishment of the CEPEJ “was due to procedures and its evaluation as a positive international excessive workload of the European Court suits, and by the experience, drafting a law “On mediation”, establishing a

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Unified Judicial Portal and other judicial reforms in our country. the modern requirements, transparency of courts should be It is worth to mention that the Law “On mediation” has been increased, the effectiveness of judicial proceedings should be prepared by the CEPEJ experts in close collaboration with the improved, as well as full and timely implementation of court World Bank and adopted on March 29, 2019. The adoption decisions should be ensured. of the Law “On Mediation” is an integral part of the ongoing According to the Law dated December 28, 2018, “On changes judicial and legal reforms in Azerbaijan. to the Civil Procedure Code”, economic claims under 10,000 (ten thousand) manats will be considered as “small claims” In recent years, legal reforms regarding the effective and will be subject to review by electronically simplified protection of entrepreneurs’ rights have been carried out proceeding. A case shall be heard within a shortened period in Azerbaijan. We would like to know your thoughts on of time (30 days), in comparison to other cases and this type this issue. of cases is considered in simplified procedure based on The has launched large-scale reforms documents submitted by parties without oral court hearings in all spheres, as well as in the economic sphere in order to - by “written proceedings”. The parties should provide the create a favourable business environment, bring investments, response and all necessary documents through e-cabinet increase transparency and efficiency in recent years. As a electronically. result, Azerbaijan has significantly improved main indicators Decree of the President of the Republic of Azerbaijan “On in the ranking of Doing Business. deepening reforms in the judicial-legal system” which was Starting from June 2018, all necessary legislative and adopted in April of this year, also can be an obvious sample administrative reforms have been undertaken in order to for these reforms. The decree advises state bodies to jointly improve the e-management of the court system and to make analyze civil procedural law, and submit proposals on its it fully automated. By recent legislative changes, there should improvement, taking into account the best practices in this field be automated solutions in the system, such as, e-filing, in order to increase the effectiveness of judicial proceedings e-notifications, e.g. obligation to proceed all court proceedings on civil cases and economic disputes, in particular, faster and electronically (preparing the documents, scheduling the court efficient settlement of entrepreneurship cases in the courts. hearings, enforcement orders, delivering the judgments and On the other hand, it also advises the National Confederation notifications through e-Cabinet, by SMS and e-mail). of Entrepreneurs Organizations to jointly prepare proposals In order to accelerate the process of forming justice that meets on promoting effective international arbitration procedures in

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our country, taking into account the best practices of foreign (BI) systems, the introduction of artificial intelligence, countries for expanding the instruments of out-of-court predictive justice and set of Key Performance Indicators (KPI), settlement of disputes on entrepreneurial activity. as well as developing the completely electronic economic In order to improve the quality and effectiveness of justice, case. Therefore, work is currently underway to integrate with the decree implies the establishment of a court specialized all government agencies, as well as attract both foreign and in cases on tax and customs payments, disputes arising out local experts in the field of AI, BI and performance evaluation. of the payment of compulsory state social insurance fees Thereby, we will be able to significantly improve the efficiency and other issues related to entrepreneurial activity in order of legal proceedings and protect the rights of citizens. to ensure facilitation of the access of entrepreneurs to court It is planned that our next reforms in the judicial sphere will and hearing of disputes related to entrepreneurship by judges cover significant increase in judges’ financial security in order who have deeper legal knowledge and experience in the to enhance their social protection. Taking serious measures relevant area. to formulate a unified court practice to ensure the stability Another innovation of the decree is related to analyzing of the approach to the solution of legal issues in courts and international practice in alternative mechanisms of forensic carrying out awareness-raising and outreach activities on the examination, including implementation of examination by introduction of the mediation process. private organizations. In order to further optimize the courts’ performance, to Biography of our Guest improve the quality of justice and to shorten the timeframe Dr. Ramin Gurbanov is the President of the European for hearing cases in courts, the total number of judges in the Commission for the Efficiency of Justice since early 2019. courts has been increased from 600 to 800. Before this position, he was the Vice-President (2016-2018) It is projected that, continuous audio recording of all court and in 2014 elected at the plenary meeting as a member of hearings, the electronic publication of court decisions, the Bureau. electronic distribution of court cases in a random and In 2008 – 2020 period, Dr. Gurbanov is the Project Coordinator automatic way will increase transparency and efficiency in for the World Bank funded large-scale judicial modernization the economic sphere. projects in Azerbaijan. He is responsible for the coordination and management of the World Bank funded nation-wide You are working as a judge along with your international judicial services and smart infrastructure modernization activities and according to the information we receive projects in Azerbaijan. Strategic and operational planning from the Unified Judicial Portal of the Republic of in the role as Chief of the Working Group, responsible for Azerbaijan, you are the judge who has made the most activities related to the transformation of Azerbaijan judiciary acquittal judgments in the history of the Azerbaijani during the implementation of smart electronic E-Court judicial system. What can you advise to other judges in systems (e.g. Case & Document Management Systems, this regard? Court Audio & Video Recording, e-Enforcement system), The acquittal judgments require wide analysis of all facts and along with the modernization of the underpinning Court considering all aspects of the case, as well as to make parties buildings and IT infrastructures within the judiciary. Besides to understand and accept the final decision. My position is that, he participated in international research projects dealing that a judge should approach each case equally, because with the evaluation and organization of judicial systems. each case is the fate of a person regardless of whether it In 2013 joined the Azerbaijan judiciary and appointed as a is civil or criminal. And each president, as well as judge of judge (criminal specialization). In 2017 elected as a member all courts should enhance the prestige of the judiciary and of the Board of Association of Judges in Azerbaijan. From strengthen public confidence in the courts, strictly respect the 2005, he is member and national correspondent of the principles of justice, lawfulness, impartiality, publicity, equality European Commission for the efficiency of justice (CEPEJ), in of all before the law and the court, and other principles of 2011 member of the Working Group on evaluation of judicial justice laid down in the Constitution and the laws of the systems (CEPEJ-GT-EVAL) and in 2014-2018 participated country. To increase the confidence of citizens in judgements, in the peer evaluation trips to Estonia, Switzerland, Slovakia, judges should also be well-educated, experienced and with Cyprus and Georgia, as well as presided over the peer high moral values. If these criteria are met, judges can deliver evaluation trips to Lithuania and Former Yugoslav Republic justice based on the rule of law. Thus, it will increase the of Macedonia. credibility of the population to the courts, which in turn will From 2011 worked on different positions at the Azerbaijan result in investment in the country. National Academy of Sciences, and from 2018 is the Head of the “International law” department of the Institute of Law What kind of reforms is planned in the judicial sphere? and Human Rights. He delivers the lectures at the Justice The most important task of the next stage of judicial Academy and the Judicial-Legal Council. From 2018, he is reforms is to implement e-Court system in all jurisdictions of the deputy Director of Justice Academy. Dr. Gurbanov is Azerbaijan, as well as to ensure business intelligence system PhD/Doctor in Law, with more than 98 publications in different in the management of the court system. This task will be aspects of international, European and criminal law, including accomplished through the installation of Business Intelligence CEPEJ publications (Studies N21 and N22).

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Smarter Systems for Dispute Resolution Hamad Buamim President & CEO, Dubai Chamber of Commerce & Industry Chairman, ICC World Chambers Federation

Chamber 4.0 Our smart transformation was inspired by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. We continue to develop and expand our range of smart services and solutions designed to meet the evolving needs of Dubai’s fast-growing business community. These solutions have enabled customers to access a majority of Dubai Chamber’s services online or via smart applications, which include payments, membership registration and renewal, certificates of origin and ATA Carnets, thus saving them time and money in the process. Earlier this year, we reached a milestone as smart transactions at Dubai Chamber reached 96 percent in the first quarter of 2019. As a result of this uptick, an 85 percent drop in the number of visitors to Dubai Chamber’s service centres was recorded over the same period as customers shifted towards smart services to complete their transactions. An estimated $1 million worth of transportation costs was saved by our customers who processed transactions electronically, Hamad Buamim, President & CEO, Dubai Chamber of while an 84.3 percent drop in paper consumption was Commerce & Industry and Chairman of the ICC World observed during the same quarter as Dubai Chamber scaled Chambers Federation says businesses have a lot to gain by up its efforts to support the Dubai Paperless Strategy which utilizing smart mediation and arbitration services. aims to eliminate over one billion papers annually used for Among the key strengths that has catapulted Dubai to its Dubai government transactions. position as a global business hub has been the city’s ability to continuously evolve and adapt in line with the needs of the private sector. Over the last year, the Dubai Government has rolled out a series of new measures to improve ease of doing business, including a decision to allow 100% foreign ownership in mainland companies, long-term residency visas investors and entrepreneurs and experts in certain professions, along with slashing various government fees applicable to companies. All of these efforts have been introduced to boost the competitiveness of our economy and ensure its sustainable growth. Dubai Chamber of Commerce and Industry is supporting this vision by leveraging advanced technologies and adopting smart solutions that add value to our members and the wider business community. Part of this smart chamber drive has been focused on improving and expanding our range of legal, mediation and arbitration services with the aim of ensuring a conducive business environment.

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Raising legal awareness Over the years, Dubai Chamber’s Legal Services department has focused its efforts on raising awareness about important legal matters that impact the business community. Given the rapid rate at which Dubai’s economy has expanded and developed, it is only natural that we do our part to keep businesses informed of new and updated laws and regulation. The Chamber regularly hosts workshops and seminars, to keep companies informed and offer them practical legal advice. These events have tackled a wide range of matters of mutual interest to business in Dubai, such as value-added tax, legal aspects of real estate, Dubai’s new arbitration law and employment relationships. Dubai Chamber regularly hosts legal workshops and seminars to keep businesses informed of important regulatory developments in Dubai. Business beyond borders Championing smart mediation As one of the world’s largest membership-based chambers of Now more than ever before, businesses are looking for faster commerce, Dubai Chamber has embarked on an ambitious and more effective ways to resolve their disputes. Mediation international expansion strategy over the last six years. In has helped meet that market need in many parts of the world, 2012, the Chamber opened its first representative office in while it remains a viable alternative to litigation which can , Azerbaijan which has been at the forefront of facilitating often prove to be costly and tedious. trade and investment relations between our members Within Dubai, the use of mediation services has increased and countries of Eurasia. Since then, the Chamber has considerably over the last decade as the business community gradually expanded internationally, and currently operates has matured and evolved. Keeping this in mind, Dubai 10 representative offices that are strategically located across Chamber launched the first-of-its-kind smart mediation app Africa, Asia, Eurasia and Latin America. These offices have in 2015 which enables companies to submit their mediation created new channels for our 231,000 members to explore requests, relevant documents, process payments and obtain potential in promising markets around the world and capitalize reports electronically. In addition, the Chamber continues to on new business opportunities. play an active role as a mediator to settle commercial disputes Through its various offices around the world, Dubai Chamber efficiently. offers a wide range of value-added services, resources and facilities to our members, such as business platforms and Advancing arbitration standards events, business matching, market intelligence, supplier Businesses in Dubai and abroad can access high-calibre sourcing, trade missions, business development support and arbitration services and facilities through the Dubai market strategy consultation. By providing our members with International Arbitration Centre (DIAC) which remains the access to new markets, we are creating a mechanism that largest arbitration centre in the Middle East. An initiative of enables companies in Dubai to expand their global footprint Dubai Chamber, DIAC is an autonomous institution that has and enhance their competitiveness. been instrumental in solving cases through arbitration. Dealing with disruption and adapting to the changing As an institutional arbitration centre, DIAC provides efficient, business landscape requires re-evaluating value propositions flexible and impartial administration of disputes, and handles and creating future-ready solutions that foster innovation, everything from appointing arbitrators to organizing venues economic growth and prosperity. to fixing fees of arbitrators and conciliators. DIAC has developed a strong framework for arbitration in the Middle Author’s biography East supported by rules and procedures that are based on Mr. Hamad Buamim is the President & CEO of Dubai best international practices, while it has built a community of Chamber of Commerce & Industry since 2006. He is also experienced arbitrators from different nationalities and legal the Chairman of the Paris-based ICC - World Chambers backgrounds. The Centre regularly organises workshops and Federation. Buamim also serves as a Board Member of Dubai participates in international and regional events to promote a World & Dubai International Financial Centre and he acts as culture of commercial arbitration within the region. Chairman of National General Insurance. There are several reasons why arbitration through DIAC In previous roles, Hamad served as Chairman of Emirates remains a popular option for dispute resolution. First, DIAC Financial Services, Emirates NBD Capital and Hawkamah, guarantees complete neutrality as it is an independent the Institute for Corporate Governance, as well as a Board non-profit organization that is separate from any control by Member of Emirates NBD, Network International and the UAE governmental or private bodies. Arbitral awards made under Central Bank. DIAC have the same effect as final and conclusive judgments Buamim holds a Master of Business Administration (MBA) awarded by courts under the law. Compared to litigation, with honors in Finance from the University of Missouri, the arbitration process is quicker, more cost-effective and Kansas City, United States. He also obtained a Bachelor of convenient as the parties control the process, and results can Science with Magna Cum Laude in Electrical Engineering be produced within a specified timeframe. from the University of Southern California, Los Angeles.

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Mediation and its Benefits for Business

Rashid Mammadov as with most processes those promote negotiated settlement – the sooner the better. Legal and Policy Officer, Mediation leaves the control of the outcome to the parties. A AmCham Azerbaijan mediator does not render a decision at the end of mediation, instead, mediator assists the parties to identify the issues in the dispute between them and take steps towards resolving that dispute. Mediators are trained to establish and maintain a safe, confidential, communicative process and to help At some point or other, all businesses have disputes whether participants reach an agreement. Mediator must be completely it is about contracts or employee benefits or any other number impartial and have no interest in the outcome of the dispute. of issues. While most disputes can be resolved fairly quickly A mediator is often chosen not only for skills at facilitating and quietly, occasionally disputes escalate into something a discussion of the dispute and possible resolutions, but for that needs intervention. In these cases, mediation can be knowledge and expertise in specific areas. Mediators, unlike helpful to resolve the issue. arbitrators, do not act as a judge; rather, they engage in Mediation is a form of alternative dispute resolution (“ADR”) shuttle diplomacy, often starting with a joint conference of process in which a neutral third person – mediator, who has all parties but using private caucuses to determine and then no power to impose a decision if all of the parties do not agree share underlying interests. The quality and experience of the to settle the case, helps the parties reach an agreement by mediator has a huge influence on the effectiveness of the focusing on the key issues in a case, exchanging information mediation process and outcome. A positive outcome does not between the parties and exploring options for settlement. It just depend on the willingness of both parties to come to an promotes reconciliation, settlement or compromise between agreement, but rather the ability of the mediator to facilitate, conflicting parties. Mediation tends to accommodate the remain neutral and to build rapport with both parties. needs of each party and help the parties to formulate a Mediation is a beneficial way to solve business disputes workable solution. This increasingly popular form of ADR because it offers more control, fewer expenses, greater serves as a viable option for business owners who choose to confidentiality and better communication. Effectively managing resolve conflicts through a forum other than lawsuit. disputes is a sure way to reduce legal and administrative Mediation bridges the gap between negotiation and litigation. costs to free up management time for more productive In mediation, mediator facilitates negotiation between the purposes. The savings gained by avoiding just one court parties, breaks impasse by reducing emotion, increasing case a year and the advantages for businesses in adopting rationality, building desire for resolution and helping come mediation processes are multifaceted and immeasurable. up with creative solutions. An internet search on mediation Moreover, mediation is private, the terms of resolution can statistics indicates success rates that seem to hover around be confidential and the mediation often preserves business 85 percent and reveals that mandatory mediation is only 10 relationships that would become broken in an adversarial percent less effective than that. It is astounding that even where parties do not want to mediate, the process brings them to their own voluntary resolution 75 percent of the time. If the parties cannot agree through mediation, they can proceed to arbitration or litigation. The process is confidential and only the parties taking part in the mediation need to know about it. Mediation cases give the parties the opportunity to discuss their issues, clear up misunderstandings and find areas of agreement in a way that would never be possible in a lawsuit. Mediation is often voluntary and typically the mediator has no authority to make a binding decision unless both parties agree to give the mediator that power. Mediator’s sole purpose is to help the parties to explore their options. The best time to mediate dispute depends on the circumstances of a case. However,

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proceeding such as trial. If parties mutually agree to a fair will end. One of the most overlooked benefits of mediation is agreement using mediation, implementation becomes much that it can help preserve relationships, business and personal, easier. The advantages of mediation are almost endless and that would likely be destroyed through years of litigation. here are sum up of its benefits in business disputes: Because it is a collaborative, rather than adversarial process, and because mediation isn’t inherently a win/lose process, Increased control over the outcome: Mediation increases important relationships can often be saved. During mediation, the control parties have over the resolution. Each party is both parties are able to share their opinion with a neutral party directly involved in negotiating its own agreement and no in hopes of coming to an agreement between themselves. If settlement can be imposed upon parties. In comparison, the parties plan to continue to conduct business with each dissatisfaction is often experienced in court where parties other in the future, mediation may help to preserve the have little choice but to accept the judgment made, which relationship. they may not be happy with. Confidentiality: Another key way mediation diverges from Lower cost and more efficient process: A business litigation is confidentiality. Unlike court cases, which are dispute can get expensive for both parties, especially when public, mediation is typically confidential, which means there it goes through litigation. Lawyers usually have to spend are no records or transcripts and any evidence introduced more time preparing for court than they do for the mediation during mediation cannot be used later or revealed. Often this room, which is why the bill for those types of disputes can confidentiality makes both parties feel more secure, which be much higher. Businesses in certain industries may also allows them to speak candidly. It can also help to protect the have to pay experts to testify. When arguing associates want image of the company. This makes mediation much more to save some money, it might be best to turn to mediations. likely to be successful. Mediator’s fees are usually divided between the parties involved in the dispute. It should also be noted that, mediation More communication: Mediation gives both parties a chance doesn’t result in any type of punitive damages, as would be to tell their side of events. Some mediators may choose to use the case in a civil litigation suit. Therefore, the parties can active listening sessions, which give each party a chance to prevent additional fees or problems associated with damages tell their stories without interruptions. When everyone gets a that are awarded in a legal suit. Mediation not only costs less, chance to explain their position, it is easier for a compromise but it is generally a short process in comparison with litigation. to be made. During other dispute resolution, there may be This can free up time and resources, making it more efficient less time for this open communication to take place. all around. Less formal: Mediation is a process by which parties Preservation of relationships: Businesses work hard to in conflict are given an opportunity to resolve the issues maintain relationships with customers, partners, vendors and amongst themselves outside of the formal court system. employees. When a problem arises, there is a threat that it The informality of mediation allows the parties to be more will affect the relations negatively or worse – the relationship engaged than they would be in a court-driven process with

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Greater compliance: Because mediation produces better results more quickly and cheaper, compliance with mediated dispute resolutions is generally higher than with lawsuits. Parties who have reached their own “customized” agreement are generally more likely to follow through and abide and comply with its terms than those whose agreement has been imposed by a third-party decision-maker.

Voluntary process: Mediation is a voluntary process. Any party may withdraw mediation at any time and for any reason.

As discussed above, there are many advantages of mediation. However, mediation is not for everyone. It is suitable for the ones willing to communicate with the other party and attempt to better understand and settle their dispute with the help of a trained third party. It requires a building of trust between the an abundance of rules and procedures designed to separate the parties. Accordingly, since the mediator deals directly with the parties, the mediator can focus the attention of the parties upon their needs and interests rather than on their stated positions. And this makes mediation much less stressful than court proceedings.

Support and better results: Mediators are trained in working with difficult situations. The mediator acts as a neutral facilitator and supports each party through the process. The mediator may be able to propose creative solutions or accommodations. Parties generally report a better outcome as a result of mediation than they do from a lawsuit. Also, because there is no winner or loser, no admission of fault parties and the mediator, as well as between each other; it also or guilt, and the settlement is mutually agreed upon, parties requires compromise. The ones who are not willing to trust are typically more satisfied with mediation. Mediation also the process and each other or who refuse to compromise on teaches the disputing parties how to negotiate effectively, and a position are usually not strong candidates for a successful may help individuals resolve future issues themselves. mediation. Fundamentally, mediation rarely produces a satisfactory resolution unless both parties to a dispute are committed to a resolution. If the parties have reached a settlement, they will conclude a settlement agreement. A settlement agreement is a legally binding contract which details the terms upon which the parties agree to settle the dispute and ancillary matters. Where the parties have failed to reach a settlement, they are free to pursue legal action as against each other and to assert otherwise their legal rights.

Author’s biography Mr. Rashid Mammadov is a Legal and Policy Officer at the American Chamber of Commerce in Azerbaijan (AmCham Azerbaijan). Since his professional career, Mr. Mammadov has worked in different fields, such as court, migration, human rights, construction, banking, education, art and NGOs. At the same time, he delivers lectures and trainings on different law-related subjects at educational institutions. Rashid carries LL.M. Degree from European University Viadrina in Germany and a Bachelor Degree at the Law Faculty from the . Mr. Mammadov is an author of several research pieces on law related topics.

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Empowering Societies Through Negotiation

Deniz Kite Guner tool which people can use. They can negotiate voluntarily for a common relationship they themselves define and build. They Founder, can use certain principles to deal with disputes and they can Global Mediators & Negotiators find creative solutions to reach their objectives. The ability to negotiate brings people the ability to make choices. Freedom walks hand in hand with responsibility. People who are not taking responsibility as negotiators will ultimately depend on a third party’s decision. One of the most fascinating things about mediation is that it Sometimes, even if they do take responsibility, various can give a chance to parties to be responsible; they own the reasons such as highly charged emotions or a lack of conflict and are ready to resolve it with external assistance. negotiation skills, people fail to succeed. The upside is, we Either a country has mediation in its traditions or it chooses all can learn to master negotiation; it requires training, honest to develops it as an alternative to the existing legal system. self-evaluation and building up experience. Being a voluntary process, mediation is empowering people to resolve disputes. Negotiation Offers People Options All of the above is what I used to believe for many years. Not Negotiation cannot be part of a court system and will not be anymore. mandatory. Instead, negotiation offers options to pursue better Although mediation is broadly understood to be an alternative deals. Negotiation theory has a set of ethical standards but it dispute resolution method, in some countries recent does not have a contradicting code of conduct like voluntary developments have changed this and it has become very much but mandatory mediation. Anyone can be a negotiator, a part of the legal system. At first, (voluntary) mediation was either for themselves or for others. Mediation, on the other applauded as fast and cheap. But the percentage of actually hand, is regulated and limited to certain professionals. The mediated cases was quite low in comparison to the total more negotiating ability we have, the more harmonious the disputes in the courts. After immense public advertisement communities we will create. This is not only empowering and investments, there were only a few good examples. In people, but empowering societies at large. many countries, mediation as a dispute resolution method became a disappointment rather than a success story. Author’s biography This lead to the next step: mandatory mediation. Mediators Mrs. Deniz Kite Guner is the Founder of GMN (Global Mediators like myself, who believe in the voluntary nature of mediation & Negotiators) which trains, mentors and certifies mediators in and its social benefits, have doubts. Others are very happy Azerbaijan, Turkey, Cyprus, Brazil, Argentina, Kyrgyzstan and about mandatory mediation as it increases the market of Paraguay and certifies Turkish & Kurdish speaking mediators mediated cases and grows the income of mediators. worldwide as an IMI (International Mediation Institute) QAP. On the other hand, independent of how a case is mediated, She is the founder of Negotiators Society which promotes good mandatory means mediation becomes a court procedure. negotiation practice and negotiation culture in Turkey & Central It isn’t any longer an alternative which helps people own Asia and develops Code of Conduct for Negotiators. their conflict and volunteer to negotiate for a resolution. By Ms. Kite is the first professional mediator of Turkey & the first law, they have to try mediation first! Unfortunately forcing Turkish Speaking IMI Certified Mediator, Member of Consultants’ disputants to try mediation first, is not helping to create the Panel at MBBI (Mediators Beyond Borders International) trust that is essential to make it succeed. Washington D.C and Founder of MBBI Turkey, QAP Appraisal Committee Member at IMI, the first Turkish Musteshar of Egypt, People like to be able to choose listed international mediators of Milan & Florence Chamber of In my opinion, this is the very reason why people need to Commerce and a mentor at Workinton Incubation Center. develop negotiation skills. Firstly, they can make better deals, Deniz Kite has written 8 books, 4 poetry books, 2 books on sign good agreements, and have sustainable partnerships. mediation, one included her paintings and was on meditation and Secondly, when there is a dispute, they can negotiate one philosophical novel between 2005-2013. Since 2017, she is between themselves first. If necessary, they may prefer an one of the mentors at Workinton Incubation Center in Istanbul assisted negotiation through mediation. and Jury Member selecting entrepreneurs for international From this perspective, negotiation theory offers a wonderful competitions and also studying sociology at Istanbul University.

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Alternative Dispute Resolution. Main Features

1 Sevil Tahirova great virtue. However, litigation through the formal channels of courts is a regular practice in the USA. For contract or Senior Lawyer, business negotiations in the USA, business people empower Nobel Oil Services their attorney or corporate counsel as a member of the negotiation team. In Asian countries this may seem a little confrontational, a little unnecessary, and a bad omen or a sign that disagreement is inevitable. However, considering a large number of advantages, ADR is becoming more popular “Discourage litigation. Persuade your neighbors to and the legal acts supporting ADR are being introduced all compromise whenever you can. Point out to them how the over the world. nominal winner is often a real loser---in fees, expenses, and Nowadays, the most popular and widely used ADR waste of time. As a peacemaker the lawyer has a superior mechanisms are the followings: opportunity of being a good man. There will still be business 1. Negotiations - the simplest form of dispute resolution, enough.” © Abraham Lincoln. where the parties resolve the dispute themselves through Expansion of transnational business relationships with the negotiations without the participation of the third party. respective increase of cross-jurisdictional problems and such There are even several sources stating that negotiation disadvantages of traditional litigation as heavy caseloads of cannot be referred to ADR. the courts high costs, and delays in judicial proceedings, as 2. Mediation - focuses on effective communication and well as publicity and stressfulness of such proceedings led to negotiation skills. The mediator role is to facilitate more the development and spread of alternative dispute resolution effective communication and negotiation of the parties, (ADR) system throughout the world. thereby enhancing their ability to reach a decision. In this light, it is impossible to overestimate the value of the 3. Conciliation – is very similar to mediation, but unlike new “Law on Mediation” introduced on March 29, 2019, as mediator, conciliator contributes even more actively to part of recent judicial reforms in Azerbaijan. The new law the conciliation process and can come up with solutions requires economic, labor and family disputes to go through to resolve a dispute. the mediation process before going to court. Presently, this 4. Arbitration – is a binding dispute resolution mechanism requirement is not of binding nature, but starting from June applied through involving the private entities known as 1, 2020, it will be compulsory. Among other factors, the new arbitral tribunals. Arbitral tribunals usually consist of law is aimed at decreasing the workload of courts through either one or three arbitrators. amicable resolution of disputes and obviously it is a significant step towards development of the alternative dispute resolution In contractual issues, in order to refer dispute to any form of system in the country. ADR, the parties should include the relevant ADR clause to the contract. Exempli gratia2, clause on arbitration is common What is ADR and how it works? for the contracts concluded within oil and gas, insurance and Known also as “Appropriate Dispute Resolution”, “Amicable construction industries, especially when such contracts are Dispute Resolution” (this term is used by International signed between the parties based in different jurisdictions Chamber of Commerce), “Effective Dispute Resolution” (used (transnational or trans-jurisdictional contracts). in Australia) it is the way of resolving and settling disputes (firstly arising out of the civil legal relationships) between Main advantages of ADR parties without resorting to traditional litigation with (or Advantages of ADR that people can benefit from: without) the help of the third party. • Flexibility, which includes freedom of choice of Alternative Dispute Resolution is widely used and supported applicable law and procedures. While traditional courts in the countries both with common and codified law system resolve disputes only in accordance with the law of the and thereafter application of ADR procedures is legislatively country they work in, in ADR, parties are free to choose regulated in many countries. the law applicable to resolution of their dispute, as well There is a contrasting approach to ADR in different cultures. as relevant domestic standard or even a religious law As evidenced in practice, disputants in Asian countries prefer in some cases. As a practice, parties in dispute agree to settle their disputes in an amicable way, instead of going 1. Richard Schaffer, Filiberto Agusti, and Beverley Earle, International Business Law and Its Environ- to courts and it derives from considering the harmony a ment (7th edn, 2009) 87 2. Latin legal term – meaning “For the sake of example”

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that was drafted in New York on June 10, 1958 with the main purpose of providing enforcement and recognition for arbitral awards, should be specifically emphasized. New York Convention became an important milestone in the development of the institution of international arbitration. As of today, a vast number of countries, including Azerbaijan are parties to the New York Convention and comply with its fundamental principles to recognize binding nature of arbitration agreement, and recognition and enforcement of on governing law beforehand in the process of contract arbitral awards. conclusion. • Confidentiality – in camera hearings, i.e. nobody is Conclusion allowed to participate in hearings, which is not the case As for the new “Law on Mediation”, first of all, it is necessary in traditional litigation. to overcome some hurdles in public consciousness. Naturally, • Expeditious resolution of a dispute, quick and efficient as a tradition, when introducing something new, there are a mechanism of dispute resolution without bureaucratic lot of mistrust and resistance. In the case with the new law, delays and formalities, which leads to lower stress for the there are even such thoughts that its mandatory requirement parties to the dispute. to go through mediation before applying to court is simply an • Relatively lower cost. This advantage of ADR is obstacle to legitimate lawsuits. Nevertheless, despite some applicable to the countries with higher court fees and mistrust, it is just a question of time until it proves its worth costs, such as the USA, UK, as well as some European and makes a room for itself. Statistics show that in most countries. cases mediator successfully resolves a dispute and execution • Resolution of dispute by the person having special level of the mediation decisions is significantly high. knowledge in the relevant dispute area, allows the Therefore, it is safe to say that adoption of the new law is a parties to choose arbitrates whom they trust most. In significant event in the Republic of Azerbaijan and now parties traditional courts, when complicated technical issues that in dispute possess an additional state-approved instrument are not understood by many people outside a relevant for the resolution of conflicts. Mediation as an instrument is industry are considered, a great deal of time has to be used in countries with reputable legal institutions, such as spent on educating the judge and jury, just so they can the UK, USA, France and Germany, and the adoption of the make an informed decision. new law in Azerbaijan testifies to the high-level legislative • Protection of business relationships between the development process in the country. With the correct parties, is what merely impossible if the dispute sent to implementation of the new law, it is possible to decrease the a court. ADR procedures are often held collaboratively extent of conflict and tension of disputes and pave the way for which help disputing parties understand each other’s more active protection of rights and interests of legal entities position and what is also important, the parties often and individuals, which make positive impact on the socio- come up with more creative solutions that a court may economic and socio-legal situation in the country. not legally allow to impose. Upon the whole, as mediation is a pre-trial procedure, it is capable of significantly facilitating the work of court system. It is worth noting that once the agreement is achieved between Having reconciled, parties will not apply to the court further the parties on choosing one of the mechanisms for resolution for settlement of the dispute. Moreover, it is expected that of the disputes arising from the agreement, no party is able due to some decrease in the workload of the courts, the to unilaterally decide to change its mind and send the dispute effectiveness of judicial system functioning will considerably to the traditional court. Whether the party still applies to court rise. for resolution of the dispute, the court shall discontinue the Author’s biography proceeding. However, courts can overrule an arbitration Ms. Sevil Tahirova is an established professional with a award if the award is a product of corruption, or if there is a profound knowledge of corporate, contract and commercial, fraud case or serious misconduct by arbitrator. construction and labor law. She has extensive experience in Inclusion of ADR clause into the contract is a favorable input legal support for sales of oil & gas equipment, construction, as on which the parties agree in case of a conflict. However, well as business development. She started her career in ABA in contractual relationships in order to ensure successful CEELI as a legal adviser, and then worked in Bahar Energy application of ADR it is essential for lawyers to consult parties Operating Company. In 2015, Ms. Tahirova joined Nobel Oil not only on advantages of ADR, but also on its disadvantages. Services and now works as the senior lawyer running legal One of the crucial disadvantages of ADR is the complexity in activities within Nobel Oil Services group of companies. enforcement of decisions taken in ADR process, since they Ms. Tahirova holds Bachelor degree in Law and Master Degree are only decisions of arbitrate that are enforceable. In this in Criminal Law from Baku State University. In 2018 she respect, Convention on the Recognition and Enforcement of obtained LLM degree in International Commercial Law from the Foreign Arbitral Awards (known as “New York Convention”) City University of London, Law School.

14 Issue 34 in focus

Litigation Process in Azerbaijan - In the Light of Recent Judicial Reforms Fuad Gashamov administrative-economical boards. 3. Court of cassation - there are 4 boards under Senior Legal Manager, the Supreme Court – civil, criminal, military and Ekvita administrative-economical boards. There are also exceptional instances such as the Constitutional Court and additional cassation in the Supreme Court which hear specific cases. For the time being, there are the following 7 administrative- New wave of reforms in the judicial system of Azerbaijan economical courts that are specialized courts to hear the started from 13 February 2014 with the Presidential Decree commercial disputes: “on establishment of “Electronic court” information system”. 1. Baku Administrative-Economical Court No. 1; 2. Baku Administrative-Economical Court No. 2; In the Presidential Decree, dated 13 February 2014 realization 3. Ganja Administrative-Economical Court; of certain points emphasized, such as: 4. Nakhchivan Autonomous Republic Administrative- • Electronic document turnover; Economical Court; • Automated distribution of the cases among the judges; 5. Shaki Administrative-Economical Court; • Audio and video recording of the court hearings; 6. Shirvan Administrative-Economical Court; and • Electronic notification of the parties to the court hearings; 7. Sumgait Administrative-Economical Court. • Establishment of “personal cabinet” in electronic court information system and so on. Nevertheless, in the Presidential Decree on Deepening of Reforms there is a reference to the idea of establishment of As a result, “Electronic court” information system (the new specialized courts to hear specific disputes (such as in “Electronic Court Portal”) was established and new era in the relation to the tax, customs duties and state social insurance judicial system began with the Electronic Court Portal - payments). www.courts.gov.az. As a logical continuation of these reforms, it was necessary to Time and cost for resolving civil and commercial disputes amend the Civil Procedural Code (the “CPC”) which regulates From business perspective, time and cost for resolving a civil the litigation process in civil and commercial disputes. and commercial dispute through a local court, and the quality Consequently, on 28 December 2018, the several significant of judicial processes are of high importance. Below it can be improvements were made to the CPC through the respective seen how long it takes to litigate a lawsuit from start to finish amendment (the “Amendment to CPC”). in civil and commercial disputes. Thereafter, on 03 April 2019, new conceptual framework was set out through the Presidential Decree on “Deepening of Courts of first instance: reforms in judicial-legal system” (the “Presidential Decree on A case must be heard and settled within 3 (three) months Deepening of Reforms”). from the date of receipt of a statement of claim by the court. After a short introduction to a judiciary system of Azerbaijan, In employment litigation and in disputes arising out of the we will see the recent improvements and ongoing reforms in mortgage agreement this period is 1 (one) month. relation thereto. Entry into legal force: If the court decision has not been appealed, it enters into legal force after 1 (one) month upon Introduction to the court system its issue. In Azerbaijan, the court system consists of three instances: Period for an appeal: Appeal may be submitted within 1 (one) 1. Courts of first instance - district (city) courts, military month upon official submission of the court decision. courts, administrative-economical courts and courts on grave crimes. Courts of appeal: 2. Courts of appeal - function in 6 regions of the country A case must be heard in courts of appeal within 3 (three) and consist of 4 boards – civil, criminal, military and months of its submission to the court.

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Entry into legal force: If the decision of the court of appeal has not been appealed, it enters into legal force after 2 (two) months upon its issue. Period for cassational appeal: The appeal may be submitted within 2 (two) months upon official submission of the court decision.

Court of cassation: A case must be heard in court of cassation within 2 (two) months of its submission to the court. Entry into legal force: The decision of the court of cassation enters into legal force from the moment of its issuance. This is the general overview of the court system and the period of litigation. In specific circumstances, there may be different terms other than stated herein.

Payment of the state duty In accordance with the CPC, the state duty must be paid at the time of submission of a claim. The amount of the state duty is determined as per the Law on State Duty, dated 04 December 2001. If the amount in dispute is up to AZN 500 (approximately USD complicated. 294), the state duty for filing a claim is AZN 20 (USD 12), and The parties must be notified within 5 five business days prior if the amount in dispute is more than AZN 500, the state duty to the date of the preliminary hearing. is AZN 30 (USD 18). State duties for the appellate and cassation instances are Court hearings and adjournments 50% (fifty per cent) of the state duty paid for the first instance Under the Amendment to CPC, the parties to the dispute must (AZN 10 or AZN 15 as the case may be). be notified within five business days prior to the date of the Under the Amendment to CPC, the payment of the state hearing. The court hearing must be appointed to the date not duty must only be carried out electronically. It can be paid later than thirty days upon the date of the preliminary hearing. either directly from Electronic Court Portal or via Government This date can be extended up to fifteen days depending on Payment Portal (www.gpp.az) and then the number of the number of participants and the complexity of the case. the receipt of the respective payment can be shared in the It should also be noted that the Amendment to CPC, has Electronic Court Portal which will be accepted as the sufficient brought the new rules with respect to the adjournments. proof in connection therewith. Now, the court hearing can only be adjourned in unforeseen In the Presidential Decree on Deepening of Reforms there is a or exceptional circumstances. The court hearings can only reference to the idea of differentiating the amount of the state be adjourned not more than 3 times. If the court adjourns duties proportionate to the amount in dispute. the hearing more than 3 times, then it must issue the specific substantiated court ruling as to the reasons of such Notification of the parties adjournment. The court notices are mainly served by registered post, or by delivering them personally. In the courts which are integrated Extract from court decisions to the Electronic Court Portal, the notices can also be served Under the Amendment to CPC, the judge must issue an through electronic means. extract from the court decision on the time when the decision Under the Amendment to CPC, if the parties to the case is declared in the courtroom and submit the same to the are registered in the Electronic Court Portal, the respective parties without delay. documents are placed in the “electronic personal cabinet” and The extract must reflect the introduction and conclusion parts in the meantime, the notice is sent via SMS. In commercial of the court decision. disputes, the notices are placed in the “electronic personal cabinet” and at the same time are sent via SMS notifications. Simplified process for small claims The Amendment to CPC brought new provisions with respect Preliminary hearing to the small claims. First of all, “small claims” are defined as Under the Amendment to CPC, the preliminary hearing must the claims less than two thousand manats (approximately be held no later than 15 days upon receipt of the claim by USD 1200) in civil cases and less than ten thousand manats the court. It can be extended up to 15 days depending on (approximately USD 5882) in commercial cases. the number of participants of the case and if the case is The litigation process for small claims have been simplified. As

16 Issue 34 in focus

noted, all documentation process is carried out electronically. If a defendant fails to voluntarily perform the writ of execution The court must issue its decision on the basis of the within 10 (ten) days, then the enforcement officer is entitled documents submitted by the parties within 30 (thirty) days to perform mandatory enforcement measures (such as upon receipt of a claim by the court and without attendance of attachment of salary, attachment of bank assets, attachment the respective parties. of vehicles, attachment of immovable properties etc.). The The court decision for small claims enters into force after one defendant’s right to leave the of the Republic of month upon issuance of the decision, if the decision has not Azerbaijan may also be restricted by the court based on the been appealed. request of enforcement officer. It should be noted that the statutory time limit for enforcement Expertise is 2 (two) months (it is different for enforcement of mortgage Under the CPC, the judge may appoint expertise based on its related court decisions). However, in practice enforcement own initiative or on the basis of a motion of one of the parties. proceedings are slow and it may last longer than the period For the time being, there is no statutory time limit for carrying stated in the Law on Enforcement to enforce the writ of out an expertise except the time limits set out by the judge in execution. the respective court ruling on appointment of expertise. The Civil Procedural Code and the Law on Enforcement There are no alternative private expertise centres in ensures that the defendant may take some actions to challenge Azerbaijan and the expertise is mainly conducted by the enforcement measures within a resonable timeframe which Judicial Expertise Centre under the Ministry of Justice. Due may delay the enforcement proceedings. to the workload the expertise is generally slow and ineffective. The speediness of enforcement also largely depends on It is important to note that the Presidential Decree on cooperation of third parties, such as the banks and state Deepening of Reforms envisages the idea of establishment authorities (the State Registry Service of Immovable Property, of private alternative expertise centres and setting out specific tax authorities, the State Traffic Police and so on). statutory time limits for issuing the respective expert opinion. It should also be emphasized that the Law on Enforcement contemplates 7 % (seven per cent) enforcement fee of the Specific notes for commercial disputes amount to be enforced from the defendant. In commercial disputes, submission of a claim, complaint In the Presidential Decree on Deepening of Reforms there is a and other documents, their receipt by the court and other reference to the idea of establishment of private enforcement participants of the case are only carried out via electronic offices which we believe will help to accelerate and make the personal cabinet created in Electronic Court Portal. whole enforcement process effective. A person may register in the Electronic Court Portal and create an electronic personal cabinet therein through the ID Conclusion card, ASAN signature or electronic signature. To sum up, new wave of the reforms and improvements in The hearings in the commercial disputes are video-recorded judiciary system are continuing process which started with in all three instances. the establishment of the Electronic Court Portal. Automated With effect from 01 July 2020, it will be mandatory for the parties distribution of the cases among the judges, electronic to commercial and labour related disputes to participate in the document turnover in commercial disputes, SMS notifications, preliminary mediation session before applying to a court (the video-recording of the hearings in commercial disputes, Law on Mediation, dated 29 March 2019). timelines for hearings, certain limitations set out in relation to adjournments, simplified process for small claims and so on Enforcement of the court decisions are important indicators of the improvements. Once the court decision enters into force, then within a month The ideas enshrined in the Presidential Decree on Deepening the court must issue the writ of execution and send it to the of Reforms, such as differentiating the amount of the respective enforcement office for enforcement. state duties proportionate to the amount in dispute, the If a defendant is physical person, then the writ of execution is establishment of private alternative expertise centres and enforced either in the place of its residence, or in its workplace setting out specific statutory time limits for conducting of or in a place where its property located. If a defendant is a expertise and the establishment of private enforcement offices legal entity, then the writ of execution is enforced either in the will increase the quality of judicial processes in Azerbaijan. place where such legal entity is registered (where the legal Author’s biography address is) or in the place where its property located. Mr. Fuad Gashamov is a Senior Legal Manager and head of the Dispute Resolution Practice at EKVITA. He is currently Once the enforcement officer receives a writ of execution, involved in advising clients with legal assistance on litigation, then it: real estate, regulatory compliance, construction, intellectual • Issues a decision on commencement of enforcement property, contract and other areas. proceedings; Fuad Gashamov holds LL.M. in International Law from Baku • Sends a notification to the defendant to voluntarily State University and Bachelor degree in International Law perform the writ of execution within 10 (ten) days. from .

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Resolution of Commercial Disputes in Azerbaijan

Gumru Eyvazova that the defendant Grand Motors was not given due notice of the arbitration proceedings. Afterwards, in order to prove Senior Legal Associate, its rights in CC, GRATA International Law Firm filled an GRATA International Azerbaijan application to the Constitutional Court. The hearing in CC was held on 15 April 2019 and CC has adopted a decision on invalidation of SC decision based on the fact that the SC did not give POSCO DAEWOO an opportunity to rebut Grand Motor’s argument. According to the CC, the SC made Nowadays, we can observe a great impact of International its decision solely based on Grand Motor’s contention that it law to the law system of the Republic of Azerbaijan. As an did not receive the notice of arbitration proceedings. The CC example, we can mention two significant documents adopted invalidated the decision of the SC on refusal to enforce the on April 3, 2019 which are: (i) the Decree of the President award issued by the Korean Arbitration Council and noted that of the Republic of Azerbaijan on enhancing reforms in the the SC failed to comply with the 1958 New York Convention judicial-legal system and (ii) the Law on Mediation. As the on enforcement of arbitration awards and local laws, which types of dispute resolution, both mediation and arbitration can contain rules substantially similar to those in the Convention. impact the parties to resolve the dispute without litigation. The Furthermore, CC ruled that when considering applications for reasons for preferring mediation or international arbitration the recognition of arbitral awards, the SC should rely only on over litigation in a given contractual setting depend on the the grounds for rejection in the relevant legislation, and these circumstances and strategic considerations of the parties cases should be supported by appropriate evidence. involved. Generally speaking, the benefits of mediation or This decision has to be a message to all judges of SC of the arbitration are often considered to be “lower costs, greater Republic of Azerbaijan during the adoption of any decision efficiency and speed, and the ability to choose expert about enforcement of foreign arbitral awards. adjudicators to resolve specialized disputes.” However, sometimes we face with the issues, where unexperienced judge skips the local and international law and adopts an unfair decision. As an example of such cases, we can mention the decision of Azerbaijan’s Constitutional Court (“CC”), adopted on 15 April 2019, on invalidation of the decision of the Supreme Court (“SC”) on refusal to recognize and enforce an arbitral award which was issued by the Korean Arbitration Council. This dispute was raised from the sale and purchase contract signed in 2012 between the Korean company POSCO DAEWOO Corporation (“POSCO DAEWOO”) and Azerbaijani company Grand Motors Limited Liability Company (“Grand Motors”), and based on this contract POSCO DAEWOO has to supply Grand Motors with certain construction related equipment, Author’s biography while the buyer has agreed to pay for these equipment. Ms. Gumru Eyvazova is a Senior Legal Associate at GRATA Grand Motors breached the provisions of the contract and International Azerbaijan LLC. For many years she was POSCO DAEWOO filled a claim to the Korean Commercial experienced in a banking sector and worked as a Head of Legal Arbitration Council as a matter of the signed contract. Korean Division in some banks of Azerbaijan. She attended training Commercial Arbitration Council adopted the award in favor of related to the management as a legal manager and was a Legal POSCO DAEWOO. Consultant of 2 prominent global airline companies. Gumru GRATA International Law firm, a representative of POSCO also serves as a Chair of the Board of Directors of local NGO, DAEWOO in Azerbaijan submitted the award to the "Khazrim" Student-Youth Organizational Public Association. Azerbaijani SC seeking to enforce it. However, the SC as Ms. Eyvazova has graduated from the School of Public and the authority in charge of recognition and enforcement of International Affairs of ADA University (LLM, 2018), School of foreign arbitral awards, refused enforcement on the grounds Law from Baku State University (LLM, 2007; BSc, 2004).

18 Issue 34 in focus

Specialisation in Judicial System

Narmin Laijova Ruhulla Rahimov Legal consultant, Legal consultant, BDO Azerbaijan BDO Azerbaijan

According to World Economic Forum’s Global Competitiveness Index 2018, Azerbaijan was ranked 69th in overall index and 49th in judicial independence score among 140 countries. Compared to 2008, Azerbaijan advanced 35 steps for judicial independence score. This demonstrates that reform efforts made over the past years in judicial system bring their positive results. The most recent of such reforms is the newly enforced Decree of the President of the Republic of Azerbaijan of 3 April 2019 on Intensifying Reforms in Judicial and Legal System, which introduces a number of important changes in this area. We believe that the following measures envisaged in the Decree may yield substantial improvement and contribute to positive outcome in the area: • Establishing a specialised court for entrepreneurs’ disputes; • Differentiating amounts of state duties depending on value of claims; Measures identified by the Decree allow creating a more • Continuous audio recording of court sessions; professional and transparent judicial dispute resolution • Determining deadlines for judicial examination exercise; mechanisms. However, because the Decree is substantially • Digital publishing of court rulings and creating an effective a roadmap, its ultimate impact and outcome are somewhat search system; uncertain. Nevertheless, Article 3.1 of the Decree covers a • Promoting tools for alternative dispute resolution; specific issue and allows for its detailed legal discussion. • Increasing total number of judges. The mentioned Article instructs the Ministry of Justice to establish new courts and determines the general scope of their authority. These courts shall hear cases on tax, customs and compulsory social insurance payment issues of entrepreneurs. Scope of authority of these courts also extends to other matters related to entrepreneurial activity. As the expression “other matters” is very vague, it is unclear which elements of business shall be covered. Through newly established courts the Decree also aims at more professional resolution of entrepreneurs’ problems and decrease of workload of other courts. The main goal seems to be specialisation of each court in a respective subject area of law. A question arises on the structure of the judicial system after the reform, as the mentioned authority of new courts currently belongs to Administrative-economical Courts. Current authorities of these courts include hearing disputes of different categories: both administrative (arguing administrative acts, acts of administrative bodies, etc.) and economic (contractual conflicts, tax payment disputes, etc.). The Decree now transfers some of these authorities to new courts to be established, however transferred authorities also

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fall into two different categories: disputes with government to investigate cases in a specific field of law; secondly, authorities which are subject of administrative matters, and establishing specialised courts provides opportunities for disputes regarding entrepreneurs’ activity which are subject of prompter technically competent resolution of disputes. economic matters. Such differentiation shall cause confusion Regarding the matter of authority of courts in the framework in the judicial system’s structure. of specialisation, we believe that in accordance with global In international practice judicial system’s specialisation is best practice they shall be differentiated by fields of law rather realised in two main directions: specialisation of courts and than parties of a dispute. We think giving administrative and specialisation of judges. In foreign countries where specialised economic authorities to two different courts shall better serve courts exist alongside with courts of general jurisdiction, such the purpose. Differentiation by economic areas (general, separation is made by the subject of the case, not the party labour, intellectual property, etc.) is possible by establishing to the dispute. This means that in order to create a consistent judicial boards within a relevant court hearing business approach to justice, countries with mature legal system split disputes. courts by their area of activity, i.e. by legal fields like civil law, administrative law, etc. We understand from the Decree that the current reform’s direction takes us towards direct specialisations of courts rather than establishing separate boards within each court. As mentioned above, such distribution is already observed in Azerbaijan’s judicial system (existence of criminal, administrative, economic courts), however in the light of matters raised above, it is not clear where and how new courts shall be positioned by their area of activity. Covering both administrative and economic issues shall mean that new courts will eventually settle somewhere in the middle of administrative and economic courts, without being their part. Unfortunately, it’s hard to justify such separation. One could argue that these courts shall hear all disputes regarding entrepreneurs’ issues, however, this then would mean further narrowing authority of Administrative-economical Courts, rather than differentiating specific areas of activity. In general, in Azerbaijan both administrative and economic Authors’ biography matters are ruled by the same court. Considering this, Ms. Narmin Laijova is a legal consultant at BDO. She has been we can possibly look at new courts as a sub-category of in the profession for 5 years, working as a court clerk and a Administrative-economical Courts, however, even this doesn’t lawyer. give an impression of a proper judicial structure. Narmin has great experience in litigation on different civil and To summarise, we consider establishing specialised courts administrative lawsuits including drafting claims, objections, reasonable for a number of reasons: first, this allows judges motions, representation in courts, corporate cases, such as drafting and amending various contracts, legal consultancy in tax, customs, civil law and she is very familiar with Azerbaijani law. Narmin holds an LL.B. from Baku State University and she is fluent in Azerbaijani, Russian and English.

Mr. Ruhulla Rahimov is a legal consultant at BDO and has 3 years of experience in this sphere. He has expertise and experience in corporate cases such as analysis and amendment of contracts and corporate charters, transaction of participatory shares, litigation with state authorities on tax disputes and immigration cases. He has excellent analytical skills and provides support in communications with state authorities. He also contributes to the Roadmap for Beneficial Ownership Disclosure for the Extractive Industries in Azerbaijan Implementation Project. Ruhulla has LL.B. from the Ankara University Law School and he is fluent in Azerbaijani, English, and Turkish and is competent in French and Russian.

20 Issue 34 in focus

10 Key Questions About Mediation in Azerbaijan

Elnur Aliyev settlement agreement affecting the growth, development and other interests of child to the relevant executive authority. Senior associate,

BHM Law Firm Who can be a mediator? Individuals meeting the following requirements may be a mediator: • to have higher education; • to be at least 25 years old; What is mediation? • to have at least 3 years of work experience; Mediation is a process in connection with settlement of a • to complete the initial training for mediators and to obtain dispute arisen between the parties on the basis of mutual the relevant certificate. consent and in a satisfactory manner for the parties through facilitation of mediator(s). The following individuals cannot be a mediator: • persons with no or limited functional capacity as determined by courts; What kind of disputes will be subject to • persons, in respect of whom there are final and binding mediation? court decisions about compulsory measures of medical Mediation will apply to the following types of disputes: nature; • civil and economic disputes (including disputes with • persons, whose conviction is not completed or not lifted. foreign elements); • disputes arising out of family relations; An individual, who wants to be a mediator and meets the • disputes arising out of labor relations (individual and above-mentioned requirements gets the right to function as collective labor disputes); a mediator from the moment of becoming a member of the • disputes arising out of administrative relations; Mediation Council. Mediator can engage in any other activities • In case the above-mentioned disputes touch the rights not prohibited by the legislation of the Republic of Azerbaijan. of third parties, not participating at the mediation or As it is seen, the mediators do not need to be lawyers, the persons with no or limited functional capacity as which is reasonable considering that mediation is not the determined by the courts, they can not be subject to settlement of the dispute on the basis of law or deciding mediation. which party is right and which party is wrong under the law, but about mediating the negotiation between the parties to The following disputes arising out of family relations can be reach a mutually acceptable settlement. As such, mediation settled by mediation: requires certain set of skills, which lawyers do not necessarily • conditions for continuation of marriage; • manner of carrying out the parental rights and obligations; • determination of the child’s place of residence; • the manner of maintenance of child or other family member without work capacity; • other disputes arising out of family relations. The Mediator shall get opinion of the relevant executive authority in respect of the disputes touching the interests of child. The mediator is obliged to inform the relevant executive authority in case there are circumstances that may endanger normal growth and development of a child or may damage his/her interests or there is a possibility of such circumstances during disputes arising out of family relations. The mediator can refuse from conducting the mediation process in the mentioned cases. The parties are obliged to submit the

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have. It may be argued that in respect of certain issues, as • the procedure must not result in a binding decision; determining whether the dispute can be mediated under the • it must not cause a substantial delay for purposes of law and to draft a settlement agreement which would be valid bringing legal proceedings; and enforceable under the law, the mediators need to have • the period for the time-barring of claims must be some legal knowledge. It may be assumed that the training of suspended for the duration of the settlement procedure; the mediators would cover also these issues. Also, it should • it must not give rise to costs (or only very low costs) for be noted the parties may still have their lawyers advise them the parties; in respect of legal points. • electronic means cannot be the only means by which the settlement procedure may be accessed; and Is the mediation voluntary or • interim measures must be possible in exceptional cases. Since the mandatory initial mediation session under the mandatory? Azerbaijani law meets the above-mentioned criteria, it can be In principle, mediation is of voluntary nature and conducted concluded that such a procedure is not contrary to the right on the basis of the mediation agreement about the mediation of access to court. The people are not being denied access concluded based on mutual consent of the parties. Mediation to court because mandatory mediation is not being ordered agreement can be concluded prior to the referral of the in lieu of going to court. Instead, the access to court is only dispute between the parties to the courts or while the dispute delayed; the parties may initiate litigation if mediation fails. is pending before the courts. However, prior to referring the economic, family or labor disputes to the courts, the parties must participate at the How will the mediation be carried out? initial mediation session. At the initial mediation session, the Mediation process is conducted in accordance with this mediator explains the essence, advantages and rules of the Law, standards and rules in connection with professional mediation process to the parties, conducts joint and separate functioning of mediators, professional ethical conduct rules meetings with the parties. Then the parties decide whether or of mediators and other legislation, in a manner and under the not they wish to proceed with the mediation process. In case term determined between the parties and the mediator. During the parties wish to proceed with the mediation, they conclude the mediation process the mediator can have joint or separate a mediation agreement. In case both or one of the parties meetings, cooperate with the parties, make written or oral do not wish to proceed with the mediation, the mediator suggestions. The mediator shall not carry out actions putting terminates the mediation process and issues a certificate one of the parties in a superior position or restricting its rights indicating impossibility of mediation. Afterwards, the parties and obligations. The parties can withdraw from mediation at may refer the dispute to the courts. any stage of mediation process, subject to the compulsory Thus, although the participation at the initial mediation session initial session described above. The parties can participate at is mandatory in certain types of disputes, the parties may still the mediation process in person or through representatives. opt out of mediation. This type of mediation is successfully The parties can get the assistance of advocates, translators, applied in Italy since 2013. The reason for success of this experts and specialists in the relevant field at the mediation type of mediation is that, when a certain option is provided process. Other persons can also participate at the as default, and the individual has to opt out, the percentage mediation process based on mutual consent of the parties. of using that option would be higher than the scenario when At the mediation process, the parties make oral or written an individual has to opt in for a certain option. It is said that suggestions concerning their positions and the terms of the “you may be able to lead a horse to water, but you cannot settlement of the dispute and come to an agreement about make it to drink”. But the rationale behind the mandatory the terms of the settlement of the dispute. The mediator may initial mediation session is that, the horse will probably drink make oral or written suggestions for settlement of the dispute, the water, if given the chance. which would not be binding for the parties. Is mandatory initial mediation session contrary to the right of access to court? The right of access to court is a fundamental human right protected under Article 6 of the European Convention on Human Rights. There is no case law of the European Court of Human Rights yet about the mandatory initial mediation session. However, the Court of Justice of EU had already decided a case about this issue. In Rosalba Alassini v. Italia Telecom SpA, the CJEU found that the principle of effective judicial protection did not preclude mandatory mediation as long as certain requirements are met:

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signing to the parties. Settlement agreement becomes binding for the parties from the moment of its conclusion. Unless other term is determined in the mediation agreement, it shall be voluntarily executed within 10 days after it becomes effective. Refusal from voluntary execution of settlement agreement shall be subject to liability stipulated in respect of the settlement agreements indicated in the Civil Code. Either party may apply to court or to notary for confirmation and mandatory execution of settlement agreement. In case the Settlement agreement is contrary to the provisions of the effective legislation and breaches the rights and interests of third parties, its confirmation and mandatory execution is rejected. How long will the mediation take? A mediation process may take up to 30 days. The duration What would mediation cost? of the mediation process can be prolonged for up to 30 more Costs of the mediation process would include: days based on mutual consent of the parties taking into • fees paid to mediator and also bonuses in case of account the complexity of the dispute. If the parties cannot settlement of the dispute through mediation; reach an agreement within these time limits, the mediation will • incurred by mediator and (or) mediation organization be terminated. Mediation process suspends the application of in connection with conducting the mediation, including, statutory time-limits for claims. expenses for accommodation, per diems and travels to the place of the examination of the dispute. The amount of the fee paid to mediator or mediation What would be the outcome of organization is determined in the agreement concluded between the parties and mediator or mediation organization mediation process? prior to start of the mediation process. Unless otherwise Mediation process may end in the following ways: stipulated in the agreement for application of the mediation • The parties conclude a settlement agreement; process, the expenses incurred for the mediation shall be • The mediator decides that the settlement of the dispute borne equally by the parties. In case mediator refuses to upon mutual consent of the parties is impossible; conduct the mediation due to circumstances impeding his/her • Both parties or either of them reject the mediation; impartiality, then the mediator shall refund the amount paid • The maximum time-limit for the mediation process by the parties. passes. What is the settlement agreement concluded at the end of mediation and how will it be enforced? Settlement agreement shall be concluded between the parties in written. The following information shall be stipulated in the mediation agreement: • the date and place of the agreement; • the parties to the mediation process; • subject-matter of the dispute; • information about the mediator and mediation Author’s biography organization, in case the mediation process is carried out Mr. Elnur Aliyev is a senior associate at BHM Law Firm. through the mediation organization; Elnur specializes in international business law, sports law, • the conditions accepted by the parties towards the human rights and international dispute settlement. His previous settlement of the dispute, methods and time-limits for experience includes working for three years as an assistant execution of those conditions; lawyer at the European Court of Human Rights and working as • consequences of non-execution or mis-execution of the a senior lawyer at Baku 2015 European Games and Baku City terms of the mediation agreement. Circuit (Formula 1 Azerbaijan Grand Prix). • other terms required by the Civil Code and other laws. Elnur Aliyev holds an LLM in International Business Law from Settlement agreement is signed by the parties and mediator(s). Central European University and LLB in International Law from Settlement agreement shall be provided on the date of Baku State University.

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Positive Impact of Judicial Reforms on Investments and Economic Growth Prof. Elnur Eyvazov EU standards, and the country’s Supreme Court’s internal regulations are not sufficient enough to ensure that court Professor, decisions are implemented effectively. The government, ADA University Business School non-government bodies, and even some international development organizations have identified court decisions enforcement as one of the factors preventing effective judicial dispute resolution, particularly impacting business contracts. Moreover, lack of effective court enforcement in commercial Growth many long-term investments are the guaranty of cases prevents many entrepreneurs and businesses from the future economic growth and success of any country. obtaining their rights. Finally, Improvements in recognize However, due to some issues with the country’s judicial and execution of international rulings if they do not materially systems, international investors might become distrustful of conflict with Azerbaijan legislation will also enhance trust in the country, and this distrust has to be overcome. Key reforms the business and investment climate of the country. need to be implemented in the judicial system to improve the Another issues is the lack of necessary court expertise investment climate in the country. in dealing with the bankruptcy and insolvency cases that Lack of strong, formal market-supporting judicial system posses risk for the improvement of business climate in the forces companies and international investors to trade country. Specifically, this matter got a lot of attention after the on a much more informal basis, incurring political, legal devaluation and economic downturn that occurred due to the and economic risks in conditions of instability and over- sharp fall of oil prices. While an insolvency law of Azerbaijan dependence on informal relationships. Consequently, it will has been in operation for a long time, insolvency frameworks lead to the reduction of foreign direct investments (FDIs) and procedures need to be strengthened. Insolvency in into the country’s economy and even outflow of the existing Azerbaijan is court-led, and many aspects of insolvency law investments. are complex and controversial, requiring specialized judges Below are several suggestions to help improve Azerbaijan’s to handle them. The establishment and strengthening of the investment climate through the judicial reform. These specialized insolvency court is expected to have significant recommendations are useful to many countries in transitions, positive impact on the insolvency framework and on the including the CIS region: country’s investment climate. Good judicial reforms will fuel While acknowledging positive development in the judicial innovation, entrepreneurship, more economic growth and sector, concerns remain over the lack of predictability of increased foreign and inward investments. judicial decisions, including contradictory judgments and inconsistency in the administration of justice. Therefore, it Author’s biography is important implementing programs and projects that aim Prof. Elnur Eyvazov is a Professor of Business Law and to improve the investment climate in Azerbaijan by building Business Ethics at ADA University Business School. He is also judicial capacity in commercial cases and increasing the a Director of the Office of Diversity and Equal Opportunities uniformity of judicial practice. Under the program and projects, at ADA University. Professor Elnur Eyvazov is an expert in it is imperative to develop training to build judicial knowledge business law, investments, business ethics, and finance. At of commercial mediation as an alternative to in-court dispute the same time, Mr. Eyvazov is a Senior Legal Adviser with resolution. Finally, it is extremely possible that computer Capital Legal Services. He also serves as a member of editorial and artificial intelligence (AI) tools could help them in their board of international journals. Professor Eyvazov also has a rulings. A judge analyzing a new case may use a similar considerable experience in disability rights law. program to compare law cases, indicating which similarities Prof. Eyvazov received his LL.B degree from the Law Faculty and differences were found or even how an AI would rule it of Baku State University. Mr. Eyvazov obtained his master based on previous rulings. This will improve the predictability degree in International Commercial Law from the Law Faculty of judicial decisions and overcome problems of contradictory of Cambridge University. Mr. Eyvazov is also a graduate of judgments and inconsistency in the administration of justice. Law faculty of Oxford University where he got his MJuris/M. Another obstacle for effective functioning of the judicial Phil degree in financial, banking and corporate finance law. Mr. system is the court decision enforcement. Ineffective court Eyvazov also attended Columbia University School of Law on a decision enforcement system in Azerbaijan leaves many Fulbright Fellowship where he obtained MCL degree in Law and who win their court case behind disappointed, as verdicts Finance. He has been recognized by Legal 500 in 2017, 2018 and decisions are not properly enforced. Hearings are often and 2019 as the Next Generation Lawyer for his considerable delayed, existing mechanisms are still not up to the current achievements.

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Convergence of the Business Climate in the EaP Countries*

Sabit Bagirov President, Entrepreneurship Development Foundation

of World Economic Forum; 7. The Global Entrepreneurship Index 2018, Annual Report of The Global Entrepreneurship and Development Institute, Washington, D.C., USA; 8. New business density (new registrations per 1,000 people ages 15-64), 2006-2016, World Bank.

The above eight methodologies and their respective reports allow us to draw appropriate conclusions about the business climate in various countries of the world, including Eastern Partnership countries. Such an abundance of various indices, which pursue similar goals, is explained by the different approaches of the authors of the methodologies to the question of which factors are major in terms of a favorable business climate. Today, the most popular one of the reviewed methodologies is the Doing Business report. This report is often referenced not only by experts, but also by governments of different countries (especially when a country achieves an improvement in the index value). Other studies are less popular, although each of them is of undoubted value for improving the business climate in countries. This article briefly describes1 the approach to assessing One of the features of the indices is that the time parameters the degree of convergence of the business climate in the (the year of the report and the date of publication of the next countries of the Eastern Partnership with the business climate report) do not coincide. And one of these indices (OECD SME in the EU. This approach is based on comparing the values Policy Index) was published only twice: in 2012 and 2016. of the indices of EaP countries in the well-known reports of Another feature of the indices is that only one of them (OECD international organizations: SME Policy Index) focuses on the problems of the EaP countries. And this study focuses on the application of the 1. Doing Business 2019, Annual Report of World Bank; principles of the Small Business Act for Europe by these 2. OECD SME Policy Index 2016 EaP; countries. 3. Corruption Perceptions Index 2017, Annual Report of Transparency International; Such a variety of methodologies puts people who wish to 4. Economic Freedom of the World 2018, Annual Report of understand the extent to which the business climate in their Fraser Institute (Canada); country is close to the business climate in the EU in a difficult 5. 2018 Index of Economic Freedom, Annual Report of position. Heritage Foundation (USA); 6. The Global Competitiveness Report 2018, Annual Report The analysis of the indices described above shows that

*. This article was prepared in the framework of research conducted by a group of authors in the each of them, of course, can also be used to assess the course of the implementation of the project “Convergence of the business climate in the EaP countries level of convergence of the business climate in the Eastern with the business climate in the EU”, funded by the EaP Civil Society Forum. 1. The full text of the article can be found here: http://edf.az/ts_general/eng/layihe/BCEPC/results/ Partnership countries with the EU business climate. To this results-of-research.htm

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end, it is necessary to calculate the averaged values of the indicators (used in these indices) related to the 28 EU countries. This is the easiest way. Let’s call this approach: “Preferred Index Method.” Above, when considering the eight reports of international organizations, these simple calculations were made. They allow us to see the proximity or remoteness of an EaP country from the average European values of the indicators. The results for all the reports analyzed above are summarized in Table 1 given below. But the use of separate indices may, firstly, lead to contradictory results (for example, in one of the indices, an EaP country may be between the worst and best index values in EU countries, and in another index, the situation may look different), and secondly, each of the indices examines a specific set of business climate indicators. These indicators do not coincide; which is why their complex use can give a more correct idea of about the proximity of the business climate in an EaP country to the business climate in the EU. 1. In the Index of Economic Freedom of the Fraser Institute, Table 1 the points awarded by the foundation to Azerbaijan, Belarus and Ukraine were lower than the worst value in DB EFF EFH OECD ТI GK GEI NBD the EU (Greece); Аrmenia 75.37 7,60 68,7 3,23 35 59,9 24 1,74 2. In the Index of Economic Freedom of the Heritage Аzerbaijan 78.64 6,38 64,3 2,75 25 60,0 30 1,03 Foundation, the points awarded by the Foundation

Belarus 75.77 6,23 58,1 2,82 44 - - 1,09 to Ukraine were lower than the worst value in the EU (Greece); Georgia 83.28 8,01 76,2 3,41 58 60,9 26 8,37 3. According to the OECD index, it is not possible to Moldova 73.54 6,56 58,4 3,03 33 55,5 21 1,75 conduct a comparison of the business climate in EaP Ukraine 68.25 5,38 51,9 2,50 32 57,0 27 1,54 and EU countries, since this study is carried out only Average for EaP 75.81 6,69 62,9 2,96 37,83 58,7 26 2,59 in EaP countries. Nevertheless, taking into account the Average for ЕU 75.91 7,54 70,2 64,68 72,0 54 7,00 fact that the assessment in EaP countries is carried out 65.43 6.49 57.3 65.43 60.1 28 0.59567 on a five-point system, one can note the considerable Worst for EU remoteness of the economic policy in EaP countries from MT GR GR MT HR BG AT the principles of the Small Business Act for Europe. For 84.64 8.07 80.4 84.64 82.8 78 20.76074 the time being, Georgia demonstrates the best proximity Top for EU DK IE IE DK DE GB EE to the principles; 4. In the Corruption Perceptions Index, only Georgia has NOTE: DB – Doing Business 2019; EFF - Economic Freedom an indicator between the lower and upper values for EU of the World 2018, Annual Report of Fraser Institute; EFH countries. The other five countries have indicators below - 2018 Index of Economic Freedom, Annual Report of the worst EU values (Malta); Heritage Foundation; OECD - OECD SME Policy Index 2016 EaP; ТI - Corruption Perceptions Index 2018; GK - The Global Competitiveness Report 2018; GEI - The Global Entrepreneurship Index 2018; NBD - New business density. As can be seen from Table 1, Georgia, according to the results of 7 reports out of the 8, has the best results compared to other EaP countries. The results of Georgia in four reports (Doing Business 2019, Economic Freedom of the World 2018, 2018 Index of Economic Freedom, New business density) are even better than the average European ones. Only in one index - The Global Entrepreneurship Index, the situation in Azerbaijan is better than in other EaP countries.

According to Table 1, in the following cases, the indicators for countries turned out to be beyond the minimum and maximum values for EU countries:

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5. In the Global Competitiveness Index, only Georgia has an indicator between the lower and upper values for EU countries. The other five countries have indicators lower than the worst EU values (Croatia); 6. In the Global Entrepreneurship Index, only Azerbaijan has an indicator between the lower and upper values for EU countries. The other five countries have indicators lower than the worst EU values (Bulgaria); 7. In New Business Density, the indicator for all EaP countries is between the lower and upper values for EU countries.

Another approach, let’s call it “The method of composite use of the most popular indexes”, involves the use of all or several of the eight examined above. The authors of this study carried out appropriate calculations for this method. According to the results, also in this case, Georgia is the country in which the business climate is closest to the business climate in the EU. Georgia’s performance is It seems appropriate to assess the degree of convergence of even better than most EU countries. the business climate in the EaP countries with the business Thus, keeping in mind some of the assumptions made, we climate in the EU with annual frequency: can estimate the degree of convergence of the business 1. The governments of the EaP countries in order to identify climate in EaP countries with the business climate in EU ways to improve the business climate in their countries countries, taking into account all eight studies described and rapprochement with the EU; above. Moreover, this can be done annually in order to 2. Civil society organizations, including Think Tanks, analyze the dynamics of changes in the business climate of business associations. EaP countries. Thus, to assess the degree of convergence of the business It is advisable to include a business climate convergence climate in the EaP countries with the business climate in the assessment in the EaP countries with a business climate in EU, both methods described above can be used: the EU in the Eastern Partnership Index - An index reflecting 1. ThePreferred Index Method the progress made by six Eastern Partnership countries 2. The method of composite use of the most popular towards sustainable democratic development and European indexes. integration. *this research paper was developed with support of Yurii Vdovenko, Head of Center for cross-border cooperation, Ukraine, Nino Elizbarashvili, President of The Georgian Association” Women in Business”, Georgia, and Samir Aliyev, expert of Support for Economic Initiatives Public Union, Azerbaijan.

Author’s biography Sabit Bagirov, Ph.D, is the President of the Entrepreneurship Development Foundation in Baku, Azerbaijan. In 1971, he graduated from the Mechanical Faculty of the Azerbaijani Petrochemical Institute (currently Azerbaijan State Oil and Industry University). In the period of 1971-1992, Dr. Bagirov worked in the industry of petroleum engineering, led many projects in the management of industrial enterprises and the design of oil equipment. Sabit defended his dissertation at the Institute of Management Problems of the USSR Academy of Sciences (Moscow). From 1992-1993, he served as the state advisor on strategic programs to the president of Azerbaijan. During this period, he was also president of the State Oil Company of Azerbaijan (SOCAR). From 1994 he was consultant for several private companies on Caspian energy. He is the author of many articles and several books.

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Focus and Commitment – Tools of Success Are there any areas where Gulfstream is intended to Emin Hasanov put more emphasis and which have a potential to create Solution Division Manager greater opportunities for customers? Product wise we have a special focus on cyber security, cloud solutions and hyper converged solutions – which are Ziya Qasimov very actual and demanded in global market currently. Also we Volume Distribution Division Manager put an emphasis on development of new partner integrator companies, with young and potential IT professionals. Both will add value to our customers in different aspects in the near future. Adil Aliyev CEO, Gulfstream Distribution What is the reason of your company’s success in the short run? :) Focus and commitment! We have long terms strategy, have Please give us brief introduction about your company? excellent team of young professionals, who are committed to Gulfstream Distribution is the biggest IT & Telecom distributor the work they do and focused on their strategic and day to company in Azerbaijan. Company successfully develops day actions. various distribution segments, such as computer and digital IT equipment, network, storage, Wi-Fi, software for complex Can you provide more information about your basic infrastructure and cloud security solutions. principles and partnership? The main principles which our company has always We achieved a large market share in Azerbaijani IT market, maintained are following: in a very short period and being distributor of world’s more • Customer and Partner focus, we provide high level of than 25 leading IT manufacturers, such as Cisco, Dell EMC, reliability and transparency Huawei, Check Point, Acer, Canon, Plantronics, NEC, APC • Offering demanded solutions based on proper needs by Schneider and others, have long term vision to develop assessment; the market further. • Wide range of distribution network that can provide the Supporting our local partners in product knowledge, engineer most optimal choice according to customers’ wishes and support, marketing, global expertise and logistics, our requirements; company has successfully implemented many governmental • Highly specialized, professional team of sales people and commercial projects in the last 9 years. and engineers;

What is the daily work of someone holding your position? The Partnership Program is our main strenghth, in fact, it is a In short please describe one typical day in Gulfstream set of steps we are fully involved - from helping our partners Distribution. with selection of proper products and solutions to marketing Of course, first of all it is high workload and responsibility. Our support. If we talk about all details and aspects of it, it is government puts huge focus on IT infrastructure development, an article (smiling). Shortly speaking, our company’s main and so does commercial units, what increases demand for products, knowledge and expertise. Every day our team is dealing with operational and strategic tasks, to create value for our partners, customers and vendors. Being multy-brand distributor, we are developing and implementing different marketing strategies depending on brand, put lots of efforts in education and development of engineers in our partners and customers, and our engineers work hard to create solutions that fit our partners and customers needs. Obviously, my business day is usually long and busy (smiles). However, loving your job and what you do never makes you tired and I need to admit that we have an amazing team work with.

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strenghts in partnership are: Have you ever had the impact of factors, such as luck • Value added distibution that contains support in every and coincidence in your professional life? stage of the project I’m strongly recommending to everyone not to rely on such • Advanced logistics system that provides optimal and factors. You have to work very hard and show dedication in reliable delivery of orders order to succeed. I believe you need to work constantly on • Best price offer and cost optimization yourself and develop your skills in order to be succesful not • Support in IT skills development, career path support, only in professional area, but also in private life. You need and consulting to believe on yourself and self motivations is a powerfull • Marketing support containing wide range of tools leverage. Thus, believe on yourself, work hard, sacrifize and • DEMO equipment support chase your goals. • International expertice that can add value Last, what would you recommend to those taking first The biggest feature of IT sector is permanent innovation. steps in IT industry? What would your company recommend or what steps it Be ready for a tough, but fascinating journey and don’t forget takes to ensure IT professionals are always kept with that you always have to work on yourself. actual requirements in such a work environment? Very good question. I’d say that it is the main development area of our market and people involed in IT sector. Everything in modern world is rapidly changing, and IT is the most of all. Properly understanding customer needs, knowledge on modern trends in IT, consultative approach and excellent product knowledge would be very effective in terms of cost optimization, resource allocation and strategic approach to technology. Our role is very important as distributor, as we are investing a lot into training, seminars, webinars and workshops for IT people, arrange platform for share of ideas with international colleagues, bring DEMO equipment to have on hand experience.

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I Keep Learning and Developing Myself in My Own Field look for job in. It is always good to read about the countries Husseyn Atakishiyev we would like to go to work. Learn about the culture, customs, General Manager, Six Senses Kaplankaya food and all other things which may affect your personal life before applying.

In order be able to find a job outside of the country, what are the strategic issues and requirements from applicants? Mr. Atakishiyev, you have a rich experience in tourism Let me tell you what I look at when I get CVs of applicants. industry. You have worked both in Azerbaijan, and Usually what I look at is how long that person worked in one outside of the country. Could you please share your place continuously. If I see that person who is changing the view in this regard? workplace every couple of month and jumping from one to another position, it could be a sign of instability, not knowing What would be your advise: to choose a country of what the person really wants to do, loyalty and so on. I think destination or business(es) to apply for work? first we need to decide what we want to do and make sure Well, it is really depending on both sides. Some countries that we will enjoy it. When it comes to people who have all would not get work permit for us as it is difficult to justify the in place and would like to look for a job outside, is to have a reason of getting a foreigner for a certain positions. Mostly professional profile in LinkedIn with a decent photo as well many countries are open for us as Azerbaijani to go and work. as some information about themselves. Have good people in We can experience now that many of us go to Middle East your connection. Labor market also mostly all about how you for example as it is easy to get work permit. However, still present yourself, how you sell your skills and expertise. You depending how good we are we can easily get work permit need to be honest when you evaluate yourself. Confidence in anywhere in the world. Choosing the country to apply for should be there but confidence without knowledge behind is work mainly also depends on our language skills. If we speak a guaranteed failure. So avoid making up stories, in stead French then most probably we would target the francophone be yourself, have knowledge and confidence and learn counties, if Mandarin then most probably if English speak about those achievements you had. Be prepared then mostly any country. So it is changing. More language for questions related to position you are applying for. Read you speak wider choice you have to select which country you about the company and make some research about it before applying and interview.

How Azerbaijani professionals can compete in international labor market? It is a good question. In fact I do not think it is something related with being Azerbaijani. My personal opinion is that when you are a professional, no one is looking at where you come from or your nationality. Main thing is to make sure that you love what you do and you do it 100% professionally. I know many successful who work abroad and never had issue to get work permit. Some of them even were invited to take positions after they graduated university abroad. Nowadays we can also notice that many young Azerbaijanis taking opportunists to go abroad to work, gain experience, learn new skills and grow in their professional fields. We can compete with others in our local and in international labor market if we do things professionally. Sometimes we come across to that when local professionals on the same level underpaid as their foreigner collegues.This mainly causes the demotivation and people with high skills start to leave and local and international companies end up

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This should be applicable for all Institutes and Universities and not only for Tourism. This way we can have our young generation learning English, Russian or any other language and find job much easier. As it comes to Tourism, we need more experts to teach and create service passion which we are missing now in many places. The issue is that many of young generation who graduated university would not want to start working in junior positions. They do not want to work as waiter, bellman, doorman, cleaner any other job which is none managerial or administrative. Mostly many of them would like to become Supervisor or Manager after a year without any experience. We need more schools now which prepare waiters, housekeepers, cooks, receptionist, bellman, doorman and may other junior servicing staff and teach them minimum language skills which they can use while they work in different service areas. Quality and qualified junior staff spending more on payroll and benefits of expats. Maintaining who speak some level of basic professional foreign language local talents should be a goal for us now and for long run our to cover their areas is what we missing now in our Tourism country as well as all the companies will benefit from it a lot. and other service areas. Summarizing: Language skills in all For this I think there should be regulation not allowing local service areas, passion to serve and qualified, quality junior professional get underpaid vs expats. Having said that we as personnel in our Tourism what we need. Otherwise we have locals should make sure that we do contribute and deserve all what we need, great people, culture, history, music, cuisine the salary we get. I would like to mention also one crucial and wonderful country. thing in here and it is speaking foreign languages. English is always winning language as it is widely spoken. I think this should be a base for our career and any additional language as Russian, French, Arabic, Mandarin is a great plus. This is for both local and international labor market.

What is the role of networking to get a job outside of Azerbaijan? Networking very important part of building relationship. It is about meeting new people, helping each other, getting and giving ideas and maintaining healthy relationship not depending where you are. It helps a lot if you have outgoing and socializing personality. Though I Ido not think networking should have a focus on future job search but we cannot deny the fact that many times we get recommended to others by people we are networking with. This may be a new job, business, partnership or any other opportunity.

You have a rich experience in hospitality business. According to your expertise, what are the next stages in tourism industry of Azerbaijan? What should be done on Biography of our Guest: macro level? What are the lessons learned from Turkey? Mr. Husseyn Atakishiyev is General Manager at Six Senses Thank you for your question and I have to highlight that since I Hotels Resorts Spa since January 2019. started my Hospitality career in 1995 as doorman and reached Mr. Atakishiyev startedhotel carrier in 1995 at Hyatt Regency General Manager position, I keep learning and developing Baku as a Doorman and later worked in different positions myself in my own field. Learning is the process which never at Hyatt Hotels Baku. He continued with Four Seasons Hotel stops for me. Today in our Tourism I personally think that Gresham Palace Budapest and Four Seasons Baku as Director we are suffering in lack of foreign language skills, especially of Rooms, followed by as General Manager of Marriott’s English. I strongly believe all Institutes and Universities Autograph Collection brand Hotels: Boulevard Hotel Baku and should require on compulsory level to have intermediate or Intourist Hotel Baku. high degree of Internationally Certified Foreign Language Husseyn graduated from Exam Certificate before all the students get their Bachelor English Language & Philology at Azerbaijan State University of degree Diplomas into their hands. Language can be done Languages (2001) and Baku Soviet Trade Technical School as outside of University too, not necessarily in the University. Manager in Trade with red diploma (1993).

31 AmCham Azerbaijan About Us The American Chamber of Commerce in Azerbaijan (AmCham Azerbaijan) is a leading private, non-profit business association supporting and promoting the interests of foreign and local businesses in Azerbaijan.

Established in 1996, the Chamber is Being one of the largest and the most Travel, Tourism & Hospitality, Corporate composed of around 300 Members influential organizations in the country Social Responsibility, Healthcare & and Associates active in every sector AmCham provides the best networking Medical Insurance, Legal & Compliance, of the Azerbaijani economy. AmCham opportunities. Other membership benefits FMCG and Procurement to make a real Azerbaijan represents nearly 80% include access to the data on the latest contribution to the future of business of all foreign investment, as well as a tendencies in the market (through such in Azerbaijan); Member-to-Member significant portion of local investment, information resources as Annual National Discount Program offers; U.S. Business in Azerbaijan. Through its 8 industry Employee Salary Surveys, Quarterly Visa Facilitation Program benefits etc. sector committees and 2 working Inflation Surveys, AmCham White Papers, groups, Members and Associates are AmCham Annual Reports, IMPACT Notably, the delegation of AmCham had able to share information, raise issues of Azerbaijan Quarterly Magazines); chance a privilege to meet with the President of common concern and propose possible to be heard and influence (Member Azerbaijan, H.E. , in 2016. solutions. AmCham Azerbaijan remains Companies represent themselves Besides, the organization has established the most influential Access, Advocacy in committees in the areas of Tax & fruitful dialogue and keeps on cooperating and Advisory services provider in Customs, Banking, Finance & Insurance, successfully with government institutions Azerbaijan serving the improvement of Human Resources & Labor, Information on the highest level the business climate in the country. & Communications Technologies,

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AmCham Azerbaijan Adopts IPR Pledge The protection of Intellectual Property Rights (IPR) is important protection of IPR defends the innovation and enthusiasm of for Azerbaijan’s economy and for its further growth. The level technology professionals. IPR protection is vital in this context of protection of IPR is one of the main key performance and for the protection of the interests of business. indicators of the maturity of the local economy and business AmCham supports all initiatives taken by public and private investment climate of any country. The American Chamber bodies aiming to maintain strict protection of IPR, to ensure of Commerce in Azerbaijan (AmCham) and its member the rights of all enterprises are safeguarded in accordance companies pledge to respect and protect IPR and advocate with the law, and to build an inviting environment for business for improved IPR protection and enforcement in Azerbaijan. and innovation. In its White Papers, AmCham has consistently Today, the development of information technologies requires a stated recommendations on combatting IPR infringement new review of the principles of intellectual property protection. and violations, as well as counterfeits, accepting the fact As the amount of intellectual property grows, consequently, that IPR protection is key for building a competitive market the possibility of violating copyright holders’ interests economy. AmCham is committed to cooperating with the increases. Facing a new round of technological revolution, Azerbaijani government and other stakeholders in improving countries value innovation as drivers of development, and IPR protection in Azerbaijan. The Ambassador of the United States of America Baku, Azerbaijan May 20, 2019 American Chamber of Commerce Member Companies American Chamber of Commerce in Azerbaijan The Landmark Tower , 90A Baku, Azerbaijan

Dear Member Companies: I would like to sincerely thank you for the positive step forward you took on May 16 in pledging to respect and protect intellectual property rights and advocate for improved enforcement in Azerbaijan. As you correctly noted in your pledge, the modern global I commend you for your foresight in announcing that the economy is built around ideas. Ensuring that ideas receive largest companies in Azerbaijan are committed to protecting appropriate copyright protections helps spur innovations. intellectual property rights. In the coming months, the US AmCham’s willingness to be at the forefront of this issue in Embassy plans to work closely with the AmCham Board and Azerbaijan is notable and welcomed. America’s ideas are member companies to encourage the Azerbaijani government some of our greatest exports and guaranteeing protection for and other local companies to join your pledge. Thank you intellectual property in Azerbaijan will result in an investment again for your leadership. climate more hospitable to local innovators and foreign investors. Sincerely, Earle D. Litzenberger

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Business Events

Conference on “Judicial Reforms in such kind of business-to-government meetings is essential for the representatives of the private sector to get updated on Azerbaijan: Public Discussion with the judicial-legal reforms agenda in the country and engaged with its ongoing progress. Mr. Karimov reiterated that the very AmCham” reforms reflect the commitment of the Government to create favorable legal mechanisms for the effective protection of On May 6, the Conference on “Judicial Reforms in Azerbaijan: rights of both local businesses and foreign investors. Public Discussion with AmCham” took place to focus on Afterwards, Mr. Ilgar Mehti, Member of the Board of Directors the issues arising from the Decree of the President of the of AmCham and Managing Partner of Ekvita, summed up the Republic of Azerbaijan on Intensifying Reforms in Judicial position and expectations of the Chamber towards the judicial- and Legal System of April 3, 2019. High-level officials from legal reforms in Azerbaijan. He passed the floor to Mr. Vusal the Presidential Administration and the Ministry of Justice of Isayev, Head of Legal Services Sector of the Department of Azerbaijan, as well as more than 150 AmCham members, Work with Law Enforcement Bodies and Military Issues at partners and representatives of the diplomatic corps participated at the event. Mrs. Natavan Mammadova, Executive Director of AmCham Azerbaijan, and Mr. Nuran Kerimov, President of the Chamber, delivered opening speeches, welcomed the Conference participants and briefed them about the mission of the Conference and major importance of judicial-legal reforms to further promotion and acceleration of the economic development of Azerbaijan. Then, the floor was passed to Mr. Gunduz Karimov, Aide to the First Vice-President of the Republic of Azerbaijan, who shared the latest updates on the judicial-legal reforms in Azerbaijan. Referring to the role of the event, he stressed upon that having the Presidential Administration of the Republic of Azerbaijan, Mr. Azer Jafarov, Deputy Minister of Justice of the Republic of Azerbaijan, Mr. Ramin Gurbanov, Judge in Baku City Yasamal District Court, President of European Commission for the Efficiency of Justice (CEPEJ), Mr. Gorkhmaz Aghayev, Head of Legal Department of AtaHolding, Mr. James Hogan, Managing Partner of Dentons Baku, who spoke on the main directions of the judicial-legal reforms in the country and increasing effectiveness of mechanisms of justice, addressed the issues related to access to justice, including the establishment of specialized courts, enforcement of court decisions, the prospects of developing mediation and arbitration practices.

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Amcham Members’ Luncheon Social Protection and Guarantee” dated August 9, 2018. Mr. Babayev underlined that 126 types of social services within the framework of DOST project, implemented upon the initiative of Mrs. , First Vice President of the Republic of Azerbaijan, President of the Heydar Aliyev Foundation, would be provided to the citizens through the transparent and operative “one window” system. He mentioned that such Centers are going to be opened in the regions of the country next year with an extensive network of services set up on the online platform. Mr. Sahil Babayev then spoke on the mechanism of automated pension assignment mechanism, activities on expanding e-services coverage in the social security system, disability assessment tools, labor inspection systems and improvement of employment services. The Minister emphasized that encouraging results of the social reforms in the country gain strong international recognition. As its vivid demonstration, a number of important social programs being implemented, Azerbaijan received special awards from the International Social Security Association (ISSA). Touching upon the “E-social” internet portal, Mr. Sahil Babayev underlined that its “Employment” subsystem, which will be launched in coming days, would allow the transition of employment services to the electronic platform. This subsystem will comprise a constantly updated database to 31 May benefit both employers and employers. On May 31, AmCham Azerbaijan organized members’ luncheon hosting honorable Guest Speaker, Mr. Sahil Babayev, Minister of Labour and Social Protection of the Republic of Azerbaijan. More than 130 AmCham members and partners attended the event, including representatives of diplomatic corps. Mrs. Natavan Mammadova and Mr. Nuran Kerimov opened the event and greeted the Luncheon guests. They underscored the large-scale social reforms process, which is taking place in Azerbaijan. Mr. Sahil Babayev, Minister of Labour and Social Protection of the Republic of Azerbaijan stressed upon the latest achievements in the social reforms program, which are The Minister pointed out that systematic measures are being carried out by H.E. Ilham Aliyev, President of the Republic brought to life in order to reduce unemployment, whereas of Azerbaijan. He mentioned that the minimum wage and increasing the minimum wage by the relevant Presidential minimum pensions increased by 40% in the previous year, Decree, effective measures aimed at stimulating the whereas social allowances and pensions by an average of legalization of illegal employment, especially the new tax- 100%, which is of a great importance for the social well-being insurance privileges applied in the private sector, raising of 3 million citizens. awareness activities give positive results in this area. Last The Minister made an overview of social programs, such year, the number of labor contracts reached 91,3 thousand, as housing, transportation and one-time payment coverage more than 94 thousand during the five months this year (more provided to the victims of war and martyr families. He briefed than 28 thousand in the public sector, more than 66 thousand the Luncheon participants on DOST (Sustainable and in the private sector). Operative Social Security) Agency and the first DOST Center Mr. Sahil Babayev further mentioned that 10 thousand families established recently according to the Decree of the President are going to be engaged with self-employment program of the Republic of Azerbaijan “On Additional Measures to this year, spoke on the “DOST (Friend) of an Unemployed” Improve Management in the Field of Employment, Labor, program and other active employment measures.

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environmental issues. Mr. Babayev expressed gratitude for the face-to-face channel of communication with the business community provided by the Chamber. Additionally, the Luncheon highlighted several member presentations. More than 100 AmCham members and partners attended the event, including representatives of diplomatic corps. 30 April On April 30, AmCham Azerbaijan organized its monthly members’ luncheon. The esteemed Guest Speaker – Mr. Mukhtar Babayev, Minister of Ecology and Natural Resources of the Republic of Azerbaijan – spoke on the environmental protection and preserve of the ecological balance in Azerbaijan, measures undertaken by the Government towards solving existing environmental problems, as well as the tasks and challenges the Ministry is facing in its activities aimed at addressing

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thanked the Chamber for its efforts to help improve the business climate in Azerbaijan, including through its White Papers, and for its work to foster stronger dialogue between the Azerbaijani government and businesses and consumers, and to expand the scope of the U.S.-Azerbaijan bilateral relationship. He also thanked AmCham and its President and Executive Director, Mr. Nuran Kerimov and Mrs. Natavan Mammadova, for consolidating the group’s recent initiatives and implementing concrete and innovative solutions to further develop the partnership between the United States and Azerbaijan. The Ambassador expressed his commitment to further deepening the bilateral relationship and enhancing cooperation in all areas of common interest, stressing that the United States valued Azerbaijan as a strategically important country. Ambassador Litzenberger is a career member of the Senior Foreign Service and was confirmed by the U.S. Senate on January 2, 2019 as the U.S. Ambassador to Azerbaijan. He was joined at the Luncheon by more than 100 AmCham members and partners, and representatives of the diplomatic corps. The Luncheon also featured several presentations from AmCham members.

29 March Newly arrived U.S. Ambassador to Azerbaijan H.E. Earle Litzenberger was the guest speaker at Monthly Members’ Luncheon of AmCham Azerbaijan. Ambassador Litzenberger

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Committee Highlights Tax & Customs Committee Meeting On May 22, AmCham Tax & Customs Committee hosted its meeting. Mr. Jeyhun Mammadov, newly appointed chairperson of the Committee, opened the meeting by welcoming participants and introduced new deputy chairpersons, Mr. Zaur Gurbanov and Ms. Narmin Aslanova. The meeting was devoted to the discussion around the clarification letter issued by the Ministry of Taxes on application of State Social Protection Fund (SSPF) and Unemployment Fund contributions to different categories of employees and different types of income, and practical aspects of it. The initiative of the tax authorities to bring the clarity in their new control area and their attempt to apply unified approach within the country were welcomed, although some of the points discussed in the letter remain contradictory. Detailed discussion was held on application of SSPF contribution to life insurance in light of the recent amendment to the legislation on that respect; taxation and calculation of discussions and invited to formulate their observations SSPF contribution to the payments for disability; calculation and recommendations on the issues highlighted within the of SSPF contribution to business travel expenses, as well framework of the Committee. as to I kind benefits; and SSPF and Unemployment Fund contribution application to foreigners working under special tax regime. Health Care & Medical Insurance Committee Meeting On May 24, AmCham HMI Committee hosted its meeting. The HMI Committee Chair Ms. Lala Bilandarli opened the meeting by welcoming the members of the Committee. Then Ms. Bilandarli passed the floor to Dr. Raphael Psaras, Director of Baku International Mental Health Center (BIMH). He gave brief information about the BIMH which offers psychiatric, psychotherapeutic and counselling services for the people of Azerbaijan. The sessions are conducted in English or Russian language. All services are free for Azerbaijani citizens.

Legal & Compliance Committee Meeting On April 19, AmCham hosted another meeting of its Legal & Compliance Committee. The meeting agenda was run by Mr. Ilgar Mehti – previously the Chairman of the Committee and now the Member of AmCham Board of Directors. Mr. Mehti made an overview of the key legislative improvements covering the judicial and legal system in Azerbaijan, including new Law on Mediation, draft Law for Introduction of Limits on Interest Rates to Offered Credit Facilities, Decree of the President of the Republic of Azerbaijan on Deepening Reforms in the Judicial and Legal System. The meeting participants were actively engaged in interactive

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He also explained on the BIMH Center Education Programs, such as Psychopharmacology Training Program, Psychotherapy Training Program, and SOS Village for Kids Collaboration, BIMH Center Collaborations and etc. Procurement Working Group meeting On February 25, AmCham Procurement Working Group meeting was held. Mr. Kanan Tabasaransky, Founder of the Smart Solutions Group, opened the meeting to thank all participants, guests and highlighted main points of the role/ mission of Procurement Working Group. Then, Mr. Mirdamat Karimov, Deputy Head of Public Procurement Department, State Service for State Antimonopoly Policy and Consumer Rights Protection delivered a speech on “Overview on the newly updated Public Procurement Law”. tried to do some exercises regarding mind-sets. After this, Mr. Fariz Jafarov, Director, E-Gov Development The event was held in a format of discussion, so participants Center talked about “Developing of E-tendering Platform for were in touch with each other sharing their experience and Public Procurement”. finding answers to their questions. Afterwards, Mr. Pavel Borodai, CEO, Procuriosity (Ukraine) made brief introduction “Digital Transformation ICT Committee Meetings of Public Procurement” and informed about challenges in On April 26, AmCham Information and Communications implementation/using of E-Platform solution for both type of Technologies (ICT) Committee hosted its meeting. Ms. Procurement (Public and Private). Kamilla Shahbazov, Chairperson of the Committee, opened Later, Mr. Alexandr Golovko, SME Banking Director, PASHA the meeting together with Mr. Rufat Hajialibayov, AmCham Bank was invited to present “Supply Chain Finance” and Board of Director Member, by welcoming participants and explained cash conversion cycle concept, SCF solution, announcing the agenda. The discussion was dedicated to the “Win-Win” for Buyers and Suppliers, etc. 2 topics. Firstly, Ms. Shahbazov offered to have discussion about the changing the name of the Committee to Digital Technology and Innovation Committee (DT&I). All opinions were shared with participants and they also added some ideas regarding new change. Afterward, Kamilla khanum shared with participants a presentation which shows DT&I Committee strategy and plan for 2019. They briefly reviewed proposals of the committee meetings and practical workshops in the development of the ICT sector. At the end of the meeting, Ms. Kamilla Shahbazov asked the participants to actively contribute in questionnaire for offering their ideas to make progress in the meetings and thanked everyone for participation.

Human Resources Committee Meeting On April 18, AmCham HR Committee’s meeting was held. The HR Committee Chair Mrs. Elnara Mammadova introduced the guest speaker Mrs. Zarina Zeynalova, Chartered FCIPD and Independent Management Effectiveness Consultant. Then, Mrs. Zeynalova shared some reflections on how HR can develop as an internal consulting organization. In today’s world there is an increasing expectation that HR professionals must work with management to help move the business forward. She explained what we can do to grow and adjust continuously, also discussed around our self-development and learning in the context of growth mind-set. They also had a chance to talk about key steps in consulting process and

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On April 21, AmCham Information and Communications risks and how to manage risks in projects were also discussed Technology Committee – ICT hosted its workshop. Ms. in the committee meeting. Kamilla Shahbazov, Chairperson of the Committee, opened Afterward, Mr. Guluzade added information about governance, the meeting by welcoming participants and explained benefits management and compliance (GRC) model in COBIT 2019 of the workshop. Then, she announced the agenda and and showed examples of inherent risk descriptions, risk chart, introduced guest speakers. Discussion on “Risk Management etc. in IT” was covered by Mr. Alikhayyam Guluzade, Manager, After the discussion, participants also asked their questions about blockchain, cyber-security, cloud services procedures and safety procedures in a company and also mentioned their opinion regarding the current topic. At the end of the meeting, Ms. Kamilla Shahbazov thanked everyone for participation and mentioned that the topic is of a particular interest so the Committee is going to get back to it. The next meeting was postponed to June due to last minute change in speaker’s schedule. Travel Hospitality and Tourism Committee Meeting On April 4, AmCham THT Committee hosted its meeting within the framework of 18th Azerbaijan International Travel and Tourism Fair – AITF 2019 in Baku Expo Center. Information Risk Management, at KPMG Azerbaijan and Mr. Mr. Farid Isayev, Chairman of the THT Committee, opened Otabek Sidikov, Senior Manager at PwC Azerbaijan. the meeting by welcoming the audience, expressed gratitude Firstly, Mr. Guluzade delivered presentation on Information to Baku Expo Center for hosting the Committee meeting and Risk Management and gave information about IT risks and announced the agenda. added brief information regarding local market in this sector. He mentioned about preparations on data privacy, cyber-security regulations by government, and IT Risk Management risks regulations by FIMSA. The ideas regarding these regulations preparation process announced in the FinTech Summit which was held on May 16-17 in Baku, Azerbaijan were supported by Ms. Shakhbazov. She expressed the readiness of the ICT Committee to assist for the process. Then, Mr. Guluzade informed about IT Risk management concepts which have 2 types. Questions where to start in risk management and how to optimize it were discussed by showing steps in diagrams. He also explained about methodology of risk assessment process. Then, Mr. Sidikov delivered a speech on how we are going to identify IT risks and initiated interactive discussion with participants to find out their opinion as well. Topics – how to accept/mitigate IT risks, who is responsible for measuring IT The meeting was held in the format of a panel discussion titled “Tourism in Azerbaijan: New Horizons” highlighting the participation of Ms. Nazrin Shamkhalova, Executive Sales Manager of Baku Convention Center, Mr. Fuad Yusifov, Marketing, Commercial and Ground Ops Director of CJSC Azerbaijan Airlines, Ms. Nigar Arpadarai, Head of Marketing and Communications of , Mr. Martin Kleinmann, President of Azerbaijan Hotel Association and Ms. Sevda Aliyeva, Deputy Director of Azerbaijan Convention Bureau, to make the guests acquainted with the activities and nearest plans of their teams. Participants of the meeting addressed their questions and shared their opinions with the speakers. Finally, Mr. Isayev thanked everyone for participation and fruitful discussion.

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AmCham Legal Update

TAX, CUSTOMS, ACCOUNTING AND FINANCE • period for review of petitions filed with the court Law on Insolvency and Bankruptcy has been amended in connection with the termination or alteration of The Law of the Republic of Azerbaijan “On Insolvency and the property administrator’s decision on approval Bankruptcy” (the “Law”) was amended by the Decree of the of settlement agreement with creditors, as well as President of the Republic of Azerbaijan. rejection of creditors’ claims and complaints has been According to the amendments, the grounds for debtor’s determined as 10 (ten) days. insolvency determined by court or creditors have been amended. A debtor will be considered insolvent by the court Amendments have been made to the “Banks” and or the creditor in the following cases: “Accounting” laws of the Republic of Azerbaijan • incomplete execution of its obligations vis-a-vis According to the amendments made to the “Banks” Law, the creditors in the course of consecutive 2 (two) months chief accountant of a bank or a person performing duties from the due date of the execution and in respect of of the chief accountant must be a qualified accountant. the reimbursement of damages caused to the life or Likewise, as per the amendments, the Financial Market health, alimony, the obligations arising out of labor and Supervisory Authority exercises supervision over fulfilment related relationships and the payments under copyright of the requirements of the “Accounting” law in banks. agreements; Furthermore, it is also indicated that accounting rules and • incomplete execution of taxes (interest and applied form, content and frequency of reports in credit institutions financial sanctions) and other state payments within shall be determined by a body established by the Financial consecutive 10 (ten) months from the date of their Market Supervisory Authority. calculation; and • non-execution of its obligations vis-a-vis creditors in the The amendments to the Law “On Securities” has been specified period. approved • According to the amendments, transactions with securities, Other necessary changes to the Law shall include the issued by international organizations, which the Azerbaijan following: Republic is member, have not been applied to the provisions • duration for debtor to prepare the rehabilitation plan has of inside trade and manipulation. Prior to the amendments to been determined 2 (two) months; the law, the operations of the Central Bank of the Republic

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of Azerbaijan, financial market supervisory authority or Code of Administrative Offenses has been amended other bodies for the purpose of implementing money, state The Law of the Republic of Azerbaijan “On Amendment debt and currency regulation policy and operations in to the Code of Administrative Offenses of the Republic of accordance with Article 12 of the Securities Act and Article Azerbaijan” (the “Law”) came into force by the Decree of the 105-1 of the Civil Code of the Republic of Azerbaijan in order President of the Republic of Azerbaijan. According to the to the stabilization of the securities price and the withdrawal Law, organization of illegal international telecommunication of the securities by the issuer were not applied to certain services by establishing the telecommunication operator’s provisions. or provider’s telecommunications network through a relevant device has been identified as an administrative The amendments to the Law “On Currency Regulation” offence. Along with confiscation of equipment and means has been approved used to commit such an administrative offense, monetary According to the amendments, the Financial Market penalties have been introduced for the said violation. Supervisory Authority will adopt its decision on granting Moreover, monetary penalties shall apply in case of failure licenses individually within the limits of its competence by the telecommunications operator or provider to prevent without agreeing with the relevant executive authority. by means of technical facilities, equipment or software, We note that, prior to the amendments, the issuance or the use of illegal international telecommunication services refusal of the license issuance regarding to the submitted conducted by joining the telecommunications network application and its supplements was carried out by the through an appropriate device. Financial Market Supervisory Authority with the agreement of the relevant executive authority. The amended article is Regulation on Single Internet Portal for Public as follows: Procurement has been approved The Regulation on Single portal for Public Procurement has “13-2.5. Financial Market Supervision Authority shall make been approved by the Decree of the President of the Republic a decision to refusal to issue or issue a license no later of Azerbaijan. The portal provides users with the opportunity than 20 business days from the date of application on the to publish a tender announcement, submit relevant basis of the consideration of the submitted application and documents to the supplier (contractor), pay the participation attached documents.” fee, register the supplier as a bidder, create electronic data Amendments have been made to the “Excise rates of room, exchange information and documents between the excise taxable goods imported to the territory of the buyer and the supplier, submit tender proposals and provide Republic of Azerbaijan” security, conduct virtual meetings of the tender commission, According to the Decision of the Cabinet of Ministers of the arrange the electronic signing of procurement contracts, Republic of Azerbaijan, amendments have been made to place the relevant contract and other documents based on the “Excise rates of excise taxable goods imported to the tender results, file complaints and obtain decisions on their territory of the Republic of Azerbaijan.” The amendments results, submit invoices to the procuring company and etc. and additions on excise rates are shown below: The State Agency for Antimonopoly Policy and Supervision of the Consumer Market of the Republic of Azerbaijan (the “Agency”) is responsible for the management, organization 1,0 manat per 2710 19 210 1 TC-1 fuel for jet engines of activity and development of the portal. With the help of the 1 ton electronic services module, the suppliers will be able to be Other fuel for jet 80 manat per 2710 19 210 9 registered as applicants and send the relevant documents to engines 1 ton the buyer. It will also be possible to maintain a single registry KO-20 lighting of procurement contracts. In addition to the above, the kerosene and KT-2 1,0 manat per 2710 19 250 1 Agency together with the State Agency for Public Service kerosene technical 1 ton and Social Innovations under the President of the Republic purposes of Azerbaijan will take the necessary measures to integrate 2710 19 250 9 Kerosene for other 80 manat per the portal into the “Electronic Government” Information purposes 1 ton System. TELECOMMUNICATIONS AND E-GOV LEGAL AND JUDICIARY Law on Telecommunications has been amended The Law on Mediation has been adopted According to the amendment to the Law, an operator or The President of the Republic of Azerbaijan signed the provider has been obligated to take measures by using Decree on April 3, 2019 on the application of the Law of technical means, equipment or software to prevent illegal the Republic of Azerbaijan “On Mediation” No 1555-VQ international telecommunication services conducted by dated March 29, 2019 (the “Law”). The Law regulates joining the telecommunications network. public relations in the field of mediation, and defines goals, principles, rules of conduct of the mediation, as well as the

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status of mediators. arbitration procedures have been envisaged in our country “Mediation” means the process defined by the Law on in order to extend the out-of-court settlement of disputes the settlement of the disputes arising between the parties over entrepreneurial activity. In addition to the above, the as mediated by mediator (mediators) based on mutual Decree provides implementation and strengthening of the consent. A “mediation process” agreement is signed following measures: between the parties in order to resolve the dispute through the implementation of mediation process. Mediation is • ensuring the independence of judges and improving the applied to civil and economic disputes (including those with mechanisms for preventing from an intervention in the a foreign element), as well as the disputes arisen in the field judicial activities; of family, labor and administrative law relationships. From • substantial increase of compensation of the judges; 1 July 2020, it will be required to attend the initial mediation • differentiation of rates of the state duty paid for the court session before applying to the court in connection with the cases in accordance with the value of the claims; disputes arisen in the field of economic, family and labor • directing part of the paid state duty to strengthening relations. The initial mediation session is carried out by a the social protection of judicial staff employees and mediator or a mediator organization, which the parties strengthening the material and technical conditions of have agreed to, and party’s non-participation at the initial the courts; mediation session without any valid reason entails liability • examination of the possibility to apply advanced prescribed by the Law. international experience in Azerbaijan in order to According to the Law, the Mediation Council (the “Council”) empower private institutions to execute decisions of will carry out the regulation and control over mediation. the court and other state bodies as an alternative Moreover, initial training for the persons wishing to become mechanism of the execution; mediators and the professional development of the • analyzing advanced international experience in mediators will be carried out by the mediation training body. implementation of judicial expertise by private agencies; Under the Law, subject to some exceptions, disputes arising • taking actions in formation of the court practice and from adoption, execution or cancellation of administrative publication of the court decisions in electronic form; acts by the administrative bodies or from any other action or • carrying out relevant technical measures to ensure fast omission of the administrative body can be settled through and effective search in the “Electronic Court” information mediation in accordance with the Law of the Republic of system; Azerbaijan “On Administrative Execution”. • allocation of funds directly to the Bar Association of In addition to the above, the Law defines the definition of Azerbaijan for legal support rendered at the state a “judicial mediation.” Thus, according to the Law, at any expense; and continuous audio recording of court stage of the proceedings and by taking into account the proceedings and compilation of the minutes as per circumstances of the case, the court may propose to resolve audio recording of the court proceedings to ensure the the disputes through mediation process at its own discretion objectivity. and subject to the parties’ consent or by the request of one of the parties and subject to other party’s consent. In this case, Decree on Establishment of Appeal Councils in State- the court proceedings are suspended until the settlement Owned Legal Entities has been signed agreement and the protocol on the result of mediation According to the decree, the Appeal Councils will be process are submitted. established in the state-owned legal entities such as joint- stock companies, limited liability companies and any Decree on Reforms in Judicial System commercial legal entities in other organizational-legal forms Action plan on deepening of the reforms in the judicial whose 51% or more of the stakes are directly or indirectly system has been set up by the Decree of the President of the owned by the state, as well as non-commercial legal entities Republic of Azerbaijan, dated 3 April 2019 (the “Decree”). and public legal entities established by the State. It should The Decree is directed to broaden the reform of the judicial be noted that “legal entities” under the Decree do not practice, improve the social conditions of the court staff, include the legal entities subordinated to the legal entities develop the judicial proceedings and appeal procedures. themselves owned by the State or by the central and local The Decree stipulates the creation of a specialized court executive authorities. on tax and customs payments, the disputes arising out of payment of mandatory state social insurance contributions The amendment to the Law “On Execution” has been and other matters with regard to the entrepreneurial activity. approved The aim is to facilitate the entrepreneurs’ access to court According to the amendment, the executive records of and to ensure the consideration of the disputes pertaining the notary should be immediately addressed to execution. to entrepreneurial activity by the judges who would have Please note that before the amendment, it was intended that deeper legal knowledge and experience in the relevant the notary records be directed to execution within ten days. field. At the same time, measures to promote international

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AmCham Azerbaijan

STATE REGISTRATION AND DUTIES VISA AND MIGRATION The amendments to the Law “On State Registration and The amendments have been made to the Regulation State Registry of Legal Entities” have been approved of the “ASAN Visa” system The amendments resulted in change of the procedure of According to the amendments, with the help of “ASAN Visa” state registration of legal entities. The law as amended system a single or multiple electronic visa will be provided states that: within 3 working days, accelerated single electronic visa “The registration application shall be signed by a founder will be provided within 3 hours upon the submission and a (by all founders, if there are several founders), an authorized single electronic visa at international airports of the Republic representative (authorized representatives) or person of Azerbaijan will be provided in a real-time mode. properly authorized by their respective representatives, and be notarized.” Procedural change in the process of work and temporary In other words, during the registration of a legal entity (or a residence permit application branch or a representative office of a foreign legal entity in Commencing from 2019 the State Migration Service the Republic of Azerbaijan) or change of a director, a person (“SMS”) implemented significant change in procedure of appointed as the director shall express his/her consent filing and collection of documents for work and temporary with the said appointment by signing a power of attorney residence permit application. As per the change, any person to an agent who would be dealing with the registration. The (i.e. an employee or an independent service provider) said power of attorney must be notarized and, if issued representing the company that invites an expat employee, outside Azerbaijan, legalized/apostilled. Another option for may file the documents and collect the issued the director to confirm his/her appointment is to appear permits on the basis of the Power of Attorney granted in person in the Department of National Revenues of the to him/her by company management. Kindly be Ministry of Taxes. informed that previously only Directors, Deputy Directors and employees of the company duly registered with the State duties for registration of inventions, utility models SMS as legal representatives had such authorities. and industrial designs are determined As a supporting document, the SMS may request either According to amendments to the Law “On state duties”, an extract from an order of appointment (if the new state duties were imposed for registration of inventions, utility models, industrial designs and for issuance and representative is an employee of the inviting company) or publication of patents. Besides, the amendments introduced the copy of the first and last pages of an agreement certain state duties for transfer of respective rights or signed between the inviting company and the provider of amendments thereof. The notable state duties determined migration services (if the representative is an employee by the amendments are as below: of the independent service provider).

• registration of invention – 20 AZN; MISCELLANEOUS • registration of utility models – 15 AZN; State Program on Food Safety in Azerbaijan for 2019- • registration of industrial designs – 15 AZN; 2025 has been approved • 1 AZN for each page of a document with patent-proof The State Program in the field of food safety for 2019-2025 formula of more than 30 pages and etc. has been approved on the basis of Article 5.5 of the Decree no. 1235 of the President of the Republic of Azerbaijan On Launch of electronic state registration of a limited “Additional measures for improvement of the food safety liability company with local investment system in the Republic of Azerbaijan. Core targets of the The implementation of amendments to the Law “On State State Program have been determined as follows: Registration and State Registry of Legal Entities” of the Republic of Azerbaijan has started. A person willing to • adaptation of norms and standards in the field of food register a limited liability company with local investment will safety with international requirements; be identified in the electronic registration system by entering • improvement of the population’s safe and quality food into the “Internet Tax Administration” with his/her ID’s PIN supply; code and cellular phone number registered on his/her name • increase of food safety and quality, increasing their without an electronic signature. Then, the information must competitiveness and export potential to foreign markets; be included online to the application of the registration. • compliance of the activity of food subjects with the The TIN issuance will be completed after finalization of requirements of the legislation on food safety in single procedure. Automatic transfer of the notifications of cooperation with entrepreneurs; employment contracts to the database of the Ministry of • animal and plant health in accordance with the Labor and Social Protection of Population, registration of international best practice. taxpayer for VAT purposes, issuance of duplicate- certificate • It’s planned to carry out the priority activities by the to open a bank account will be provided within the framework working groups to be established by the relevant of the procedure. state authority in order to achieve the successful

45 AmCham Azerbaijan

implementation of the State Program. The activities the doors, windows (window sills), showcases, as well as should include the following: on outdoor equipment, motorway stops and underground • optimizing existing laboratories in the area of food passages, air balloons, aerostats and aircrafts. Furthermore, safety, creating new laboratories that meet modern the Amendments limit circle of boards (texts) which have not requirements and providing logistics; been considered as advertisement previously. Thus, now, • establishing a food safety training center; only boards (texts) meeting the below criteria will not be • creation of subjects and objects of the food sector acting considered as an advertisement and can be used without a in all stages of the food chain, as well as production of permission of respective authority: food products and database of trade flows; • carrying out activities related to the electronic issuance • placed on the entrance, facade (wall, dam) of the of export certificates and implementation of measures directly related service, trade or other facilities; for their recognition by importing countries. • informing the consumers of the name, affiliation, type of activity, address and business mode of those facilities; Amendments on outdoor advertising • not more than 1 in number (previously it was 2); and The amendments were mainly aimed at regulation of • with the total size not exceeding 1 sq. m (previously it outdoor advertising and introduced a more comprehensive was 2 sq. m). definition for outdoor advertising. That said, now outdoor advertising includes advertisements that are placed directly Besides, under the Amendments, the permission required or through the advertising tools on land plots, the facades for placement of outdoor advertising now can be granted (walls, dams), roof tops of buildings, installations and other for a period of not more than 3 years. Previously, this period constructions, outward from the outer and inner sides of was limited to one year.

New to AmCham Regular Associates

International Faculty CITY College.

46 Issue 34 AmCham Azerbaijan

AmCham Calendar of Events 1 March - 1 June, 2019

26 April - ICT Committee Meetings

21 April - ICT Committee Meetings

19 April - Legal & Compliance Committee Meeting

18 April - Human Resources Committee Meeting

31 May - Members’ Luncheon

24 May - Health Care & Medical Insurance Committee Meeting

22 May - Tax & Customs Committee Meeting

4 April - Travel Hospitality and Tourism Committee Meeting

29 March - Members’ Luncheon

25 February - Procurement Working Group meeting

6 May - Conference on “Judicial Reforms in Azerbaijan: Public Discussion with AmCham” 30 April - Members’ Luncheon

47 We do believe our members appreciate an opportunityto benefit from AmCham M2M Discount Program exclusively designed for our Member Companies to obtain as well as for the Associates to provide discounts on a wide range of products and services from thehotel stays to food and beverage outlets. This AmCham initiative is recognized as a strong promotional vehicle aimed to add more value to companies’ membership by helping to increase the volume of sales and to save costs. To become a discount provider you need to complete M2M Discount Program Agreement, print it out and return the signed copy to us. This program allows two people from each Member Company to obtain discounts in below mentioned companies upon presentation of special M2M cards. Currently, our M2M Discount Program encompasses the following offers:

TRAVEL, HOSPITALITY AND LEISURE

JW MARRIOTT ABSHERON BAKU

Ÿ 10% discount on all Food & Beverages – Discount is applicable maximum for 20 HOLIDAY INN BAKU people per card. The card cannot be applied for meetings & events held in 10% Discount on Food and Beverages at hotel Ÿ BOULEVARD HOTEL BAKU 10% discount on all Spa Treatments – Holiday Inn Restaurant Marina 18 and Ÿ Sagi Bar The limit is 20 guests per card. Discount Ÿ 15% SPA Ÿ 15% Discount on Holiday INN Spa does not apply for spa products retail Ÿ 10% Retail/rack price of room 30% discount on Laundry & Cleaning – annual subscription (fitness center and 15% Laundry Ÿ swimming pool) Ÿ Discount is applicable for minimum on 3 Ÿ 15% Food and Beverage days service Ÿ 10% Discount on “Your Special Day” events inclusive Weddings, Engagements, Henna Parties

THE LANDMARK HOTEL BAKU

15% discount on Food & Beverages at: Ÿ Caspian Grill & Terrace (ala carte) Lunch & Dinner HYATT REGENCY BAKU Ÿ Bangkok Noi (ala carte) lunch Ÿ 15% discount on restaurant and bar Ÿ Seto (ala carte) Lunch & Dinner INTOURIST HOTEL BAKU Ÿ 15% discount on laundry and dry Ÿ Salo (ala carte) lunch 15% SPA cleaning Ÿ Shin Shin (ala carte) Lunch & Dinner Ÿ 10% Retail/rack price of room Ÿ 20% discount on Spa treatments at Ÿ Dolce Pausa (regular menu) Throughout Ÿ Armaiti Spa & Fitness the day Ÿ 15% Laundry