A Word from Executive Director of AmCham Dear AmCham members and friends,

After a long break I am pleased to introduce the 21st issue of IMPACT Azerbaijan. This time IMPACT Azerbaijan is devoted to regional development of Azerbaijan, which has been a hot theme.

Issue 21 This is a theme where AmCham carries a big voice, experience and contribution. Being a business association with approximately 300 members, in the last two decades most of our members Credits focused heavily to regional development. It has been vivid in various economic sectors: construction and manufacture, hotel AmCham Executive Director: and hospitality, financial and banking, agriculture, energy, health care, IT, trading and many others. We are proud to see AmCham members succeed in Nargiz Nasrullayeva-Muduroglu harmonizing private sector investment with state program and strategic pillars and keen for regional development! Editor: From the materials contributed by member companies, you will able to see various Jeyhun Atayev glimpses for the regional development. As a reader of IMPACT Azerbaijan, you will be able to benefit from the legal outlook – logical follow up of the mentioned state programs; Articles contributed by: practical example for regional development – Gusar, a city with hot tourism spot; as well Farid Isayev as harmony of events (exhibitions!) to boost diverse economic segments and widening market opportunity for the participant companies. Clive Smith Kamran Abbasov It should be also highlighted that within this issue you will be able to read AmCham’s active Farouk Mohamed relationship with governmental institutions; organized Taxation and ICT conferences; presentations of annual national employee salary survey and Index of Prices; diverse Sakina Ibrahimova social events for the member companies. Laura Hamidova Sabir Gasimov Overall, I appreciate for our members for taking time to contribute for development of IMPACT Azerbaijan. I am sure you will find this edition informative and interesting! Lala Abdurahmanova Lavinia Iosub Kind regards, Nargiz Nasrullayeva-Muduroglu Advertisers: Azerfon Editor’s Comment YapiKredi Bank Azerbaijan Dear reader, ADA University Welcome to the 21st issue of IMPACT Azerbaijan journal. This Publisher: time, we are discussing aspects of regional development, as well as, contribution of AmCham member companies. It is an American Chamber of Commerce issue which deserves the highest attention not only in within the in Azerbaijan Chamber, but nationwide.

In this edition of IMPACT Azerbaijan, you will able to go through Tel: (+994 12) 497 13 33 interesting materials related to contribution of our members into Fax: (+994 12) 497 10 91 the development of the regions. This is really fascinating! In fact, www.amchamaz.org it is really the power of our members which is invested for the sustainable development of our country! The “In Focus” section covers experience and contribution of our members to the issue. As you will be able to see, it is quite diverse Advertising opportunities: and rich in scope. Please contact the Editor at [email protected] At the same time, in “member contribution” section, we have revealed other hot topics as well. The magazine will introduce you with emerging matters – living in FATCA era, recruitment and development approaches, securities market and various other topics. Tel: (+99412) 497 1333 Herein, the role of IMPACT is to uncover issues which are interesting for our member companies, their employees, as well as our country at large. The articles in IMPACT Azerbaijan It is also my pleasure to thank our writers who contributed articles to the 21st issue. express the opinions of the authors Furthermore, highly appreciate our advertisers who observe higher value in development and do not necessarily reflect the and publication of IMPACT Azerbaijan. position of the American Chamber of Happy reading, Commerce in Azerbaijan Jeyhun Atayev

1 contents

IN FOCUS

4 Legal outlook into regional 31 Securities market: what you development need to know to start making Farid Isayev, KPMG money Sabir Gasimov

8 Recent developments in Qusar DEVELOPMENT AND EDUCATION region Clive Smith, Shahdag Mountain 34 What we have learned as a Resort company? Lala Abdurahmanova, KEEL Academy 10 Interview with Farid Mamedov, Executive Director of Iteca Caspian 36 Business conferences – education with a twist of networking Lavinia Iosub, P World in Azerbaijan 13 Acting in synergy for a sustainable development of the regions Kamran Abbasov, Synergy Group AMCHAM AZERBAIJAN OJSC 39 About Us

MEMBER CONTRIBUTION 40 Government Relations 15 Azerbaijan: what lies beneath 43 AmCham Committees Highlights Farouk Mohamed, Grant Thornton Azerbaijan 48 Business Events

17 Are you ready to live in FATCA era? Sakina Ibrahimova, PwC 50 Amcham Practical Seminars Azerbaijan 53 Social Events 22 Modern & modest recruitment and development approaches Laura Hamidova, FireWorks HRM 59 AmCham Legal Update

25 Peculiarities of FATCA 67 Members’ News and Events implementation in Azerbaijan 71 AmCham Calendar of Events Farid Isayev, KPMG 74 (M2M) Discount Program

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Legal Outlook into Regional Development

Farid Isayev, increasing the contribution of regions to common economic Manager, Head of Legal Services success. Thus, this article sets out to analyse the legal KPMG Azerbaijan Limited framework implemented by the state for facilitation of economic development of Azerbaijan’s regions. State Program I

The first major step in this direction was taken with the Azerbaijan’s steady economic growth and remarkable adoption of “State Program on Social-Economic Development statistical data supporting this stance has left some impressed, of Regions of the Republic of Azerbaijan for 2004-2008” while also raising expectations in relation to regions’ economic (“Program I”). Program I was adopted by the Decree of the development. The implications of overall economic progress President of Republic of Azerbaijan №24 dated 11 February have resulted in more scrutiny being placed on the share of 2004 and set out to implement comprehensive measures regions of Azerbaijan in the main pool of achievements. Both on efficient use of labour, natural and economic resources the government and various major stakeholders in country’s in regions, accelerating development of the non-oil sector, economy have repeatedly stressed the significance of expanding reforms in agrarian sector, increasing employment

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of population, decreasing the level of poverty, renewing the development of regions of the country. infrastructure, creating favorable investment climate, modern Action Plan of State Program consisted of the following enterprises and new jobs. sectors:

The Program I also focused on such goals as efficient - Tax and monetary-credit policy; external debt management, maintenance of average annual - Measures on expansion of industrial and agricultural inflation level and the exchange rate of the national currency production; at reasonable level, reducing number and rates of taxes to - Environment protection and use of natural resources; appropriate levels, extension of concessional period applied to - Improvement of road infrastructure and transport; producers of agricultural goods, regulation of customs tariffs - Power, heating and gas supply; taking into account domestic production interests. - Measures on improvement of communication services; - Measures on upgrading water supply and sanitation In terms of monetary policy and given increase of oil revenues, services; extra emphasis was put on exchange rate policy with a - Measures on amelioration and irrigation; view of ensuring protection of national currency- manat’s - Measures on safety of population; competitiveness. In relation to investment policy, the main - Measures on housing and social protection; objective was streaming of state investments to improvement - Construction and reconstruction of healthcare, cultural, of infrastructure and utility service supply of regions and sport and education facilities. construction of socially designated buildings. Tax and monetary policy Foreign economic policy was aimed at facilitation of exports of locally produced goods, while also ensuring elimination of a/ taxes unfair competition and/or cases of monopolisation of certain Law “On making amendments and additions to the Tax Code of spheres of domestic market. The process of harmonization of the Republic of Azerbaijan” №835 dated 19.06.2009 reduced legislation was effectively aimed at establishing smooth legal the level of profit tax from 22% to 20% from 1 January 2010 path for implementation of actions laid down in Program I, onwards. In another attempt to ease tax burden, maximal though, arguably none of legislative measures in this regard tax rate applicable to physical persons’ monthly wages was could be viewed as radical or groundbreaking. reduced from 30 to 25%, while also the amount of income tax for physical persons taxed at 14% was increased from The first Program on social-economic development of regions AZN 2,000 to AZN 2,5001. Similarly, tax incentives applicable was a positive major step in diversification of economic to monthly wages of certain social group of individuals were streams from the capital to cover other areas of the country, increased from AZN 100 to AZN 200. In order to provide albeit with mixed results. Its major impact, arguably, could be favourable tax applications to all groups of war veterans, the assessed as paving way for forthcoming similar programs and criteria of I and II group of disability was removed. setting the tone for continuity of this strategy. The phrase “minimal wage” was replaced with “living minimum State Program II for people across the country with labour capacity” thus helping to raise the amount of sum from AZN 93,5 to 125 to which tax The second “State Program on Social-Economic Development incentive applied, in case the person’s monthly wage in the of the Regions of the Republic of Azerbaijan 2009-2013” main workplace did not exceed AZN 200. (Program II) came into force by virtue of the Presidential Decree №80 dated 14 April 2009. In accordance with article 102.1.11 of the Azerbaijani Tax The document was intended to serve as the logical way forward Code, income of physical persons resulting directly from from the previous Program I and build on the groundwork production of agricultural products was exempt from taxes as laid by its predecessor. In comparison to the previous one, of 1 January 2001. This exemption was extended by virtue of the new Program also extended to cover measures aimed at Law “On prolongation of effective period of the law on provision enhancing social and economic development of Baku city and of term tax exemptions to producers of agricultural products” its districts as an essential direction. dated 22.11.2013, thus providing such exemptions to legal entities and private entrepreneurs until 1 January 2019, with In general, the measures to be implemented within the the exception of land tax. framework of the Action Plan of the Program II could be defined on three levels: In another move to stimulate industrial growth, residents of industrial and technological parks being legal entities or - Measures of country importance; private entrepreneurs were exempted from profit, income, - Measures focusing on Baku city and its districts; property, land and value added taxes on equipment imported - Measures with a specific focus on social-economic for related purposes. Likewise, operators of such industrial and

1 Law of the Republic of Azerbaijan “On Making Amendments to Tax Code of the Republic of Azerbaijan” dated 21.12.2012

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technological parks were exempted from these taxes by virtue of Law “On making amendments to the tax code of Republic of Azerbaijan” №509-IVQD dated 21 December 2012. b/ monetary policy Insurance sector came under scrutiny in 2010 and the Ministry of Finance of Azerbaijan via its resolution increased the requirements for minimal amount of charter capital of insurers and reinsurers of Azerbaijan. Thus, for insurer the minimal amount of charter capital should have been increased in three stages: AZN 3m until 01.01.2011, AZN 4m until 01.01.2012 and AZN 5m until 01.01.2013. Similarly, for reinsurers this requirement was: AZN 6m until 01.01.2011, AZN 8m until 01.01.2012 and AZN 10m until 01.01.2013.

Gross Domestic Product (GDP) in the amount of 34,6 billion AZN was produced in 2009 and increased by 9,3 percent in comparison with the same period of the previous year. The value of GDP per capita was 3917,3 manats (4874,1 US dollars) and increased by 7,9 percent in comparison to the same period of the previous year.2

Production of GDP increased by 3,2 percent in non-oil sector during the reporting period. Value of general product Development of Winegrowing for 2012-2022”. of agriculture with constant prices increased by 3,5 percent, plant-growing by 4,0 percent, poultry-products by 2,8 percent. Energy sector Having the productivity of average 26,6 quintal of each hectare 2988,3 thousand tons of grain was produced in 2009 at the The need to develop alternative energy sources has long been result of government support to the grain production. a target for the government in order to increase the efficiency of energy consumption within the country, as well as to reduce Incomes of population per capita was 2537,7 AZN by increasing dependence on traditional sources which inevitably are going 6,7 percent in comparison with previous year, level of inflation to decrease in the coming years. For this purpose, Presidential was 1,5 percent and level of poverty reduced up to 11 percent Decree dated 16 July 2009 marked the creation of State in 2009. Average monthly salary was 298 AZN in 2009 and Agency on Alternative and Renewable Energy Sources. increased by 8,6 percent comparing to applicable period of the previous year. In order to develop economic and social Communications and IT fields in the regions of the country 2,9 billion AZN investment out of total amount of state investments of 7,4 billion AZN was The Davos World Economic Forum in its report on “Global directed to regions in 20093. Informational Technologies 2012” ranked Azerbaijan in 61st place among 142 countries based on “Network Availability Industry and agriculture Index”. In addition, 2013 was announced as “Informational- communicational technologies” year. In that same year on 8th Industrial growth was boosted by creation of new industrial of February, the very first Azerbaijani satellite was launched. parks. Thus, by virtue of Presidential Decree dated 5 November 2012, creation of High Technological Park was established with Housing, education and social security the aim of setting up modern and highly efficient technological complexes. Additionally, in 2013 relevant Presidential Decree measures formalized establishment of Azerbaijan Steel Production Complex Closed Joint Stock Company. In the period between Housing Code of Republic of Azerbaijan was adopted in 2009 2009-2013 shares of 155 open joint stock companies were by virtue of Presidential Decree dated 27 August. The Code privatized via public auctions. set out to bring more structure and clarity in various matters regulating relations in this area. Agricultural sector witnessed a few positive developments as In 2013, the major event worthy of mention was adoption of part of implementation of Program II. Thus, Presidential Decree “State strategy on development of education in Republic of dated 15 December 2011 approved “The State Program of Azerbaijan”.

2 http://www.economy.gov.az 3 http://www.azstat.gov.az

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One of the milestones of measures aimed at strengthening of social security in the country was establishment of ASAN service. This service was launched by virtue of Presidential Decree №685 dated 13 July 2012 under the State Agency on Service to Citizens and Social Innovations. Indeed, this was innovational approach in terms providing various types of services to citizens by state bodies. The main idea behind ASAN service was provision of them based on “one-stop shop” principle, previously available to commercial entities. The creation of ASAN centres made those services available to citizens in a single agency. Some of the services currently provided by ASAN centres are illustrated below:

- State registration of citizenship acts; - Notary actions; - Issuance of national ID cards and passports; - Issuance of driving licenses; - Inmate certificate; - Registration of operations concerning immovable property; - State registration of commercial legal entities; - Immigration matters; dependence on energy sector, as well as concentration of - Determination and formalization of pensions; major economic activities in or nearby Baku has long been - Apostillation of documents. flagged as issues to be addressed. The three programs can serve as groundwork for addressing those issues. State Program III Whereas results of those programs are better assessed from various perspectives, such as financial, economic, The previous two programs had somewhat set the trend and legal etc., it should also be stressed that the results might be it seemed rather inevitable that the next chapter of these evident, particularly tangible ones, in the long haul. On the program would follow. This proved to be the case and on 27 one hand, the analysis in this document can be used to credit February 2014 the President signed Decree to approve the the government for such initiatives. In particular, measures third “State Program on Social-Economic Development of and actions undertaken in taxation and consequently by Regions of the Republic of Azerbaijan” (“Program III”). The tax authorities in applying them should be credited and new program set the following priority areas to be addressed: emphasized. On the other hand, one should also aim to ensure that the future programs set new and more ambitious - Maintenance of inflation and Azerbaijani manat’s rate at targets to achieve. reasonable level; - Determination of optimal levels for tax and customs tariffs; Author’s biography - Continuing stimulation measures for producers of Farid Isayev is the Head of KPMG’s Legal Practice in agricultural products; Azerbaijan. Prior to joining KPMG, Farid worked in the legal - Stimulation of export oriented activities of producers; practice of another Big4 firm in Azerbaijan. Farid’s other - Stimulation of creation of new work places; experience includes working in banking&insurance sphere for - Increase of non-oil sector share in GDP; VTB Bank (Azerbaijan) and Baku Insurance company, legal - Continuing measures for strengthening agricultural security consultancy experience in regional law firm Grata, oil&gas of people. expertise working for AzGerNeft German- Azerbaijani Joint Venture. His international experience includes working for It remains to be seen the extent of success to be achieved one of the world’s largest commodity traders GlencoreXtrata by the new Program III. The spirit of the Program III could be (formerly Glencore International AG) in London, UK. interpreted to suggest that it is aimed to build on foundations Mr Isayev holds an LLB with honours in International Law of the previous two programs. However, it is rather premature from Kingston University London and Western University in to judge or predict the exact measures that are likely to follow Baku. He currently serves as the acting Board Member of the from Program III in practice. German-Azerbaijani Chamber of Commerce (AHK). Farid Isayev overseas KPMG’s wide range of legal services Conclusion in Azerbaijan. His main areas of expertise include antitrust, banking&insurance, civil, consumer, contract, corporate, The emergence of social-economic programs regulating energy, immigration, employment, maritime and other areas measures aimed at regional development is undoubtedly a of law. Mr Isayev is also in charge of FATCA, HR advisory and positive step taken in the much needed direction. Azerbaijan Corporate Governance divisions of KPMG in Azerbaijan.

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Recent developments in Qusar Region

Clive Smith, Tucked away below the beautiful Caucasus Mountains, the General Manager venue offers timeless elegance, breathtaking views, plus Shahdag Mountain Resort the premium ski resort, which is the largest National Park Pik Palace and Park Chalet hotels, in Azerbaijan. The resort itself offers extravagance at every managed by Absheron Hotel Group level and we expound upon this, delivering an extra measure of indulgence for guests. Moreover, beginning first with our initial regional location and continuing with the addition of our second, which is due to open this winter season, we We are proud to honor tradition and commitment to regional have routinely chosen to select local resources, support the development by providing the highest levels of luxury services, local people and reinforce the resident economy whenever while remaining loyal to the roots, culture and history of each possible. This not only benefits our resorts and our visitors, country we reside in. We operate two luxury destinations within but also Qusar’s tourism, as well as economy, and Azerbaijan Azerbaijan’s premium ski resort, Shahdag Mountain Resort. as a whole.

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According to official estimates, at the beginning of April 2013, unemployment rate in Azerbaijan amounted to 5.15% of the economically active population in 2013. A year earlier, the official unemployment rate in Azerbaijan on the methodology of the International Labor Organization was 5.3%. Our company has brought approximately 320 new job positions into Qusar. While providing these opportunities for local, hard-working citizens, we are not only able to help stimulate the regional economy, but additionally allow those visiting our establishments to experience the rich local culture and its warm, inviting people, firsthand.

Our restaurants proudly source 30-percent of our food products locally. This not only means that our guests receive the most exquisite meals made with the freshest ingredients possible, but also that local businesses thrive economically and are receiving the opportunity to grow as we do.

The destination retreats our company provides at Shahdag Mountain Resort leave a lasting impression on our local and international guests. From the lavish rooms at our establishments to the relaxing spas and decadent dining options, guests are treated to the finest things Qusar has to offer. When they leave the resort, they are in awe of the beauty of the location, as well as the outstanding service and experience they have received. They depart feeling well-rested and relaxed, with the sense that Qusar and all of Azerbaijan are the premier international travel destination for luxury. In a global economy, word travels fast and these positive interactions help to ensure that both Qusar and Azerbaijan become synonymous with quality, culture and beauty.

We aim to become a strategic hospitality industry player, with a medium-term aspiration of taking a leading position in the national and regional markets through establishing a world-class portfolio of hotels and resorts. However, we will also continue to maintain focus on regional development, preservation of local historical and cultural heritage, as well as environmental consciousness, within each country that we operate. As such, we are pleased to be a premier destination within Azerbaijan’s first year-round resort, the Shahdag Mountain Resort. properties, before joining InterContinental Group as Resident We look forward to many years of growth and continued Manager in Mayfair, London. He was then transferred to the development, not only for our establishments, but also for InterContinental Jeddah in 2001 and promoted to General Qusar and all of Azerbaijan. Manager at the InterContinental Lusaka, Zambia in 2005. In 2010 Clive then joined Divan Hotels in Turkey as Pre-opening Author’s biography General Manager of their luxury property in Erbil, Iraq. After graduating hotel school in Devon, England, Clive began his hotel career in 1988 in the Front of House department and In November, 2013 Clive joined Absheron Hotel Group as a continued gaining experience in all areas of hotel management. General Manager of two luxury hotels, Pik Palace and Park Between 1988 and 2001 Clive worked for a number of Chalet in Shahdag Mountain Resort. companies including InterContinental, Forte Grand, Mandarin Oriental, DeVere and Holiday Inn. He held the position of Clive was born in England and his hobbies include reading, Food and Beverage Manager at The Balmoral and Deputy travel, skiing and golf. He is married with a 12 year old General Manager for DeVere at two of their luxurious resort daughter and twin boys of 9 years old.

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Exhibitions are the key to development Interview with Farid Mamedov, Executive Director of Iteca Caspian

Exhibitions have already become the one of the integral parts industry professionals. A lot depended on the enthusiasm of the of the economic life of Azerbaijan. Every year, more than people that believed in this business and its benefit to the country. 30 exhibitions take place in the capital and act as a litmus Many things have changed over twenty years. Today, there are paper for the state of particular industries. We spoke about over 20 exhibitions a year, we have an established infrastructure the prospects for the development of exhibition industry in the and the exhibitors can use a professional exhibition platform - country with Farid Mamedov, Director of Iteca Caspian, the the Baku Expo Center, which was designed and constructed in leading exhibition organiser in Azerbaijan. accordance with high international standards.

Mr Mamedov, specialised trade exhibitions have taken From the beginning of each exhibition, our aim was to turn place in Azerbaijan for over 20 years. You were there at every exhibition into the main event in the industry of the the very beginning. What has changed over this time and Caspian region and we have managed to achieve this. Projects at what stage are exhibition services in Azerbaijan? such as the BakuBuild construction exhibition, Caspian Oil The exhibition industry of Azerbaijan has gone along a great path and Gas, Bakutel telecommunications exhibition, the AITF of development over this time. We started with one universal tourism exhibition and a number of others have acquired a exhibition which included all oil related fields. There was no good reputation and are known far outside the borders of developed infrastructure, there was no exhibition equipment or the country. In Spring 2014 alone, over 1405 companies

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and 30000 visitors were at the exhibitions organized by Iteca Caspian in Azerbaijan. These numbers cannot be anything but pleasing. But we are not standing in one place.

Today, economic development is not so much growth in quantity, but a growth in quality. We strive to discover and develop new opportunities for development and to demonstrate the great potential of Azerbaijan to the global economic community. I would especially like to note that from the first days of our activity in Azerbaijan we have felt tangible and active support from the leadership of the Republic, who pay great attention to the development of exhibitions in Azerbaijan. We also work closely together with industry related state bodies, which give all kinds of assistance to the exhibitions, sometimes acting as the initiator of new exhibitions or conferences. This is why I think that the exhibition business is dynamically developing together with the whole national economy and there are only bright prospects for the future.

In what way does the organisation of exhibitions influence the development of the country? Could it be said that exhibitions and conferences are a necessary part of a developed economic system? The leading exhibitions have a significant effect on the development of industries and the economy of the whole region in which they are held, making a contribution to the economy of the country. Business events such as exhibitions are the most effective tool for the search for new clients and markets and increasing the geography of sales for exhibiting companies. The exhibitions stimulate competition and create additional jobs. The organisation of the exhibition provides profits to a whole range of companies that provide various services place where professionals from different countries can meet. as well as the organisers themselves. These include stand It is where the market is concentrated, which results in a construction companies, transport companies, advertising deep understanding of the current situation and prospects for agencies, companies that provide specialised personnel and development and new ideas are generated. Of course, the many others. Another significant source of monetary funds effect of the exhibition is not just concentrated in Baku but for the economy of the country in the exhibition period is also includes the regions of Azerbaijan. the spending by visitors to the capital during the exhibitions, including accommodation, food, transport and entertainment. Exhibitions are one of the most important tools for regional development that facilitate increases in the competitiveness I would also like to mention another important point. The and growth of regional business, the development of visits made by leading industry specialists to international infrastructure, the creation of jobs, introduction of new exhibitions helps to develop the perception of the country as developments and the attraction of investments, which results a centre for business communications in this industry, which in an increase in tax contributions and the growth in the has a positive effect on its image. This is why I think that the volume of gross regional product. Another issue is whether exhibition and conference business definitely helps economic one region or another is prepared for the organization of an development and has a significant part to play in the process exhibition. Right now, there is a tendency for the regions to of introducing innovations into local production and the become active exhibitors at the exhibitions in Baku. development of intercultural links. We already have positive experiences of organizing exhibitions At the moment, all exhibitions in Azerbaijan are in the regions. We organized the West Azerbaijan Infrastructure concentrated in the capital. Are you planning to develop regional exhibition in Ganja in the autumn of 2007, 2008 exhibitions and fairs in the regions of Azerbaijan? and 2010. The exhibition was very well received by the city I believe that in this case the capital and the regions do not administration and took place during the celebration of the need to be separated, you must understand the way that City of Ganja day. However, we did not feel that the business the exhibition industry works. A large international exhibition community was interested in this project in the following years. is a significant event for the industry in the whole country, a This is why we decided not to organize this exhibition for now.

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At this stage, we have concentrated on the organization of 20 year anniversaries this year, while the CTE environmental exhibitions in the capital of Azerbaijan where exists exhibition exhibition will celebrate its 5th edition. Over the years, these infrastructure meets international standards and we are not exhibitions have achieved leading positions in the Caspian Region planning to organize events outside the capital. and have become the traditional meeting places for professionals that attract the greatest number of visitors. Companies book What is your main strategy for developing your activities their spaces at these exhibitions a year in advance. Our social in the regions? projects are also rapidly developing - the Azerbaijan International Our main current activity as exhibition organizers is directed Education and Career exhibitions, which is also very satisfying. at the attraction of exhibitors and visitors from the regions to The Beauty Azerbaijan and Stomatology Azerbaijan beauty the exhibitions in Baku. It is in this area that we make a lot and aesthetic medicine exhibitions, the CIPS security exhibition of effort to work with the regions and try to give the greatest and the Aqua-Therm Baku heating, ventilation and conditioning amount of information to entrepreneurs about our exhibition, exhibitions will also be taking place. working closely with administrations and regional executive government. As an example, there is the annual invitation The autumn season will be opened by our new project - the extended to entrepreneurs to attend the WorldFood Azerbaijan 1st Azerbaijan International ADEX exhibition for the defense and AgriHort Azerbaijan exhibitions with the aim of introducing industry, which will take place from 11 to 13 September at the latest equipment and production technologies to the the Baku Expo Center. This debut exhibition will become a regions with the assistance of executive authorities. grand display of modern weaponry and technology and a demonstration of the power of the national defense of the This year, info-tours for entrepreneurs from Barda, Gabala, country. The "Modern methods in military engagements and Ganja, Lankaran, Saatly, Sabirabad and Khachmaz were security issues" conference will take place at the Jumeirah organised to the above exhibitions. It was a pleasure to receive Bilgah Beach hotel. The conference programme will include positive feedback from the visitors. As an example, one of the specialist speakers, military experts, representatives of visitors from the Autonomous Republic of Nakhchivan noted government bodies and the business community. The that 'The development of farming in any region is connected to exhibition was initiated by the Ministry of the Defense Industry the use of the latest achievements of science and technology, of the Republic of Azerbaijan and the Ministry of Defense of so where, apart from such a substantial exhibition, could we Azerbaijan. The Organization Partners of ADEX 2014 are receive additional knowledge, sign new agreements, if possible, Iteca Caspian and Caspian Event Organizers (CEO) LLC. We or purchase the latest industrial infrastructure products?' are very proud to be involved in this project.

Another example of the activity of the regions at the exhibition We are also one of the organizers of the SOCAR OGPC is their participation in the AITF tourism exhibition. For Forum, which will take place from 5 to 6 November 2014 at the example, regions involved in the regional display in 2014 Fairmont Baku hotel on the initiative of the State Oil Company included Gabala, Gah, Guba, Zagatala, Ismayilly, Lerik, of Azerbaijan Republic (SOCAR). This is the second forum Mingechevir, Khachmaz, Shamakhi, Shamkir, Sheki and the dedicated to the construction of the Oil and Gas Processing Republic of Nakhchivan, as well as the department of culture and Petrochemical Complex (OGPC). and tourism of the city of Sumgait. Around 60 hotels from As you can see, there is a lot of work ahead of us and many throughout Azerbaijan exhibited at the regional display. The interesting events. I would like to use this occasion to thank the large scale of the involvement of the regions of Azerbaijan has state bodies, partners and all exhibitors at our events for their become one of the most interesting and colorful events at the support and active involvement. Finally, I would like to thank Azerbaijan tourism exhibition and made a definite contribution IMPACT magazine for their interest towards our activities and to the development of internal tourism in the country. invite the readers of the magazine to visit the exhibitions that will take place at the Baku Expo Center this autumn. There are very many examples of this kind of interaction with the regions at the exhibitions. We will continue working in this Short bio of our guest: direction and try to increase our cooperation with the regions at Farid Mamedov, Executive Director of Iteca Caspian LLC, the exhibitions in Baku. I would like to note that we are watching was born in 1974 in Baku. He attended secondary school the market very carefully and carry out regular market research. from 1981 to 1991. In 1992, he entered the State Economic If we see promise in a particular sphere we will of course be Regulation Faculty at Azerbaijan State Economic University happy to organize exhibitions in the capital of Azerbaijan. (ASEU), which he graduated in 1998. In April 1992, he was employed by the Ministry of Material Which exhibitions is Iteca Caspian planning for autumn Resources. From 1992 to 1994, Mr Mamedov undertook military this year and are there any new projects? service. On his return from military service in 1994, Mr Mamedov We have planned to organize 11 exhibitions in the autumn. I continued his education whilst working at the Ministry of Material am pleased to say that a number of our exhibitions - the BIHE Resources until 2000, when he joined Iteca Caspian LLC. healthcare exhibition, BakuBuild building exhibition and the In 2007 he completed an UFI course on the Organization and BakuTel telecommunications exhibitions will celebrate their Management of Exhibitions.

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Acting in synergy for a sustainable development of the regions

where all major industries are concentrated. The regions Kamran Abbasov, of Azerbaijan have enormous potential for development in Chairman of the Executive Board Synergy Group OJSC the non-oil sector, especially tourism. To create new job opportunities and improve the quality of life in the regions by developing the tourism industry, the Group invests in the construction of hotels and recreation destinations. One of the recent remarkable accomplishments was Excelsior Hotel Shamkir, which was inaugurated by the President during his One of the largest local investment companies Synergy Group last visit to Shamkir in September. The Group also owns and completed several large-scale projects with a strong focus on successfully operates Caspian Sea Resort Hotel in Nabran, the social and economic development of outlying regions of the first five stars hotel of Khachmaz region. Another major Azerbaijan. A number of recent grand openings in Shamkir project currently being implemented is the construction of city such as Excelsior Hotel Shamkir, Shamkir City Park, Galaalti Hotel & Spa in Shabran, which will be managed and West Gate Shopping Line provide strong evidence of by Synergy Group upon completion. Situated about 120 Synergy’s diversified development strategy. kilometers to the north of Baku and located on the Siyazan and Shabran mountains, the venue will feature high-class Synergy Group oversees hospitality properties in numerous wellness, hospitality and recreation centers. provinces of Azerbaijan. Being inspired by the development of large-scale tourist infrastructure projects in Azerbaijan, Synergy Group pays attention to the development and Synergy Group acts locally, thus, aiming to contribute to modernization of agricultural production in Azerbaijan. By decreasing the gap between the regions and the capital Baku channeling strategic investment into the restoration of the

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country’s wine-making traditions, Synergy Group modernized its winery in Siyazan region. Already, last year the first harvest was reaped in the Hamya valley. Known for its finest and most authentic Azerbaijani wine brands, Caspian Coast Winery & Vineyards LLC also presented a new brand of cognac, the ‘City of Winds’ consequently, expanding its portfolio to 21 wines and four cognac varieties.

Synergy Group also produces Dutch types of roses. Located in Shamkir region, Azagro LLC grows the finest ranges of world-renowned rose types, such as Avalanche, Fiorenza, Red Naomi, and Spray Rose. As of March 2013, the company started distribution to flower stores all over the country. It is worth noting that Azagro is also expanding its business abroad by entering the Georgian rose market and, according to an initial agreement with Kazakhstan and Russia, the first shipments have already been sent.

The President of Republic of Azerbaijan has declared 2014 the "The Year of Industry". Synergy Group considers the industrial sector as one of its strategic investment priorities and so far the Group has made substantial investments in this area. The construction of the fiber-cement plant in Azerbaijan has been launched. It will be the first such facility in Azerbaijan to manufacture construction products such as roofing materials, facing panels, and sidings made from fiber cement. Located in the Garadagh district, it is likely to come online in mid-2015. Furthermore, Zayam Technologies Park -featuring a plant specialized in the manufacturing and production of metal structures such as oil cisterns, curved metal sheets, water tanks, stay tubes, large-sized metal structures used in the construction of factories, buildings, and bridges will be opened by the end of 2014. Synergy Group is set to further expand its activities in the non-oil economy. To discover the rich potential of the regions, another subsidiary, Ecolime, will be engaged in the production of slaked and burnt lime. It is worth pointing out that the construction of a plant adjacent to the natural resource conducted by the Group is appreciated and its achievements itself is a sound strategic move from a logistical perspective. encourage the team to work harder and become one of the The plant will be launched in 2015. main actors in improving the image of our country as a modern, dynamic and sophisticated economy. Synergy Group OJSC, Being loyal to its slogan "For a sustainable future", Synergy acts in synergy today for a sustainable future of Azerbaijan. Group aims at excellence, values teamwork, and apply innovative approaches to its business activities, ensuring the sustainable Author’s biography development of our country in all spheres. Being the main sponsor Kamran Abbasov is a Chairman of the Executive Board of the first professional cycling team-Synergy Baku Cycling Project, at Synergy Group OJSC. Holding a Masters Degree in we have hosted for the third time already Tour d'Azerbaidjan. Thus, Economics from Azerbaijan State Economic University and we continue to contribute to the development of sport, promoting being certified by several international Business Management healthy lifestyle and tourism opportunities. courses, Mr. Kamran Abbasov is responsible for development of business strategies of the Group companies. Last but not least, in April of the current year "Synergy Group" OJSC has successfully implemented "Shamkir Chess 2014" - Prior to joining Synergy Group, he held senior management the international chess tournament. Thus, Group continues to positions with Holcim Group and Philip Morris. His international support the development of Education and Sports in Azerbaijan. and local management experience in the sphere of business development enables Mr. Abbasov to effectively supervise For all mentioned above, Synergy Group received the UGUR the implementation of corporate strategy and business Economy and Business National Award for contributions development plans of the subsidiaries both in Azerbaijan and to socio-economic development of the regions. All the work international field.

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Azerbaijan: What lies beneath Farouk Mohamed, Managing Partner Grant Thornton Azerbaijan

The start of any dynamic business can be filled with complex decisions including identifying the most suitable geographical location which will support your business growth. Azerbaijan, ranked among the most vigorous national economies, and with an aggressive economic platform, many believe it is emerging as key geographical country to do business in.

Being a relatively young country, starting a new from regaining its independence in 1991, Azerbaijan holds promise for both local and international businesses. The challenge of mapping out a culture that is internationally acceptable and enticing cannot be taken lightly by the nation’s leadership, and this truth alone holds positively to those who are looking to enter the fluid economy.

For a number of years, one of the buoyant industries in Azerbaijan has been oil & gas, previously making the economy dependent on this industry. However, with a vision for growth and development by the year 2020, it was imperative for Azerbaijan to diversify its economy. With the visionary leaders of Azerbaijan and the increase in import and export, the country began developing other major industries allowing it to diversify and not rely solely on oil & gas. The strategic direction of the country saw the emergence of new business industries including leisure & hospitality, information technology, financial services, infrastructure and retail to name a few. facilitating business and its day-to-day requirements including The development of these new business industries further improved telecommunications infrastructure, developing hotels promoted inbound investment which continued to support the as part of the leisure & hospitality plans and enhancing the diversification alongside strengthening the economy. With foreign transportation links for ease of doing business in the region. investment thriving in the region, the UK is well represented with 150 companies currently in Azerbaijan. British Petroleum is the The country’s wealth in oil resources, new emerging industries largest foreign investor in Azerbaijan. Other companies from and increase in trade has enabled Azerbaijan to stamp its mark the UK include GlaxoSmithKline, AstraZeneca, Mace Group on the world. However, like many other emerging markets and AngloAsian Mining. UK franchises include Debenhams, it is not immune from potential constraints which need to be Mothercare, Accessorise, Burberry, Bentley amongst others who managed to ensure they do not impact growth. are represented within the local market. This further highlights and supports the diversification of the Azerbaijani industry, which A key constraint on growth has been identified by the has continued to grow year on year as a direct result of the International Business Report conducted by Grant Thornton inbound investment and trade opportunities International which found that business leaders believe a lack of skilled workforce and IT infrastructure can hinder growth. Whilst The government, in line with their drive to attract and support Azerbaijan continues to attract foreign investment it is pivotal incoming business entities, is continuously enforcing measures that the economic infrastructure is structured to accommodate to improve the business platform in all facets, paying great the fluid market, by doing so it must attract top talent who can attention to developing world-class infrastructure essential for further support the strategic direction for dynamic businesses.

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Another potential constraint on growth is IT infrastructure. In the economy, people and communities of Azerbaijan for years ever changing business environment, technology continues to to come. move faster than ever before, therefore it is essential to invest in this facet to further prompt growth and remain competitive in Author’s biography a fluid market. Farouk Mohamed is the Managing Partner of Grant Thornton Azerbaijan. In addition to the overall management of the Grant Thornton Azerbaijan continues to advise dynamic firm, his client portfolio covers some of the biggest names in organizations that have entered the Azeri market or have been the country, as well as prominent multinational companies. present and are looking for new opportunities to further facilitate With his extensive and varied business experience of over growth. By highlighting the importance of IPOs, providing 35 years, Farouk has particular interest in auditing financial strategic advice and adding value to our clients, people and institutions, i.e. banks, insurance companies, etc. He has communities in which we work, we continue to support the significant experience in assurance, tax and management Azerbaijan market. consultancy services, including preparation of documentation and company structure for IPO and listing within the local and Azerbaijan is a market in its prime, and the people within international financial markets. Farouk Mohamed is a Certified Azerbaijan are a pioneering mind in shaping the atmosphere Public Accountant, a Member of the Egyptian Society of Public and culture of this very promising market. To shape a market, Finance and Taxes, a Member of the Federation of Arab and to be part of its molding foundation is more than just owning Accountants, a Fellow of the Association of Certified Public a business, it is sharing a legacy. Accountants (CPA, UK), a Fellow of the Institute of Certified Public Accountants (CPA) in Ireland, a Fellow of the Montana At Grant Thornton Azerbaijan, we see our role as helping our Society of Certified Public Accountants (US), a Fellow of dynamic clients sustain long-term growth whilst unlocking Institute of Financial Consultants (USA), a Certified Accounting their potential, which will continue to not only develop Technician in Canada, and a Certified Business Administrator dynamic organizations but will also continue to support the in USA. He speaks English, Arabic, and French.

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Are you ready to live in FATCA era?

Sakina Ibrahimova, institutions and other entities across the world to supply the U.S. Tax Manager government with the information about the investments and PwC Azerbaijan funds held directly or indirectly by U.S. persons.

What is FATCA and its underlying legislative framework? On 18 March 2010, the Hiring Incentives to Restore Employment Act (hereainfater “HIRE Act”) was enacted into federal law in the USA. Section 501(a) of the HIRE Act added Combating tax evasion and avoidance have come into focus for a new chapter 4 to Subtitle A of the U.S. Internal Revenue many countries in recent years. The United States has been the Code. The provisions in chapter 4 are referred to as FATCA most aggressive and broad in its fight against tax avoidance or and impose certain information reporting and disclosure evasion. The Foreign Account Tax Compliance Act (“hereinafter requirements on foreign financial institutions (hereinafter FATCA”) is the most recent global instrument of the U.S. to “FFIs”) and passive nonfinancial foreign entities (hereinafter combat U.S. tax evasion, which has the biggest impact on “NFFEs”). To enforce compliance, a 30 percent withholding tax financial institutions outside the U.S. will be imposed on withholdable payments made to FFIs that do not agree to collaborate with and report certain information So what is the rationale behind FATCA and why it has been to the Internal Revenue Service (hereinafter “IRS”) regarding introduced? The reason is that U.S. persons (e.g., U.S. citizens, the U.S. accounts1 opened in these FFIs. Moreover, 30 percent corporations incorporated in the U.S.) are subject to U.S. income withholding tax may also be imposed on certain NFFEs that do tax on their worldwide income regardless of whether such U.S. not agree to make the required disclosures on their substantial persons reside within or without the U.S. It is not uncommon that U.S. owners to withholding agents. This means that not only U.S. persons invest their funds directly into offshore accounts financial institutions are influenced by FATCA, but FATCA or indirectly through ownership of foreign entities and fail to has an impact also on non-financial entities whose primary pay U.S. taxes. This can happen through the normal course business is not financial services. of living overseas or intentionally to avoid or circumvent U.S. taxes. To identify such investments and uncover and penalize Detailed guidance to enforce FATCA rules set in the Internal tax evaders, the U.S. government adopted and passed FATCA. Revenue Code are contained in the Tax Regulations By introducing FATCA, the U.S. government obliged financial (hereinafter “Treasury Regulations”) issued by the IRS.

1 Note: U.S. Account is a financial account held by one or more Specified U.S. persons or by non-U.S. Entity with one more Controlling Persons that is Specified U.S. Person. Nonreciprocal Model 1B Agreement, No TIEA or DTC (Updated 6-6-2014), Article 1.1(y)

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Moreover, the U.S. Department of the Treasury, in • The beneficial owner of such payment is the NFFE or any collaboration with certain foreign governments, developed two other NFFE; model (Model 1 and Model 2) intergovernmental agreements • Beneficial owner of the payment can be treated as an NFFE (hereinafter “IGAs”) to achieve the efficient implementation of that does not have any substantial U.S. owners, or as NFFE FATCA information reporting. that has identified its substantial U.S. owners; and • The withholding agent reports the information relating to A country signing a Model 1 IGA with the U.S generally any substantial U.S. owners of the beneficial owner of such undertakes to adopt local rules to require all relevant FFIs payment. located in the jurisdiction of Model 1 IGA (hereinafter “reporting Model 1 FFIs”) to identify U.S. accounts pursuant What is FFI? to due diligence rules specified in the IGA. The FFIs in Model FFI means any financial institution that is a foreign entity. 1 IGA jurisdictions must report the information required under The term is defined in the Treasury Regulations and includes FATCA for U.S. accounts to the government of that jurisdiction, a financial institution as defined pursuant to a Model 1 IGA which, in turn, will be obliged to report the information to the or Model 2 IGA. The Treasury Regulations clarifies the term IRS on an automatic basis, generally under a Tax Information financial institution generally meaning an entity that either: Exchange Agreement. As of 8 July 2014, the U.S. has signed Model 1 IGAs with 34 countries and has reached agreement (i) Accepts deposits in the ordinary course of a banking or in substance with 54 countries. The Agreement in substance similar business (depository institution); was reached with Azerbaijan on 16 May 2014. (ii) Holds as a substantial portion of its business, financial assets for the benefit of one or more other persons A partner country signing a Model 2 IGA agrees to direct all (custodian institution); relevant FFIs located in this jurisdiction to follow the terms (iii) Is an investment entity; of an FFI Agreement including reporting information about (iv) Is an insurance company or a holding company that is U.S. accounts directly to the IRS. As of 8 July 2014, the U.S. a member of expanded affiliated group that includes has signed Model 2 IGAs with 5 countries and has reached insurance company, and the insurance company or holding agreement in substance with 8 countries. company issues, or is obligated to make payments with respect to, a cash value insurance or annuity contract; or What is the general rule of withholding and what are the (v) Is an entity that is a holding company or treasury center. objectives? For purposes of an FFI context, an entity is a holding On payments to FFIs company if its primary activity consists of holding all or A withholding agent (defined as any person, U.S. or foreign, that has part of the outstanding stock of one or more members of the control, receipt, custody, disposal or payment of a withholdable its expanded affiliated group. An entity is considered a payment or passthru payment) is required to deduct and withhold a treasury center if the primary activity of such entity is to tax equal to 30 percent of the amount of any withholdable payment enter into investment, hedging, or financing transactions made after 30 June 2014 to a payee (defined generally as the with or for members of is expanded affiliated group for person whom a payment is made, regardless of whether such certain purposes (e.g., managing risk of price changes or person is the beneficial owner of the amount) that is an FFI unless currency fluctuations).2 the payment is exempt from withholding tax or the payment is made under the grandfathered obligation or constitutes gross proceeds What are withholdable payments that may be subject to from the disposition of such an obligation. Grandfathered obligations withholding under FATCA? generally mean certain debt obligations outstanding on 1 July Withholdable payment means: 2014. The term obligation means any legally binding agreement or instrument and includes a debt instrument, an agreement to extend (i) Any payment of U.S. source3 FDAP income. FDAP credit for a fixed term, certain derivative transactions. income is generally defined as fixed or determinable annual or periodic income. Fixed or determinable income Hence, to avoid being subject to 30 percent withholding tax, includes all income included into gross income (with some the FFIs and countries agreed to Model 1 IGA (including exceptions) under Section 61 of Internal Revenue Code. Azerbaijan) shall cooperate with the IRS by identifying and (ii) For any sales or other dispositions occurring after 31 reporting information on U.S. accounts. December 2016, any gross proceeds from the sale or other disposition of any property of a type that can produce On payments to NFFEs interest or dividends that are U.S. source FDAP income4. For payments made to certain NFFEs, a withholding agent generally must withhold 30% of any withholdable payment The Model 1 IGA uses the U.S. Source withholdable payment made after 30 June 2014, unless term instead of withholdable payment, which is defined as any

2 Fin. & Temp. Treas. Reg. § 1.471–5(d) (2014) 3 Note: U.S. source income is defined under section 861 through 865 and other relevant provisions of the Internal Revenue Code. 4 Fin. & Temp. Treas. Reg. § 1.473–1(a)(1) (2014)

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payment of interest (including any original issue discount), Information to be obtained and exchanged with respect to dividends, rents, salaries, wages, premiums, annuities, each U.S. Reportable Account of each Reporting Financial compensations, remunerations, emoluments, and other fixed institution should include: or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States.5 (1) the name, address, and U.S. TIN of each Specified U.S. Person that is an Account Holder of such account and, in the Justification by FFIs to be treated as Reporting Model 1 case of a Non-U.S. Entity that has one or more Controlling FFI in order not to be withheld upon Persons that is a Specified U.S. Person, the name, address, Generally, in order to be treated as a Reporting Model 1 FFI and U.S. TIN (if any) of such entity and each such Specified (applicable also FFIs in Azerbaijan) and not to be withheld U.S. Person (in other words substantial U.S. owners); upon, such FFIs shall provide to withholding agents (among (2) the account number (or functional equivalent in the other information) the Global Intermediary Identification Number absence of an account number); (hereinafter “GIIN”) that appears on the published IRS FFI list (3) the name and identifying number of the Reporting once an FFI registers with the IRS. However, for withholdable Azerbaijani Financial Institution; payments made prior to 1 January 2015, a withholding agent (4) the account balance or value (including, in the case of would generally treat a payee that is an FFI as a Reporting a Cash Value Insurance Contract or Annuity Contract, Model 1 FFI if the withholding agent receives a withholding the Cash Value or surrender value) as of the end of the certificate from the payee indicating that the payee is Reporting relevant calendar year or other appropriate reporting Model 1 FFI and the country in which the payee is a reporting period or, if the account was closed during such year, Model 1 FFI and verification of GIIN for the payee is not required. immediately before closure; etc.9 With respect to pre-existing obligations, the withholding agent may treat the payee as a Reporting Model 1 FFI if it obtains a Each Reporting Azerbaijani Financial Institution would be special pre-FATCA Form W-8 from the payee, and the payee treated as complying with FATCA, and not subject to withholding indicates that it is a Reporting Model 1 FFI and the country in if Azerbaijan complies with its aforementioned reporting which it is a Reporting Model 1 FFI. Thus, GIIN is only needed obligations and the Reporting Azerbaijani Financial Institution to be provided to withholding agents for payment on and after 1 January 2015, which means that Reporting Model 1 FFI a) identifies U.S. Reportable Accounts through due-diligence (including FFIs in Azerbaijan) will have to register with the IRS and reports annually to the Azerbaijan’s Competent and obtain a GIIN before 1 January 2015.6 Authority the required information; b) for each of 2015 and 2016, reports annually to Azerbaijan’s Reporting obligations for Azerbaijan and FFIs under a Competent Authority the name of each Nonparticipating Model 1 IGA Financial Institution to which it has made payments and Under the Model 1 IGA, Azerbaijan will be required to obtain the aggregate amount of such payments; the information with respect to all U.S. reportable accounts and c) complies with the applicable registration requirements on annually exchange this information with the U.S. on an automatic the IRS FATCA registration website; and basis. U.S. Reportable account means a financial account7 d) in the case of Reporting Azerbaijani Financial Institution maintained by a Reporting Financial Institution and held by one makes a payment of, or acts as an intermediary with or more Specified U.S. persons8 or by non-U.S. Entity with one respect to, a U.S. Source Withholdable Payment to any more Controlling Persons that is Specified U.S. Person. Nonparticipating Financial Institution, the Reporting Azerbaijani Financial Institution provides to any immediate Thus, a competent authority in Azerbaijan will have to issue payor of such U.S. Source Withholdable Payment the guidance and rules on how U.S. reportable accounts should information required for withholding and reporting to occur be reported to the Azerbaijani authorities so subsequent with respect to such payment.10 reporting to the IRS could be carried out. With respect to 2014, Azerbaijan will have to report to the IRS by 30 September Due Diligence Requirements under the IGA 1 Model 2015 meaning that financial institutions in Azerbaijan will be for Azerbaijani Financial Institutions to identify U.S. required to report to the local authorities before then. Reportable Accounts

5 Nonreciprocal Model 1B Agreement, No TIEA or DTC (Updated 6-6-2014), Article 1.1(ee) 6 Fin. & Temp. Treas. Reg. § 1.471–3(d)(4)(iv) (2014) 7 Note: The term account is determined as financial account and means depository account, custodial account, equity or debt interest, and insurance and annuity contracts and does not include certain saving accounts, certain escrow accounts, account or product excluded under a particular IGAs, etc. 8 Note: U.S. persons means U.S. citizen or resident individual, a partnership or corporation organized in the United States or under the laws of the United States or any State thereof, a trust if (i) court within the U.S. would have the authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust, and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust, or an estate of a decedent that is citizen or resident of the U.S. Specified U.S. Person is U.S. Person, other than a corporation the stock of which is regularly treated on one or more established securities market, etc. 9 Nonreciprocal Model 1B Agreement, No TIEA or DTC (Updated 6-6-2014), Article 2.2 10 Nonreciprocal Model 1B Agreement, No TIEA or DTC (Updated 6-6-2014), Article 4.1

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Reporting Azerbaijani Financial Institutions shall carry out the due diligence procedures11 to identify U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions. The due diligence may be performed based on the requirements set in IGA, or alternatively based on the procedures described in the Treasury Regulations.

Individual Accounts The following Preexisting Individual Accounts are not required to be reviewed, identified, or reported: 1. A Preexisting Individual Account with a balance or value that does not exceed $50,000 as of 30 June 2014. 2. A Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract with a balance or value of $250,000 or less as of 30 June 2014. 3. A Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract, provided the law or regulations of Azerbaijan or the United States effectively prevent the sale of such a Cash Value Insurance Contract or an Annuity Contract to U.S. residents. 4. A Depository Account with a balance of $50,000 or less.12

Preexisting Individual Accounts with a balance or value as of 30 June 2014, that exceeds $50,000 ($250,000 for a Cash Value Insurance Contract or Annuity Contract), but does not exceed be reviewed, identified, or reported as a U.S. Reportable Account $1,000,000 are considered “Lower Value Accounts” and shall until the account balance or value exceeds $1,000,000.17 be reviewed as a part of due-diligence by 30 June 2016.13 A Preexisting Entity Account that has an account balance Preexisting Individual Accounts with a balance or value that or value that exceeds $250,000 as of 30 June 2014, and a exceeds $1,000,000 as of 30 June 2014, or 31 December Preexisting Entity Account that does not exceed $250,000 2015 or any subsequent year are considered “High Value as of 30 June 2014 but the account balance or value of Accounts” and are subject to enhanced review procedures. which exceeds $1,000,000 as of the last day of 2015 or any The review of “High Value Accounts” as of 30 June 2014, shall subsequent calendar year, must be reviewed.18 With respect be completed by 30 June 2015.14 to these accounts, only accounts that are held by one or more Entities that are Specified U.S. Persons, or by Passive NFFEs New Individuals Accounts are those opened on or after 1 July with one or more Controlling Persons who are U.S. citizens or 2014.15 The following New Individual Accounts are not required to residents, shall be treated as U.S. Reportable Accounts. be reviewed, identified, or reported as U.S. Reportable Accounts: Accounts held by entities and opened on or after 1 July 2014 1. A Depository Account unless the account balance exceeds are considered New Entity Accounts. Unless the Reporting $50,000 at the end of any calendar year or other appropriate Financial Institution elects otherwise, either with respect to all reporting period.16 New Entity Accounts or, separately, with respect to any clearly 2. A Cash Value Insurance Contract unless the Cash Value identified group of such accounts, where the implementing rules exceeds $50,000 at the end of any calendar year or other in Azerbaijan provide for such election, a credit card account or appropriate reporting period. a revolving credit facility treated as a New Entity Account is not required to be reviewed, identified, or reported, provided that Entity accounts the Reporting Financial Institution maintaining such account A Preexisting Entity Account with an account balance or value that implements policies and procedures to prevent an account does not exceed $250,000 as of 30 June 2014, is not required to balance owed to the Account Holder that exceeds $50,000.19

11 Note: all of these thresholds under “Due Diligence Requirements under the IGA 1 Model for Azerbaijani Financial Institutions to identify U.S. Reportable Accounts” section of this article are based on aggregate amounts and not individual account values. 12 Annex I to Model 1 Agreement (6-6-2014), Section II.A 13 Annex I to Model 1 Agreement (6-6-2014), Section II.B and C 14 Annex I to Model 1 Agreement (6-6-2014), Section II.D and E 15 Annex I to Model 1 Agreement (6-6-2014), Section III 16 Annex I to Model 1 Agreement (6-6-2014), Section III.A 17 Annex I to Model 1 Agreement (6-6-2014), Section IV.A 18 Annex I to Model 1 Agreement (6-6-2014), Section IV.B 19 (Annex I to Model 1 Agreement (6-6-2014), Section V.A

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With respect to other New Entity Accounts not described above, the Reporting Financial Institution must determine whether the Account Holder is: (i) a Specified U.S. Person; (ii) an Azerbaijani Financial Institution or other Partner Jurisdiction Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or Passive NFFE.20

FATCA implications on multinational corporations Although most of the burden of FATCA is on financial institutions, multinational corporations (hereinafter "MNC") whose primary business is not financial services may also be affected by FATCA. MNCs may not even know that their global affiliated group may contain entities that can be qualified as FFIs under the FATCA requirements, in many cases due to their treasury functions. If such entities are considered FFIs, they should follow the obligations of FFIs under FATCA. Preparing for FATCA It is crucial for business to align all key stakeholders, including Even if an MNC does not have any entity in its structure that operations, technology, risk, legal, and tax, in order to would qualify as an FFI, FATCA may have an impact nonetheless successfully comply with FATCA. FFIs and NFFEs should by affecting its relationships with counterparties, banks and consider other financial institutions. If an MNC or its subsidiary makes or receives U.S.-source or withholdable payments withholding • Analyzing legal entity structures and registering FFIs that obligations and risks must be considered. Therefore, in addition are required to register to the requirement for MNCs to identify FFI entities in their • Conducting gap analyses to identify systems and processes group, MNCs shall also review their relationship with banks that must be updated and financial institutions to ensure that these financial partners • Developing an implementation plan for the changes are in compliance with FATCA. MNCs shall also put in place required for FATCA compliance procedures for identifying withholdable payments to non- • Performing due diligence on preexisting account holders FATCA compliant FFIs and design the processes for obtaining and remediate non-compliant accounts information from NFFEs on their FATCA status and substantial • Evaluating and designing controls related to FATCA U.S. owners. compliance 21

Moreover, MNCs may be required by withholding agents to PwC Azerbaijan will be happy to help you to support you in provide the required information and be FATCA compliant to your preparation and implementation of a response to FATCA. avoid being withheld upon them. Author’s biography Transitional Period Sakina Ibrahimova is a Tax Manager at PwC Azerbaijan Tax The IRS treats calendar years 2014 and 2015 as a transition and Legal department. She has been with the Firm since period for the purposes of IRS enforcement and administration 2005. In 2010, Sakina worked in the international tax team at of obligations under FATCA. The IRS will consider the extent PricewaterhouseCoopers U.S. where she has been engaged to which entities with FATCA obligations have made “good in a number of international tax planning, structuring and faith” efforts to comply. In the absence of such “good faith compliance projects. She manages corporate and international efforts” no enforcement relief will be given to an entity with tax projects for businesses from various industries to assist FATCA obligations. By “good faith” it is understood that FFIs them with new investments into the country, outbound and withholding agents must have compliance program so as investments overseas, tax cost optimisation and compliance, to enable them to document payees’ FATCA statuses, etc. and to provide other tax solutions.

Harmonization of Azerbaijani laws with FATCA requirements Sakina is a holder of the Masters in Law degree in Tax and On 20 June 2014, Azerbaijani Parliament discussed changes Corporate Law concentration from the Pennsylvania State and amendments to a number of legal acts (e.g., Tax Code, University. She also holds BA in Law and Masters in law Law on Banks) to enable taxpayers to meet the disclosure degrees from the Baku State University. She is an author of requirements of FATCA. As of 8 July 2014, these amendments several articles on tax and legal topics and have rendered a and changes have not entered into force yet. number of presentations and lectures on tax topics.

20 Annex I to Model 1 Agreement (6-6-2014), Section V. B 21 Source: http://www.pwc.com/us/en/financial-services/what-is-fatca.jhtml

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Modern & Modest Recruitment and Development Approaches

Laura Hamidova, However, the recruitment process is not as simple as it may Director, FireWorks Human look at first sight. According to well-known author in HRM Resources Management - Armstrong “Recruitment is the process of finding and engaging the people the organization needs and selection is that part of the recruitment process concerned with deciding which applicants or candidates should be appointed to jobs.” My approach is not to limit recruiting new staff by using only “word of mouth”, which means that the company doesn’t “Word of mouth” have an access to the whole pool of candidates with different backgrounds and experience. Most companies in Azerbaijan and worldwide still using “word of mouth” as its recruitment approach, which is understandable, “Modern vs. Modest” as it is a very old and proven method. Of course it has a lot of benefits; however, disadvantages also exist. “Word of mouth” Before there was only one source, “word of mouth,” for or employee referrals are used by big and small companies, recruiting people, but as society becomes more and more because it is the fastest and cheapest method of recruiting. global, it becomes less necessary for human resources to limit This approach may insure that the company will get new itself to only this method. staff from a safe source with guaranteed references. It also motivates current employees that they can recommend their Nowadays there are a lot of modern recruitment methods that relatives and friends to the job. are widely used and proven by big international companies like

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Total, BP, General Motors, Samsung and so on. Later we will discuss modern recruitment methods such as online recruitment (companies’ public websites, job boards, social networks like LinkedIn, Facebook and Twitter), local newspapers, agencies, head-hunters and graduate recruitment programs. But before doing this, let’s see what needs to be done before starting recruitment process. First, the company needs to make an analysis of recruitment strengths and weaknesses. The analysis of strengths and weaknesses should cover such matters as: the national or local reputation of the organization, pay, employee benefits and working conditions, the intrinsic interest of the job, security of employment, opportunities for education and training, career prospects, and the location of the office or site. The second, identification of sources of candidates is vital. Despite the fact that many different sources have been mentioned above, the most appropriate method would be to consider internal candidates first. Recruiting internally is always advantageous to both the company and employees. The company avoids spending additional time teaching new employees about company’s culture and products, and employees get promotions, leading to their motivation and commitment. social networking is an important tool for recruiting, retaining and managing employees (Achievers, 2013). The biggest “E-recruitment” advantage from using social media is having access to a very wide pool of specialists. You may review their profiles and read Coming back to the modern recruitment methods, online recommendations straight away. You also have the opportunity recruitment is becoming more and more popular, especially for to join groups that you are interested in and post any job large and multinational companies. This method also creates announcement free of charge. However, the main disadvantage the possibility for the company to advertise their vacancies to the may be the following fact, that some users of LinkedIn are not wider labour market and receive a response from a more diverse updating their profiles accordingly and sometimes recruiters pool, which is always a big benefit. In addition, it saves employees’ may be faced with fake profiles of LinkedIn users. time applying for the job, as all applications are gathered electronically. One type of e-recruitment is the company’s public “Do the companies really benefit from Recruitment Agencies?” website, which is a well proven and a very useful recruitment A company may really benefit from using agencies and head- method. It especially helps to build a “company brand” and to hunters, as this is usually a very fast way of getting good make it an “employer of choice”. Corporate websites usually have quality candidates that are currently looking for the job. Of a separate area, for example, “careers,” for job advertisements. course, it’s a preference to use services of recruiting agencies The company usually posts current vacancies with job details, only for hard-to-fill vacancies, as both sources may be not as contacts and how to apply for the job. It may be applicable for big cheap as other ones. Agencies can charge a fee of 8-15 per companies like for example Azercell, Bakcell, Nar Mobile and big cent or more of the first year’s salary for finding someone. Construction and Oil & Gas Companies in Azerbaijan, as people From another perspective, a company needs to be ready to may have an interest in visiting such a large company’s website. pay for quality, especially when recruiting key professionals.

It’s not recommend using job boards as a separate method for “Fresh graduates” recruitment, as in reality they are only an additional source to corporate websites. Using job boards gives the company an As the companies may have a lot of long-serving employees inexpensive way of getting CVs and always staying in the loop and some of them may be thinking about retirement or changing of candidates who are looking for jobs. But sometimes the their workplace, the companies may need to have a practice to volume of CVs received is unmanageable for reviewing, and exercise “Annual Graduate Recruitment programs”. This is the the quality of CVs may not meet the company’s requirements. most common way to guarantee that the company has enough There always should be a separate person who keeps reviewing human resources for future needs. It is a big advantage, as the and selecting the potential ones for hiring managers’ attention. employers also have the possibility to grow and develop the skills that are required to perform any specific jobs. “Social media” “Promoting and Developing” As the corporate environment becomes more and more global, social networks like LinkedIn, Twitter and Facebook As I’ve already mentioned above, when recruiting, the company first are good tools for recruiting. Even 98% of HR respondents needs to look internally. Then if nobody is available, it can recruit to the 2013 Achievers Social HR survey say they believe that externally. However, there is no strict approach that all vacancies

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needs to be filled internally, as sometimes by bringing someone will meet organizational requirements at the end, it is necessary from outside may bring fresh ideas to the company. But to retain and to identify characteristics of people who are currently performing keep employees motivated and engaged, it is necessary to provide as engineers and supervisors. From another side, there is them with the possibility to grow and to develop their career. There always a risk that developed and trained employees may leave are two concepts that are related to promoting and developing the company by receiving better job offers. employees: talent management and succession planning. Qualified employees are an invaluable asset for an Jeffrey Pfeffer, Stanford Business professor said: “When there is a organization, that’s why it is necessary to build a talent talent war between companies, it becomes more vital for a company pool. I highly recommend using different sources when to produce its own talent”. Promoting and developing employees recruiting and not to think of this process as a simple one is a long process which requires a lot of effort and planning from and investing more time, money and efforts in people’s an organizational point of view; however, it’s a process where both training and development. Employers need to recognize that sides benefit. It gives the company a guarantee that they have development of people is a process which has bottom-line a required talent pool to perform the company’s specific needs. results, but not an event. Development of employees always gives a sense of motivation to the staff. It is already proven that the company benefits when Author’s biography employees are motivated. In reality, the company can obtain real Laura Hamidova received both Bachelor and Master degrees benefits by promoting and developing people; but only in the case in Law & Social Studies from Khazar University. She holds that this process becomes consistent. It needs to use such career a CHRM Wales University, UK. Also her education includes management practices such as: education programs, performance a number of local trainings and workshops from different appraisals, individual development plans, succession planning, trainers and legal professionals. She started her career as common career path, formal mentoring and so on. an HR specialist in Det.Al Aliuminius and Vest Consulting, then she worked as an HR Coordinator for AMEC at the time The major difficulty when promoting people is that the company when the company was responsible for BP’s EMS project needs to plan everything correctly: what exact characteristics Engineering & Design work. After this Laura joined Moore of specialists and supervisors need to be developed, and how Stephens as the Recruitment & Talent Acquisition Manager. much time, energy and money the company is ready to invest At the end of 2013 she established her own company - in developing their staff. As each company has its own structure FireWorks HRM. Company which currently works with a and culture, the features that a potential supervisor needs to variety of businesses in different sectors, providing Human have are also very specific. To guarantee that developing staff Resources Management Services.

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Peculiarities of FATCA implementation in Azerbaijan

Farid Isayev, Furthermore, recent developments have confused what was Manager, Head of Legal Services already a thorny issue. Delays in expression of governments’ KPMG Azerbaijan Limited or state financial regulators’ formal position on the Act, and the emergence of potentially transformative intergovernmental agreements (IGAs), many of which are still being negotiated, have left financial institutions unable to fully define their FATCA-compliance statuses, despite the imminent or already passed deadlines. Despite the name, Foreign Account Tax Compliance Act (“FATCA”), which is part of the US Hiring Incentives to Restore Global outlook in numbers Employment Act of 20101, is not simply a tax related issue. Rather, compliance with the Act demands financial institutions With the industry hobbled by so many uncertainties, KPMG adopt a cross-functional approach that incorporates their conducted a recent international survey of global and regional compliance, operations, tax, legal and information technology banks, insurance companies and various other financial departments2. institutions to assess participants’ awareness, attitudes and

1 http://www.hmrc.gov.uk/fatca 2 KPMG publication # 121273, “Surveying the market: Are you ready for FATCA?”

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actions regarding FATCA: what steps have they taken thus leverage their AML/KYC compliance programs to help satisfy far, what resources are they allocating to the task, how much the FATCA requirements. time will compliance require, where do the key challenges lie? Legal and practical hindrances of FATCA Key survey findings include: • Status: Most organizations have started to tackle FATCA implementation in Azerbaijan compliance but are at various stages of preparedness. The majority (59 percent) say they have completed or are Implementation of the Act in Azerbaijan has been accompanied undertaking an impact assessment. with several legal, as well as practical complications, typically • Project leaders: Tax (25 percent) and Compliance (24 peculiar to such processes in various other jurisdictions. Like percent) groups are the leading project frontrunners within many others countries, Azerbaijan has gone from having institutions. no FATCA status at all to being within one step of signing • Participants: 50% say all groups (compliance, operations, the Intergovernmental Agreement (“IGA”). Participants of tax, legal and information technology) are participating in their such a long and complicated “journey”, Azerbaijani financial FATCA compliance programs. institutions, have come across a few challenges and yet • Implementation plan: 86 percent of organizations intend some issues are pending their resolution in the foreseeable to adopt some form of centralized implementation plan, as perspective. opposed to taking a purely decentralized approach by country or region. Practical hindrances • Professional assistance: Majority (57 percent) of For starters, Azerbaijani financial institutions for a while were left organizations are using or plan to use a professional guessing whether FATCA was mandatory for implementation, consultancy firm(s) to assist with implementation. whilst others, willing to implement it, were concerned what • People involved: Majority (63 percent) estimate 10 implications this may have from local legislation perspective. or more people will be involved in FATCA planning and Both groups of financial institutions, though, were unanimous implementation, of which 18 percent say they will use more in their assessment that the ultimate solution needs to satisfy than 100 people. demands of local legislation without harming their position in • Budget: Median budget allocation is approximately global financial system. US$250,000, although there are wide disparities in the amount organizations plan to or have spent already, ranging Arguably, the biggest challenge for Azerbaijani financial from less than US$100,000 to more than US$100 million. institution was to overcome the vacuum created by absence • Timescale: 2/3 anticipate FATCA implementation will take of any formal stance on FATCA on the part of government, somewhere between 6 and 18 months, while 23 percent regulator in the relevant sphere or other state authorities, such forecast it will require 18 months or more. as Ministry of Finance or the Ministry of Taxes. As majority of • Readiness: Less than half (45 percent) would have been global counterparts, Azerbaijani financial institutions favoured able to meet the FATCA requirements by the original 1 a more conservative approach and therefore refrained from January 2013 deadline for US Financial Institutions (USFI) taking materials measures applying FATCA requirements and Foreign Financial Institutions (FFIs), before the Internal to their operations until the government expressed some Revenue Service (“IRS”) extended the deadline for withholding indication of its position on this subject. agents to implement new account opening procedures until 1 July 2014 for physical persons and 1 January 2015 for legal Another critical issue was the assessment of potential impact entities accordingly. on financial institutions’ businesses in Azerbaijan. For one • IGA awareness: More than half (56 percent) were not aware reason, FATCA measures were aimed at taking extra steps or of any governments in the countries in which they operate cautions when dealing with clients whether they are physical intending to enter into an intergovernmental agreement with persons, private entrepreneurs or legal entities. Naturally, the IRS to maintain domestic reporting. The US Treasury application of additional control measures on the clients with Department subsequently announced on 8 November 2012 their direct or indirect participation could have negative effects that it is discussing the development of IGAs with more than or reflect such prudence almost like a mirror effect by the 50 countries, which raised the awareness of the issue. clients themselves. In other words, financial institutions were • Process revision: Almost all organizations (92 percent) left with a dilemma of running the risk of losing or hampering feel their client on-boarding, customer identification or client trust or face complications when dealing with major documentation processes will need to be revised as a result global players in financial sector already joining FATCA. of FATCA. • Greatest compliance challenge: Account identification Finally, but equally important was the assessment of associated requirements emerge as the top-ranked FATCA-related costs at which FATCA would need to be implemented. It compliance challenge, followed by documentation should be stressed that proper FATCA implementation would requirements and systems changes. be a costly process, whether this is done by the financial • Existing program leverage: 4/5 of organizations plan to institution using its own resources or by way of attraction of

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external consultant. This factor becomes even more relevant considering that, essentially, FATCA implementation does not bring any financial or material benefits to the financial institutions. At best, the financial institution would secure its existing level of operations and avoid sanctions or isolation from global financial system.

Legal hindrances The stand-out and, arguably, most critical legal hindrance concerns the principle of “bank secrecy”, given that financial institutions are not allowed to disclose their customers’ individual or commercial information, with the exception of certain cases specifically provided for in the relevant legislation.

This issue may be best illustrated by the relevant requirements applicable to banking sector in Azerbaijan. Thus, Azerbaijani banking legislation envisages that information on bank account, account transactions, account balance, as well as information on the client (account holder) and his/her address shall be treated as confidential and bank guarantees its secrecy.3 In addition, the relevant legislation stipulates list of persons, who information representing bank secrecy can be disclosed to:

• Account holder and his/her representative(s) • Inspectors of the Central Bank performing supervision/ control over bank’s activities • External auditors • Insurance control body in the course of performance of control over activities of insurers4 • Financial monitoring body in cases stipulated under the Law of the Republic of Azerbaijan "On fighting legalization of criminally obtained funds or any other property and the financing of terrorism"5 • credit register6 Electoral Committee in accordance with the Electoral Code Information classified as bank secrecy can only be disclosed of the Azerbaijan Republic.7 to state bodies in the following cases: In case bank illegally discloses information which qualifies • as part of criminal investigation; as bank secrecy, client (account holder) whose rights were • where a court resolution is in effect regarding encumbrances breached may demand compensation for damage incurred.8 or confiscation of person’s financial assets; The aforementioned issues illustrate the extent to which • Information on deposit account holder’s account is provided complications or hindrances Azerbaijani financial sector to the Azerbaijan Deposit Insurance Fund in the event of faced in the light of impending FATCA requirements. In this occurrence of insurance payment; regard, it is essential to analyse in more depth the current • Information on bank account and operations of any legal status of legislative framework and its compatibility with the entity, physical person or private entrepreneur is provided requirements of the Act. to the tax authorities only in cases stipulated in the Tax Code of the Azerbaijan Republic; The role of Intergovernmental Agreements (“IGA”) • Information on funds credited into or debited from the The role of IGA is crucial in facilitating smooth transition to special electoral account may be provided to Central FATCA requirements for financial institutions in countries where

3 Article 41.1 of Law # 590-IIQ “On Banks” of the Republic of Azerbaijan, effective as of 16 January 2004 (“Law On Banks”); Article 967.1 of the Civil Code of the Republic of Azerbaijan, effective as of 1 September 2000 4 Article 41.2 of the Law “On Banks” 5 Article 7.2.1 of Law of the Republic of Azerbaijan “On Fighting Legalisation of Criminally Obtained Funds or any other Property and Financing of Terrorism” №767- IIIQ, effective from 10 February 2009 6 Article 35.4 of the Law “On Banks” 7 Article 41.2 of the Law “On Banks” 8 Article 41.6 of the Law “On Banks”

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formal stance on FATCA has been relatively late or unclear. responsible person, appointing FATCA working team, Thus, financial institutions in Azerbaijan have also welcomed the establishing FATCA policies and procedures, reporting to government’s intention to join FATCA under Model 1. the management and to the board of directors). 2. Examining the need for registering and signing an Under Model 1 IGA, a government signing the agreement with agreement with US authorities, in line with the timetables the United States of America agrees to adopt the relevant rules set forth in the provisions. for the purposes of identification and reporting information on 3. The manner of conduct vis-a-vis customers, particularly U.S. account holders and corresponding accounts. Financial the possibility of refusing to provide banking services institutions covered by Model 1 IGA, that are not exempt under to a customer that does not cooperate with the banking the agreement, must identify U.S. accounts pursuant to due corporation in the manner required for implementation of diligence rules adopted by the partner government and report FATCA provisions.11 the required information on the U.S. account holders and corresponding accounts to the partner government, i.e. to the One of the main quizzes when discussing the negotiation United States. Thereafter, the partner government exchanges process is what actually forms the subject of negotiations, this information with the IRS on an automatic basis, i.e. using given that FATCA is long established set of rules and electronic reporting channels. requirements that are also mandatory. In this regard, it should be noted that Annex II to IGA enables the country At the present moment, there is a list of jurisdictions (partner to express its reservations or outline certain clarifications governments) that are considered having IGAs in effect (such with regard to FATCA requirements from local legal and as, Australia, Canada, France, Mexico, Israel, Republic of custom perspective. For instance, major focus of Israeli South Africa and etc.) and jurisdictions that have reached government was on various banking products which could the agreement “in substance” (such Algeria, Belarus, China, not be reasonably classified or assessed in relation to Georgia, Turkey, India and etc.).9 The mentioned updated lists relevant FATCA provisions. Similarly, one may reasonably may be accessed through the “Resource Centre” of the official expect Azerbaijani government to make full use of its website of the U.S. Department of Treasury. discretion and outline its views in Annex II before IGA is formally agreed and signed. Experience of other countries As mentioned above, the approach and subsequent measures Impact of FATCA on Azerbaijani legislation for adaption of FATCA in various jurisdictions have faced similar challenges along the way. Azerbaijan, having experienced In the light of the aforementioned issues, it is vital to discuss complications, as many other global counterparts, can be measures undertaken by Azerbaijan to facilitate smooth and compared to other countries in this process in order to better proper implementation of FATCA. understand the upcoming challenges yet to be resolved. Joining FATCA In this regards, Israel can be used to compare those The Decree of the Cabinet of Ministers #103 dated 22 April experiences, being a country that has long standing and close 2014 (“Decree”), deemed reasonable and necessary the ties with the United States of America. Thus, Israel is one of start of negotiations between governments of Azerbaijan those countries which signed Model 1 IGA on 30 June 2014.10 and the United States for the purposes of implementation of However, it should be emphasized that the negotiations requirements of FATCA in Azerbaijan. As per the Decree, the preceding the signing of the IGA lasted for almost three years. Ministry of Taxes of the Republic of Azerbaijan was assigned Similarly to Azerbaijan, Israel state regulators in relevant as the authorized body conducting negotiations on behalf of spheres for large period avoided making formal statements the Azerbaijani government.12 on FATCA while the negotiations between the governments gathered pace. It was not until 16 March 2014 when Israeli For the purposes of agreeing the IGA “in substance”, special Central Bank formally issued a statement urging banks to do commission for Azerbaijani party was set up and it comprised all the necessary measures as required by FATCA and within governmental officials from the Ministry of Taxes, Ministry the timeframe stipulated therein, irrespective of whether or of Finance, Ministry of Foreign Affairs, Ministry of Economy not IGA is signed between the two states. Thus, banks were and Industry, Ministry of Justice, Central Bank and State instructed to take necessary course of actions in the below Committee on Securities.13 areas: IGA between Azerbaijan and USA 1. Corporate governance processes (appointing FATCA In the middle of May 2014, the U.S. Treasury Department

9 http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA-Archive.aspx 10 http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA-Archive.aspx 11 http://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/16-3-2014-FATCA.aspx 12 Cabinet of Ministers Decree # 103s dated 22 April 2014, paragraph 2 13 Cabinet of Ministers Decree # 103s dated 22 April 2014, paragraph 3

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updated its relevant FATCA portal reporting that Azerbaijan • 17 July 2014: Changes proposed to the Law “On personal had reached the agreement “in substance” for Model 1 IGA data” come into force. with the United States and consented to this status as of May 16, 2014.14 FATCA action plan for Azerbaijani Thus, Azerbaijan fell in the list of states that have reached agreement on IGA “in substance”. The execution of IGA financial institutions in nutshell between Azerbaijan and USA is expected to be agreed and executed by the end of the current calendar year the Having analysed the peculiarities of FATCA implementation latest. in Azerbaijan, it is equally important to look through the key steps financial institutions need to consider for implementing Timeline of adoption FATCA oriented changes in the requirements of the Act. In particular, bearing in mind that Azerbaijani legislation the vast majority of financial institutions qualifying of FATCA • 20 June, 2014: Bill on changes to the Law “On banks”, implementation in Azerbaijan are banks, the below points “Insurance activity”, “Personal Data” and “Tax Code” of should serve as overview of necessary steps: the Republic of Azerbaijan was proposed and passed first reading at the Parliament of the Republic of Azerbaijan • Registration with IRS: Bank, after registration with IRS, is assigned a GIIN (i.e. global intermediary identification The essence of the changes suggested that they were aimed number) number and further should provide its GIIN to at facilitation of adaptation of the Azerbaijani legislation to the foreign financial institutions evidencing its participating requirements of FATCA: status with FATCA. • Adaptation of bank’s internal documentation used for “information on financial operations performed by the physical opening of new bank accounts: Banks should make relevant persons and legal entities in the territory of Azerbaijan can changes and amendments to their internal documentation, be provided either directly or indirectly (via designated used for opening bank account, such as bank account body) to the authorized body of the other state providing an contract, application for opening bank account with the intergovernmental agreement between Azerbaijan and the purpose of identification of U.S. persons, as well as other other state is in place”. internal guidelines/policies/regulations for this purpose. • Developing documentation required under FATCA: Bank • 9 July 2014: Bill on changes to the Law “On Banks”, is required to develop and approve “FATCA Compliance “Insurance Activity”, “Personal Data” and “Tax Code” of the Policy”, which outlines the procedures performed in the Republic of Azerbaijan were approved by the President of bank in order to be FATCA compliant. Normally, this is the Republic of Azerbaijan. prepared by bank’s FATCA Responsible Officer. • 9 July 2014: the President of the Republic of Azerbaijan • Implementation/adaptation of IT operational system: Adaptation signed Decree on application of: of IT operational system can rightly be regarded as one of the key elements of action plan on FATCA implementation at - the Law of the Republic of Azerbaijan # 994-IVQD banks. Results of those measures can significantly reduce the “On changes to the Law on Banks” dated 20 June burden on bank’s human resources and mitigate risks. 2014; • Classification of pre-existing bank accounts of physical - the Law of the Republic of Azerbaijan # 992-IVQD “On persons, private entrepreneurs and legal entities: Such changes to the Tax Code of the Republic of Azerbaijan” classification shall be done with timeline determined by the dated 20 June 2014; IRS, though immediate priority should be the new clients - the Law of the Republic of Azerbaijan # 995-IVQD “On accepted by the banks after FATCA came into force. changes to the Law on Personal Data” dated 20 June 2014; FATCA Foreign Financial Institution List - the Law of the Republic of Azerbaijan # 993-IVQD “On Internal Revenue Service maintains the constantly updated register changes to the Law on Insurance Activity” dated 20 June of participating Foreign Financial Institutions, which contains 2014. information on financial institutions duly registering and having their registration approved by the IRS.15 Accordingly, the list now • 12 July 2014: Changes proposed to the Tax Code of the also contains information on Azerbaijani financial institutions that Republic of Azerbaijan come into force. have had their applications for registration accepted and approved. • 13 July 2014: Changes proposed to the Law “On Insurance activity” come into force. Conclusions • 16 July 2014: Changes proposed to the Law “On Banks” come into force. The notion of FATCA, which may be regarded as a trend

14 https://www.kpmg.com/us/en/issuesandinsights/articlespublications/taxnewsflash/pages/2014-1/fatca-model-1-iga-reached-in-substance-with-azerbaijan.aspx 15 http://apps.irs.gov/app/fatcaFfiList/flu.jsf

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that could even be qualified as 21st century-cult is the Author’s biography increasing apparition of fiscal or tax-related expressions Farid Isayev is the Head of KPMG’s Legal Practice in in modern vocabulary. The United States, where taxation Azerbaijan. Prior to joining KPMG, Farid worked in the is determined by nationality and not by residence, have legal practice of another Big4 firm in Azerbaijan. Farid’s introduced limitations on their tax law in this way. Thus, the other experience includes working in banking&insurance territoriality principle is not respected insofar as it has an sphere for VTB Bank (Azerbaijan) and Baku Insurance extra-territorial effect, the extent of which could be defined company, legal consultancy experience in regional law firm as a form of modern fiscal colonialism. Jury is still out to Grata, oil&gas expertise working for AzGerNeft German- decide whether FATCA eventually achieves its principal Azerbaijani Joint Venture. His international experience aim. That being said, the ever-increasing tendency in includes working for one of the world’s largest commodity growing close ties in the global financial system makes traders Glencore Xtrata (formerly Glencore International it virtually impossible for any country to isolate itself from AG) in London, UK. the requirements of FATCA without incurring damage to its Mr Isayev holds an LLB with honours in International Law financial institutions. from Kingston University London and Western University in Baku. He currently serves as the acting Board Member of the Azerbaijan has chosen to follow the suit, like vast majority of German-Azerbaijani Chamber of Commerce (AHK). other states, in adaptation of the country’s financial system Farid Isayev overseas KPMG’s wide range of legal services to FATCA’s requirements. Striking the balance between in Azerbaijan. His main areas of expertise include antitrust, engineering a complex process and making that process banking&insurance, civil, consumer, contract, corporate, manageable so as to become business as usual will be of energy, immigration, employment, maritime and other areas utmost importance for both the government and ultimately of law. Mr Isayev is also in charge of FATCA, HR advisory and Azerbaijan’s financial institutions. Corporate Governance divisions of KPMG in Azerbaijan.

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Securities Market: what you need to know to start making money

Sabir Gasimov, Graduate Student of the Faculty of Law History: Foundation Baku State University The history of the securities market goes back several centuries. 400 years ago, in 1592, in Antwerp a list of prices for securities traded on the local stock exchange was unveiled. This year is recognized as the year of birth of stock exchanges as special organizations involved in the purchase and sale of Today there are several problems that inhibit the development securities. Since that time the stock market has constantly of the securities market in Azerbaijan. In this article we will talk evolved. Today, it is the foundation of a market economy. about general aspects of this matter and how to best resolve these problems. Legal side

The securities market is one of the most important parts of the There are many different types of securities. According to global economy. Every day we are faced with many different the Civil Code of the Republic of Azerbaijan, there are such types of economic relations, and every day we make many types as orders, promissory notes, checks, bonds, stocks, different kinds of transactions, visiting different stores or commodity papers, and other documents. In this article I opening our own business. Each penny spent has a knock-on will be discussing stocks and bonds. A stock is defined as economic effect and the need for greater flexibility in these a security certifying membership in a joint stock company market relations led to the creation of the securities market. as well as certifying the right of an owner (stockholder) to

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receive a part of the income of the joint stock company and the right to part of the property of the joint stock society left after its liquidation. Today, there are two kinds of joint stock companies: a) Open Joint Stock Company is a joint stock company whose participants may dispose of their shares freely without restriction. Such joint stock companies have the right to hold open subscriptions for the shares they are issuing. b) Closed Joint Stock Company is a joint stock company whose shares are distributed only among its founders or other predetermined persons. You need to know

As we see, open joint stock companies are involved in the stock exchange. When considering stocks it is necessary to know that there are primary and secondary markets. In the primary market, securities are placed for the first time for their initial subscribers. This is the market for new long term equity capital. Stocks in this market are placed to attract investors and capital. The primary market is convenient for the purpose of setting up a new business or for expanding or modernizing an existing business. The secondary market is a mechanism for resale of securities that have been issued earlier. This is the market where the trading of existing securities is done. Here we see the buying and selling of stocks on stock exchanges, stock quotes and rates. An intermediary between a buyer and seller The securities market of the Republic of in this market is a broker; a licensed professional specializing in trading securities. Purchase and sale transactions on the Azerbaijan stock exchange are conducted through brokerage firms. Azerbaijan is a developing country with a strong potential and The securities market of the USA fast growing economy. The securities market in Azerbaijan is not fully developed yet. In Azerbaijan the stock market The securities market in the United States ranks first in the began its development a couple of centuries later than in the world for the number of securities issued and the volume of USA. After the restoration of independence of the Republic the stock and bond markets. It accounts for almost 40% of the of Azerbaijan, the State Committee for Securities (the global securities market. The world's largest stock exchange, “Committee”) was established on December 30, 1998 with the in terms of turnover, is the New York Stock Exchange (NYSE) purpose of creation and development of the securities market. located on Wall Street in New York, which is the main stock The Committee deals with the adoption of regulations relating exchange of the USA. It was founded in 1792. The securities to the securities market, issuance and circulation of securities market of the USA is the most powerful and extensive market and investment funds. In 2000 the Baku Stock Exchange among national markets of Western countries. It significantly (“BSE”) was established. In the 60s the United States created influences the stock markets of other countries. In the USA, the an electronic securities trading system NASD Automated stock market is particularly developed. In Europe the wealthy Quotations (NASDAQ). Due to this system, it was possible to mostly prefer to keep their spare money in bank accounts, buy carry out online trading. A similar system was established in insurance or real estate, whereas in the USA the majority of Azerbaijan recently where one can engage in online trading investors invest in financial assets. Thus, the national stock and see changes in rate and quotes. Also, in April 2014, the market of the United States has markedly overtaken European Committee and BSE initiated the establishment of the Listing markets in its development. The USA has developed better Advisory Program with the purpose of increasing public mechanisms for financial transactions and is now considered awareness of the securities markets. This program gathers to be the most organized and accecible market for securities. together law firms, accountants and brokerage firms which According to American stock market experts, approximately commit themselves to provide free advice and training to any 100 million people are potential buyers on the exchange. Today interested issuers. The main purpose of this program is to train the stock market and stock exchanges of the United States are entrepreneurs, cultivate good corporate governance practices the best models for the development of the securities market and financial transparency, and to ensure the accountability in developing countries. of companies.

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In addition to the above, to develop the market you need to financing. This process is called an Initial Public Offering (IPO) follow certain principles: So we can conclude that one major factor inhibiting the development of this market is a lack of knowledge about the a) to support order on the market, to create normal working securities market. conditions for all participants; b) to protect market participants against fraud and bad faith Conclusion behavior by individuals and organizations; c) to provide free and open pricing of securities on the basis of As mentioned above, the legal regulation side of this activity supply and demand; is satisfactory. However, there is a need to attract people d) to create an efficient market in which there are always to this market, motivate them to actively participate in the incentives for business and in which each risk is adequately market. One of the problems here is distrust. If one has the rewarded. correct marketing program, as well as extensive advertising, providing people with visual examples and experiences of To achieve these goals the Republic of Azerbaijan has created other people in this activity, interest in this market will rise. many necessary and useful legal acts. But the main problem Also another way to inform people about this market is to is not the legislation. The main problem is the lack of interest use the news, radio, the mass media. By placing information of entrepreneurs and citizens in this market. We can compare in the mass media about local companies as we see it done the development of the securities market in the United States, abroad, we will give people the opportunity to observe as well as in other countries. And of course every country this activity themselves. The main objective is to show an has its own nuances. The securities market in the Republic average citizen that activity on the securities market and of Azerbaijan is developing, but not as fast as it deserves. on the stock exchange can be profitable. Investors will The problem is that not everyone knows how the stock want to invest their money in promising projects. Hence, market works. For example: a young entrepreneur has a good a lot depends on marketing and public awareness. If it is business idea but no financial resources. Some take loans possible to achieve progress on these aspects it would from banks and some do not find any resources. If the public contribute to further economic development of the Republic was aware of the stock exchange, then that entrepreneur of Azerbaijan. might have issued shares in his newly established company and people would have invested in his company. Firstly this Author’s biography is very beneficial to the investor because it is profitable and Sabir Gasimov graduated from Baku State University (Faculty secondly reduces the risk for the entrepreneur. As a result, the of Law; 2013) and is now an LL.M degree student in Theory of buyer is offered the opportunity to profit, and the seller obtains State and Law at Baku State University.

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What we have learned as a company?

have earned” and “what we have spent” are the key topics Lala Abdurahmanova, of the discussions, which result in cutting in the budget, KEEL Academy particularly, in those areas we see huge expenditures and unreasonable goal setting for the next year. But in the whole process what we miss is an important thing such as learning mindset of the company!

To become a learning company which is able to analyze “The only real mistake is the one from which we learn itself and its environment in a correct manner, as well as to nothing.” learn fast and keep the right knowledge inside, we need three - Henry Ford fundamental values: internal cooperation, free communication and culture of trust. The last and the first months of the year are usually full of internal meetings and workshops in every company. It’s a According to Peter Senge, an American scientist, lecturer and period of reporting, assessment and planning in all companies. author of the book “The fifth Discipline: the art and the practice While this process can vary in every company, the concept of learning organization”, the learning organization has the and goal is identical, i.e. it is to find out the last year figures following characteristics: and to plan the new ones. - System Thinking. If we look at the organization as a body and Let’s stop here for a second! Are we talking about the figures not as a machine producing revenue, we would see numbers only? Unfortunately, this is the case. Questions like “what we of systems and structures needed to work simultaneously.

34 Issue 21 development & education

Literally speaking we cannot take care on bones and ignore muscles, go to gym and eat unhealthy. Every single part of the body is important to feel good and to live a happy life. Every single part of the organization is important to develop further. We can have enough revenue today, but if our clients or employees are not engaged or satisfied, we cannot ignore it today otherwise it will show up in figures later. Look at the different parts of the organization, such as employees, clients, processes, development, decision making, trust and so on and realize how they influence each other in the short and long terms perspective.

- Personal Mastery. Organizations learn through individuals who learn. But individual learning does not guarantee the organizational learning. It’s not only about the skills and knowledge. It requires the vision, creative tension and commitment. Let’s imagine that you are going to have a new product or service in your portfolio. First, you will need to set a vision to know what is your ‘great product” is all about. Then, you have to be creative enough to set the all process of selling this product to the market. And finally, you have to be committed to understand the truth of reality and be flexible to Try to look at your company from this perspective! What change the structure or process according to circumstances. elements exist and work properly? What elements need The big part of personal mastery is self-awareness, how some improvement? much we know ourselves and the impact of our behaviors on others. The most important thing is that in learning companies, the leaders are not only the traditional managers, they have to - Mental models. We all have our understanding of the be designers and teachers. Being a teacher does not mean world through our values, believes and perception. to teach people what to do and how to achieve the vision. It Sometimes we do not realize how it impacts on is about fostering learning and creating the learning culture assumptions, behaviors and our decisions. Mental within the company. models present some significant obstacles to learning and innovation. According to Peter Senge, mental Are you ready to take this role and care the responsibility? models often limit the ways in which we think and act. If Small changes can produce big results. Start with something our mental models are incorrect, we will make the wrong small, but start! Having the learning organization, you will have decisions. For example, a common mental model for a greater results. production manager may be that low-level employees are lazy and that's why production goals are not being “I’m not afraid of storms for I’m learning how to sail my ship.” met. If organizations are to develop a capacity to work - Louisa May Alcott with mental models then it will be necessary for people to learn new skills and develop new orientations. In other Author’s biography words, it means fostering openness. Mrs. Lala Abdurahmanova is a professional trainer, facilitator, consultant and coach, who provides training, consulting and - Building shared vision. The key vision question is ‘What do coaching services to a wide range of businesses. we want to create together?’ Taking time early in the change Out of 18 years of her professional career, Mrs. Abdurahmanova process to have the conversations needed to shape a truly worked as manager for 11 years, which contributed to a shared vision is crucial to build common understandings high-quality of her work, competence and responsibility. and commitments, unleash people’s aspirations and hopes Having started as a trainer in U.S.- based non-governmental and unearth reservations and resistances. organization ISAR, in few years she continued her career as a country representative of the Dutch consulting company - Team learning. The discipline of team learning starts Quadra Consulting. For the last 8 years she worked in Azercell with ‘dialogue’, and represents the capacity of members Telecom, holding the positions of Azercell Academy Manager of a team to suspend assumptions and enter into a and Organizational Development Manager. genuine ‘thinking together’. It happens when teams start Since 2014 Mrs. Abdurahmanova represents her brand ‘thinking together’ – sharing their experience, insights, KEEL Academy (www.facebook.com/keelacademy) providing knowledge and skills with each other about how to do professionals services in training, business consultancy and things better. coaching.

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Business conferences - education with a twist of networking

at conferences are credited by many as one of the most Lavinia Iosub, inspiring, a-ha-moment-causing encounters in their entire Country Manager P World in Azerbaijan business life. A Financial Times editor recently wrote "A curiosity of the internet age is that the more opportunities people have to talk and see each other online, the more they want real contact"1.

However, because "I like to meet people and be inspired!" Let's take a minute and imagine a world of no real-life alone is probably not an argument that stands in a conversation business events. Would Skype calls & conferences, with CEOs and finance managers who approve budgets, let us LinkedIn groups, Google Hang-outs, webinars, podcasts go through the main reasons companies would pay for their and e-learning be enough? Do we even remember half of employees to attend conferences. the people we've ever interacted online with? Would we be as engaged and inspired if we've never actually met A. Education the experts and peers in our industry, if we were never to As we all know, the ultimate goals of education are related to experience the magic that face-to-face interaction holds in increasing skills and knowledge levels as well as improving the business sphere? As members of this profoundly social the quality of one's attitudes and behaviors. Therefore, in human race, a majority of us do not find that alternative so regards to this topic, we can talk about two main processes palatable. In fact, those spontaneous hallway conversations taking place during conferences, forums and trainings:

1 Skapinker, M. Conference management is an excellent career choice http://www.ft.com/intl/cms/s/0/f29b0eea-4804-11e4-ac9f-00144feab7de.html#axzz3Jdn4bxm0

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1. Knowledge transfer • Theoretical knowledge - the primary goal of going to a conference is often advertised as being updated on the latest trends, technologies and tools used, timely research results, evidence-based best practices in one's field. • Practice - the second most common activity scheduled in conferences is learn by doing in workshops, role plays or case-studies, as it is common knowledge that we retain information better once we've applied it, even in a controlled and pre-set environment. 2. Mindset shaping: attitudes, behaviors are often formed through exposure not only to new information, but especially to role models or counterparts, to their own attitudes and behaviors which can be compared, analyzed, critically assessed, chosen. We often learn just as much from the way a topic is presented (from the visuals of the presentation, to the tone, jokes, clothing of the speaker and so on) as from the content itself.

B. Networking The value of networking is a topic that has been much debated 3. smoother "sailing" in terms of getting business done if on and the general conclusion is that, if done right, it can capitalized on all those new contacts and techniques have a surprising number of positive effects. To put this in an learned at the event organized list, I would mention the following: I would also take a moment to focus on one aspect that managers • peers-to-peer or delegate-to-delegate interaction often forget to do: we obviously can't send our whole teams to • delegate - speaker interaction: most of the speakers are conferences as someone has to do the work as well and the open and glad to follow up on their sessions with private or financial side translates, many times, into a quite substantial group conversations, to everyone's benefit cost. That doesn't mean that when the conference is over, what • positioning oneself as an expert - we like it or not, people happened there is the exclusive property of those who attended. love to work with those who are considered among the best In fact, asking these people to share the information with their in what they do. Therefore, if one is looking for recognition colleagues would be highly beneficial for both the audience as and developing their business, being the "best kept secret" well as for the person disseminating information. might not be the best strategy. • interaction with exhibitors, service providers, suppliers and "We don't believe in ownership of the knowledge - our job is contractors - the contacts we often depend on in our job to connect those who have something to teach with those are not all found in online databases, and even if they are, who are ready to learn and not to be the custodians of the an extensive feedback page is often missing. Therefore, knowledge" getting to know the exhibitors at an event or the partners -Jeff Turner, Head of Learning and Development EMEA your peers recommend is not to be neglected. Facebook, former L&D at O2 and AOL.

C. Fun After all, this is what events are and should be about. I left this for the bottom of the list, as for many it might not be among the primary reasons for attending a professional Business events in Azerbaijan event. However, high-quality conferences often provide parties, artistic performances, cruises or dinners for the exact Focusing on the local reality, it is truly thrilling to observe the reason of providing entertainment and a better environment bustling development of the events scene in Azerbaijan. Not for networking, which makes the process that much more longer than four-five years ago, we could say that the offer enjoyable. was mostly consisting of local events, with speakers of varying quality and, as a consequence, with low respect, discipline D. Return On Investment and quality on the participants’ side as well. Among the most common ROIs mentioned by companies that have their people attending our conferences are: In the meantime, the business market has matured and we now routinely witness occasions where local delegates and 1. more prepared, productive, connected and motivated speakers can mingle with foreign ones during high-profile employees events, in order to discuss state-of-the-art ideas and topics. 2. a more visible brand, a more attractive employer image To mention but a few examples, speaking of business events

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exclusively: the World Economic Forum (Davos) in Baku 2013, Internet Governance Forum 2012, The Economist's Azerbaijan Investment Summit (2014), the launch and regular subsequent meetings of "100 Business Women of Azerbaijan" and an innumerable number of exhibitions for each field and sector.

In regards to our specific expertise and experience at the P World, over the past 2-3 years, we brought to Azerbaijan a number of "firsts":

• the first international event for PR professionals ("Baku PR Experience", 2012) which featured speakers like Princess Diana's Former Private Secretary, Patrick Jephson; Sietse Bakker, Event Supervisor Eurovision or Thierry Nicolet, VP Schneider Electric • the first international marketing event, which is already preparing for its third edition (Marketing Kingdom 2013, 2014, the 2015 edition being scheduled for April 16-17th) and included, over the years, guests like Mary Jo Jacobi, one of the most prominent corporate and communications strategist in the world, with experience in counselling US events. A couple years ago, companies were still surprised that Presidents, BP, Lehman Brothers, HSBC; Greg Nugent, the they have to pay in order to attend a high-quality event, expecting Marketing Manager of the London Olympics and consultant to be offered invitations. Although as specialists in the field, we can for the Games in Rio de Janeiro; Colleen Harris, Official note that attendance fees are lower here than in most European Spokesperson for Prince William and Kate Middleton's capitals, there used to be quite an outrage in regards to prices or Wedding; Lars Silberbauer, Director SM at Lego, Richard the sole idea of paying. That is now a thing of the past. Another Beaumont, VP at Rolls-Royce and dozens of other global huge milestone was and still is related to fair competitions and managers and representatives from companies like awards: although at the beginning of our activity in Azerbaijan we Facebook, Google, BBC, Unilever, Coca-Cola, P&G, Henkel, encountered a deep disbelief in the trustworthiness and value of Phillips, Diaggeo, Tate Museum, Pepsi or Huffington Post. this type of competition and ceremony, we can now see some of • the first international human resources event Baku HR the most well-known companies in Baku competing as fiercely Experience (first edition 2013, second edition November as their European counterparts do in similar events. The awards 2014, a third edition tentatively scheduled for November ceremonies we organize are gaining every year more and more 2015) which featured so far influencers like Rob Veersma, credibility and popularity. Director T&D Gazprom, MBE Jenny Arwas (British Telecom) and many other global managers and representatives from The only major challenge remaining is related to the visa companies like eBay, Skype, Hertz, HP, Dell. process still hindering a large number of foreign delegates and • the first international business excellence awards: "Golden speakers to come in the country without weeks of prior logistic Crown Awards" for marketing and communication arrangements in the same way they go to Turkey, for example. professionals (first edition 2014, a second edition in preparation), "Excellence in HR Awards" (first edition There are many reasons to believe Baku has a bright future 2013, second edition November 2014) involving juries of ahead in regards to holding large international business events. internationally recognized specialists, organized in order Its fast development, hunger for "new", a plethora of beautiful to provide the first platforms for highlighting and rewarding venues equipped to handle almost any type of event one would local professionals in the fairest of manners. think of, larger and more accessible dedicated budgets, and an increasingly positive and visible national brand abroad are only Putting all of these into perspective, three years ago, some of them. We all just have to pick the right ones, do our Azerbaijani professionals in most business fields had to go homework and learn to boost that return on investment. to London, New York or at least Istanbul to hear the global names that matter share their experience at an event. At the Author’s biography P World, we are proud to be among those entities that have Lavinia Iosub is the Country Manager of P World in Azerbaijan. significantly contributed to changing that. Bakuvians now She holds a Bachelor degree in Mass Communication and a have plenty of chances to attend prominent business events Masters in Business Administration. Over the last 8 years, happening at their doorstep. Lavinia has been focusing on event management, business Over these past years, we have equally witnessed a tremendous development and PR in corporate, start-up and NGO improvement in regards to mentalities and behaviours toward environments.

38 Issue 21 AmCham Azerbaijan

The American Chamber of Commerce in Azerbaijan is a About us private, non-profit business association supporting and promoting the interests of business in Azerbaijan.

Established in 1996, AmCham is com- posed of over 295 members and asso­ ciates active in every sector of the Azer­ baijani economy. We represent 80% of all foreign investment, as well as a significant portion of local investment which allows us to promote American, Azerbaijani and multinational corpora- tions. This includes leading companies in Energy, Banking, ICT, Legislative/ Financial Consulting, Professional Ser­ vices, Education, Real Estate Develop- ment, Health, Transportation, Travel and Production fields.

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

39 AmCham Azerbaijan

Government Relations April – December 2014 Director of Outreach and Protocol Mr. Jason Steinbaum, HFAC Minority Staff Director COL Andrea Thompson, Military Advisor, HFAC CPT Krystyl Watson, U.S. Army.

25 April Luncheon On April 25th AmCham welcomed Chairman of State Social Protection Fund of The Republic of Azerbaijan (SSPF) Mr. Elman Mehdiyev at the Monthly Members’ Luncheon. In his speech Chairman of SSPF underlined an effective cooperation between Fund and AmCham and stated that this cooperation is a result of reforms implemented under the management of the President of the Republic and the formation of corporative social responsibilities mechanisms. At the end of the luncheon Mr. Mehdiyev answered questions of guests and representatives of media. 3 April Luncheon On April 3rd AmCham hosted Monthly Members’ Luncheon with Vice-President of SOCAR on Investments and Marketing Mr. Elshad Nassirov.

Ilgar Veliyev, President of AmCham cordially welcomed Mr. Nassirov and luncheon participants and expressed his sincere satisfaction with the cooperation between SOCAR and AmCham. Mr. Nassirov briefed the members about the latest achievements on Southern Gas Corridor. “Pretty many things can be said about the Southern Gas Corridor and of course we have to think what this gas corridor is providing to Europe and the world markets. European Union needs more security, and energy security definitely cannot be separated from the national security - it becomes obvious more and more that energy is equal to the national security of any country. The big gap in price and security of supply between European average 22 May Luncheon and countries in periphery of Europe provides the necessity On 22nd of May AmCham hosted Monthly Members’ to construct something to connect the Caspian region to Luncheon with Deputy Minister of Labor and Social Protection the European Union. This is a challenging, if not the most of Population Mr. Idris Isayev. challenging energy project in the world.“ said Mr. Nassirov. “At the end of February 2014 State Oil Company of the Republic Ms. Nargiz Nasrullayeva-Muduroglu, Executive Director of Azerbaijan has joined AmCham large family of more than 270 of AmCham, cordially welcomed Mr. Isayev and luncheon members and became the fifth state-owned enterprise among participants and expressed her sincere satisfaction with AmCham members along with “Azercosmos” OJSC, ADA the cooperation between the Ministry and the Chamber: University, AzPromo and The International Bank of Azerbaijan. "Permanent cooperation with the Ministry of Labor and Membership of SOCAR at AmCham increases networking Social Protection of increases business opportunities for the opportunity for all our members and further integrates SOCAR Chamber members and allows the Ministry to work closer to into Azerbaijan business community.” said Ms. Nargiz the business circles" Nasrullayeva – Muduroglu Executive Director of AmCham. Mr. Isayev briefed the members about the recent changes and On April 20th AmCham staff met with the members of US amendments to labor legislation as well as on other recent Congressional Delegation: Rep. Ed Royce (CA), Chairman, developments, latest achievements and reforms. House Foreign Affairs Committee (HFAC) Rep. Eliot Engel (NY), Ranking Member, HFAC Rep. David Cicilline (RI) Rep. Deputy Minister also underlined the effectiveness of cooperation Lois Frankel (FL) Mrs. Marie Royce Ms. Elizabeth Heng, HFAC between the Ministry and AmCham: "This kind of cooperation

40 Issue 20 AmCham Azerbaijan

as well as the events, aimed at the improve of labor relations, help us to review and take into consideration the comments and recommendations on further developments in the labor market, for both foreign and local companies,- because the steps taken in this regards serve the common interests of all the parties at the labor market", - said Mr. Isayev. Speech of the Deputy Minister was followed by Q&A session. In the closing remarks Mr. Ilgar Veliyev, President of AmCham, expressed his sincere gratitude to Mr. Idris Isayev and Management of Ministry for continuous cooperation with the Chamber and voiced his hope for further joint efforts and projects.

On June 2nd AmCham staff met with high level Delegation consisting of Congressman Luis Gutierrez (Illinois), Illinois State Representatives Kenneth Duncan and Lashawn Ford, Development of Education (adopted in 2013) which are aimed Sean Fetchko, CEO, I-Foods, Inc. (California and Sydney) and to create educational system holding a leading position among Katherine Quinn, widow of actor and artist Anthony Quinn. the world countries according to the results of quality and which The meeting was dedicated to further strengthening US- is based on qualified teachers, educational managers and Azerbaijan relations and to discuss partnerships developed advanced technologies. Describing the strategic priorities of between Azerbaijani and American companies. the university rector highlighted the followings: improving the quality of the educational process and developing its quality, On June 11th AmCham management held a meeting with the improvement the efficiency of scientific activity, development of representatives of the Ministry of Justice: Adil Aliyev, Chief of innovation educational system, integration to the international the General Department for Legislation, Rahim Rahimov, Head scientific and educational sphere, increase of the role of of the Registration Department of the General Department university in socio-economic development of the republic and for Notary and Registration and Afgan Alekberov, Deputy improvement of the social welfare of academic staff. Head of the General Department for Organizational Control. Ilgar Veliyev, President of AmCham expressed his sincere satisfaction The meeting was devoted to the set of recommendations, with the cooperation between the Embassy and AmCham. “US proposed at AmCham 2014 White Paper and further measures Embassy in Azerbaijan was among founding members of the taken by the Ministry – in the issues of transparency, access Chamber back in 1996. Cooperation with the Embassy increases to information, electronic services offered to citizens as well as networking opportunity for all our members” said Mr. Veliyev. activities, undertaken by the Ministry within the implementation Ambassador Morningstar briefed the members about of the National Strategy on Open Government. Azerbaijan’s development of a modern, diversified economy. “I am very optimistic about Azerbaijan’s long-term prospects and I am also proud of the level of economic cooperation we have enjoyed with Azerbaijan during my tenure here“ said Ambassador Morningstar.

On July 8th AmCham met with representatives of Ministry of Education: Elchin Aghakishiyev, SABAH Groups Project and Sulhaddin Gozalov, Department of Science and Higher Education – to discuss SABAH project and possible ways of cooperation between AmCham and the Ministry within the framework of the project implementation.

On August 7th AmCham staff members and representatives of member companies met with official from State Social Protection Fund to discuss achievements of the project aimed at establishment of non-state pension funds and development 25 June Luncheon of legal framework for regulating their activities. State Social On June 25th AmCham hosted Monthly Members’ Luncheon Protection Fund was presented by Nigar Panahova, Head of with Professor Adalat Muradov, Rector of Azerbaijan State Personal Accounts Department, and the staff of the project Economic University and the United States Ambassador to the were represented by Agrita Groza, Resident Twinning Adviser, Republic of Azerbaijan Mr. Richard L. Morningstar. Jana Muizniece, Director of Department of Social Insurance of the Ministry of Welfare of Republic of Latvia and Dace In his speech Rector of the University noted that there are Brencena, Senior Expert of Ministry of Welfare, Head of five large-scale measures within The State Strategy for the Private Pension Committee of Latvian Bank Associations.

41 AmCham Azerbaijan

executive and legislative power at the public hearing of the Law on Advertisement on November 14th. On December 24th AmCham submitted its Position Papers on Advertisement and E-trade to Milli Mejlis.

30 October Luncheon On 30th of October AmCham hosted its Monthly Members’ Luncheon with, Mr. Elchin Aghakshiyev, Head of Executive Committee of SABAH Project, run by Ministry of Education, who updated participants on the project, its current stage and perspectives. His speech has been be followed by Q&A session. Mr. Farid Ismayilzada, Acting Executive Director of AmCham, cordially welcomed special guests - Ambassador John Maresca, Special Advisor to the Rector of ADA University and Francisco Ernesto Romero Bock, Chargé d'affaires of 25 September Luncheon The Embassy of Mexica to Azerbaijan - and briefed luncheon On September 25th AmCham hosted Monthly Members’ participants about AmCham 2014 Salary Survey and Job Fair Luncheon with Deputy Minister of Taxes Mr. Natik Amirov. Project. Later on Aynura Piriyeva, Chairperson of AmCham Mr. Farid Ismayilzada, Acting Executive Director of AmCham, CSR Committee updated luncheon participants on AmCham cordially welcomed Deputy Minister and luncheon participants 2014 CSR Excellence Award. and expressed his sincere satisfaction with the cooperation In addition to the traditional presentations by AmCham between the Ministry and the Chamber: "Permanent members, Special Guest Speaker Dr. Ruth A. Shapiro, cooperation with the Ministry of Taxes increases business Senior Advisor to the Asia Business Council addressed the opportunities for the Chamber members and allows the Chamber’s members on current trends in philanthropy and Ministry to work closer to the business circles" social entrepreneurship. In his speech Mr. Amirov briefed the members about the recent developments, latest achievements and reforms and underlined an effective cooperation between the Ministry and AmCham. Speech of the Deputy Minister was followed by Q&A session. In the closing remarks Mr. Ilgar Veliyev, President of AmCham, expressed his sincere gratitude to Mr. Natik Amirov and Management of Ministry for continuous cooperation with the Chamber and voiced his hope for further joint efforts and projects. In addition to the traditional presentations by AmCham members, September Luncheon had also been featured by a unique chance to meet representatives of U.S. Department of Commerce and a trade mission of 12 Canadian companies from a range of sectors (Oil&Gas, Natural Resources, Engineering, Construction, IT, Aerospace, Agriculture, Academic Exchange & Professional Trainings). The trade mission was headed by John Holmes, Ambassador of Canada to Turkey, Azerbaijan, 4 December Luncheon Georgia and Turkmenistan and organized by The Canada On December 4th AmCham held its last monthly members’ Eurasia Russia Business Association in collaboration with the luncheon in 2014. Mr. Farid Ismayilzada, Acting Executive Embassy of Canada to Turkey and the government of Quebec. Director of AmCham, cordially welcomed guests of the event and delivered presentation on AmCham 2014 Annual National On October 15th AmCham staff together with the Employee Salary Survey Report, which is the invaluable representatives of member companies (Baltika Baku, source of information on the country’s labor market and provide Deloitte, Dentons and KPMG) met with the representatives information on the employment conditions in 120 leading of Apparatus of Milli Majlis - Rauf Hajiyev, Head and Vasif foreign and local companies operating in Azerbaijani market. Amiraslanov, Advisor of Economic Legislation Department – in As usual - traditional presentations by AmCham members order to discuss the draft Law on Advertisement and position were also delivered to the participants of the luncheon. of AmCham members’ community on the new drafting of the Special Guest Speaker of AmCham December Members’ law. E-trade, its challenges and opportunities in Azerbaijan as Luncheon - Mr. Fariz Azizov, Head of Executive Board of well as shortcomings in the legislation were discussed within Baku Stock Exchange addressed the Chamber’s members the second part of the meeting. The position of AmCham on recent developments of exchange market; his speech has members’ community was shared with representatives of the been followed by Q&A session.

42 Issue 21 AmCham Azerbaijan

AmCham Committees Highlights April – December 2014 Within the second part of the meeting, the Chairperson passed Labor/Human Resources Committee the floor to the guest speakers - Donald Townsend, US Meeting Embassy Russia Regional Intellectual Property Rights Attache on Russia, CIS and Georgia and Nikita Zharinov, Intellectual 15 April 2014 Property Specialist at the US Embassy in Moscow. Guests Within the first part of the meeting guest speaker Mr. Rizvan gave an overview of recent IPR developments in the region and Karimov, Labor Relations Expert updated participants on particularly in Azerbaijan, as well as various issues companies recent amendments to labor legislation and discussed have with IPR infringement and enforcement, including patents, technical and administrative adjustments to be done by HR trademarks, copyrights and trade secrets. Managers. His overview covered the following issues: The overview was followed by discussion on challenges and • social payments regulations, including sick leave, maternity opportunities of the IPR environment in Azerbaijan with the leave, child care, etc.; representatives of various companies, working in ICT sector. • e-signature; • electronic contracts; Tax&Customs Committee Meeting • employees’ database regulations; and • electronic registration of employment contracts. 23 April 2014 TC Committee hosted guest speaker, Mr. Guloglan Muradli, Q&A session with Mr. Karimov on various labor issues, General – Major of Customs Service, Head of Department including latest changes in labor legislation followed in the for Struggling Custom Infringements, State Customs second part of the meeting. Participants received a number of Committee of the Republic of Azerbaijan (Gömrük Sahəsində useful recommendations and advices from the expert, who has Hüquqpozmalara Qarşı Mübarizə Baş İdarəsi), who updated years of experience in the field. participants on recent reforms, changes and developments in Customs Service, including e-services. Presentation of Mr. Muradli was followed by intensive Q&A session and further discussions on the topic of his speech. Labor/Human Resources Committee Meeting 7 May 2014 Within the first part of the meeting Sabina Zeynalova, AmCham Annual Salary Survey Expert and Turab Teymurov, AmCham Member Services Specialist shared previous experience and discussed plans in 2014 survey preparation. The discussion followed by Q&A and feedback session with participants.

In the second part of the meeting Laura Hamidova, Director of FireWorks Human Resource Management Agency briefed ICT Committee Meeting the participants on activities of the Agency and made the presentation on “Build your people”. 16 April 2014 At the third part of the meeting, the Committee welcomed this Within the first part of the meeting the Chairperson updated month Guest Speaker, Eric G. Morin, Chief of Consular Section the committee members on preparation for 2014 Annual ICT of the US Embassy in Baku, who gave extended and detailed Conference and recent meetings of the working group with the information on US Visa Facilitation program for employees of representatives of the Ministry of Communication and High AmCham Member Companies. Technologies. The date and venue were already confirmed with the Ministry; tentative agenda was developed by the date of the At the conclusion of the Committee meeting, participants Committee meeting and was shared with the participants. It was updated each other on practical steps, to be done within the agreed that AmCham office will keep ICT Committee members framework of recent changes in regulations of employment updated on the issue. contracts’ electronic registration.

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of administrative circumstances and end of the business Joint Banking, Finance & Insurance season the Ministry of Communication and High Technologies and Tax & Customs Committees suggested to postpone the event till the upcoming autumn. It was agreed that AmCham office will keep ICT Committee Meeting members updated on the issue. Within the second part of the meeting, the Chairperson passed the floor to the guest speakers - senior staff members of Global Resources, Inc., USA (an international consulting firm that works exclusively with developing and emerging nations in ICT and infrastructure fields, www.global-resources.com) who were visiting Baku from May 14 to 21, as the firm, conducting a Feasibility Study on behalf of Azercosmosand joined the Committee Meeting to give an overview of technical and business management concepts that are emerging in ICT and supporting industries. Di Landau, CEO of Global Resources talked about the current themes in ICT Planning. John Savageau, a Visionary Technology Executive, made a presentation on current trends on Data Centers, Cloud computing and Big Data management and additionally discussed data centers cost components, data confidentiality and information 14 May 2014 leakage prevention mechanisms with the participants. The Committees hosted guest speakers from Ministry of Taxes: Stuart Browne, a Senior Consulting Associate held a session on recent developments in VSAT and Broadband Solutions for • Mr. Natig Shirinov, Head of Tax Policy and Strategic Big Businesses. Researches Department (Vergi siyasəti və strateji The overviews and presentations were followed by discussion araşdırmalar Baş İdarəsi); on challenges and opportunities of the ICT sector in Azerbaijan. • Mr. Elchin Mammadov, First Deputy Head of Taxpayers' Service Department (Vergi ödəyicilərinə xidmət Baş Idarəsi) • Mr. Hamid Zeynalov, Deputy Head of Tax Policy and Strategic Researches Department (Vergi siyasəti və strateji araşdırmalar Baş Idarəsi) • Mr. Shamil Arabov – Head of Tax Policy Division of the Tax Policy and Strategic Researches Department (Vergi siyasəti və strateji araşdırmalar Baş İdarəsinin Vergi siyasəti idarəsi)

Within the first part of the meeting Mr. Shirinov and his colleagues updated participants on recent amendments to taxation legislation as well as reforms, developments and perspectives in Tax Service. Special attention was paid to e-services – both newly announced and to be provided to taxpayers soon, including e-signature, e-qaimə and e-audit CSR Committee Meeting concept. Mr. Shirinov also updated participants on activities, being conducted within the implementation of Azerbaijan 2020 21 May 2014 Strategy Actions Plan, including various projects, aimed at Jeyhun Atayev, AmCham Member Services Officer opened the Taxes Ministry capacity building and twinning projects, being floor, welcoming new Chairperson of CSR Committee, guests implemented jointly with foreign counterparts. and participants of the meeting. Q&A session at the second part of the meeting involved all Within the first part of the meeting the Chairperson reviewed the guests and participants into the intensive to discussion of and discussed 2014 Committee Annual Plan with the various taxation issues. committee members. It was agreed that the Annual Plan will not be static and ICT Committee Meeting members of the committee are welcomed to propose any additional activities during the year. It was also proposed to 20 May 2014 invite representative of The State Committee for Family, Women ICT Committee Chairperson opened the floor, welcoming and Children Affairs of The Republic of Azerbaijan in order to guests and participants of the meeting. discuss currents activities of the Committee and possibilities for Within the first part of the meeting the Chairperson updated cooperation within the framework of CSR Committee. the committee members on preparation for 2014 Annual Idea of CSR Excellence Award Contest interested participants a ICT Conference and informed them that due to the number lot and it was agreed to create the working group, which will work

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further and in details on the application forms to be distributed to Chair of the Committee. The issue of Deputy Chairperson will the Chamber member companies during the summer break – to be raised during the next meeting of the committee, where have initial results by the beginning of autumn 2014. the insurance sector will be represented by bigger number of It was proposed to place AmCham CSR Newsletter as a companies (during 12 June meeting this sector was represented section in IMPACT Azerbaijan – official publication of AmCham only by one out of four AmCham members). Azerbaijan as a replacement for of electronic newsletter, being Within the second part of the meeting newly elected previously distributed only among CSR Committee Members. Chairperson reviewed and discussed 2014 Committee Annual Within the second part of the meeting, the Chairperson priorities, including: shared her view of “Go Green” campaign activities, which can be implemented jointly by CSR Committee members and • National Healthcare System (NHS) other Chamber member companies. As a first activity within • code of business ethics this initiative it was proposed to join World Environment Day • cooperation with counterpart organizations activities by BAT Azerbaijan and the following announcement • access to innovations (including innovations in medical was shared with the Meeting participants with request to spread technologies) it further among colleagues and partners: Within the third part of the meeting, the Chairperson passed the Within the third part of the meeting Marina Giorgobiani from floor to the guest speaker - Samaya Jafarova, representative Sanofi made a brief presentation on the Marketing Code of of SOS Children Village Azerbaijan, who joined the Committee Association of Pharmaceutical Companies, launched in May Meeting to give an overview of Family Based Care approach 2014 in Georgia. Ms. Giorgobiani called participants to review for children without parental care and Family Strengthening the document and start the campaign for establishment the activities held in Azerbaijan. Her presentation followed same practice in Azerbaijan. by extended Q&A session with participants - on potential cooperation with the local businesses in support to children and families through enabling their self-sustainability. Joint Banking, Finance & Insurance and Within the forth part of the meeting, AmCham staff shared with Tax&Customs Committees Meeting the meeting participants the request for books in Azerbaijani language from UC Berkeley University Library. The request 24 June 2014 came from UC Berkeley University and has been raised at The Committees’ June meeting guest speaker was Mr. Nuran AmCham April Board Meeting and then it was suggested to Kerimov from Deloitte Azerbaijan, who delivered a detailed forward it to the attention of CSR Committee members. This presentation covering issues of FATCA and its impact on issue aroused the interest of ADA University representative. Azerbaijani financial institutions. Presentation of Mr. Kerimov AmCham Office will provide Janine Clarke with details, so the was accompanied and followed by intensive Q&A session and University and its partners can proceed further. further discussions on the topic of his speech. The Committee meeting finished by networking and one-to- one conversations between representatives of business, civil CSR Committee Meeting society and academia. Healthcare and Medical Insurance Committee Meeting 12 June 2014 Nargiz Nasrullayeva-Muduroglu, AmCham Executive Director opened the meeting, welcoming members of newly established AmCham Healthcare and Medical Insurance Committee. Within the first part of the meeting the Executive Director provided participants with the background of the creation of H&MI Committee, its goals and priorities. After the general overview, Executive Director welcomed participants to choose nominations for the Committee Chairperson and Deputy Chairperson. After the short discussion, participants agreed that 30 June 2014 the Committee should be chaired by Azerbaijani national staff, CSR Committee June meeting was held at the premises of which, in opposite to rotating expats, can run the Committee KPMG Azerbaijan office. with a sustainable strategic approach. All the participant of Jeyhun Atayev, AmCham Member Services Officer opened the the meeting voted for Jeyhun Alibayov, Country Manager of floor, expressing gratitude to management of KPMG Office for GLAXOSMITHKLINE. hosting the meeting and welcoming Chairperson and participants. It was also agreed by the participants of the meeting that the Within the first part of the meeting the Chairperson gave an overview representative of the insurance sector should act as a Deputy of AmCham 2014 CSR Excellence Award Contest. It was agreed

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that the working group will work further on the application forms to be distributed to the Chamber member companies during the summer Joint Banking, Finance & Insurance break – to have initial results by the beginning of autumn 2014. Within the second part of the meeting, the Chairperson passed and Tax & Customs Committees the floor to the guest speaker - Tural Abbasov, representative of Center for Economic and Social Development (CESD), Meeting who joined the Committee Meeting to make presentation on 8 October 2014 Achieving Sustainable Development through Corporate Social AmCham Member Services Officer, Jeyhun Atayev opened the Responsibility, recent research, conducted by CESD. His floor, welcomed and introduced newly appointed Chairperson presentation followed by Q&A session. The Committee meeting of Banking, Finance & Insurance Committee of the Chamber finished by networking and one-to-one conversations Ms. Ayten Rustamova. Short Bio: Ayten Rustamova, Principal Banker in European Labor/Human Resources Committee Bank for Reconstruction and Development (EBRD). Ms. Rustamova joined EBRD in 2001. After attending rotation Meeting in EBRD headquarters Ayten worked on putting together EBRD 3 October 2014 debt and equity transactions with financial institutions as well Within the first part of the meeting representatives of Azerbaijan as complex sovereign infrastructure projects in Azerbaijan. State University of Economics (ASEU) - Fuad Aliyev, Director of Ayten is the EBRD Financial Institutions Coordinator for ASEU Career Center, Mircavid Hasanov, Director of Innovative Azerbaijan responsible for building and maintaining long- Business Incubator, and Nicat Hacıxanov, ASEU Career term relationships and business development. She is leading Center Project Manager made a presentation on activities of multiple Financial Institutions transactions with wide range ASEU Career Center, its Innovative Business Incubator and of products. Ayten is working on infrastructure projects of Professional Accounting Center project. The presentation was $370m particularly responsible for handling relationship with followed by Q&A and feedback session; representatives of the government in all stages of project cycle. university called HR managers to contact Career Center when Ayten Rustamova holds Bachelor and Master Degrees they need interns and volunteers for their activities. in Linguistics from University of Languages and an MBA AmCham HR Committee members were also informed about specializing in International Business from Khazar University the upcoming “Fostering Co-operation between Universities in Azerbaijan. and Potential employers” conference, to be organized by British At the first part of the meeting Chairperson of T&C Council Azerbaijan on 17 October 2014. The conference focuses Committee welcomed representatives of KPMG Azerbaijan on how partnerships can be developed between Universities Office (Mushfig Aliyev, Director, Head of Tax&Legal , Farid and business enterprises and will also showcase successful Isayev, Manager, Head of Legal Practice and Teymur experience of UK Higher Education Institutions and UK business Dadashov, Legal Consultant), who joined the Committees’ companies. The Universities will share their successful partnership joint meeting to deliver presentation on “Tax audits: what experience with businesses and how this experience works for the to expect?” to cover various tax and legal aspects of tax benefit of graduate students. Azerbaijani universities and leading audits. Detailed presentation was followed by Q&A session businesses will participate in the conference on employability that after the meeting. provides opportunities for presentations and networking among Within the second part of the meeting, AmCham Policy and the participants. The universities that already have successful Legal Officer, Orkhan Jafarli briefed the meeting participants partnership with Azerbaijani businesses will be showcasing their on current status of the draft “Law on Advertisement”: success stories as well. on September 30 Milli Majlis held its first plenary sitting At the second part of the meeting, the Committee welcomed within framework of autumn session. The Work Plan of the this month Guest Speaker, Labor Relations Expert, Rizvan Parliament for the autumn session was approved at the sitting. Karimov, who gave extended and detailed overview on recent The draft “Law on Advertisement” wasn’t included to the amendments to labor legislation and Electron Imza system. Work Plan, but it is expected to be discussed at the plenary The overview was followed by Q&A session and discussion sitting during this session. Taking this into consideration Mr. on various labor issues, including latest changes in legislation, Jafarli scheduled a meeting with Members of the Department recent technical adjustments in employment contracts’ electronic of Economical Legislation of Milli Majlis. During the meeting registration system. Meeting participants received a number of AmCham Policy and Legal Officer is planning to to discuss useful recommendations and advices from the expert. AmCham’s previous recommendations and future cooperation Taking into account number of questions regarding gaps and with the Parliament on this issue. Mr. Jafarli called meeting loopholes in guidelines and current regulations, it was agreed participants to contact him if they (or their colleagues) have at the conclusion of the Committee meeting that AmCham any further recommendations regarding this draft law. All the office will gather all the questions from HR Managers and recommendations will be taken into account and will be raised practitioners and will send a letter to The Ministry of Labor and during the meeting at Milli Majlis. the Social Protection of Population with request to answer all Preparation for 2014 Annual Tax Conference was discussed the questions and enquiries. with the meeting participants the third part of the meeting.

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and Central Bank (Mahir Abdullayev, Head of Department, Corporate Social Responsibility Ministry of Finance, Nabi Aliyev, Parvin Ahadzada and Alakbar Ismayılov, Heads of Department at The Central Bank) with Committee Meeting the representatives of commercial banks. The following 31 October 2014 topics were raised and discussed: deficiencies in accounting Within the first part of the meeting Orkhan Rajabov, Leader and reporting in SMEs, views on legal constraints to increase of Cleantech and Sustainability Services of EY Azerbaijan lending to SMEs, corporate governance issues in businesses, delivered the presentation on Sustainability reporting and audit. bankability of businesses as well as assistance to companies The presentation has been followed by Q&A session. and expectations of financial institutions. Within the second part of the meeting the Chairperson updated Within the forth part of the meeting representatives of MilliKart the Committee meeting participants on AmCham 2014 CSR LLC- Ms. Sabina Mirzayeva and Ms. Nigar Rustamzade Excellence Award Contest (number of applications received, delivered presentation on New International Payment Systems general statistics on category of projects, composition of in Azerbaijan. jury, etc.). It was announced that jury members will review the applications within the next two months and the results of Excellence Award will be announced at AmCham 2015 January Members’ Luncheon on January 29nd. Within the third part of the meeting, the Chairperson passed the floor to the visiting expert - Dr. Ruth A. Shapiro, Executive Director of Asia Business Council, who joined the Committee Meeting to share Best practices in cooperation between businesses and Non-Profit Organizations. Her presentation followed by Q&A session and discussion with representatives of private and non-profit sector representatives. The Committee meeting finished by networking and one-to-one consultations. Banking, Finance & Insurance Committee Meeting 28 November 2014 In November AmCham hosted Joint Meeting of AmCham BFI Committee and National Confederation of Entrepreneurs (Employers) Organizations of The Republic of Azerbaijan. The purpose of the joint meeting was to gather members that have Labor/Human Resources Committee interrelated interests and functions to discuss the issues and Meeting ways to start the dialogue that would serve the needs of both borrowers (real sector) and financial institutions. 19 December 2014 BFI Committee Chairperson, Mrs. Ayten Rustamova, In December the Committee welcomed guest speakers from opened the meeting, welcoming Committee Members and Hay Group – Ms. Fulya Karakurum and Mr. Gorkem Balci. representatives of National Confederation of Entrepreneurs During the first part of the meeting guest speakers provided (Employers) Organizations of The Republic of Azerbaijan. information on Hay Group, its mission and services provided. Afterwards, she delivered a presentation on “SME Finance in Afterwards they proceeded with the presentation on salary Azerbaijan”. Within the second part of the meeting Committee management and the overall picture of reward management Chairperson passed the floor to Mrs. Natavan Mammadova, and internal equity, sharing additional information regarding Secretary-General of National Confederation of Entrepreneurs Azerbaijani salary market and stressing the fact eligibility (Employers) Organizations. Mrs. Mammadova provided bonuses is much higher in Azerbaijan in comparison with participants with the information on the Confederation, its Russia and Turkey. recent activities on local and international levels and on its role The second part of the meeting was dedicated to presentation as another strong link of AmCham Members to wider business of “Job Fair” Project organized by AmCham and the Ministry of community in the country Azerbaijan. Further discussion with Education in cooperation with British American Tobacco (BAT). the participants reflected banking sector’s interest to increase The presentation was followed by discussion and exchange lending in micro, small and corporate sectors of the country of related ideas with HR Business Partner of BAT - Mrs. Nigar and importance to continue further dialogue between clients Ibadzada. (business community/real sector) and financial institutions. The last Committee meeting of the year followed by networking The discussion was followed with exchange of information and and one-to-one conversations and consultations and ended up ideas of the the invited representatives of Ministry of Finance with greetings and a holiday cake.

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Business Events 2014 ICT Conference Conference, Memorandum of Understanding between HighTech Park and Microsoft Azerbaijan was signed.

“We have shared our local expertise in one-day conference”, said Mr. Tural Hajiyev, Chairman of AmCham ICT Committee and indicated that it is very important event for gaining international experience. “I believe that this conference will be very fruitful for developing ICT high-tech sector and getting the international experience from the countries who has already reached positive results in ICT high-tech sphere which is considered as one of the significant trends for international cooperation by Azerbaijan government”, stated Mr. Hajiyev. “Once again, we’re sure that, as a part of the developing world, Azerbaijan is in line with the rapidly evolving high- sector. Comprehensive approach is important in this sphere and international cooperation is a key to success”. To structure its support to the Government of Azerbaijan in developing ICT sector and to pass the message of the business community on path the Government should consider and take while developing the ICT sector, American Chamber of Commerce in Azerbaijan (AmCham), since 2011, established an ICT conference and successfully organized it in 2011 and 2012.

In 2014 the conference was elevated to the level of Forum for discussions - devoted to the issues of accelerating further development of high-tech and communications sector, titled Azerbaijan business climate for communications and high- tech sector. The conference featured high ranking Azerbaijani State officials, including Minister of Communications and High Technologies Mr. Ali Abbasov as well as representatives of the private sector who spoke on the visions for future development of the ICT sector and best practices in and beyond the borders of Azerbaijan. The event was carried out in an interactive Davos format and was an outstanding opportunity for participants to get the latest trends in ICT from the invited sector leaders and to get involved in discussion with key stakeholders. The Conference consisted of the following four sessions:

1. Role of Communications, High Tech and e-Government in development of the country 2. Human Resources potential of Azerbaijan in high-tech 3. Stimulation of high-tech production in Azerbaijan 4. Finances and innovation – opportunities and dilemmas of the high-tech & finance clusters in Azerbaijan

Every AmCham ICT Conference is featured by signing the official document, so this time - at 2014 AmCham ICT

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Business Events IV AmCham Annual Tax Conference The conference was organized with the support of PASHA Bank, EY Azerbaijan, Deloitte & Touche, KPMG Azerbaijan, PwC Azerbaijan and Synergy Group.

On December 1 2014, AmCham Azerbaijan hosted its IV Annual Tax Conference jointly with Ministry of Taxes. The program of the Conference, titled “Transparency and compliance in the tax system”, was featured by distinguished speakers from the private sector as well as high-level officials from State Agencies. The President of AmCham, Mr. Ilgar Veliyev, opened the event, welcoming guests of the Conference. In his speech Mr. Veliyev emphasized the importance of enhanced cooperation between tax authorities and business circles. He also stated that the main purpose of IV Annual Tax Conference was creating a dialogue on tax policy and harmonization, corporate compliance and modernization of the tax system. Later, the floor was passed to Mr. Ziyad Samedzadeh, Chairman of the Economic Policy Committee of Milli Majlis, who stated in his speech that the establishment of e-government in the country facilitates the transparency of the economic system; and that improvement of tax administration does not only affect activities of the tax authorities in general, but also improves tax compliance. Afterwards, Mr. Akif Musayev, Advisor to the Minister of Taxes, updated conference participants on current tax reforms in Azerbaijan. During the conference Mr. Shahin Sadigov, Head of the Economic and Financial-Credit Department of the Cabinet of Ministers’ Apparatus stressed the importance of dialogue between the Cabinet of Ministers and private sector for further sustainable cooperation between state and private sectors. The conference had also been featured by speeches and presentations of Mr. Natig Shirinov, Head of the Main Department on Tax Policy and Strategic Researches at the Ministry of Taxes and Mr. Alakbar Mammadov, Advisor to the Minister of Taxes and representatives of private sector.

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AmCham Practical Seminars April – December 2014 In 2014 AmCham Azerbaijan started new practice – Aysel Suleymanova – with the following subtopics: Practical Seminars. Several seminars on various topics • The power of reputation have been held during the year. • Things that matter: key factors that affect reputation • Global brand reputation ranking 2014 Marketing • Reputable brand stories • How things went wrong with Bankers Trust and Arthur Anderson • Communication – modern talking about the right things • What do CEO’s think about trust? PwC’s 17th Annual CEO Survey • To talk or not to talk – that’s the question • Social networks - risks & benefits • Now let’s talk about it together! Interactive discussion with members

Short profile of Presenter: Aysel Suleymanova is Marketing and Communications Manager in PwC Azerbaijan and co-founder of the “Purple” advertising agency. Prior to her assignment to PwC, she was in charge for Member Relations and PR within the American Chamber of Commerce (AmCham) in Azerbaijan – an organization she joined at its very early development stage and witnessed an immense growth during the ensuing years. Aysel holds a Master’s Degree 1 July 2014 in philology and has about 10 years’ experience in marketing, The first seminar was intended to member companies’ marketing corporate communications, PR, events and project management. managers and to anyone who is interested in marketing issues. Her wide breadth of experience features communications, brand, The following two topics were presented and discussed: advertising, ATL and BTL as well as business development in private and public sectors. Aysel is a frequent speaker at various 1. Expressing Passion through Sports by Geray Yusifov marketing and advertising sessions and author of articles on Short profile of Presenter: related topics. Geray Yusifov is the partner and the CEO of ADV Group Azerbaijan, Aysel believes in a power of love: she is confident that you the leading advertising group in the county. Geray is a fifteen year- can never succeed without loving and enjoying what you do. old veteran of advertising industry having experience in such fields Successfully combining a diverse scope of roles, Aysel is a as media, creative, PR, event management, branding, production professional manager, business owner and a happy mother of and digital. Geray has started his career in advertising in 1998 at two children. McCann Erickon Azerbaijan. In 2001 he started leading first in the country specialized media agency — Universal McCann. Since E-registration of Employment 2003 he was appointed as a General Manager of McCann Erickson Azerbaijan. After acquisition of the company by the largest in CIS contracts advertising holding — ADV Group — in 2004, Geray became a 8 July 2014 shareholder of ADV in Azerbaijan. Along with McCann Worldgroup In view of the recently adopted regulations on electronic agencies he has established media agency MPG in 2004, later registration of employment agreements, AmCham has on affiliated to Havas Media global network, and in 2014 — new organized a seminar, aimed to provide member companies’ creative agency Havas Worldwide. Agencies in both McCann and HR managers and labor relations experts with practical, step-by Havas groups have won many awards and recognitions, while step guidance on completing the registration of their employees. McCann Baku has become the Agency of the Year in 2014. The seminar, moderated by Banu Kokoz, AmCham HR Geray is an energetic person, motivating and leading more than Committee Deputy Chair, was conducted by very special 100 talented people. He is passionate about what he does and experts in the field – Aida Sharifova from Labor Policy is constantly looking for new opportunities to develop both his Department of The Ministry of Labor and Social Protection of teams and himself. Population and Rizvan Karimov, Labor Relations Expert. The detailed presentations were accompanied by Q&A session and 2. Upholding high-end reputation through communications by followed by additional consultations.

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initiative has been started with the first seminar - on recent HR trends on talents management, conducted by Tuba Kazmi, Corporate Talent Acquisition Manager from CCI Headquarters.

Short bio of Presenter: A seasoned HR professional with 15 years of core HR experience in MNCs in management consulting, pharmaceuticals, agriculture, chemicals, power, calibration and FMCG, with special interest and demonstrated capability in Talent development, Organization effectiveness & development, Change management, Strategic planning and Business partnering. Excellent interpersonal and leadership skills to compliment strong HR functional skill set. Firmly believes in an innovative and creative thinking approach with strong focus on implementation and execution. Has always demonstrated high personal integrity; is articulate; confident; persuasive team builder & leader; able to motivate and 18 September 2014 communicate effectively. 2014 Autumn Seminar was initiated by AmCham CSR Committee She holds a Masters in Public Administration and Human and was intended to member companies’ managers, professionals, Resources Management. She is also certified MCIPD from experts and practitioners responsible and interested in project Chartered Institute of Personnel Development UK. management and project portfolio management. “How-to-Deliver- Exceptional-Project-Results” was presented by and discussed with Jamal Moustafaev, Founder and President of Thinktank Consulting.

Short profile of Presenter: Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting, is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. . Mr. Moustafaev holds a PMP certification, an MBA and a BBA from Simon Fraser University (Vancouver, Canada). Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East. Jamal Moustafaev's book "Delivering Exceptional Project Results: A Practical Guide to Project Selection, Scoping, Cyber Crime and Bank Fraud Estimation and Management" released by J. Ross Publishing 29 October 2014 in September 2010 has been adopted and endorsed by the In October 2014 HighTech Park Azerbaijan hosted Seminar on Project Management Institute (www.pmi.org). Jamal's second Cyber Crime and Bank Fraud, organized for members of AmCham book tentatively titled "Project Scope Management: A Practical ICT and Banking, Finance&Insurance Committees. The seminar was Guide to Requirements for Engineering, Product, Construction, conducted by Trevor Hogan, Director in IT Advisory, PwC Astana IT and Enterprise Projects" is scheduled to be published in December of 2014. Jamal is also a contributor to various project Short bio of Presenter: management publications and a frequent speaker at the key Trevor is a Director in IT Advisory, providing technology, project management conferences. strategy and risk management consulting services to public and In addition to teaching a highly acclaimed “Project Management private entities in the banking, telecommunication, and energy Essentials” course at British Columbia Institute of Technology sectors. Trevor has more than 14 years of experience with (Vancouver, Canada), Jamal also offers several Project and specializations in IT Governance, IT architecture and Cyber Portfolio Management corporate seminars through his company. Security for large government and financial entities. Trevor recently transferred from Washington DC where he worked Talent Imperatives for HR with clients such as the World Bank Group, US Department of professionals the Treasury with both Fiscal Services and Office of Financial Stability, US Department of Education – Federal Student Aid, 22 October 2014 and several state and local agencies across the United States. In order to improve young HR professionals' capabilities, Before his consulting career, he work for Smithfield Foods Inc., AmCham HR Committee starts the chain of seminars and the world’s largest fresh pork producer, building data centers, workshops on various related issues. In October 2014 this AD services and web application architectures.

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Example Trevor’s recent project experience includes: Further to the fist seminar in October 2014 this initiative continued in December by Seminar by representatives of • Developed a Process Convergence Methodology for the Hay Group – Ms. Fulya Karakurum and Mr. Gorkem Balci World Bank Group’s (WBG) Information and Technology who delivered presentations on the overall picture of the Solutions (ITS) group to converge Information Technology Reward Management phenomenon and Salary Structure Service Management (ITSM) process across the bank based Aggregates - such as scales and job size. Guest speakers on ISO 20000 and 27001/2 provided participants with detailed and the most updated • Development and managed the IT Strategy and Governance information on purpose of salary management and revealed Program including the redesign and deployment of ITIL, the concept of “salary police” as well as on Internal Equity ICFR, security and compliance processes for US Department Market Competitiveness. Training ended up by Q&A session, of Treasury – Office of Financial Stability discussion and exchange of information and ideas among the • Advised the City Operations and Public Safety Office of the City young HR professionals and guest speakers and one-to-one of Astana, KZ on IT technical architectures, applications, cyber consultations. security, virtualization (private cloud), metro area networks, and data architectures in preparation of the development of City Operations Center (COC), the future command and control center of city services such as public safety and emergency services, traffic management, and general citizen services. • The Smart Astana project will be featured in the Smart Astana Expo 2017. Salary Management 19 December 2014 In order to improve young HR professionals' capabilities, AmCham HR Committee starts the chain of seminars and workshops on various related issues. Projects October 2014 AmCham Azerbaijan Index of Prices AmCham Azerbaijan has established its own Consumer Price rose by 1.04 percent for Azerbaijani consumers and 1.07 for Index and reports changes in the AmCham Azerbaijan Index of Expatriate consumers. The largest upward effect on the AAIP Prices (AAIP) regularly on a quarterly basis since 2006. rate came from Meats, poultry, fish & meat products and Non- The survey is conducted collecting the prices of a fixed durable household goods for routine maintenance, where Index representative group or ”basket” of goods and services every of Prices rose by 1.88 and 1.51 percent respectively. quarter. These prices are then compared to the prices of the same goods and services from the previous quarter and the price Public utilities, 0 change calculated. The prices of these goods and services are transportation then combined into a single index measuring the overall level of Fuel 0 prices. Different ”weights” are attributed to the various goods Pharmaceutical products 0,9 and services to reflect the average expenditure by households. and personal hygiene Non-durable household The sample of representative goods and services for which goods for routine 1,51 prices are collected each period is held constant and the maintenance 0 set of weights is fixed to reflect the importance in the typical Fats and oils Dairy and related 0,11 household budget of the particular good or service. It is possible products that, following the trial period. Meats, poultry, fish 1,88 As before AmCham reports two AAIPs: one for Expatriate and meat products households (AAIPE) and one for Azerbaijani households Sugar and sweets 0 (AAIPA). Prices were collected in Baku. Over the last year (the base is 100 at 30 June 2013) the AAIP Fruits 0,44 Cereals and rose by 13.03 percent for Azerbaijani consumers and 12.82 0 bakery products for Expatriate consumers. In the 3rd quarter of 2014 the AAIP 0 0,4 0,8 1,2 1,6 2

52 Issue 21 AmCham Azerbaijan

Social Events 19th Annual US Independence Day Picnic On June 28th 2014 American Chamber of Commerce in Azerbaijan (AmCham) hosted an incredible 19th Annual US Independence Day Picnic in See Breeze Nardaran, which was visited by 1300 people. Tickets were sold out in six days!

The official ceremony started with Azerbaijan and US National Anthems with US Marine Color Guard followed by welcome addresses of AmCham President Ilgar Veliyev (EY Azerbaijan) and US Ambassador to Azerbaijan Richard Morningstar. Representatives of the main sponsors of the event - Sona Abbasova, Director of Corporate Communications of PASHA Bank, Kent McNeley, Chief Executive Officer of Nar Mobile and Asgar Alakbarov, Chairman of Management Board of Qala Life - welcomed the guests in their speeches and Nargiz Nasrullayeva- Muduorglu, the Executive Director of American Chamber of Commerce in Azerbaijan announced the official opening of the 19th Annual US Independence Day Picnic.

“AmCham does a great job in promoting the interests of American businesses in Azerbaijan and helping to improve the business climate for all companies operating here, regardless of where they have their headquarters,” said Ambassador Morningstar, who was the guest of honor of the 19th Annual dancers, performance by New Gypsies and live broadcast Independence Day Picnic and visited the event with his wife, of 2014 FIFA World Cup. Picnic guests also had a chance to Faith Morningstar. “I think the government respects and participate in PASHA Bank Football and Qala Life Volleyball listens to AmCham,” he added. “As a result, AmCham is Tournaments. making an important contribution to Azerbaijan’s economic development.” The highlight of the event was AmCham’s first ever “Sing Like a Star Contest” (also known as «Один в Один»). Team Live music band and BBQ party started at 17:00 and members of PwC Azerbaijan, Four Seasons Hotel, AmCham, continued till dawn. Guests enjoyed the kids club, various Deloitte Azerbaijan and Isa Aydin Production participated in games and competitions for adults and kids, the amenities the show and the winners were Yevgeniya and Tural Hajiyev and activities of Village Brazil 2014 including samba&salsa from Deloitte Azerbaijan who performed Eros Ramazzotti and Tina Turner’s Cose Della Vita.

The raffle draw started right after the show and the main prize was return Business class tickets to London for two people graciously donated by British Airways. The evening finished by fireworks and followed by disco. The Gold sponsors of the 19th Annual Independence Day Picnic were PASHA Bank, NarMobile and Qala Life. Our Bronze Sponsors were British Airways and Tuborg. General Sponsors - Cross Caspian, Chevron Khazar, Coca-Cola, A+A Group, PwC Azerbaijan, International SOS. This year our Raffle Sponsors were: Four Seasons Hotel, Kempinski Hotel Badamdar Baku, Absheron Hotel Group, Jumeirah Bilgah Beach Hotel, Fairmont Baku, Gazelli International ltd., Golden Pay, JW Marriott Absheron Baku, The Landmark Hotel Baku, Hilton Baku, Indian Clinic, Excelsior Hotel & SPA Baku, Hyatt regency Baku, Sea Breeze Hotel.

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54 Issue 21 AmCham Azerbaijan

Social Events June 11, End of the business season cocktail On 11 June AmCham Azerbaijan and PASHA Bank celebrated the end of the business season! The first summer cocktail was dedicated to the completion of PASHA Bank’s chairmanship at AmCham Banking, Finance and Insurance Committee by Shahin Mammadov, CFO of PASHA Bank and Chairman for more than 2 years.

Guests enjoyed great company, networking, delicious appetizers and exquisite drinks on the gorgeous terrace of JW Marriott Absheron Baku.

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June 18, Business-after-hours Summer Cocktail Party On 18 June AmCham Azerbaijan welcomed its members and partners at Business-after-hours Summer Cocktail Party, organized at YAY Gallery in Old City and dedicated to the anniversary of AQS Group activities in Azerbaijan.

56 Issue 21 AmCham Azerbaijan

Social Events September 13, Back-to-Business Cocktail On 13 September AmCham & Deloitte held the traditional joint ‘Back to Business’ Cocktail evening. The event was held on the outdoor terrace at one of Baku’s most glamorous venues - H2O Pool Bar & Grill of Fairmont Baku Flame Towers.

As usual – the traditional evening was the best way to dive back into professional cycle after a long summer. AmCham members and friends enjoyed great Company of business community’s most prominent representatives, like-minded professionals, colleagues and partners, delicious appetizers and exquisite drinks on the fabulous H2O Poolside.

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Projects 2014 Annual National Employee Salary Survey With 120 companies participating • FMCG Sector Report JOBS SURVEYED AmCham Azerbaijan completed its 16th • Pharmaceutical Sector Report Annual National Salary Survey and • Hospitality Sector Report Forty three job families have been released the final report to all participating • Report for employees working in identified: companies in November 2014. The regions survey gives a detailed report on terms • Top 20 payers Report • Management of employment and benefits provided by • Administration & Support the leading foreign and local companies METHOD OF SURVEY • Audit and organizations operating in Azerbaijan • Banking covering issues like insurance, meal The Survey is completely confidential; the • Business Development allowances, salary planning methodology, information submitted by the participants is • Conferences & Events housing, redundancy payments and not disclosed to anyone. The data has been • Customer Care /Services retention schemes used by companies as collected anonymously through Confidential • Drilling Engineering well as remuneration figures for more than Code Procedure, hiding company identity. • Driver a hundred different positions. All data was destroyed on publication of • Engineering /Construction / the survey. AmCham’s secured software Maintenance The outcome of the survey is presented ensures highest levels of confidentiality and • Finance /Accounting in the form of one main and 8 separate efficiency of the survey process. Our survey • Food & Beverage Service reports with possibility to compare salaries is open for all our members as well as the • Fraud Expose across Job Families: companies outside of the membership. • Guest Services Participation in the survey is free of charge. • Housekeeping & Laundry • Oil & Gas Sector Report Results, however, are only available to the • Human Resources • ICT Sector Report companies that have participated, members • Health Safety Environments • Banking Sector Report and non-members. • Information & Communication The chart below illustrates reported Salary Increases Technologies in Business Sectors surveyed in 2014 • Insurance 12 • Insurance Claims 10, • Interpreter /Translator 10.33 10,30 • Kitchen 1 • Lending/ Credit ,0 • Marine Specialists ,3 , ,3 • Marketing • Medical , • Offshore Technician Staff • Oil & Gas /Facilities Engineering • Public & Government Relations ,33 • Purchasing, Warehouse & Logistics ,20 4,2 • Quality Control 4,00 • Quality Management • Risk Management • Sales & Market Support 2 • Security • Semi-Skilled/Manual Worker • Skilled • Spa & Recreation • Stewarding Oil Services ICT Sector Banking Hospitality Pharmacy • Subsurface Staff Sector Sector Sector Sector • Tax and Legal Salary increase in 2014 Forecast Salary increase fir 2015 • Training • Other

58 Issue 21 AmCham Azerbaijan

AmCham Legal Update • On amendments to the Migration Code • On amendments to the Law on Advertisement • On amendments to the Regulation on the Implementation of the Law on Registration upon Place of Residence and Stay • On amendment to the Law on Tourism • On amendments to the Law on Central Bank of Azerbaijan Republic • On amendments to the Law on Food Products • On amendments to the Law on Registration upon the Place of Residence and Stay • On amendments to the Tax Code • On amendments to Law on Banks • On amendments to Law on State Registration and State Registry of Legal Entities” • On amendments to the Family Code • On the living wage for 2015 • On amendments to Law on Compulsory Insurance

Presidential Orders: • National Strategy on the Development of information society THE FOLLOWING LEGAL ACTS HAVE BEEN ADOPTED in the Republic of Azerbaijan for the years 2014-2020 WITHIN THE PERIOD OF APRIL – DECEMBER 2014 • On the Travel Document • On amendments to the Decree on implementation of the Laws: Law on State Registration of Real Estate • On amendments to the Law on Medical Insurance • On amendments to the Decree on implementation of the law • On amendments to the Law on Technical Security on State Fee • On amendments to the Law on Entrepreneurial Activity • On implementation of the law on amendments to the law on • On Seaports exit from the Country, entry into the Country and Passports • On amendments to the Law on State Fees • On measures to improve governance and accelerate • On amendments to the Law State Registration of Real Estate institutional reforms in the agricultural sector • On amendments to the Tax Code • On the approval of "Model Statute on Technology Park" • On amendments to the Law on Banks • On amendments to the “Rules on the Regulation of Import- • On amendments to the Law on Personal Information Export Operations” • On amendments to the Law on Insurance Activity • On amendments to the Statue of the Ministry of Culture and • On amendments to the Tax Code Tourism • On amendments to the Law on Compulsory Insurance • On amendments to the Statue of the Ministry of Labor and • On amendments to the Administrative Offences Code Social Protection • On amendments to the Law on State Duty • On Establishment and Set Up of Industrial Districts • On amendments to the Law on Compulsory Insurance • On some issues related to the implementation of the Law From Disability As a Result of Industrial Accidents and “On Inspection of entrepreneurs and the protection of the Occupational Diseases entrepreneurs’ interests” • On amendments to the Law on Local Taxes and Fees • On some issues related to the implementation of the Law • On amendment to the Law on Non-bank credit organizations on Inspection of entrepreneurs and the protection of the • On amendments to the Customs Code of the Republic of entrepreneurs’ interests” Azerbaijan • On confirmation of the Guidelines for the State Control Over • On amendments to the Law on Investment Funds the Urban Development • On amendments to the Law on Protection of Consumer • On amendments to Statue of the State Fire Control Service Rights of Ministry of Emergency Situations • On amendment to the Law on Protection of investors’ rights • On amendments to Statue of the State Maritime on securities market Administration of the Republic of Azerbaijan • On amendment to the Law on Entrepreneurial activity • On amendments to Statue on the local executive authorities • On amendment to the Law on Insurance activity • On amendments to Statue of the Ministry of Emergency • On amendments to the Customs Code Situations

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• On amendments to Statue of the State Civil Aviation Administration of the Republic of Azerbaijan Laws • On amendments to Statue of the Ministry of Transportation • On amendments to Statue of the Ministry of Internal Affairs - On Seaports In accordance with Article 94 of the Constitution of the Presidential Orders: Azerbaijan Republic this law regulates relations arising • On amendments to the order on the Creation of Steel from commercial shipping in the seaports; sets basis for Production Complex construction, opening, closing, performance of operations, as • On implementation of the Law on the amendments to the well as state regulation of operations in the seaports. Law on Technical Security The Law on Seaports was prepared as a result of Twinning • On implementation of the Law on the amendments to the Project between European Union and Azerbaijan Republic Law on Medical Insurance called “Twinning Project on strengthening the Sea Security of • On implementation of the Law on the amendments to the the Azerbaijan Republic”. Law on Entrepreneurial Activity The Law consists of 7 chapters and 29 articles. The Law • On implementation of the Law on the amendments to the also regulates relations arising from registration of seaports, Law on State Fee functioning of ship captains and seaport agents, port • On Additional Measures to Support Foreign Non- mandatory rules, ensuring security of seaports, the main Governmental Organizations Projects related to Azerbaijan requirements for the owners of seaport facilities, port service Republic tariffs and etc. • On Additional Measures to Improve Mobile Services Mentioned Law also includes legal norms dealing with the Provided by the State Agency for Public Service and Social basis for marine terminal operators liability, requirements for Innovations under the President of Azerbaijan Republic the carriage of dangerous goods, regulations of legal relations • On Additional Measures to Improve the Process of Issuing between marine terminal operators and carriers, restriction of Visas the circulation of seaport infrastructure facilities, management • On approval of the State Program on development of of state-owned seaport infrastructure objects and the terms of industry in the Republic of Azerbaijan for 2015-2020 years their lease.

Cabinet of Ministers Resolutions: - On amendments to the Law on Medical Insurance • On amendment to the Decree on the list of goods imported into According to this amendment health insurance organizations the territory of the Republic of Azerbaijan, exempt from VAT shall form insurance reserves from insurance premiums in • On amendment to the Decree “On the Rates of Custom Fees accordance with the Law on Insurance Activity in order to of Import-Export Operations” ensure the sustainability of health insurance organizations • On approval of the Charter and the structure of “Azerbaijan and insurance operations. Steel Production Complex” Closed Joint-Stock Company • On approval of "the Rules regarding labor contract notification - On amendments to the Tax Code form and its entry into information system, information form According to the amendments to the Code made on November sent to employer in order to register notification about labor 22, 2013, tax incentives can be defined only in accordance with contract, as well as retrieval of information from registered the Tax Code. On the basis of this amendment, on May 16 2014 labor contract notification form in real time" new amendments were made to the Code. New amendments • On Amendments to the “Guidelines for the Use of Electricity” included to the Code tax incentives defined in accordance with • On Approval of “The Rules on Declaration of Goods and other legal acts. In this regard, new adjustments were made Vehicles Passed through the Customs Border” to several legal acts in order to exclude tax incentives from • On approval of the “List of public interest entities (except credit those acts. institutions, insurance companies, investment funds and non-state (private) social funds and legal entities presented Amendment to three legal acts (On amendments to the at stock market) which are required to conduct accounting of Law on Banks, On amendments to the Law on Personal financial reports in compliance with International Standards Information and On amendments to the Law on Insurance and to present the reports to relevant state fiscal bodies” Activity) was discussed on the plenary sitting of the Milli • On approval of the “Rules on placement of communications Majlis of the Republic of Azerbaijan which took place on June (power, utilities), buildings and constructions in the reserve 20 2014. According to the amendment the following provision areas of the roads” has to be added to aforementioned legal acts: “In accordance • On amendments to the Charter on “License Attorney” with the international agreements concluded between the • On fundation of National Nuclear Researches Centre JSC Republic of Azerbaijan and other countries, information • On approval of the Rules on SMS notification about about the financial operations conducted by the entities and Temporary closure of roads and other measures in this area individuals of such countries in the territory of the Republic • On amendments to the Statue on the Election of the Council of Azerbaijan, is submitted to the competent bodies of such by the Public and Civil Society Institutions countries directly or through relevant executive authority in the

60 Issue 21 AmCham Azerbaijan

extent and manner specified by relevant executive authority.” carried out only in accordance with the Law on “Inspection of entrepreneurs and the protection of the entrepreneurs’ - On amendments to the Tax Code interests”. “ On June 20 2014, amendments on adding 2 new provisions According to addendum to articles 98.8 and 98.10, before to the Tax Code were discussed at the plenary sitting of the the audit members of public organization shall present record Parliament of Azerbaijan Republic: from the registry and their certificate of employment. a) New Article 76.2-1 which states that banks and credit Article 98.9 is expected to be extracted which states the organizations conducting separate types of bank operations follows: shall submit the information about the financial operations, “The maximum time period for general customs audit is 3 conducted by the entities and individuals of such countries days. Checkback of the same goods is forbidden.” in the territory of the Republic of Azerbaijan, to the Article 98.13 is also expected to be extracted which stated the competent bodies of such countries directly or through follows: relevant executive authority in the extent and manner Special customs audit should be carried out in the shortest specified by relevant executive authority, in accordance period of necessary time. It shall be completed no later than with the international agreements concluded between the 2 months from the date of the decision to hold the inspection. Republic of Azerbaijan and other countries. The term between the requirement to provide documents b) New Article 60.1.4 which stipulates the follows: and information and fulfilling such a requirement shall not be “For failure to comply with the aforementioned terms, banks included to the term of special customs audit. and other credit organizations, which provided separate types of bank’s transactions, are liable for financial - On amendments to the Law on Investment Funds sanctions in the amount of 30% of the total cost of the According to the amendments several technical changes conducted operation, if no operation was conducted on are expected to be made to the normative legal act with the these accounts, in the amount of AZN 400 for each such purpose to bring in to conformity with the Law on “Inspection account.” of entrepreneurs and the protection of the entrepreneurs’ interests”. - On amendments to the Law on Compulsory Insurance Besides, new article number 48.3 is expected to be added to According to the amendments the competent authority is the Law, which states the follows: requested to submit information about insurance accident, the “Controlling authority, its official, its employee bears spread of which is not prohibited in accordance with the Law responsibility in accordance with the article 35.1 of the on “Access to Information”, within 10 days after submission of Law on “Inspection of entrepreneurs and the protection of application. the entrepreneurs’ interests” for the violation of the Law Additionally, according to new amendments insurers should on “Inspection of entrepreneurs and the protection of the pay fines of 0.1 percent of the amount of the insurance entrepreneurs’ interests” during the conduct of inspection, payment for each day of Insurance payment delay. for failure of performance his/her professional duties, for the damage occurred as a result of abuse of authority.” - On amendments to the Law on Local Taxes and Fees Article number 51.3 is expected to be added which states the According to the amendment new article was added to the follows: Law, which stipulates that local taxes and fees should only be “Inspection are funded by inspection authorities”. paid by means of banks, national postal operators as well as other non-cash payment facilities. It is prohibited to receive - On amendments to the Law on Protection of Consumer local taxes and fees in cash by municipalities. Rights Article 19.2.6 of the above mentioned law sets obligation - On amendment to the Law on Non-bank credit for public organizations of conducting inspections of organizations entrepreneurs. Due to the fact that inspection duty of public According to the amendment The Central Bank of the organizations is fully regulated by the Law “On Inspection Republic of Azerbaijan inspects the activity of non-bank credit of entrepreneurs and the protection of the entrepreneurs’ organizations in accordance with the Law on “Inspection interests”, article 19.2.6 was extracted from the Law on of entrepreneurs and the protection of the entrepreneurs’ “Protection of Consumer Rights”. interests”. - On amendment to the Law on Protection of investors’ - On amendments to the Customs Code of the Republic of rights on securities market Azerbaijan According to the Law “On Protection of investors’ rights on According to the draft of new amendments following changes securities market” inspections on the sphere of securities are expected to be made in the Customs code: market are conducted by the State Committee on Securities The formulation of Article 98.4 is expected to be changed as and the rules of conduct of inspections are defined by the per below: Committee. According to the amendment rules of conduct of “Custom audits and formalizing of its results should be inspections in the sphere of securities are defined only by the

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Law “On Inspection of entrepreneurs and the protection of the of the Republic of Azerbaijan and in cases it is impossible to entrepreneurs’ interests”. get travel documents for those individuals from their country of origin is legal ground for leaving country without visa.” - On amendment to the Law on Insurance activity As a result of amendments originals of the following documents According to the amendments the insurance control authority, should be presented with its copies when they are submitted its official bear responsibility within the provisions of the Law for the prolongation of temporary stay, the temporary residence “On Inspection of entrepreneurs and the protection of the permit for foreigners and stateless persons in the territory of entrepreneurs’ interests” for violation of mentioned law and the Republic of Azerbaijan and for the permanent residence the law “On Insurance Activity”, for failure to perform duties, permit in the territory of the Republic of Azerbaijan: for abuse of authority and for damages caused by them to insurers and insurance intermediaries. • a passport or other document of border crossing • certificate of registration of the residential area - On amendments to the Customs Code • identity card of the person who gives the residential area to According to the amendment to Article 73 time limit for Customs the foreigner or stateless person Committee officials for keeping the submitted documents reduced from three days to one day. Another amendment Originals are returned immediately after confrontation with its was made to Article 160, which states that checking the copies. compliance of name, origin, quantity and cost of the goods According to the new added Article 64.0.6-1 work permit is with the declaration submitted to Customs Committee officials not required for the officers and specialists which are invited should be carried out in two days. For information I would to work in the Armed Forces and other military formations like to stress that time limit for those process was three days created in accordance with the legislation of the Azerbaijan before the amendment. Republic.

- On amendments to the Migration Code - On amendments to the Law on Advertisement According to the amendment to the Article 3 travel document According to the amendment new part number 11 was added given to expelled foreigners and stateless persons is included to the Article 17, which states that: to the list of border crossing documents. “Only legal entities which have recieved a special licence New Article 15.6 was added to the Migration Code which for carrying out mediation of employment of citizens of the states the follows: Republic of Azerbaijan in foreign countries have the right to “Travel document which is given to the expelled foreigners and make advertisements and notices of such services.” stateless persons in cases stipulated by international treaties

62 Issue 21 AmCham Azerbaijan

- On amendments to the Regulation on the Implementation mentioned Law with the Migration Code of the Republic of of the Law on Registration upon Place of Residence and Azerbaijan. According to the amendments registration process Stay of foreigner and stateless person upon the place of residence The purpose of the amendments is to proportionate above and stay can be proceeded by using the online portal of the mentioned Regulation with the Migration Code of the Republic reliant executive body as well. of Azerbaijan. According to the amendments registration process of foreigner and stateless person upon the place of - On amendments to the Tax Code residence and stay can be proceeded by using the online According to the amendments to the Article 34.2 electronic portal of the reliant executive body as well. registration of taxpayers is realized immediately and appropriate certificate is sent in a real time regime to the - On amendment to the Law on Tourism e-mail which is created especially for them. With the purpose of proportion of the Law with the Migration Code addendum was made to the above mentioned Law. New - On Amendments to Law on State Registration and State Article 7-1 was added to the normative legal act: Registry of Legal Entities Article 7-1 Tourist visas and e-visas given to tourists Article 13.4 was given in a new edition which states that 7-1.1. If a visa is required to visit the Republic of Azerbaijan certificate of state registration and extract from the state foreigners and stateless persons should get a tourist visa registry shall be the only legal basis for personalization of in accordance with the Code of Migration of the Republic of branch and representative office. Azerbaijan. 7-1.2. By tourist visa the time limit of stay in Azerbaijan is set - On Amendments to the Family Code as 30 days. In accordance with the Amendments passing the medical 7-1.3. A document conforming the travel to be a tourist travel examination before the marriage is compulsory. Medical (tourist voucher, cruise ticket, reservation document of hotel examination is conducted for the diseases the list of which and etc.) and documents provided by the Article 36 of the is prepared by the relevant executive body. Medical analysis Migration Code are required for clearance of the tourist visa. are free of charge and conducted by the state local clinics. 7-1.4. Tourists coming to Azerbaijan can get visa via travel Results of medical examinations are confidential and cannot companies. be demanded by the officials of state registration institutions. 7-1.5. Foreigners and stateless persons can apply tourism Concealment of venereal diseases and AIDs existence is a companies accredited by relevant executive authorities of the legal basis for the termination of marriage. Republic of Azerbaijan directly or through the partners of that companies in their native land with a purpose of getting tourist - On the living wage for 2015 visa. According to the Law living wage in Azerbaijan defined as 7-1.6. The procedure for issuing electronic visas is governed follows: by the Code of Migration of the Republic of Azerbaijan. • 131 AZN for the main socio-demographic groups of population - On amendments to the Law on Central Bank of Azerbaijan • 140 AZN for able bodied population Republic • 108 AZN for pensioners According to the amendments many technical changes were • 108 AZN for children made to the legal act. Among the amendments the most This Law comes into force since January 1, 2015. important is a change to the Article 18. Article 18.2 was given in a new edition which states that a draft law should - On amendments to Law on Compulsory Insurance be conformed with the Central Bank before submission to According to the addendum to the Article 6 the definition of Parliament if it includes regulatory guidance and (or) tasks family member is given for the purposes of the Law. New related to the Central Bank, banking activity and banking Chapter 4-1 was added to the normative legal act which system. includes provisions about “Green Card” system. There definition, main requirements, registry issues of “Green Card” - On amendments to the Law on Food Products system is regulated. According to the amendments all the New addendums were made to the Article 6. According to insurers who has the permission for activity of civil liability changes the expiration date of the conformity certificate of insurance of vehicle owners should be registered at “Green foodstuffs imported to the Azerbaijan Republic is equivalent to Card” system. Provision about “Green Card” system get into the expiration date of the foodstuff. State fee for the certificate effect from January 1, 2016, other provisions get into effect should be paid only by the means of bank, post office, plastic from the day of publication. Addendums were made to the card, electronic payment systems or the Internet. Article 27. According to addendums new duties were set for the Compulsory Insurance Bureau. Financing the awareness - On amendments to the Law on Registration upon the raising events, cooperation with the subjects of international Place of Residence and Stay insurance systems and free publication for insurers the The purpose of the amendments is to proportionate above certificate blanks which is provided by the Law “On Compulsory

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Insurance against Disability as a result of Industrial Accidents conformity with Customs Code of Azerbaijan Republic. On that and Occupational Diseases” and to provide its registry are the score, several provisions of Rules were extracted and several new duties of the Bureau. According to the newly added Article changes were made. 27.4 creation entrepreneurs organizations and to take part at Provisions about several forms of export operations were such an organizations is the only form of the entrepreneurial extracted as they are widely regulated by Customs Code. activity which Bureau can provide for achieving its goals. In According to the new amendments, provisions about the list of accordance with the addendums to the Article 28 new rules documents required for clearance of foreign trade operations were set in the sphere of attendance at the Bureau. were extracted too. In compliance with amendments, forms and rules of declaration as well as the list of documents and data required for customs purposes will be determined by the Cabinet Presidential Decrees of Ministers of the Republic of Azerbaijan, shall be published in official publications and placed in the official web sites of the - National Strategy on the Development of information Cabinet of Ministers and the State Customs Committee of the society in the Republic of Azerbaijan for the years of Republic of Azerbaijan. 2014-2020 The National Strategy is based on the results of the work - On Amendments to the Statue of the Ministry of Culture done so far on the formation of the information society and and Tourism defines policy for its further development, the main goals and Amendments were made to the part 8 of the Statue which objectives, priorities and main directions of activity. In this reflects the obligations of the Ministry. According to changes new strategy the demand for high-tech society, world experience, obligation was set for the Ministry of Culture and Tourism. New recommendations of international organizations, issues arising subparagraph 8.25-1 was added which stipulates that Ministry from “Open Government Initiative” were taken into account. should provide the accreditation of tourism companies operating The main objective of the National Strategy is formation of in the Republic of Azerbaijan which have right to receive an information society in the Azerbaijan Republic and promoting electronic visa for tourists. effective, sustainable socio-economic and cultural development by using its means. - On amendments to the Statue of the Ministry of Labor and The mainstream of the National Strategy is the world-class Social Protection development of information and communications infrastructure The purpose of the amendments was conformation the Statue to and services; development of high-tech sphere and its scientific the Code of Migration of the Republic of Azerbaijan. Amendments technical capacity; enhance the role of ICT and “E-government” were made to the part 3 of the Statue which reflects the obligations as a factor in the development of society. of the Ministry. According to changes new obligations were set for The National Strategy will be implemented in 2 stages (2014- the Ministry of Labor and Social Protection. They are the follows: 2017,2018-2020). At every stage separate State Program will be New subparagraph 3.1.42-1 was added. According to adopted which will serve as a basis for actions of implementation subparagraph Ministry of Labor and Social Protection should of the National Strategy. exercise control over the ensuring the rights of migrant workers by employers. - Model Statute on Technology Park The subparagraph 3.1.44 was given in a new edition which states Statute regulates the creation and management of technology that Ministry of Labor and Social Protection should give feedback parks by the state, and performance of their activities. According whether it is possible to meet the demand for specialist from local to the document technological parks can be established under labor resources before providing work permit or its prolongation the scientific and educational organizations or can be established by the State Migration Service. independently. In order to ensure a more efficient management of New subparagraph 3.1.46-1 was added which stipulates that the industrial park by the decision of the competent authority, the Ministry of Labor and Social Protection should inspect the activity operator may be involved in the basis of competition. However, of legal entities which provide mediation on finding employment the management of the organization and the operator shall not in foreign countries for Azerbaijan citizens. operate as a resident of an industrial park. The Statute also regulates the process of preparation an annual - On Establishment and Set Up of Industrial Districts report on the activities of an industrial park, operator selection, The main purpose of the Decree is establishment of industrial making proposals to the President of the Azerbaijan Republic districts which is a new practice in the Republic of Azerbaijan. on the abolition of the technological park, activities of Governing Presidential decree identifies the definition of industrial district. Organization and the resident of industrial park and the use of According to the Decree industrial district is an area which has land. It is mentioned that technological park can be created on necessary infrastructure for entrepreneurial activity and which the state-owned, municipal and private land. is used to provide services and production of goods by small and medium-sized businesses. The President of the Republic - On amendments to the “Rules on Regulation of Import- of Azerbaijan set concrete tasks for public organizations in Export Operations” several issues. According to the decree Ministry of Economics The Decree was signed with the purpose of bringing the Rules to and Industry is responsible for establishment of such areas, for

64 Issue 21 AmCham Azerbaijan

creation of appropriate infrastructure. “Azerbaijan Investment compulsory insurance of the civil liability related to real estate Firm” Open Joint Stock Сompany is responsible for organization (except residence buildings, houses and flats) and the use and regulation of activity of industrial districts. The Cabinet of real estate in accordance with the Law “On Compulsory of Ministers should prepare the draft of the “Model Statute on Insurance” Industrial Districts” jointly with the Ministry of Economics and • State Civil Aviation Administration of the Republic of Azerbaijan Industry and approve with the grant of the President of the – to monitor the compulsory personal accident insurance of air Republic of Azerbaijan. transport passengers according to the Law "on Compulsory Insurance" - On some issues related to the implementation of the Law • the Ministry of Transportation - monitoring of the compulsory “On Inspection of entrepreneurs and the protection of the personal accident insurance of road and rail passengers in entrepreneurs’ interests” accordance with the Law on compulsory insurance The Decree was signed with the purpose of implementation of the Ministry of Internal Affairs - monitoring of the compulsory the Law on “On Inspection of entrepreneurs and the protection of civil liability insurance of vehicle owners in accordance with the entrepreneurs’ interests”. the Law on compulsory insurance According to the Decree the followings are understood under the expression of “Direct and serious threat or significant damage for human life or health, environment and property interests of Presidential Orders the state” 1. temporary or permanent loss of ability to work of one or On Additional Measures to Support Foreign Non- several people, or the death of one or several people, as well as Governmental Organizations Projects related to the spread of infectious diseases, the risk of epidemics, or the Azerbaijan Republic occurrence of such cases According to the Document, 3.000.000 (three million) manats 2. quantitative and qualitative changes in individual components were allocated to the Council of State Support to NGOs from of the ecological system, the threat for the ecological balance, or state budget with the purpose of financing projects related the occurrence of such cases to multiculturalism and secularism, experience of effective 3. the risk of damage or destruction of the state property which management and implementation of e-government, Baku costs 50000 (fifty thousand) AZN or more or the occurrence of European Games 2015, conducting research about Azerbaijan such cases and setting information portal.

- On confirmation of the Guidelines for the State Control -On Additional Measures to Improve Mobile Services Over the Urban Development Provided by the State Agency for Public Service and The Guidelines regulates implementation of state control over the Social Innovations under the President of Azerbaijan preparation and implementation of territorial planning documents. Republic According to Guidelines State Committee for City Building and According to the Decree signed on July 16, 2014 eight million Architecture carries out control in a state level and local executive (8.000.000) AZN allocated from the state budget to the State authorities carry it out in a local level. The Guidelines also includes Agency for Public Service and Social Innovations with the prerogatives of each subject of the state control and forms of purpose of provision of durable and high quality mobile services some documents which are used during the implementation of to the people living in the regions. such control. - On additional measures to improve the process of With a purpose of implementation of the Law on Compulsory issuing visas Insurance several amendments were made to the Statues of According to the Order concrete tasks are given to the Cabinet some organizations. According to amendments the following of Ministers and Ministry of Foreign Affairs with the purpose of new duties were set for the following organizations: improvement of visa issuing system. The Cabinet of Ministers is • the State Fire Control Service of Ministry of Emergency in charge of the following: Situations - to control the compulsory insurance of the civil • to join all the embassies and consulates of the Republic of liability related to real estate (except residence buildings, Azerbaijan in foreign countries "Visa" subsystem houses and flats) and the use of real estate in accordance • to improve the existing software of "Visa" subsystem with the Law on compulsory insurance • to equip the embassies and consulates with satellite • State Maritime Administration of the Republic of Azerbaijan - communications via “Azerspace-1” satellite and etc. monitoring of the compulsory personal accident insurance of The Ministry of Foreign Affairs is in charge of organizing regular water transport passengers in accordance with the Law "on training for employees if embassies and consulates which are Compulsory Insurance" directly involved in issuing visas. • the local executive authorities - monitoring of the compulsory insurance of residence buildings, houses and flats in - On approval of the State Program on development of accordance with the Law "on Compulsory Insurance" industry in the Republic of Azerbaijan for 2015-2020 years • the Ministry of Emergency Situations - to control the According to the decree, the Cabinet of Ministers, together with

65 AmCham Azerbaijan

the relevant central and local executive authorities were instructed - On Amendments to the “Guidelines for the use of to take the necessary measures to ensure the implementation electricity” of the State program, the Ministry of Economy and Industry The amendments were made with the purpose of implementation - to coordinate the implementation of the measures contained of the Law on “Inspection of entrepreneurs and the protection in the State Programme and annually inform the President of of the entrepreneurs’ interests”. According to amendments Azerbaijan on the implementation of the Programme. authorized representatives of the institution of the electric energy supply along with their service cards should present the copy Cabinet of Ministers Resolutions of the decision to hold the counter technical test and the memo from the registry (The Main Register of Audited Entrepreneurs) - Resolution №183 on approval of "the Rules regarding labor to entrepreneur or his/her authorized representative before contract notification form and its entry into information system, conducting counter technical test. information form sent to employer in order to register notification about labor contract, as well as retrieval of information from - On Approval of “The Rules on Declaration of Goods and registered labor contract notification form in real time.". Vehicles Passed through the Customs Border” In modern times, electronic systems are vastly used in daily life and Cabinet of Ministers approved the Rules on Declaration of Goods e-registration of the employment contracts is in the focus of society and Vehicles Passed through the Customs Border. The new nowadays. In this regard, appropriate amendments were made to Rules will be implemented regarding to the goods and means legislation. On December 27, 2013 new amendments were made of transportation passed the customs border since November to Labor Code. These amendments created legal basis for the 1, 2014. Rules are applied to imported and exported goods usage of electronic employment contracts. As a logical outcome and vehicles. With the purpose to use simplified procedure of this process, the Rules on the form of employment contract of declaring goods by natural persons duotrack system was notification and its input in the electronic information system were implemented – Green Track and Red Track. With the exception approved by the Decree #183 of the Cabinet of Ministers of the of products which are sent by an unaccompanied luggage and Republic of Azerbaijan published on 13 June 2014. by mail, Green Track is aimed to declare goods orally by natural persons. Through the Green Track goods pass customs border The Rules define notification forms of employment contract, the under the special conditions. Under these conditions goods are process of inclusion of labor contract notice into an electronic free from customs procedures, customs fees and trade policy information system, process of achieving labor contract notices measures. The use Green Track by natural persons is assumed and related information in the real time mode and etc. Under these as a lack of goods must be declared in the hand luggage or in the rules, employees should include information in the electronic accompanied luggage. Customs declaration can be submitted in system of the Ministry of Labor and Social Protection with the the written or electronic form. purpose of electronic registration of signature, amendments and termination of employment contract. This provision disables - On approval of the “Rules on placement of employers to employ persons without formalizing labor relations communications (power, utilities), buildings and i.e. without signature of labor contract. Rules also define solid constructions in the reserve areas of the roads” range of information that should be shown in the electronic The rules contain requirements for placement of communications, employment contract. That makes both employees and employers buildings and constructions in the reserve areas as well as list of to sign employment contract in the form that meets the minimum documents required for getting the permission. requirements. Before adopt of this legal act employment contract were not drafted in a required form, many important pieces of - On foundation of National Nuclear Researches Centre information were missing. In accordance with these Regulations By signing this Resolution Prime Minister approved the Statue employee have the chance to obtain information about signature, and the structure of the “National Nuclear Researches Centre” amendments and termination of their employment contract in JSC. The following issues were regulated by the Statue: real-time mode. This provision solves many problems in the • Legal status of the JSC area of employees’ rights. Statistically, majority of employees do • The main purpose and the activity of the JSC not have information about their employment contract or do not • The authorized capital, property and profits of the JSC have access to such information as most of times employment • The supreme governing body of the JSC contracts were signed in one copy. Employees having less legal • The executive body of the JSC information did not claim the other copy or were not interested in - On approval of the Rules on SMS notification about Temporary that process. So this provision can be assumed as an important closure of roads and other measures in this area pace in the protection of employees’ rights. According to the Rules the SMS notification system is implemented by Intellectual Management System of the Ministry Implementation of these rules will have many positive results. of Transportation jointly with mobile operators. The system It will ensure the transition from informal employment to formal users pay monthly fee for the usage. The amount of the fee is employment, increase employment opportunities and protect set with the contract between Intellectual Management System employees’ rights, improve the living standards of people, and mobile operators. In order to start to benefit from this system increase budget and social insurance revenues. SMS request should be sent.

66 Issue 21 AmCham Azerbaijan

Members’ News and Events International Insurance Company signs US$3mm loan agreement with ING Bank N.V.

OJSC International Insurance Company intends to continue its work towards collaboration and development of new projects with international financial institutions. OJSC International Insurance Company (IIC or the Company) signed a USD 3 million loan agreement with the Amsterdam Legal support on the transaction was provided by Baker & office of ING Bank N.V. (ING) on 27 June 2014 and the loan McKenzie, which is one of the very largest international law firms. was utilized by the Company at the beginning of July 2014. At Q1 2014, the total assets of ING Group, the parent This is the first time this type of assignment has been corporation of ING BANK N.V., totaled EUR 948 billion. ING implemented on the Azerbaijani insurance market. It takes ranks 13th in the top 20 European Financial institutions by into consideration the strategic objectives for the Company’s market capitalization. business development as well as establishing a tradition of cooperation with international financial institutions. The Founded in 2002 by the International Bank of Azerbaijan, borrowed funds will be used for general corporate purposes the biggest bank in the Azerbaijan Republic and one of the including increasing the client portfolio, diversifying sources 50 top banks in the CIS, IIC provides services on 32 types of income, and improving the Company’s insurance services. of insurance to both individuals and corporate entities. IIC’s According to the facility agreement, the term of the loan is 370 share capital is AZN 14.8 million. days, with the option to extend the term for the same period.

ING Bank N.V.’s lending commitment to Azerbaijan’s insurer is a strong indicator of the Azerbaijan Republic’s economic development and growing image as a stable and reliable partner in the world.

FireWorks HRM launches new web resource for HR Procedures”, “HR forms”, “Legal information” and “HR updates.” Information will be available based on current HR trends in Azerbaijan and worldwide. Jobseekers may access to ‘’Hot vacancies” and apply for suitable opportunities. Web resource is available both in Azerbaijani and English languages.

In order to be on the top of current HR news, FireWorks HRM team suggests subscription for news which provides the opportunity to receive most recent HR articles to corporate or personal e-mail.

Another important tool is “HR Forum” where you are able to hold the discussions with your Colleagues and benefit from them. These discussions are based on best practices from HR Professionals. To read a lot, to investigate, to share and to discuss your knowledge means to be professional and be updated. Stay with FireWorks HRM new web resource and be updated! FireWorks HRM is happy to present its new project- HR web resource www.fworks.az. The main difference from Job boards and other HR websites is that the webpage is designed to help both HR professionals and jobseekers to increase their knowledge in relevant topics. HR professionals may benefit from applying useful information from sections like “Guidelines

67 AmCham Azerbaijan

Winemaking companies present Azerbaijan at London Wine Fair Olympia

From 2- 4-th July 2014 for the first time in history of Azerbaijan winemaking three local companies presented their products at London Wine Fair Olympia 2014 at the ‘Wines of Azerbaijan’ booth. The idea of promotion of Azerbaijani wines at such an important event was born during the winter exhibition of ProdExpo in Moscow. Azerbaijan Export and Investment Promotion Foundation (AZPROMO) suggested the most suitable event for such an initiative - London Wine Fair Olympia 2014. This initiative was supported by three major Azerbaijan wine producers: ASPR Winery (Savalan), Caspian Coast and Fireland. The main intrigue of this event was the participation of -competitors companies under the one roof. The Commercial Director of ASPI Winery, enough, but Azerbaijan remains an exotic country for most of Mr. Timur Mamedov explains this issue in details. the visitors. I have to add that the guests of the exhibitions were ‘I think no one can call our companies competing. We are the invited to the event by special registration, that means that each players of one Azerbaijani team. Our main purpose was to of them was specially chosen amongst the best sommeliers, proudly present our country’s best wines at the worldwide event. restaurant owners, distributors and wine journalists. That is why There is a close friendship and mutual understanding between we were so pleased with such interest towards our booth by the companies. During this exhibition sometimes we even had visitors’ to advertise to visitors the products of others winemakers. I have ASPI Winery would like to express its gratitude to The to stress that there was a huge interest by visitors in our exhibit. Ambassador of Azerbaijan in UK Mr. Fahreddin Gurbanov who We saw empty expositions of neighboring exhibitors such as visited the Azerbaijani booth as well as to the entire staff of Spain or Italy and it’s not because their products were not good Azerbaijan Embassy for their help and support during this event.

PwC Azerbaijan held Talents Club Graduation Ceremony On June 20, 2014 PwC Azerbaijan held a Graduation Ceremony of Talents Club II. Talents Club II graduates, representatives of partner companies and PwC leadership, as well as, several high level guests attended the ceremony and congratulated students wishing success in their further career path.

PwC Talents Club is a 6 month free program, established by PwC Azerbaijan in 2012 and uniting talented students of the 3rd to 5th year from various universities. This program provides students with fundamental knowledge in business, applied in real cases, and is aimed at professional development of the young people, preparing placed in the leading companies for internship and employment. for career in business and public service. During a three-stage PwC Azerbaijan is committed to further support the Azerbaijan admission process, 17 the most talented students were selected youth in development of their professional skills and knowledge out of 400 candidates for PwC Talents Club second intake. and improve their competitiveness from the outset of professional career in local and international markets. Information about the In total, the 50 academic hours of study program covered 20 upcoming intake will be available on www.pwc.com/az official weekly sessions, from Audit, Consulting to time management, web site as well as on "PwC Azerbaijan" and "PwC's Academy soft skills etc. Additionally, 6 teambuilding events were held. Azerbaijan" official Facebook pages. Classes were given by PwC Azerbaijan employees, as well as invited speakers and experts, in English. For all questions regarding admission to the Talents Club, please contact PwC's Academy Senior Supervisor Aynur At the end of the program, the Talents Club II members have been Movsumova on (012) 497 25 15.

68 Issue 21 AmCham Azerbaijan

PASHA Bank held agricultural business forum in Sheki

the agriculture industry about the range of financing options available to them, and we are delighted that it was so well attended. We believe that the agricultural industry in Azerbaijan has tremendous growth potential, and PASHA Bank is best placed to help agricultural SMEs to grow their businesses. This On 22 October 2014 PASHA Bank held a business forum in turn contributes to the development of Azerbaijan’s non-oil in Sheki titled “Financing and prospects for agricultural industries, which remains a key focus of PASHA Bank.” development”. Representatives from approximately 50 small and medium-sized enterprises (SMEs) from Sheki, Zagatala, Gabala, Oguz and other neighboring regions attended the event. Speakers included specialists from the Ministry of Agriculture, PASHA Holding, PASHA Bank, etc. The SMEs that attended the forum heard expert views on a range of issues, including the current status of the agricultural industry in Azerbaijan, its role in the wider economy, and growth prospects for the industry. Delegates also learnt more about sources of alternative financing and private investment opportunities through case studies. Taleh Kazimov, Chief Investment Officer and member of the Board at PASHA Bank, commented: “Our main objective in organizing this event was to educate SMEs operating within

JTI shifts focus to water supply projects in Azerbaijan

Apart from this project, JTI supports the International Mugham Center of Azerbaijan to promote Mugham, a unique national music on the UNESCO’s list of Intangible Cultural Heritages of Humanity, and the National Carpet Museum, a key institution promoting the ancient art of carpet weaving and Azerbaijani Following a series of successful cultural projects in Azerbaijan, carpets. But, our portfolio of cultural support is not limited to JTI is now taking the side of people living in disadvantaged only indigenous national culture, but extends to modern art, conditions by supporting projects to provide potable water to as well. Recent cooperation with Yarat modern art space improve their living conditions. envisages support in purchasing books on modern art for the The first such project was implemented with the National organization’s new library, which will be inaugurated in 2015. NGO Forum of Azerbaijan to provide drinking water to around On the people’s side, along with supporting water supply 2,000 people living in Qarasaqqal village of Kurdamir District in projects, JTI is working closely with Damla charity organization central Azerbaijan, which lacked clean, safe and potable water on providing food assistance to disadvantaged families and resources. people with disabilities. Under this project, more than 300 least This milestone project signaled a new start for JTI’s Corporate disadvantaged people will receive monthly food packages. Social Responsibility activities in Azerbaijan, which is helping people have safe and durable access to potable water across the country. Inspired by the success of the first project, JTI teamed up with a regional NGO in northwest Azerbaijan to co-finance another water supply project in a village in Shaki District. The Shaki Ecology and Education Center is now finalizing the water supply system in Boyuk Dahna village to grant access to more than 6,000 people living in and around the village. As continuation of this fruitful cooperation, JTI and the National NGO Forum have signed another contract to pipe potable water to a village in Lerik District, where more than 2,000 people are in urgent need for potable water, having to walk several kilometers to get it.

69 AmCham Azerbaijan

New to AmCham Мembers

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70 Issue 21 AmCham Azerbaijan

AmCham Calendar of Events April - June 2014 May 20

Information & Communications Technologies Committee Meeting

21 May - Corporate Social Responsibility Committee Meeting 3 April - April Members' Luncheon 22 May - May Members' Luncheon 15 April - Labor/Human Resources Committee Meeting 10 June - Meeting of AmCham Working Group on Education 16 April - Information and Communications Technologies Committee Meeting

22 April - CEO Breakfast

23 April - Tax&Customs Committee Meeting

11 June - AmCham and PASHA Bank Summer Business- After-Hours Cocktail

12 June - Healthcare and Medical Insurance Committee Meeting

18 June - AmCham and AQS Group Business-After-Hours Summer Cocktail

19 June - CEO Breakfast 25 April - Members' Luncheon 24 June - June joint Banking, Finance & Insurance and Tax&Customs Committees Meeting 29 April - Seminar on New Business Opportunities in Kazakhstan 25 June - June Members' Luncheon 7 May - Labor/Human Resources Committee Meeting 28 June - AmCham 19th Annual Independence Day Picnic 14 May - May joint Banking, Finance & Insurance and Tax & Customs Committees Meeting 30 June - Corporate Social Responsibility Committee Meeting

71 AmCham Azerbaijan

AmCham Calendar of Events July - September 2014

1 July - Practical Seminar: Marketing

16 September - AmCham & Deloitte Back to Business Cocktail

8 July - Practical Seminar: E-registration of Employment contracts

14 July - Roundtable on Caucasus Transit Corridor

23 July - Workshop on AmCham 2014 National Employee Salary Survey 18 September - Practical Seminar: Project Management

25 September - September Members' Luncheon

3 September - 2014 ICT Conference 25-26 September - Canadian Trade Mission to Azerbaijan

72 Issue 21 AmCham Azerbaijan

AmCham Calendar of Events October - December 2014

3 October - Labor/Human Resources Committee Meeting

8 October - Joint Banking, Finance & Insurance and Tax & Customs Committees Meeting

1 December - 2014 AmCham Annual Tax Conference

22 October - Practical Seminar: Talent Imperatives for HR professionals

29 October - Practical Seminar: Cyber Crime and Bank Fraud

30 October - October Members' Luncheon

31 October - Corporate Social Responsibility Committee Meeting 4 December - December Members' Luncheon

19 December - Practical Seminar: Salary Management 28 November - Banking, Finance & Insurance Committee Meeting 419 December December - -December Labor/Human Members' Resources Luncheon Committee Meeting

73 AmCham Azerbaijan

(M2M) Discount Program

designed for our Member Companies mention in the agreement if you wish even more valuable. Analyzing to obtain as well as for the Associates to participate in M2M Plus as well. our members businesses and to provide discounts on a wide range daily operations, it was a demand- of products and services from the hotel M2M – INDIVIDUAL DISCOUNTS driven initiative to expand M2M stays to food and beverage outlets. This program allows two people to something bigger and tangible. This AmCham initiative is recognized from each Member company to With this in mind, we developed as a strong promotional vehicle aimed obtain discounts in below mentioned M2M+ Discount Program envisaging to add more value to companies’ companies upon presentation of corporate discount rates not only membership by helping to increase special M2M cards. for two delegates, but for a whole DISCOUNT CONDITIONS the volume of sales and to save company within AmCham Azerbaijan We do believe our members costs. To become a discount provider M2M+ CORPORATE DISCOUNTS network! Please contact AmCham appreciate an opportunity to benefit you need to complete M2M Discount AmCham Azerbaijan has a office, to receive more information from AmCham M2M and M2M Program Agreement, print it out and groundbreaking commercial initiative about corporate discount packages Plus Discount Programs exclusively return the signed copy to us. Please to make membership in the Chamber represented in M2M Plus Program.

TRAVEL, HOSPITALITY AND LEISURE GARAGE ISKENDER PROFESSIONAL SERVICES -20% discount on food and beverages BRITISH AIRWAYS Note: This discount will be applicable to all items BIZNESINFO.AZ -British Airways is ready to match Silver/Gold cards on our menu except “Business Lunch Menus” and -15% discount on all banner advertising on of other airlines mentioned in the detailed offer to “Ramadan Menus” biznesinfo.az British Airways Executive Club Silver Status -British Airways offers 10% to AmCham members GAZELLI ACT AZERBAIJAN (M2M and M2M Plus) -15% discount on cosmetic products made by -10% discount on all services Gazelli Group at Gazelli SPA@Wellness centers. QATAR AIRWAYS -15% discount on SPA treatment at Gazelli Evi: MOZAIK -10% discount on both economy and business class pilling (all kinds), wrapping (all kinds), cedar barrel, -10% on all products tickets valid only on QR flights applies to bookings hydro massage, Aroma cabin. made on Qatar Airways’s booking engine when SEABAK especially dedicated Promo Code is entered in SCALINI - up to 10% on IT Support Services Promo Code Field (M2M and M2M Plus) -10% discount on food and beverages - FREE migration to CLOUD.AZ Services

HYATT REGENCY BAKU SCALINI LOUNGE INTERNET AND COMMUNICATIONS -15% discount on restaurant and bar -10% discount on food and beverages -15% discount on laundry and dry cleaning NETTRENDS -30% discount on Spa treatments at Armaiti Spa & SUNSET -10% discount on the quoted monthly subscription Fitness -10% discount on food and beverages tariffs for the online media monitoring services

EXCELSIOR HOTEL AND SPA BAKU DOUBLE COFFEE SAZZ 4G INTERNET -10% discount on all F&B Outlets -10% discount on food and beverages -Connect to Sazz 4G Internet and receive AX -15% discount on Aura Wellness Centre 326 Sazz USB Modem as a gift in return for user Memberships and massages AMAREDDINE charge (50 AZN) -25% discount for Women on Aura Wellness Centre -10% discount on food and beverages -M2M Plus users will be presented with special Memberships offers on an individual basis. WOK INN JUMEIRAH BILGAH BEACH HOTEL -10% discount on food and beverages SEABAK -10% on F&B in all outlets -up to 15% on Internet Services at Landmark and -10 % on accommodation ZADIG & VOLTAIRE other business centers -10 % on Talise Spa & Fitness Center, Beach and -15% collection discount Waterpark (M2M and M2M Plus) BANKING, FINANCE AND INSURANCE MAFRAT JW MARRIOTT -15% collection discount A GROUP INSURANCE - 10% discount on all Food & Beverages – Discount -15% on all types of insurance is applicable maximum for 20 people per card. The MIRTILLO card cannot be applied for meetings & events held -15% collection discount INDIAN CLINIC in hotel. -15% on medical services - 10% discount on all Spa Treatments – The limit is SIMONETTA 20 guests per card. Discount does not apply for spa -15% collection discount ANADOLU MEDICAL CENTER products retail -10% on all services at the clinic excluding materials, -30% discount on Laundry & Cleaning – Discount is E. MARINELLA drugs and applied taxes applicable for minimum on 3 days service. -15% collection discount -5% on all services at the clinic excluding materials, All above discounts do not apply in conjunction with drugs and applied taxes (M2M and M2M Plus) other promotions. PULS DRUGSTORES -15% on all medications REAL ESTATE KEMPINSKI HOTEL BADAMDAR BAKU Kempinski Conference and Meetings SEABAK ALTES GROUP Book a conference for 100 and more participants -up to 5% on IT Equipment, Cartridges and Software -5% on “Altes Group” and get an upgrade on a coffee break: from classic Licensing apartments to premium Coffee break classic includes: tea/coffee, STS INTERNATIONAL MMC EDUCATION assortment of cookies. Upgrade to premium -15% discount on any oil change (motor oil, includes additional sweets of the chef’s choice: antifreeze, ATF, power steering) at STS oil change ADA UNIVERSITY Azeri sweets or French pastry service (M2M and M2M Plus) -10% on Executive Education Corporate Training Programs (M2M and M2M Plus)

74 Issue 21