Azerbaijan

Comesa

Azerbaijan regulates competition policy with a system comprizing various legislative texts. The major laws dealing with competition issues are: the Law on Antimonopoly Activity no. 526 of 1993 which was amended by Law 381-IGD of October 10, 1997, hereby analysed; the law on Natural Monopolies No 590-IG of December 15, 1998, published in the “Azerbaijan” newspaper on 19 March, 1999; the Law on Unfair Competition No 62.Law No. 1049 June 2, 1995; and the Law on Protection of Consumer Rights.

Library

	Law on Azerbaijan Republic on Antimonopoly Activities of 1993
	Law on Natural Monopoly
	Competition-related Extracts from the Partnership and Cooperation Agreement between EU and Azerbaijan 1999
	Contribution of Competition Policies to the Achievement of MDGs
	ADB TA for the Development of Competition Framework 2003
	Azerbaijan's Law on Unfair Competition 1995
	Contact Info Azerbaijan Competition Authority

General Profile
Substantive Provisions
Institutional

GENERAL PROFILE

Contact information	State Committee on Antimonopoly Policy and Support for Entrepreneurship 370002, Baku, Azerbaijan, S.Askerova st. 85 tel: (994 12)957972 fax (994 12)946951 E-mail: komit@antimon.baku.az http://web.az:8101/antimon/ Ministry of Economic Development Department of Antimonopoly Policy 20, Usif Safarova str. 370025 Baku AZERBAIJAN Tel: (99412) 94 78 75; 99 74 43 Fax: (99412) 94 69 51 E-mail: office@economy.gov.az Website: http://economy.gov.az/HTML/Departments/AP/structure.htm
Competition Law	Law no. 526 of March 4, 1993 Law no. 526 establishes in Art. 1 that the Antimonopoly legislation of the Azerbaijan Republic consists of the Constitution, the Law no. 526 and other normative-legal acts.
Year CL first enacted	1993
Years CL amended
Type of law	Administrative
Principal objectives
Consumer welfare
Economic efficiency
Public interest/benefit
Promotion of competition
Other	Art. 1 Prevention, restriction and suppression of the monopoly activity. Monopoly activity is defined as activity of economic subjects or executive power and administrative bodies which, being in one or another form monopolistic, is directed to prevention of competition, its restriction or elimination.
Coverage
Effects in the country	Art. 2; Art 10.5 The Law is applicable to the whole territory and it covers all legal entities and physical persons. Administrative bodies, and executive power are covered. The Law covers as well acquisition of foreign companies by Azerbaijanian companies wich might restrict the competition in the national market.
Extraterritorial application	Art. 2 If agreements and contracts concluded with physical or legal foreign entities have anticompetitive effects in the Azerbaijan territory, the Law applies.
Sectors exempted	Art. 2, 3; Art. 11; Law on Natural Monopolies No 590-IG, of December 15, 1998. IP rights are not covered. Natural monopoly are separately monitored. A list of natural monopolists is approved by the Milli Mejlis (National Assembly) of Azerbaijan Republic. Control of the activity of subjects of natural monopolies is carried out by relevant executive power bodies (hereinafter - the bodies carrying out control over natural monopolies).
State enterprises
Practices (Collective Bargaining, R&D Coop)
Other

SUBSTANTIVE PROVISIONS

Law differentiates between horizontal and vertical agreements
Yes
No	Art. 10 The Law does not distinguish between horizontal and vertical agreements.
Horizontal Agreements

Collusion	Art. 10.1 The agreements are prohibited if they lead to monopolization of the market because one of the subject is a dominant player in the market.
Price fixing	Art. 10.1
Bid-rigging
Prevent the entry or expulsion from the market	Art. 10.1; Art. 10.8
Restricting output: limit/control market, production, technical development, or investment
Customer/market allocation	Art. 10.1
Export/import cartels
Collective bargaining
Discriminatory practices: dissimilar conditions to equivalent transactions	Art. 10.1
Tying
Open ended provision
Other
Cooperative agreements-exceptions
R&D
Production agreements
Purchasing agreements
Commercialization agreements
Agreements on standards
Environmental agreements
Exchange of information or statistics
Other
Vertical Agreements

Resale price maintenance	Art. 10.2 Agreements between non-competing market subjects, one of them occupying dominating position, another being its supplier or buyer which are or might become the cause of restriction of competition in the market.
Exclusive distribution/exclusive territories	Art. 10.7
Tying	Art. 10.6
Quantity forcing	Art. 10
Franchise fee contracts
Royalty
Discriminatory practices
Open ended provision
Other
Exceptions
Active sales in exclusive territory
Restrictions of sales to end-users by a wholesaler
Restrictions of sales to unauthorized distributors
Restrictions of sales of components by a buyer
License agreements
Other
Dominance
Single firm	Art. 14
Joint dominance
Size thresholds
Market share
Turnover
Factors considered	Art. 14 When dominant players carry out "monopolistic activity and their actions result in restriction of competition and violation of the customers' interests, and their forced desegregation doesn’t seem possible" the executive power body might apply to the executive power bodies and administrative bodies with respective proposals concerning establishment of state control on prices charged; application of progressive tax rates; forcing licensing of new patents; annulment of limitations provisions inserted in contracts concluded by the dominant players; annulment of import-export operations.
Barriers to entry
Potential competition
Economic dependence of the suppliers and purchasers
Other
Abuse	Art. 14 Dominant players engaging in monopolistic activities and restricting the competition in the market.
Predatory pricing
Prevent the entry or expulsion from the market
Refuse to deal
Refuse access to essential facility
Open ended provision
Other	Art. 14; Art. 15 The executive power body can decide to proceed to a forced desegregation for a period of at least 6 months. If this is not feasible due to technological, territorial and organizational reasons, other remedies are available as stated in Art. 14.
Monopoly
Art. 5; Art. 6; Art. 7; Art. 8; Art. 9; Art. 12 The Law covers in great detail with illegal actions of 1) executive power bodies, 2) branch administrative bodies, 3) economic subjects and 4) financial-credit organizations which result or might result in restriction of elimination of competition, infringement of interests of economic subjects and customers. For each entity a list of illegal behavior is listed. The Law makes illegal certain abuse of monopolistic right on patents and licenses such as 1) failure to use the patent by its owner and ungrounded refusal in granting license thereto; 2) restrictions in technical policy of the licensee; 3) restrictions in use of licensed technology by the licensee; 4) restrictions in commercial activity of the licensee; 5) making more difficult terms of payment for the license by its owner.
M&A
Definition	Art. 13 Amalgamation and association of economic subjects; liquidation (except for cases of liquidation of enterprises according to judgement of court) and division of the enterprises, the total value of assets of which exceeds 50-threshold fold minimal amount of salary, and also municipal enterprises (if it will be resulted in establishment of economic subjects, the share of which exceeds 35% at respective commercial market).
Merger of undertakings	Art. 10.3; Art. 13
Acquiring controlling interests	Art. 13.1 “• when purchasing more than 20% of shares constituting partnership capital of one economic subject and giving the voting right to other economic subject (association of economic subjects). • if in the case of transfer of main assets of the production or non-material assets of one economic subject to the ownership or use of another economic subject (association of economic subjects), the balance value of the property, being the subject of transaction, exceeds 10 % of main assets of the production and non-material assets of economic subject, alienating this property; • when the other economic subject (association of economic subjects) purchases the rights of one economic subject, specifying terms of business activity or giving the possibility to carry out the functions of his high management body by.”
Joint ventures	Art. 10.4; Art. 13.1
Notification requirements	Art. 13.3 Establishment, reorganisation and liquidation of economic subjects without the approval of the executive power body may be invalidated by the courts.
Thresholds	Art. 13.1 Resulting economic subject share exceeding 35% of the relevant market or total value of assets exceeding 75-ths-fold minimal amount of salary;
De minimis
Test
SLC
Dominance
Efficiency Exception/Factor
National champion-export
Exceptions
Acquiring share for reselling
Failing firm defense
Other
Unfair Trade Practices	Law on Unfair Competition No. 62. Law No. 1049 dated June 2, 1995 The Law prohibits 1) copying of economic activity of competitor; 2) discrediting of economic activity of competitor; 3) interference with economic activity of competitor; 4) unfair enterpreunership 5) unscrupulous business behavior; 6) delusion of consumers.
State Aid	Art. 5 Art. 5 deals with some illegal actions done by executive power bodies, some can be qualified as state aids.
Other

INSTITUTIONAL

Authority or agency	Art. 3 Department on Antimonopoly Policy of the Ministry of Economic Development (DAP/MED) and State Committee on Antimonopoly Policy and Support for Entrepreneurship. The Law states as well that the state policy on prevention, restriction and suppression of antimonopoly activity is carried by executive power bodies defined as executive power and administrative bodies of Azerbaijan Republic, its cities, regions and constituent administrative-territorial units. All unions, associations, concerns, consortiums and other unions of enterprises whenever they exercise administrative functions are also regarded as management bodies.
Separate body
Part of Ministry
Part of the Congress or Parliament
Quasi-judicial authority
Independence
Number of Members
Appointment/Tenure
Appointment by President
Appointment by Prime Minister
Appointment + confirmation by Congress
Elections by Assembly
Cooptation
Ex Officio
Other
Membership requirements
Conflict of interest
Length of mandate
5 years
Other
Compensation
Removal of commissioners
End of the term
Removal
Suspended as a civil servant by a court
Condemned for criminal offences
Resignation
Death or serious illness
Bankruptcy
Other
Voting system
Competences
With relation to other regulatory agency
Part of international network	Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part (Council and Commission Decision of 31 May 1999-99/614/EC, ECSC, Euratom) Treaty on the Implementation of a Coordinated Competition Policy, signed on 24 December 1993 in Ashkhabad between Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Republic of Moldova, the Russian Federation, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.
Quarantine after completion of term
Number of staff	The Department on Antimonopoly Policy had in 2003 staff comprising of 21 persons.
Total number
Civil servant
Lawyers
Contractors
Advisers
Economists
Admin. staff
Budget
Independent
Approved by the Assembly
Other
Separation investigation and adjudication
Opening case
Based upon complaints
Ex Officio
Authorization needed
Investigatory powers-subpoena
Enter in premises
Enter in private home/cars
Seize documents as legal evidences
Compel witnesses to testify
Compel the production of documents	Art. 16
Other
Timeframe
Hearing	Art. 13 In Merger analysis, "the respective executive power body should provide information in written form to the applicant on decision taken no later than 15 days after receipt of the required documents".
Public
Closed door
Criteria used to solve the case
Based on law
Based on economics
Right of the parties
To be notified
Right to access to documents by the parties
Right to be heard
Opportunity to participate in the process of determining the conditions and obligations
Other
Interim measures Provisional Powers
Suspend the merger
Other
Leniency program
Decisions published
No
Opening investigation
Closing investigation
Requests for exemption
Type of remedies	Art. 15 In case of monopolistic activities by dominant players, forced desegregation is possible.
Structural
Behavioral
Type of penalties
Administrative	Art. 3; Art. 14; Art. 17 Consequences of the violation of the Law are: • repayment of the profit obtaining as a result of violation of the Law, to the state budget in an order envisaged by the legislation; • restore original situation, change or annul the agreement and undertake other actions; • reimburse losses; • pay penalties.
Criminal
Other remedies	Art. 18; Law on Natural Monopolies No. 590-IG, dated December 15, 1998, Art. 6 The companies and their managers and officials are subject to up to 50-fold minimal amount salary for each day of delay or for the non provision of information and documents. In case of natural monopolies, the authorities may decide to control the prices (tariffs) for commodities; the identification of customers to whom the services must be provided and (or) in cases when subjects of natural monopoly are not able to satisfy in full customers’ demand in commodity, identification of required minimum of said commodity; bringing the production volume of commodity in correspondence with requirements of this Law.
Consent orders or undertakings
Damages
Publish annual reports
Enforcement of the decision	Art. 17 The losses are recovered by the law courts or arbitration courts
Right of appeal
No
Based on law
Based on economic facts
Nature of the appellate body
Same authority of the first instance
Part of the judicial system
Special appellate body
Competition Advocacy
Independent role
Invited
- by the public
- by the government
back to top Updated as of: April 30, 2007