Law of the Azerbaijan Republic
About Privatisation of State Property in Azerbaijan
Republic
The present Law determines principles and organisation-legal basis of
privatisation of state property in Azerbaijan Republic.
Clause 1. General
Under privatisation of state property we shall mean transfer of state
property into private property according to provisions of the present Law.
Clause 2. Legislation concerning
privatisation of state property
1. Legislation concerning privatisation of state property consists
of the Law of Azerbaijan Republic «About property», the present
Law, other legislative acts of Azerbaijan Republic issued based on the
present Law.
2. Privatisation of land and housing fund is controlled by other legislative
acts of Azerbaijan Republic.
Clause 3. Procedure of privatisation
of state property
Privatisation of state property in Azerbaijan Republic will be accomplished
by the body subordinate to the President of Azerbaijan Republic that exercises
control over state property.
Clause 4. Objects of privatisation
All enterprises and property constituting state property of Azerbaijan
Republic are considered objects of privatisation, except enterprises and
objects that cannot be privatised.
Clause 5. Subjects of privatisation
Subjects of privatisation (buyers) might be:
-
working collective of privatised object;
-
citizens of Azerbaijan Republic;
-
legal entities that are not state enterprises, companies and organisations;
-
legal entities with the state share in their ownership capital not more
than 25 percent;
-
foreign legal entities and physical persons.
Clause 6. General principles of
privatisation of state property
General principles of privatisation of state property are:
-
state control over the process of privatisation of state property, with
establishment of stages, succession, classification into groups, ways,
forms and options of privatisation;
-
consideration of economical interests of the state, working collectives
and all social layers during privatisation;
-
determination of privatisation share in order to provide participation
of citizens of Azerbaijan Republic in privatisation;
-
consideration of opinion of working collective when choosing forms and
ways of privatisation, except enterprises (objects) subject to obligatory
privatisation;
-
consideration of requirements of antimonopoly policy during privatisation;
-
development of conditions for participation of foreign legal entities and
physical persons in privatisation process with the objective of attraction
of foreign capital into national economy of Republic and use of experience
of business circles;
-
accomplishment of privatisation in conditions of publicity, state and public
control over results of privatisation.
Clause 7. Procedure of privatisation
1. Privatisation of state property in the Republic is accomplished
on the basis of national currency - Azerbaijan manat.
2. Privatisation of state property is accomplished after preparation
of necessary documents (forms) according to order determined by the body
exercising control over state property.
3. Participation of foreign legal entities and physical persons in privatisation
is controlled by regulations envisaged by Clause 8 of the present Law.
4. Housing and social-cultural objects, auxiliary economy objects being
on balance of enterprises under privatisation might be privatised both
together with their total property and separately. If it is impossible
to accomplish privatisation of these objects they are transferred under
control of the body governing state property.
5. Privatisation of state property is accomplished by means of auctions
(sales), competitions, various investment funds, securities and stock exchanges.
6. Each member of working collective of the enterprise, being privatised
by means of auction (sale) and competition, who had not received right
for property will be given compensation at the expense of the new owner
at the moment of his dismissal.
Amount and procedure of compensation payment are determined by provisions
on organisation and realisation of auctions and competitions.
7. On transformation of state enterprises into stock companies various
privileges are granted to members of working collective, particularly the
right to purchase part of shares at their nominal value or with partial
payment.
Clause 8. Participation of foreign
legal entities and physical persons in privatisation
1. Participation of foreign legal entities and physical persons in
privatisation is allowed according to legislation of Azerbaijan Republic,
in an order determined by state program of privatisation.
2. Whenever foreign legal entities and physical persons participate
in privatisation of state property jointly with local capital the former
shall have priority over the latter.
3. Enterprises with foreign investments, wherein share of local participant
is compensated by private (individual) capital might take part in privatisation
based on reinvestment (repeated investment) of profit obtained at the territory
of Azerbaijan Republic.
Reference about sources of profits shall be submitted to the body that
exercises control over state property before beginning of the auction (sale)
and competition.
Clause 9. State control over privatisation
1. State control over privatisation is exercised by the body having
control over state property within the limits of authority determined by
the present Law and other legislative acts of Azerbaijan Republic issued
on the basis of the present Law.
2. The body exercising control over state property:
-
develops state program of privatisation of state property in Azerbaijan
Republic;
-
exercises methodical control over privatisation all over the territory
of the Republic;
-
establishes its own territorial structures exercising privatisation program
in respective regions, accomplishes control over their activity;
-
analyses cases of privatisation of state property before the commencement
of the present Law, submits to Law Courts or Courts of Arbitration appeals
about annulment of decisions and deals that contradict legislation on privatisation;
-
accomplishes other functions envisaged by the present Law and other legislative
acts of Azerbaijan Republic.
3. Ways, forms and options of privatisation, procedure of their accomplishment,
specificity’s in various branches of economy, various enterprises and objects,
estimation of their cost, normative, methodical and also other necessary
documents concerning distribution and use of money obtained as a result
of privatisation are developed by the body exercising control over state
property and approved by the President of Azerbaijan Republic.
Clause 10. State program of privatisation
1. State program of privatisation determines:
-
list, technical-economical indices of enterprises under privatisation,
objects (property) and their initial estimation;
-
stages, term of privatisation;
-
classification of enterprises and objects under privatisation, ways and
forms of privatisation, specific options of formation of stock companies;
-
amount, terms of granting of privatisation share and procedure of its use;
-
use of money obtained as a result of privatisation.
2. Every year, not later than on the 1st of November, state
program of privatisation is submitted for approval by Supreme Council of
Azerbaijan Republic by the President of Azerbaijan Republic.
Supreme Council of Azerbaijan Republic approves state program of privatisation
not later than on the 20th of December.
Amendments to the state program of privatisation might be introduced
after approval of Supreme Council of Azerbaijan Republic.
Clause 11. Restrictions on privatisation
of state property
List of enterprises, objects (property) that are not subject to privatisation
is approved by the Supreme Council of Azerbaijan Republic on presentation
of the President of Azerbaijan Republic.
Clause 12. Classification of enterprises
and objects under privatisation
In the course of privatisation of state property the following classification
of enterprises and objects is proposed:
-
enterprises and objects being privatised on decision of the higher body
of state and executive power;
-
enterprises and objects being privatised on decision of the body accomplishing
control over state property;
-
enterprises and objects being privatised on decision of the local power
bodies.
Clause 13. Ways of privatisation
1. Sale of privatised property with full compensation of the cost.
2. Sale of privatised property with individual (privilege) compensation
of cost.
Clause 14. Forms of privatisation
1. Sale of property that has been taken on lease before to leaseholder
on agreement of the body controlling state property.
2. Redemption of the property by the enterprise' collective.
3. Organisation of auctions (sales) and competitions.
4. Establishment of Limited liability company and close stock companies.
5. Establishment of open stock companies.
Clause 15. Options of transformation
(establishment) of state enterprises into stock companies
1. Establishment of stock companies when the state possesses the control
package of shares.
2. Establishment of stock companies when the state doesn't possess the
control package of shares.
Clause 16. Estimation of cost of
state property being privatised
1. Estimation of cost of state property is accomplished either by
the enterprise itself or on agreement with specialised enterprises, with
subsequent expertise and approval of its results by the body exercising
control over state property, according to instructions and methodical recommendations,
developed by abovementioned body.
2. Questions on sale or long-term leasing of land site together with
privatised state enterprise and object located thereon shall be solved
individually, according to existing legislation and order, by the body
exercising control over state property in pursue to agreed mutual decision
of respective bodies depending on location of said land site, its cost,
communication network under this land site, electrical lines, cables, on
type of activity and aim of the enterprise' activity, on the subject accomplishing
privatisation and other factors.
Clause 17. Sources of money for
redemption of state enterprise by working collective
1. Working collectives might redeem state enterprise at the expense
of money taken from the following sources:
-
privatisation shares;
-
individual sources;
-
bank credits.
Clause 18. Privatisation share
1. Privatisation share is share of privatised state property given
to all citizen of Azerbaijan Republic free of charge.
2. Privatisation share is given to citizens of Republic for establishment
of equal starting conditions for participation in privatisation process.
3. Amount of privatisation share is established based on cost of state
enterprises and objects chosen for privatisation.
4. Privatisation share is being kept at specially opened accounts in
respective bank on the names of all citizen of Republic.
5. Privatisation shares might be used by citizens of Republic only for
the purposes of privatisation.
6. Privatisation shares having special purpose are not handed out, cannot
be used for payment in the sphere of money circulation, and might be only
transferred from one account to the other.
7. Whenever privatisation share is transferred as legacy it should be
also used only with the same specific purpose.
8. Procedure of giving out and use of privatisation shares is controlled
by the President of Azerbaijan Republic.
Clause 19. Investment funds
1. With the objective of efficient use of part of privatisation shares
belonging to the citizens of Republic that were not used due to some reason
the state establishes specialised investment fund. With the same objective
private (individual) investment funds might be also established in the
Republic.
2. Regulations concerning specialised, private (individual) investment
funds and other normative documents controlling their activity are approved
by the President of Azerbaijan Republic.
3. Investment funds exercise their activity on the basis of licenses
given by National bank and under control of this bank; they are subordinate
to National bank.
Investment funds are included into Common State register.
Clause 20. Use of money obtained
as a result of privatisation of state property
Money obtained as a result of privatisation of state property constitute
national property and are used for social-economic development of Azerbaijan
Republic.
Clause 21. Applications in connection
with privatisation of state property
1. Applications for privatisation of state property are submitted
after publishing the program of state privatisation in mass media.
2. List of documents and data that should be enclosed with applications
submitted in connection with privatisation is determined by state program.
3. When submitting application for privatisation respective state duty
is paid; amount of said duty is equal to initial cost of property declared
at the auction.
Clause 22. Organisation of auctions
1. Auctions on privatisation of state property are organised by the
body exercising control over state property.
2. Procedure of sale of the objects at the auction is governed by respective
Provisions approved by the body exercising control over state property.
Clause 23. Organisation of competitions
1. To carry out privatisation of state property in the form of competition
participant of the competition should establish specific conditions in
connection with this property.
2. Competitions are being held according to Provisions approved by the
Body controlling state property.
Clause 24. Establishment of stock
companies
1. With the purpose of privatisation enterprises are transformed into
open or closed stock companies.
2. Transformation of state enterprises into stock companies is governed
by respective legislation.
Clause 25. Procedure of legalisation
of deals
1. The Body exercising control over state property shall grant documents
confirming right for property to the buyer of the object to be privatised.
2. Whenever working collective is buying the enterprise on credit terms
it acquires proprietary right after payment of first instalment and presentation
of guarantees of subsequent payments secured by the part of property already
paid off.
3. Until cost of the enterprise is completely redeemed by working collective
its right for charge of free transfer or sale of the enterprise' property
to the other party is limited.
Clause 26. Social protection of
people during privatisation
1. People who lost their job because of privatisation of state enterprises
shall enjoy rights and privileges established according to respective legislation
for the people dismissed on reorganisation and liquidation of enterprises.
2. When paying compensations and granting other privileges at the enterprises
transformed into stock companies with the objective of privatisation pensionaries
having worked at the enterprise at least seven years and also persons having
right to return to their former posts according to existing legislation
are also accounted for.
Clause 27. Information about results
of privatisation
1. Privatisation processes in Azerbaijan Republic are accomplished
in conditions of wide publicity and under public control.
2. State program of privatisation is published in mass media, and people
should be provided with necessary information concerning auctions, competitions,
transformation of state enterprises into stock companies at least one month
before.
President of Azerbaijan Republic
A. Elchibey
Baku, January 7, 1993
No 445
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