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Economical news
Bulletine Economics 

2017 November 03 ( Friday )  17:52:52
Print version
Русский Azərbaycan


Organizers of Shopping Festival in Baku Announce Lottery

Baku / 03.11.17 / Turan: Starting on November 1, the instant lottery of the Baku Shopping Festival Surprises of the Festival started.

Winners of the lottery organized during the Festival will be given different gifts and gift coupons, including plasma TVs from Metro Park, smart phones Micromax from the hypermarket Bravo, super modern ovens from Optimal Electronics, newest video cameras from Park Boulevard, vacuum cleaners from Baku Electronics, as well as numerous prizes from shops and shopping centers that are participants of the Festival.

During the second Baku Shopping Festival, every customer who has made a shopping trip for the sum of more than 100 AZN can become a participant of the Surprises of the Festival lottery. For this, the buyer must provide the purchased goods with a tax invoice in one of the Tax Free kiosks operating during the Baku Shopping Festival. At the VAT kiosk, the representative of the tax authority, after checking, making special notes and placing a seal, returns one copy of the invoice to the buyer.

A client with a sealed tax invoice and an identification document after receiving a part of the VAT in an authorized bank should apply to the Information Desk of the Festival. Here the buyer, depending on the amount indicated on the invoice, is given 1 (one) or 2 (two) lottery tickets: for the purchase amount from 100 to 500 AZN, the buyer will receive 1, and for a sum of 500 AZN and above - 2 tickets.

Prizes are given to the winner after presentation of the lottery ticket within 30 (thirty) working days. The lottery tickets must be returned to the employee of the Information Desk of the Baku Shopping Festival. The winner must provide a prize coupon, a document confirming the participant"s identity and the original tax invoice, with the help of which the winner received a chance to participate in the lottery.

Started on October 15, the Shopping Festival will end on November 15. -71D-

Number of Retirees to Decrease in 2018

Baku / 03.11.17 / Turan: In 2018, the Azerbaijani government forecasts a decrease in the total number of labor pensioners from 1 million 311 thousand to 1 million 304.1 thousand people. Since July of this year in Azerbaijan pension reform has been launched, according to which the retirement age is raised twice a year, both for men and women.

In the previous year, in Azerbaijan, 1 million 315.2 thousand people were paid labor pensions. Of these, 781.9 thousand received pensions by age. In 2018, such pensioners will be 760.2 thousand people. The remaining pensioners will receive disability pensions (384.1 thousand - 2017) and for the loss of the head of the family (158.3 thousand in 2017), the Accounts Chamber noted on the draft budget of the State Social Protection Fund for 2018.

According to government forecasts, in 2018 the average monthly amount of labor pensions will be 216.6 manat (127 US dollars), 3.6% more than this year. At the same time, the subsistence minimum for pensioners will be AZN 144 or $ 84.

The retirement age for men will be brought to 65 years by July 2021. The retirement age for women will also grow at this rate and until July 2027 they will be equal. More than 50% of the members of the Cabinet of Ministers of Azerbaijan are persons above the retirement age, but so far none of them is going to retire. ---08B

Raw Materials and Materials for Ferrous Metallurgy and Aluminum Industry Exempted from VAT

Baku / 03.11.17 / Turan: By decree of President Ilham Aliyev dated November 2, the import of a number of raw materials and materials used in the ferrous metallurgy and aluminum industry has been released from VAT.

The list includes nine names of goods. These are calcined pyrite, aluminum ores and concentrates, aluminum oxides, direct reduction products of iron ore, ferrous metal lots, electrodes for ferrous metallurgy and aluminum electrolysis facilities.

The direct beneficiaries of this decision are two monopolists: Baku Steel Company LLC and Det.Al Aluminum LLC. Both enterprises do not publish consolidated financial statements, although the former must comply with the decision of the Cabinet of Ministers. Baku Steel Company LLC and Det.Al Aluminum LLC have not complained about the low profit from their activities. ----08D

World Bank"s Report Makes Expert Laugh

The institute of bankruptcy does not work in Azerbaijan, and I do not understand how the country could advance on this item in the international rating - Akram Hasanov

This week, the World Bank Group published an updated report Doing Business - 2018. Judging by the document, among other achievements, Azerbaijan achieved the greatest progress on the index "solving issues related to bankruptcy", moving 39 steps forward!

"I admit, I do not quite understand how Azerbaijan rose in the Doing Business rating on the mentioned item; maybe other countries lost their positions," the well-known bank expert Akram Hasanov responded to the request of Turan, noting that the institution of bankruptcy does not work in the country . Not only individuals, but even companies very rarely declare bankruptcy due to weak legislation. The Law on Insolvency and Bankruptcy adopted in 1997 is outdated and does not meet the requirements of the time. "A rare company will decide to declare bankruptcy, acting in the shadow economy. The income of many companies is unofficial, so what bankruptcy procedure can there be in this case? After all, if the money is hidden, declaring bankruptcy, to put it mildly, is unprofitable," Hasanov said.

According to him, the number of bankruptcies increased only due to the liquidation of 11 commercial banks. "This has not happened in the history of our country. I think this circumstance could influence the growth of the position in the rating of Doing Business (laughs - Ed.). I have already said on many occasions that the liquidation of banks occurs with egregious violations, and creditor committees have been created only in four out of the eleven bankrupt financial organizations with very limited powers, and only in Bank Standard the committee seeks to comply with creditors" rights, grant documents on loans issued, inspections by the Central Bank and other documentation. However, our legal requirements have not yet been fulfilled. And when the World Bank reports that we have risen 39 steps to take bankruptcy-related decisions, I frankly do not understand what decisions they talk about," the expert said.

According to Hasanov, the seriousness of the report is doubtful, mainly from the point of view of the effectiveness of achievements expressed in the growth of positions: "This is a semi-serious document. I will cite a similar example with the growth of the rate of business registration in the country. I.e. it is possible to open a company in a couple of days, and since local legislation has achieved this, we were raised in the corresponding rating. As a result, an opportunity is created to establish one-day companies and a field for corruption. Doing Business believes that this is good, but the Germans are laughing. Why are not they in Germany rushing to raise their ratings by speeding up this procedure? The answer is that they are afraid of corruption, and they do it right."

Returning to the issue of promoting our country in the Doing Business - 2018 rating to address issues related to bankruptcy, Hasanov half-jokingly noted this could have been caused by the organization of creditor committees, mostly fictitious entities: "Perhaps this is a success, because this did not happen before. I.e. a bank was closed and the creditors who invested their money had no information about what was going on there at all."

Recall that according to the report, Azerbaijan took the 57th place in the Doing Business-2018 rating, promulgated by the World Bank Group. According to this document, Azerbaijan implemented four reforms during the reporting period. These reforms dealt with access to credit, protection of minority shareholders" rights, execution of contracts, and regulation of bankruptcy.--0--

Number of Taxpayers in Azerbaijan Decreases

Baku / 03.11.17 / Turan: Over the past two years, the number of taxpayers in Azerbaijan decreased by 6.4%, according to the Accounting Chamber.

As of July 1, active taxpayers in Azerbaijan were 197,829 legal entities and individuals. This is 13,476 subjects or 6.4% less than at the beginning of the second half of 2015. In 12 months from July 1, 2016, 165 more taxpayers became active. The Accounting Chamber received this information provided by the Ministry of Taxes from the Finance Ministry.

It is noteworthy that according to the register of economic entities, as of July 1, 2017, Azerbaijan had 112,598 economic subjects in the form of a legal entity (+8,400 for 12 months) and 770,920 individuals engaged in entrepreneurial activities not creating a legal entity (+195,500). Thus, out of 883,500 taxpayers registered in the Tax Ministry, only 22.4% are active.

The conclusion of the Accounting Chamber on the draft state budget for 2018 noted that the Social Protection Fund did not provide this supreme audit body with information on the number of subjects of compulsory social insurance and insured persons. -----08B

Officials Forced to Pay?

There are general parallels between the legislative and construction boom in the capital

The new powers of the Accounting Chamber (AC) and the updated Criminal Code can force executive officials to repair the damage caused by illegal construction. This conclusion is prompted by a confluence of the following circumstances: the extension of the AC authority in the part of administrative offenses, the liberalization of the Criminal Code, which exempts from criminal prosecution, provided that the damage is paid to the budget. And finally, the growing construction boom in the capital, accompanied by the demolition of illegal buildings and the question "who will pay for this "pleasure"? But first things first.

Recently, the parliament discussed the amendments to the law On the Accounting Chamber, where, in the detection of offenses not only with signs of a financial crime in the form of an unprofitable expenditure of budgetary funds, but also administrative misconduct, the joint venture will be able to send the case materials to the relevant executive authority and the Prosecutor General"s Office. The new version of the law also covers offenses with signs of administrative misconduct, whereas the current one is limited to "offenses with signs of a crime in the exercise of control over the management of state property, its disposal, and the execution of the state budget."

The article titled The Main Functions of the Chamber of Accounts in the corrected form looks as follows: "... In case of detection of offenses with signs of administrative misconduct or crime while exercising control over the management of state property, ordering it, execution of the state budget, receipts to the state budget of funds received from the privatization of state property, or the use, by designation, of funds allocated to legal entities and municipalities from the state budget, the Chamber shall promptly transmit the relevant materials to the relevant executive authority body or the Prosecutor General of Azerbaijan."

Simply put, if earlier the joint venture sent materials to the Prosecutor General"s Office about offenses that have signs of a crime, the updated document also suggests administrative misconduct. Typically, this kind of violations is typical for management processes, experts say.

"I think that not least the updated legislation expanding the powers of the Accounting Chamber will affect the bodies of the district executive authorities, for example, in the issue of building permits, etc. It happens that officials in the executive and municipal authorities issue a document confirming the possibility of building on an inadequate territory, without thinking about the consequences. As a result of this misdemeanor, the citizen who obtained the permit, can build a house, say, in the zone of passing high-voltage lines or on a landslide, a seismically dangerous territory, but the demolition of such housing will require compensation for damage. In general, the financial damage caused by such unlawful action and detected by the Court of Accounts, upon its submission, becomes the subject of the proceedings of the General Prosecutor"s Office, which ascertains whether the official knew the consequences of such an administrative decision and on what basis he accepted it. Thus, the symptoms of a criminal case can be identified, etc. This is just a separate example, which allows us to partially track the mechanism of the updated legislation," a source in expert circles said.

It is difficult not to notice the connection of this decision with the bill on revision of the Criminal Code, discussed on October 20 at the plenary session of the Milli Majlis, within the framework of the humanization of punishments. Among other things, this provides for the liberalization of legislation in respect of a number of crimes against property and in the field of economic activities related to material damage. Thus, persons who have committed a number of crimes of this category, with full compensation for the damage caused, are exempted from criminal liability. In the event of large damage (in a large or very large amount), or obtaining illegal income, in addition to full compensation for damages, they will also have to pay part of the damage to the state budget (for some offenses even twice), after which the perpetrator is released from criminal prosecution.

It should be noted that against the background of the revision of the legislation in terms of the powers of the financial control body and the Criminal Code, the expiring month was remembered by the activation of the demolition of residential buildings in the capital. During the construction of new quarters old and partly illegal buildings are demolished. In general, there is a situation when the state bears financial expenses associated with illegal construction on the territory of new projects, and the correction of legislation in terms of the authority of the AC to investigate such facts, as well as the possibility of compensating the damage caused to the budget can help to solve this problem. -0---

Bank Ombudsman Achieves First Reconciliation between Bank and Creditor

Baku / 03.11.17 / Turan: The Bank Ombudsman, functioning in Azerbaijan since September 2017, achieved the first reconciliation between the bank and the creditor, the Ombudsman said.

The Ombudsman mediated in the dispute between a citizen Abit Abdullah Oglu Baghirov and Mugan Bank. The subject of the dispute was the citizen"s debt to the bank in US dollars.

After discussions with the bank"s representatives, taking into account the health problems of the 70-year-old A. Baghirov (suffering from diabetes and a stroke), and taking into account the low level of social welfare, the bank agreed to forgive the remaining debt, and an amicable agreement was signed.

At the same time, the amount of the debt was not indicated in the Ombudsman"s message.

It should be recalled that the decision to establish the Bank Ombudsman was adopted by the general meeting of the Association of Banks of Azerbaijan in February 2017. The Ombudsman started functioning in September.

The powers of the Bank Ombudsman include settling debt disputes that do not exceed $ 2,000. -71D-

Finance Ministry to Place State Bonds of AZN 115 Million in November

Baku / 03.11.17 / Turan: The Ministry of Finance announced the plan of placement of government bonds for November, according to which an auction on attracting AZN 45 million was set for November 7.

In November, the Ministry of Finance intends to place government bonds for a total of 115 million manat, which is 35 million manat more than in the previous month. Discount bonds with circulation period of 364 days are put on the first auction. At the second auction, it is planned to sell three-year bonds worth 10 million manat.

This year, the Ministry of Finance has issued bonds for a total of 700 million manat to cover the state budget deficit. In 2018, it is planned to raise funds in the same amount for this purpose in the local market. -----08D--

State Oil Fund Sold Currency at Auction in October 26.2% More Than in September

Baku / 03.11.17 / Turan: In October, the State Oil Fund of Azerbaijan at the currency auctions of the Central Bank sold 318.7 million dollars, which is 66.5 million dollars or 26.2% more than in September.

In general, for the first ten months of 2017, the State Fund sold currency at currency auctions for the amount of 2 billion 804.72 million dollars, which is 34.5% less compared to the same period of the previous year.

In October 2017, the national currency rate varied between 1.7001 and 1.7003 manat per dollar. -71D-

10,929 Insurance Contracts Concluded on Compulsory Real Estate Insurance in October

Baku /03.11.17/ Turan: In October of this year the participant insurers of Compulsory Insurance Bureau concluded 10 929 compulsory real property insurance agreements collecting 2 207 063 manat of insurance premiums. The objects insured according to those agreements were houses and apartments (8225 in number), administrative buildings (145) and other immovable property types (2559).

In comparison with the last year"s same period, the number of concluded contracts decreased by 42%, whereas the amount of collected insurance premiums grew by 25%.

There were also registered 352 agreements on compulsory third party liability insurance associated with the use of real property with 20 790 manats of insurance premiums and 2 contracts on compulsory personal accident insurance of passengers with 930 manat of premiums.

At present, 13 insurance companies, which are the members of Azerbaijani Compulsory Insurance Bureau, provide compulsory real property insurance policies. Those are Ateshgah Insurance Company OJSC, Standard Insurance OJSC, AtaInsurance OJSC, Xalg Sigorta OJSC, PASHA Insurance OJSC, AXA MBASK OJSC, AzSıgorta OJSC, State Insurance Company of Azerbaijan Republic, Mega Insurance OJSC, Silk Way Insurance OJSC, Azerbaijan Industry Insurance OJSC, Qala Insurance OJSC and Günay Sıgorta OJSC. -0--

Number of Contracts for Compulsory Motor TPL Insurance Increased by 21%

Baku/03.11.17/Turan: In October of this year 96 040 contracts on compulsory third party liability insurance of motor vehicle owners were registered in the information system of Compulsory Insurance Bureau. 14 199 of the contracts were related with the motor vehicles registered abroad and being in the territory of Azerbaijan on transit. The amount of insurance premiums collected by insurance companies on standard and border insurance agreements made 7 635 989 manats for the reporting period. Compared to the relevant term of 2016, the number of insurance contracts and volume of collected premiums grew by 21% and 16% respectively.

Since 1st November 2016, compulsory motor insurance contracts are concluded electronically.

At present, 13 insurance companies, which are the participants of Azerbaijani Compulsory Insurance Bureau, provide compulsory motor insurance policies to citizens. Those are Ateshgah Insurance Company OJSC, Standard Insurance OJSC, AtaInsurance OJSC, Xalg Sigorta OJSC, PASHA Insurance OJSC, AXA MBASK OJSC, AzSıgorta OJSC, State Insurance Company of Azerbaijan Republic, Mega Insurance OJSC, Silk Way Insurance OJSC, Azerbaijan Industry Insurance OJSC, Qala Insurance OJSC and Günay Sıgorta OJSC. -0--

Foreign currencies rates fixed by Central Bank

1 ABŞ dollarıUSD1.7003
1 AvroEUR1.9829
1 Avstraliya dollarıAUD1.3075
1 Argentina pesosuARS0.097
1 Belarus rubluBYN0.86
1 Braziliya rialıBRL0.5203
1 BƏƏ dirhəmiAED0.4629
1 Cənubi Afrika randıZAR0.1216
100 Cənubi Korea vonuKRW0.1527
1 Çexiya kronuCZK0.0772
100 Çili pesosuCLP0.2703
1 Çin yuanıCNY0.2568
1 Danimarka kronuDKK0.2664
1 Gürcü larisiGEL0.6453
1 Honq Konq dollarıHKD0.2179
1 Hindistan rupisiINR0.0263
1 İngilis funt sterlinqiGBP2.2229
100 İndoneziya rupiasıIDR0.0126
100 İran rialıIRR0.0043
1 İsveç kronuSEK0.2027
1 İsveçrə frankıCHF1.7032
1 İsrail şekeliILS0.4847
1 Kanada dollarıCAD1.3277
1 Küveyt dinarıKWD5.6264
1 Qazaxıstan tengəsiKZT0.0051
1 Qırğız somuKGS0.0248
100 Livan funtuLBP0.1122
1 Malayziya rinqqitiMYR0.4017
1 Meksika pesosuMXN0.0895
1 Moldova leyiMDL0.0975
1 Misir funtuEGP0.0963
1 Norveç kronuNOK0.2091
100 Özbək somuUZS0.021
1 Polşa zlotasıPLN0.468
1 Rusiya rubluRUB0.0292
1 Sinqapur dollarıSGD1.2497
1 Səudiyyə Ərəbistanı rialıSAR0.4534
1 SDR (BVF-nun xüsusi borcalma hüquqları)SDR2.3876
1 Türk lirəsiTRY0.4467
1 Tayvan dollarıTWD0.0563
1 Tacik somonisiTJS0.193
1 Yeni türkmən manatıTMT0.4859
1 Ukrayna qrivnasıUAH0.0631
100 Yapon yeniJPY1.4916
1 Yeni Zelandiya dollarıNZD1.1782