“The main thing is that the laws are correctly implemented”

In Azerbaijan, people illegally transferring more than 50,000 manats will be brought to criminal liability. This issue was discussed at a meeting of the Committee on Legal Policy and State Building of the Milli Majlis and reflected in the amendments proposed to the plenary session of the Parliament, which were reflected in the Criminal Code and the Code of Administrative Offenses.

According to the proposed amendment to the Criminal Code, an individual who organized the transfer of more than 50,000 manats through substitution and other mutual settlements without committing criminal acts under the Article on smuggling, will be held criminally liable.

According to the proposed amendments to the Code of Administrative Offenses, it is envisaged to bring to administrative responsibility a person who organized an illegal transfer of up to 50,000 manats from Azerbaijan to foreign countries or from abroad to Azerbaijan.

The draft amendments to the law "On Grants" were submitted for discussion in the first reading at a meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship. According to the proposed change, in the new part 2-2 of Article 3 of the Law of the Republic of Azerbaijan “On Grants”, the maintenance of the register of grants will be determined by the body (structure) appointed by the relevant executive authority.

What is the purpose of the expected changes in legislation?

A lawyer, an expert on banking and financial issues Akram Hasanov answers ASTNA questions.

* * *

Question: According to the amendments proposed to the Criminal Code and to the Code of Administrative Offenses, a person who organized an illegal transfer of funds from Azerbaijan to foreign countries or from foreign countries to Azerbaijan in the amount of up to 50,000 manats will be punished. What is the purpose of this change?

Answer: First of all, I would like to note that we have not yet been acquainted with the mentioned draft law. Because it hasn't been published. Deputies who claim to act in the name of the people and for the people traditionally hide their bills from the people.

Normal parliaments immediately publish not only drafts, but also their rationale. Thus, the foundation of lawlessness is laid in a country where elected legislators are not transparent. In connection with the mentioned bill, the website contains only this information: “the documents provide for strengthening the fight against illegal money transfers from Azerbaijan abroad and from abroad to Azerbaijan.” The rest of the information that we take from the press is what was orally transmitted by the Committee on Legal Policy and State Building. But this information is also unreliable.

Firstly, it may happen that the information provided is not completely true. In a word, at this stage, our judgments about the bill under consideration are nothing more than abstract assumptions.

In any case, taking into account the purely economic situation, I think that, most likely, the purpose of the project is, first of all, to prevent the illegal outflow of currency from the country. And the mention of hard currency illegally imported from abroad is intended to maintain an appearance of objectivity. That is, the state says it will take a tough stance in order to prevent illegal currency flows in both directions.

Of course, the Code of Administrative Offenses (Articles 430 and 483), and the Criminal Code (Article 208) still provide for liability for violation of currency legislation. But responsibility is soft. According to the Code of Administrative Offenses, only a fine is provided for violation of the rules of currency regulation and failure to return foreign currency from abroad. According to the criminal code, only for non-transfer within 180 days to a bank account in Azerbaijan of foreign exchange funds received as a result of foreign economic activity, punishment is provided in the form of imprisonment for up to 5 years. And the components of these violations and crimes themselves are also reflected in an extremely imperfect form. Since, if a person buying goods from abroad, as a rule, transfers an advance, then he may not be guilty of non-arrival of goods or non-payment of the cost of the goods sold. But, even if this is true, it is very difficult to prove it. The person will tell you what to do if my counterparty abroad violates his obligations: he does not send the goods and does not pay money. Naturally, such an uncertain situation contributes to abuses and the expansion of corrupt opportunities for law enforcement agencies.

It should also be taken into account that the current legislation is aimed only at preventing violations of bank transfers. It is not intended to combat informal money transfers. For example, it is not a secret that the whole world has been embraced by such informal money transfer mechanisms as the Guarantee settlement system. Since the size of the shadow economy in Azerbaijan is still large, a significant part of the cash flow occurs through such mechanisms. But this is done by specific persons, and responsibility for this is not provided. Now there will be such a responsibility.

In this sense, a more rigid approach is logical. The geopolitical situation in the world is extremely tense, economic forecasts are also not encouraging. The liberal approach is no longer relevant. Each country must first of all ensure its financial security. The foreign exchange in the country must also serve the national economy.

Q: How will this affect entrepreneurs?

This will not have a negative impact on entrepreneurs operating under the law. Complications will be for those who are not clean at hand. In a sense, this will also serve as a healthy competition. Also, the preservation of money in the country means that due to some of them, investments will increase. True, for this the state must also simultaneously create a normal investment climate.

Question: Will this change prevent money from being taken out of the country illegally, especially to offshore zones?

Answer: I think that there will be real enforcement, then these violations will be largely prevented. Another thing is that there should be complete transparency. Whatever happens, the majority cannot withdraw money, but some are indulged in this.

Question: What impact will this change have on the activities of NGOs, on grants coming into the country? Will this apply to them as well?

Answer: Naturally, in the case of illegal grants, it will apply to them as well. But, as I already mentioned, the change primarily concerns the exported money. Grants come legally. In addition, we are talking about amounts that exceed 50,000 manats.

Question: According to the new amendment to the law “On Grants”, the register of grants will be maintained by a body (structure) appointed by the relevant executive authority. What is the purpose of this change?

Answer: We have not yet seen this project either. If in each case we are only talking about maintaining a register, then this is a purely organizational issue. It is not important for the grantor and the recipient who maintains the registry.

Q: Do you think these changes are progressive or do they make laws more reactionary? What do you think about these changes, do you have any suggestions?

Answer: I will give my final opinion after the publication of the project. So far, from the point of view of intentions, I consider the changes to be progressive. These are steps taken as part of the fight against the shadow economy, unhealthy competition, corruption, etc. The main thing is that they are correctly recorded in the project and then implemented.