"The real reason for the restrictions on cashing out abroad is unclear"

More than 10 thousand dollars cannot be cashed out with plastic cards purchased from Azerbaijani banks during a month of stay abroad. That is, a monthly limit will be set for the cards to withdraw funds,  stated the recently adopted by the Central Bank of Azerbaijan (CBA) "Rules for conducting transactions of residents of the Republic of Azerbaijan in foreign currency, as well as transactions of non-residents in national and foreign currency."

According to the new rules, daily limits on amounts transferred by individuals outside the country for personal purposes have been abolished and replaced with monthly limits. What is the purpose of these restrictions?

An expert on banking and financial issues, lawyer Akram Hasanov ans wered these and other questions of ASTNA.

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Question: According to the amendments to the "Rules for conducting transactions of residents of the Republic of Azerbaijan in foreign currency, as well as transactions of non-residents in national and foreign currency" recently introduced by the CBA, plastic cards purchased from Azerbaijani banks cannot be cashed out more than 10 thousand dollars during a month abroad. Do you think this is the right decision? What is it designed for?

Answer: In general, this is a logical continuation of the policy of restrictions on foreign exchange transactions. If there is a restriction on the export of foreign currency from the country, it is logical that there should also be a restriction on withdrawing cash from a card abroad. But in fact, this restriction will not work. First of all, anyone who wants to cash out more than the limit abroad can take a card from several banks with them. In addition, he can take with him cards belonging to other people.

Actually, a normal person does not need to cash money from a card abroad, especially in developed countries. There you can make non-cash payments by card. For example, what will our citizen do in Europe, cashing out large sums? There, people who have a lot of cash are looked at as not fully normal.

Therefore, it is not entirely clear what this restriction is really designed for. This is probably a purely formal restriction: if there is a limit on the export of cash abroad, let's also set a limit on the withdrawal of cash from the card.

Question: At the same time, under the new rules, daily limits on amounts transferred by individuals outside the country for personal purposes have been abolished and replaced with monthly limits. There is a monthly limit of up to $20,000. And what is the purpose here?

Answer: This is a positive innovation. First of all, the limit has been doubled: from $10,000 to $20,000. On the other hand, canceling the daily limit is correct. There used to be such a problem. For example, if I wanted to transfer $5,000 to my relatives abroad, I had to go to the bank for five days and transfer $1,000 each. It was also inconvenient, and besides, every time I had to pay the bank a commission for the transfer.

At first glance, this is the liberalization of the currency regime. But, on the other hand, there is already an unofficial annual limit on the purchase of foreign currency in the country (allegedly banks apply it on the basis of collusion) within 20,000 manats. And without this, anyone who can receive less than $ 12,000 in foreign currency for a year will not be able to transfer $ 20,000 per month. When they want to buy currency, they already ask about the source of funds. In a country where officials do not submit an income declaration, an ordinary citizen is asked about the sources of income. From a purely legal point of view, a citizen can give any answer about the source: it is money accumulated over the years, funds left over from his grandfather, etc. But in fact, most people lack literacy and the courage to say it. The limit is designed for this. In any case, mitigation by increasing the official limit is not enough. Unofficial, illegal restrictions should also be eliminated.

Question: Who will these restrictions create more difficulties for, officials or ordinary citizens?

Answer: In our country, laws in any case do not create restrictions for high-ranking officials. We are among the countries where laws work mainly only for the poor. Not to mention the issue of taking money out of the country. And without this, officials will take out as much as they need. Therefore, these amendments are intended for ordinary citizens, and, as I have already said, the currency regime has been facilitated for them in any case.

Question: If someone wants to buy a car or real estate abroad, how then will these transfers be carried out? Won't this create a problem for citizens?

Answer: No, it won't. The specified limit does not apply to the purchase of a specific property. This limit applies to transfers for personal purposes. For example, I come to the bank and say – transfer 10 thousand dollars to such a relative in Georgia.

Question: Where is the exit? What needs to be done?

Answer: It is necessary to apply the declaration of income and expenses. Especially for officials. In 2005, our state assumed such an obligation to the UN, adopted a law. But there has been no mechanism for the enforcement of this law for 18 years. The Cabinet of Ministers has not yet approved the declaration form. In April of this year, I prepared and sent this form to the government, please approve it. However, nothing has been heard yet.

That is, if there is transparency in the country, if everyone declares what they have, then restrictions in foreign exchange transactions will not be needed. Let everyone be lucky and openly translate as much as they wish. If he does it more than he earned, he will be held accountable. However, the existence of such rules is unprofitable for officials. Therefore, the CBA is forced to resort to such archaic instruments when conducting monetary policy.