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RULES UNDER COMPETITION CODE
Several regulations under the Competition Code have been adopted by the Cabinet of Ministers of the Republic of Azerbaijan:
Competition Commission
January, 2025 The Rules adopted by the Cabinet through Resolution No. 527, dated 18 December 2024, set out the framework for establishing the competition commission, defining its composition, functions, and decision-making procedures.
The Commission is convened by an order of the head of the competition authority upon identifying indications of competition law violations during investigations and inspections. It is responsible for reviewing cases related to anti-competitive conduct and ensuring the enforcement of its rulings. All decisions are issued in writing or electronically, and affected parties retain the right to file a complaint for the actions of officials.
Market Monitoring
The Rules adopted through Resolution No. 528, dated 18 December 2024, establish the regulatory framework for market monitoring carried out by the competition authority.
The Rules, developed in accordance with Sub-Section 44.2 of the Code, govern both scheduled and unscheduled market monitoring to examine competitive conditions, identify legal infringements, and facilitate regulatory interventions. The results from this process are compiled into a formal report, serving as the foundation for subsequent analysis and decision making.
Rules of Financial Reporting by Natural Monopolies
The Rules adopted by the Cabinet through Resolution No. 529, dated 19 December 2024, set out the requirements for natural monopoly entities to submit financial statements for their business operations. January, 2025
Under the Rules, natural monopolies are required to submit to the competition authority regular financial reports, including a balance sheet, profit and loss accounts, statement of changes in equity, cash flow statement, and selected explanatory notes. Additionally, they must provide a year-end report detailing their assets, liabilities, capital, revenues, customer reimbursements, and investment project allocations. The submitted financial data enables the authority to assess market positions, monitor financial trends, and determine whether an entity continues to qualify as a natural monopoly or has transitioned to a competitive market structure.
The reports must be submitted in written or electronic form no later than the 20th day of the month following the end of each quarter. Non compliance with these reporting obligations may lead to enforcement measures by the competition authority.
Determination of Dominance in Financial Sector
The Rules adopted by the Cabinet through Resolution No. 530, dated 20 December 2024, establish the criteria for determining the dominant position of financial institutions, including market share thresholds and assessment methodologies. Various financial indicators, such as revenue and transaction volume are considered when assessing dominance, under the Rules. A financial institution is deemed dominant if it holds a market share of 50 percent or more; additionally, two institutions with a combined market share exceeding 50 percent, or three to four institutions jointly holding more than 70 percent, are classified as jointly dominant.
Abuse of Dominant Position
The Rules adopted by the Cabinet through Resolution No. 531, dated 20 December 2024, set out the principles for assessing the objective necessity and efficiency of practices that may constitute an abuse of dominance. A business may apply to the competition commission within 30 days of the date of submission of its decision to the parties to a case regarding abuse of a dominant position to justify the necessity or efficiency of its conduct. The assessment process takes into account several important criteria, including economic efficiency, innovation, investment growth, and technical constraints. The burden of proof rests with the business.
Market Concentration in Financial Sector
The Rules adopted by the Cabinet through Resolution No. 532, dated 20 December 2024, establish the criteria requiring financial institutions involved in market concentration transactions to obtain prior approval from the competition authority. According to the Rules, any transaction requires approval from the competition authority if one of the participating financial institutions holds a dominant position in the market or if the transaction results in the formation of a dominant financial institution. Transactions carried out as part of a resolution process are exempt from this requirement; however, the Central Bank must notify the competition authority within seven business days.
Market concentration is deemed to occur when a financial institution acquires more than 20 percent of another institution's assets.
Forthcoming Regulatory Developments
January, 2025 In addition, several further rules and regulations under the Code are expected to be adopted, including (1) Criteria for Permissible Agreements and Exemptions from Competition Law; (2) Definition of Relevant Markets and Methodologies for Calculating Market Shares; (3) Assessment Rules for Market Concentration Transactions; (4) Procedures for Inspections of Market Participants and Natural Monopolies; (5) Rules for Management of Confiscated Goods; and (6) Methodologies for Calculating Financial Sanctions against Competition Law Violations.
REGULATIONS OF NATIONAL SPATIAL DATA SYSTEM
The Azerbaijani national spatial data is any information directly or indirectly related to a specific location, territory, and geographical region within the territory of the Republic of Azerbaijan. The National Spatial Data system is a Government-owned information system collecting, processing, managing, integrating, and providing services of the national spatial data. Just as any geographical information system (GIS), the system is a framework for gathering, managing, and analyzing spatial and geographic data, this time, particularly to Azerbaijan.
The rules of developing and integrating the national spatial data have been effective since 29 December 2018 when the Ministry of Economy was tasked to develop the National Spatial Data system and have it integrated into the E-Government Information System. The Cabinet of Ministers was contemporaneously tasked to draft Regulations of the National Spatial Data system. The Regulations were approved on 10 January 2025 by the president of the Republic.
Under the regulations, the stated objective of the system is to ensure, through the use of digital and communication technologies, efficiency, flexibility, and transparency of operations of public agencies, companies, and institutions, including local governance, and of their relations with entities and individuals, as well as systematization and accessibility of the services provided by, and of data stored in, the system.
The system is implemented to:
- develop and integrate technical specifications for the national spatial data, national spatial data, and metadata;
- achieve efficient management of public funds to eliminate duplication of efforts in developing the national spatial data;
- ensure accessibility and on-demand availability of the developed spatial data; and
- provide real-time, high-quality, and efficient services of the national spatial data.
The regulations govern data in the system that is disclosable. Holders of the information are public agencies to be listed by the Cabinet of Ministers.
.The system has the following subsystems:
- integration, converts original data provided by participants of the system into a unified format and structure, and includes data into the system of participants who do not have information systems or resources;
- data processing, processes and interconnects data and metadata entered into the system by participants;
- data monitoring, verifies compliance and relevance of data and metadata entered by participants into the system with technical specifications or data models;
- digital map, development of new multi-purpose maps based on data collected in the system's database;
- reportability, obtains statistical reports of system data; and
- management interface, enables use of the system by its participants and users.
The National Spatial Data system will include personal data, but only for the stated objective of the system. Such data must be protected concurrent with the personal data protection legislation of Azerbaijan.
The regulations list the rights and responsibilities of the holder, operator, participants, and users of the system. The holder and operator of the system is the Ministry of Economy.
The Ministry of Economy together with the Ministry of Digital Development and Transportation are tasked with integrating the National Spatial Data system into the G-cloud. The system as well as backup copies of the data in it are stored in the G-cloud. Data developed, acquired, and gathered in the system as well as electronic documents are, according to the regulations, property of the Republic. Documents in the system are generated under the Law, On Electronic Signature and Electronic Document.
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