PRESIDENTIAL DECREE OF THE AZERBAIJAN REPUBLIC

of October 23, 2003 No. 975

About state regulation of use of subsoil

For the purpose of ensuring state regulation of use of subsoil according to requirements of the Law of the Azerbaijan Republic "About subsoil" I decide:

1. Approve "Regulations on rules and conditions of carrying out tenders and auctions for transfer of subsoil to use" it (is applied).

2. Approve "Rules of use of subsoil for production of radioactive raw materials and burial of radioactive waste, hazardous substances" (are applied).

3. This Decree becomes effective from the date of publication.

Approved by the Presidential decree of the Azerbaijan Republic of October 23, 2003

Regulations on rules and conditions of carrying out tenders and auctions for transfer of subsoil to use

I. General provisions

1.1. This Provision is prepared according to the Law of the Azerbaijan Republic "About subsoil", presidential decrees of the Azerbaijan Republic of April 27, 1998 No. 701 "About application of the Law of the Azerbaijan Republic "About subsoil" and of February 13, 1999 No. 102 "About ensuring execution of the Law of the Azerbaijan Republic "About subsoil" and establishes rules and conditions of carrying out tenders and auctions for transfer of subsoil to use.

1.2. Legal entities and physical persons of the Azerbaijan Republic, and also foreign countries can take part in the tenders and auctions held in connection with transfer of subsoil to use.

1.3. Tenders and auctions for transfer of subsoil to use are carried out by the Ministry of Ecology and Natural Resources of the Azerbaijan Republic and the Ministry of Emergency Situations within their powers according to requirements of the Law of the Azerbaijan Republic "About subsoil", and also this provision.

II. Preparation of subsoil plots for removal at tender and auction

2.1. The Ministry of Ecology and Natural Resources of the Azerbaijan Republic on the basis of the analysis of the materials which are stored in the State fund of geological information prepares the list of the subsoil plots which are of interest as subjects to licensing or consent in the current year and on perspective.

2.2. In the list subject to licensing or issue of consent of objects are specified: the name of object, degree of its geological study, data on the estimated resources, including the body which performed assessment (confirmation) and date, the provided terms of carrying out tender and auction, the type of use of subsoil, type of tender or auction (opened or closed).

By transfer of subsoil plots to use for the purpose of construction and operation of the underground constructions which are not connected with mining, the State fund of geological information on the request of the Ministry of Emergency Situations of the Azerbaijan Republic in accordance with the established procedure prepares and provides it geological information on subsoil plots.

2.3. In the procedure established by the legislation for allocation of the parcels of land on all subject licensing or issue of consent to the objects included in the list prior consent of competent authorities shall be received.

2.4. The list constituted by the Ministry of Ecology and Natural Resources of the Azerbaijan Republic and the Ministry of Emergency Situations of the Azerbaijan Republic within their powers at first will be approved with the ministries, committees, organizations and the organizations which representatives enter into tender (auction) commission of experts.

III. Type of the tenders and auctions held on transfer of subsoil to use

3.1. Competition (auction) held on transfer of subsoil to use can be announced open or closed.

3.2. The open tender (auction) is held without introduction of any restrictions on number and category of subsoil users.

3.3. The closed competition (auction) is held for stated below subsoil users:

- companies of the Azerbaijan Republic;

- the defense companies performing the conversion program;

- the state companies of the Azerbaijan Republic for the purpose of use of subsoil for production of radioactive raw materials and burial, hazardous substances.

IV. Preparation of conditions of tenders and auctions

4.1. Conditions of tenders and auctions prepare before their carrying out and afterwards cannot be changed.

4.2. Depending on type of mineral and mining and ecological conditions of its operation act as the main conditions of tender or auction:

- terms of attraction of the field of mineral to operation and amount of production of mineral raw materials by years throughout effective period of the license or consent;

- complete ensuring production of inventories of the found and estimated main and collateral minerals and valuable components;

- requirements to environmental protection;

- preliminary amount of lump and regular payments for use of subsoil;

- requirements concerning carrying out social measures for the population living in the area where the field which is subject to operation is located.

4.3. As conditions of the tenders and auctions held taking into account the characteristics licensed or on which the consent of subsoil plots is issued rates and intensity of exploration works, procedure for attraction of local labor power, the main requirements to safe working conditions and other can be established.

4.4. If the subsoil plot which is subject to use based on the agreement on the equity Section of production is submitted for tender, in the conditions of tender the main indicators or criteria of the conclusion of this agreement shall find the reflection.

4.5. Conditions of tender (auction) prepare on each subject to use of subsoil or group of the same objects.

4.6. In case of rationality of joint exploitation of group (sites, blocks) of close located fields for such group of fields (sites, blocks) uniform conditions of tender and auction prepare.

4.7. Conditions of carrying out tenders and auctions with indication of terms are constituted and affirm depending on type of use of subsoil by Gosgeolkom or the Ministry of Emergency Situations of the Azerbaijan Republic.

4.8. By transfer of subsoil plots to use for the purpose of construction and operation of the underground constructions which are not connected with mining, conditions of tender or auction are determined by the legislation.

V. Procedure for forming expert (competitive, auction) commissions

5.1. For the purpose of adoption of the objective decision on the forthcoming tenders and auctions the commission is created expert (competitive, auction).

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