PRESIDENTIAL DECREE OF THE AZERBAIJAN REPUBLIC

of February 9, 1996 No. 437

About transfer of the state companies (objects) to management on the basis of agreements

As a result of ustareniye and wear of production capacities on number of industrial complexes and the companies, lack of experience of industrial process control according to modern requirements and for other reasons amount of the made products in the country in recent years, without having sustained the competition, considerably decreased, some industrial enterprises are under the threat of suspension.

For the purpose of acceleration of works on application of the modern advanced methods of management providing improvement of activities of the state companies and industrial complexes, to preparation and implementation of the corresponding projects with participation of foreign firms I decide:

1. Approve the offer of the Cabinet of Ministers of the Azerbaijan Republic on transfer of the separate state companies (objects) in cases when there are no internal opportunities, in management to legal entities and physical persons for certain term on the basis of agreements for the purpose of improvement of activities of the companies.

2. Approve Regulations on transfer to management on the basis of agreements of the state companies (objects). Determine that transfer of the state companies (objects) to control on the basis of agreements is exercised only according to the Provision.

Approved by the Presidential decree of the Azerbaijan Republic of February 9, 1996 No. 437

Regulations on transfer of the state companies (objects) to management on basis under the agreement

1. General provisions

1.1. This Provision is developed for the purpose of implementation of the relevant activities for ensuring improvement of the state companies (objects) (further - "company" (object)" on the basis of individual projects.

1.2. The provision determines general rules of transfer of the companies (objects) to management for the agreement when privatization of object is inexpedient economically or premature.

1.3. The provision determines the main mechanism of transfer of the companies (objects) to management, conditions of participation in this process of legal entities and physical persons, rules of consideration of their offers, registrations and approvals of the agreement on enterprise management (object).

2. Subject and basic provisions of the agreement

The conclusion of the agreement on enterprise management forms the basis for transfer by the body acting on behalf of the owner (Public service on property questions under the Ministry of Economics), to the applicant of right to use by the company for certain term.

The right and extent of participation of the applicant in privatization of the company in the future with condition of accomplishment of all obligations of the applicant to the body acting on behalf of the owner can be provided in the agreement.

The legal entity or physical person acquiring the company in management after the conclusion of the agreement shall provide activities of the company with accomplishment of the following main requirements reflected in the agreement:

* preserving and whenever possible production orientation expansion;

* providing amount of production at the level corresponding to demand taking into account the conclusion of the Ministry of Economics of the Azerbaijan Republic;

* preserving all workplaces or their percent established by the agreement;

* improvement of quality and product competitiveness by ensuring profitability of production at the level established by the agreement;

* financing of the objects of the social sphere entering property complex of the company;

* implementation of social security of employees of the company;

* holding the actions provided by the agreement in the period of the duration of the agreement and return of the company after this term to the body acting on behalf of the owner, at least in such condition in which it was by transfer to management.

In some cases depending on features and condition of the company the requirements stated above can be added.

3. Rules of preparation and conclusion of the agreement

The decision on improvement of the company by transfer to management is made by the President of the Azerbaijan Republic.

Forms of transfer of the company to management are determined by the President of the Azerbaijan Republic by representation of the Cabinet of Ministers of the Azerbaijan Republic, taking into account features of the company.

Transfer of the company to management is performed in the following forms:

* by holding open tender on the conclusion of the agreement on enterprise management;

* by carrying out closed competition on the conclusion of the agreement on enterprise management;

* by adoption of the offer from the specific applicant and the conclusion of the contract with it on enterprise management.

All applicants are allowed to participation in open tenders.

To closed competitions the limited number of the applicants determined by the body acting on behalf of the owner is invited.

The agreement can be signed without announcement of tender in the presence of only one applicant.

The agreement prepared according to appendix No. 5, affirms as each of the cases stated above the President of the Azerbaijan Republic or such power is conferred to them to the Cabinet of Ministers of the Azerbaijan Republic.

3.1. Procedure for preparation and the conclusion of the agreement when holding open tender.

3.1.1. According to the made decision the body acting on behalf of the owner creates the contest committee. The commissions surely are included representatives of the following organizations:

* the body acting on behalf of the owner;

* the ministries or departments (the state committee, the company, concern, consolidation) under which supervision the company is;

* it is excluded;

* Ministries of Finance;

* it is excluded;

* labor collective of the company.

The chairman of the contest committee is the representative of the body acting on behalf of the owner.

Decisions of the contest committee are made by a simple majority vote.

In case of equality of votes the chairman's voice is considered decisive.

The contest committee can attract as necessary independent experts.

All expenses on carrying out tender are covered at the expense of means of the company submitted for tender.

3.1.2. The contest committee makes the decision on conditions and terms of carrying out tender.

3.1.3. The contest committee not later than one month about the announced day of the beginning of tender publishes "Message" on conditions and terms of tender in media.

3.1.4. "Message" shall include:

* conditions of tender and criteria of determination of the winner expressed in points;

* term of the agreement on management;

* form, the size and payment due dates for management under the agreement;

* procedure for familiarity with the company;

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