Unofficial transfer (c) Soyuzpravoinform LLC

Approved by the Law of the Azerbaijan Republic of December 8, 2023, No. 1051-VIQ

THE CODE OF THE AZERBAIJAN REPUBLIC ABOUT THE COMPETITION

This Code according to Items 10, 15 and 16 parts I of article 94 of the Constitution of the Azerbaijan Republic determines the general principles of providing, protection and development of free and healthy competition in the Azerbaijan Republic, the state control of compliance with law about the competition, regulation in the field of the competition, organization-legal bases of state regulation in connection with natural monopolies, the rights and obligations of subjects of the market, and also responsibility for violation of the legislation on the competition, creates the legal soil for implementation of economic activity, including entrepreneurial, fair methods.

Chapter 1. General provisions

Article 1. The basic concepts used in this Code

1.1. For the purposes of of this Code the following basic concepts are used:

1.1.1. family members are the spouses, parents, children, adoptive parents adopted grandfathers, grandmothers, grandsons, native (summary) sisters and brothers, children and grandsons of sisters and brothers, sisters and brothers of parents, parents, sisters and brothers of spouses, husbands of sisters, wives of brothers, guardians and persons taken under guardianship, heirs;

1.1.2. active sale - the sale performed by active targeting of clients by means of the letter, e-mail, call, the address to the address of the client or other direct means of communication (the targetting advertizing or marketing means in online or offline - form);

1.1.3. the buyer - the business entity acquiring goods for the purpose of production, use (in connection with economic activity, including business activity) or resales, including the distributor;

1.1.4. exclusively low price - the low price established by the business entity holding dominant position on products acquired by it for the purpose of covering of the expenses at the expense of the seller or the price is lower than the prices which are created in the conditions of the competition which the business entity holding dominant position applies to products sold to them for the purpose of replacement of competitors from the market;

1.1.5. entrance barriers on the market - any legal, economic or administrative conditions, and also action (failure to act) which can limit or prevent the potential competition in the market, and also entrance of potential competitors or other business entities on the corresponding market, creating thereby benefits to the business entities existing in the market;

1.1.6. market share - the relation of turnover of sales (in natural or value term) one or several business entities in the corresponding market to total turnover (in natural or value term) in this market;

1.1.7. subjects of the market are business entities, state bodies (structures) and local government bodies regulating structures, other subjects who are participants of the relations arising in the market;

1.1.8. the defendant - the subjects of the market which broke as approves competitive body, the competitive legislation;

1.1.9. dumping - sales of goods in the domestic market at artificially cut price below average retail price or below cost;

1.1.10. other subject - business entity, state bodies (structures) and local government bodies, the regulating structure or legal entity or physical person which does not act as the client and can influence decisions of business entities;

1.1.11. the state monopoly - monopoly which activities in communication by products offered by it are not regulated by the competitive legislation and control methods and regulations of its activities in the monopolized market are determined by the state;

1.1.12. products which are in the state monopoly - products provided by state bodies (structures), the prices (rates) for which are determined by the law;

1.1.13. system of exclusive deliveries - the agreement or set of agreements in which the seller allocates certain territorial or client group exclusively for himself or certain buyers and are limited active sales of these buyers to exclusive territorial or exclusive client groups of each other;

1.1.14. the applicant - the physical person or legal entity which submitted the address about investigation and elimination of violation of the law;

1.1.15. unfair competition - actions of business entity for the purpose of receipt of benefit in the corresponding market which contradict the law and business traditions and also cause (can do) harm to the managing rival subject or cause (can cause) damage to its goodwill with use of unfair methods;

1.1.16. decisive control - availability of any of the following circumstances allowing legal entity or physical person (persons) direct or indirect (through one or several legal entities) by individually or jointly to limit or direct activities of other legal entity or physical person (persons):

1.1.16.1. availability of the property right to more than 50 percent of assets of other person;

1.1.16.2. availability between persons of the relations of affiliated or dependent economic society;

1.1.16.3. availability at the controlling person of power to instruct controlled person, obligatory for execution, proceeding from nature of relations between them;

1.1.16.4. availability at controlled person of opportunity to influence in a decisive way forming of structure of governing bodies, process of vote or decision making (the rights allowing to change the course of any process);

1.1.17. dominant position - exclusive provision of business entity which market share exceeds the limits set by this Code, allowing it to limit on the basis of own exceeding market force the competition in the corresponding market or to influence it irrespective of competitors and clients (including to change general rules and conditions of the product circulation, to create entrance barriers on the market, to eliminate competitors from the market);

1.1.18. service (work) - the activities which are not considered as representation of goods which results have material (or non-material) expression and are held for sale;

1.1.19. economic activity - the types of activity relating to important functions of the state, performed only by state bodies (structures), and any activities which are characterized by representation of products in the market, except for acquisitions of products for consumption by physical person;

1.1.20. cartel collusion - the horizontal agreement prohibited by this Code signed for the purpose of competition restriction;

1.1.21. interchangeable products - products comparable to destination, to application, quality and technical characteristics, the price and other parameters which the client replaces or is ready to replace with each other in case of consumption (including consumption in the production purposes).

1.1.22. manipulation the prices - the actions performed by the business entity holding dominant position, irrespective of general requirements of the market, and consisting in decrease, deduction at one level and price increase with violation of the competitive legislation, for the purpose of competition restriction;

1.1.23. goods - any material or non-material property, held for sale, exchange and other forms of the address;

1.1.24. financial institutions - the business entities performing financial services according to the laws regulating the financial markets which activities are controlled by the Central bank of the Azerbaijan Republic (further - the Central bank);

1.1.25. interested persons - legal entities or physical persons which interests can be directly infringed by the decision of the competitive commission, or the legal entities or physical persons involved based on their own address;

1.1.26. products - any goods or service (work), held for sale, exchange and other forms of the address;

1.1.27. the comparable competitive market - other market determined proceeding from the purposes of purchase or sale of products and conditions of access to the corresponding market, and comparable on amount of implementable goods, the list of clients or sellers;

1.1.28. significant resource - infrastructure, object or resource which cannot be reproduced have no actual substitute in the corresponding market and if they are not allowed to be used, fully or partially limit activities of the competitor;

1.1.29. the client - the person using products, ordering, buying or intending to order or purchase it including the consumer;

1.1.30. the corresponding market - the market in which the client for economic, technical or other practical reasons does not consider expedient acquisition of the corresponding goods out of its geographical boundaries and the goods having identical characteristics, the prices and purpose of use, or being interchangeable are offered;

1.1.31. know-how - set of the unlicensed and relating to experience data acquired by the seller on the basis of experience and testing, at the discretion of the owner, not all known and not easily available, important and useful to use, sale or resale of products by the buyer, and comprehensively and in detail described for confirmation of conformity to secrecy requirements and materiality;

1.1.32. passive sale - the sale performed without orientation to certain territory or client group on the basis of proposals of the specified clients;

1.1.33. the potential competitor - the business entity having opportunity (except for theoretical opportunity) to enter for short period of time the corresponding market, having incurred necessary costs, in case of lack of the agreements or other actions (failure to act) limiting the competition;

1.1.34. the competition - the activities of the business entities performing independent activities which are not contradicting the law for the purpose of creation more beneficial business relationships with the existing or prospective clients and (or) sellers of products;

1.1.35. - the direct or indirect liability limiting possibility of the buyer to make, buy from other business entity, to sell or resell products competing with products delivered by the seller, either the direct or indirect liability forcing the buyer to buy more than 50 percent (is calculated according to cost or if it is impossible, - according to amount of products purchased by it in the last financial year) the same or interchangeable products in the corresponding market to purchase the obligation about not competition from the seller or from other business entity determined by the seller;

1.1.36. competition restriction - the conclusion subjects of the market of agreements, making of coordinated actions, decision making, abuse of dominant position and making of other similar actions which aim at prevention, elimination or restriction of the competition lead to such effects or can lead to such effects;

1.1.37. the competitive body - the body (structure) determined by relevant organ of the executive authority which exercises the state control over observance of the competitive legislation participates in forming of competition policy of the state and provides realization of this policy, and also regulation in the field of the competition;

1.1.38. the competitor - business entity who can bring products to the corresponding market;

1.1.39. the seller - the business entity selling products to the client or distributing it for resale;

1.1.40. the agreement - open or secret ended agreements in written or oral form (including the effects recognized invalid and entailed cancelled or terminated) about demonstration of common interests between business entities and (or) other subjects in connection with behavior in the market, or transactions, and also solutions of associations of business entities;

1.1.41. system of the selection deliveries - the agreement or set of the agreements determining obligation of the seller to sell products only to the distributors chosen on the basis of certain criterion and such distributors not to sell goods without the permission to other distributors within the territory allocated for them;

1.1.42. the vertical agreement - the agreement signed by business entities who are or can be with each other in the relations of purchase and sale and are not competitors, or other subjects among themselves or concluded between business entities and other subjects;

1.1.43. network effect - increase in possibility of the business entity performing sale of products to affect the corresponding market through information and telecommunication networks due to increase in number of the users connected to this network;

1.1.44. group of persons - the legal entities or physical persons which are interdependent according to the Tax code of the Azerbaijan Republic and also the legal entities or physical persons directly or indirectly having decisive control over the decisions made with each other or legal entities or physical persons, one of which has decisive control over the decisions made by another, or over its activities in the market, or managed by the same persons (legal or physical) or members of their family;

1.1.45. natural monopoly - the market situation in case of which satisfaction of the product demand in conditions when owing to technology features of production there is no competition, and also it is considered adverse or inexpedient from the economic point of view is necessary owing to the state or public concerns, but is the most effective for providing the product demand which cannot be replaced in consumption with other products;

1.1.46. the subject of natural monopoly - the business entity occupied with production (realization) of products in the conditions of natural monopoly and included in the list approved by the body (structure) determined by relevant organ of the executive authority;

1.1.47. concentration - consolidation of one or several business entities, their separate parts (fields of activity) according to the procedure, specified in article 26 of this Code, or acquisition of business entity, its separate parts (fields of activity, shares, shares) it is also right or creation of joint business entity;

1.1.48. the regulating structure - the structure performing functions of state regulation in the respective sphere of the market according to the law;

1.1.49. business entity - any legal entity or physical person, irrespective of type of property, form of business and financing source, engaged in economic activity, including business activity, permanent mission, branch and other division of foreign legal entity or physical person, and also group of persons, consolidation of business entities or one or several physical persons exercising decisive control over business entity;

1.1.50. associations of business entities - the organizations created by two and more business entities performing the same type of activity, representing the members (participants) before the state and the public and protecting them legitimate interests, and also the unions of legal entities;

1.1.51. coordinated actions - adaptation (coordination or repeating) business entity of the behavior to actions (failure to act) of other business entity without agreement between them in the corresponding market, parallel actions or actions, coordinate the third parties;

1.1.52. the horizontal agreement - the agreement signed between the business entities who are acting in the corresponding market and competing (including potentially competing) with each other, or between business entities and other subjects;

1.1.53. the activities serving to general economic interest - the offer business entities of products to the market by provision by the state it (including natural monopolies and the state monopolies) exclusive rights for the purpose of providing the product delivery which business entities in normal market conditions cannot offer clients at the reasonable price and acceptable quality;

1.1.54. exclusively high price - the price established by the business entity holding dominant position, the high prices which are created on products sold by it in the conditions of the competition for the purpose of compensation of the unreasonable (overestimated) costs or receipt of additional profit in comparison with competitive conditions.

1.2. For the purposes of of this Code the last accounting year is meant as the last financial year.

1.3. Other concepts used in this Code express the values determined by regulatory legal acts of the Azerbaijan Republic.

Article 2. Competitive legislation of the Azerbaijan Republic

2.1. The competitive legislation of the Azerbaijan Republic consists of the Constitution of the Azerbaijan Republic, international treaties which the Azerbaijan Republic, of this Code and other regulatory legal acts governing the relations in this sphere joined.

2.2. This Code does not limit the rights in the field of intellectual property determined by regulatory legal acts of the Azerbaijan Republic.

Article 3. Principles of competition policy of the Azerbaijan Republic

3.1. The principles of competition policy are:

3.1.1. ensuring implementation of economic activity, including entrepreneurial, in the conditions of free and healthy competition;

3.1.2. providing, protection and development of the competition;

3.1.3. demonopolization of economy and stimulation of the competition;

3.1.4. ensuring state regulation and control over agreements, behavior and actions (failure to act), and also activities of natural monopolies which can lead to competition restriction;

3.1.5. pricing on the basis of interaction of the demand and supply in the market;

3.1.6. accounting of interests of clients in case of open pricing and providing the right of the free choice;

3.1.7. ensuring approval of interests of clients and subjects of natural monopolies;

3.1.8. inadmissibility of the agreements limiting the competition, concentration and abuse of dominant position and provision of natural monopoly;

3.1.9. establishment of conditions of open entry to the market, equal access to resources and equal conditions of regulation for all subjects of the market.

Article 4. Circle of application of this Code

4.1. This Code governs the relations arising between the business entities performing activities in all industries of economy in the Azerbaijan Republic, between them and state bodies (structures), local government bodies, the regulating structures and other subjects, and also clients, and influencing the competition.

4.2. This Code extends also to the activities serving to general economic interest and also to other economic activity of the subjects of the market occupied with such activities.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info