LAW OF THE AZERBAIJAN REPUBLIC

of May 2, 2017 No. 667-VQ

About encumbrance of personal estate

This Law is prepared according to Items 11 and 13 of part 1 of article 94 of the Constitution of the Azerbaijan Republic and regulates legal regime of encumbrance of personal estate in connection with ensuring accomplishment of obligations, rules of implementation of the rights of owners of encumbrances of personal estate, questions connected with seizure of personal estate, maintaining the state register of encumbrance of personal estate and its use.

Chapter 1. General provisions

Article 1. Basic concepts

1.0. For the purpose of this Law the following concepts are used:

1.0.1. encumbrance of personal estate - ownership limitation on personal estate based on the law or the act for ensuring accomplishment of the obligation on the bases specified in article 4 of this Law;

1.0.2. encumbrance subject - the personal estate established in article 3 of this Law, and also the right and the requirement;

1.0.3. the debtor - the person obliged to fulfill the obligation, provided with encumbrance for benefit of the owner of encumbrance or the third party having it the obligation;

1.0.4. giving encumbrance - person creating encumbrance for benefit of the owner of encumbrance (giving encumbrance can be the debtor or the third party);

1.0.5. the owner of encumbrance - person having the right to the direction of arrest regarding the encumbrance in case of default on obligation provided with encumbrance (in case of the state and municipal encumbrance the structure provided in article 4 of this Law);

1.0.6. the benefit right - compensation of the requirement of the owner of encumbrance at the expense of encumbrance subject according to the procedure of benefit in relation to requirements of other owners of encumbrance and creditors;

1.0.7. the notification - information entered into the state register of encumbrance of personal estate for maintaining the data connected with emergence of encumbrance of personal estate, modification of encumbrance, its termination, and also objection on encumbrance of personal estate;

1.0.8. the state register of encumbrance of personal estate (further - the register) - the state information system consisting of the systematized data set (data) specified in article 1.0.7 of this Law.

Article 2. Legislation on encumbrance of personal estate

2.1. The relations connected with encumbrance of personal estate are regulated by the Constitution of the Azerbaijan Republic, the Civil code of the Azerbaijan Republic, this Law, other legal acts of the Azerbaijan Republic and international treaties as which party the Azerbaijan Republic acts.

2.2. The relations in connection with encumbrance of personal estate in the Alyatsky free economic zone are governed according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".

Chapter 2. Subject, types of encumbrance and disclosure to the third parties

Article 3. Encumbrance subject

3.1. Except for the movable things registered in the official register of personal estate, and the securities which are subject to state registration, the subject of encumbrance constitutes any personal estate, and also the rights and requirements, including personal estate which in the future will be in property of the owner of encumbrance.

3.2. The same personal estate can be subject of several encumbrances.

3.3. If the Law or the agreement of other procedure do not provide other, encumbrance of personal estate extends to the following:

3.3.1. to encumbrance subject accessories;

3.3.2. to the benefit received as a result of use of subject of encumbrance (the income, growth, fruits, derivative and other forms);

3.3.3. the encumbrance subject which is subject to exchange, replacement or recovery;

3.3.4. income gained from alienation of subject of encumbrance on condition of possibility of their identification as income gained from alienation of subject of encumbrance;

3.3.5. insurance payment in case of insured event if the subject of encumbrance is insured based on the law or the agreement;

3.3.6. the compensation amount paid giving encumbrance as a result of enforced sale, requisition or nationalization of subject of encumbrance on the bases and according to the procedure established by the law (the amount which is sufficient for satisfaction of requirements of the owner of encumbrance).

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