New law on state debts dictates international standards

Adopting a new Law on State Debts of Azerbaijan resulted from the demand of the time. The old law was adopted in 1992. However, since them, many changes have taken place in social and economic situation of the Country. After 15 years, Azerbaijan needed a new document corresponding to the international laws and rules of managing State debts and providing guarantees for the external debts.

It is already high time to transfer to the unified management of the financial assets and liabilities, ensure unified account of the operations with the currency and manat debt liabilities and unified statistics of the internal and external debts and financial assets. As known, the information on the external debts of the Country is regularly disclosed, but the statistics of the internal debts of Azerbaijan are not published and the report of the credits which have not been guaranteed by the State is not provided.

In addition, the policy of managing the State debts should be transparent to increase the faith of foreign and local investors, as well as to enable the civil society to fully control this activity of the Government. From this point of view, the new Law on State Debts is the success with regards to the management and service of the state debts.

According to the law, the State debt requires paying liabilities specified in the contracts signed on behalf of Azerbaijan. The structure of the State debt includes credits attracted by the Government of Azerbaijan; securities issued on behalf of the Government; borrowing through State guarantee. The law defines the process of the external borrowing.

For the first time, the law defines tasks on account of the external debts without state liabilities. The Republic of Azerbaijan does not take responsibility for the liabilities of residents and non-residents of the Country who borrow funds in foreign currency without State guarantee.

In addition, the Government of Azerbaijan will not take responsibility for the debt liabilities of the State enterprises if the funds have been attracted without State guarantee. According to the law, presenting State guarantee is in the disposal of the relevant body of the executive power (it will be defined by the President of Azerbaijan).

Further the Government of Azerbaijan will not take responsibility for borrowings by the non-State enterprises. However, no later than 10th of the month after the quarter, the non-State enterprises should present the National Bank of Azerbaijan information on their external debts. The NBA will include the information in the registry. In addition, the statistic data on the external debts of the non-State enterprises should be placed on Internet once a year.

As previous, the account of the guaranteed credits will be made by the Ministry of Finance and the account of the external debts of the commercial organizations and banks will be trusted on the State Statistics Committee.

According to the information by the Finance Ministry of Azerbaijan, as of 1 July 2007, the external debts of Azerbaijan amounted to $2.089mln, which makes up 7.7% of the GDP. The foreign debts of Azerbaijan increased by 5.9% as compared to the beginning of them year. The external debts of Azerbaijan per capita make up $242.9.

$164.6 credits were used in the first half year. The expenses on the external debts totaled $73.6mln. The key debts amount to $47.9 mln and interest - $25.6mln. Some $22.8mln has been allocated from the State budget to pay off the credits.

According to the order of the President of Azerbaijan, the Cabinet of Ministers of the Country should, within three months, submit proposals for bringing legislative acts with the Law on State Debts. It is clear that the new law will envisage higher norms of responsibility for the credit beneficiaries.

In addition to implementation of the account and management specified in the Law on State Debt, the Ministry of Finance is in charge of devising a project on opening of the secured account (special budget account). This account will be formed at the expense of the funds by the State budget and payments for receiving State guarantee from the main borrower.

Further, the Ministry of Finance should devise and submit the project on rules of implementing register on State debt and State guarantee. The data in the register should be presented no later than 10 days after the registration of the liabilities. Thus the Ministry will receive data from the borrowers regarding the banking account of debt service and re-payment of the attracted funds, define kind, ways of sale, interest rates of the issued securities, as well as expenses on their preparation and will determine the amount, period and other conditions of issuing securities for the external debts. As a result, a source of media will be selected to place the open information on State debt in Internet.

The central and local executive powers are also in charge of implementing the account and include in the State registry the information on formerly undertaken and active debt liabilities and on State guarantee.

The Justice Ministry has been selected to sign legal conclusions on the base of inquire of the interested sides.

The law also stipulates for several regulations on limit of attraction of internal and foreign debts in budget year. Thus, limit of borrowings will be pointed in the public budget for next year in national currency. If a new borrowing is intended for payment of liabilities which were not paid off in time the debt is not included into limit. Limit of public debt can be increased or decreased only in case of an appropriate change is made in the Law on Public Budget of Azerbaijan.

Thus, limit for foreign borrowings of Azerbaijan was fixed at $600mln in the public budget for 2006 and $560mln was borrowed in fact. The limit was not reached for a loan for construction of AzGRES-Imishli electric mains was not allocated by the German Development Bank. The bank plans to allot €30mln for its implantation, but signing of a loan agreement was postponed for a year due to delays in discussion of the terms of the credit. Meanwhile, limit for foreign borrowings was increased to AZN 1.2bln in the public budget for 2007 due to issue of a debit part of Eurobonds. The main object of crediting in the beginning of 90s were trade purchases of grain, foodstuff, medicaments and the items of first necessity, but today foreign borrowings are intended for implementation of investment projects. For instance, essential means were attracted for reconstruction of roads, power engineering, melioration systems, and purchase of airbuses.

However, even in the most tensioned years, when there was an acute need in foreign financing, careful policy was pursued in foreign borrowings. A system of efficient public debts management system was established. Delays in payment of foreign liabilities were unacceptable. The new Law on Public Debt will promote switching of public debts management policy to international standards.

Armenian armed forces retreat in direction of Gubadli - MoD
Armenian armed forces retreat in direction of Gubadli - MoD
Significant amount of Armenian Armed Forces’ manpower, equipment destroyed - MoD
Significant amount of Armenian Armed Forces’ manpower, equipment destroyed - MoD
Helpless on battlefield Armenia spreads false, provocative information - Azerbaijani MoD
Helpless on battlefield Armenia spreads false, provocative information - Azerbaijani MoD
Loading Bars
U.S. Vice President Pence's chief of staff tests positive for COVID-19
Armenian armed forces retreat in direction of Gubadli - MoD
Significant amount of Armenian Armed Forces’ manpower, equipment destroyed - MoD
Azerbaijani troops advance new positions in Khojavend, Gubadli, Lachin directions of front
Over 150 new COVID-19 cases reported in Kazakhstan
Volume of loans issued to trade sector in Iran disclosed
WHO reports record increase in confirmed COVID-19 cases of over 465,000 in 24 hours
Samsung chief Lee dies
5.4-magnitude quake hits 74 km off Kawalu, Indonesia
Turkey reports 2,091 COVID-19 patients
Yemen's Houthis targeted two airports and a base in Saudi Arabia
Brazil reports another 432 COVID-19 deaths
Moscow's death toll from confirmed COVID-19 cases rises by 68
Afghan forces kill senior al Qaeda leader al-Masri who was on FBI most wanted list
UK records another 23,012 coronavirus cases with 174 deaths
Helpless on battlefield Armenia spreads false, provocative information - Azerbaijani MoD
Hikmet Hajiyev: Using children under 15 as soldiers is a war crime
8 killed, 4 injured in road accident in Pakistan's Punjab province
Necessary conditions will be created to extradite Armenian prisoners of war and civilians to third countries - MoD
Armenian army's combat equipment destroyed (VIDEO)
Azerbaijan's Defense Ministry calls on civilians in occupied territories to stay away from military facilities
Ministry of Defense: Armenian Armed Forces resort to provocations to prevent operations of Azerbaijani army
Iran declares amount of loans issued to housing & construction sector
Armenia continues to use underage children in military hostilities (VIDEO)
Photo of another missile launched by Armenia against Azerbaijan unveiled (PHOTO)
President Ilham Aliyev on political objectives of Armenian military attack on Azerbaijan
In center of Baku, there is Armenian church, but mosques on occupied territories were destroyed - President Aliyev
With Georgia our relations are excellent, says Azerbaijani president
Armenian government should not try to frighten its population with Turkey - President Aliyev
And after war with Armenia stops, political settlement enforced, role of Turkey will be very important, very positive - President Aliyev
Wounds of war must be healed by political wisdom, by political will - President Aliyev
Armenian government should understand that they are not now in position to dictate - President Aliyev
Best way for future of Karabakh - to live in peace in harmony, try to become good neighbors again, says President Aliyev
Unlike Armenia, from Russia we buy weapons, we pay for them, says Azerbaijani president
Turkey is not involved in the conflict at all - Azerbaijani president
If Armenia didn’t violate ceasefire today clashes would have stopped - President Aliyev
We cleaned completely the Azerbaijani-Iranian border from Armenian occupants, and there will be no more inconvenience for our brothers across river of Araz in Iran - President Aliyev
If Armenia do not stop, we will go until end to liberate all occupied territories - Azerbaijani president
Azerbaijan became already regional hub for not only for energy, but also for transportation - President Aliyev
Armenia - occupier, it obliged to liberate territories of Azerbaijan - Lebanese political scientist
Loans of dead servicemen and persons affected by hostilities to be repaid in Azerbaijan
Recep Tayyip Erdogan: Azerbaijan begins to return its lands
Azerbaijani army liberates occupied lands with great inspiration (VIDEO)
Religious confessions of Azerbaijan demonstrate solidarity in fight against Armenian terror (VIDEO)
65 Azerbaijani civilians, including women, children, killed since beginning of Armenian provocation - Prosecutor General's Office
State-controlled international television and radio network Voice of America apologizes for its mistake (PHOTOS)
Russian Embassy in contact with family of teenager who died as result of Armenian shelling
Artillery units of Armed Forces of Azerbaijan continue to inflict crushing blows on Armed Forces of Armenia (VIDEO)
Azerbaijani flag to be raised in Shusha, Agdere and other lands - MoD
Armenia gives updated list of its soldiers killed in Nagorno-Karabakh conflict zone
Weekly overview of Azerbaijan's financial market
Attacks by Armenia on territory of Azerbaijan - another act of military aggression, says Azerbaijani top official
Teenagers honor memory of Russian citizen who died as result of Ganja shelling by Armenian Armed Forces (PHOTO)
Iran discloses amount of loans issued to industrial and mining sectors
Iran reveals amount of loans issued to agricultural sector
Iranian Energy Exchange announces products to be on sale October 25
Buy/sell operations at Iran Mercantile Exchange decrease
Armenian army’s another combat UAV destroyed by Azerbaijan
Azerbaijan Air Forces destroy military equipment, infrastructure of Armenian troops
Armenian attempts to attack Azerbaijani army units suppressed
New data on Azerbaijani civil casualties, damages from Armenian attacks revealed
Azerbaijani military servicemen act within framework of int'l law - MoD
Terrorist acts against ancient city of Ganja target not only civilian population, but also historical monuments
Argentina extends COVID-19 restrictions until Nov. 8
Armenian terror walks streets of France - Lebanese legal expert
Azerbaijan confirms 220 more COVID-19 recoveries
Air Defense of Azerbaijan shoot down combat aircraft of Armenian Air Force
Reserves of Azerbaijan's Kalbajar region deposits to be re-examined, evaluated
Eight schoolchildren killed, 16 injured due to Armenian terror - Azerbaijan's Ministry of Education
Iran reveals its COVID-19 data for October 24
Azerbaijan fighting misrepresentation of its occupied territories on maps
Armenia shelling Azerbaijan’s Lachin and Gubadli districts from its territory
Import of Uzbek products into Azerbaijan increases
Value-added taxes paid by private sector down in Georgia
Volume of loans issued in Iran increases
Turkmen Ministry of Construction extends tender for construction of checkpoints
Unexploded missile on territory of Azerbaijan’s Goranboy (PHOTO)
Uzbekistan Airport announces tender for water pumps repair
Socio-economic issues in Azerbaijan - in center of attention during COVID-19 - Ali Ahmadov
Expert talks about sanctions against Armenia
Armenia must put end to attacks, illegal occupation of Azerbaijan's territory - Turkish Defense Ministry
Weekly review of events in Azerbaijani agricultural sector
Uzbekistan increases textile products manufacturing
Turkmen Health Ministry to purchase medical equipment via tender
Uzbek-Korean JV announces tender on transport services
Weekly review of Azerbaijan's precious metals market
Azerbaijan informs Russian embassy about Russian citizen killed by Armenia's attacks
Uzbek-Korean Uz-Kor Gas Chemical to buy filters via tender
Azerbaijani diaspora youth actively taking part in media fight against Armenia
Assistant to Azerbaijani president talks teenager killed due to Armenian terror (PHOTO)
Number of online payments reach record high in Georgia
Int'l financial institutions eye to provide assistance to Uzbekistan’s energy sector
Georgia’s coronavirus cases reach 26,503
Armenians barbarously exploited mineral deposits in Zangilan - Azerbaijani Ecology Ministry
Armenia at state level continues terror attacks on Azerbaijani civilians – assistant to president
Azerbaijani oil prices down
Teenager in Azerbaijan's Ganja city dies from wounds following Armenia's missile attack
Salt production growing in Turkmenistan
Uzbekistan's Ministry of Internal Affairs announces tender on equipment supply
Volumes of cargo transshipment from Algeria through Turkish ports revealed
All news