Acquisition of investments from an investor for state needs, as
well as the state acquisition of investments of strategic
importance to prevent exceptional circumstances that harm the
interests of the Azerbaijani state and people or contradict
Azerbaijan’s national interests, shall not be considered
discriminatory.
Nationalization or state acquisition of strategically important
investments for the purpose of preventing such exceptional
circumstances shall be carried out in accordance with the laws of
the Republic of Azerbaijan.
Investors whose investments are nationalized or acquired by the
state shall receive compensation in accordance with the provisions
outlined below.
The compensation shall be determined according to the investment
agreement. If no such procedure exists, compensation shall be
calculated immediately after the nationalization or state
acquisition of the investment, or upon its public disclosure,
whichever occurs first, based on the fair market value of the
investment. Payments shall be made promptly in freely convertible
currency for foreign investments and in the currency in which the
investment was made for domestic investments.
Justification of the Amendments
Currently, investments may be acquired by the state on two
grounds: for state needs and for requisition purposes, such as
natural disasters, technological accidents, epidemics, or other
emergencies, as decided by the relevant state authorities for the
benefit of society. In both cases, the investment value is
compensated to the investor in accordance with the law “On
Investment Activities.”
The proposed amendment establishes a new legal basis for state
acquisition of investments of strategic importance, allowing the
state to prevent exceptional circumstances that harm the interests
of Azerbaijan or contradict its national interests.
Accordingly, the draft law provides a legal framework for
acquiring strategically important investments by the state to
safeguard national and public interests. Such acquisitions may be
carried out generally through compensation paid to investors and in
accordance with the laws of the Republic of Azerbaijan.
Following discussions, the draft law was put to a vote and
adopted in the first reading.
