NO RESPONSE IS A SIGN OF CONSENT

Amid falling prices for energy, the non-oil sector has gained the status of the main budgetary donor. With this in mind, the state seeks to simplify the activities of entrepreneurs as much as possible and eliminate bureaucratic obstacles. In order to address these issues, on the initiative of President Ilham Aliyev, it was decided to hand over the process of issuing all types of licences required for business activities to ASAN Service centres in the autumn of last year. At the same time, the country adopted new rules for licensing, and on 29 December 2015, the Milli Majlis approved the bill "On Licences and Permits" in its first reading.

Over the last decade, the country has adopted a lot of legislative acts and administrative mechanisms aimed at forming the most favourable regime for the development of the private sector. In some cases, these measures were effective. Today, however, amid the significant fall in revenues from energy exports, the state can no longer act as a major investor and donor that keeps private initiative afloat. There is a need for new, non-financial incentives that support the investment and entrepreneurial activity of businesses.

In this regard, in October last year, the law "On the suspension of inspections in the field of entrepreneurship" was adopted on the initiative of Azerbaijani President Ilham Aliyev. The legislative act, which came into force on 1 November last year, among other things, provided for minimizing the number of licensed areas of economic activity and significantly simplified the rules for issuing such permits.

Until recently, licensing covered nearly 60 types of entrepreneurial activity, and the process of issuing permits involved 23 government agencies. The process of obtaining licences required a considerable number of documents and took a lot of time. Moreover, in some cases, entrepreneurs applying for permits faced bureaucratic obstacles and other violations of the existing legislation.

Thus, it became obvious that the existing licensing system no longer met the requirements of time and had in fact turned into an inertial mechanism constraining the development of private companies.

In order to overcome the negativity in this area, a major legislative reform was planned in the area of licensing. One of the most effective mechanisms for ensuring transparency in this matter was the decision to hand over the right to grant licences for business to ASAN Service centres. The new system, even in unfinished form, demonstrated its effectiveness in the first two months after the adoption of the law. In particular, in November-December last year, ASAN Service centres issued hundreds of licences to entrepreneurs for services in the sphere of international transportation, long distance and intercity regular passenger services as well as pharmaceutical activities and sale of ethyl alcohol and alcoholic beverages.

Another step aimed at optimizing legislation in this area was the decree of Azerbaijani President Ilham Aliyev "On some measures in the field of licensing", which was published on 21 December 2015. According to this document, the list of licensable types of entrepreneurial activity in Azerbaijan was reduced from 59 to 37. So, among other things, licences for tourist activities were annulled - until recently the amount of the state duty for obtaining such a permit was 5,500 manats. Licences for the manufacture, import or sale of alcoholic beverages and tobacco products are no longer needed. There is no need to obtain licences for the sale of oil and gas products, as well as for urban, inter-regional and international passenger and cargo transportation. And the sphere of passenger and freight transportation will be governed by new rules: according to amendments to the law on road transport, permits for passenger and freight transportation will be provided on an electronic card, while the process of their issuance will be significantly simplified.

The production, processing and circulation of precious metals and stones, as well as non-ferrous metals no longer need to be licensed. Mapping activities, printing of accountable forms and transportation of passengers and goods by sea and by air no longer need special permits. The activities of the commodity exchange and customs brokers, non-state pension funds and mediatory services for the employment of citizens of Azerbaijan in foreign countries will be carried out without a licence. Licence free activities include the installation and repair of energy facilities, the reconstruction and repair of buildings, non-governmental phytosanitary services, including the sale and storage of agricultural chemicals. Based on the decree of the head of state, the amount of the duty payable for obtaining licences to operate in the field of education has been cut in half. The introduction of the new rules reduced the fee for a licence to provide insurance services by 50 per cent.

At the end of last year, work on the draft law on the licensing of commercial activity was also completed. Work on the new law was conducted for two months, and while preparing this document, the positive experience of Georgia, Ukraine, Moldova, EU states and others was used.

The bill "On Licences and Permits" provides for the full facilitation of the issuance of licences and permits through ASAN centres, licensing based on the principle "silence gives consent" and other innovations. The main task entrusted to the new law on licensing is ensuring transparency, elimination of bureaucratic obstacles and other factors hindering the development of entrepreneurship, the chairman of a parliamentary committee, Ziyad Samadzada, said.

In particular, the draft law "On Licences and Permits" suggests optimizing the number of licensed types of activity, giving up fixed-term licences and switching to indefinite permits. The changes will cover the pricing of licences: the amount of state duties in this area today is quite high - from 110 to 22,000 manats. The bill provides for the creation of a unified register of licences and permits, as well as an Electronic Licence portal. However, the main innovation of the bill is linked to the introduction of the principle "silence gives consent": if an entrepreneur is not rejected by a licensing body within a certain period of time, he may begin operations without receiving a licence formally. This is an extremely important point, bearing in mind that the maximum period for the decision to grant a licence will be reduced from 15 to 10 working days and permits - to 7 working days.

Another innovation of the bill provides for the establishment of a single set of rules for granting permits for commercial activities. Previously, this area was regulated by numerous bylaws and circulars of government agencies. The bill also focuses on the implementation of the "single window" principle where licensing procedures for commercial activities will be governed by one body and on the formation of partnerships between the entrepreneur and the licensing authority. In particular, the staff of the government agency will be able to act as consultants of businesses, helping them in the process of obtaining licences.

It is noteworthy that at the end of last year the Milli Majlis adopted a number of changes to the law "On the State Duty", which also affected the sphere of licensing. For example, entrepreneurs operating only in the regions will be given a 50-per-cent discount for a number of types of licences. At the same time, if a businessman applies for a licence of several types (e.g., sale, import and manufacture of any product), he will only pay for one licence, which costs higher than the others. The amendments also provide for a discount of 50 per cent for additions to licences, which allow you to carry out business activities at another facilities or to provide new services that are not specified in the licence. And no state duty will be charged for renewing or restoring a licence.

In short, the vast majority of problems facing entrepreneurs in obtaining permits for commercial activities can be considered solved. In view of the economic situation in the world and the country, it is necessary to eliminate the remaining obstacles to the real development of the non-oil sector at the same speed and with the same determination.