Azerbaijan Credit Bureau: Online System for Credit Registrations and Searching

1. CENTER FOR ANALYSIS OF ECONOMIC REFORMS AND COMMUNICATIONOF THE REPUBLIC OFAZERBAIJAN FINANCIAL MARKET SUPERVISORY AUTHORITY OF THE REPUBLIC OF AZERBAIJAN GETTING CREDIT AZERBAIJAN

2. Azerbaijan Credit Bureau LLC State Registry for Encumbrance of Movable Property www.acb.az mpcr.fimsa.az Notice based system Electronic database Online system for registrations, modifications, objections, terminations and searching Indexing and searching according to debtor identity and registration number of the notice All types of assets accepted for registration (except securities and those with private registry) Registration done by secured creditors The registrar is liable only for errors caused by malfunction or unavailability of the registry system The registrar is not in charge of verifying information and rejecting or accepting applications, unless mandatory information is missing • Positive and negative data on both firms and individuals distributed • Data from banks, financial institutions, retailers, utilities etc. are distributed • Up to 10 years of historical data preserved and distributed • Borrowers have the right to access their data in the credit bureau for free twice a year • banks and financial institutions access borrowers’ credit information online • Offers credit scores DB2019 score 8/12 DB2020 score 12/12 (expected) DB2019 score 8/8 DB2020 score 8/8 (expected)

3. Statistics As of 18.04.2019

4. Scoring inquiries were skyrocketed by 42 times per month reaching at 802,813 inquiries this year in total.

7. Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description of collateral? DB2019 NO DB2020 YES Legal basis: Articles 276.1 and 280.2, Civil Code Articles 3.1 and 22, Law on Encumbrance over Movable Properties New amendments: Article 280.2, Civil Code Article 306, Civil Code Article 306 (Civil Code) was redrafted and the obligation to keep book of pledged property in turnover and specify them in the contract was removed from the Civil Code

8. Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? DB2019 NO DB2020 YES Legal basis: Article 280.2, Civil Code Articles 3.1 and 22, Law on Encumbrance over Movable Properties New amendments: Article 280.2, Civil Code Article 280.2 (Civil Code) was redrafted. Article prescribes that pledge subject’s description may indicate that it consists of all existing or future movable assets of the collateral provider including maximum amount for which the assets are encumbered.

9. May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the original assets? DB2019 NO DB2020 YES Legal basis: Articles 278, 280, 391 and 395, Civil Code Articles 10 and 22.2, Law on Encumbrance over Movable Properties New amendments: Articles 278, 280, 391 and 395, Civil Code Amendments to the Civil Code make a security right possible to be extended future or after-acquired assets and it applies to their products, proceeds and replacements of the original asset by default

10. Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? DB2019 NO DB2020 YES Legal basis: Articles 296.1 and 297, Civil Code Articles 13, the Law on Encumbrance over Movable Properties New amendments: Articles 296.1 and 297, Civil Code Both Article 296.1 and Article 297 of the Civil Code were amended to reflect the enforcement procedures in the Law on Encumbrance over Movable Properties

11. Othermodifications • Technical improvements were made and one new state encumbrance was added to the Law “On Encumbrance over Movable Properties” on 28.12.2018 (enter into force 30.12.2018) • Cabinet of Ministers approved the list of information systems through state encumbrance will be integrated to the state registry of encumbrance over movable property automatically. By this decision, state authorities will entry state encumbrances to the Registry via E-government portal using web-service. Notwithstanding the decision, state authorities can entry state encmubrances to the Registry manually. • Technical improvements were made to the law “On credit bureaus” (as effective from 02.05.2018) • Centralized Credit Registry stopped distributing information to users starting from 01.04.2018. CCR continues to collect data from credit organizations for only supervisory purposes. • The deadline for CCR to distribute its database to a newly established credit bureau were extended one year. New deadline is: 09.12.2019 • Tax authorities distribute information on taxpayers to credit bureau (Article 30.6.10, Tax Code)

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