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The Law of Azerbaijan Republic on Grants

The Law of Azerbaijan Republic
On grant
1
Th e present law shall regulate economical and legal relations related to issue, receipt and
use of grants (including sub- grant, addition to grant, as well as support registered
officially in the other form for the purposes enshrined in the first part of Article 1 with
the exclusion donations ).
Article 1. Grant
1. Grant – assistance rendered pursuant to this law in order to develop and implement
humanitarian, social and eco -logical projects, works on rehabilitation of destroyed
objects of industrial and social purpose, of infrastructure in the territories damaged as a
result of the war and dis aster, programmes in the field of education, health, culture, legal
advice, information, publishing, sport, scientific research and design programmes as well
as other programmes being important for the state and public. Grant shall only be
provided for spe cific purpose (purposes).
2. A grant shall be provided in the form of financial means and/or in any other material
form. The grant shall be rendered gratis and its repayment in any form may not be
requested.
3. Material assistance used directly for generat ion of profit shall not be considered a
grant. Financial and/or other material means remaining unused at the grant beneficiary’s
disposal should be allocated for implementation of projects and programmes that, in the
beneficiary views, might be the subject of the grant unless otherwise provided for by an
agreement (award) on the grant.
4. Material assistance shall not be considered grant should it is used directly for the
purposes of political struggle and lobby activity on adoption of law and other legisla tive
acts, for political promotion, for financing election campaign of any political organisation
(organisations), political figure (f igures).
Article 2. Donor
1. Those providing grants shall be donors in respect of a beneficiary.
2. The relevant body of the executive power may provide a grant on behalf of the
Azerbaijan gover nment to legal and physical persons, to citizens of Azerbaijan Republic
and foreign countries and to foreign legal and natural entities.
1 This text includes changes adopted on 17 December 2013 and which came into effect in February 2014.

3. A grant on behalf of Azerbaijan Republic shall be provided at the expense of the state
budget of Azerbaijan Republic. Special means may be allocated as a separate item in
revenue of the state budget for provision of such grants. Any additional taxes may not be
introduced or rates of taxes in force may not increase in order to form such funds.
4. Any natural entity and legal entity of Azerbaijan Republic, could provide the grant to
legal and natural entities of Azerbaijan Republic and foreign countries.
5. International organisations and their repres entations, foreign governments and their
representations, international organisations of charitable, humanitarian and other social
directions, financial – credit institutions, foreign public organisations including funds,
associations, federations and comm ittees carrying out activities in the field of
development of education, science, health, culture and sport, and branches and
representations of foreign legal persons, registered in Azerbaijan and not being aimed at
profit (branches and representations of foreign NGOs registered in the Republic of
Azerbaijan on the basis of the agreement which is envisaged in the Article 12.3 of the
Law of Non -G overnmental organizations (Public Associations and Foundations) of the
Republic of Azerbaijan ) of foreign legal en tities may act as a donor after obtaining the
right to give a g rant in the Republic of Azerbaijan. It is required an opinion on financial –
economic reasonability of the grant by the relevant executive authority body f or
obtaining the right to give a g rant.
5- 1. Procedure o n obtaining the right to give a g rant by the donors envisaged in
paragraph 5 of this Article shall be defined by the relevant executive authority body.
6. Donor shall be fully independent in provision of a grant, selection of a grant
benefi ciary, projects and programmes for whose implementation the grant is provided.
On behalf of the Azerbaijan government the grant shall be provided to legal and natural
entities of Azerbaijan Republic based on a tender.
Article 3. Recipient
1. A Grant beneficiary is a recipient in respect of a donor.
2. The following may be a recipient:
o the Azerbaijan government in the person of the relevant body of the executive
power;
o municipal bodies;
o legal entities being residents and non- residents, their branch offices,
representations and departments carrying out activity in Azerbaijan Republic,
whose basic objective is charity or implementation of projects and programmes
that may be a subject of a grant, and which are not aimed at direct generation of
profit resultin g from grant (those recipients can receive grant only from donors
envisaged in paragraphs 2 and 4 of Article 2 of this Law as well as branches and
representations of foreign legal persons not being aimed at profit registered in the
Republic of Azerbaijan ( branches and representations of foreign NGOs registered
in the Republic of Azerbaijan on the basis of the agreement which is envisaged in
the in the Law of Non -G overnmental organizations (Public Assoc iations and
Foundations) of the Republic of Azerbaijan) ;
o natural entities of Azerbaijan Republic.

3. Recipients of Azerbaijan Republic are independent in receipt of a grant, selection of a
donor, projects and programmes for which they receive the grant.
4. At provision of a grant by donors from Azerbaijan Republic to legal or natural entities
of foreign countries the range of recipients shall be identified by legislation of the
relevant country.
5. Recipients shall carry out their activities pursuant to provisions of agreements (awards)
on grant.
Article 4. Gr ounds for Award of Grant
1. A written agreement between a donor and a recipient or written award of the donor on
provision of a grant shall be grounds for the grant issue, receipt and use. The objective,
amount, subject of the grant and specific conditions, should those be laid down by the
donor before the recipient, shall be specified in the agreement (award).
2. Grant may only be used for implementation of objectives specified in an agreement or
award. The use of a grant for other purposes, if it is not stipulated by the agreement
(award) on the grant, shall only be possible with the written permit of a donor.
3. Over the period of implementation of a project being the subject of a grant, the sale or
change into money of values provided as a grant or boug ht at the expense of the grant,
shall only be admissible in cases if these operations were provided for by an agreement
on grant or with the written permit of a donor. In these cases financial means transferred
to a recipient’s disposal should be aimed at implementation of projects and programmes
that might be the subject of the grant.
4. Agreements (decisions) on giving grants to foreign recipients by donors, being legal
or natural en tity of the Republic of Azerbai ja n, as well as branch office or represen tation
of legal entity of the Republic of Azerbaijan shall be submitted for registration by donors.
Agreements (decisions) on receiving grants of recipients of the Republic of Azerbaijan
shall be submitted to registration by the same recipients. Relevant information on the
grant given on the base of state budget shall be submitted to the body, regist ering grant
agreement (decision) by the donor.
5. Non -registered agreements (decisions) on giving and receiving of grants cannot be
subject to bank or any ot her operations.
6. Published, audi o, audio- visual, cinema and other materials, conferences and other
events at the expense of grant should be provided with information on sources of their
financing.

Article 4 -1.
4- 1. Requirements on grant agreement (decis ions) in this article apply to annexes
agreements on grant agreement (decision), as well as the term of agreements (decisions),
changes of aims, amounts.
4- 2.Rule s of registration of the grant agreement s (decision s) shall be defined by the
relevant execut ive authority body .

Article 5. Grant taxation
1. Money and (or) other pecuniary aid received as a grant based on an agreement or an
award on the grant, shall be exempted from all taxes, duties and compulsory payments
into the state budget.
2. Legal ent ities shall pay tax for implementation of grant projects and programmes
pursuant to legislation in force.
3. Income tax shall be collected pursuant to legislation in force for payments received
from a recipient by natural entities participating in implemen tation of projects and
programmes during the utilization of a grant. The recipient shall be exempted from
compulsory payments from the amount paid to natural entities.
4. Financial means retaining at a recipient ’s disposal after the completion of a project
being the subject of a grant, as well as financial means provided as a grant or transferred
to the recipient ’s disposal from the sale and change into money of values purchased at the
e xpense of the grant, and alloca ted for implementation of projects or pr ogrammes that
may be the subject of the grant, shall not be the objects of taxation.
Article 6. Responsibility
1. For infringement of the present Law a donor and a recipient shall be liable in
accordance with the procedure established by legislation.
In the event if one of donors and recipients is an organisation or a citizen of foreign
country, disputes between them shall be settled pursuant to laws of a country selected
previously and identified in an agreement (award) on a grant. Otherwise the disputes
shall be sett led pursuant to legislation of Azerbaijan Republic.
President of Azerbaijan Republic
Heydar ALIEV
Baku, April 17, 1998
N 483- 1G
Published in the Law Collection of the Azerbaijan Republic (June 30, 1998, No .6,
Article 366) (VneshExpertService) .
© VneshExpertService
Non- official translation

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