The Milli Majlis (National Assembly) of Azerbaijan has approved new grounds for the state acquisition of investments during its plenary session held today as part of the spring session. The amendments to the Law on Investment Activity were passed in the final reading, establishing a clearer legal framework for the protection of national interests.
Operative Information Center-OMM reports that the significant changes proposed to the law were thoroughly discussed in parliament before being adopted. The new legislation aims to balance the rights of investors with the strategic security requirements of the Republic of Azerbaijan.
Existing grounds for state acquisition of investments
During the session, it was highlighted that investments can currently be acquired from an investor by the state under two primary grounds: for state needs and for the purpose of requisition.
Requisition cases include actions taken in the interests of society by decision of relevant state bodies during natural disasters, technological accidents, epidemics, and other circumstances of an extraordinary nature. In both instances, the value of the investment is covered through the payment of compensation to the investor, in accordance with Articles 13.3 and 13.4 of the law.
National interests and strategic investments: What the new rules change
The newly adopted amendment introduces an additional ground for the state acquisition of investments, specifically targeting investments of strategic importance. This innovation is designed to prevent exceptional cases that could harm the interests of the Azerbaijani state and its people or contradict the country's national interests.
The legislation provides a robust legal basis for the state to intervene when strategic assets are at risk. This move aligns with international practices where governments maintain oversight over critical infrastructure and sectors vital to national security. By formalizing these procedures, Azerbaijan aims to increase transparency and predictability in the investment climate while safeguarding its sovereign priorities.
Compensation mechanism and legal framework
The bill stipulates that the acquisition of investments of strategic importance will be carried out under general rules. Crucially, investors will be guaranteed compensation in exchange for the state acquisition of their investments. Furthermore, the process for acquiring such strategic investments will be regulated exclusively by the laws of Azerbaijan.
Following the discussions, the project was put to a vote and officially adopted in the third reading. This legislative update is part of a broader effort in Baku to modernize the legal framework governing economic activities and ensure that foreign and domestic investments contribute positively to the long-term development of the country.
