President Ilham Aliyev has signed a law amending the Law on Public Procurement, which was adopted by the Milli Majlis (National Assembly) on July 13. The legislative update introduces a mechanism to exempt non-resident suppliers from performance and advance payment guarantee obligations, according to the Operative Information Center-OMM.
Under the new amendments, non-resident legal entities or individuals may submit a reasoned application to the procurement commission to be exempted from the obligation to provide performance and/or advance payment guarantees alongside their procurement proposals.
Furthermore, when applying the single-source procurement method, if the procurement commission determines that it is impossible for non-resident entities to provide these guarantees—either on its own initiative or based on an application—the procuring organization must contact the relevant government body within 10 business days. The relevant authority, based on proposals from the oversight body, will then make a final decision within 20 business days regarding the exemption or refusal of the foreign supplier's guarantee obligations. If the same procuring organization purchases the same item from the same supplier within 12 months of the exemption decision, a new decision will not be required.
In addition to the legislative changes, the head of state signed a decree amending the August 19, 2023, decree on the application of the Law on Public Procurement. According to this decree, the Cabinet of Ministers is tasked with approving the procedures for reviewing and deciding on applications from procuring organizations regarding the exemption of non-resident suppliers from guarantee obligations within three months.
These reforms are part of Azerbaijan's broader strategy to enhance the business environment and streamline international participation in state procurement processes. By reducing administrative burdens for foreign companies, the government aims to increase competition and efficiency in public spending, ultimately contributing to more favorable conditions for international trade and investment within the Republic of Azerbaijan.
