President Ilham Aliyev has signed a law introducing significant amendments to the Civil Code, Criminal Code, Tax Code, Code of Administrative Offenses, and several key legislative acts, including those governing state duties, legal entity registration, the Central Bank of Azerbaijan, securities markets, and anti-money laundering measures. This legislative package officially establishes the legal framework for crowdfunding activities in Azerbaijan.
According to the Operative Information Center-OMM, the new regulations aim to formalize the crowdfunding sector, bringing it under the supervision of the Central Bank of Azerbaijan (CBA). Under the new rules, legal entities operating crowdfunding platforms must register with the CBA, with a state duty of 2,750 manats required for this process.
The legislation mandates that crowdfunding operators function as subjects of Central Bank oversight, requiring them to submit regular activity reports. Furthermore, the law introduces strict penalties for non-compliance:
- Failure to disclose or publish required information will result in fines for legal entities ranging from 3,000 to 4,000 manats.
- Failure to submit reports or providing distorted information will incur fines between 2,000 and 3,000 manats.
- Violations regarding the management of funds will lead to fines between 6,000 and 7,000 manats.
Additionally, crowdfunding operators are now classified as subjects under anti-money laundering and counter-terrorism financing legislation. The law also outlines specific penalties for violations related to foreign currency transfers and requires that any issuance of securities within crowdfunding platforms adhere to the requirements of the new Law on Crowdfunding. These changes are designed to enhance transparency and security in the rapidly evolving digital financial landscape of Azerbaijan, ensuring that alternative financing methods operate within a regulated and protected environment.
