SECO: Legal framework in movable property in Azerbaijan most advanced in region

By  Trend

Financial opportunities based on movable property are quite new experience for Azerbaijan, Simone Haeberli, deputy regional director for South Caucasus at the Swiss State Secretariat for Economic Affairs (SECO), Trend reports.

She was speaking at a conference entitled “Using Financing Opportunities to secure Movable Property”.

She said that the legislation of Azerbaijan in the application of this financial mechanism is the most advanced one in the region.

SECO and IFC provided great support in drafting the “Law on Encumbrance of Movable Property”, she noted.

The Financial Markets Supervisory Authority of Azerbaijan (FIMSA) created in 2017 supported the implementation of quite important reforms in the financial sector, she said. It is important to eliminate some nuances, she added.

This is related to the use of assets of small and medium businesses as collateral, she said.

For SECO, it is important to attract more people and parties to the use of financial resources and loans, she noted, adding that there is still work to be done in this direction.

The Azerbaijani parliament passed a law in 2017 on encumbrance of movable property, which envisages the creation of a registry of movable property.

The law will simplify the use of various equipment and other movable objects as pledge in obtaining a loan.

The registry of movable property, where information on movable objects will be stored, will allow, for example, any credit institution to check the object before it is accepted as a pledge, whether this object is a collateral object for another loan.

Under the law, a special portal will be created, with the help of which anyone can register his/her personal property and subsequently use it as collateral.

The Azerbaijani legislation does not prohibit the use of movable property as a pledge. However, credit institutions prefer not to take such a risk due to the lack of sufficient information, because it is not always possible to determine who actually owns a given property, whether it is already a subject of pledge or not.