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Corporate ownership information made confidential in Azerbaijan

Corporate ownership information made confidential in Azerbaijan
While most countries of the world are moving towards better corporate governance and greater transparency standards, Azerbaijan has made a step in the opposite direction. Only limited information on the country’s companies has, until recently, been available from an online corporate database maintained by the tax ministry. Soon, this database will be of no use to those who wish to know who owns Azeri companies. On 12 June 2012 the Azerbaijani parliament voted to limit public access to corporate information, including registration details and ownership. According to amendments to the laws “on commercial secrets” and “on state registration and the state registry of legal entities”, corporate information is only available upon request made by a court, law-enforcement agencies or the financial monitoring body (which investigates suspected money laundering or terrorism financing activities). In other instances, corporate information can be provided to the public only with the consent of the company itself. The new amendments have caused major discontent among the local journalistic community and international transparency NGOs which were concerned about the negative impact these changes will have on media freedom and public access to information. Although, according to Wikipedia, post hoc ergo propter hoc, Latin for “after this, therefore because of this”, is a logical fallacy, we note that the changes were introduced after a series of articles were published by Azeri investigative journalists into the alleged links between members of the ruling family and large businesses in construction, telecoms, banking and other sectors. The investigations relied, to a large extent, on analysing corporate information on local and offshore companies. There is little doubt that the new amendments will not help the country’s ability to fight corruption, which is the single most important factor preventing foreign investments in Azerbaijan. In 2011 the country already ranked 143rd of 183 countries in Transparency International’s Corruption Perception Index and the recent corporate information availability restrictions will not lead the country in the right direction. By Youri Smakouz Associate Director, Business Intelligence, Moscow
Published: 12th July 2012