In Azerbaijan, new fines have been determined for those engaged in buying and selling goods. According to the amendment to the Code of Administrative Offenses, for failure to submit the information constituting the credit histories to the credit bureau in the prescribed manner or completely, correctly or on time in accordance with the requirements of the Law “On Credit Bureaus”, officials shall be fined from 1,500 to 2,000 manats, legal entities 10,000 manats. they will be fined from AZN to 12,000 AZN.
Courts must also pass on negative information
Lawyer Jeyhun Jafarli explained why the law was adopted and what it serves. He said that this law is useful for organizations and companies: the law “On credit bureaus” was adopted in 2016. The purpose of adopting this law was to create a database on credit obligations, current and paid debts, mortgages, pledges, and deposits of legal and natural persons, thus forming a stable financial policy. All information about the debt obligations of a natural and legal person must be transferred to credit bureaus. This information must be uploaded to the portal electronically. Credit bureaus are organizations that collect, store, and analyze data. It collects them from the Central Bank, insurance companies, re-insurers – leasing organizations, utility service organizations, communication services, mobile operators, housing cooperatives, large shopping centers and pawnshops. For example, a bank wants to give you a loan or a leasing company sells a car. How will that company know what your positive and negative financial information is like? The law “On credit bureaus” states that negative information must also be passed on to courts. For example, a person does not pay alimony debt or a debt resulting from harm. In this case, he is not given credit in other places. This is to strengthen people’s financial discipline and create responsibility.”
The law does not apply to the sale of household goods
The lawyer noted that what is unclear in the law is to whom it applies. Some people think that this also applies to the sale of household goods. In fact, it refers to credit organizations under contract: “This change is due to the necessity of applying the law. That is, many organizations evaded the requirement to disclose the mentioned information. But let’s not forget that the companies themselves will mutually benefit from this information. In this case, a stable financial policy will be implemented. Individuals’ access to financial opportunities will depend on this information. Also, the number of cases going to the courts will be reduced. Entrepreneurs will also be protected. However, this law does not apply to small entrepreneurs and neighborhood markets, but to persons who are regulated by a legal contract and who sell goods officially.”
“It does not mean that there will be no sales”
Economist Eyyub Karimli explained why companies do not follow the law. According to him, by doing this, they add interest on the product and earn additional income: “This law created agitation among people. But in fact, the issue has little relevance to individuals. This law is not directed against anyone who sells goods to nysia in the district. This mainly applies to legal entities working with credit. In fact, they take income from those who sell goods on credit, but they mark it as if it is a loan sale, and they do not put any additional money. In order to avoid tax, they register it as a sale and present it to the tax authorities. In this case, they sell the product they sell to the buyer at a higher price, add an additional interest on it and hide his income. That is, they do not show it as a loan. This law is to prevent those cases. It does not mean that there will be no short sale. Fines are provided for failure to provide information. Because there is little information about the law, there is agitation among people.”
According to the expert, if the organizations transfer the information correctly, then the law will work properly and people’s credit information will be shown more clearly: “This change will not affect citizens. Tax evasion will be prevented. Now, when a citizen buys a product on credit from any store or other place, it will be reflected in the official credit history that the person has credit.”
We will get the products more expensive on credit
The economist said that after the introduction of this innovation, some entrepreneurs will leave the market, but this will not affect the economy: “Commercial entities that have been operating informally until now will either formalize their activities or stop working. Entrepreneurs who do not formalize their activities will no longer be able to work in this field. But the market will not experience a major shock. Because in most cases, we see that more big companies are engaged in this activity. I don’t think they will limit their activities either. From this point of view, I don’t think it will affect the consumer. On the contrary, the consumer will get a more guaranteed, quality service. You can just see an increase in prices. We will get the products on credit a little more expensive. Because the costs of formalization will increase.” (“Kaspi” newspaper)
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