Azerbaijan bolstering integration within "Green Card" car insurance system Review by Caliber.Az

As a regional transport and logistics hub, Azerbaijan aims to simplify and expand road transit across its territory as much as possible. To this end, legislation and mechanisms in the field of customs and cross-border procedures are being modernised, the visa regime is being simplified, etc. The most important component of this work was the republic's participation in the international insurance system "Green Card", as well as the process of Azerbaijani-Turkish integration, which began this year within the framework of the system, with the prospect of a union at the level of the Organization of Turkic States. On December 26, the board of the Central Bank made a decision on the determination of the amount of lump-sum cash payments to be paid by insurers in the "Green Card" system and insurance premiums applied here.

The "Green Card" system is an agreement on mutual recognition of the insurance certificate of civil liability insurance of vehicle owners between the participants of this system, i.e. the country members. This international structure has been in operation since 1951, and its main purpose is to organise the settlement of claims for victims of road traffic accidents (RTAs) involving foreign motorists in accordance with the national legislation of the country of the accident. The national "Green Card Offices" are part of a single organisation, the Bureau Council, headquartered in Brussels, which operates under the auspices of the Working Party on Road Transport of the Inland Transport Committee of the UN Economic Commission for Europe. Forty-eight countries are now full members of the international Green Card system, with Azerbaijan joining as of 2016.

Given the current role of road transport in freight traffic, the importance of Azerbaijan's participation in this international project cannot be overestimated. To date, more than 54% of all international traffic, including transit cargo, crossing the territory of our country is carried by road. Participation of local road transport operators in international traffic is not less intensive. According to the State Road Transport Service under the Ministry of Digital Development and Transport, only in the first half of this year, the number of Azerbaijani trucking companies involved in international road transportation increased by 2.9 times, and the number of vehicles involved in this process grew by 2.7 times - up to 7208 units.

These statistics cover only cargo transport, as Azerbaijan's land borders were closed to passenger traffic at the start of the coronavirus pandemic and this ban has recently been extended until March 2023. However, the pandemic restrictions will sooner or later be lifted, and buses and private cars will be the key mode of transport for visiting tourists from neighbouring states to Azerbaijan and vice versa. In order to approximate the potential for cross-border road traffic, it is appropriate to quote some statistical data. For example, in the most prosperous year for tourism development, more than 3.170 million foreign visitors visited Azerbaijan in 2019, with 58.7% of tourists arriving in the country mainly by road and partly by rail. In other words, once pandemic restrictions are lifted and tourist exchange with neighbouring countries is restored, the entry potential of cross-border bus and road transport alone can be estimated at two million or more people, and if we add our citizens travelling by road, these figures can be increased by at least 50%.

Thus, the current growth of international motor road transportation and the prospects of increasing cross-border tourist traffic will be the long-term basis for the development of the international "Green Card" insurance system in Azerbaijan. There is no need to speak about the importance of such policies: if an Azerbaijani truck or private car driver causes an accident abroad, the insurance indemnity for the injured will be provided by 13 domestic insurance companies which have a right to operate within the international system. Well, if the accident in Azerbaijan is caused by a foreign motorist from one of the 48 countries that have signed the agreement, the insurance indemnity will be compensated under the "Green Card" by a foreign insurer.

Apparently, insurance cases requiring "Green Card" payments are not so rare. The statistics of the Compulsory Insurance Bureau of Azerbaijan (ISB), an agency coordinating the "Green Card" system in our country and representing the republic in the Bureau's Council in Brussels, testify to it. Thus, in January-November this year the ISB paid 531,000 manats within the system for accidents that occurred abroad with the participation of citizens of our country. Moreover, insurance payments for accidents caused by foreign cars in Azerbaijan exceeded 95,000 manats.

Azerbaijan's authority on obligations within the "Green Card" system is quite high, as evidenced by the fact that in the middle of this year the ISB was elected a full member of the Council of International Bureaux for five years before the expiration of the 10-year probation period. This step allowed our country to save 5 million manats, payment of which was required from the interim members of the Bureau. And the other day the Azerbaijani regulator was given the right to "export services" - sales of "Green Cards" by domestic insurance companies to drivers of vehicles registered in Georgia and Kazakhstan.

On December 26, the tariffing indicators of the "Green Card" system for the next year were also determined: the Board of the Central Bank of Azerbaijan (CBA) set the amount of lump sum payments to be paid by insurers participating in the "Green Card" system, as well as the number of insurance premiums to be applied by insurers. According to the CBA decree, the amount of a lump sum payment under the "Green Card" is set at 10,000 manats. In turn, insurance premiums on green cards for motor vehicles registered in Azerbaijan and going to Türkiye and Iran is 12-440 manats, and for Belarus, Moldova, Russia, and Ukraine - 10-400 manats, while for other countries it is 30-1200 manats. In turn, insurance payments for trucks registered in Georgia and Kazakhstan going to Türkiye, Iran, Belarus, Moldova, Russia, and Ukraine are fixed at 15-1,630 manat; for trucks from Georgia and Kazakhstan going to other countries - from 30 to 2,389 manats. The decision will enter into force from January 1 next year.

Expanding cooperation with Georgia and Kazakhstan, our country's key transit and trade partners, in the transport and insurance sector is vital. However, the number of close partners of Azerbaijan in the "Green Card" system will further increase in the near future. Since March this year, the ISB and Türkiyə Motorlu Taşıt Bürosu have signed a protocol on cooperation to integrate "Green Card" systems, which will simplify and speed up border-crossing procedures by checking relevant insurance details using digital technology. In the near future, the mechanisms and experience of Azerbaijani-Turkish cooperation are to be expanded within the Organization of Turkic States, where the creation of an Insurance Union Federation is planned.

Such international cooperation also contributes to the better identification of counterfeit green cards and the prevention of risks in this field. In this regard, since last year the specialists of the State Customs Committee (SCC) of Azerbaijan carried out large-scale work on the integration of the database and relevant elements of the Unified Automated System of Customs Administration (VAIS) of the SCC with electronic information resources of ISB. In particular, the measures taken make it possible to prevent facts of the use of falsified "Green Card" contracts observed recently in a number of countries of the world.