Azerbaijan strengthens antimonopoly administration From State Service to State Agency

In recent years, Azerbaijan has made significant strides in combating unfair competition and monopolies, while also strengthening consumer protection. A major milestone was reached in late 2023 with the adoption of the long-awaited Competition Code (CC), which came into effect in July of that year. In addition to the CC, various regulatory documents were developed last year, focusing on its application, as well as advancements in standardization and electronic public procurement.

Building on these efforts, a presidential decree issued on February 12 marked a pivotal moment in the country's regulatory reform. The decree elevated the State Service for Antimonopoly and Consumer Market Control, previously operating under the Ministry of Economy, to a full-fledged State Agency under the direct authority of the President of Azerbaijan. 

The primary goal of adopting the new Competition Code and all subsequent reforms in antimonopoly legislation is to create conditions for free competition in Azerbaijan through effective regulation of various sectors of the economy and the market as a whole. These measures aim to enhance the country’s investment attractiveness, attract international capital, and stimulate domestic businesses to modernize enterprises, implement advanced technologies and innovations, and increase non-oil exports, thereby raising the level of employment in the population.

Alongside the legislative reforms in the field of competition, Azerbaijan is taking consistent steps to reform administrative mechanisms and enhance the institutional status of the country’s primary antimonopoly body. The first step in this direction was the presidential decree issued in late August of last year, titled "On Additional Measures to Improve Management in the Field of Antimonopoly Control and Supervision of the Consumer Market." According to the decree, the existing State Service for Antimonopoly Control, previously part of the Ministry of Economy, is set to be transformed into a State Agency for Antimonopoly and Consumer Market Control under the President of Azerbaijan.

This move clearly reflects the elevation of the antimonopoly body’s status, as its forthcoming tasks and activities will now be under the direct supervision of the President, positioning the State Agency as an authoritative body for optimizing market regulation processes and protecting businesses from the negative impacts of unfair competition. Overall, the new State Agency will be granted expanded powers and a broad toolkit to fully implement the provisions of the Competition Code, improving antimonopoly oversight and control, and ensuring a swift transition from static to dynamic market regulation.

Along with the elevation of the antimonopoly regulatory body’s status, Azerbaijan is set to undertake several other steps to optimize activities in this area. In particular, last year, the National Action Plan for 2024–2026 was developed, aimed at expanding the competitive environment and preventing manifestations of monopolism. Additionally, the development of a Competitiveness Index is underway, and a corresponding national competition map will be created — an open digital platform that will provide information on market structure and its participants across all regions of the country.

A logical continuation of efforts to strengthen the antimonopoly administration came with the presidential decree issued on February 12 by President Ilham Aliyev. This decree transformed the State Service for  Antimonopoly and Consumer Market Control, previously under the Ministry of Economy of Azerbaijan, into a State Agency with the same name. The new State Agency is designated as the legal successor to the State Service, inheriting all of its rights, obligations, and assets.

Among other provisions, the decree approves the charter, regulations, and organizational structure of the State Agency, setting the staffing limit at 214 positions for the main office and 105 for regional branches. The Cabinet of Ministers is tasked with approving a list of subordinate structures not included in the State Agency’s structure within two months, and informing the head of state. Within three months, the transfer of the property of the State Service for the Control of Precious Metals and Gems under the Ministry of Finance to the State Agency must be completed.

As per the decree, the State Agency, both directly and through its subordinate bodies, will assume responsibility for state supervision in various areas. These include the production, processing, use, and circulation of precious metals and gemstones, as well as their imports, exports, and the issuance of permits for the import and export of rough diamonds. Additionally, the Agency will oversee the use, circulation, accounting, storage, and monitoring of these materials.

In turn, the ministries of finance and economy have been tasked with ensuring the transfer of the remaining off-budget funds allocated for the Service to the Agency, as well as securing the necessary funding for organizing the activities of the new structure in the current year.

As part of efforts to enhance antimonopoly control, the newly established State Agency has taken on additional responsibilities. These include overseeing public procurement, advertising (excluding outdoor advertising), and sectors such as standardization, metrology, technical regulation, conformity assessment, accreditation, quality management, and more. Significant progress has already been made in these areas.

In 2024, the Azerbaijani Standardization Institute (AZSTAND), under the former State Service, developed drafts for 27 out of 34 national technical regulations concerning the safety of various product categories. Additionally, 232 new reference standards were adopted in fields including food technology, agriculture, construction materials, information technology, telecommunications, electrical engineering, oil and gas, transport, textiles, leather, jewellery, as well as in medicine, labour safety, and environmental protection. 

The past year saw heightened activity from antimonopoly authorities in implementing market remediation measures, preventing legal violations, and safeguarding the interests of the country's citizens. In 2024, for instance, 2,259 final protocols related to public procurement were annulled due to legal violations. Thanks to the transparency of electronic public procurement mechanisms, the average number of participants in completed tenders and competitions increased to 6.4, doubling compared to the previous year.

Additionally, the State Service reviewed 161 complaints related to market competition restrictions—three times the number from 2023—resolving 57% of all appeals in favour of the complainants. Finally, in 2024, the State Service helped return approximately 426,000 manats ($250,000) to consumers whose rights had been violated, demonstrating a clear commitment to protecting consumer interests and ensuring fair market practices.