Azerbaijan: Official corruption; whether business owners must pay bribes to government officials; ramifications for non-payment

Corruption is "a widespread phenomenon" that is "viewed by many [in Azerbaijan] as something normal and inevitable" (Bagirov 2 Oct. 2002, 1). According to Transparency International's Corruption Perceptions Index (CPI) for 2002, Azerbaijan ranked 95th out of 102 countries surveyed with a score of 2.0 out of a perfect or "clean" score of 10 (28 Aug. 2002). In 2001 Azerbaijan's CPI was also 2.0 (TI 27 June 2001), a 0.5 point increase from its 2000 score of 1.5 (ibid. 13 Sept. 2000). In addition, the rank of 95th in 2002 and 84th (out of 91) in 2001 are both the lowest positions, indicating the highest perceived corruption, of any Eastern European country or former Soviet state surveyed for these indexes (ibid. 28 Aug. 2002; ibid. 27 June 2001). Azerbaijan has not yet been a subject of Transparency International's Bribe Payer's Index. In addition, TURAN news agency reported the results of a 2002 joint survey undertaken by the World Bank and the European Bank for Reconstruction and Development (EBRD), which found decreases in the levels of corruption and bribery between 1999 and 2002 (24 Dec. 2002). The results of this survey have not yet been published in the public domain (ibid.).

Although the Azeri government have introduced legislation in an effort to curtail corruption (Bagirov 2 Oct. 2002), the US Embassy in Baku warned investors that anti-corruption laws and regulations in Azerbaijan "are not effectively enforced" (US 23 Nov. 2001, 40). In a paper presented to an anti-corruption workshop hosted by the Bulgarian Center for the Study of Democracy (CSD), Sabit Bagirov, President of the Entrepreneurship Development Foundation and Chairman of the Board of Transparency Azerbaijan, argued that state measures to combat corruption were not systemic or comprehensive enough and that Azerbaijan lacked an anti-corruption programme (2 Oct. 2002, 1). The Azeri judiciary was described as corrupt, inefficient and dependent on the executive branch (Country Reports 4 Mar. 2002) and a parliamentary opposition minister claimed that the outcome of trials is generally known at the outset of the case (Trend News Agency 12 Feb. 2002). Azerbaijani President Heydar Aliyev stated that the bribery of police officers continued despite measures introduced to counteract such behaviour (TURAN 13 Sept. 2002).

A Zerkalo report stated that many foreign investors "come up against open bribe-taking and extortion on the part of some top officials, which makes any economic project ineffective ..." (22 June 2002). Moreover, corruption and the requirement for bribery is thought to have contributed to a number of major international companies leaving Azerbaijan in recent years ([email protected] 4 Apr. 2002; RFE/RL 19 Apr. 2002). A 2001 business advisory prepared by the Commercial Service of the Embassy of the United States in Baku stated that

[c]orruption is a significant deterrent to investment in Azerbaijan, especially in the non-energy sector. ... Corruption appears most pervasive in the regulatory, tax, customs, and dispute settlement systems. Throughout the country, problems in the quality, reliability and transparency of governance, as well as abuse of the regulatory system and poor contract enforcement, significantly impede the ability of many companies to do business in Azerbaijan and have driven many companies, including some major Western firms, from the market. Politically-connected businesses appear to have benefited from government regulatory and other decisions to achieve effective control over several lucrative sectors of the economy, including cotton, tobacco, and imported food products (US 23 Nov. 2001, 40).

The Research Directorate was unable to find reports describing the ramifications of a company refusing to pay bribes among the sources consulted. However, although not stated in direct relation to corruption in their report, the TURAN news agency reported that "tax and customs bodies interfered in the activities of private enterprises and violated their working schedules ... [and] law-enforcement bodies ... continue to carry out groundless inspections of enterprises" (14 May 2002).

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.

References

[email protected]: A Weekly Analytical - Information Bulletin. 4 April 2002. No. 14 (316). Farhad Mammadov. "Foreign Companies Leave Azerbaijan." (Azerbaijan Daily Digest, Eurasianet.org) [Accessed 8 Jan. 2003]

Bagirov, Sabit. 2 October 2002. "Anti-Corruption Efforts in Azerbaijan." Presentation at the Balkan/Black Sea Anti-Corruption Workshop at the Center for the Study of Democracy, Sofia Bulgaria, 1-3 October 2002 [Accessed 7 Jan. 2003]

Country Reports on Human Rights Practices for 2001. 4 March 2002. United States Department of State. Washington, DC. [Accessed 7 Jan. 2003]

Radio Free Europe/Radio Liberty (RFE/RL). 19 April 2002. Azerbaijan Report. Almaz Mahmudgizi. "Azerbaijani President Plans to Meet with Entrepreneurs." [Accessed 8 Jan. 2003]

Transparency International (TI). 28 August 2002. "Corrupt Political Elites and Unscrupulous Investors Kill Sustainable Growth in Its Tracks, Highlights New Index." (Press release) [Accessed 7 Jan. 2002]

_____. 10 February 2002. "Frequently Asked Questions about the TI Corruption Perceptions Index (CPI) 2002." [Accessed 7 Jan. 2002]

_____. 27 June 2001. "New Index Highlights Worldwide Corruption Crisis, Says Transparency International." (Press release) [Accessed 7 Jan. 2002]

_____. 13 September 2000. "Transparency International Releases the Year 2000 Corruption Perceptions Index" (Press release) [Accessed 7 Jan. 2002]

The Country Perceptions Indexes for 2001 and 2002 rank "countries in terms of the degree to which corruption is perceived to exist among public officials and politicians" (TI 10 Feb. 2002).

Trend News Agency [Baku, in Russian]. 12 February 2002. "Azeri MP Accuses Police and Legal System of Corruption" (BBC Monitoring 12 Feb. 2002/WNC)

TURAN [Baku, in Russian]. 24 December 2002. "World Bank Survey Shows Decrease in Corruption in Azerbaijan." (FBIS-SOV-2002-1224 24 Dec. 2002/WNC)

_____. 13 September 2002. "Azerbaijan: President ‘Regrets' Police Bribery." (FBIS-SOV-2002-0913 13 Sept. 2002/WNC)

_____. 14 May 2002. "Azerbaijan: Aliyev Pledges ‘Particular Measures' Against Corruption." (FBIS-SOV-2002-0514 14 May 2002/WNC)

United States. 23 November 2001. Embassy of the Untied States, Baku, Azerbaijan. Doing Business in Azerbaijan: Azerbaijan Country Commercial Guide FY2002. [Accessed 8 Jan. 2003]

Zerkalo [Baku, Internet version, in Russian]. 22 June 2002. A. Rasidoglu. "Baku Daily Cites Impact of Corruption in Azerbaijan, Armenia." (FBIS-SOV-2002-0710 22 June 2002/WNC)

Additional Sources Consulted

NEXIS

Unsuccessful attempt to contact the Institute of Peace and Democracy, Baku Azerbaijan

Internet sites, including:

Bribe Payers Index, Transparency International

Eurasianet.org

World Bank, Baku Office