Azerbaijan's economy continues to undergo transformation and restructuring. In addition to its openness to global trade, relatively moderate taxation and government spending have been essential to the transition to greater economic freedom. Nonetheless, Azerbaijan remains a challenging market for doing business, not least due to the systemic level of corruption which has deterred many potential investors from entering the market. Similarly, non-transparent and arbitrary regulations, corrupt government bureaucracy, weak legal institutions, and predatory behaviour by politically connected monopolistic interests have severely hindered investment outside the energy sector, according to the US Department of State 2011.

In Azerbaijan, government and business elites are strongly interlinked as top officials regularly invest in strategic industries. Moreover, government members control companies and influential elites treat state companies as private property. The intermingling of political and business interests is exemplified in the US Department of State 2011, which describes how the Azerbaijan State Caspian Shipping Company (CASPAR) and the national airline (AZAL) have effectively blocked foreign companies from entering their respective markets by using their mirror regulatory authorities to set up barriers for foreign investment in the sectors.

The country has few institutional checks on graft and the rapid growth in the energy sector has offered considerable opportunities for the institutionalisation of corruption. According to Transparency International's Global Corruption Barometer 2010, corruption within the private sector is perceived as less widespread when compared to other sectors, with only around 10% of the respondents evaluating it as 'extremely' corrupt. Among companies surveyed in the World Economic Forum Global Competitiveness Report 2011-2012, corruption is identified as the greatest constraint on foreign companies operating in Azerbaijan. This perception is corroborated by the fact that one-quarter of companies surveyed by the World Bank & IFC Enterprise Surveys 2009 identify corruption as a major constraint on doing business. Similarly, the World Economic Forum Global Competitiveness Report 2011-2012 establishes that public funds are commonly diverted to companies, individuals, or groups due to corruption. Given these reasons, companies are recommended to use a specialised public procurement due diligence tool in order to help mitigate the costs and risks of corruption involving public procurement processes in Azerbaijan. In addition, companies are recommended to develop and implement integrity systems, and to carry out extensive due diligence before committing funds or when already doing business in the country.

Corruption is institutionalised in Azerbaijani bureaucracy. Citizens as well as companies frequently face bureaucrats who are not subject to oversight during the course of their duties, which offers significant leverage for bureaucrats to demand bribes or to offer undue advantages to friends. The US Department of State 2011 reports that corruption, lack of transparency and politically connected economic monopolies remain among the greatest obstacles for companies operating in Azerbaijan. Civil servant salaries have traditionally been low, but recent years have seen rising salaries and training being undertaken to raise awareness in the bureaucracy about corruption. These initiatives offer some hope for the future, but in an environment of heavily institutionalised corruption, change does not come easily. There have been instances of civil servants keeping their government jobs or obtaining new government jobs even though they have been convicted of corruption. Similarly, in Transparency International's Global Corruption Barometer 2010, nearly 25% of Azerbaijani households perceive public officials to be 'extremely corrupt', and this category is considered to be among the most corruption-prone sectors in Azerbaijan in the survey.

Companies operating in Azerbaijan may face serious problems when obtaining the required licences for doing business, including continual demands for bribes from public officials; almost two-thirds of the companies surveyed in the EBRD & World Bank BEEPS Azerbaijan 2008 state that corruption constitutes a problem for conducting business in Azerbaijan. This figure is much higher than the corresponding average figure for Europe and Central Asia. In a similar vein, business executives surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 perceive government administrative requirements to be quite burdensome. Moreover, business executives also report that government policy-making is sometimes opaque and that government officials often favour well-connected companies and individuals when deciding on policies and contracts. According to the US Department of State 2011, the government has created a new business registration mechanism based on the principle of a one-stop shop under the Ministry of Taxes, allowing companies to register within 3 days. However, the tax authorities have a reputation as being notoriously corrupt. Foreign citizens and companies cannot own land, but can lease it. The Law on Protection of Foreign Investments permits foreign direct investment in most sectors. Prohibited areas include those relating to national security and defence, and the government carefully controls other key sectors, such as energy and communications.

Azerbaijan has passed several pieces of anti-corruption legislation, including laws regulating gifts to civil servants and ministers' relations with private companies. However, laws and regulations that exist to combat corruption are not effectively enforced, with corruption in the regulatory, tax and dispute settlement systems being most pervasive, according to the US Department of State 2011. 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. According to the same report, in practice, courts are weak, judges are often inexperienced, and economic legislation is poorly understood. Moreover, the Economic Court, which has jurisdiction over commercial disputes, is weak, widely regarded as corruptible, and its decisions are often inconsistent. In addition, business executives surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 report that the judiciary is not independent from political influences of members of government, citizens or companies. The Law on International Arbitration of 2000 allows international arbitration of commercial disputes to be conducted both in Azerbaijan and in any foreign jurisdiction mutually agreed upon by the parties. However, in practice arbitration is seldom used to resolve disputes. Azerbaijan is a signatory to several international conventions regulating the mutual acceptance and enforcement of foreign arbitration, including the New York Convention 1958, and is a member of the International Centre for the Settlement of Investment Disputes (ICSID). Access the Lexadin World Law Guide for a collection of arbitration and other laws in Azerbaijan.

Corruption and Progress in Azerbaijan's Oil and Gas Sector

The remarkable growth in Azerbaijan's market economy can be explained by the rapidly increasing production and export of oil and gas. The oil and gas sector accounts for more than 70% of Azerbaijan's exports and for 60% of its GDP. The state holds huge interests in the sector, and there are close links between the oil and gas industry and governmental institutions. Despite measures taken by the government to address issues of corruption and transparency, accusations of corruption and irregular practices in the oil sector continue. For instance, according to the US Department of State 2011, the oil and gas sector is considered by many to be one of the greatest sources of corruption within the country, despite the fact that Azerbaijan was named the first participating country to be fully compliant with the Extractive Industries Transparency Initiative (EITI) principles and criteria in 2009.

Azerbaijan created the State Oil Fund (SOFAZ) in 1999 to collect and manage oil revenues. SOFAZ contributes to the state budget to support investments in infrastructure, education, poverty reduction and other social projects. International and local NGOs claim that SOFAZ is under the control of the Presidential Bureau and that massive fraud and misappropriation of the fund's money by top politicians and officials has taken place. For example, the government spent a large sum of money from SOFAZ to pay pensions and raise civil service salaries in a presidential election year. Furthermore, local NGOs have accused SOFAZ of funding development in the oil sector instead of strengthening other sectors in the country.

Individual Corruption

The Azerbaijani judicial system is tainted with corruption and official pressure, according to the US Department of State 2010. According to Transparency International's Global Corruption Barometer 2010, the judiciary is perceived by citizens to be among the most corrupt public institutions in Azerbaijan. A substantial part of the households interviewed in the survey reports having paid a bribe to the judicial authorities in 2009. This is supported by Global Integrity 2008, according to which Azerbaijan's judicial system remains subject to international criticism. The NGO, Cooperation Network Against Corruption (Korrupsiyaya qarsi QHT sabakasi), reports that the largest number of citizen complaints about corruption still involves the courts. Citizens usually calculate the potential cost of bribery when deciding whether or not to initiate a lawsuit.

Lawyers in Azerbaijan complain that they function as 'brokers' rather than legal defenders. Moreover, according to Global Integrity 2007, a prison sentence can be shortened for around USD 2,000, the investigation of a traffic accident can be suspended for USD 1,000 and overriding substantial evidence for a court case can be bought for USD 50,000. According to Transparency International's Global Corruption Report 2007, Azerbaijani judges tolerate their court staff demanding bribes. They argue that illicit payments are the only way to achieve a reasonable standard of living for the staff.

Business Corruption

Despite the fact that Azerbaijan's leadership admits that the judicial system does not adhere to the rule of the law, not much progress has been seen in the implementation of institutional reform. For example, the US Department of State 2011 observes that the judiciary is corrupt and inefficient and not independent from the executive. The courts work too slowly and produce unfair judgements, especially in disputes between private companies. Consequently, companies often prefer to drop cases or 'negotiate with the judge'. Therefore, the additional costs of bribing a judge must be added when choosing to engage business partners or other entities in an Azerbaijani court.

In line with this perception, the World Bank & IFC Enterprise Surveys 2009 reveals a remarkable distrust among companies towards the effectiveness and fairness of the country's justice system. Furthermore, companies surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 indicate that courts are subject to political influences of members of government, citizens and companies. According to the Bertelsmann Foundation 2008, corruption in the country's Economic Court (entrepreneurs often call it the 'Economic Exchange') is a serious obstacle to investment growth in Azerbaijan.

Political Corruption

According to the US Department of State 2010, although the law provides for an independent judiciary, in practice, judges do not function independently of the executive branch. For instance, according to the report, judges and prosecutors still take instruction from the presidential administration and the Ministry of Justice, particularly in cases of interest to international observers. Despite the fact that judges' salaries steadily increased for several years prior to 2008, there continued to be allegations that judges routinely accepted bribes. During 2010, the Ministry of Justice reported that the Judicial Council initiated disciplinary proceedings against 21 judges. At the same time, 11 Ministry of Justice officials were subjected to disciplinary actions, and one employee was convicted.

The selection mechanism for judges is reportedly flawed, as it is possible for judges to purchase judicial appointments. All services are for sale in the Azerbaijani judicial system and, according to Transparency International's Global Corruption Report 2007, judges pass judgements based on two principles: they decide in favour of the highest bidder or they decide on the basis of political considerations.

Frequency

The World Bank & IFC: Doing Business 2012:
- It takes 39 procedures and 237 days at a cost of 18.5% of the claim to enforce a commercial contract.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business leaders give the Azerbaijani judiciary's level of independence from influences of government, citizens and companies a score of 3.4 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 3.3 and 3.8 respectively on a 7-point scale (1 'extremely inefficient' and 7 'highly efficient').

Transparency International: Global Corruption Barometer 2010:
- 21% of households surveyed consider the judiciary to be 'extremely corrupt'.

- 42.3% of households who had contact with the judiciary in 2009 report to have paid a bribe.

- Citizens give the judiciary a score of 3.2 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2009:
- Just over 49% of companies surveyed believe that the court system is fair, impartial and uncorrupted.

- 6.5% of companies identify the functioning of the courts as a major constraint.

Individual Corruption

According to the US Department of State 2010, corruption and impunity are pervasive in the police force. Traffic police, in particular, are notorious for soliciting bribes. In spite of efforts to reduce bribe taking by traffic police further, such as substantial pay rises to traffic police officers, citizens continue to report being solicited to pay bribes, although less frequently than in previous years. Similarly, in Transparency International's Global Corruption Barometer 2010, households consider the police to be the most corrupt public institution in Azerbaijan. According to the US Department of State 2010, police often levy spurious, informal fines for traffic and other minor violations and extract protection money from local residents. During 2010, the Interior ministry reported that it dismissed and brought criminal cases against six police officers.

Global Integrity 2008 reports that citizens continue to pay bribes to passport officials, despite the new legislation accelerating the waiting period from one month to one week.

Business Corruption

Business executives surveyed by the World Economic Forum Global Competitiveness Report 2011-2012 report that the police cannot be consistently relied upon to enforce law and order. This is further corroborated by the World Bank & IFC Enterprise Surveys 2009, which reveals that a substantial part of the surveyed companies pay for security in Azerbaijan, while a comparatively smaller part identifies crime, theft and disorder as major constraints to doing business in the country.

Political Corruption

According to Global Integrity 2009, the law enforcement agencies are not sufficiently protected from political interference. In fact, the investigative and enforcement work of agencies, such as the Interior Ministry or Prosecutor's Office, is commonly influenced by political actors or the government, especially in high profile cases. Similarly, appointments to the law enforcement agencies are often based on criteria other than professional, such as party loyalties. Moreover, according to Global Integrity 2009, law enforcement officials generally enjoy protection from criminal investigations.

Global Integrity 2008 reports that while corruption is still endemic in Azerbaijan, citizens are sometimes successful in claiming their rights. A recent example involves an opposition activist from the Nakchivan Autonomous Republic of Azerbaijan (NAR), Intigam Ismayilov, who refused to pay a USD 6 bribe to the local police department to get his citizenship identification card. When Ismayilov complained to the Interior Ministry of NAR, he was arrested and sentenced to 15 days in jail. However, after the media got hold of the story, Ismayilov was released after having spent three days in prison. Consequently, Zakir Mammadov, chief of the relevant department of the Interior Ministry of NAR, was dismissed.

Frequency

World Economic Forum: Global Competitiveness Report 2011-2012:
- Business executives give the police in Azerbaijan a score of 3.8 on a 7-point scale (1 'cannot be relied upon at all' and 7 'can always be relied upon').

Transparency International: Global Corruption Barometer 2010:
- 55.4% of households who had contact with the police in 2009 report to have paid a bribe.

- Citizens give the police a score of 3.6 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2009:
- Nearly 62% of companies surveyed pay for security in Azerbaijan.

- 10.5% of companies surveyed identify crime, theft and disorder as a major constraint on doing business.

Global Integrity: Azerbaijan Country Report 2008:
- A passport can be purchased within 5-7 days for a USD 209 bribe, plus USD 49 to cover the official fee.

Individual Corruption

Many citizens identify the process of obtaining licences and permits as widely corrupt, as illustrated by Transparency International's Global Corruption Barometer 2010. Citizens frequently report either offering or being compelled to pay a bribe in connection with obtaining various permits and licences. Citizens also perceive corruption in relation to getting utilities connected and repaired as widespread. Furthermore, the Azerbaijani health system is also riddled with corruption, and under a half of households who had contact with medical services in 2009 report having paid a bribe, according to the same source. Also, the education system is considered by the households to be among the most corrupt categories in Azerbaijan, only overcome by the Azerbaijani police.

According to Transparency International Azerbaijan, some Baku citizens have complained that agencies providing utility services issue inflated bills, and subsequently claim that customers have failed to pay. In Ganja, the police were reportedly asked by the city electric power distribution company to harass citizens who failed to pay their electricity bills. According to Global Integrity 2007, a driver's licence can be obtained within two days without any exams or tests if bribes are paid.

Business Corruption

Azerbaijani SMEs face corruption on a regular basis when trying to open their own company. Registration is a problem as well as interference by law enforcement bodies. Business licences are reviewed by the Ministry of Justice and this process works as a form of screening of the applying company. Reportedly, ministry officials make extra-legal determinations of whether the investment is appropriate before registering it. The US Department of State 2011 reports that the Ministry of Justice operates in a non-transparent and arbitrary manner, and some investors have alleged that bribes are required when attempting to register their companies.

Another area for corrupt practices is the business inspections conducted by government officials. Thus, Global Integrity 2009 reports that, in practice, business inspections by government officials to ensure public health and safety standards are routinely carried out in an arbitrary and ad-hoc manner, designed to extract bribes from companies in return for favourable treatment or expedited processing.

Political Corruption

In 2007, the former minister of health, Ali Insanov, was convicted of corruption, his property worth USD 17 million was confiscated, and he was sentenced to 11 years of imprisonment by the Grave Crimes Court, according to the US Department of State 2009. Insanov was charged with embezzling large amounts of state property and abusing authority. However, according to the OSCE trial monitors, as cited in the report, there was an overwhelming perception that Insanov did not have a fair trial and that the judges were not impartial.

In 2008, a group of high-ranking officials of the State Anti-Monopoly Service (DAİX) under the Ministry of Economic Development, including the head, Samir Dadashev, were arrested on charges of alleged bribery, according to Global Integrity 2009. However, the press speculated on the true motives of these arrests, including internal political rivalry within the ruling elite. According to the report, Dadashov was consequently released, and the criminal case against him was terminated. Three other officials, including Dadashov's deputy, were sentenced to two years of conditional term, which allowed them to be released one month later with restrictions on travel and electoral participation.

According to Global Integrity 2009, construction projects in Azerbaijan tend to be plagued by non-transparent practices which could trigger corruption. An illustration of this is the construction of the Oguz-Qabala-Baku water pipeline funded by the State Oil Fund of Azerbaijan (SOFAZ). According to the report, this project has lacked transparency in relation to projected times and costs, and there has been no accountability to the public from the management's side.

In 2009, the Presidential Administration removed from office the appointed head of the Executive Committee of the Nizami District of Baku, Mehbali Aliyev, reportedly due to corruption, according to the US Department of State 2010. However, no criminal charges were filed against Aliyev as of the end of 2009.

Frequency

The World Bank & IFC: Doing Business 2012:
- It takes an average of 8 days, 6 procedures and a cost of 2.7% of GNI per capita to start a company, which is less than the regional average.

- It takes an average of 212 days, 30 separate procedures and close to 335% of income per capita to construct a warehouse.

- It takes an average of 2.7 years to close a company at a cost of 8% of the estate.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give government administrative requirements (permits, regulations, reporting) in Azerbaijan a score of 3.7 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all'), constituting a competitive business advantage for the country.

Transparency International: Global Corruption Barometer 2010:
- Nearly 25% of households surveyed consider public officials to be 'extremely corrupt'.

- Almost 40% of households who had contact with registry and permit services in 2009 report to have paid a bribe.

- 45.6% of households who had to obtain medical services in 2009 report to have paid a bribe.

- Roughly 30% of households who had contact with the education system in 2009 report to have paid a bribe.

- Citizens give the education system a score of 3.3 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt'), thus, perceiving it as one of the most affected by corruption sectors in the country.

The World Bank & IFC: Enterprise Surveys 2009:
- 35% of companies expect to give gifts to get an operating licence.

- Over 71% of companies expect to give gifts to obtain a construction permit.

- Over 51% of companies expect to give gifts to get a phone connection.

- More than 54% of companies expect to give gifts to get an electrical connection.

- 40.6% of companies expect to give gifts to get a water connection.

- 8.5% of companies identify business licensing and permits as a major constraint on doing business.

EBRD & World Bank: BEEPS Azerbaijan 2008:
- 32% of the companies surveyed identified business licensing and permits as a problem for doing business in the country.

Individual Corruption

Corruption in the Azerbaijani land administration is not uncommon. According to Transparency International's Global Corruption Barometer 2010, a considerable amount of Azerbaijani households point to the interaction with land authorities as an area where bribes are often demanded. Moreover, households perceive land matters to be distorted by grand and political corruption, according to Transparency International's Global Corruption Barometer 2009.

Business Corruption

According to the US Department of State 2011, current land regulations in Azerbaijan can easily create additional opportunities for the abuse of property rights, since they allow the authorities to forcibly purchase property. While the Azerbaijani government has been working with the World Bank to improve the property registration system, the system remains overloaded with bureaucratic requirements and is generally seen as corrupt and inefficient.

In a similar vein, Global Integrity 2008 reports that up to 40% of transactions in relation to real estate ownership certificates occur via 'unofficial payments'.

Political Corruption

According to Global Integrity 2009, land administration in Azerbaijan is tainted by a lack of transparency and grand corruption. Thus, it is not uncommon for the administering authorities, such as the State Committee for Land (SCL), to violate laws regulating land sale and conduct illegal sales. Moreover, there are also reports of widespread bribery during land sale auctions. According to the report, this shows that the new procedural reform of 2009, which abolished direct sales of municipal lands and introduced the auctions, has not been overly effective and has not resulted in more transparency.

Nevertheless, some high-ranking officials have been arrested in recent years for being involved in illegal land sales, according to Global Integrity 2009. For example, in 2009, both the chairman of Xocasan village municipality and the chairman of Baku's Sabail District Municipality were arrested on charges relating to illegal land sales.

According to the Bertelsmann Foundation 2010, property rights in Azerbaijan are occasionally violated as a result of political interests or large oligarchic interests and competition between members of the political elite.

Frequency

The World Bank & IFC: Doing Business 2012:
- 4 procedures taking an average of 11 days (nearly three times less than the OECD average) and a cost of 0.2% of the property value are required to register property in Azerbaijan.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business leaders give protection of property rights a score of 3.8 on a 7-point scale (1 'very weak' and 7 'very strong').

Transparency International: Global Corruption Barometer 2010:
- 23.4% of the households surveyed reported to have paid a bribe to land services in 2009.

Transparency International: Global Corruption Barometer 2009:
- 40% of households consider grand or political corruption in land matters to be a 'very serious problem'.

- 43% of respondents consider bribes to land authorities to obtain favourable decisions a 'very serious problem' in Azerbaijan.

Global Integrity: Azerbaijan Country Report 2008:
- A property certificate from the State Real Estate Register Agency can be purchased for a USD 123 bribe.

- The standard bribe for permission to build a one-entrance, multi-story apartment building in Baku is USD 150,000.

Individual Corruption

According to Transparency International's Global Corruption Barometer 2010, only a small part of the households surveyed reports to have paid a bribe to tax authorities in 2009. Overall, the problem of taxation for small taxpayers has decreased somewhat in recent years.

Business Corruption

According to the World Economic Forum Global Competitiveness Report 2011-2012, tax regulations are considered among the most problematic factors for conducting business in Azerbaijan. Similarly, Global Integrity 2009 reports that tax laws are seldom enforced uniformly and without discrimination, and some groups consistently avoid paying taxes due to their connections. Moreover, according to the report, tax officials regularly demand bribes from companies. Also, the EBRD & World Bank BEEPS Azerbaijan 2008 reports that bribery connected to taxes and tax collection is not uncommon in Azerbaijan, and companies sometimes 'negotiate' a fine with tax officials if small violations of tax laws are discovered during audits. 

Tax administration continues to be cited by companies as one of the most corruption-prone sectors in Azerbaijan. Nevertheless, various measures have been initiated, such as the computerisation of tax declarations, training on internal inspections and on the Code of Ethics for Tax Officials as well as the creation of hotlines, in order to fight corruption in the sector.

Political Corruption

The Ministry of Taxes has some investigative powers in corruption offences if these arise during investigations of suspected tax evasion. During the last three years, the Ministry of Taxes has created an Internal Security Department responsible for fighting corruption among its staff.

According to Global Integrity 2009, some privileged groups may sometimes be able to reduce their tax payments due to their political connections, or may negotiate fixed amounts with tax officials.

Frequency

The World Bank & IFC: Doing Business 2012:
- Companies spend an average of 225 hours and make 18 payments a year dealing with taxes at a total tax rate of 40% of profits.

Transparency International: Global Corruption Barometer 2010:
- Nearly 6% of households who had contact with tax revenue services throughout 2009 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2009:
- 43% of the surveyed companies expect to give gifts in meetings with tax officials.

- 10% of the surveyed companies identify tax administration as a major constraint on doing business.

EBRD & World Bank: BEEPS Azerbaijan 2008:
- 13% of the companies surveyed report that bribery in connection with taxes and tax collection is widespread, a figure, which is higher than the average of Europe and Central Asia.

- On average, the surveyed companies were inspected by tax authorities slightly over 3 times a year.

Individual Corruption

The Azerbaijani customs system has improved considerably in recent years. Previously, customs and border control officers charged citizens between USD 10-150 to enter or exit the country via Baku Airport. According to Global Integrity 2007, this practice has for the most part come to a stop. Nevertheless, customs administration continues to be considered as prone to corruption by citizens, and a substantial part of the households surveyed in Transparency International's Global Corruption Barometer 2010 reports to have paid a bribe to tax authorities in 2009.

Business Corruption

The State Customs Committee is identified by the US Department of State 2011 as the institution of the greatest concern to companies operating in Azerbaijan. Reportedly, it is common for foreign businesspeople to be asked for bribes by customs officials when crossing the country's borders. According to Global Integrity 2007, total bribes may reach 35% of the value of imported goods.

Similarly, according to the EBRD & World Bank BEEPS Azerbaijan 2008, bribery in relation to customs is not uncommon in Azerbaijan and, in addition, almost one-fourth of the surveyed companies identify customs and trade regulations as a constraint to business operations in the country. In addition, the World Economic Forum Global Enabling Trade Report 2010 points out that time-consuming bureaucracy related to trade across borders opens the way for public officials to demand bribes in Azerbaijan. For example, trade is impeded by customs procedures that lack efficiency, and exporting and importing require time-consuming paperwork to clear goods at the border. Corruption and bribery in these processes are not uncommon.

Political Corruption

Despite recent successes and improvements in customs service, Global Integrity 2009 reports that, in practice, customs and excise laws are not always enforced uniformly or without discrimination, and some groups are more likely to evade these laws due to their connections.

Frequency

The World Bank & IFC: Doing Business 2012:
- A standard export shipment of goods takes an average of 38 days and 8 documents at a cost of USD 2,905 per container.

- A standard import shipment of goods takes an average of 42 days and 10 documents at a cost of USD 3,405 per container.

World Economic Forum: Global Competitiveness Report 2011-2012:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Azerbaijan a score of 3.5 on a 7-point scale (1 being 'extremely inefficient' and 7 'extremely efficient').

World Economic Forum: The Global Enabling Trade Report 2010:
- Business executives give the transparency of border administration (pervasiveness of undocumented extra payments or bribes connected with imports and exports) a score of 3.5 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

Transparency International: Global Corruption Barometer 2010:
- 43.4% of households who had contact with customs throughout 2009 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2009:
- 7% of the trade companies surveyed identify Azerbaijani customs and trade regulations as a major constraint on doing business.

- 27.7% of companies expect to give gifts to get an import licence.

EBRD & World Bank: BEEPS Azerbaijan 2008:
- 13% of the companies surveyed stated that bribery is frequent in dealing with customs/imports.

Business Corruption

According to the ACN Azerbaijan Monitoring Report 2006, the Azerbaijani public procurement system lacks transparency. Procurement notices can be found on the website of the State Agency on Procurement. However, obligatory publishing of tender proposals is allegedly not enforced, and a corruption case involving public procurement officials has yet been investigated. The ACN Azerbaijan Monitoring Report 2006 indicates that business representatives believe that many of the most valuable projects are not published at all.

Moreover, companies surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 report that government officials often favour well-connected companies and individuals when awarding contracts. In general, the law on procurement is not very effective. For example, according to Global Integrity 2009, companies found guilty of major violations of procurement regulations are not blacklisted and can continue to participate in future procurement bids. Companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Azerbaijan.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Political Corruption

According to Global Integrity 2009, Azerbaijan's increased oil revenue allows the government to spend huge resources on public investment projects with almost no accountability, which could potentially create opportunities for corruption in the area of government contracting. The implementation of these projects, their costs, and their supply contracts lack transparency. In addition, according to the report, public works contracts and subcontracting sometimes lack transparency and are awarded without relevant tenders, according to both Global Integrity 2009 and the US Department of State 2010. Also the US Department of State 2011 points out the financing of major projects from Azerbaijan's state budget lacks transparency, and contractors for lucrative state projects are not selected through tenders; they are appointed.

Also, an example of non-transparent practices within public procurement has been the government's purchase of city buses. Reportedly, these buses were bought by the Ministry of Transport from private companies without proper tender processes, according to Global Integrity 2009. Also, there was little transparency in relation to the costs of this purchase.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business leaders give the diversion of public funds to companies, individuals, or groups due to corruption a score of 2.8 on a 7-point scale (1 'very common' and 7 'never occurs').

- Business leaders give the favouritism of government officials towards well-connected companies and individuals when deciding upon policies and contracts a score of 3.1 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2009:
- 14.2% of the companies surveyed expect to give gifts to secure a government contract.

- The value of a gift expected to secure a government contract is 1.1% of the contract value.

EBRD & World Bank: BEEPS Azerbaijan 2008:
- The value of an unofficial payment made to secure a government contract typically constitutes around 2% of the contract value.

Business Corruption

Global Integrity 2009 reports that, in practice, business inspections by government officials to ensure public environmental standards are routinely carried out in an arbitrary and ad-hoc manner, designed to extract bribes from companies in return for favourable treatment or expedited processing.

The Azeri Committee of Oil Industry Workers' Rights Protection (COIWRP) has illustrated how top managers from oil companies, such as of the state-owned SOCAR, systematically extract money by forming private companies to which they submit orders at prices much higher than the market price. Subsequently, the companies typically pay 50% back to the managers, such as those of SOCAR, and keep the remaining 50%, sometimes even without carrying out any work.

According to the US Department of State 2010, Azerbaijan's oil and gas sector lacks transparency, and some observers have complained that the country's oil and gas revenues were not properly managed by the State Oil Fund (SOFAZ) and did not fully adhere to transparency practices of the Extractive Industries Transparency Initiative (EITI). While all of the country's oil and gas companies participated in the EITI process, only a few of them agreed to revenue reporting. See this profile's special section on Azerbaijan's oil and gas sector for more information.

Political Corruption

According to Transparency International's Corruption & the Environment 2006, environmental laws in Azerbaijan are being blatantly disregarded and even manipulated to increase the wealth of public officials. Accordingly, in some Azerbaijani cities, sturgeon is poached by fisherman in full view of authorities. In order to poach sturgeon freely, the fishermen have to pay a bribe to the officials worth USD 500.

NGOs claim that the State Oil Fund is basically controlled by the Presidential Bureau and that massive fraud and misappropriation of the fund's money by top politicians and officials take place systematically. See this profile's special section on Azerbaijan's oil and gas sector for more information.

• Legislation: Azerbaijan ratified the Council of Europe Criminal and Civil Law Conventions on Corruption in 2004 and the United Nations Convention against Corruption in 2005. Azerbaijan has also passed other anti-corruption legislation in recent years. On 13 January 2004, the Law on Combating Corruption was adopted. This law defines corruption-related offences regarding public officials. Other relevant legislation includes the Law on Procedures on Declaration of Finance Related Information by Public Officials, the Law on Public Procurements, the Law on State Protection of Persons Participating in Criminal Proceedings, the Law on Money Laundering, the Criminal Code (in Russian) and the Criminal Procedure Code (in Russian). The Criminal Code criminalises the major forms of corrupt activity, including active bribery, passive bribery, attempted corruption, extortion, bribing a foreign official, money laundering and abuse of office. It also forbids officials to receive gifts valued more than USD 55, to hold additional jobs and to engage in business activities. However, it is noted by the ACN Network that Azerbaijan's definition of bribery does not fully comply with international standards. Moreover, as emphasised by GRECO, Azerbaijan's existing mechanism for checking property declarations submitted by public officials is inefficient in practice, since these declarations cannot be verified in any way. The Law on Rules of Ethical Conduct of Civil Servants was passed by Parliament in 2007 and aims at increasing transparency and efficiency of the public institutions. In February 2009, the Azerbaijani parliament passed the Law on the Prevention of the Legalization of Criminally Obtained Funds or Other Property and the Financing of Terrorism. In June 2009, President Aliyev signed a Decree on strengthening the fight against corruption-related law violations in the area of management of state and municipal property and resources. According to the US Department of State 2010, the Azerbaijani government has made significant progress in the area of anti-money laundering through its newly established Financial Monitoring Service (FMS; see below). Access the Lexadin World Law Guide for a collection of legislation in Azerbaijan.

• Government Strategies: In 2004, a presidential decree was passed regarding the State Programme on Combating Corruption to cover the period from 2004 to 2006. A common criticism of the bureaucracy in Azerbaijan is that political connections and patronage networks are used to obtain jobs in public agencies. The State Programme on Combating Corruption represents an attempt to counter this kind of cronyism and introduces the implementation of a central system of competitive, anonymous examinations to determine the job placement in the public sector. In addition, a rotation principle for public officials in the police and in the tax and customs authorities has been introduced as a measure to counter corrupt practices in these organs. According to the Monitoring Report on Azerbaijan 2006 by the Anti-Corruption Network for Eastern Europe and Central Asia, a network of NGOs called the Information and Cooperation NGO Network had some success in influencing the wording of the state programme. A National Strategy on Increasing Transparency and Combating Corruption covering 2007-2011 was issued by the President in July 2007. According to an assessment by the US Department of State 2010, the key provisions of the anti-corruption strategy still have not been implemented. The strategy establishes a framework for increasing the accountability of government, cooperating with civil society, and systematically monitoring and reporting on the implementation of anti-corruption measures. One of the national strategy's main elements, the Law on Financial Disclosure, requires officials to report their annual income, sources of income, property, and financial liabilities. It also prohibits nepotism and limits gifts and direct or indirect financial benefits to public officials or third parties, according to the US Department of State 2010. Freedom House 2011 reports that the new anti-corruption strategy has not yet resulted in a measurable improvement of the corruption environment. In September 2008, the State Programme for Poverty Reduction and Sustainable Development 2008-2015 was approved by President Aliyev, which aims at strengthening the judicial and procurement systems and improving the business environment.

• Anti-Corruption Agencies: The Commission on Combating Corruption (CCC) was established in 2005. The CCC consists of 15 members, five appointed by the President, five by the Parliament and five by the Constitutional Court. Among the main objectives of the agency is taking part in policy formation on corruption issues, analysing the state and effectiveness of the fight against corruption and receiving complaints from individuals. According to Global Integrity 2009, the CCC is not protected from political interference in practice and is commonly influenced by political incentives. Also, appointments to the CCC tend to be based on political considerations rather than professional criteria. Reportedly, the CCC is not used for addressing anti-corruption issues fairly and systematically, but rather for settling scores between rival political fractions. Similarly, according to Freedom House 2011, the CCC is fully dependent on the ruling elite and has shown that it is not ready to challenge politically powerful interests or individuals. Until now, the agency has not launched any important cases, and the cases that have been opened have been politically motivated.

• Prosecutor General's Office: Within the Prosecutor General's Office, a special Anti-Corruption Department has been set up to detect and investigate instances of corruption and submit the cases to the courts. The department has a staff of 60 employees; 40 of which are prosecutors and investigators. According to Prosecutor General Zakir Garalov, 150 people have faced corruption charges since 2005. Of these, 56 cases have been taken to courts by the office's Anti-Corruption Department and another 258 people have been found guilty for corruption by the courts. According to Global Integrity 2009, the department very seldom independently initiates investigations into allegations of corruption by law enforcement officials. In addition to the work of the Prosecutor General, the police also investigate instances of corruption. The main police department involved in these investigations is the Department for Combating Organized Crime, staffed with 75 policemen. In March 2005, a 'Unit for special investigation measures in corruption crimes' was formed.

• Financial Monitoring Service (FMS): The FMS was established by the Azerbaijani government in 2009 to provide implementation of the state policy, improve the supervision system, and coordinate activities of relevant state authorities in the anti-money laundering field. The FMS thus monitors and analyses suspicious transactions across the banking and finance sector. Because of its considerable efforts to improve legislation, statutes, and procedures, the FMS was removed from international Financial Action Task Force and Moneyval watch lists in October 2010, according to the US Department of State 2011.

• Auditor-General: Auditing in Azerbaijan is supervised by the Chamber of Auditors. The Chamber of Auditors has set up a specialised department for combating corruption, as reported by the GRECO Evaluation Report Azerbaijan 2006. The Chamber is independent, but is reportedly influenced by the Ministry of Finances and the Ministry of Taxes. According to Global Integrity 2009, in practice, the appointments to the Chamber do not sufficiently support its independence from the executive; thus, appointments may sometimes be based on political considerations, and individuals appointed may have clear party loyalties. Similarly, according to an evaluation by Freedom House 2011, Azerbaijan's Chamber of Auditors is under political pressure by the authorities and generally weak. Furthermore, the government usually ignores or only gives superficial attention to the audit reports; thus, the findings and recommendations of the agency do not lead to policy changes, according to Global Integrity 2009. The reports of the Chamber of Auditors are not publicly available. Another institution responsible for auditing in Azerbaijan is the Accounting Chamber (in Azeri).

• Ombudsman: The Constitutional Law on the Human Rights Commissioner (Ombudsman) was adopted in 2001, and provides the legal basis for the work of the Ombudsman. The Ombudsman is meant to restore freedom and human rights if they are violated by public officials or municipal or government bodies. However, the Ombudsman cannot investigate any activities of the President, deputies of the Parliament or judges. The Ombudsman submits motions to the President or to the Parliament. The law states that the Ombudsman can examine complaints of violations of human rights related to red tape, loss of or delayed delivery of documents in courts, as well as delays in the execution of court judgments. The Ombudsman is elected by majority vote in Parliament from among three candidates nominated by the President. According to Global Integrity 2009, the Ombudsman is not protected from political interference in practice and, similarly, the appointments to the institution often do not support its independence. The government usually does not act on the findings of the Ombudsman and often ignores or gives superficial attention to its reports, according to Global Integrity 2009. Access the Ombudsman Annual Report 2009 (in Azeri).

• EITI Implementation: Azerbaijan decided to implement the Extractive Industries Transparency Initiative (EITI) principles of good management of natural resource wealth in 2003. Azerbaijan has produced several reports on its progress in this field. The State Oil Fund is responsible for Azerbaijan's implementation of the EITI principles, and cooperates with the Coalition of Azerbaijan Non-Government Organization. EITI in Azerbaijan is seen by several observers as a positive exemption from the general unwillingness of corporation with NGOs. The US Department of State 2010 reports that Azerbaijan has taken significant steps to implement the EITI. In February 2009, the EITI Board designated Azerbaijan as EITI compliant. According to Freedom House 2011, Azerbaijan's compliance with EITI has significantly increased the transparency of state oil revenues. Access the EITI Validation Report 2009.

• E-Governance: The UNDP is involved in developing Azerbaijan's e-governance portfolio programmes and has worked to develop a UNDP-Azerbaijan evaluation of the e-governance portfolio programmes. Furthermore, citizens and companies can declare their taxes on the website of the Ministry of Taxes. The idea behind this initiative to reduce the possibility for corruption to occur by limiting direct encounters between citizens/companies and tax officials.

• Public Procurement: Public Procurement in Azerbaijan is regulated by the 2001 Law on Public Procurement. Tender notices and business opportunities are published on the website of the State Agency on Procurement. According to the Law on Public Procurement, major procurements require competitive bidding, and strict formal requirements limit the extent of sole sourcing. Unsuccessful bidders can ask for an official review of the bidding process and challenge the concrete procurement decision in the courts, according to Global Integrity 2009. The State Agency on Public Procurement is permitted to ban certain companies from bidding in future procurements. Nevertheless, in practice, companies guilty of major violations of procurement regulations, such as bribery, are not effectively prohibited from participating in future procurement bids. According to Freedom House 2011, there is little transparency in Azerbaijan's public procurement and contracting, with state investments accounting for 34% of the 2010 budget. Almost all results are published in state newspapers within five banking days - however, some results are kept secret, as reported by Global Integrity 2009. In addition, there are no clear mechanisms in place to enforce the conflict of interest regulations for public procurement officials.

• Whistle-Blowing: There are no legal measures that ensure the protection of public or private employees should they report instances of corruption. No legislation exists that forces public officials to report instances of corruption, apart from police officers. Police officers are required to report violations of the law to their superiors if they encounter such violations. However, all citizens, including civil servants, are required to report imminent or committed crimes of serious nature, including corruption offences. Global Integrity 2009 reports that many government bodies have online forums and hot-lines where people can report corruption. The Anti-corruption Portal lists telephone numbers for corruption hotlines for some state agencies. A new draft Law on the Prevention of Conflicts of Interest includes legal whistle-blower protection, but implementation hereof is yet to be seen.

• General Comments on the Public Anti-Corruption Initiatives: Although Azerbaijan adopted anti-corruption legislation in 2005 and a National Strategy on Increasing Transparency in Combating Corruption, as well as an ethics code for civil servants in 2007, little progress in implementing these measures has been made, as reported by the US Department of State 2010. One of the reasons could be a reluctance to implement policies that could hamper the interests of high-level figures. The auditing capacity of the legislative branch is weak, and government investigations of civil servants are usually politically driven.

• Media: Freedom of speech and the press is guaranteed in Azerbaijani law; however, the authorities notoriously limit press freedom in practice. The state controls much of the media, including the four main television stations. Azerbaijan banned foreign radio stations from broadcasting on local frequencies in 2009. Foreign stations now may only broadcast via satellite, Internet, or cable. The US Acting Deputy State Department spokesman, Gordon Duguid, said that the move would 'represent a serious setback to freedom of speech'. Some of the media outlets are controlled by family members of the President or by people close to the President. Independent and opposition papers struggle financially and are often subject to heavy fines and imprisonment of their staff. Both the Bertelsmann Foundation 2010 and Freedom House 2011 report that media freedom has deteriorated in Azerbaijan in recent years, illustrated by the arrest of several journalists in 2007, the closure of foreign-language radio stations such as the Voice of America in 2008, and the closure of the only television station that operated on a somewhat independent basis. Azerbaijan was criticised by the international community in 2007 for having the highest number of imprisoned journalists among OSCE member states. The European Parliament's human rights committee has called the press freedom situation in Azerbaijan 'unacceptable'. Reporters Without Borders 2011 ranks Azerbaijan 152nd out of 178 countries, while Freedom House 2011 ranks the country 171st out of 196 countries and describes its media environment as 'not free'.

• Civil Society: In general, civic traditions in Azerbaijan are weak, although the NGO sector has been growing in recent years. NGOs sometimes face difficulties in registration. The maximum registration period for NGOs, according to Azerbaijani law, is 40 days. If there is no response from the authorities after this period, registration is granted automatically. However, the registration authorities (Ministry of Justice) are plagued by delays. Global Integrity 2009 reports that the government sometimes creates barriers to the establishment of new anti-corruption NGOs by using taxes and police enforcement. In total, the country has some 3,100 registered NGOs. However, according to the Bertelsmann Foundation 2010, fewer than ten percent of these NGOs are active and only a small percentage of those can be considered as genuinely effective. Political and oppositional NGOs are reportedly under consistent pressure from the authorities. In addition, NGOs working with sensitive issues encountered the strongest obstacles, from registration issues to tax controls or outright pressure and intimidation, according to Freedom House 2011.

• Transparency International Azerbaijan: Transparency International Azerbaijan has issued several reports on the level of corruption in the country. Some of these have a special focus on companies. In general, Transparency International Azerbaijan is a very active player on the field, but has itself faced some problems regarding registering as an NGO with the Ministry of Justice. Transparency International Azerbaijan has set up an Advocacy and Legal Advice Center (ALAC). Under this project, a hotline has been opened for reporting instances of corruption. It is also possible to report instances of corruption via e-mail. The initiative is supported by USAID, OSCE Baku and the American Bar Association Central Europe and Eurasia Law Initiative (ABA CEELI). The ALAC has had some successes in addressing specific instances of corruption.

• Fund of Struggle Against Corruption: The fund aims at eradicating corruption in Azerbaijan by carrying out research in the field of corruption. The fund administers investigations, seminars and conferences with the purpose of revealing insights into the condition of corruption in Azerbaijani society, and has made some interesting reports and surveys of SMEs and their exposure to corruption.

• Anti-corruption Portal: The Anti-corruption Portal is an Internet-based portal hosted by the Internet Access and Training Program (IATP). The Anti-corruption Portal aims at implementing the first public consultation centre online to address corruption issues directly from citizens and serving as their online liaison with the Government of Azerbaijan. The purpose of this project is to try to fill the implementation gap of existing law. Observers note that one of the reasons for the lack of the realisation of the anti-corruption mechanisms is the passivity of the public and the absence of a public control mechanism towards implementing anti-corruption regulations. The aim of the portal is to educate and arm citizens in the struggle against corruption, enable their active participation in this struggle and to raise their civic awareness and legal literacy. The portal also provides free legal consultation and services for citizens.

• National Confederation of Entrepreneurs Organisations (AEC): AEC is a non-governmental and non-commercial organisation that unites many entrepreneurs and entrepreneurs' associations. AEC engages in anti-corruption work.

The websites listed below provide useful facts on Azerbaijan as well as contacts and tools for companies operating in Azerbaijan:

• International Finance Corporation: Global SME Toolkit
  Guide to sustainable business management practices for SMEs.
• Business Fighting Corruption
  An online resource centre for business on collective action to avoid corruption which contains a guide and resources for partnerships with companies and other stakeholders to fight against corruption.
• CIA World Factbook: Azerbaijan Profile
• World Bank: Azerbaijan Data Profile

Sources for further reading:

• Freedom House: Nations in Transit - Azerbaijan 2011.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.

UNCAC Status: Signed 27 February 2004. Ratified 1 November 2005.

Status on UNCAC Implementation
This field describes the country's status on the United Nations Convention against Corruption. Please note any declarations and reservations made upon ratification. The list of signatories can be found on the UNODC website. Read more about the UNCAC.

Other Relevant Conventions or Treaties

• Council of Europe Criminal Law Convention on Corruption. Signed 21 May 2003. Ratified 11 February 2004.
  Read Transparency International's summary and assessment of the convention.
• Council of Europe Civil Law Convention on Corruption. Signed 21 May 2003. Ratified 11 February 2004.
  Read Transparency International's summary and assessment of the convention.
• United Nations Convention against Transnational Organized Crime: Signed 12 December 2000. Ratified 30 October 2003.
  Read Transparency International's summary and assessment of the convention.
• Member of the Council of Europe Group of States Against Corruption (GRECO) since 1 June 2004.
• Member of the OECD Anti-Corruption Network for Eastern Europe and Central Asia.

Transparency CPI: 2011: 143/182 (Score: 2.4)

Transparency CPI
This field consists of the score for the country in question on the Corruption Perceptions Index from Transparency International as well as its ranking.

World Bank CORR Index (-2.5 - +2.5): 2010: -1.17

World Bank Corruption Index
This field consists of the score for the country in question on the 'Control of Corruption' indicator in the World Bank Governance Research Indicator Country Snapshot (GRICS): 1996-2010.

OECD Country Risk Classification (0-7): 2011: 5

Country Risk Classification
The classification of countries by risk category has the aim of providing OECD countries with a basis for calculating the premium interest rate to be charged to cover the risk of non-repayment of export credits. Countries are placed in risk categories 0 - 7, with 0 being the lowest risk category and thus the least expensive. Conversely, premium group 7 is the highest risk category. Each classification is comprised of 2 components: 1) an assessment of the country's economic/financial situation, and 2) its overall political stability. Access the complete list of OECD Country Risk Classification figures.

Data Verification:

Publication date: December 2011

Data verified by: Global Advice Network

General Information Sources

• The World Bank & IFC: Doing Business 2012.
• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Freedom House: Nations in Transit - Azerbaijan 2011.
• Freedom House: Freedom in the World - Azerbaijan 2011.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• Freedom House: Nations in Transit - Azerbaijan 2010.
• PressTV: 'Aliyev wins Azerbaijan elections', 8 November 2010.
• US Department of State: Human Rights Report - Azerbaijan 2009.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• Today Az: 'PACE adopts new program on Azerbaijan 2009-2010', 3 July 2009.
• Today Az: 'Amendments to Azerbaijani Constitution to increase efficiency in human right: Deputy Minister', 12 June 2009.
• Reuters: 'Azerbaijan votes to lift Aliyev term limit', 18 March 2009.
• EBRD & World Bank: Business Environment and Enterprise Performance Survey (BEEPS) Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2008.
• Freedom House: Freedom in the World - Azerbaijan 2008.
• Freedom House: Nations in Transit - Azerbaijan 2008.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2008.
• Government Accountability Project: Privatization and Corruption: The World Bank and Azerbaijan, 8 August 2008.
• RIA Novosti: 'Azerbaijani court approves scrapping limit on presidential terms', 24 December 2008.
• Today Az: 'Fund of combat against corruption: 50-60% of Azerbaijani population gives bribes to settle their problems', 15 December 2008.
• Reuters: 'Azerbaijani says vote turnout high despite boycott', 15 October 2008.
• GRECO: 'CE to Estimate Azerbaijan's Successes in Corruption Fighting', 11 April 2008.
• Global Integrity: Azerbaijan Country Report 2007.
• US Department of State: Background Note: Azerbaijan 2007.
• Transparency International: Global Corruption Report 2007.
• Asian Development Outlook: Azerbaijan 2007.
• UNDP Azerbaijan Development Bulletin: 'Azeri opposition's chances in 2008 presidential election slim', 2007.
• Sofaz: 'State Oil Fund of Azerbaijan wins the UN Public Service Award!', 18 May 2007.
• OECD Anti-Corruption Network for Eastern Europe and Central Asia: Azerbaijan Update on Implementation Measures 2006.
• GRECO: Evaluation Report on Azerbaijan 2006.
• Freedom House: Nations in Transit - Azerbaijan 2006.
• American Chamber of Commerce in Azerbaijan: Observations and Recommendations for Improving Azerbaijan's Business Climate 2005.
• COIWRP: Report on Corruption in Azerbaijan Oil Industry Prepared for EBRD & IFC Investigation Arms 2003.

Corruption Levels Sources

Judicial System

• The World Bank & IFC: Doing Business 2012.
• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Freedom House: Nations in Transit - Azerbaijan 2011.
• Freedom House: Freedom in the World - Azerbaijan 2011.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• US Department of State: Human Rights Report - Azerbaijan 2009.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• Global Integrity: Azerbaijan Country Report 2008.
• Freedom House: Freedom in the World - Azerbaijan 2008.
• Freedom House: Nations in Transit - Azerbaijan 2008.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2008.
• Transparency International: Global Corruption Report 2007.
• Global Integrity: Azerbaijan Country Report 2007.

Police

• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Freedom House: Nations in Transit - Azerbaijan 2011.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Human Rights Report - Azerbaijan 2009.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• Global Integrity: Azerbaijan Country Report 2008.
• Global Integrity: Azerbaijan Country Report 2007.
• GRECO: Evaluation Report Azerbaijan 2006.
• Fund of Struggle Against Corruption: Monitoring of Public Opinion: Small and Medium Business: Problem of Struggle Against Corruption and Ways of its Overcoming 2005.

Licences, Infrastructure and Public Utilities

• The World Bank & IFC: Doing Business 2012.
• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Freedom House: Nations in Transit - Azerbaijan 2011.
• Freedom House: Freedom in the World - Azerbaijan 2011.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• US Department of State: Human Rights Report - Azerbaijan 2009.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• EBRD & World Bank: Business Environment and Enterprise Performance Survey (BEEPS) Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2008.
• Freedom House: Freedom in the World - Azerbaijan 2008.
• Freedom House: Nations in Transit - Azerbaijan 2008.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2007.

Land Administration

• The World Bank & IFC: Doing Business 2012.
• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• Global Integrity: Azerbaijan Country Report 2008.
• Global Integrity: Azerbaijan Country Report 2007.

Tax Administration

• The World Bank & IFC: Doing Business 2012.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• Transparency International: Global Corruption Barometer 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• EBRD & World Bank: Business Environment and Enterprise Performance Survey (BEEPS) Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2008.
• Global Integrity: Azerbaijan Country Report 2007.
• Fund of Struggle Against Corruption: Monitoring of Public Opinion: Small and Medium Business: Problem of Struggle Against Corruption and Ways of its Overcoming 2005.

Customs Administration

• The World Bank & IFC: Doing Business 2012.
• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• World Economic Forum: Global Enabling Trade Report 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• EBRD & World Bank: Business Environment and Enterprise Performance Survey (BEEPS) Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2008.
• Global Integrity: Azerbaijan Country Report 2007.
• Fund of Struggle Against Corruption: Monitoring of Public Opinion: Small and Medium Business: Problem of Struggle Against Corruption and Ways of Its Overcoming 2005.

Public Procurement and Contracting

• World Economic Forum: The Global Competitiveness Report 2011-2012.
• Transparency International: Global Corruption Barometer 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• The World Bank & IFC: Enterprise Surveys 2009.
• EBRD & World Bank: Business Environment and Enterprise Performance Survey (BEEPS) Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2008.
• Freedom House: Countries at the Crossroads - Azerbaijan 2006.
• OECD Anti-Corruption Network for Eastern Europe and Central Asia: Azerbaijan Update on Implementation Measures 2006.

Environment, Natural Resources and Extractive Industry

• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Human Rights Report - Azerbaijan 2009.
• Global Integrity: Azerbaijan Country Report 2009.
• Global Integrity: Azerbaijan Country Report 2007.
• Transparency International: Corruption & the Environment 2006.
• Economic Research Center: Three Views of EITI implementation in Azerbaijan 2006.
• COIWRP: Report on Corruption in Azerbaijan Oil Industry Prepared for EBRD & IFC Investigation Arms 2003.
• Bank Information Center: International Fact-Finding Mission Preliminary Report: Azerbaijan, Georgia, Turkey Pipelines Project: Azerbaijan Section 2003.

Public Anti-Corruption Initiatives Sources

• Freedom House: Nations in Transit - Azerbaijan 2011.
• Freedom House: Freedom in the World - Azerbaijan 2011.
• US Department of State: Investment Climate Statement - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• US Department of State: Investment Climate Statement - Azerbaijan 2010.
• Freedom House: Nations in Transit - Azerbaijan 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• Global Integrity: Azerbaijan Country Report 2008.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2008.
• Lexadin: The World Law Guide - Legislation Azerbaijan 2008.
• ABC News: 'Under the Poverty Reduction Programme until 2015, Azerbaijan is planning to change salaries and subsistence wage', 16 September 2008.
• GRECO: 'CE to Estimate Azerbaijan's Successes in Corruption Fighting', 11 April 2008.
• OECD Anti-Corruption Network for Eastern Europe and Central Asia: Istanbul Anti-Corruption Action Plan for Azerbaijan. Update about actions to implement the recommendations taken during December 2006 - September 2007.
• Global Integrity: Azerbaijan Country Report 2007.
• UNDP Anti-corruption Practitioners Network 2007.
• Trend News: 'Fifty-Six People Accused of Corruption in Azerbaijan in 2007 - Azerbaijani Public Prosecutor', 10 December 2007.
• USAID: 'Azerbaijan Government Unveils National Strategy to Combat Corruption', 2007.
• GRECO: Evaluation Report on Azerbaijan 2006.
• OECD Anti-Corruption Network for Eastern Europe and Central Asia: Azerbaijan Update on Implementation Measures 2006.
• OECD Anti-Corruption Network for Transition Economies: Istanbul Anti-Corruption Action Plan for Azerbaijan: Summary Assessment and Recommendations 2004.
• Ministry of Taxes.

Private Anti-Corruption Initiatives Sources

• Freedom House: Nations in Transit - Azerbaijan 2011.
• Freedom House: Freedom in the World - Azerbaijan 2011.
• US Department of State: Human Rights Report - Azerbaijan 2010.
• The Bertelsmann Foundation: Transformation Index - Azerbaijan 2010.
• Freedom House: Nations in Transit - Azerbaijan 2010.
• Reporters Without Borders: Azerbaijan Country Report 2010.
• Freedom House: Freedom of the Press Index 2010.
• Global Integrity: Azerbaijan Country Report 2009.
• Reporters Without Borders: Worldwide Press Freedom Index 2009.
• RIA Novosti: 'Azerbaijan bans foreign radio broadcasts on local frequencies', 1 January 2009.
• Global Integrity: Azerbaijan Country Report 2008.
• Freedom House: Freedom of the Press - Azerbaijan 2008.
• Freedom House: Freedom in the World - Azerbaijan 2008.
• Freedom House: Nations in Transit - Azerbaijan 2008.
• Global Integrity: Azerbaijan Country Report 2007.
• Anti-corruption Portal 2007.
• OECD Anti-Corruption Network for Eastern Europe and Central Asia: Azerbaijan Update on Implementation Measures 2006.