The Restriction of Competition Criminal Offence Amended

A series of important amendments have been introduced to the Criminal Code of the Republic of Azerbaijan. These legislative changes are aimed at strengthening the protection of the competitive environment, specifying the monetary criteria applied to the elements of the crime, and adapting the existing penalties to a more flexible legal mechanism. 

Regarding Article 193-1.1 ("Legalization of Criminally Obtained Property"), the previous version stipulated a fine ranging "from four thousand manats up to eight thousand manats." However, the new version now determines the fine as 50% to 70% of the value of the subject matter of the crime, a modification intended to ensure that liability is set more proportionally and in line with current economic indicators. 

Article 199, previously titled "Monopolistic Acts and Restriction of Competition," has undergone a substantial revision in its content. The old version of the crime's element was broad, including "the application of means restricting competition, participation in a cartel agreement, the creation of market barriers resulting in the prevention, elimination or restriction of competition, the use of means of restrictive activity, and other monopolistic acts by business entities with the aim of eliminating other competitors from the market or preventing new competitors from entering the market." In contrast, the new version now defines the offence of "Restriction of Competition" more narrowly, covering "violations of competition legislation – including concluding horizontal and vertical agreements, carrying out concerted practices, and abuse of a dominant position – when significant damage is caused or substantial income is obtained," thereby clarifying and limiting the scope of the crime. 

Concurrently, the minimal monetary threshold for the income obtained or damage caused by the act to be considered a crime has been significantly raised from 10,000 manats to 200,000 manats. In parallel, the definitions for large monetary amounts have been revised: a significant amount is now determined as being from 200,000 manats up to 500,000 manats, a large amount is set from 500,000 manats up to 1,000,000 manats, and an especially large amount is defined as above 1,000,000 manats. 

Moreover, the offence of Restriction of Competition has been included in Article 73-2, which concerns Exemption from Criminal Liability in the Field of Economic Activity. According to this provision, an individual is exempted from criminal liability if they have fully compensated the damage caused by the committed crime or fully transferred the obtained income to the state budget, provided they also make an additional payment equal to one time the amount of the damage (or income). 

These comprehensive amendments are expected to make the application of competition legislation more flexible and transparent, align liability with real economic indicators, and ultimately enhance the protection of the competitive environment.