Azerbaijan-Selling and buying

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Published: 06 Oct 2008 17:50:09 PST

Distributing a product

Distribution network: This country has been independent only for a few years and its direct marketing system is just trying to develop.
The old centralised State system is disappearing. From now on, state enterprises (except in the energy sector) are supplying foreign goods. Independent traders and small stores are prospering. The activity has been developing until now through the intermediary of distributors, agents and thanks to the setting up of representation offices. The government is encouraging foreign investments. There has been no record to any franchise in this country. The government does not impose any price except on bread and fuel and the prices of imported products are generally indicated in US Dollars. The Azerbaijanis are used to negotiate prices.
Storage facilities are limited and can considerably depend on the expected planning of the goods unloading. The notion of after-sale service is unknown to the customs officials of this country exactly as the notion of a guaranteed product or a guaranteed service.
The legal system in this country is not transparent.
Reaching the consumers
Selling to the firms

Commercial policy: The Decree on Further Development of Foreign Trade Regulation constitutes the legal framework of foreign trade. It touches four reference fields: import, export, compensation, control and authorisations.
Every import that is not submitted to a special authorisation is cleared through customs by means of a declaration made by the local Customs office and must take into account the general regulation of import prices. Imports of radioactive equipment, narcotics and psycho-pharmaceutic products is prohibited. Imports of firearms, explosives, radioactive equipment meant for petroleum industry requires the possession of a license.
Goods can be exported only in exchange for cash payment made for the following products: petroleum, petroleum products, electricity, non-ferrous metals and cotton. The other goods can't be exported on credit terms or as a consignment except after registration with the Ministry of Foreign Trade (MFER/MFT) or with the local Customs Office.
Import procedures and custom duties: All the goods since July 1997, have been subject to an entry fee of 15%. A limited number of goods is, however, exempted from the entrance fee (5% preferential tariff).
As for excise duties on wine and beer, the government levies 90% excise duty, on other alcoholic drinks 65% and on tobaccos 50%.
Azerbaijan levies export duties at the rate of 70% on certain products.
Import taxes (excluding consumer taxes)

By sea: There are communication links by ferry boats between Bakau,Turkmenistan and Iran.
By air: xx
By road: International communications have been very much disturbed by the political instability in the Caucasus mountains. Two great road axis are situated in the West and in South. The road network extends over 57,700 km including highways of which most are badly maintained.
By rail: The railway lines in the North of the country link Georgia and the Russian frontier. The railways towards Armenia are blocked. The railway line extends over 2,125 km.
Useful resources: The airport of Baku