Procedures on auditing accounts belonging to natural persons and legal entities of foreign countries were approved by the Ministry of Taxes. Under this “Rules of Conducting Comprehensive Inspection Procedures for Identifying Information on Financial Transactions of Legal Entities and Physical Persons in Foreign Countries of the Republic of Azerbaijan” (the “Rules”), the accounts of legal entities and individuals are divided into the following categories based on the date of opening:– Pre-existing accounts – Accounts existing at a reporting financial institution as of 1 July 2017; and

– New accounts – accounts opened at a reporting financial institution on or after 1 July 2017.

Under the Rules, the following pre-existing accounts of individuals will be checked, identified and will be reported on:

  • low-amount accounts – pre-existing accounts with a residual or value less than USD 1,000,000 as of 30 June 2017; and
  • high-amount accounts – pre-existing accounts with a residual or value exceeding USD 1,000,000 as of 30 June 2017 or 31 December of any subsequent calendar year.

The Rules further provide that comprehensive inspections of pre-existing accounts of individuals shall be completed by June 30, 2018.

Under the Rules, the pre-existing accounts of legal entities that need to be audited are as follows:

  • accounts with an accumulated a residual or value exceeding USD 250,000 as of 30 June 2017; and
  • accounts which have not exceeded USD 250,000 by 30 June 2017, but exceeding this amount by the last of any subsequent year.

In addition, the Rules provide the procedures for identifying the account holder and checking the information submitted by such account holder.

This article was published by the attorneys of Baku Attorneys & Consultants (BAC), an Azerbaijani law firm, specialized on various spheres of law in Azerbaijan, including banking and finance, corporate, commercial etc. BAC advises clients on opening and operation of bank accounts, lending/borrowing and other financing transaction to minimize their risks and ensure their compliance with the requirements of local law. You may reach out us via www.batco.az and request initial review of your case.

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