Azerbaijan to allow nationalisation of ‘strategic investments’ on national security grounds
The Azerbaijani Parliament has begun discussing a bill that would allow the government to nationalise ‘strategic investments’, if they are deemed to run contrary to national interests.
According to APA, investors would be compensated in the event the law was enacted. However, the draft law does not specify what exactly is meant by strategic investments and what would be considered contrary to national interest.
If enacted, the bill risks deterring international investment into the country. Responding to the news, Rovshan Aghayev, an independent economist, warned that there was a real risk the law would be misused.
‘Such practices exist around the world’, he said, citing the US and Europe as examples. He said such laws were used to prevent investors from blackmailing the country or refusing to produce key strategic goods.
‘In democratic countries, the goals of this process are clear, and the processes and actions themselves are transparent’, he said. ‘But in our country, we don’t know under what guise the government will use this.’
‘In any case, if it is enshrined in legislation, then it will be implemented. But what the hidden goals are and who it is intended for are difficult to say’, he said.
He added that without clarifying what constituted a strategic project, the bill could be used broadly across sectors, including the food or energy sectors.
‘Foreign companies are coming to Azerbaijan and investing in wind energy, private companies. These are strategic investors, strategic investments’, he said.
The amendments come as Azerbaijan appears to be courting further international investment. Discussions of the bill came just a day after President Ilham Aliyev received representatives from the US Chamber of Commerce, a delegation led by Senior Vice President of International Member Relations Khush Choksy.
Choksy said that the delegation included representatives of 31 American companies, including from the energy, technology, and transportation industries.
‘Typically, business relations move faster than political relations. But here, the political relationship has advanced faster than the business relationship, which is unusual. However, companies will work fast and will catch up quickly’, Choksy said.
On Tuesday, APA reported that Choksy also met with Azerbaijani Energy Minister Parviz Shahbazov, along with representatives of the state-run oil and gas company, SOCAR.
‘The discussion focused on the implementation of electricity corridors between Azerbaijan, Turkey, Central Asia, and Europe, electricity transportation under the TRIPP, and prospects for cooperation with American companies on these projects’, APA wrote.
