Update in the regulation of tobacco products

 

A number of amendments have been made to the Laws of the Republic of Azerbaijan 'On Tobacco and Tobacco Products' and 'On Licenses and Permits.' These amendments provide for the registration of entrepreneurial entities engaged in the import and production of tobacco products and the creation of a Registry of entrepreneurial entities engaged in the import and production of tobacco products.

The procedure for maintaining the mentioned Registry and the regulation of the Registry will be determined by the Cabinet of Ministers of the Republic of Azerbaijan. The law will come into force on the same day that these procedures are approved. A period of 4 months has been set for the Cabinet of Ministers of the Republic of Azerbaijan to approve these acts.

 

Therefore, an 'extract from the Registry of entrepreneurial entities engaged in the import and production of tobacco products' has been added to the 'List of Permits for Entrepreneurial Activities' established by the Law of the Republic of Azerbaijan 'On Licenses and Permits.

According to the amendment made to the Law of the Republic of Azerbaijan 'On Tobacco and Tobacco Products,' it is envisaged to determine requirements for the volumes of use of local tobacco raw materials in the production of tobacco products. Thus, the requirements for the volumes of use of local tobacco raw materials (tobacco with the midrib partially or completely removed) are determined as follows:

• For every 1,000 units of tobacco products to be produced in 2024, a minimum of 60 grams;
• For every 1,000 units of tobacco products to be produced in 2025-2026, a minimum of 72 grams;
• For every 1,000 units of tobacco products to be produced in 2027-2029, 96 grams;
• For every 1,000 units of tobacco products to be produced in 2030 and each subsequent year, 120 grams.

 

According to the amendment, entrepreneurial entities engaged in the import and production of tobacco products must be registered by the relevant authority based on the application of these entities, and the registered entrepreneurial entities must be included in the Registry. These entities will be issued an extract from the Registry in electronic or paper form upon payment of the relevant state fee.

 

Conditions for the registration of tobacco product manufacturing entities

 

The registration conditions for entrepreneurial entities engaged in the production of tobacco products are as follows:

• Investment of at least 34 (thirty-four) million manat in the purchase of equipment (this condition applies only to entities involved in cigarette production and newly established entities registering for the first time);
• Absence of overdue tax and other mandatory payment obligations in the Republic of Azerbaijan, as well as no existing decision classifying the entity as a high-risk taxpayer according to the Tax Code of the Republic of Azerbaijan;
• Availability of a document certifying ownership, use, or lease rights for the property where the business activities are conducted, registered with the tax authorities;
• Possession of a certificate of verification for the measurement instruments to be used in the production of tobacco products, a standard sample or certificate of type approval for the measurement instruments, and documents for the conformity assessment of devices, tools, measurement instruments, and testing equipment according to the "Technical Regulation" Law of the Republic of Azerbaijan;
• Having a contract with an accredited testing laboratory in the relevant field for conducting quality and safety tests (if the manufacturer does not have its own accredited testing laboratory in the relevant field).

 

Entrepreneurial entities registered under the law must comply with the requirements in the production of tobacco products (applicable only to cigarette production) set by the relevant authority regarding the volumes of local tobacco raw materials used (tobacco with the midrib partially or completely removed).

 

Conditions for Importing Tobacco Products

 

The conditions for the registration of entrepreneurial entities engaged in the import of tobacco products are as follows:

• Conducting tobacco product manufacturing activities within the territory of the Republic of Azerbaijan for at least 1 (one) year (this condition applies only to cigarette imports);
• Absence of overdue tax and other mandatory payment obligations in the Republic of Azerbaijan, as well as no existing decision classifying the entity as a high-risk taxpayer according to the Tax Code of the Republic of Azerbaijan;
• Availability of a document certifying ownership, use, or lease rights for the property where the business activities are conducted, registered with the tax authorities (if the entity’s activities are related to the business property).

 

According to this Law, the import and production of tobacco and tobacco products must not be carried out without registration. Additionally, if the registration conditions (except for the condition of having no overdue tax and other mandatory payments in the Republic of Azerbaijan) are violated, or in cases specified in Article 26.1 of the Law of the Republic of Azerbaijan 'On Licenses and Permits,' the registration of entrepreneurial entities engaged in the import or production of tobacco products will be revoked.

 

Persons engaged in the import and production of tobacco products before this Law comes into effect must apply for registration within 6 (six) months from the date this Law comes into effect.