Evaluation activity

Appraisal is the activity of determining the value of the object of appraisal by the appraiser.

When was the new Law of the Republic of Azerbaijan "On Appraisal Activity" adopted and what does it say?

The new Law of the Republic of Azerbaijan "On Evaluation Activity" was adopted on December 8, 2023. The Law of June 25, 1998 on assessment has been repealed. The new law was adopted in order to improve and optimize regulations in the field of evaluation, as well as to eliminate existing deficiencies in this field, and defines the organizational, economic and legal basis for the implementation of evaluation activities in the Republic of Azerbaijan.

Until the adoption of the new law, there were a number of problems in the field of evaluation:

• the concept of an evaluator was not defined concretely; >failure to involve members in mandatory training, periodic education;
• resolution of conflicts of interest, failure to define rules and principles of behavior of evaluators;
• the absence of a single base-register in the field of evaluation;
• not determining the certification requirements for performing evaluation activities;
• not determining the procedure for terminating the evaluation activity and measures of responsibility of evaluators;
• competition of evaluation companies lack of ability, etc.

The following issues and improvements are envisaged in the new law:

basic concepts (evaluation activity, evaluator, evaluation organization, evaluation object and customer) and scope of application of the Law;
directions of evaluation activity;
Creation of the Chamber of Appraisers, its powers, establishment of bodies and activities;
information to be indicated in the contract concluded between the customer and the appraiser or appraiser organization and in the report on the results of the appraisal;
the rights and duties of the customer;
higher The requirement that a person who has education and not less than 3 (three) years of general work experience, who has successfully passed the qualification exam and is a member of the Chamber of Appraisers, can become an appraiser, the organization and conduct of the qualification exam, the issues of admission to membership in the Chamber of Appraisers;
organization of additional education of appraisers taking measures for;
Approving the evaluator's rules of ethical behavior by the Chamber of Appraisers and monitoring compliance with the requirements of these rules;
Maintaining the register of its members by the Chamber of Appraisers and placing relevant information on the official website;
conducting the appraisal restrictions, prevention of conflicts of interest;
disciplinary measures applied to the appraiser and the procedure for their application; insurance requirement;
grounds for suspending and terminating the activity of the appraiser.

Appraisal activities are carried out in the following directions:

• appraisal of movable property (machines and equipment, vehicles, animals and plants, etc.);
• appraisal of real estate, including land plots;
• valuation of movable and immovable cultural heritage samples, cultural assets, historical, cultural and natural monuments;
• valuation of enterprises; valuation of shares and securities in property, as well as claims and rights;
• valuation of payables and other obligations, receivables, material reserves and other assets;
• valuation of natural resources;
• damage, loss evaluation of profits and risks;
• evaluation of services;
• evaluation of other evaluation objects.

The appraisal service fee does not depend on the final value of the appraisal object. The service fee for the evaluation, including the labor of specialists involved in the evaluation activity, is determined based on mutual agreement.

Subjects performing evaluation activities are the evaluator and the evaluation organization. An appraiser is a natural person who meets the requirements established by law, who has obtained the right to carry out appraisal activities and is a member of the Chamber of Appraisers, and an appraising organization is a commercial legal entity whose main field of activity is appraisal activity and which specializes in the direction (directions) of appraisal activity.

A person who has a higher education and a total work experience of not less than 3 (three) years, who has successfully passed the qualification exam and is a member of the Chamber of Assessors can be an assessor. Intentionally serious and especially serious crime, as well as corruption crime regardless of its nature and degree of public danger, and other crime against the interests of service, as well as a court decision that has entered into legal force on the application of compulsory measures of a medical nature to a person whose conviction for committing a crime in the economic field has not been paid or not removed. cannot be appraisers.

Qualifying exams to engage in evaluation activities are organized and held by the State Examination Center of the Republic of Azerbaijan in the directions of evaluation activities, consisting of a written test. individuals can participate in qualification exams. Participation in qualification exams is paid. A person who has received a qualification certificate applies to the Presidium of the Chamber of Appraisers with an application for admission to membership. Persons who are not members of the Chamber of Appraisers cannot engage in appraisal activities in the territory of the Republic of Azerbaijan.

The Chamber of Appraisers is a non-commercial legal entity created on the basis of mandatory membership of appraisers and carrying out its activities on the basis of the principle of self-management.

Determine the persons who have the right to establish the Chamber of Appraisers by July 1, 2024, prepare the constituent meeting and in order to ensure the holding, the Cabinet of Ministers established an organization committee consisting of 5 members, including representatives of the Ministries of Economy and Finance. On the basis of the order of the organizing committee, the State Examination Center will organize and conduct qualification examinations for assessment activities every month for a period of 6 months. The Chamber of Appraisers will be established by at least 15 appraisers who have the right to establish the Chamber of Appraisers, the chairman, deputy chairmen and other members of the Presidium, the chairman and members of the Disciplinary Commission of Appraisers will be elected.

Chamber of Appraisers:

• gives suggestions on improving the legislation on appraisal activity;
• approves appraisal approaches and methods;
• accepts or terminates membership in the Chamber of Appraisers, determines the amount of the membership fee and the method of payment;
• approves the rules of ethical behavior of the appraiser and monitors compliance with the requirements of these rules by its members; represents the interests of its members in relations with associations;
• defends the rights and legal interests of its members;
• keeps a separate register of its current members and former members, and on its official website the name, surname, patronymic, work experience, and education of each member , posts information about the existence of the qualification certificate and the evaluator's professional liability insurance certificate and the insurer;
• considers the requests of customers and other persons regarding the activities of its members;
• imposes disciplinary punishment on its members in the manner determined by this Law;
• organizes the information and methodical provision of its members;
• once a year, no later than the 20th of the month following the reporting year, it posts information about its activities and the activities of its members on its official website.

Until the Chamber of Appraisers is established, questions on the topic should be sent to the e-mail address of the Ministry of Economy: office@economy.gov.az.