Chairman of the Justice, Law, Democracy (AHD) Party and Member of Parliament Gudrat Hasanguliyev shared his thoughts during the first reading of the draft law “On Financial Leasing” at today’s plenary session of the parliament.
The Member of Parliament stated: “Honorable Chairman, honorable colleagues, guests, media representatives!
Of course, I would have liked to be informed in the report why we adopted the “Law on Leasing” in 1994, why we abolished it in 2003, and why we are adopting it again under a different name now?
The change of the law’s name is justified by the fact that it is called “financial leasing” in many countries.
In this regard, reference is made to the international convention adopted in Ottawa on May 28, 1988, by the International Institute for the Unification of Private Law (UNIDROIT). However, the name of that document in English is: Convention on International Financial Leasing. So, it is specifically about financial leasing here as well. I believe that the translation is also incorrect.”
The MP added: “Furthermore, honorable Chairman, if we are changing the name of the law due to these terms, I would like to note that many international terms are used in the Civil Code. For example, servitude, usufruct, rent, offer, acceptance, subsidiary, beneficiary, termination of obligation as a result of novation, factoring agreement, franchising agreement, broker agreement, etc.
Citizens do not understand most of these terms. For example, if we ask what financial leasing is, they won’t understand that either, but as soon as you say “leasing,” most people will understand it. Because their family members or relatives have acquired some property, equipment, or cars through a leasing agreement. Therefore, firstly, there is no need to change this name. Secondly, I would like to note that the law itself still refers to leasing organizations. For example, Article 21 states that if they do not start leasing activities, they can be removed from the registry by the Central Bank, etc.
Besides this, one of the most important issues I want to touch upon is that the report states that the main features characterizing and distinguishing financial leasing, i.e., leasing, are not reflected in the legislation. At the same time, the fact that this sector remains outside the state’s prudential regulation and supervision creates difficulties for financial lessors in attracting additional resources from financial markets. However, no precise information is provided about what these difficulties specifically consist of.
Secondly, it is noted that this draft law was prepared within the framework of facilitating access to finance for small and medium-sized business entities. But it is not explained in what exactly this facilitation consists.
I believe that in many cases, we adopt laws that limit the business environment under good names. For example, there is information that three leasing organizations were liquidated in 2026 alone. It would be better if we were informed how many leasing organizations are operating in Azerbaijan.
The best way to help the business environment is to create a competitive environment. If this is a commercial organization, why are the powers of the Central Bank being expanded so much? The registration of leasing organizations will be carried out again. I believe this will lead to this sector being brought under strict control. In business activity, the more regulation and reporting there is, the less business will develop. Both Azerbaijani and world experience show this.
Therefore, it is noted here that the Central Bank can demand an increase in the lessor’s capital. Many broad powers are being granted. In this regard, adopting this law without serious justification will further worsen the business environment in this sector and may even serve to create a monopoly. Therefore, I will vote against this draft law.”