Study of Small and Medium Enterprises in Azerbaijan - IFC

Moreover, import and export of certain group of products, such as construction
services, legal consultancy services, is subject to approvals by various authorities,
which creates further complications for SMEs involved in import/export activities and
exclude the majority of SMEs. Such approvals can be justified with respect to certain
goods, such as pharmaceuticals, veterinary articles, and even some construction
services, given the apparent associated risk to life and property of consumers. However,
this requirement seems excessive or overregulated with respect to a significant portion
of goods and services, as the risks associated with them are not substantial.
As evident from the analysis above, Azerbaijan needs to simplify further the procedure
for export and import if it hopes to boost foreign trade, which is central to economic
growth of every country.
9.2.2 Technical regulation is complicated
The Azerbaijani system of standardization and certification represents another serious
constraint to foreign trade operations of entrepreneurs as in-depth interviews and
legal analysis reveals.
On the one hand, exported goods need to be in compliance with international standards
to be competitive internationally, as Azerbaijani national standards are not recognized
in the international markets. On the other hand, since Azerbaijani law requires exported
and imported goods to comply with national standards as well, entrepreneurs have to
bother with double certification, which increases time and costs spent.
On the import side, Azerbaijani law requires that internationally certified goods
be submitted to Azerbaijani standardization authorities for domestic recognition,
which, again, creates double certification, adding to the complexity of foreign trade
procedures. Consequently, even the products marked with international markings of
conformity, such as the “CE” marking originating in OECD countries need to pass
complicated conformity assessment process.
In Azerbaijan, the authority in charge of standardization, the Agency for Standardization,
Metrology and Patent (the “Standardization Agency”), also issues certificates
of compliance for products and services, as well as certificates authorizing the use of
marks of conformity. More effective would be if these functions are delegated to different
authorities. Moreover, some other state agencies also issue certificates that in most
cases duplicate the certificates issued by the Standardization Agency (see Box 9.2).
Box 9.2 Certification and standardization
Standardization and certification are two processes within a system aimed at ensuring both product quality and safety of the consumer, which
should be divided and considered separately. Standardization refers to the establishment of a range of voluntary norms and requirements
for products with mandatory requirements set forth in technical regulations. Certification is a process, whereby the state authorities should
verify the compliance of products with the established norms, rules, and standards and document it in the form of certificates. In order to
avoid conflict of interest, these two functions are usually separated and delegated to different bodies: standards are issued by special state
agencies, while certification is conducted by independent authorized institutions.
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St u d y o f Sma l l a n d Me d i u m Ent e r p r i s es in Az e r b a i j a n