Legal analysis of the process of withdrawal of state privatization checks

It is now universally accepted that state privatization vouchers are securities. Thus, taking into account the legal philosophy accepted in the world regarding securities, international theories in this field, and the legislation of the Republic of Azerbaijan, we can say that any document can be considered a security depending on the existence of 3 main conditions. The first of these conditions is that the security is drawn up in a form established by law, the second is that the security confirms an alienable right with economic value (property value) (for example, the right of demand, ownership, share right, etc.), and the third is that the document is a security if is directly regulated by law.

As it is known, state privatization checks were drawn up by the Republic of Azerbaijan, the issuer, in the form established by law (condition 1 fulfilled), confirming the right to the state privatization share with economic value (property value) given to citizens from state property (condition 2 fulfilled), clearly and directly regulated as a security by the Law of the Republic of Azerbaijan dated September 29, 1995 (condition 3 fulfilled). For this reason, we can say that state privatization vouchers are securities since September 29, 1995.

In addition, as is known, one of the main reasons for the emergence of the concept of securities in law is to facilitate the circulation of assets (property and rights) with material value, in other words, circulation. Thus, by handing over the security to another person, i.e. through circulation, the right confirmed by him will be given (circulated). For example, let us consider that joint-stock company A has 100 shares. In one sense, everyone will accept that each of those shares gives its owner some property rights related to the joint-stock company A (for example, the right to ownership of the joint-stock company's common property, the right to demand dividends from its profits, the right to buy back the remaining property at the time of liquidation in accordance with its share and so on) confirms that you have other rights that are not in the nature of property rights (for example, the right to vote, the right to be elected, the right to challenge decisions, etc.). Therefore, all the rights mentioned in the way of selling any share by the owner to another person (it can also be referred to as giving, circulation, circulation, etc.) will belong to the new owner (owner) of that share without the need for any other transaction or contract. This process is called circulation (expropriation, issuance, circulation) of securities.

The securities released for circulation by the issuer may be removed from circulation only by following the conditions required by law. In this article, the conditions required by the legislation of our Republic with the removal of securities from circulation will be analyzed and the conclusions we reached regarding the removal of state privatization checks from circulation will be touched upon.

Of course, in order to be able to clearly analyze the subject, we believe that it is useful to determine what is meant by the concepts of circulation and use of state privatization vouchers (in general, securities) as means of payment.

1. Legal analysis of concepts of circulation, circulation and use of state privatization checks as means of payment.

The concept of circulation of securities in our republic is regulated in Article 1078-20.1 of the Civil Code of the Republic of Azerbaijan.

It is stated in that norm "Circulation of securities is the process of transfer and registration of ownership rights as a result of concluding civil-legal contracts with securities after placement."

Again, Article 1078-20.1 of the Civil Code states that "Transactions on securities are concluded and implemented in accordance with this Code and the Law of the Republic of Azerbaijan "On the Securities Market".

As it is known from here, when we say circulation (circulation) of securities, it is intended to transfer the ownership right over those securities to another person by its owner through civil legal contracts, for example, purchase, sale, exchange, donation, etc. Therefore, we can say that circulation and circulation are synonymous words and are the same legal concepts.

Let us not forget that the concept of circulation of state privatization checks and their use as means of payment are concepts of almost the same nature. Thus, the concept of circulation of securities, in other words, state privatization checks, and the concept of using them as a means of payment, although they sound different from each other, in fact, they complement each other, without one, the other cannot exist, and have the same nature. Because when we say circulation of a check (valuable paper), according to the requirements of the legislation, it is understood that it is sold to someone else as a legal document, alienated in another form.

At the same time, when it is said that a check (securities) is used as a means of payment, it is understood that the document is used as money (means of payment) to pay the price of a purchased item, another security (share).

In both cases, that is, in the case of circulation of the check, and in the case of the check being used as a means of payment, while the owner of the check gives the right of ownership over the check to the other party, the other party also gives the owner of the check another right that belongs to him.

For this reason, we believe that if circulation of the check is prohibited, its use as a means of payment will not be possible.

It is a well-known fact that if a currency unit is withdrawn from circulation, it cannot be used as a means of payment, except for legal exceptions. However, during the existence of the state that issued that money, it cannot be ruled out that this currency unit will be redeemed and compensated (payment of its value) by the central bank of the state, and it cannot be limited to a certain time.

In the same way, it is clear that if a security is taken out of circulation, it cannot be used as a means of payment.

2. Legal analysis of normative legal acts related to limiting the circulation (circulation) of state privatization vouchers for a certain period of time.

Article 10 of the Law of the Republic of Azerbaijan "On the Privatization of State Property in the Republic of Azerbaijan" dated 1993, where the first regulations regarding the "State Privatization Share" were made, states that "the amount of the state privatization share, the conditions for its issuance and the rules for its use State Program on Privatization is determined by".

The first State Program on the privatization of state property in our republic is the "State Program of the Privatization of State Property in the Republic of Azerbaijan in 1995-1998" approved by the Law dated September 29, 1995, signed by our National Leader Heydar Aliyev (hereinafter referred to as the "I State Program").

The 3rd section of that Program called "State privatization share" states that

1. Privatization using the state privatization share is implemented within 3 (three) months after the adoption of the Program.

2. Privatization share—is a free share of the privatized state property given to every citizen of the Republic of Azerbaijan.

3. Privatization share—is given to citizens of the republic to buy shares of privatized state enterprises and investment funds. The share (cheque) can be sold, pledged to banks, bequeathed and alienated in another form provided for by the current legislation of the Republic of Azerbaijan.

4. State privatization share—no name. (to the bearer) cash value: in the paper firm, which consists of 4 (four) checks. It has the same value at the moment it is issued as a check included in the privatization share.

5. 32,000,000 (thirty-two million) state privatization vouchers with a circulation period of three years are issued for circulation.

6. The nominal value of each check included in the privatization share is the material equivalent protected from the effects of inflation: it is 1/32,000,000 of the state property of the Republic of Azerbaijan to be privatized with the check.

7. Each citizen of the Republic of Azerbaijan registered before the start of privatization is given one state privatization share consisting of 4 (four) vouchers. The list of citizens who will receive a share of privatization is drawn up by the relevant local executive authorities together with the local bodies of the Economic and Social Committee.

As it is known from the 5th paragraph of the 3rd section of the mentioned Program, "32,000,000 (thirty-two million) state privatization vouchers with a circulation period of three years are issued." In other words, with the "I Program" approved by law, in other words, with the act in force, the period of circulation (circulation) of state privatization checks was determined as 3 years. Although this three-year period ended in 1998, the circulation of state privatization checks continued in 1999-2000. As it is known from here, the state has actually shown that the circulation period of the state privatization checks has been cancelled.

We believe that these and other legal facts are the reason why the purpose of limiting the circulation period of "state privatization vouchers" to 3 years in Program I was related to the creation of an investment fund. In other words, it was assumed that all state property could be privatized within 3 years. If it cannot be completed, it is planned to invest the remaining state privatization vouchers in the investment funds to be created and give dividends to the owners.

Thus, in Article 19 of the Law dated January 7, 1993 on the privatization of state property in the Republic of Azerbaijan, it is stated that "in order to effectively allocate the part of the privatization shares (cheques) belonging to the population of the Republic that are not directed to those (privatization) purposes due to one reason or another, the state a specialized investment fund is created by

As it is known from here, the "state privatization vouchers" which cannot be used in any form during the period of circulation, in other words, cannot be directed to the purposes of privatization, should be invested in a specialized investment fund created by the state, and the owners should be given dividends in the form of shares. However, since none of these were implemented, the state actually canceled the circulation period of the state privatization vouchers.

After that, according to clause 1.5 of the "II State Program of Privatization of State Property in the Republic of Azerbaijan" approved by Decree No. 383 of the President of the Republic of Azerbaijan on the approval of the "II State Program of Privatization of State Property in the Republic of Azerbaijan" adopted on August 10, 2000 "The state privatization shares (cheques) distributed to the citizens of the country in accordance with the legislative acts on the privatization of state property in the Republic of Azerbaijan were regulated until January 1, 2002. Then, before that period, until July 1, 2004, and after It was extended until January 1, 2008, then until January 1, 2010, and finally until January 1, 2011.

As it is known from here, the maximum period during which the state privatization vouchers confirming ownership of the state privatization share given to citizens can be in circulation was limited by Program II approved by Decree No. 383 adopted on 10.08.2000 (normative legal act not in force).

In that II Program and other normative legal acts, the legal consequences of state privatization vouchers after January 1, 2011 were not regulated.

This situation meant that the holder of the state privatization voucher had ownership rights over the state privatization share until December 31, 2010, but after January 1, 2011, without any compensation (compensation) for that ownership right. will be terminated by a normative legal act (II State Program approved by Decree) that is not in force. This is contrary to all accepted universal rules and constitutional norms regarding property rights.

3. Contradictory points between Decree No. 450 dated March 25, 1996 and Decree No. 75 dated June 11, 2004 of the President of the Republic of Azerbaijan.

"Regulations on State Privatization Shares (Checks) in the Republic of Azerbaijan" (hereinafter referred to as "Checks"), approved by Decree No. 450 of the President of the Republic of Azerbaijan dated March 25, 1996, bearing the signature of the Great Leader Article 5 of section 1) states that "It is prohibited to refuse to accept state privatization shares (checks) as a means of payment during the privatization of state property." As it is known from here, with the Regulation approved by the Decree, state privatization checks can be used as a means of payment in all privatization periods, even state authorities are informed that it is forbidden to refuse to accept them as a means of payment in all privatization periods.

Clause 1.1 of the Decree No. 75 dated June 11, 2004 of the President of the Republic of Azerbaijan "On the extension of the period of use of state privatization shares (checks) put into circulation in the Republic of Azerbaijan" states that the payment of state privatization shares (checks) in circulation during the privatization of state property ( term of payment) is until January 1, 2011. According to paragraph 1.2 of that Decree No. 75, "Privatization shares (checks) that are not used as means of payment during the privatization of state property until the period specified in paragraph 1.1 of this Decree are removed from circulation (circulation) in the manner established by legislation."

As it is known, there is currently a conflict between two decrees of the President of the Republic of Azerbaijan, Decree No. 450 dated March 25, 1996 and Decree No. 75 dated June 11, 2004, regarding the period of use of state privatization checks as a means of payment.

Thus, while the Decree No. 450 dated March 25, 1996 regulates with an imperative norm that state privatization checks will be used as a means of payment during the entire privatization process, and it is forbidden to refuse their acceptance as a means of payment, while Decree No. 75 dated June 11, 2004 The decree limited the period of use of these checks as a means of payment during the privatization of state property until January 1, 2011. After that, they will be taken out of circulation.

As mentioned above, with some differences, circulation of state privatization checks and their use as a means of payment are almost the same concepts.

We believe that limiting the period of use of state privatization checks as a means of payment to the maximum period (until January 1, 2011) violates the property rights of those check holders.

4. Norms of the Civil Code of the Republic of Azerbaijan regarding withdrawal of securities from circulation (circulation) and withdrawal of state privatization checks.

Article 1078-27 of the Civil Code entitled "Withdrawal of securities from circulation" regulates the rules for withdrawal of securities from circulation (circulation)

It is stated in Article 1078-27.1 of the Civil Code that "securities are withdrawn from circulation in the following cases:

1) By decision of the general meeting of shareholders regarding shares (Article 1078-27.1.1);

2) By the decision of the financial market control body if the emission of securities is considered not to have taken place (Article 1078-27.1.2);

3) When the issuance of securities is considered invalid by the court (Article 1078-27.1.3);

4) When the activity of the issuer is terminated in accordance with the law (Article 1078-27.1.4);

5) When the securities are paid after the end of the circulation period (Article 1078-27.1.4-1);

6) In other cases stipulated by the legislation (Article 1078-27.1.5).

Taking into account the mentioned norms, we believe that the withdrawal of state privatization checks from circulation is possible according to the requirement of Article 1078-27.1.4-1 of the Civil Code of the Republic of Azerbaijan "When securities are paid after the expiration of the circulation period".

We believe that it is not possible to apply the requirement of Article 1078-27.1.5 of the Civil Code of the Republic of Azerbaijan regarding the withdrawal of state privatization checks from circulation: These are analyzed separately below.

5. Since the state confirms the ownership rights of citizens over the privatization shares, their withdrawal from circulation is possible only and only through payment of their value. For this reason, we believe that the withdrawal of State privatization vouchers from circulation should have been carried out in accordance with the requirement of Article 1078-27.1.4-1 of the Civil Code of the Republic of Azerbaijan "securities are withdrawn from circulation (circulation) after the expiration of the circulation period".

Thus, as mentioned above, state privatization checks are securities and confirm the ownership rights of the citizen (check holder) over the "state privatization share". These checks were withdrawn from circulation due to the expiry of the period of circulation in accordance with paragraph 1.5 of the II State Program approved by Decree No. 383 of the President of the Republic of Azerbaijan dated August 10, 2000. However, the value of state appropriation checks was not paid to the check holders when they were withdrawn from circulation. This situation, of course, contradicts the ownership rights of citizens regarding the privatization share guaranteed by the Constitution and Civil Code of the Republic of Azerbaijan, and also led to the termination of this ownership right by a normative legal act (Decree) that does not have the force of law, which was adopted cannot be done.

Thus, the issuer of the state privatization checks is the state of the Republic of Azerbaijan, which, drawn up in the form established by law, confirms the ownership right of the state privatization share with economic value given to each citizen from the state property.

It was on March 7, 1995, at the meeting held in the Presidential Palace, the Great Leader stated in his speech that "One thing is clear that citizens should have a share during privatization, every citizen should get his share and use this share as he wishes. He will either own a part of the privatized enterprise, or he will give or sell his share to someone else. These will all be in future processes. But the citizen should have a share. Undoubtedly, as stated here, privatization cannot be carried out in the long run. Abdulsalimzadeh said that the characteristics, mentality and other factors of our people do not allow us to carry out privatization in a short time. Maybe we can take 30 percent of it in a few years, and then another part after that. That is, this privatization will take 10 years, 15 years, 20 years. In this case, if we believe today that state property will be privatized and people will receive this share, when will they receive this share? It turns out that someone will receive their share today, someone will receive it in a year, and someone will receive it in 15 years or 20 years. But how will this be determined?"

Apparently, the Great Leader saw the problems we are experiencing now, and he noted the importance of a sensitive approach in a special way, and said that the rights of the citizens (i.e. the right to property) should be protected and protected by the state regardless of the time and period in which the privatization checks are approved. .

Thus, 65% of the properties already belong to the citizens who hold the vouchers after the initial placement of privatization vouchers. Even if the law removes these checks from circulation, they cannot be sold to someone else without compensation according to the Constitution.

6. The authority to remove state privatization checks from circulation belongs to the state of the Republic of Azerbaijan, but this authority must be exercised by law.

Thus, the authority to remove state privatization checks, which are securities, from circulation belongs to the state of the Republic of Azerbaijan. But the state can exercise that authority after the payment of those checks. Otherwise, the citizens' property rights based on those checks will be violated, which the Great Leader never wished for.

In other words, we believe that the state of the Republic of Azerbaijan is fully authorized to remove the state privatization checks remaining in circulation (circulation) from circulation (circulation) on the basis of Article 1078-27.1.4-1 of the Civil Code, following the requirements specified in that article. Of course, as stated in that norm, on January 1, 20011, the process of withdrawing these checks from circulation should have been completed by calculating the value (price) of the state privatization checks still with the citizens and paying them that value.

As it is known, according to paragraph 1.5 of the II State Program, approved by the Decree of the President of the Republic of Azerbaijan No. 383 dated August 10, 2000, "state privatization vouchers" were withdrawn from circulation due to the expiration of the period of circulation without payment of the price (value), which is the property of citizens. is a violation of the right. Article 29, paragraph IV of the Constitution of the Republic of Azerbaijan states that "No one can be deprived of his property without a court decision. Expropriation of property for state needs can be allowed only on the condition of fair payment of its value in advance.

As it is known from here, it is possible to deprive citizens of the right to property only by a court decision, i.e. to terminate it, in accordance with the law. Terminating or depriving the owner of the property right in the cases and in the order stipulated in the normative legal acts that are lower than the law is considered a violation of Article 29 of the Constitution of the Republic of Azerbaijan on property rights and other norms.

In other words, the ownership rights over the state privatization vouchers issued to the citizens from the state definition by the law cannot be canceled by the decree which is lower than the law.

7. Removal of state privatization vouchers from circulation cannot be carried out on the basis of the requirement of Article 1078-27.1.5 of the Civil Code of the Republic of Azerbaijan "Securities are removed from circulation in other cases provided for by the legislation". Because the acceptance of the opposite will lead to the termination of the citizens' ownership rights over the privatization shares confirmed by the state privatization checks without payment of compensation and by a normative legal act (Decree) which is valid below the law.

So, on the basis of the requirement of Article 1078-27.1.5 of the Civil Code "Securities are removed from circulation in other cases provided for by the legislation", it can be suggested that securities, including state privatization vouchers, Presidential Decrees, Cabinet of Ministers decisions, As well as the decisions of the central executive authorities, it can be taken out of circulation in the cases and in the order specified in the legislative acts that are lower than the law.

We believe that this approach regarding the withdrawal of state privatization checks from circulation is not correct.

Thus, since the state appropriation checks also confirm the ownership rights of citizens over the state appropriation share, the removal of those documents from circulation may lead to the limitation or termination of the owners' ownership rights. According to the Constitution of the Republic of Azerbaijan and the requirements of the Civil Code, limitation and termination of property rights is possible only in the cases and in the order specified by law.

In the absence of another statement in the law, it is unacceptable to limit or terminate the ownership rights of citizens based on the circumstances and rules regulated in normative legal acts that are inferior to the law, including the withdrawal of state privatization vouchers from circulation in the cases specified in normative legal acts that are inferior to the law in the absence of a law. is unacceptable.

Firstly, because this situation causes violation of citizens' property rights. Secondly, because state privatization vouchers were given to citizens by law, and the return of securities from citizens should be only and only by law.

For this reason, we believe that the state privatization checks in the case specified in the Decree of the President of the Republic of Azerbaijan No. 383 of August 10, 2000, adopted on the basis of Article 1078-27.1.5 of the Civil Code of the Republic of Azerbaijan, i.e. "because the period of circulation has expired (without payment of compensation)" It is against the imperative requirements of the Constitution of the Republic of Azerbaijan and the Civil Code regarding the right to property to claim that they were taken out of circulation and that there is no need to compensate the value of those checks because compensation is not provided for in that Decree.

As it is known from the above, since the state confirms the ownership rights of citizens over the privatization shares, their withdrawal from circulation is possible only and only through payment of their value. For this reason, we believe that the withdrawal of State privatization vouchers from circulation should have been carried out in accordance with the requirement of Article 1078-27.1.4-1 of the Civil Code of the Republic of Azerbaijan "securities are withdrawn from circulation (circulation) after the expiration of the circulation period".

At the meeting held in the Presidential Palace on March 7, 1995, the Great Leader stated in his speech that "One thing is clear that during privatization, citizens should have a share, every citizen should receive his share and use this share as he wishes. He will either own a part of the privatized enterprise, or he will give or sell his share to someone else. These will all be in future processes. But the citizen should have a share." It confirms that these citizens are legally and gratuitously granted the right to ownership of state property by means of state privatization shares and state privatization vouchers, which are securities they are tied to.

The authority to remove state privatization checks from circulation belongs to the state of the Republic of Azerbaijan, but this authority had to be exercised by law. Thus, the authority to withdraw state privatization checks from circulation belongs to the state of the Republic of Azerbaijan. But the state can exercise that authority after the payment of those checks. Otherwise, the citizens' property rights based on those checks will be violated, which the Great Leader never wished for. In other words, we believe that the state of the Republic of Azerbaijan is fully authorized to remove the state privatization checks remaining in circulation (circulation) from circulation (circulation) on the basis of Article 1078-27.1.4-1 of the Civil Code, following the requirements specified in that article. Of course, as stated in that norm, on January 1, 20011, the process of withdrawing these checks from circulation should have been completed by calculating the value (price) of the state privatization checks still with the citizens and paying them that value.

Removal of state privatization vouchers from circulation cannot be carried out based on the requirement of Article 1078-27.1.5 of the Civil Code of the Republic of Azerbaijan "Securities are removed from circulation in other cases provided for by the legislation". Because the acceptance of the opposite will lead to the termination of the citizens' ownership rights over the privatization shares confirmed by the state privatization checks without payment of compensation and by a normative legal act (Decree) which is valid below the law.

That is, state privatization checks are removed from circulation in the case specified in the Decree of the President of the Republic of Azerbaijan No. 383 of August 10, 2000, adopted on the basis of Article 1078-27.1.5 of the Civil Code of the Republic of Azerbaijan, i.e. "because the period of circulation has expired (without payment of compensation)" and that It is contrary to the imperative requirements of the Constitution of the Republic of Azerbaijan and the Civil Code regarding the right to property to suggest that there is no need to compensate the value of those checks because the decree does not provide for the payment of compensation.

Mubariz Yolchiyev

Associate Professor of the Faculty of Law of Baku State University, member of the Bar Association

Sarvar Suleymanli

Associate Professor of Civil Law Department of Baku State University Law Faculty