‘Approved’
Financial Markets
Supervisory Authority
of the Republic of Azerbaijan
Resolution № 47/1

‘21’ December 2017

Chairman of the Board of Directors

______________________
Rufat Aslanly

Regulations on currency exchange operations by the persons licensed for currency exchange

1. General provisions

1.1. The ‘Regulations on currency exchange operations by the persons licensed for currency exchange’ (hereinafter – the Regulations) have been developed in connection with implementation of sub-item 3.1.1 of Decree No 1415 of the President of the Republic of Azerbaijan dated 18 May 2017 ‘on application of the Law of the Republic of Azerbaijan No 649-VQD dated 25 April 2017 ‘on making amendments to the Law of the Republic of Azerbaijan on Currency Regulation’ and regulate currency exchange operations by the persons licensed for currency exchange, organizational, logistic and security requirements for currency exchange operations, a list of supporting documents on those requirements, single forms on accounting, reporting and documentation of currency exchange operations, procedure and deadline for their submission, and selection of areas for location of the points of currency exchange in accordance with the Law of the Republic of Azerbaijan ‘on Currency Regulation’.
1.2. No services other than currency exchange may be performed at an exchange office.

2. Main definitions

2.1 The definitions used in these Regulations bear the following meanings:
2.1.1. Exchange office – the place (site) where currency is exchanged by the persons licensed for currency exchange;
2.1.2. Exchange operation – cash buy/sell/exchange of foreign currency;
2.1.3. Cash exchange of foreign currency – exchange of cash foreign currency of a foreign state into cash foreign currency of that foreign state of another denomination;
2.1.4. Cash foreign currency – a monetary unit in the form of a banknote and a coin, a legal tender in a foreign state, or a group of states;
2.1.5. Teller – person who exchanges currency, maintains accounting and develops reports provided for herein;
2.1.6. Transaction day – working hours of customer service at the exchange office during a day;
2.1.7. Accounting of transactions – relevant documentation of exchange operations;
2.1.8. Exchange rate – buy/sell rate of the national currency of the Republic of Azerbaijan against a foreign currency negotiated between the exchange office and the customer;
2.1.9. Currency transaction accounting software – special software that allows the exchange office to record transactions on buy, sell and exchange of foreign currency in cash and issue relevant reports.
2.2. Other definitions used herein bear the meanings specified in the Law of the Republic of Azerbaijan ‘on Currency Exchange’.

3. Organizational requirements

3.1. Hours of business of the exchange office are set by the person licensed for currency exchange by coordinating with the Financial Markets Supervisory Authority of the Republic of Azerbaijan (hereinafter – the FIMSA). The FIMSA should respond to the appeal by the person licensed for currency exchange within five working days.
3.2. The teller should have a badge with his/her first, last, middle names, position, and image. The teller should not allow transfer of his/her powers to another person and entry of outsiders into the exchange office.

4. Logistic requirements

4.1. An exchange office is organized in the form of a kiosk, in a separate building or in a part of a building with access to the street. Exchange offices with access to inside of buildings are opened only in hotels, railway stations and ports.
4.2. The exchange office should have an area of at least six square meters to carry out intended transactions.
4.3. Construction of the exchange office should provide security of the teller and protection of valuables.
4.4. The front wall of the exchange office should have an observable view, and the observance window surrounded with anti-vandal glass.
4.5. Security (video surveillance cameras) and fire alarm devices in accordance with the requirements set by the Ministry of Emergency Situations of the Republic of Azerbaijan, as well as telephone communication devices (microphone, telephone, and internet) should be installed at the exchange office, centralized police should be connected to the security panel in case of e-security systems of the office.
4.6. Video surveillance cameras should be installed in the place to record the teller and the customer. Recorded images should be stored for at least 3 months.
4.7. The exchange office should be equipped with computing, money counting machines, equipment examining authenticity of money and a fire-proof safe.
4.8. The exchange office should be equipped with technological facilities (computer, printer) and relevant software to record every transaction and provide video surveillance. Software of the exchange office should record currency exchange transactions, as well as buy/sell exchange rate per transaction, cash management and cancelled transactions during a transaction day.
4.9. After the end of the transaction day at the exchange office, cash balance is allowed to be kept at the exchange office during all non-working hours of the exchange office, provided that the security service of the Ministry of Internal Affairs of the Azerbaijan Republic is available or there is an agreement with a person licensed by law to provide private security
4.10. AZN20 (twenty) thousand, or equivalent – AZN200 (two hundred) thousand or equivalent may be transported by the exchange office accompanied by an armed security service. Collection service should be used to ensure safe transportation of AZN200 (two hundred) thousand or equivalent and more.
4.11. The following information should be reflected in a visible place for customers at an exchange office:
4.11.1. e-board indicating exchange rate of cash currency against the national currency (the board should indicate the name of the exchange office with visible letters);
4.11.2. Working hours of the exchange office;
4.11.3. A copy of a license or annex to the license issued by the FIMSA to the exchange office;
4.11.4. Information on ‘Hotline’ of the FIMSA for consumer appeals or complaints.
4.12. The person willing to engage in currency exchange submits supporting documents specified in Annex 1 herein in accordance with Article 13-1.2.9 of the Law of the Republic of Azerbaijan on Currency Regulation to obtain a license.

5. Currency exchange transactions and their accounting

5.1. Persons licensed for currency exchange maintain currency exchange only in cash and at a customer order.
5.2. Except for currency exchange operations between the persons licensed for currency exchange, they may not carry out currency exchange between them and other legal entities or unincorporated entrepreneurs for business purposes.
5.3. Exchange offices provide the following operations:
5.3.1. buy/sell of cash foreign currency with the national currency;
5.3.2. buy/sell of cash currency of one foreign state for that of another foreign state;
5.3.3. cash exchange of a foreign currency.
5.4. Exchange offices sell over USD500 (five hundred) equivalent to, as well as buy more than USD10, 000 (ten thousand) equivalent from one customer only with an ID card.
5.5. The exchange office may not maintain only buy or sell operations, except for the case when foreign or national currencies run out during the transaction day.
5.6. Every transaction at the exchange office should be registered at the time of its execution as per Annex 2 herein.
5.7. Registered information should be kept in relevant software of the exchange office for at least three years.
5.8. When conducting currency exchange transactions, the customer receives a currency exchange receipt, a strict reporting form for those transactions.
5.9. A currency exchange receipt is drawn in two copies – one for a customer, the other one for the exchange office.
5.10. Currency receipts and expenditures on currency exchange transactions at the exchange office should be registered in the cash register as per Annex 3 herein by the end of the transaction day.
5.11. At the end of the transaction day, actual cash balance is checked for each type of currency based on transaction records. If there is a discrepancy between the balance and the actual cash balance on the accounting data, the teller of the exchange office documents the discrepancy with a relevant act and delivers to the person licensed for currency exchange (except for the cases when the teller's function is performed personally by the sole participant of the legal entity or by an unincorporated entrepreneur).

6. Requirements for submission of information

6.1. In accordance with the Labor Code of the Republic of Azerbaijan, the questionnaire as per Annex 4 herein, which contains information about the teller, is submitted to the FIMSA within three working days from the date of entry into force of the employment agreement.
6.2. A monthly report on currency exchange operations is developed as per Annexes 5 and 6 herein based on the information recorded at the exchange office over the transaction day and delivered to the FIMSA not later than the seventh day of the following month.
6.3. Annual financial statements of the exchange office are submitted to the FIMSA within first three months of the year following the reporting year.
6.4. The information and reports specified in Items 6.1 - 6.3 herein are submitted on a stamped paper or as an electronic document certified by an electronic signature.

7. Final provisions

7.0 Changes to these Regulations are made in coordination with the President of the Republic of Azerbaijan.

Annex 1
to the Regulations on currency exchange
operations by the persons
licensed for currency exchange

A list of supporting documents regarding organizational, logistic and security requirements

1. Copy of an order on recruitment of the teller and a labor agreement, ID card
2. A copy of the order determining the mode of operation
3. A copy of the technical passport of the facility the exchange office located in
4. A copy of the document confirming compliance of fire protection devices with the requirements set by the Ministry of Emergency Situations of the Republic of Azerbaijan
5. A copy of the document, confirming interface of electronic security systems of the exchange office to the centralized police security panel or the lack of technical capabilities for this interface.
6. A copy of the document confirming use of the relevant security service during all non-working hours, in the case specified in Item 4.9 herein.
7. A letter from the license holder on availability of other equipment required in Part 4 herein at the exchange office