1.  General Provisions

1.1. The Regulations (hereinafter referred to as “Regulations”) determines the distribution and payment order of royalty collected by “Azerbaijan Professional Filmmakers Guild” (APFG) Public Union while mass performance on-air, cable broadcasting, retransmission, and mass demonstration of audiovisual work  fulfilling the statutory functions on collective management of rights:

1.2. The Regulations has been made according to the Law of the Azerbaijan Republic on

“Copyright and related rights” and other legislative instruments, Articles of Association of APFG and other documents.

1.3. The terms used for the purposes of the Regulations have the following meanings:

AVW – audiovisual work;

APFG  DB (APFG’s database) – systematic summary of data on APFG’s owners of rights or which whom the contract concluded, work and rights on them, including other data allowing to realize the collection of royalty to APFG, distribution and payment of them to the owners of right and royalty recipients;

Genre of the work – category applied for classification of works;

Registered work – the work which all or any rights on it given to APFG by the APFG member or via contract;

Foreign organization – the organization acting abroad for management of rights collectively and concluded contract with APFG on mutual representation of interests;

International databases, international DB – systematic set of data on the owners of rights registered in the foreign organizations, works and rights on them (WID, CIS-NET, IPI);

Non registered work – the work which all rights of it are not given to APFG according to the approved rules of APFG;

User –  legal person or individual making use of works, broadcasting of them via on-air or cable transmission, including retransmission;

producer – studios or producers creating audiovisual work;

 

royalty receiver – legal person or individual who is not the owner of rights but reserving a right to get royalty on the basis of proper contract with the owner of right or in accordance with the legislation;  

owner of right – individual or legal person having exclusive right to make use of the work, according to the contract of alienation of the right as well as other rules determined under the law or signed a license contract (exclusive licence), with a person having an exclusive right to use the work, on awarding the right of use from the work without keeping the right to issue license to others in licensor or having a right to get royalty for performance or broadcasting via on-air or cable transmission of audiovisual work or the work which includes to the composition of the audiovisual work;

work – any disclosed audiovisual work, including the work included to the composition of other audiovisual work;

Distribution system of APFG (ABS) – the system used to distribute royalty automatically;

Statistical data – the data developed on the basis of the accounts made by statistic analytical methods on use of the work of Azerbaijani and foreign authors as well as users’ accounts, APFG’s data base and other information sources;

Other terms and definitions provided in the Regulations have the meanings specified in the applicable legislation.

2.  Distribution of Royalty

2.1.  Distribution of royalty collected within the territory of the Republic of Azerbaijan

2.1.1.  Main principles

2.1.1.1. The distribution of royalty is fulfilled regularly not less twice in a year according to the Articles of Association of APFG.

2.1.1.2. The distribution of royalty is realized on the basis of existing data at the APFG’s DB on used work and data mentioned in the users’ or producers’ accounts.

The content and forms of users’ or producers’ accounts is determined by the license contracts between users or producers and APFG and the contracts on payment of royalty.

In case it is impossible to obtain the data on the objective causes based with required documents for distribution in the cases provided in the Regulations or distribution is not advisable from economic standpoint, the amount of royalty may be distributed on the basis of statistical data.

2.1.1.3. The accounts of users or producers made properly and containing rather enough data for distribution shall be accepted for distribution.

The accounts are considered not prepared properly and not containing enough data in the following cases:

• The account has not been prepared in a form provided in the contract;
• The stamp has not been fixed and signature of the representative lacks in the account;
• No data has been provided in the necessary box in the account;  The authors’ names and/ or the names of the work have not been provided;    Evident not exact information has been provided in the account;

 

In the above mentioned cases the account is returned to the user or producer for completion and considered not presented.

In this case the amounts of royalty included to such account are not distributed until receiving appropriate accounts.

A claim may be raised on full payment of royalty to the user or producer by submission of appropriate accounts in the necessary cases.

The provisions provided in this Item shall be applied to the document, submitted in accordance with the contract by the user or producer, and which is base for distribution.

2.1.1.4. Entry of the information provided in the account of the user or producer to the APFG’s distribution system is realized provided the amounts of the royalty concerning to the account is received by APFG.

2.1.1.5. The works of both Azerbaijani and foreign authors are included to the distribution except the cases the owner of right refuses APFG to manage the rights according to the legislation.

2.1.1.6. The followings are distributed royalty:

• Not registered works and authors,
• Non registered part of registered work in part is kept in reserve within three years from the date of distribution. Necessary steps are taken for the search and identification work and authors, the registration of work and the owner of right.

Royalty ceased before is paid in the stipulated order after identification and registration of work and the owner of rights according to the results of done work.

After the end of three year period ceased royalty is sent for redistribution on the basis of statistical data if necessary information for distribution is not received.

2.1.1.7. The amounts for payment of damages, compensations and the amounts received as the result of solution of disputes regarding the breach of rights of the owner of right by other APFG in a court order.

If APFG has a valid court order, the amount of the compensation, damage and other amounts received by APFG under this order are considered royalty for the purposes of the Regulations and distributed to the owners of the right taking into account the information on registration of work and the owner of right in the APFG’s DB. International data bases, international posters and other documents, including the contracts and agreements in APFG.

 

2.1.2.  Distribution of royalty received from users for the works of Azerbaijani authors

2.1.2.1. The users’ accounts are developed on the basis of data on registration of works and the owners of rights in APFG DB.

While the use of the users’ accounts in the distribution, first the identification and search, in the APFG DB, of works provided in the account is realized.

2.1.2.2. If the information on the work and its authors in the user’s account is conforms to those in the APFG DB but the genre of the work is different the royalty is calculated in accordance with the registration in the APFG DB.

2.1.2.3. In case the work compared to the work mentioned in the user’s account lacks in the APFG DB, the search of the following variants is conducted in the APFG DB:

• the works which authors conforms to those in the accounts exactly but names taking into account transliteration;
• the works which authors conforms to those in the accounts exactly but names with the provision to write figures with writings;
• in case the work is in the APFG DB and some authors are not member of APFG, the search and collection of information on non- member authors is conducted and information on the royalty calculated for non-member authors is placed on the APFG’s website.

If one of the search variants listed above lacks in the APFG DB, the decision of APFG on entry of the information mentioned in the account to the distribution system is taken by authorized official.

2.1.2.4. If no conformity is found in the APFG DB for the work mentioned in the user’s account (by taking into account the variants mentioned above), the information on the work is entered to the APFG’s DB and APFG distribution system on the basis of account of user’s account and with the note on non-registration (as non-registered work).

The amount of royalty distributed for such work is kept according to the Item 2.1.1.6 of 2.1.1. Main Principles chapter.

The distribution of kept royalty between the owners of right (royalty receiver) and its payments is conducted after registration of the work in the APFG’s DB. In this case recalculation of royalty not distributed is carried out.

2.1.3.  Distribution of royalty received from producer for the use of the work of Azerbaijani authors

2.1.3.1. The amount of royalty due to authors for the use of audiovisual works has been determined 18% of the profit obtained from the use of work by the user by appropriate decision of Conference of Filmmakers Guild agreeing with Azerbaijani main film producers in the contracts signed between APFG and producers regarding the royalty due to authors from the use of the work.

 

2.1.3.2. 18% percent of the income obtained from the use of audiovisual work by the producer is distributed between authors in the following proportion (%):

 

1	Feature film, film-spectacles  in %	18
	Producer	6
	Script writer	6
	Operator	2
	Artist	2
	Compositor	2
2	Musical film, in %	18
	Producer	4
	Script writer	4
	Operator	2
	Artist	2
	Compositor	6
3	Animated cartoon, in %	18
	Producer	6
	Script writer	4
	Operator	2
	Artist	4
	Compositor	2
4	Documentary and scientific-mass films, in %	18
	Producer	7
	Script writer	5
	Operator	5
	Compositor	1

 

2.1.3.3. Distribution of royalty entered from the income obtained by producer from the use of audiovisual work is carried out analogic rule provided in Article 2.1.1. of the Regulations according to the accounts submitted by producer.

2.1.3.4. Royalties from audiovisual works related to musical compositions that belongs to the composer are regulated by organization in Azerbaijan that collectively manages rights of composers.

2.1.4.  Distribution of royalty received for the use of work of foreign authors

2.1.4.1. The users’ accounts containing the work of foreign authors are made analogic rule specified in Article 2.1.2 of the Regulations on the basis of information on registration of works and the owners of right in the APFG DB.

2.1.4.2. If the work mentioned in the user’s account absence in the APFG’s DB, the information on the work is entered to the APFG’s DB and distribution system as “foreign author” on the basis of data on the work entered from foreign organizations or international DB.

2.1.4.3. In case the work mentioned in the user’s account does not exist or exists in the foreign DB but information on the shares of the owners of right lacks and at the same time a relation of author to any foreign organization is known, the distribution of royalty is conducted in accordance with CISAC (Lack of Documentation) rules.

2.1.4.4. In case the work mentioned in the user’s account lacks in the APFG’s DB and foreign

DB, the information on such work, the information on the work is entered to the APFG’s DB and distribution system on the basis of users’ accounts and with the note on non-registration.  The amount of royalty distributed for such work is kept in accordance with Item 2.1.1.6 of the 2.1.1. Main Principles chapter.

To determine whether such works belong to a foreign organization and/ or the owner of right the information on the mentioned work is submitted to the foreign organizations (“BLANK BOX”) in accordance with CISAC rules.

 

2.2.                 Distribution of royalty entered from foreign organizations for the use of works outside Azerbaijan

2.2.1. Distribution of royalty collected by a foreign organization concluded representation contract with APFG is realized on the basis of distribution schedules entered from a foreign organization.

2.2.2. Distribution schedules are received for distribution of royalty on hard copy and/ or electronically and contain the following information:

• the name of audiovisual work;
• list of authors whom the royalty due to;
• share of each owner of right (percent);
• the amount of royalty for each owner of right / each work in a currency of foreign organization.

2.2.3. Distribution of royalty received from foreign organization is realized on the basis of information mentioned in the distribution list in accordance with registration data provided in the APFG’s DB.

2.2.4. Royalty received from a foreign organization is calculated in Azerbaijani manat according to the exchange rate of the Central Bank as of the receiving date of the royalty.

2.2.5. Distribution schedules received appropriately must be distributed with the provision of entry of appropriate amounts of royalty to the APFG’s account.

2.2.6. If there are differences between the information mentioned in the distribution schedule of a foreign organization and registration information in the APFG’s DB, distribution of royalty is carried out in accordance with registration data in the APFG’s DB.

2.2.7. The amount of royalty is to be returned when the works and/ or the owners of rights not concerning to the APFG’s repertoire– the members of other foreign organization is revealed in the distribution schedule of a foreign organization.

2.2.8. If the royalty in the distribution schedule is transferred by mistake by APFG then the amounts is redistributed on the basis of exact information.

 

3.  Deduction of Amounts from Royalty

3.1. APFG shall deduct amounts for collection, distribution and payment of royalty according to

Paragraph 1, Item 1, Article 43 of the Law of the Republic of Azerbaijan on “copyright and related laws” and the Articles of Association.

3.2. Mentioned amounts shall be deducted for the purpose of adding to the personal accounts of the owner of rights (royalty receiver) of the royalty.

3.3. The mentioned amounts are determined by the decisions of the Board of Directors, APFG in accordance with the Articles of Association.

3.4. In the cases provided in the applicable legislation, APFG fulfills the functions of tax agent and calculates appropriate tax amount from royalty due to the owner of right (royalty receiver) according to the distribution results.

4.  Payment of Royalty and Its Term

4.1. Payment of royalty is realized regularly not less than twice in a year according to the Articles of Association of APFG.

4.2. Payment of royalty to foreign organizations is carried out regularly and within the terms determined in the contracts signed between APFG and such organizations. Reimbursement of royalty to foreign organizations is fulfilled under planned payments.

4.3. Payment of royalty distributed to the works considered disputed is stopped  until getting documents showing the end of the dispute from the parties of the dispute under the order stipulated in the Articles of Association of APFG and the Regulations.

4.4. Payment of royalty calculated and ceased in accordance with the Regulations is fulfilled under planned payments after identification or registration of the works in the APFG’s DB.