Armenian Government Issues Customs Waivers to Companies Owned by Former Officials and Their Relatives
The Armenian government often exempts businesses from import duties who invest in the country’s priority economic sectors.
The Pashinyan government has identified manufacturing, agriculture, energy, tourism, information technologies, transportation and communication as so-called priority sectors.
Here, Hetq looks at those businesses that have benefited for such government largess.
From September 2020 to August 2021, the government granted a total of 31 exemptions from customs duties to 29 businesses. Five were granted to companies belonging to Astghik Aleksanyan, daughter of businessman and former MP Samvel Aleksanyan. Import exemptions were also granted to companies owned by other former officials and citizens of other countries, as well as companies on the verge of bankruptcy.
Privileges granted to Samvel Aleksanyan's daughter’s companies
Samvel and Astghik Aleksanyan
On November 30, 2020, the government granted exemptions to four companies, two of which are linked to Astghik Aleksanyan. The government did not meet to discuss the exemptions, nor were the draft bills published.
Without convening parliament and presenting a draft decision, the government granted privileges on November 30, 2020 to 4 companies, 2 of which are affiliated with Astghik Aleksanyan, the daughter of former MP and businessman Samvel Aleksanyan.
The government decree states that ABC Textile LLC was granted an import duty exemption. The decree appendix states that the company had to import raw materials mainly for textile production from China, Iran, and the EU at a total cost of around 4 billion drams.
Another executive order states that Anitex LLC had to import raw materials mainly from China and India for the production of bedding at a total cost of around 3 billion drams. This company was also exempted from import duties.
ABC Textile LLC was founded on October 10, 2017. Eighty percent of the company’s shares belong to the company Natcom Limited, which is registered in Limassol, Cyprus, while 20% belong to Kotontina LLC, which is registered in Yerevan. According to the Cyprus registry, Astghik Aleksanyan holds 40% of shares of the company Natcom Limited, and Peter and Gary Nazarian, sons of former Lebanese Minister of Energy and Water Resources Arthur Nazarian, each hold 30% of shares.
Anitex LLC was founded on August 15, 2017. The sole owner of the company is the same person who owns the Natcom Limited company. Anitex LLC was granted customs privileges from the government in April and June of 2018 as well as January 2020.
On March 18th of this year, the government granted another customs privilege to the company belonging to Astghik Aleksanyan, the daughter of former MP and businessman Samvel Aleksanyan, but this time it was not for textile production but rather for cigarettes. A government decree provided Lex Tobacco Company LLC with customs exemptions.
The decree appendix states the company was to import raw materials for the production of tobacco from a number of countries at a total cost of 12.4 billion drams, and the customs duty exemption amounted to 1.1 billion drams.
Lex Tobacco Company LLC was founded in May 2019, and the sole owner of the company is Astghik Aleksanyan. Despite the fact that the company is actually engaged in the production of cigarettes, the State Revenue Committee shows it operating in the real estate market.
In July, the government again granted two privileges to two companies owned by Samvel Aleksanyan's daughter, Astghik Aleksanyan. First was a decree on July 1st exempting Alex Textile LLC from customs duties. The decree appendix states the company had to import raw materials from a number of countries for the production of tights. The total cost of imported raw materials amounted to 2 billion drams, and the exemption from customs duties was 106 million drams.
A July 28 government decree granted a customs duty exemption to Texas Production CJSC, whose shareholders are Astghik Aleksanyan and Kaif LLC, which is registered in Bulgaria. The company had to import goods from several countries for the production of clothes, which amounted to a total cost of about 1 billion drams, and the customs privilege was estimated at 52 million drams.
It is noteworthy that, in just the last year alone, the companies affiliated with Astghik Aleksanyan received 5 customs privileges from the RA government.
Privileges granted to companies linked to former government officials
An October 15, 2020 government decree exempted Kapavor LLC from customs duties. According to the decree appendix, the company was to import a model CAT 336-07 excavator from China at a cost of about 109 million drams.
Kapavor LLC is a well-known construction company that was founded in Artsakh in 2002. The company owners are Arman Hakobjanyan (93.75%), Arayik Hakobjanian (3.75%), and Lilit Hakobjanyan (2.5%), the children of former Artsakh Minister of Urban Development Marat Hakobjanyan. Lilit Hakobjanyan is the Health Advisor to the President of the Artsakh Republic.
This company was also granted an import duty exemption on April 8, 2021. According to the government decree appendix, Kapavor LLC was to import 10 CAT 428-07 excavator cranes from China at a total cost of 380 million drams.
Kapavor LLC is actively involved in the state procurement process of the Republics of Armenia and Artsakh. The company has carried out road construction works in different regions of Armenia and Artsakh in accordance with agreements signed with both governments.
Presently, Kapavor LLC is building a new village for displaced residents from the villages of Sghnakh, Jraghatsner, Madatashen, and Moshkhmhat in Artsakh.
The last customs privilege granted in October 2020 went to Armyanskiy Urazhay LLC, which was founded in 2014 by Aram Gharibyan, Chief Advisor to the third RA President Serzh Sargsyan, and his brother Abel Gharibyan.
This company engages in growing roses. Armyanskiy Urazahay was exempted from import duties with a customs privilege granted on October 26th of the previous year. According to the decree appendix, the company was to import greenhouses, rose seedlings and cotton wool from European Union countries at a total cost of 6,824,000,000 drams.
As already mentioned, the company was founded by Serzh Sargsyan’s former advisor Aram Gharibyan and his brother Abel Gharibyan, though they no longer have shares in the company. At present, 33.66% of the company’s shares belong to Aram and Abel Gharibyan’s nephews Ara and Markos Gharibyan, 32.66% belong to Armen Sandoyan, and the remaining 33.68% belong to Odessnus AB, a company registered in Sweden that is engaged in the online sale of snus (smokeless cigarettes). There are Armenians on the board of directors of this company.
The government granted import duty waivers to two companies in December 2020. The first was Ar Tobacco, operating in the Artsakh. The company planned to import 33 billion AMD in raw materials from Europe to manufacture cigarettes. The exemption was estimated at 1.7 billion drams.
Two companies received import duty exemptions from the government in December 2020. The first was Ar Tobacco CJSC operating in the Republic of Artsakh. The company was to import raw materials for the production of tobacco mainly from a number of European countries, amounting to a total of 33 billion drams, and the customs duties exemption was estimated at 1.7 billion drams.
One of the owners of Ar Tobacco CJSC is Hamlet Vachenants, a Russian-Armenian businessman born in Chartar in the Martuni region. The other owner is Garik Atayan, the nephew of Mikayel Atayan, a businessman who is close with former Artsakh President Bako Sahakyan.
Damala Group LLC received the first government privilege in 2021. A February 25 executive order exempted the company from import duties. The draft decree states that Damala Group LLC was to import raw materials from Italy for the production of shoes at a cost of around 32 million drams.
It was stated in the draft order that the company is engaged in the production of shoes. However, it should be noted that, according to data put out by the State Revenue Committee, Damala Group is documented as being involved with the renovation of residential and non-residential buildings.
Hovhannes and Serge Sofoyan
Damala Group LLC was founded in July 2015. Serge Sofoyan, son of former Armenian National Assembly MP Hovhannes Sofoyan, was the sole owner until June 2020 when he transferred 50% of his shares to Tex CJSC, which is owned by Vardan Vardanyan.
Damala Group LLC was founded in July 2015. Until June 2020, the sole owner of the company was Serge Sofoyan, son of the former MP Hovhannes Sofoyan. He later sold 50% of his shares to Tex CJSC, which is owned by Vardan Vardanyan.
On April 8, 2021, ML Mining, one of the largest mining companies in the country that operates mines in the Kotayk, Aragatsotn, Armavir and Ararat regions, was granted a customs exemption from the government.
The government decree appendix states that ML Mining LLC was to import equipment needed for extraction from a number of foreign countries at a total cost of about 3.7 billion drams, and the customs privilege amount was set at 311 million drams.
ML Mining LLC, founded in 2003, has been solely owned by Davit Sukiasyan since 2010. From 2017-2020, he first served as Special Investigation Service Chief of Staff and later as Secretary General.
In May of this year, the government did not grant any privileges to economic entities, while in June, it granted a customs duty exemption to Bari Arev LLC, which is engaged in the construction and operation of solar stations.
The decree appendix states that the company was meant to import goods from China for the construction of solar stations at a total cost of 718 million drams, and the executive privilege granted amounted to 67 million drams.
Hayk Harutyunyan, Tigran Karapetyan
Bari Arev LLC was founded in 2017. Tigran Karapetyan, son of former Armenian Prime Minister Karen Karapetyan, owns a 19% stake in the company. A 41% share belongs to Hayk Harutyunyan, former Armenian Deputy Minister of Energy Infrastructure and Natural Resources (2014-2018).
Hayk Harutyunyan, who’s married to the daughter of former Prime Minister Karen Karapetyan, is the son of Arzuman Harutyunyan, the brother of Gagik Harutyunayan, a former Deputy Director of the National Security and former chairman of the Constitutional Court. The remaining 40% belongs to Armen Gharibyan.
Government grants customs waivers to companies facing bankruptcy
The I Plast company, which is engaged in the production of surgical supplies, was granted an import duty exemption in a October 1, 2020 decree. It is stated in the government decree appendix that the company should import 33 million drams worth of necessary items from China for its production.
I Plast LLC was founded in June 2013. The sole owner and company director is Harut Gaspar.
On February 17, 2021, the credit organization Gazel Finance filed a lawsuit against I Plast LLC to have the court declare its bankruptcy. The property, accounting, and other legal documents of I Plast LLC were declared wanted by the bankruptcy court in a May 10, 2021 decision. According to information available on Datalex, the whereabouts of Harut Gaspar, the director of I Plast who is in debt, remains unknown. This is why he didn’t apply to challenge the company’s bankruptcy and thus his property and legal documents are wanted.
The government issued a customs waiver to company owned by Turkish citizen
Murad-Sar LLC received an import duty exemption from the government in a March 4 decree. The executive order appendix states that the company had to import raw materials from a number of countries for the production of doors and windows at a total cost of 6,123,000,000 drams. The import customs duty was estimated at 378 million drams.
This company was granted another customs privilege from the government in March 2020. Murad-Star LLC was again exempt from paying 86 million drams in import customs duties for importing raw materials from abroad. In March 2021, the government press service covered the company’s activities.
Murad-Star LLC was founded in 2000. Since 2004, the sole owner of the company has been Turkish citizen Murad Sarayl.
Other companies receiving exemptions
On October 26, 2020, the government granted a customs duty exemption to Vansjan LLC, which is engaged in wine production in Araks in the Armavir region. The government decree appendix states that the company must import glass bottles at a total cost of 42 million drams from France.
This company was founded in May 2014. The owner and director is Susanna Davoyan, and the company's trademark is Golden wines.
This company was also granted a government privilege in February 2018.
The Ghalburjyan Group LLC, which is engaged in the production of vegetable oil, was exempted from import duties in a October 26, 2020 decree. The company had to import olive oil, palm syrup, sesame seeds, bottles, and cork from a number of European, Asian, and African countries at a total cost of 236 million drams, according to the government decree appendix.
Ghalburjyan Group LLC was founded on October 10, 2018. Zohrab Ghalburjyan owns 45% of the company’s shares. His son Harut Ghalburjyan holds 45% of shares, and the remaining 10% belong to his other son, Vardan Khalpurjyan.
Moderna LLC was granted a government exemption from import duties in an October 26, 2020 decree two months after its establishment in August.
The government decree appendix states that Moderna LLC had to import silicone, pigments, and catalysts from Hungary, China, and Taiwan for the production of sponges at a total cost of 127 million drams.
The owner and director of the company is Garnik Nikoghosyan.
In September 2020, the government granted an import duty exemption to Starmed CJSC to import raw materials from China for the production of three-layer medical masks. The total value of imported goods was 24 million drams, according to the September 24, 2020 government decree appendix.
Starmed CJSC was founded exactly three months before being granted a government privilege on June 24th, at the peak of the coronavirus spread. The founder and owner of the company is Ani Gyodakyan. The registration and work place address of Starmed CJSC is on Verin Antarayin Street in Yerevan. According to the State Revenue Committee, the company is engaged in the production of clothing and other accessories.
Oval Plastic company, which is engaged in the production of plastic containers, was granted an exemption from import duties in a November 18, 2020 government decree.
The company was to import polyethylene and polypropylene from Iran, China, Saudi Arabia, and a number of other countries at a total cost of 3,340,000,000 drams, according to the government decree appendix.
Oval Plastic LLC was founded in 1995. The sole owner and director of the company is Varuzhan Khalatyan.
This company also has experience in public procurement. Oval Plastic LLC signed 4 contracts with the Ministry of Defense over 2018-2021 to supply drinking water containers and bottles.
It is worth noting that the RA government did not convene from September 24th to November 26th due to the 44-day Artsakh war, yet government decrees were issued, even while draft decrees were not presented. The above-mentioned privileges were granted during that time.
Metal Steel CJSC, which is engaged in the production of steel pipes, was granted a customs duty exemption in a November 26, 2020 government decree.
The company had to import various materials and devices from a number of countries for the production of its pipes. The total value of imported raw materials was 390 million drams, and the customs duty exemption was 32 million drams.
Metal Steel CJSC was founded in 2007. The founder and executive director of the company is Norik Hakobjanyan.
The following company to be granted privileges in November 2020 was AAS Industry LLC. This company received a customs duty exemption for the import of aluminum foil. The company had to import raw materials from Iran, China, Japan, Korea, and India at a total cost of 1.5 billion drams.
AAS Industry LLC, founded in 2017, is engaged in the production of thermal paper. The company has three owners: Sargis Vardumyan (34%), Aram Stepanyan (33%), and Rosa Geloyan (33%).
Thermorex CJSC, which is engaged in the production of electric power distribution and regulating devices, was granted a privilege in a November 30, 2020 government decree. The decree appendix states that the company was to import raw materials worth 95 million drams from China for its production, but on January 21, 2021, the government amended the decree to make it clear that the total value of imported raw materials was around 107 million drams. The executive order exempted this company from import duties. Thermorex CJSC was founded in 2004. There is no information about the company's shareholders in the registry of legal entities.
The last company to receive a privilege in November 2020 was Rock Berry LLC, which grows strawberries and raspberries in Kamaris in the Kotayk region. The executive decree appendix states that Rock Berry was to import artificial lighting systems from France, the Netherlands, and Great Britain at a total cost of 44 million drams.
Rock Berry LLC received another government privilege in April 2021. The decree appendix states that the company had to import seedlings and greenhouse complexes from the European Union (no specific country mentioned) at a total cost of 1.7 billion drams. The executive order exempted this company from paying import duties.
Rock Berry also benefited from privileges in 2018.
This company was founded in December 2017. 82.76% of the company's shares belong to Lilit Muradyan, and 17.24% of shares belong to Belgian citizen Kirkor Onkur.
In August 2020, Prime Minister Nikol Pashinyan visited the Rock Berry company's greenhouses in Kamaris.
Betonagorts CJSC also received an import duty exemption from the government on April 8th. The decree appendix states that the company had to import raw materials for the production of metal and plastic items from a number of countries at a total cost 2.2 billion drams, and the government privilege amounted to 149 million drams.
Betonagorts CJSC was founded in 1999. The owner and director of the company is Arthur Kalantaryan.
Private entrepreneur Garegin Hakobyan Norayel also received a customs duty exemption on April 22nd. The draft government decree states that he will use the imported goods for tourism in the Tavush region. The decree appendix states that the sole proprietor had to import tents, rafting boats, and electric motors for boats from China at a total cost of 1.2 million drams, and the customs duty exemption was estimated at 175,000 drams.
Eurofurnitura LLC was also exempted from customs duties in a July 15 executive order. The decree appendix states that the company had to import raw materials from China for the production of glue at a total cost of 480 million drams. The government privilege was estimated at 24.7 million drams.
Eurofurnitura LLC was founded in 2012. The director and the sole owner of the company is Azat Aghajanyan.
Wolverine E.A.D.G. LLC was granted an import duty exemption in a July 22 government decree. The draft government decree states that the raw materials imported by the company and equipment will be used for protective ballistic military helmets; armor jackets; special nonthermal tactical gear; disconnection and blockade capsules; hunting, tactical, and military weapons and auxiliary weapon parts, and target shooting guns and accessories. The decree appendix states that the total value of good imported from China and the USA amounted to 2.2 billion drams, and the customs duty exemption was estimated at 135 million drams.
Wolverine E.A.D.G. LLC is a new company founded in December 2020. The owners of the company are Andranik Tsaturyan (55%), Garry Derdzyan (30%) and Eduard Mosolov (15%).
Europlast 999 LLC is the last company to be granted a government import duty exemption in the period covered by this article.
The August 18 government decree states that the company will import raw materials for the production of plastic suspended ceilings. The decree appendix states that the materials will be imported from China at a total cost of 757 million drams. The executive order exempts this company from paying 49 million drams in customs duties.
Europlast 999 LLC was founded in May 2018. 60% of the company's shares belong to lawyer Marine Mirijanyan, and 40% belong to Samvel Manasaryan.
Authors: Anna Sahakyan, Rima Grigoryan, Sona Petrosyan
Coordinator: Trdat Musheghyan