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    Categories: 2019

RFE/RL Armenian Report – 07/25/2019

                                        Thursday, 

Armenian Food Exporter ‘Not Cleared Of Tax Evasion’

        • Sargis Harutyunyan

Armenia -- A heavy truck parked at the Spayka company's premises in Yerevan, 
June 21, 2013.

The State Revenue Committee (SRC) is continuing a tax evasion investigation 
into Armenia’s largest food exporting company despite releasing its chief 
executive from prison about three months ago, the SRC chief, Davit Ananian, 
said on Thursday

Ananian stressed at the same time that his agency comprising the Armenian tax 
and customs services does not want to disrupt the Spayka company’s operations 
given their significance for the domestic agricultural sector.

Spayka’s official owner and executive director, Davit Ghazarian, was arrested 
in early April after the SRC accused the company of evading over 7 billion 
drams ($14.5 million) in taxes in 2015 and 2016.

The accusations stem from large quantities of foodstuffs which were imported to 
Armenia by another company, Greenproduct. The SRC says that Greenproduct is 
controlled by Spayka and that the latter rigged its customs documents to pay 
fewer taxes from those imports.

Ghazarian strongly denied the charges and any ownership links to Greenproduct. 
The businessman was set free in early May after paying the government 1 billion 
drams.


Armenia -- Davit Ananian, head of the State Revenue Committee, speaks to 
journalists in Yerevan, .

Ananian said that the SRC not only stands by its tax fraud claims but also 
believes that Spayka owes the state more back taxes than were alleged by it in 
April. He declined to specify the revised sum.

“We are now working to obtain additional facts and make [further] 
calculations,” the SRC chief told reporters. “At this stage we have left the 
company and the company’s executive a bit alone so that they deal with the 
company’s normal work.”

“But this doesn’t mean that we have backed away,” he said. “On the contrary, 
the initially stated figure of 7-8 billion drams has increased.”

Spayka is Armenia’s leading producer and exporter of agricultural products 
grown at its own greenhouses or purchased from farmers in about 80 communities 
across the country. The company employing about 2,000 people also owns about 
300 heavy trucks transporting those fruits and vegetables abroad and Russia in 
particular.


Armenia - Businessman Davit Ghazarian (C) shows Prime Minister Nikol Pashinian 
around a newly built dairy factory of his Spayka company, Yerevan, March 26, 
2019.

In a series of statements released in April, Spayka warned that it may not be 
able to buy large quantities of agricultural produce from Armenian farmers this 
year. It said that because of Ghazarian’s arrest its mainly foreign creditors 
are withholding further funding for the company.

Prime Minister Nikol Pashinian dismissed those warnings on April 9. He said he 
is confident that the food giant will carry on with the wholesale purchases.

Ghazarian was arrested on April 8 two weeks after inaugurating a 
state-of-the-art cheese factory in Yerevan at a ceremony attended by Pashinian. 
Spayka planned to build another cheese plant and expand its greenhouses under a 
$100 million project that was due to be mostly financed by the Kazakhstan-based 
Eurasian Development Bank (EDB).

Andrey Belyaninov, the EDB chairman, said on April 25 that the disbursement of 
its $67 million loan to Spayka has been put on hold due to Ghazarian’s arrest. 
“We can’t take such a risk if we are talking about [Spayka’s] potential 
bankruptcy,” Belyaninov was reported to say.



European Court Orders Massive Compensation To Armenian Plaintiff

        • Artak Khulian

France -- The building of the European Court of Human Rights in Strasbourg, 
November 15, 2018.

The European Court of Human Rights (ECHR) on Thursday ordered Armenia to pay as 
much as 1.6 million euros ($1.8 million) in compensation to an Armenian man 
whose house and land had been expropriated during a controversial redevelopment 
of downtown Yerevan.

The ECHR set the amount of “just satisfaction” for Yuri Vartanian, an 
83-year-old Yerevan resident, nearly three years after ruling that Armenian 
authorities violated his rights to property ownership and a fair hearing in 
court.

Vartanian and his family used to own a house and a plot of land in an old 
district in the city center which was slated for demolition in the early 2000s 
as part of redevelopment projects initiated by then President Robert Kocharian. 
A real estate agency authorized by the state estimated the market value of the 
1,400 square-meter property at more than $700,000 in May 2005.

A few months later, Yerevan’s municipal administration and, Vizkon, a private 
developer cooperating with it, challenged Vartanian’s ownership rights in 
court, saying that they had never been recognized by any judicial act. The 
claim was accepted by a district court but rejected by Armenia’s Court of 
Appeals.

According to ECHR documents, the municipality and Vizkon expressed readiness to 
settle the case when it reached the higher Court of Cassation in 2006. They 
offered to give Vartanian USD $390,000 in cash as well as a 160- square-meter 
apartment and 40 square-meter office premises in the city center.


Armenia -- An old house is demolished in downtown Yerevan.
Vartanian rejected the proposed settlement, drawing a stern rebuke from Arman 
Mkrtumian, the then chairman of the Court of Cassation who presided over 
hearings on the case. A court panel consisting of Mkrtumian and two other 
judges subsequently ruled against Vartanian. The latter appealed to the ECHR in 
2007.

The Strasbourg-based court ruled in October 2016 that Armenian courts and other 
entities violated articles of the European Convention on Human Rights 
guaranteeing the right to a fair hearing and protection of property.

“I consider the ruling fair because we have finally won morally,” Vartanian’s 
wife, Shushanik Nanushian, told RFE/RL’s Armenian service.

However, Nanushian was not satisfied with the size of the financial 
compensation set by the ECHR, claiming that it constitutes only a fraction of 
the real market value of the property lost by her family.

The sum due to be paid to Vartanian exceeds the total amount of damages awarded 
by the ECHR since 2007 to all other Armenian plaintiffs combined. The latter 
include nine other Yerevan residents who had lost their properties in similar 
circumstances. According to Armenia’s representative to the Strasbourg court, 
Yeghishe Kirakosian, ECHR verdicts have obligated Yerevan to pay them a total 
of 324,581 euros in damages.



Armenian Tourists Stranded In Egypt

        • Susan Badalian

Egypt -- Tourists depart from a hotel in the Red Sea resort of Hurghada, 
January 9, 2016.

About 100 Armenian tourists were left stranded in an Egyptian Red Sea sort on 
Thursday due to the cancellation of charter flights to and from Egypt organized 
by a Yerevan-based travel agency.

They were due to return to Armenia on Wednesday after ending their 10-day 
holiday in the Hurghada resort.

“We are in the hotel lobby right now, waiting to see if there will be a 
flight,” one of the holidaymakers, Alla Minasian, told RFE/RL’s Armenian 
service by phone. “I have spoken to our ambassador here for a couple of times. 
He said they are trying to do something.”

“People have spent the night in the lobby and had problems with food because 
the hotel doesn’t provide them with food anymore,” said Minasian. “Buying new 
air tickets to reach Yerevan through other routes costs a lot of money.”

According to the Armenian Embassy in Egypt, the Hurghada-Yerevan flight was 
cancelled because the A & R Tour agency that sold tour packages to the stranded 
tourists failed to pay a Greek airline hired by it. An embassy official said 
the airline is ready to fly them back to Armenia as soon as the Armenian firm 
honors its financial commitments.

Planned flights between Yerevan and another popular Egyptian resort, Sharm 
el-Sheikh, arranged by A & R Tour were unexpectedly cancelled this week. Dozens 
of angry ticket holders besieged the agency’s empty office in the Armenian 
capital to demand an explanation or financial compensation.

“Our flight was delayed again today,” said Gurgen Harutiunian, a resident of 
the southeastern Armenian town of Kajaran. “There are 12 of us travelling from 
Kajaran. You can imagine how much we have to spend on food and accommodation 
[in Yerevan] because of them.”

Liana Hovannisian, who had also purchased a 10-day tour package from A & R 
Tour, learned about the cancellation of her flight when she arrived at 
Yerevan’s Zvartnots airport on Thursday morning. She said she called the agency 
and was told to come to its office.

“We came to the office at noon and were told that [the agency director] will be 
here in an hour,” said Hovannisian. “It’s now 1 p.m. and she has still not 
shown up.”

Other employees of the travel firm were also nowhere to be seen, making it 
impossible for the A & R Tour customers to know whether they will go on holiday 
after all.



Press Review


“Haykakan Zhamanak” says that last week’s protests in Ijevan against a 
government ban on illegal logging were an act of “sabotage” that failed because 
public opinion favored the government and because the authorities ruled out any 
concessions to violent protesters. “The main objective of the organizers [of 
the protests] was to test the authorities’ weak spots in hopes that they will 
bow to several hundred protesters,” writes the pro-government paper. “But the 
authorities did not budge and it made no sense to continue the show.”

Lragir.am reports that Nagorno-Karabakh’s former top military commander, Samvel 
Babayan, claims to have collected more than 25,000 signatures in support of 
constitutional changes that would allow him to run in next year’s Karabakh 
presidential election. The publication notes that virtually all major Karabakh 
parties have spoken out against such changes, putting themselves at odds with 
Babayan. It fears that Babayan’s political ambitions could destabilize the 
situation in Karabakh. “After the revolution in Armenia, Artsakh has a chance 
to form a healthy government that would protect the interests of Artsakh’s 
population, rather than the military and criminal oligarchy linked to Armenia’s 
former government,” it says.

“Zhoghovurd” looks at the Armenian government’s anti-corruption efforts. The 
paper says that government bodies tasked with planning and coordinating those 
efforts have undergone few structural changes since last year’s regime change. 
But, it says, the key difference is that their members do not include 
“officials mired in corruption.” On top of that, Prime Minister Nikol Pashinian 
is continuing his “relentless” fight against corruption, it says. “The 
[anti-corruption] body headed by him cannot make any concessions to any corrupt 
practice,” concludes the paper.

(Lilit Harutiunian)


Reprinted on ANN/Armenian News with permission from RFE/RL
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1201 Connecticut Ave., N.W. Washington DC 20036.
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