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ECONOMY: DIASPORA ARMENIANS IN NO HURRY TO INVEST, SEEING POOR PROTECTION OF FOREIGN INVESTMENTS IN ARMENIA
By NAIRA HAYRUMYAN
19.11.12 | 12:59
Economy: Diaspora Armenians in no hurry to invest, seeing poor
protection of foreign investments in Armenia
United States Ambassador to Armenia John Heffern
READERS' COMMENTS
Comments are welcomed and encouraged. However, comments not pertaining
to the topic or containing slander or offensive language will be
deleted. You have to be registered to be able leave your comment. Sign
in or Register now for free.
In his most recent video blog United States Ambassador to Armenia
John Heffern made a statement on the U.S.-Armenian-American economic
cooperation. He reminded that on October 18 Yerevan hosted a regular
meeting of the Armenian-American Task Group held for the purpose of
exploring ways to develop bilateral trade and making investments.
Earlier, the Ambassador repeatedly stated that he was trying to attract
U.S. investments to Armenia. Deputy Undersecretary of State Eric Rubin
and project coordinator of U.S. government assistance projects Daniel
Rosenblum discussed ways of improving the business environment to
promote trade and investment, in particular, concerning the reform of
tax and customs administration, ensuring open competition, intellectual
property rights and independence of the judiciary.
On November 16, the U.S. ambassador hailed the progress that
Armenia had made in these areas, which he said was reflected in the
improvement of Armenia's positions in the World Bank Doing Business
2013 report. But he stressed that political will was needed to proceed
with key reforms.
This means that Armenia still lacks sufficient conditions for
attracting sizable foreign investments. In an interview with Lragir.am
in August Heffern said that when in the United States he spoke with
potential investors, they asked him three main questions - whether
their contracts in Armenia would be protected by the judiciary,
how much their investment would cost them - taxes, customs, etc.,
and whether there was a level-playing field for competition in the
country. He noted that there was some progress in Armenia, reforms
were continuing, but "unfortunately, I still could not answer those
three questions."
Armenia has signed bilateral agreements concerning the Encouragement
and Reciprocal Protection of Investments with 37 governments of the
world, including with 15 European Union-member countries, the United
States, Russia, and six other post-Soviet countries. However, despite
the fact that according to the Doing Business rating in terms of
investment protection Armenia has risen from the 98th to 25th position,
no big flow of investments has yet started into the country's economy.
Several litigations are currently on in Armenia related to the
protection of foreign investments. Armenian-American businessman
Edmond Khudyan has unsuccessfully been trying, through courts, to
regain several million dollars that he had invested in construction
and says were seized away from him by scammers enjoying protection
at the very top of the Armenian power pyramid.
Khudyan is one of few Diaspora Armenians to have decided to use
publicity to stand up for his rights. Many Armenians from abroad
who became victims of fraud after investing money in Armenia prefer
not to talk about it loudly, often out of "patriotic reasons". They
simply silently leave, thus encouraging further fraud in Armenia.
However, public courts can be a test for the Armenian government as
they are to indicate whether investments in the country are protected
in name or in action. What is the use of good laws if the court defends
only the interests of local "fraud-committing" senior officials?
Ambassador Heffern said that he has monitored the process related
to the Khudyan case and lawyers of the Embassy would be present at
the hearings to draw conclusions. Heffern also said that he had been
in contact with the Armenian presidential administration to demand
explanations in connection with the case that has been dragged out
for two years now.
A group on the protection of Diaspora investors is also attending to
this case. This group has also chosen the way of publicity. Little
progress has been made in the Khudyan case yet, but the fact that he
is not accused of slander perhaps means that the accusations that he
makes are grounded.
There is also another court proceeding in connection with another
U.S.-Armenian, Nareg Hartounian, who was charged with tax evasion.
Remarkably, Hartounian's is a rare case when the Armenian public has
stood next to the investor, which may have had an impact on the court.
Court proceedings are also on into the claim of the German-owned
company, InstInvest, against Prosperous Armenia Party leader Gagik
Tsarukyan's Ararat Brandy-Wine and Spirits Factory. The German company
is demanding the reinstatement of its shares, which it claims to have
lost due to an alleged unlawful decision made by the General Meeting
of Shareholders.
Earlier this year, a New York court ordered Armenia's former Minister
of Nature Protection Vardan Ayvazyan to pay $37 million in penalty to
the American Global Gold Mining company. The ex-minister did not admit
his guilt and the Armenian authorities have not commented on the case,
which may also have an adverse effect the level of confidence among
potential foreign investors
By NAIRA HAYRUMYAN
19.11.12 | 12:59
Economy: Diaspora Armenians in no hurry to invest, seeing poor
protection of foreign investments in Armenia
United States Ambassador to Armenia John Heffern
READERS' COMMENTS
Comments are welcomed and encouraged. However, comments not pertaining
to the topic or containing slander or offensive language will be
deleted. You have to be registered to be able leave your comment. Sign
in or Register now for free.
In his most recent video blog United States Ambassador to Armenia
John Heffern made a statement on the U.S.-Armenian-American economic
cooperation. He reminded that on October 18 Yerevan hosted a regular
meeting of the Armenian-American Task Group held for the purpose of
exploring ways to develop bilateral trade and making investments.
Earlier, the Ambassador repeatedly stated that he was trying to attract
U.S. investments to Armenia. Deputy Undersecretary of State Eric Rubin
and project coordinator of U.S. government assistance projects Daniel
Rosenblum discussed ways of improving the business environment to
promote trade and investment, in particular, concerning the reform of
tax and customs administration, ensuring open competition, intellectual
property rights and independence of the judiciary.
On November 16, the U.S. ambassador hailed the progress that
Armenia had made in these areas, which he said was reflected in the
improvement of Armenia's positions in the World Bank Doing Business
2013 report. But he stressed that political will was needed to proceed
with key reforms.
This means that Armenia still lacks sufficient conditions for
attracting sizable foreign investments. In an interview with Lragir.am
in August Heffern said that when in the United States he spoke with
potential investors, they asked him three main questions - whether
their contracts in Armenia would be protected by the judiciary,
how much their investment would cost them - taxes, customs, etc.,
and whether there was a level-playing field for competition in the
country. He noted that there was some progress in Armenia, reforms
were continuing, but "unfortunately, I still could not answer those
three questions."
Armenia has signed bilateral agreements concerning the Encouragement
and Reciprocal Protection of Investments with 37 governments of the
world, including with 15 European Union-member countries, the United
States, Russia, and six other post-Soviet countries. However, despite
the fact that according to the Doing Business rating in terms of
investment protection Armenia has risen from the 98th to 25th position,
no big flow of investments has yet started into the country's economy.
Several litigations are currently on in Armenia related to the
protection of foreign investments. Armenian-American businessman
Edmond Khudyan has unsuccessfully been trying, through courts, to
regain several million dollars that he had invested in construction
and says were seized away from him by scammers enjoying protection
at the very top of the Armenian power pyramid.
Khudyan is one of few Diaspora Armenians to have decided to use
publicity to stand up for his rights. Many Armenians from abroad
who became victims of fraud after investing money in Armenia prefer
not to talk about it loudly, often out of "patriotic reasons". They
simply silently leave, thus encouraging further fraud in Armenia.
However, public courts can be a test for the Armenian government as
they are to indicate whether investments in the country are protected
in name or in action. What is the use of good laws if the court defends
only the interests of local "fraud-committing" senior officials?
Ambassador Heffern said that he has monitored the process related
to the Khudyan case and lawyers of the Embassy would be present at
the hearings to draw conclusions. Heffern also said that he had been
in contact with the Armenian presidential administration to demand
explanations in connection with the case that has been dragged out
for two years now.
A group on the protection of Diaspora investors is also attending to
this case. This group has also chosen the way of publicity. Little
progress has been made in the Khudyan case yet, but the fact that he
is not accused of slander perhaps means that the accusations that he
makes are grounded.
There is also another court proceeding in connection with another
U.S.-Armenian, Nareg Hartounian, who was charged with tax evasion.
Remarkably, Hartounian's is a rare case when the Armenian public has
stood next to the investor, which may have had an impact on the court.
Court proceedings are also on into the claim of the German-owned
company, InstInvest, against Prosperous Armenia Party leader Gagik
Tsarukyan's Ararat Brandy-Wine and Spirits Factory. The German company
is demanding the reinstatement of its shares, which it claims to have
lost due to an alleged unlawful decision made by the General Meeting
of Shareholders.
Earlier this year, a New York court ordered Armenia's former Minister
of Nature Protection Vardan Ayvazyan to pay $37 million in penalty to
the American Global Gold Mining company. The ex-minister did not admit
his guilt and the Armenian authorities have not commented on the case,
which may also have an adverse effect the level of confidence among
potential foreign investors