Confiscation without accountability. anti-corruption policy or

Immediately after the end of the elections, the process of politically motivated confiscation of private property gained new momentum in the country.

The government justifies its actions with the need to return property of illegal origin to the public and protect the public interest. While it is noteworthy that this policy is again applied exclusively to influential political opponents.

Such selectivity raises the question. Is this really an anti-corruption policy or politically motivated retaliation through property redistribution? What is happening forms a solid public perception of selective justice.

As a result of the measures taken, the government assumes the functions of an economic entity, establishing control over various economic sectors of the country and enterprises related to significant financial flows. However, the transfer of the asset to the state does not in itself guarantee the efficiency of management and does not eliminate corruption risks. It only changes the environment of occurrence and reproduction of risks.

A situation has been created where the government simultaneously acts as both the owner and the regulator, and the authority that makes managerial decisions about the enterprises that have come under its control.

In the absence of transparent and dignified procedures for the appointment of professional managers, boards of independent directors and managers, an obvious conflict of interest arises. it is possible to compensate the consequences of inefficient management at the expense of budget funds or increased tariffs, and unjustified economic or politically motivated commercial decisions can be justified with abstract conversations about “strategic” and “social” problems.

This practice is contrary to the Organization for Economic Development and Cooperation (OECD) 2024 Corporate Governance of State-Participated Enterprises. landmarks.

They demand to clearly separate the ownership function of the state from the functions of market regulation and policy making, to provide operational independence to state enterprises and to form their boards with professional, dignified and transparent procedures. The OECD emphasizes that combining the roles of regulator, owner and market participant creates a conflict of interest and undermines a level playing field.

The accumulated experience of state management of commercial assets in Armenia does not inspire optimism. The most obvious warning is the fate of the notorious ANIF, about which all public questions and discussions remain a “dialectic wasteland”.

This state fund operated for years without a clear mandate, accountability mechanisms and performance indicators. In 2024, after the disappearance of huge budget funds, the RA government adopted a decision to stop the activities of ANIF and liquidate it. The government not only failed to report on the failure of its own “strategic initiative”, but also placed the entire financial burden of its consequences on the state budget, i.e. the taxpayers.

The public was never presented with a comprehensive conclusion about which managerial decisions led to the failure, who was personally responsible for them, what institutional changes are needed in the state asset management system to prevent the recurrence of such problems in the future. The lack of answers to these and other important questions allows us to conclude that the purpose of ANIF’s liquidation was to cover up the “case” and clean up the tracks, without the necessary legal and political consequences.

Lack of accountability and transparency are key issues in the management of assets confiscated and transferred to the state. First of all, we do not have a unified public register of assets transferred to the state. Then, it is not known on what basis the managers are elected, what goals are set before them and by what standards their activities are evaluated.

It is unacceptable that there is a lack of comparable data on the value of assets at the time of transfer and formed after the period of state administration, received revenues and budget expenditures, liabilities, purchases, transactions with major partners and related parties. It is even unknown whether the object in question is functioning and what decisions are taken on behalf of the state, or rather, the taxpayer.

Under these conditions, statements about “restoration of justice” or “strategic importance” of assets become slogans covering up management failures, non-transparent decisions and abuses.

According to the OECD guidelines, SOEs must be held to the same high standards of accounting, information disclosure, compliance and auditing that apply to private companies. Their financial statements must be audited annually by an independent auditor. State control or state audit cannot replace external audit.

In order to exclude the above-mentioned risks, in addition to the legal grounds for expropriation, the current status and estimated value of each enterprise transferred to the state, information about the managers, the goals of public ownership management, financial results, the amount of state support, as well as the scenario of further management, such as keeping the enterprise under state ownership, transferring it to a specialized operator, or privatizing it through an open tender, must be publicly presented.

Financial statements and performance audit results should be published regularly, not after a scandal or liquidation. Otherwise, the lack of information does not allow either to assess the validity of the decisions taken or to analyze the effectiveness of the management of confiscated assets.

Therefore, the main question is not how much property the government has confiscated, but how much it has preserved and increased its value, provided professional and accountable management and measurable public benefit.

The main guarantee against turning nationalized enterprises into a source of political rent is not the high-sounding words about “state interest” and “restoration of justice”, but the pre-defined and published goals of their management, professional management, independent audit, transparency, and the inevitability of personal responsibility in case of failure to ensure the specified results of economic activity.

ARMEN MARTIROSYAN

Deputy of the RA Supreme Council and the National Assembly (1990-99)

Extraordinary and Plenipotentiary Ambassador of the Republic of Armenia

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