EX-PREMIER OF ARMENIA ADVOCATES BANNING OFFSHORE COMPANIES’ ACTIVITIES IN ARMENIA’S ORE MINING INDUSTRY
ARMINFO
Tuesday, March 19, 18:39
The bill that suggests banning the offshore companies’ activities in
the ore mining industry of Armenia is already ready, ex-Prime Minister
of Armenia, MP Hrant Bagratyan says on his Facebook page. He calls on
the Armenian authorities to ban the offshore companies’ activities
in the ore mining industry, financial sphere and other vital fields
of Armenia.
Bagratyan thinks that the non-resident companies registered in the
offshore area but working outside that area receive an opportunity to
conceal their taxes and bring the capital out of the countries. “Such
a situation is being observed in the ore mining industry sphere of
Armenia. The companies registered in the offshore area own the major
part of the shares; the necessary equipment and materials are imported
from the offshore areas (naturally, at the highest prices), and export
products to the offshore areas (naturally, at the lowest prices,
and in the offshore areas they sell them at real, high prices). This
should be stopped. There should be no offshore”, he says.
To note, most of the large (including Russian) investors working
in various spheres of ore mining industry, metallurgy and financial
sphere registered their presence in the Armenian market by means of
affiliated offshore companies, among them the Rusal-Armenal foil
rolling plant. The offshore schemes on ownership of the Armenian
enterprises and number of banks make the real structure of property
and the ultimate beneficiary owners transparent. To note, in response
to ArmInfo’s request about the offshore use practice in the Armenian
banks’ capitals, the Central Bank of Armenia said earlier that
the investors’ participation is regulated at the level of laws
and legislative instruments. The CBA completely studies the future
participant to find out the beneficiary owner of the bank. In case
of crediting of offshore companies, the banks should observe some
additional requirements connected with high risk factors.
Some peculiarities related to offshore companies are also stipulated by
the country’s legislation, first of all, regarding profit taxes. As
the country experiences numerous cases of transferring funds to
the offshore areas without pursuing the goal to receive services or
commodities, the law says that if the organization fails to receive
services or commodities within a year, then a profit tax will be
levied from the whole amount transferred to the offshore area at an
interest rate of 20%.
In the meantime, Armenia has agreements with a number of offshore
states. In 2011 the country signed an agreement on avoidance of double
taxation of property and income with Seychelles. It should be noted
that according to the statistics, Armenia carries out no trade or
investment activity with Seychelles, which is an offshore area.