Weekly Client Alert # 12

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Bills in Parliament

 

The Fine for Violating the Rules of Free Movement During the State of Emergency Has Been Reduced

From now on, in case of violation of the conditions and demands of free movement during the state of emergency, the fine shall be 10,000 AMD. The bill was fully adopted in the second reading.

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Extensive Legislative Changes in the Field of Protection of Economic Competition

Within the framework of the package of legislative amendments initiated by the RA State Commission for the Protection of the Economic Competition, a number of reforms are envisaged, as a result of which the following may be adopted:

  • participants in administrative proceedings, the scope of their rights and responsibilities, the grounds for initiating proceedings;
  • procedure for preliminary investigation of the grounds for initiating proceedings on an administrative offence and possibility to reject the initiation in the absence of grounds for initiating proceedings;
  • an opportunity to resume administrative proceedings in the event that a legal act has entered into force by the Commission to determine the extent of unlawful exercise of discretion in determining the amount of the fine;
  • procedure for submitting the Commission's correspondence to the participants of the proceedings electronically and an opportunity to participate in the sittings of the Commission through video communication,
  • possibility to impose a fine on the property of the defendant in the administrative proceedings by the decisions of the Commission,
  • a mechanism for imposing fines and the possibility to set criteria for the selection of liability measures by the Commission,
  • a mechanism for overseeing reorganizations, actions, or transactions within a group of individuals;
  • an opportunity for persons carrying out inspections to seal any building or documents at the disposal of the economic entity, to use the technical means available to the economic entity;
  • an opportunity to invalidate the trademark registration by the decision of the Commission.

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GOVERNMENT DECREES

 

Payments (Transfers) in Foreign Currency for Derivative Financial Instruments

The draft adopted on May 21, 2020, proposes to allow payments (transfers) in foreign currency between residents in the territory of the Republic of Armenia for foreign currency loans and deposits attracted in foreign currency, derivative financial transactions and REPO agreements related to foreign currency, securities denominated in foreign currency, foreign currency or interest rate.

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Amendments in the Guarantor Institute

The draft adopted on May 21, 2020, proposes to imperatively establish that a non-entrepreneur individual guarantor must bear additional responsibility, except in very limited cases. At the same time, it is proposed to determine an exhaustive list which stipulates the conditions that shall be exhausted before a claim can be made against the guarantor.

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The First Program Aimed at Long-Term Economic Development

Taking into account the economic situation resulting from the COVID-19 epidemic, the Government of the Republic of Armenia is starting to implement strategic investments with its own participation.

As part of the program, the state will participate in the non-public specialized contractual investment Fund by the scheme " Entrepreneur+state anti-crisis investments" of the closed joint-stock company", “entrepreneur+state” and will purchase the Fund's shares.

It is proposed to consider investments in the amount of up to 50 billion drams for the purpose of acquiring the Fund's units by purchasing ten shares, each up to 5 billion drams.

The Concept paper and Client Note that we have provided to the Government also laid at the base of the implementation of the program.

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Changes in the Financial Sphere

 

Increase of Thresholds of Compensation of Deposits of Natural Persons And Unification of Legislation

The Client Alert circulated on April 27 addressed the Draft Law on Making Amendments to the Law of the Republic of Armenia on Compensation of Deposits of Natural Persons, which was brought to the National Assembly by the members of the fraction “Prosperous Armenia” and suggested increasing the maximum thresholds of compensation of deposits of natural persons and establishing them as AMD sixteen million for dram deposits and AMD seven million for foreign currency deposits (instead of AMD ten million and five million respectively). Guided by the rationale of ensuring unification of legislation, on May 23 the fraction submitted the Draft Law on Making Amendments to the Law of the Republic of Armenia on Bankruptcy of Banks, Credit Organizations, Investment Companies, Managers of Investment Funds and Insurance Companies, which suggests making respective amendments of the thresholds in Article 31 of the mentioned law as well (Article 31 of the Law on Bankruptcy of Banks, Credit Organizations, Investment Companies, Managers of Investment Funds and Insurance Companies provides for the order of compensation of bank’s obligations in case of bankruptcy). It is also worth mentioning that both Draft Laws have not yet been included in the agenda of the sessions of National Assembly.

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