July/August 2021
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AMCHAM BOARD MEMBER MR. ARA HOVSEPYAN Please meet Mr. Ara Hovsepyan, the President of AmCham from 2016 to 2020. In his full-time occupation, Mr. Hovsepyan is the General Manager of the ContourGlobal Hydro Cascade (CGHC) that owns and operates the Vorotan cascade of hydropower stations. CGHC is a local subsidiary of ContourGlobal, a big publicly traded American company specializing in energy production, operation, and refurbishment. He has started his career as a diplomat in the Ministry of Foreign Affairs, later moving into international development programs and public infrastructure projects. Ara has led the projects by DFID (the British development agency), as well as the Millennium Challenge Account (MCA) and the North-South Road construction programs. Besides professional endeavors, Mr. Hovsepyan spends his free time traveling and skiing. Ara has MA in political science and international relations from the American University in Armenia and a post-graduate diploma in Diplomacy from Oxford University, UK.
ONE-DAY PROFESSIONAL ORIENTATION TOUR WITH LEADERSHIP SCHOOL ARMENIA On 14 July 2021, the Leadership School Armenia in cooperation with AmCham organized a one-day Professional Orientation Tour for a group of 50 teens from the communities near Ghukasavan village, Ararat Region, for those who do not have access and opportunity to a learning experience outside their rural community. The Tour was at AmCham Member companies Coca-Cola Երջանկության գործարան, Synergy Armenia and Inecobank CJSC. The objective of the Tour was: • To understand the structure, organizational priorities, and plans and transfer of practical knowledge and experience, in particular, computer literacy and English language skills • To meet the Leadership teams for motivational speeches and professional orientation with a Q&A session for new employment and self-employment opportunities During the visit, the Teens were able to have a talk with the leadership and other professional management representatives of the companies’, explored the working atmosphere, and understood the importance of the career specialization.
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DISCUSSION WITH RUBEN VARDANYAN ON THE FUTURE ARMENIAN INITIATIVE On 6 July 2021 AmCham Armenia, European Business Association, Armenian British Business Chamber, German Business Association - German Chamber of Commerce, France Armenia Chamber jointly organized a meeting-discussion with Ruben Vardanyan, who is the Founder of the FUTURE ARMENIAN initiative. Ruben Vardanyan is an Armenian-born Russian entrepreneur, venture philanthropist, and investor, co-founder of Aurora Prize for Awakening Humanity and Future Armenian public initiative, and UWC Dilijan College. During the discussion, Ruben Vardanyan presented The FUTURE ARMENIAN public Initiative and its 15 goals. He talked about the issues, challenges, and opportunities of the education system of Armenia, the relationships between Armenia and the Diaspora, investment environment, business promotion, and charity. Ruben Vardanyan presented 15 goals of the Future Armenian as below: 1. Vision Setting: Define and own Armenia’s future collectively. 2. Assured Sovereignty: Acknowledge our threatened security and construct a more effective and forward-looking defense system. 3. Historic Responsibility: Honor the memory of the victims, the survivors, and saviors of the Armenian Genocide through global advocacy and humanitarian support to prevent, combat, or heal from all acts of violence against humanity. 4. Free Artsakh: Guarantee Artsakh’s physical security and establish its legal status. 5. Armenia-Diaspora Unity: Transform the relationship between Armenia and the Diaspora into one based on mutualism and trust. 6. Strong Diaspora: Update and enhance Diaspora’s institutions and structures to ensure their vitality and preserve Armenian worldwide heritage. 7. Strong Alliances: Counter isolation and gain relevance through strategic partnerships regionally and globally. 8. Exponential Growth: Foster a competitive economy that attracts human and financial capital. 9. Growing Population: Address Armenia’s demographic challenges by ensuring population growth, repatriation, and skilled immigration to secure its future. 10. Excellence in Education: Prioritize education as the highest societal value for Armenians worldwide. 11. Preeminence of Science, Technology, and Creativity: Invest in science, technology, and creativity to drive innovation and development especially in health, environment, and knowledge economies. 12. Good Governance: Develop effective and accountable institutions, committed to excellence and professionalism in government and society. 13. Just Society and Reduced Inequalities: Eradicate poverty, achieve openness and fairness in society. 14. Preserved Heritage: Build upon our unique identity and historic experiences and use them to inspire and guide our future. 15. Evidence-Based Decision-Making: Demand from leadership and society that national decision-making is based on facts rather than illusions. At the end of the event, Ruben Vardanyan had a Q&A session with the participants. Members asked different questions and shared their ideas with him. Around 100 participants attended the event.
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LEGAL COMMITTEE MEETING
On 13 July 2021 AmCham held its Legal Committee Meeting at Holiday Inn Express Yerevan. During the Committee Meeting it was discussed: 1. AmCham Legal Committee Survey RESULTS review and 3 key focus area objective setting - input from the members It was proposed to have a Legal Committee meeting with the Minister of Economy Mr. Vahan Kerobyan and present the priority areas and after that identify the key 3 key points to focus partnering with the Ministry in 2021 on the following priorities: Tax law changes – business climate supportive changes; Investment strategy and policy; EAEU regulations updates – involvement of Ministry of the Economy on EAEU level, protection of interests of the sectors; PPP principles; Labor Code related issues and international hiring practices 2. Holiday Schedule Legislation Change Recommendation As the Ministry of Economy came up with the Legislation change proposal on the Reduction of the number of non-working days during the New Year/Christmas period from 7 to 2. AmCham has conducted a survey to understand what the business community thinks. After finalizing the results, 80% of AmCham Member Companies are against the reduction of holidays. AmCham Legal Committee Chair Ms. Lusine Mnatsakanyan has conducted research between different countries to understand what is the situation abroad. Russia has a similar non-working days’ scheme and in Europe the state gives more social guarantees, religious holidays, shifts the working days when it matches the weekends. In general, as need be the companies use the workforce and there is no need to make any changes to the current scheme. 3. GDPR and cybersecurity issue Some ICT companies might consider closing their offices in Yerevan due to the strict GDPR regulations within the EU, specifically in Germany, and they might be closing their offices if the servers are outside of the EU. A meeting should be organized with the Personal Data Protection Agency head to understand the risks. 4. GPartners’s initiative - to support the Government of Armenia in designing an investment promotion and protection policy (including a new Investment Protection, etc.). It was agreed that the Committee will revert to the GPartners’ initiative - to support the Government of Armenia in designing an investment promotion and protection policy (including a new Investment Protection, etc.) after meeting with the Minister of Economy to understand the real need. 5. Other proposals - A meeting should be organized with the Ministry of Finance, to understand the Public Procurement process facilitation opportunity: Guarantees; on-line application; mechanics for fraud prevention; contract draft review opportunity Need - simple process introduction, and flexible policy in place. 6. Next-step were defied: • Organize a meeting with the Minister of Economy to discuss and identify the key focus areas for 2021 and formulate the Committee Mission and Objectives, including the e-draft, public procurement, Tax law changes – business climate supportive changes, as well as: i. New Investment strategy and policy introduction ii. EAEU regulations updates – involvement of Ministry of Economy on EAEU level, protection of interests of the sectors iii. PPP principles iv. Labor Code related issues and international hiring practices. • Follow- up with BSO on the leads on the draft law on "Making Amendments and Addenda to the Tax Code of the Republic of Armenia" • Meeting with the Personal Data Protection Agency Head • Investment Promotion and Protection policy planning - lead GPartners to be followed-up after the meeting with the Minister of Economy
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TAX, CUSTOMS, AND FISCAL POLICY COMMITTEE MEETING
On 11 August 2021, AmCham in Armenia held a Tax, Customs, and Fiscal Policy Committee (TcuFP) meeting at Hyatt Place Yerevan. AmCham President Mr. Ashot Hovanesian, 2nd Vice President Mr. Gagik Gyulbudaghyan, 9 TCuFP Committee members, and AmCham Executive Team were present at the meeting. The meeting was chaired by Ms. Karine Sarkissian, the Executive Director of AmCham in Armenia. The Chair of the Meeting welcomed and thanked the TCuFP Committee Members for participating in the Meeting, moderated the discussion, and approved the agenda: 1. Amendment proposal of the RA TAX CODE on the Income-tax return tool for mortgage loans It was presented that AmCham had a meeting with the Ministry of Economy and the Armenian Developers Association regarding the new draft law on Amendments of the RA TAX CODE on the Income-tax return tool for mortgage loans. The participants presented their viewpoints. It was clearly stated and all agreed that any tax advantage should be given within a specific time frame, otherwise it will become a big burden on the state budget. The advantage was introduced to promote the construction and however, currently it has 2 sides - social and economic, thus somehow raising up satisfaction and happiness among people. There should be clear targets and budget forecasts for any change that will be implemented. In the current situation, such change might create dissatisfaction among the young professionals and trigger emigration. It was stated that the limitation of the income tax return for the primary market apartments worth 55 ml AMD has some risk of shadowed transactions, as in the downtown area in the primary market only studios or one-bedroom apartments could cost 55 ml and the downtown development is quite saturated. Still, there are some underdeveloped areas such as Firdus, Kond, other projects which could suffer. They implied the effect of the Tax Code on all related sectors and everyone shared the opinion that it would be reasonable if the citizens of the RA could be given an opportunity to acquire the second or more real estate in other Armenian regions rather than in the capital, thus having an intention to promote the growth and proportional development of the entire country. Experts concluded that they cannot come up with a proposal as for now because of the lack of precise information from the Ministry of Finance and the Ministry of Economy about the effects and consequences of the law on the above-mentioned spheres from its launch till now. The future tendency based on the present results is also of special importance to clarify. The trigger why the question of amendments was raised in general is also subject to clarification to form a justified standpoint. AmCham TCuFP Committee members will do their contribution and suggestion as soon as they have more detailed information about the Tax Code and its precise effects on all the spheres stated earlier. 2. Identification of Priorities for 2021 with the Newly Elected Government Cabinet AmCham VP Mr. Gagik Gyulbudaghyan introduced the AmCham Strategic Priorities to focus on. Principally the participants were in line with the priorities and confirmed that all the legislative changes should be run under the Regulator Impact Assessment tool which is provided by the WB and IMF as per their methodology. 3. There was a proposal from FinArm AmCham Member company on introducing a new Residence Tax Scheme which will promote the Immigration into the country. The experts talked about a benchmarking tool, suggesting to study the experience of Israel which has a Ministry of Immigration and Integration, aiming to promote the immigration flow to the country.
BE MY GUEST WITH ARMENIA WINE COMPANY On 27 August 2021 in the scope of the AmCham Be My Guest networking series, AmCham Members were invited to enjoy their Friday night with Armenia Wine Company. The evening started with a Winery tour. The guests discovered the company, the wine-making techniques, and the different wine varieties. Armenia Wine Company gave tricks on how to do a wine tasting. The evening was summed up by a delicious supper with wine and a magnificent view. During the evening participants not only enjoyed the atmosphere and wine but also got a chance for communication and for new cooperation. There were more than 60 participants from more than 30 companies. Armenia Wine Company was founded by Vardanyan and Mkrtchyan families as a result of their love for their homeland, nature, and culture. It all started in 2006 from the vineyards planted in the Armavir region, southwest of Armenia, and later turned into a big winemaking project. The winery itself was founded 2 years later, in 2008. The winery is located in Aragatsotn, one of the viti-cultural regions of Armenia. It is located between Yerevan and Mount Aragats, Armenia’s highest peak. Today Armenia Wine represents an exemplary Winery, where century-old Armenian winemaking lives its time of renaissance. Initially, the goal was to create wines that open the window to the main wine regions of Armenia, still undiscovered. Today the portfolio of the company is represented by wines allowing to discover Armenia with its indigenous grapes and terroir diversity.
SILVER MEMBER – DIANAR
Dianar CJSC was established in 2015, by Eduard Melikyan. It is one of the leading real estate developers in Armenia. Since 2015, Dianar CJSC develops more than 5,5 ha area in the city center. The latest project of the company is the reconstruction of Yerevan’s 33rd district. The 33rd district better known to the public as Firdausi is bordered by Tigran Mets Avenue, Hanrapetutyan, Buzand and Khanjyan Streets. The whole project has more than 5 hectares (57,676.18 square meters) of total area and will consist of the round square with a diameter of 80.0 meters, buildings with up to 30, 45, and 60 meters height (depending on the location), a 3-storied underground parking spaces connected together with underground streets, public and business centers, hotels and residential buildings.
SILVER MEMBER – ANTARES
Antares Holding was founded in 1992. The date of the foundation itself witnesses the thorny way that the company has passed through. The company managed to achieve a stable position among leading companies both in Armenia and abroad. The Holding includes a publishing house, advertising agency, design studio, package design and production. The Holding has marketing and advertising services and cooperates with the manufacturing sector with several enterprises, and all this was achieved due to the company’s highly professional human resources management combined with modern hi-tech equipment. The number of Antares Holding employees has been increased significantly from the date of the establishment, which supports solving the employment problem in Armenia. Antares Holding partners and customers can be sure that it will do its best to bring their ideas to life, combining creativity, quality and professionalism. Numerous diplomas and awards from international and regional competitions, festivals, book fairs and exhibitions are the best proof of Antares Holding’s achievements.
BRONZE MEMBER – HOLIDAY INN YEREVAN
Holiday Inn Yerevan-Republic Square is a brand new hotel commenced in 2021, located adjacent to the heart of Yerevan, Republic Square. Nearby guests can find a wide variety of restaurants and shops, many entertainment centers and it’s just 12-kilometer drive to Zvartnots International Airport. Holiday Inn Yerevan-Republic Square features 191 stylishly designed guest rooms and the brand’s Open Lobby concept that has been designed to combine public spaces, including the reception area, restaurant, bar and lounge – into one open, cohesive space with a contemporary feel. The concept of the hotel is created to provide guests with a place to relax, eat, work or just gather around in one integrated space. Holiday Inn Yerevan-Republic Square’s 7 modern and well-equipped meeting rooms are ideal to host any type of event from high-level conferences to fancy social events. There are superior working conditions, including state-of-the-art equipment and technical support staff who will help event organizers with any specific requirement. Holiday Inn Yerevan-Republic Square offers unique features for both visitors and locals. The Cloud 7 SPA & Fitness area is almost 1,500 sq. m. and has a 25m pool, massage rooms, beauty treatments, wide array of fitness equipment along with a whirlpool spa, sauna, hammam and a salt room. Adjacent to it is the Cloud 7 Terrace Bar & Lounge. Below the hotel, there is a secure garage with over 96 parking spaces.”
BRONZE MEMBER – ASTERIA
Since 2000, Asteria pharmaceutical company has been engaged in the import and wholesale of pharmaceutical and related products. In addition, Asteria provides state registration of medicines, marketing, and promotion services for medicines and related products. Asteria pharmacy chain has been operating since 2011, which makes Asteria one step closer to its customers. As of now, the Asteria pharmacy chain includes 23 pharmacies with over 70 specialists. The main goal of Asteria is to provide Armenian citizens and guests with friendly and caring service with the highest quality and most effective products, which will help them to be healthy. The Asteria vision is to expand the geography and portfolio of the organization, provide high-quality services, be a leading pharmaceutical company for its customers, and help improve public health.
BRONZE MEMBER – ELECTROMONTAJ
Electromontaj LLC company was founded in 2014. During 7-years of work, it has occupied its unique place in the field of THE energy sector. It has performed and continues to perform energy and electrical installation works and has implemented large-scale projects. During the years Electromontaj LLC acquired many partners, such as Sard Engineering LLC, Garage Masters’ Mall, Domus hypermarket chain, AT Automation LLC, etc. Electromontaj company is the official distributor of the internationally renown French brand Schneider Electric in Armenia, as well as the official distributor of the brand DEKraft By Schneider in Armenia, the official and exclusive representative of the Russian Teploluxe brand and the official and exclusive representative of Slovenia TEM brand in Armenia. Currently, Electromontaj LLC has a store and showroom known to the consumer as Schneider Electric and will soon be available at Garage Masters Mall.
DID YOU KNOW? Alexis Ohanian Alexis Ohanian, nowadays called the “Mayor of the Internet”, was born in 1983, in Brooklyn, New York and raised in Baltimore, Maryland. His mother was German and his father Armenian, with his grandparents had arrived in the USA as refugees after the Armenian genocide. In his junior year, whilst getting his degree in commerce and history at the University of Virginia, Alexis decided to become an entrepreneur. Together with his college best friend, Steve Huffman, Alexis came up with the mobile food ordering company called MyMobileMenu. After working throughout their senior year on the company, Ohanian and Huffman decided to pitch it to Paul Graham, the Y Combinator cofounder. He initially rejected them, but called them back the next day, asking them to build “the front page of the internet”. So Ohanian and Huffman decided to create Reddit: an online community site that was built in three weeks and launched in 2005. One year later, Reddit became the internet sensation, and the two friends decided to sell it to magazine publisher Condé Nast for $10-$20 ml. Currently, Reddit is worth $3 billion, but Alexis decided to leave the company in 2008. Following his leave, he visited Armenia in order to learn about the origins of his father’s family. Since then, he also helped to launch Breadpig – a ‘geek’ marketplace, that donates part of the profits, and the travel website Hipmunk. In 2010, Ohanian publicly opposed the Stop Online Piracy Act (SOPA), persuading the USA Congress to not pass the bill. In 2015, Ohanian and Huffman decided to co-operate once again, as Reddit was spiraling into a dark abyss of racist trolls and negative content. As Reddit was recovering, in 2016, Ohanian co-founded the venture capital firm Initialized Capital, alongside Garry Tan. The company’s early-stage fund had $500 ml in assets and invested in more than 200 companies. Ohanian married tennis superstar Serena Williams in 2017, two months after their baby girl was born. In 2019, Alexis accepted Prime Minister Nikol Pashinyan’s challenge to send monthly donations to the Hayastan All Armenian Fund.
EXTENDED PRODUCER RESPONSIBILITY (EPR) PAGER
Armenian Business Community
Take the lead and make your voice heard in the upcoming changes! With this letter, we encourage the Armenian business community to join the efforts in establishing transparent, efficient, and sustainable post-consumer waste management system to meet Armenia’s obligations to introduce Extended Producer Responsibility (EPR) system by 2023. This commitment is part of the EU-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) signed between EU and RA of Armenia in 2017: While Nature Protection Payments (Բնապահպանական վճարներ) aim to mitigate the damages caused to the environment, the Extended Producer Responsibility system ensures the proper handling of specific post-consumer waste products (tires, batteries, packaging, etc.) that producers or importers have put in the market. The models of Extended Producer Responsibility vary from country to country, and Armenia is yet to develop and adopt the best working model that would meet its environmental and economic needs. The global practice shows that the earlier the businesses engage in the initial stages of the strategy development, the better model the country adopts. While the RA Government is obliged to create the necessary legislative framework, the role of the private sector is to support this process through the following: Engage in a dialogue with the government and follow up on policy development, Co-finance the research/study of various scenarios for the introduction of an Extended Producer Responsibility (EPR) in Armenia and the development of an appropriate model according to international experience. It is important that the private sector will take an active role in helping to create the best recycling system in the country. Municipal Post consumption waste (PCW) management is in a development stage in Armenia and we as a business community need to produce data and evidence on deciding the best case scenario to increase packaging waste recycling in the most effective and efficient way to create a win-win scenario that will meet compliance targets and at the same time mitigate potential tax implications on business. Together, we need to conduct research/study through a professional agency for the following purposes: • Analyze the current PCW situation, specifically volumes, types, collectors, recyclers, and opportunities; run SWOT to decide on the best waste collection and recycling practices, from the available alternatives, which will be the most suitable for Armenia and financially justified. • Develop the best case implementation plan/guidance scenario for taking actions with the best expert agency. • To engage with the government and negotiate the best case scenario of collaboration to drive the agenda and support the business interests. Join the initiative! American University of Armenia (AUA) American Chamber of Commerce of Armenia (AmCham) Fast Moving Consumer Goods (FMCG) Committee Waste Management Working Group European Business Association Armenia (EBA) Union of Manufactures and Business of Armenia (UMBA)
EXTENDED PRODUCER RESPONSIBILITY (EPR) PAGER
Q&A Question․ What are the start and end dates of the research? Answer․ The dates will be determined when the number of organizations interested in the initiatives is confirmed. The study process is planned to start in September 2020. Before starting the study, a tender will be announced with detailed Terms of Reference. The best agency selection criteria will be based on the the best technical implementation experience and price. Question․ Which organization will conduct the research and how will it be selected? Answer․ Even though there are experienced organizations, the selection will follow the tender procedure – preparation of Terms of Reference, announcement for tender, receiving applications and selection. Question․ What is the purpose of the research and what will be the result. Answer․ As a result of the research, the best waste management model for both the public and private sectors will be selected. The model will be justified by financial and economic analysis based on the current situation in Armenia. Question․ Which level specialist form an organization shall be involed? Answer․ The organization should provide the contact details of a technical manager who is involved in waste management and environmental issues. However, the process must be under the general director’s supervision.