For a Better Business Environment
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American Chamber of Commerce in Armenia AmCham is an independent business association operating in Armenia since 2000. AmCham represents the interests of more than 120 member companies from almost all sectors of the economy. AmCham’s goal is to enhance US-Armenia business relations and improve business and investment climate in the country. AmCham is a member of US Chamber of Commerce and European Council of American Chambers of Commerce. AmCham is pleased to have also British, French and other European companies as members.
CONTACT US 1 Amiryan St., Armenia Marriott Hotel, 3rd floor, room 315, 317, Yerevan 0010, RA Email: info@amcham.am/ events@amcham.am Tel: (+374 10) 599 187 (+374 10) 599 902 Visit our page: www.amcham.am
PUBLISHED AND DESIGNED BY AMERICAN CHAMBER OF COMMERCE IN ARMENIA
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March 2018
AMCHAM LEADERSHIP MEETS THE PRINCIPAL DEPUTY ASSISTANT SECRETARY OF THE U.S. STATE DEPARTMENT’S BUREAU OF ECONOMICS AND BUSINESS AFFAIRS On 7 March 2018, AmCham Board members had a business lunch with Mr. Brian McFeeters, the Principal Deputy Assistant Secretary (PDAS) of the U.S. State Department’s Bureau of Economics and Business Affairs during a business lunch. The purpose of the meeting was to discuss ways to strengthen the U.S.-Armenian trade and investment relationship. As one of the highest ranking U.S. officials focused on international economic issues, PDAS McFeeters and members of AmCham Armenia talked about the growing trade ties between the two nations. U.S. Embassy in Armenia conducted a short video with interviews of PDAS McFeeters; AmCham President and General Manager of ContourGlobal Hydro Cascade, Mr. Ara Hovsepyan; and AmCham Board member and Director of Lydian Armenia, Mr. Hayk Aloyan. Click here to watch the video.
MARY KAY BEAUTY MASTERCLASS FOR AMCHAM WOMEN On the eve of celebration of March 8, International Women's Day, AmCham in cooperation with its member, Mary Kay Armenia, invited all women of AmCham community to a 3-day Beauty Master-Class at Mary Kay Armenia premises. Specialists of Mary Kay Armenia conducted consultation for women, during which they shared some secret tips on how to have a spa treatment at home for having naturally beautiful skin: dos and don'ts; demonstrated facial skin care procedures; and did Express Makeup, during which they shared some tricks and secrets of how to apply perfect makeup when hurrying, easy to follow instructions on what to do first, and much more. Please find the photo album here . If your company desires to have a free-of-charge consultation for your female colleagues, give us a call and AmCham will organize!
AMCHAM AND THE RA MINISTRY OF NATURE PROTECTION ORGANIZED PUBLIC CONFERENCE On 13 March 2018, the RA Ministry of Nature Protection and AmCham organized “Environment and Corporate Social Responsibility” conference, where speakers addressed the issues of CSR on the environmental front. AmCham President, Mr. Ara Hovsepyan gave a welcoming speech regarding AmCham advocacy efforts for the best business practices in Armenia, in particular in Corporate Social Responsibility through its Responsible Business Network Initiative. “The discussion of the event brings environmental policy in focus, and AmCham encourages companies operating in all sectors, but most importantly, in mining sector to prioritize sustainable development. They should take a strong and committed approach to maintaining their engagement with and accountability to stakeholders and, above all, to the communities of Armenia. Moreover, only the constructive dialogue among RA Government, industry representatives and investors, as well as civil society can develop a legal framework that is in line with the international best practices on responsible mining. The legal framework will increase the economic and social benefits of the sector, meanwhile will decrease the negative impact on environment and public health. The introduction of the Extractive Industries Transparency Initiative (EITI) standards will lead to the further development of transparent and accountable public and private systems,” Mr. Ara Hovsepyan stated. RA Minister of Nature Protection, Mr. Artsvik Minasyan continued the discussion with the topic of “Environmental Policy of the Republic of Armenia and Social Responsibility.” During the conference, the participants learned about the environmental democracy and the rights of corporations and environmental culture development from the Advisor to the RA Minister of Nature Protection, Mr. Artsrun Pepanyan and Legal Advisor to the RA Minister of Nature Protection, Ms. Haykanush Parsamyan. The discussion was followed by an active Q/A session and wine reception.
AMCHAM PRESENTS OPPORTUNITIES AND CHALLENGES OF ARMENIAN BUSINESS COMMUNITY DURING THE U.S. – ARMENIA TRADE AND INVESTMENT FRAMEWORK AGREEMENT COUNCIL MEETING On 19 March 2018, at the premises of United Stated Trade Representative Office in Washington D.C., United States and Armenian high-level government officials held its Council Meeting in the scope of U.S. – AM Trade and Investment Framework Agreement (TIFA). The purpose of Government-to-Government meeting was to discuss opportunities for expanding and to identify barriers and ways to remove impediments for enhancing trade and investments between the two countries. The discussion was focused on Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Customs, and Intellectual Property Rights. Given than TIFA Council aimed at engaging the private sector, at the Business-to-Government session of the Council meeting, the AmCham President, Mr. Ara Hovsepyan, presented cross-sectorial issues raised by Armenian’s business community – such as lack of communication of the RA Government on reforms agenda, unbiased and fair Competition law enforcement, Intellectual Property Rights Protection, predictability of regulatory framework, and limited communication on Eurasia Economic Union reforms and EU – Armenia Comprehensive and Enhanced Partnership agreement. The AmCham also discussed issues specific to agriculture, Information and Communication Technologies, as well as Pharmaceuticals and Biotechnology sectors. Mr. Ara Hovsepyan encouraged two governments to actively collaborate with the private sector on the enhancement of US-AM trade and investment relations through the engagement into Council’s Working Groups. Another key recommendation was to create an “accountability” mechanism to keep the business community involved and up-to-date with the progress made towards resolving identified issues. “The American Chamber of Commerce in Armenia, as one of the leading and dynamic business communities in the country, is ready to support the public-private sectors’ constructive dialogue and provide its solutions based on the breadth and depth of its 120+ companies’ experience, capacity, and potential,” stated Mr. Hovsepyan. The Business-to-Government session was concluded by the presentation of Coca-Cola HBC Armenia General Manager, Mr. Christoph Speck, on opportunities and challenges ahead in the continuation of Coca-Cola’s 22 years of success story in Armenia. Trade and Investment Framework Agreement between the U.S. and Armenian Governments was signed on 7 May 2015 and aims to enhance bonds of friendship and spirit of cooperation, to expand trade, and to strengthen economic relations between the two countries. AmCham had a chance to interview TIFA Council participants upon arrival to Armenia, which is available in the next section of our newsletter.
TIFA INTERVIEW WITH… c. Sanitary and Phytosanitary Measures – Information sharing, in particular, on existing EEU veterinary certification and requirements that impact the import of US products to Armenia. d. IPR – Discussions on upcoming legal reforms on IPR. and their implementation e. Public Procurement – US access to the RA reforms package in this domain. f. Environment – Trade endangered species of wild flora and fauna was in the spotlight. As a result, a new legislation was passed, implementation steps identified.
Hovhannes Azizyan Deputy Minister of the Economic Development and Investments Q: In your opinion, what are the success stories or challenges governments have had since 2015 when TIFA was signed? A: GoAM gives a high importance to the conclusion of TIFA in 2015, as it gives an additional platform for mutual cooperation and facilitates the improvement of investment climate, the engagement of US companies in Armenia, and the development of trade relations between the two countries. The first steps we made in the scope of TIFA were to determine the discussion formats having the aim TIFA potential to be used to the fullest. As an initiation stage, 8 Working Groups were established, in the scope of which we had a set of discussions on various topics. Unfortunately, at the beginning, two different approaches were observed: GoAM perceived it as an extra platform to discuss making technical assistance from the US more effective; while, US representatives perceived it as a configuration, dialogue, and mutual cooperation platform. I believe it was possible to segregate those two approaches; and we agreed to discuss two areas - business climate improvement and trade regulations. We could have utilized the platform better during these 2 years of TIFA; however, I believe, we had some progress, which can be considered sufficient for this preparatory phase. Q: How do you assess the work done and results achieved by 8 Working Groups created under TIFA? A: We had progress in each Working Group, and given the initial stage, discussions were focused predominantly on experience and information sharing: a. Trade & Investment Promotion – AM access to information on GSP program and its procedures. US side conducted sessions on GSP with numerous local exporters’ participation. b. Technical Barriers to Trade – US access to information on Armenian regulations related to Eurasian Economic Union (EEU) membership. We also engaged the National Institute of Standards that presented existing regulations and potential development paths.
g. Labor – Discussions on structure- and jurisdictionrelated issues given the conventions signed by GoAM. h. Customs – US access to information regarding EEU Customs Code and its changes. During this year’s TIFA meeting we agreed to enhance the overall understanding and format of this Working Group. In a nutshell, so far, we had a learning phase where the US Government was able to enhance its understanding of the existing and proposed regulatory framework in different fields. Thus, I believe, it was a productive experience. As for the future actions, March meeting was a point, where the development of a Joint Action Plan was discussed.
In IT area, we discussed issues that are in Governments’ decision zone, and those that are primarily private-sector driven with some limited role of facilitation by the governments (in particular, PayPal system introduction in Armenia). As for the IPR, it was agreed that solutions for IP-related issues require longterm actions, thus additional follow-up meetings with the US Embassy will be held to devise joint actions for raising awareness in Armenia on IPR laws and regulations. For customs, we agreed to conclude Customs Mutual Assistance Agreement between the two countries that will facilitate customs clearance process and will eliminate “customs value” determination issues. Significant work still needs to be done here, and the Action Plan currently devised by two sides will incorporate customs-related actions. We also covered a special topic customs duties on aluminum foil exported from Armenia to the US. Lastly, we also discussed EU-AM Comprehensive and Enhanced Partnership Agreement, which US Government views as an additional benefiting factor for the improvement of business climate in the country and attraction of US companies to Armenia. To sum up, both sides were satisfied with the meeting outcomes, and as soon as the Joint Action Plan would be finalized, based on the priorities, we may consider revamping the Working Groups and continue further active cooperation. Q: What mechanisms does the Government of Armenia consider to enhance the engagement of the private sector in this dialogue?
TIFA Council meeting; 19 March 2018 ; Washington D.C., United States
Q: What are the key outcomes of /agreements reached at 19 March 2018 TIFA Council meeting? A: Prior to March 19, we had discussions with local exporters and AmCham leadership to understand key issues related to US import regulations. Later on, AmCham participated at the open session of March 19 event and presented Armenia’s private sector voice/suggestions, which was very helpful and valueadding. Moreover, AmCham presented not only hurdles of Armenian producers in exporting to the US, but also existing gaps and positive developments in Armenia’s investment climate. We believe AmCham’s input was very constructive and was highly appreciated from both sides given that it was an unbiased assessment.
Both governments give utmost importance to the engagement of private sector in this dialogue, thus the open session was also held on March 19. However, we should be clear, which issues should be purely on government-to-government domain, and which ones should embrace private sector. In my opinion, all discussions related to the improvement of investment climate should bring businesses on board. Also, there is a need to understand how to raise the awareness and deliver messages to the private sector. We should have a mediator there. Conveying “business voice” in a professional manner is very important, and AmCham has a high value and role here. We consider AmCham as not only a “business voice” presenter, but also as a body or a bridge that can support Armenian exporters by providing user-friendly, simplified guidelines on US import procedures and regulations. And we look forward to closely working with AmCham in the near future.
During March 19 meeting we reached a set of agreements on various directions. I would like to pinpoint just several of them. RA SFSS will closely work with the identified US Points of Contact to raise issues on regular basis and in a less-time-consuming setting, thus helping the exporters to better understand the requirements and regulations to enter the US market. Establishment of a simplified system in the field of veterinary was also discussed. TIFA Council meeting; 19 March 2018 ; Washington D.C., United States
TIFA INTERVIEW WITH… I think, there is a need to further increase the awareness among the business community about the platform opportunities, how it works, and what significant role the companies can play there, and how they can address the issues that hinder refinement of business environment. Also, a flexible and open accountability mechanism should be established to report on progress made in solving issues raised by the business community, where the joint Action Plan creation is the key to success.
Ara Hovsepyan AmCham President/ General Manager of ContourGlobal Hydro Cascade CJSC
Q: In your opinion, what are the critical areas that US and AM Governments need close attention at in order to bring the economic cooperation between the U.S. and Armenia to the next level? A: TIFA platform can be a very strong tool to further advance the business and trade relations between the two countries. This is the opportunity to fully utilize the TIFA platform for further enhancement of bilateral engagement of the private sector that plays a key role in this process.
Q: What are the impressions from the participation at US-AM TIFA Business-to-Government session and how do you see the role/engagement of AmCham to enhance the bilateral economic relationship between the two countries? A: As you know, AmCham was not part of the Government-to-Government discussion that day, and this is the official format that was followed. However, the feedback we have been hearing is quite positive. As for the Business-to-Government session, I think it was constructive and proactive enough to convey the gaps and positive developments not only of AmCham members, but of the whole Armenian business community. And, frankly, I would like to see more companies at that session, but unfortunately, only AmCham and Coca-Cola representatives were able to participate. When companies experience challenges and face problems in any domain of economy, they need to vocalize them in a constructive and open manner.
Moreover, I believe, companies need to take the “driver’s seat” and come up with solutions and recommendations. Given AmCham 120+ members’ breadth and depth of experience and knowledge of international best business practices, AmCham is ready to lead the constructive dialogue with the Governments and serve as a trusted and unbiased bridge between the private and public sectors. I truly believe that this is the most important step that AmCham can commit to open up more transparent and proactive dialogue between private and public players. Q: Any specific actions on AmCham’s to-do-list? A: Everybody understands that the reforms and improvements cannot be “over a night” change some areas require a long-term strategy, vision, and well-thought actions. However, we clearly see that we have issues that can be tackled in a short run and become mutually beneficial “quick-wins.” Here, the commitment, devotion, and hard work are of paramount importance; the willingness and support of the public sector is required to be represent at the fullest at TIFA platform, as well as the strong and transparent private sector voice. To this extent, AmCham is ready to bring all those efforts to the table. As a next step, AmCham will wait for the Governments to finalize the Action Plan, then, meet and discuss the actions that it will lead for the better business and investment climate in Armenia and for the fruitful business and trade cooperation between the US and Armenia.
The private sector can testify to the effectiveness and impact of the changes in the country. Q: What were the key challenges your company brought to the attention of the governments?
Christoph Speck General Manager of Coca-Cola Hellenic Bottling Company Armenia Q: Since Coca-Cola presented during Business to Government session at TIFA Council meeting, what are the learnings and recommendations that you can give to the private sector representatives as well as the government side to make the session more proactive? A: In my opinion Business to Government sessions, held in the frame of TIFA Council meetings, not only help build a comprehensive picture of the possibilities to enhance the cooperation between the two countries, but also strengthen the bridge between the government and the private sector. In order to make this dialogue more efficient it is important for both sides to keep an open mind and share openly their first-hand experience and available expertise.
A: We are proud to be one of the first international investors, bringing our Group’s global expertise, contributing to the development of the Armenian economy in general, and FMCG market in particular. As any other, the Armenian economy has its challenges, such as relatively small market size, scarcity of suppliers in line with international quality standards, lack of favorable conditions for foreign investment, emigration of talents and others, however, that said, we do believe in the potential of the country and its economy and we are fully committed to invest further into the socio-economic development of Armenia. Q: How do you see the future contribution of Coca-Cola to the enhancement of bilateral economic relationship between the countries using the TIFA platform? A: Coca-Cola is a global company, with an outstanding history of achievements. One of the keys to the Company’s success is the expertise we possess globally. It is that experience and benchmark, along with the best-case practices, that our Group in general and Coca-Cola Hellenic Armenia in particular is willing to share with stakeholders to contribute to resolve some of the economic challenges and strengthening ties between the two countries.
TIFA Council meeting; 19 March 2018 ; Washington D.C., United States
Q: As a private sector representative what are your expectations from TIFA Council meeting, how you see the follow up? A: I think it was very important to present the point of view of the private sector on some of the opportunities and challenges that we see on the market and we are very grateful for the opportunity to be heard. The next step for us, together with other representatives of the private sector, would be to have round table discussions with representatives of the government. Together we can turn the challenges around and enhance further the economic growth of Armenia, including making the environment more attractive for investments.