Monthly №6 Newsletter 2017

For a Better Business Environment

MONTHLY MONTHLY N1

№6 NEWSLETTER NEWSLETTER

American Chamber Of Commerce in Armenia AmCham is an independent business association operating in Armenia since 2000. AmCham represents the interests of more than 100 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.

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June 2017

AMCHAM “BE MY GUEST” WITH RADISSON BLU HOTEL YEREVAN On 1 June 2017, Radisson Blu Hotel Yerevan hosted AmCham members. During the site visit, guests had the opportunity to learn about the history of “Radisson Blu” hotel and to have a tour of guest rooms and hotel facilities (including conference halls, swimming pool and spa, restaurants). The participants enjoyed Radisson Blu delicious refreshments and the panoramic view from AdAstra Rooftop Restaurant. They also received surprise vouchers for Larder Park café.

For more information about the hotel, please visit the official website of Radisson Blu Hotel Yerevan.

CONTACT US 1 Amiryan St., Armenia Marriott Hotel, 3rd floor, room 315, 317, Yerevan 0010, RA Email: info@amcham.am/ amcham@arminco.com 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

AMCHAM COMMENCED “GENERAL MANAGERS BREAKFAST MEETINGS” AmCham has initiated “GM Breakfast Meeting” series, during which a limited number of General Managers has a discussion on business and investment climate in the country, hear from AmCham President, Board representatives, and the Executive Office on ongoing AmCham current activities and upcoming initiatives/plans.

This is a regular setting, where GMs of member companies are rotated. The first meeting took place on June 20 with the participation of executives from HSBC Armenia, FINCA Armenia, OPTYM Armenia, SEAF Armenia, SI Holding, and IBIS Hotel.

AMCHAM MEMBERSHIP MEETING WITH SCPEC On 21 June 2017, AmCham organized a membership meeting with Mr. Artak Shaboyan, Chairman of the RA State Commission for the Protection of Economic Competition (SCPEC) - “Reassessing the Competition Landscape in Armenia: Current Challenges and Look-Ahead.”

During the event, the participants heard key remarks from H.E. Richard M. Mills, Jr., the US Ambassador to Armenia: “The SCPEC has an important role to play in creating an attractive investment climate. We encourage the Commission to promote transparency in fostering constructive public dialogue between the antitrust enforcement agency, academia, the judiciary, and the private sector to improve the business environment and consumer protections, and to attract more foreign investment to Armenia.” SCPEC delivered a presentation on its operations and cases, including Burger King Corporation and Microsoft case studies, which was followed by a interactive working-level discussion. As a result, AmCham members had the opportunity to provide their feedback and comments on the proposed amendments of the Competition Protection Law.

AMCHAM “BE MY GUEST” WITH DOUBLETREE BY HILTON YEREVAN CITY CENTRE In the scope of AmCham “Be My Guest” series, on 29 June 2017, AmCham members visited DoubleTree by Hilton City Centre, heard the welcome speech by the General Manager, Mr. Luciano Casagrande, learned about the Hilton Honors Rewarding Program, and enjoyed the hospitable ambiance of the hotel. At the end of the day, all the participants got a surprise vouchers for Gold Restaurant. To learn more about the hotel, please visit the link.

Welcoming New Members!

INTERVIEW WITH…

David Sargsyan Partner and Head of Legal Advisory Services at Ameria Group of Companies

within the team does not match Ameria’s client-focused values and principles, we do not accept that person’s service delivery. In Ameria we always keep the standard of the highest quality.

in one instrument very clear rules for the investor to analyze and make the decision of entering the market or not. To that end, I think that the changes might work for the benefit of future investments.

Q: Ameria Legal provides legal counseling and advisory to various sectors of economy, which one you believe is the most challenging in terms of the existing legal framework?

Q: With the recent changes in the RA Constitution, how do you see the impact of those on the corporate governance and business environment in general?

A: I would not focus on the economy, but rather on concepts that do not exist in Armenia. I believe, there is a need to further develop the rules on shareholding that will allow for proper shareholding agreements. For example, currently, a lot of issues on the shareholder level are not properly addressed and resolved under the defined Armenian law instead of being resolved on contractual basis. Another hot topic that we need to develop desperately in order to boost proper investments in the country is the PPP legal framework. This is an area that Ameria has a significant contribution to.

Q: In the long list of legal cases you won, which makes you the most proud of?

Q: Mr. Sargsyan, why law?

A: Very difficult question to answer. Nobody from my family was engaged in legal profession, so no family tradition to follow, and it was purely my decision to take the law based on “the rule of exemption.” My father, being a construction engineer, did his best to acquaint myself to engineering world; however, later on, he understood that my humanitarian mindset was stronger than the mathematical one, and he supported me in my decision to follow the “law path,“ where I obviously succeeded.

Q: What are the key competencies and skills that a top-notch lawyer, like you, should have? What are your personal qualities that took you to where you are now?

A: Well, thank you for such qualification. I am one of many lawyers we have in the market and maybe to some extent successful in this or that area, as people tend to specialize. I believe that the major and most important qualities one should have regardless of the profession are: continuous development and improvement; a broader perception of the situation; and out-of-the-box thinking. Those are the major qualities I have got especially from my Western education. Unfortunately, Armenian local perception is mostly based on the rule of ”yes” or ”no,” either you can do or you cannot. There is no effort to have the comprehensive understanding of the rule to make it work as an innovative solution. I believe, this ability has a significant importance for our market and is a success for Ameria brand: Ameria finds solutions that others do not find or even do not risk to find.

Q: What were the win themes or differentiators for Ameria Group of Companies to become one of the key players in the market?

A: In addition to out-of-the-box thinking and innovative solutions, Ameria is always near the client, always with and for the client. The service delivery is the key component; moreover, the service delivery of the highest quality is the requirement, and if anyone

A: I would not put the word “won,” but rather cases where Ameria had a contribution and succeeded in closing transactions. For me personally and my team, I think the most important case was the entrance of ContourGlobal into Armenia. This Western investment brought a diversity into the energy supply market. The transaction itself was very challenging, dynamic, and full of cooperation with other site lawyers and international experts. It took several years to pre-close, pre-execute, and then finally arrive at closure. We had a very steep learning curve.

Q: You were standing at the roots of securities market establishment in Armenia. How do you assess the progress our country has made since mid-90s and challenges of the securities market legislation these days?

A: Yes, we did some work on that in the scope of USAID initiative. I worked with a company that won the tender to implement the project. There is still a room for improvement, because unfortunately securities market is not as active as we would wish. Yes, the legislative framework has developed further: it has been simplified in terms of rules and, at the same time, it has become more comprehensible. Moreover, we have several companies listed on the market, there are bonds. However, I believe there should be a boost in the Armenian economy to take the securities market to the next level of its development.

At this point, the market is too small, and I think regional players should have a significant role in further establishment of this institution.

Q: The RA Government has proposed amendments to the “Investment Law.” In your opinion, would these changes, if approved, attract more foreign investments and what would be the general impact on the country?

A: The investment legal framework in Armenia was developed at the roots of the independence. One of the major laws, the foreign investment protection legislation initiative, has been changed since many years. It has grandfathering clause, which precludes the implementation of future negative changes in the legislation towards the foreign investment for certain number of years, etc. So, any change proposed now should be based on the history of law and consider all other changes within the legislative framework in order to have

A: We are actually in transformation to the new constitution governance framework to be established on the level of the general governance of the country.

In my opinion, it does not really impact because those are different areas. Corporate governance is a part of the private institutional development, while constitutional change is a reformation from presidential republic to the parliamentarian governance framework. Of course, if we compare, those are more interrelated and more closer to each other. I would think that changes in the corporate governance and business environment in general are not based on the changes of the constitution. Those are based on the practical implementation of the laws, which are, in my opinion, quiet modern and up-todate. The country needs to improve the compliance and implementation practice of the existing laws in Armenia.

Q: Having a lawyer spouse, do you have a “couple’s guide” to nurture and flourish the relationship?

A: Interesting question. I don’t have any kind of agreement with my wife, or in legal world “prenuptial agreement.” Once, I received a call from a foreign client asking me whether I can assist him with the prenuptial agreement with his future wife: he was from Germany and she - from Armenia. To his question whether I had any experience in the prenuptial agreement, I told “yes,” and to the question how many agreements I had under my belt, I told “zero.” He was surprised on how I would manage his case. Well, in Armenia, one will not find a real lawyer doing prenuptial agreements, it is almost non-existent here.

But apart from that, in the family we have unwritten rules that guide us. The major one is that we never fight over the legal matters, and we respect each other’s opinion. We don’t show off our strengths: we are equal. And another important factor that has a crucial role in the relationship is that we do not interfere in each other’s affairs, we do not disclose information about our clients due to the possible conflict of interests - the market is small. Basically, in some instances, I have no idea what my wife’s current deals are, and vice-versa. We just discuss the general concepts as subject matter experts. We do acknowledge the position of each other, even if we do not agree.

Q: Last words to young professionals for selfperfection and growth?

A: Unfortunately, due to time limitations, I no longer teach. It was one of major drivers for me to interact with young generations, get fresh blood, and be in shape to answer challenging questions. My advice, especially in the world of globalization with no borders and limits to education and knowledge, is to be innovative thinker, never stop developing, and listen to your client, while following the rules and principles of the profession.