“The active participation of non-resident companies in public procurements has obviously been increased. The risk is that non-resident companies are taking an advantageous position in the tenders,” this is stated in the 2013 Annual Report of the Control Chamber (CC), in the Section on Procurements organized with participation of non-resident companies and those registered in offshore zones. According to CC, the non-resident companies, and those registered in offshore zones, unlike the companies registered in Armenia, are in very advantageous position because the state control and supervisory bodies of Armenia cannot exercise a complete supervision on given procurement. To confirm this problem, the Chamber of Control has brought the example of the procurements organized by the Penitentiary Service of the Ministry of Justice. Accordingly, “Tisa” CJSC and “Avangard” LLC non-resident companies are participated in the procedures on procurement of building materials, household, sanitary-hygiene, and laundry detergents, and were announced as winners. Contracts of 127,619.6 thousand drams were signed with them. The CC has noted that the obligation on income tax calculation, collection, and transference to the state budget of Armenia for non-resident companies was assumed by the Penitentiary Service as a tax agent, which was not provided, resulting in proportional decrease of RA state budget entries. The CC has also revealed that local companies are establishing non-resident companies in “artificial way” and thus participating is the public procurements. “A local company interested in any tender intentionally establishes a non-resident company or establishes connections with similar company to be able to be recognized as a winner by occupying an advantageous position, and sign a contract. As a result, participation of some non-resident companies in public procurements is becoming a mere formality; the funds are transferred out of the republic. The supervision also decreases,” says the CC report. With the example illustrated by the Chamber of Control, in 2012, to supply with pedigree heifer, on December 19, 2011, the Ministry of Agriculture is signing contract with “DAKHKHAN” LLC and P/E Samvel Amirkhanyan consortium. The company acquired the heifers from Agro-Vest Plus s.r.o. Czech company, which was established on February 29, 2012, after signing the contract with the Ministry of Agriculture and transferring the amount. The founder of this company is Edik Amirkhanyan, who is the brother of the consortium participant “DAKHKHAN” LLC Director Radik Amirkhanyan and registered in Czech Republic P/E Samvel Amirkhanyan. “According to the customs declarations of supplied heifers, the customs value of one heifer was 1,371,195 drams (a total of 287,950.9 thousand drams for 210 heifers), in the event that the contract value was 270,900.0 thousand drams. Therefore, the consortium, according to submitted documents, allegedly had a loss of 17,050.9 thousand drams,” said the CC report. In addition, the Ministry of Agriculture, according to the Chamber of Control, had signed the contract on procurement of 210 heifers, whereas 230 heifers passed the customs clearance on behalf of the Ministry. The buyer of these heifers, pursuant to the Agro-Vest Plus s.r.o. Czech company invoices, is the Ministry of Agriculture of Armenia, and the buyer is DAKHKHAN Ltd. The CC had disclosed another example of “taking out” the money from Armenia. The report says that under the 2nd strategy implementation grant program of the Public Sector Accounting Standards, for acquisition of full testing of drafts and manuals of legal acts on accounting and installation of an automated accounting system, a 704 thousand dollar contract was signed with Cyprus «Four Assist Development Consulting Limited» company, and the amount, excluding the taxes, was transferred to Cyprus to the account of this company. The Cyprus company in its turn, on the same day of signing the contract, for providing consulting services stipulated by the contract, is signing a 288 thousand dollars sub-supply contract with “PHP Partners” Ltd registered in Armenia, which has implemented the whole volume of the work under the contract as a sub-supplier.
Nelly BABAYAN
