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Armenian Tax Chief Probed Over Business Ownership


Armenia - Gagik Khachatrian, head of the State Revenue Committee, at a news conference in Yerevan, 20Feb2013.

Armenia - Gagik Khachatrian, head of the State Revenue Committee, at a news conference in Yerevan, 20Feb2013.

A state anti-corruption body has launched an inquiry into a possible conflict of interest stemming from the alleged ownership by Gagik Khachatrian, the controversial head of Armenia’s tax and customs services, of lucrative businesses.

The state Commission on the Ethics of High-Ranking Officials has given Khachatrian until Tuesday to provide detailed explanations regarding persistent media reports implicating him in large-scale economic activities.

The commission based at the presidential administration building in Yerevan issued the order on April 13 in response to a request by the Anti-Corruption Center (ACC), the Armenian branch of the Berlin-based watchdog Transparency International. The ACC in turn cited an article published in the pro-opposition daily “Haykakan Zhamanak” last October.

The article contained a long list of companies which it said are owned by Khachatrian. Among them are a major Internet and cable TV service provider, two food-importing companies, one supermarket, a car dealership and a luxury watch store in Yerevan. According to “Haykakan Zhamanak,” the head of the State Revenue (SRC) also controls a company that has a legal monopoly on supplying paper for cash registers used by thousands of businesses.

The anti-graft commission is due to investigate whether Khachatrian’s alleged links to those firms constitute a conflict of interest.

The SRC declined to comment on the inquiry on Monday. It strongly denied Khachatrian’s involvement in business earlier this month. In a statement posted on its website, the tax collection agency slammed unnamed media “attributing assets” to its powerful chief.

Opposition-linked and independent media outlets have for years portrayed Khachatrian as one of the country’s richest men.

In a March 13 interview with RFE/RL’s Armenian service (Azatutyun.am), one of Khachatrian’s deputies, Armen Alaverdian, insisted that the SRC chief does not “personally” own any businesses. “But as far as I know, people close to him might be involved in entrepreneurial activity,” Alaverdian said.

Sona Ayvazian, the deputy director of Transparency International’s Armenian affiliate, said that even if this is the case the ethics commission should clarify whether Khachatrian has exploited his government position to help his wealthy relatives or friends. “They should also investigate to what extent those businesses have fulfilled their tax obligations,” she told RFE/RL’s Armenian service (Azatutyun.am).

Ayvazian argued that the official reason for the recent sacking of Nerses Nazarian, the Yerevan police chief, was his involvement in business. Nazarian had repeatedly denied such involvement, saying that companies linked with him are owned by his son.

In a recently circulated annual report, Armenia’s state human rights defender, Karen Andreasian, said that owning businesses is the norm among tax and customs officials. The report said some of the companies belonging to them or their cronies enjoy privileged treatment by the tax authorities, undermining their competitors.
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