Three senior executives of a customs brokerage firm reportedly linked to the former head of Armenia’s tax and customs services have been arrested as part of a crackdown on corruption announced by the National Security Service (NSS).
The NSS accused the private firm, Norfolk Consulting, of failing to pay millions of dollars in taxes and customs duties after raiding its offices, searching other premises, and announcing the arrests late last week. It claimed to have confiscated $500,000 in cash from the home of the company director, Armen Unanian.
An NSS statement said that Norfolk Consulting was set up in June last year and quickly gained de facto exclusive rights to process commercial cargo shipments from China, the United Arab Emirates and Turkey. It said nine other customs brokerage firms handling those imports until then were effectively driven out of business because of a “special privileged status” enjoyed by Norfolk with the help of senior officials from the State Revenue Committee (SRC).
The NSS charged that Norfolk may have since earned $7 million in “illegal revenue” by helping importers evade or underpay taxes. The precise “damage inflicted on the state” will be ascertained as a result of an ongoing examination of the company’s books, it said.
Unanian as well as the company’s chief accountants, Tigran Zohrabian and Simon Arakelian, were formally charged and remanded in pre-trial custody on Monday. Marine Mkrtchian, a Norfolk cashier also detained on Friday, was released from custody pending in investigation.
It was not immediately clear whether Unanian, 51, will plead guilty to the fraud accusations levelled against him. The lawyer for the two other arrested suspects said that they both deny helping importers evade taxes.
“We believe that the accusations are completely unfounded,” the lawyer, Armen Andrikian, told RFE/RL’s Armenian service (Azatutyun.am).
According to the NSS statement, two former deputy heads of the SRC have been questioned as “witnesses” in the investigation. It said nothing about Vartan Harutiunian, who ran the tax collection agency until last week.
A figure close to former Prime Minister Karen Karapetian, Harutiunian managed the Gazprom-Armenia national gas distribution network before being appointed as head of the SRC in October 2016. Unanian, the arrested Norfolk director, is Gazprom-Armenia’s former chief accountant.
The Armenian customs service has long been regarded as one of the country’s most corrupt government agencies. Harutiunian pledged to reform it after taking office. The SRC reported last year a sharp rise in customs duties and other import taxes collected by it.
The high-profile arrests came a week after the new head of the NSS, Artur Vanetsian, said that many individuals who have long “enriched themselves through large-scale corruption schemes” will be held accountable soon. The NSS will strive to ensure that they compensate the state for public funds embezzled by them, he said.
Vanetsian on Monday promised more corruption “revelations” in the coming days. “All corrupt officials will be punished,” he told reporters.
Prime Minister Nikol Pashinian, who named Vanetsian to run the powerful security agency, has repeatedly pledged to “root out” government corruption in Armenia since he swept to power on May 8 after weeks of massive anti-government protests led by him.
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