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More Armenian Customs Brokers Accused Of Tax Fraud


Armenia - A customs checkpoint on the Armenian-Georgian border, 15Apr2017.

Two more customs brokerage firms operating in Armenia have been accused of evading of millions of dollars in taxes, it emerged on Friday.

The State Revenue Committee (SRC) said its investigators have raided the Yerevan offices of the two private firms, Sargsian Import and Arm And Man, mainly engaged in commercial cargo shipments from China, Turkey and other nations. They have confiscated financial documents and summoned “many individuals” for questioning as part of a criminal investigation into of “large-scale” tax evasion,” the government agency said in a statement.

“According to preliminary calculations, damage inflicted on the state exceeds 2 billion drams ($4.1 million),” read the statement. It did not specify whether anyone has been formally charged yet.

Many Armenian companies as well as individual entrepreneurs have traditionally hired brokerage firms to pay import and other duties at the border. Widespread corruption within the national customs service, which is part of the SRC, has only added to their dependence on such middlemen. Customs officers have long enjoyed discretionary powers to estimate the market value of goods imported from non-Western countries and tax them accordingly.

It was not clear whether the two firms accept the fraud accusations. According to the SRC statement, one of them is controlled by Bagrat Navoyan, a wealthy businessman who owns a travel agency and a public transport company. Navoyan is also the owner of a major Armenian football club, FC Alashkert.

A similar criminal case was brought late last month against another, larger customs brokerage firm reportedly linked to the former head of the SRC, Vartan Harutiunian. Armenia’s National Security Service (NSS) claimed that the company, Norfolk Consulting, has evaded $7 million in taxes since being set up last summer and obtaining exclusive rights to process imports from China, the United Arab Emirates and Turkey.

Norfolk’s executive director, Armen Unanian, and two chief accountants were arrested on May 27.They all were released from custody on June 5.

In a statement reported by Aysor.am last week, Unanian admitted to tax evasion and said he has already paid an equivalent of $3 million to the government. He said he will also compensate the state for the rest of the tax shortfall alleged by the NSS.

A figure close to former Prime Minister Karen Karapetian, Harutiunian resigned as head of the SRC shortly after Nikol Pashinian was elected prime minister on May 8. The new SRC chief, Davit Ananian, has promised a tougher crackdown on companies and individuals underreporting their earnings.

Ananian said on May 24 that Armenia’s tax revenue will be “substantially higher than planned” this year. It rose by more than 7 percent in 2017.

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