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Parliament Rejects Import Tariff Sought By Tsarukian


Armenia -- A cement plant in Ararat.

The National Assembly approved on Friday a government bill which the opposition Prosperous Armenia Party (BHK) said is not far-reaching enough to protect domestic manufacturers of cement against cheap cement imports from neighboring Iran.

The parliament’s pro-government majority refused to amend the bill amid mounting political tensions with BHK leader and businessman Gagik Tsarukian, whose assets include one of Armenia’s two cement plants.

Earlier this year, the Armenian government moved to impose hefty taxes on imports of much cheaper Iranian cement which more than tripled last year, threatening continued operations of the Armenian plants. An Armenian parliament committee on economic issues watered down the relevant government bill on April 12 to ensure that the tariff does not apply to cement clinker, a nodular material developed before the final stage of cement production and easily turned into the construction material.

Tsarukian’s Multi Group, which includes the Ararat Tsement plant, denounced the amendment, saying that it renders the bill meaningless. It said Ararat Tsement would be able to use cheap Iranian clinker and manufacture cement without the vast majority of its more than 1,000 workers. Hundreds of them received notices of termination later on April 12.

The workers responded by going on strike on April 15. They ended the protest after Tsarukian cancelled the planned layoffs two days later. The tycoon cautioned at the same time that the clinker tariff sought by him is vital for the future of the plant located in Ararat, a small town 50 kilometers south of Yerevan.

Armenia -- A cement plant in Hrazdan.
Armenia -- A cement plant in Hrazdan.

BHK lawmakers echoed those warnings as the parliament debated the bill and ultimately passed it in the first reading on Friday. “We would lose our cement production capacities,” one of them, Mikael Melkumian, said.

Minister for Economic Development Tigran Khachatrian and pro-government deputies insisted, however, that cement imports must not be blocked altogether because healthy competition between domestic and foreign manufactures will only benefit Armenia’s construction sector.

Hayk Gevorgian, a senior lawmaker representing Prime Minister Nikol Pashinian, also attacked Tsarukian, saying that a company presumably linked to the BHK leader had privatized Ararat Tsement for just $200,000 in 2002. Gevorgian also implicitly accused the company of evading taxes until last year’s “velvet revolution” that brought down the country’s former government.

Tsarukian angrily denied those claims in a rare speech delivered on the parliament floor. In separate comments to the press, he said that Pashinian’s bloc will bear responsibility for economic consequences of the bill.

Armenia - Businessman Gagik Tsarukian (L) and protest leader Nikol Pashinian speak to reporters in Yerevan, 2 May 2018.
Armenia - Businessman Gagik Tsarukian (L) and protest leader Nikol Pashinian speak to reporters in Yerevan, 2 May 2018.

Tensions between My Step and the BHK have risen since Tsarukian strongly criticized the government’s economic policies early this month. Senior representatives of the two political forces traded fresh accusations in the parliament on Thursday.

Pashinian and Tsarukian met to discuss the cement dispute and other contentious issues later on Thursday. Tsarukian afterwards described the meeting as “very warm” but did not report any concrete agreements.

The BHK backed the Pashinian-led “velvet revolution” as it gained momentum in April 2018. It joined Pashinian’s first cabinet formed in May. The premier fired his BHK-affiliated ministers in October, accusing Tsarukian’s party of secretly collaborating with the former ruling Republican Party.

The BHK finished a distant second in the December 2018 parliamentary elections which Pashinian’s bloc won by a landslide.

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