President Armen Sarkissian has signed into law a controversial government bill allowing the confiscation of private properties and other assets deemed to have been acquired illegally, while warning against its “unscrupulous enforcement” by the authorities.
The bill passed by the Armenian parliament last month allows prosecutors to investigate individuals in case of having “sufficient grounds to suspect” that the market value of their assets exceeds their “legal incomes” by at least 50 million drams ($103,000). Should the prosecutors find such discrepancies they can ask courts to nationalize those assets even if their owners are not found guilty of corruption or other criminal offenses.
The latter will have to prove the legality of their holdings if they are to retain them. They will also be given the option of reaching an out-of-court settlement with the prosecutors, which would require them to hand over at least 75 percent of their assets in and outside Armenia to the state.
The government says that current and former state officials facing corruption charges will be the main targets of the legal mechanism for asset forfeiture. Prime Minister Nikol Pashinian has repeatedly portrayed it as a major anti-corruption measure that will help the authorities recover “wealth stolen from the people.” Pashinian has indicated in recent weeks his intention to use it against the country’s former rulers and their cronies repeatedly branded by him as “plunderers.”
The two opposition parties represented in the parliament have backed the bill in principle while proposing various amendments to it and voicing other reservations.
But other, more hardline opposition groups and figures have condemned the bill as unconstitutional and accused Pashinian of planning a far-reaching “redistribution of assets” to cement his hold on power. They claim that this will only discourage Armenian and foreign entrepreneurs from investing in the country.
Deputy Prime Minister Mher Grigorian likewise warned that the bill could scare away investors and lead to capital flight from Armenia when the government discussed and approved it in December.
Some of the critics, among them supporters of the former government, urged Sarkissian last month to ask the Constitutional Court to rule on the bill’s conformity with the Armenian constitution.
The president decided to sign the bill into law, however. In a lengthy explanatory note released on Monday, his office said that “numerous” Armenian non-governmental organizations, legal experts and even foreign investors have voiced concern over the legislation and its possible negative impact on the domestic business environment. It said the presidential administration has discussed those concerns with Justice Minister Rustam Badasian and received “clarifications” from him.
“The president of the republic attaches great importance to the fight against crime,” read the statement. “At the same time, it is expected that the law must be implemented in strict conformity with the legitimate aim of its passage.”
“An unscrupulous enforcement of the law could undermine trust in the state and jeopardize its effectiveness,” it said.
Sarkissian’s office specifically warned the authorities against arbitrarily accessing and using citizens’ personal data, breaching bank secrecy or hampering business activity and competition.
The statement did not clearly explain why Sarkissian chose not to request a Constitutional Court judgment on the legality of asset seizures sought by the government.
Meanwhile, Pashinian met with Badasian later on Monday to discuss practical modalities of the law’s implementation. The justice minister, who is the main author of the legislation, confirmed that the process will be handled by a new division that will be set up within the Office of the Prosecutor-General in the coming months.