Business raises its Voice: Workshop on Corruption Risks in the Business Sector

Representatives from dozens of non-governmental organizations, business associations and businesses, officials from state agencies, overall more than 50 people participated in the workshop “Corruption Risks in the Business Sector of Armenia: Recorded Problems and Upcoming Activities,” which took place on 28-29 May in Aghveran.

The topics were different, the issues raised were topical, and the proposed solutions were interesting as well. If business was not previously involved in the fight against corruption, did not speak and avoided from having direct effect, currently the situation has changed, and changed just as a result of such debates.

Speaking about the participation of business sector Mr. Suren Krmoyan, the RA Deputy Minister of Justice said, “A Year ago, business did not have any significant participation in the fight against corruption. We declared that it is important that business shall understand its role and place. Businesses can be involved in corrupt activities first of all. And eventually the business organizations and unions are also beneficiaries of the fight against corruption.”

The process of involvement of business was launched by the efforts of Transparency International Anti-Corruption Center and Armenian Lawyers Association NGO. Today, the success is evident.

The process of involvement of business was launched by the efforts of Transparency International Anti-Corruption Center and Armenian Lawyers Association NGO and has achieved certain success. “I do not intend to say that we have very good results, but I also do not want to neglect the results that now exist. First of all, the business became more active and began to speak about the problems. Recently, we also noticed that business associations are trying to raise issues related to corruption, to discuss and resolve them.”

“We already have very little time to only raise the issues; the current demand is to solve the proposed issues,” declared the President of Armenian Lawyers’ Association (ALA), Coordinator of the CSOs’ Anti-Corruption Coalition Secretariat Karen Zadoyan. According to the ALA President the government has begun working more constructive in this regard. “We see this will and the expression of the will is the fact that the Government participates in this event in a very important a representative order,” Mr. Zadoyan said.

The sooner we achieve neutralization of corruption risks in business sector the more our economy shall gain. Mr. Karen Azaryan, Trade Officer at European Commission – EU Delegation to the Republic of Armenia stressed the importance of raising the issues. According to him rising the problem plays an important role. He believes that corruption is one of the main problems, which hinders economic growth and corruption is the enemy of business which swallows up everything that should be aimed for investments.

According to Ms Naira Gyulnazaryan, Coordinator of Anti-Corruption Projects of OSCE Yerevan Office, business societies are a great and powerful force in fight against corruption. “I do not want to talk about the harmfulness of corruption in our country and what mechanisms are needed to be introduced to reduce it. I should only say that application of proper systems, the corporate governance and suspension of financial flows caused by the corruption – the “money laundering” is essential for the economy,” she said at the working meeting “Corruption Risks in the Business Sector of Armenia: Recorded Problems and Upcoming Activities.”

This year, similarly as it was in the past year, such discussions are distinguished by the fact that the business sector also supports organization of the working meeting, specifically, “Arthurs Aghveran Resort” Hotel Complex. “I really highlights this event in the fight against corruption involving state, business and civil society,” Ms Siranush Kaytsakyan, Director of the complex emphasized.

The opening speeches were followed by the discussions. Mr. Suren Krmoyan, Mr. Karen Zadoyan and the President of the SME Cooperation Association, Governing Board Member of the CSO Anti-Corruption Coalition of Armenia Mr. Hakob Avagyan referred to the topic Cooperation between the Government, business organizations and CSOs towards fighting corruption in the business sector: opportunities and challenges.

According to Mr. Avagyan until now, the most well-known corruption occurrences in business sector that we know are the following: customs clearance, communication with the tax authorities, public procurement, and advertisements and permissions in the local self government, etc.

He said that such threats occur during the customs clearance in the issues of the use or non use of the “transaction price” method, in carrying out customs inspections, carrying out customs control for small cargo crossing the border, as well as when requesting other required certificates, certificates and references.

Miss Mariam Zadoyan, the Local Expert of the “Multi-Faceted Anti-Corruption Promotion” project implemented by the ALA spoke about the fight against corruption in the business sector and dangers coming from offshore zones.

She spoke about the international experience, presenting them in the context of recent developments. The expert also referred to the process of introducing the Whistleblower’s institute and establishing guarantees for their protection.

Mr. Carl Ulbricht, the International Expert of the “Multi-Faceted Anti-Corruption Promotion” Project spoke about corruption risks in the field of public procurement and the necessity of implementing reforms targeted at their reduction.
He presented the sector and statistics, stressing that in the case of procurement from a single source, the contract price has never been less than the price estimates and often exceeds the market value.

Mrs. Astghik Karapetyan, Ms. Astghik Karapetyan, Investigative Journalist at website, introduced the topic Investigative Journalism in the field of public procurement.

In her opinion, the corruption risks grow where there is something to “sell” and “buy”. This is a problem in all countries of the world. She stressed that corruption in public procurement is not just about money. It also reduces the quality of the products and services and it may cost lives.

Astghik Karapetyan substantiated her arguments with examples of her own investigations published on the website.

Finally, she suggested her own solutions; they are monitoring by the civil society, mass media, publicizing the problems, legislative changes, introduction of regulatory and control mechanisms.

Mr. Varuzhan Hoktanyan, Executive Director of Transparency International Anti-Corruption Center spoke about corruption risks in monopolies and referred to Prime Minister Hovik Abrahamyan’s words as well as a focused on the international experience.

“Corruption risks in the field of free competition and monopolies and the steps taken in the direction of solving them” was the topic, which MR Marat Atovmyan, Coordinator of the Yerevan Anti-Corruption Center operated by ALA, Local Expert of the “Multi-Faceted Anti-Corruption Promotion” Project implemented by ALA. According to him, the monopolies occur where the merging of criminal and corrupt government business is present. These results to increase in economic crime, monopolies enhance the social tension, and exacerbate poverty. It leads to social instability and the impact on the economic and national security, at the same time without competition, there will be no increase in labor productivity, which in turn contributes to the increase in employment and social issues.

Mr. Karen Vardanyan, Executive Director of the Union of Information Technology Enterprises, Governing Board Member of the CSO Anti-Corruption Coalition of Armenia; Mr. Paylak Tadevosyan, President of the “Protection for Taxpayers” NGO; Economist Mr. Babken Tunyan; and Economic Analyst Mr. Hayk Gevorgyan held speeches as well.

Representatives from the State structures, Mr. Sergey Shahnazaryan, Head of the Internal Public Financial Oversight and Public Procurement Methodology Department of the RA Ministry of Finance Staff; Mr. Arman Mnatsakanyan, Head of the Legal Department of the RA State Revenues Committee; Mr. Arman Manaseryan, Head of the Methodology and Programmes Elaboration Department of the State Commission for the Protection of Economic Competition of the Republic of Armenia delivered speeches as well.

The working meeting “Corruption Risks in the Business Sector of Armenia: Recorded Problems and Upcoming Activities” is organized in the scope of “Multi-Faceted Anti-Corruption Promotion” project.

The Armenian Lawyers’ Association, in cooperation with the RA Ministry of Justice, the CSO Anti-Corruption Coalition of Armenia and the Freedom of Information Center, organized this event. The event is co-funded by the “Arthurs Aghveran Resort” Hotel Complex as well.

Gevorg Tosunyan

Aleksander Sargsyan