Corruption Risks in the Field of Free Competition: Problems and Solutions

What shall happen in the situation where the companies that have monopoly priority in the food market stop production or importing? The existence of economic monopolies in the country is a national security issue and serious steps should be undertaken in this direction. Such position was expressed at the Anti-Corruption event “Corruption Risks in the Field of Free Competition,” which took place in Gavar.

President of Armenian Lawyers’ Association (ALA), Coordinator of the CSOs’ Anti-Corruption Coalition Secretariat Karen Zadoyan, said this in his opening speech that today, ordinary citizens are aware that there are certain monopolistic companies in the market of food products, but it is impossible to clearly identify dominant companies, because the real owners of companies are not disclosed and that information is not available to the public.

And currently proposals on introduction of three important institutions, which are aimed to turn the fight against corruption in the republic more efficient, have been presented to the Anti-Corruption Council. It refers to publicizing the names of the real owners of companies participating in public procurements, criminalization of illicit enrichment, and the establishment of an independent anti-corruption body. Currently elaboration of legislative packages on introduction of these three institutes is in process, which most likely will be presented to the national assembly in September.

Karen Zadoyan noted that the primary task at this stage is not only to disclose the problems that exist in the field but also to develop and submit proposals for their solutions. “We are not trying to smear, but we try to find solutions.”

Representative of the Governor’s Office of Gegharkunik marz and the Deputy Mayor of Gavar City delivered welcoming speeches as well and said that in this case, it is important that the president and the government have shown the will to fight corruption.

Ms. Mariam Zadoyan, the Local Expert of the “Multi-Faceted Anti-Corruption Promotion” Project spoke about “Fight against Corruption in the Field of Free Competition and Dangers Coming from Offshore Zones.” She presented the international experience of the institute to identify the real owners of companies participating in public procurement.

Arman Yeremyan, the Director of the “Crepson” Company, made a remarkable statement. The company he leads has dealt with market monopoly and corruption risks when they submitted a project proposal in the scope of the government program on subsidizing fertilizer, which provides opportunity of savings of about 990 million AMD. However their program was rejected. High quality potassium phosphate fertilizers should have been imported wit lower price. But their project proposal was rejected as there was another company, which had monopoly in the market. In this regard, the businessman directly accused the Minister of Agriculture Sergo Karapetyan.

Karen Zadoyan said that the CSOs’ Anti-Corruption Coalition would be consistent in solving this problem and will stand by the businessman.

Mr. Arsen Hovhannisyan, the Head of the Administrative Proceedings Division of the Legal Department of the Staff of the RA State Commission for the Protection of Economic Competition said that a legislative package aimed at prevention from infringing the economic competitive conditions is being developed. Specifically, currently a mere warning is foreseen for the public servants, who can create unequal conditions of competition through abusing their position. The new draft foresees financial penalties in the amount of 500 thousand to one million AMD.

Economist Mr. Babken Tunyan spoke about the “Accessibility and Transparency of Information from the Perspective of Free Competition.” Mr. Carl Ulbricht, the International Expert of the “Multi-Faceted Anti-Corruption Promotion” Project, and Mr. Marat Atovmyan, Local Expert of the same project referred to the importance and perspectives of cooperation with CSOs for implementation of reforms.

Further, the participants discussed and raised the problems that exist in the sector and recommended proposals for their solution, which will be coordinated and submitted to the Anti-Corruption Council.

The event was organized in the scope of the “Multi-Faceted Anti-Corruption Promotion” project funded by the EU and co-funded by the OSCE Office in Yerevan. The event was funded by the OSCE Office in Yerevan.