On January 1st 2018, the Republic of Armenia published its beneficial ownership disclosure roadmap thus fulfilling the commitment acquired with the Extractive Industries Transparency Initiative (EITI) Board in 2015. Now the Republic of Armenia must maintain the efforts made to achieve the requirement that the EITI Standard sets for January 2020; the beneficial ownership disclosure, including politically exposed persons-PEPs.
In order to ensure this aim, a number of legal amendments will be required and the responsible body for the development of relevant legislation will be the Ministry of Justice jointly with the Ministry of Energy Infrastructure and Natural Resources.
As a matter of fact, the legislative definition of “Beneficial ownership” proposed was “natural person(s) who directly or indirectly ultimately owns or controls the legal entity “while “politically exposed person” was defined as “individual who has, or has been, entrusted with prominent public functions, as well as their family members and affiliated persons.”
In addition for the purpose of the definition ‘Ownership and control’ will be considered as “owning or controlling alone or jointly with family members and/or affiliated persons at least 10% of shares or voting rights in the legal entity” or “Controlling of the legal entity through ownership of priority shares, preference shares and / or shares with dual or multiple voting rights” or “deriving a substantial economic benefit from the legal entity, comprising not less than 15% of the legal entity’s annual profit” or “holding the right to appoint or remove a majority of the directors of the legal entity” or finally “holding the right to exercise influence and control over the management and operations of the company or has the capacity to predetermine decisions through other means”.
Finally the Republic of Armenia proposed a timetable of activities aimed at the disclosure of beneficial ownership of metal mining companies in the country in four directions; Legal and institutional, data collection and verification procedures, online register and capacity building and awareness raising.
Thus, the Republic of Armenia has made steps forward on Transparency and needs to keep working together with the EITI Secretariat and the EITI Multi-stakeholder Group (MSG) on ensuring the efficiency of the data collection and verification procedures but also on the legal amendments of the Mining Code and Laws, the launching of the beneficial ownership register and the capacity building trainings.
José Nicolas Dominguez Mendoza
EVS Volunteer at the Armenian Lawyers’ Association