ARMENIA Law and Practice Contributed by: Aram Orbelyan, Narine Beglaryan, Artur Hovhannisyan, Lilit Karapetyan, Sarkis Knyazyan and Shushanik Stepanyan, Concern Dialog
sion of the government and the donation agreement indicate the sole purposes for which the donated land can be used. Furthermore, investors can be entitled to specific tax or customs incentives in specific cases if the govern - ment approves the granting of incentives per a sub - mitted investment plan under the particular decree of government specifying the incentives. For example, investors might apply for a five-year exemption from customs duties during the implementation of their investment plan. Furthermore, investments in public service sectors can be considered by the Public Services Regulatory Commission (PSRC) when determining tariffs for pub - lic services. However, obtaining an operational permit in these sectors is not contingent on the submission of an investment plan. In general, the stated cases concern benefits to and incentives for the investor rather than a pre-approval process to protect the investment or for the invest - ment to be qualified as a foreign investment. Finally, it should be noted that the Parliament of Arme - nia is currently discussing the adoption of a new Law on Investments, which is further discussed in 9.1 Upcoming Legal Reforms . Although the draft law has not yet been adopted, it is already included in the formal agenda of Parliament. Upon its adoption, the Law on Foreign Investments will cease to be in force. However, the new law does not substantially alter the overall approach of maintaining an open regime towards foreign investment. 2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance As described in 2.1 Approval of Foreign Invest- ments , there is no mandatory regulation of pre- approval mechanisms for investment plans; ie, there is no requirement to invest with prior approval of state bodies. As a general rule, there is no procedure or sanction regarding the supervision or fulfilment of an investment plan as well. However, once incentives are granted under a government-approved investment plan, the relevant plan becomes subject to reporting obligations to the government, and failure to comply
with its requirements may give rise to liability depend - ing on the type of incentive granted and the conditions of the government decree on approval of the invest - ment plan under which the incentives are granted. For instance, in the case of incentives for land purchase, the consequence may be the judicial cessation of ownership rights over the land plot should the land plot be used for purposes other than those granted. 2.3 Commitments Required From Foreign Investors The applicable legislation indicates no such specific commitments. However, under the law on public-pri - vate partnerships, the government may agree with the investor on specific commitments on a case-by-case basis. As a matter of practice, such commitments can be imposed under the government decree on approval There is no specific process applicable to the appeal of government decisions concerning failure to approve an investor’s investment plan. Theoretically, however, the generally applicable administrative litigation pro - cesses concerning the appeal of administrative bod - ies’ decisions would apply. The recipient of a decision not to grant consent to the investment plan can bring a claim to challenge the decision before the Admin - istrative Court. Such a claim must be brought within two months of receipt of the decision. of the investment plan. 2.4 Right to Appeal However, the grounds and scope for potential argu - ments are limited. The government enjoys consider - able discretion in approving investment plans, with no specific criteria for rejection outlined. Technically, an appeal can be filed for procedural violations or breaches of equality requirements, where administra - tive bodies are required by law to treat similar cases consistently. In any case, it is important to reiterate that no prior authorisation for foreign investment is required, and the involvement of the government (and other state bodies) is necessary only for additional incentives or where there is a general licensing or permission pro - cedure (not linked to the specific status as a foreign investor).
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