16 March 2021 –
In Armenia, the legal framework on preventive anti-corruption measures (Chapter II) of the UN Convention against Corruption (UNCAC) has been either partially or mostly implemented in practice, but a framework for the recovery of stolen assets (Chapter V) has only been implemented poorly so far, a new civil society report authored by the Armenian Lawyers’ Association (ALA) and the CSO Anti-Corruption Coalition of Armenia finds. ALA and the CSO Anti-Corruption Coalition of Armenia produced its report, which is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition.
For the very first time, the government of Armenia has directly involved civil society organizations (CSOs) in the drafting of its fourth Anti-Corruption Strategy and Implementation Action Plan for 2019-2022. The strategy, based on three pillars (prevention of corruption; disclosure of corruption-related crimes; anti-corruption education and awareness-raising) provides a good basis for effectively tackling corruption. However, political influence, a lack of integrity monitoring and resources, and an incomplete asset recovery framework are among the many challenges that still persist in the fight against corruption in Armenia.
The official UNCAC country review in Armenia is in its final stages, with the country report currently being finalized. While CSOs were not really included in the self-assessment stage of the review, the review process was more inclusive during the country visit, where civil society representatives provided input to the official reviewers. The government of Armenia has committed to publishing the full country report of its second cycle review on Armenia’s UNODC country profiles page, once it is ready. The government was also responsive during the writing process of the civil society report and several government officials gave interviews that provided valuable insights into national anti-corruption efforts and published the self-assessment checklist.
Independent when first established in 2019, the Armenian Corruption Prevention Commission (CPC)’s appointment procedure was altered the same year, making it highly political. The need for an independent anti-corruption institution has been repeatedly stated by CSOs, as well as by the Council of Europe’s Group of States against Corruption (GRECO)’s assessments. Similarly, there is little oversight over the funding of political parties, and the enforcement of sanctions in this area is very poor.
Disclosure of assets and conflicts of interest
While it is considered a good practice that the CPC maintains the public register of assets, income and interest declarations, conducts verifications and imposes sanctions, several types of non-high-ranking officials are not obliged to declare their assets at all and the scope of family members that are covered by the disclosure is limited, resulting in widespread malpractice. Furthermore, the hiring process of civil servants, as well as of the decision-making on their appointments, is not transparent. While the codes of conduct for civil servants are binding, they are often not adhered to since the ethics commissions in charge of monitoring violations do not have the necessary capacities to enforce them in practice. Although the CPC conducts integrity checks of high-ranking officials, these are unfortunately not subject to publication, limiting the impact of this mechanism.
Moreover, despite the existing electronic procurement system being a first step towards more transparency and accountability, it does not yet use the Open Contracting Data Standard and there is no monitoring procedure in place for assessing the credibility of declarations on conflicts of interest and beneficial ownership in the procurement process. The electronic procurement system is not being used by all procuring entities, and often procurements are tailored to specific bidders.
Company ownership transparency
Additionally, there is no central beneficial ownership registry in Armenia where all types of companies are required to report their ultimate owners. The electronic register of the Unified State Register of Legal Entities Agency, which includes some general information on companies, is not fully and easily accessible to the public – but is freely accessible to journalists.
The issue of asset recovery was only very recently brought to the political agenda in Armenia in 2018 and it is very slow to progress. As a result, the legal framework of asset recovery, despite recent legislative reforms, continues to be complex and incomplete. This highlights the necessity of establishing an Asset Recovery Office on the basis of the current framework, equipped with adequate staff and other resources to fulfill its mandate effectively.
Involvement of civil society
Finally, although there is still room for improvement, the Armenian government has made significant progress in terms of civil society involvement in anti-corruption efforts, such as the UNCAC review process and the drafting of the current anti-corruption strategy. The processes of government budget adoption, for instance, involve open discussions of budget proposals with interested CSOs and a simplified and online-accessible citizen’s budget.
Similarly, several electronic whistleblowing platforms are in place in Armenia, including one run by civil society. Nevertheless, low numbers of reports show that the general populations’ eagerness to blow the whistle remains limited and only a few important contributions to uncovering corruption and implementing reforms have been made through these channels. Gaps in the protective framework for whistleblowers may be one of the reasons for this.
In its report, the ALA and the CSO Anti-Corruption Coalition of Armenia make several key recommendations for priority actions, to be taken to ensure the full implementation of the UNCAC in Armenia, such as:
- Increase the integrity of public officials and the judiciary by publishing the results of the integrity checks conducted by the CPC, and adopting codes of conduct for public officials, civil servants, members of parliament and investigators.
- Reform political financing by adopting the draft amendments to the Code of Administrative Offence on the financing of political campaigns, and envisaging proportionate sanctions for violations of reporting requirements, donation regulations and other offences.
- Expand whistleblowing legislation by covering violations committed in the private sector, foreseeing the “qui tam” concept for a whistleblower reward, and granting legal status to the alternative whistleblowing website “Bizprotect”, operated by civil society.
- Further improve the assets and income declaration system for public officials by further expanding the scope of the public officials subject to the declaration requirement and the scope of the family members that are included; and granting authority to the CPC to conduct lifestyle checks of public officials to verify their declarations.
- Implement reforms in public procurement by:
- introducing a new electronic government procurement system based on the open contracting data standard and used by all contracting authorities in the country;
- developing publicly-accessible analytical tools based on contracting data from the electronic government procurement system;
- establishing mechanisms to collect feedback to improve the procurement sphere’s integrity and efficiency; training major stakeholders to utilize contracting data and feedback mechanisms for impact;
- improving the public procurement appeals system;
- adopting stricter rules on single-sourced procurement application; providing for a specific review procedure for assessing the credibility of declarations on conflict of interest and beneficial ownership; and
- setting minimum standards for the technical specifications and estimated prices of a certain group of procurement items.
- Review the national legislative framework on asset recovery, eliminating the contradictions and fill in the gaps to fully comply with UNCAC provisions by:
- granting standing to CSOs or civil society in general to initiate legal cases for asset recovery;
- diminishing the value of assets subject to civil forfeiture;
- encompassing legal rules on the redistribution of recovered assets to the society;
- adopting the draft law on “Legal Assistance in Criminal Cases” to have national legislative grounds for asset return to other states; and
- reviewing existing treaties on mutual legal assistance and sign new ones, especially in terms of regulating the stage of the return and distribution of assets.
- Establish an Asset Recovery Office, providing it with sufficient resources, and increase human and financial resources of the Parliamentary Budget Office.
- Boost transparency in the private sector by ensuring general free access to the information on legal entities provided by the RA Unified State Register of Legal Entities free of charge and creating a freely accessible beneficial ownership registry.
- Increase efforts in Anti-Money Laundering (AML) by:
- creating a centralized register of bank accounts;
- introducing criminal liability of legal persons;
- intensifying the practices of parallel financial investigations initiated by law enforcement authorities;
- expanding the scope of the politically exposed persons and their family members; and
- amending the definition of the real beneficiary.
More specific recommendations for Chapters II and V of the UNCAC are provided in Chapter 6 of the report.Fullscreen Mode