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CC. OFFSHORE COMPANIES ARE PARTICIPATING IN PUBLIC PROCUREMENTS AND TAKE THE STATE MONEY OUT OF ARMENIA
April 9 2014
"The active participation of non-resident companies in public
procurements has obviously been increased. The risk is that
non-resident companies are taking an advantageous position in
the tenders," this is stated in the 2013 Annual Report of the
Control Chamber (CC), in the Section on Procurements organized
with participation of non-resident companies and those registered
in offshore zones. According to CC, the non-resident companies, and
those registered in offshore zones, unlike the companies registered
in Armenia, are in very advantageous position because the state
control and supervisory bodies of Armenia cannot exercise a complete
supervision on given procurement. To confirm this problem, the Chamber
of Control has brought the example of the procurements organized by
the Penitentiary Service of the Ministry of Justice. Accordingly,
"Tisa" CJSC and "Avangard" LLC non-resident companies are participated
in the procedures on procurement of building materials, household,
sanitary-hygiene, and laundry detergents, and were announced as
winners. Contracts of 127,619.6 thousand drams were signed with them.
The CC has noted that the obligation on income tax calculation,
collection, and transference to the state budget of Armenia for
non-resident companies was assumed by the Penitentiary Service as a tax
agent, which was not provided, resulting in proportional decrease of
RA state budget entries. The CC has also revealed that local companies
are establishing non-resident companies in "artificial way" and thus
participating is the public procurements. "A local company interested
in any tender intentionally establishes a non-resident company
or establishes connections with similar company to be able to be
recognized as a winner by occupying an advantageous position, and sign
a contract. As a result, participation of some non-resident companies
in public procurements is becoming a mere formality; the funds are
transferred out of the republic. The supervision also decreases,"
says the CC report. With the example illustrated by the Chamber of
Control, in 2012, to supply with pedigree heifer, on December 19,
2011, the Ministry of Agriculture is signing contract with "DAKHKHAN"
LLC and P/E Samvel Amirkhanyan consortium. The company acquired the
heifers from Agro-Vest Plus s.r.o. Czech company, which was established
on February 29, 2012, after signing the contract with the Ministry of
Agriculture and transferring the amount. The founder of this company
is Edik Amirkhanyan, who is the brother of the consortium participant
"DAKHKHAN" LLC Director Radik Amirkhanyan and registered in Czech
Republic P/E Samvel Amirkhanyan. "According to the customs declarations
of supplied heifers, the customs value of one heifer was 1,371,195
drams (a total of 287,950.9 thousand drams for 210 heifers), in the
event that the contract value was 270,900.0 thousand drams. Therefore,
the consortium, according to submitted documents, allegedly had a
loss of 17,050.9 thousand drams," said the CC report. In addition,
the Ministry of Agriculture, according to the Chamber of Control,
had signed the contract on procurement of 210 heifers, whereas 230
heifers passed the customs clearance on behalf of the Ministry. The
buyer of these heifers, pursuant to the Agro-Vest Plus s.r.o. Czech
company invoices, is the Ministry of Agriculture of Armenia, and
the buyer is DAKHKHAN Ltd. The CC had disclosed another example of
"taking out" the money from Armenia. The report says that under the 2nd
strategy implementation grant program of the Public Sector Accounting
Standards, for acquisition of full testing of drafts and manuals of
legal acts on accounting and installation of an automated accounting
system, a 704 thousand dollar contract was signed with Cyprus company, and the amount,
excluding the taxes, was transferred to Cyprus to the account of this
company. The Cyprus company in its turn, on the same day of signing
the contract, for providing consulting services stipulated by the
contract, is signing a 288 thousand dollars sub-supply contract with
"PHP Partners" Ltd registered in Armenia, which has implemented the
whole volume of the work under the contract as a sub-supplier.
Nelly BABAYAN
Read more at: http://en.aravot.am/2014/04/09/164591/
From: A. Papazian
April 9 2014
"The active participation of non-resident companies in public
procurements has obviously been increased. The risk is that
non-resident companies are taking an advantageous position in
the tenders," this is stated in the 2013 Annual Report of the
Control Chamber (CC), in the Section on Procurements organized
with participation of non-resident companies and those registered
in offshore zones. According to CC, the non-resident companies, and
those registered in offshore zones, unlike the companies registered
in Armenia, are in very advantageous position because the state
control and supervisory bodies of Armenia cannot exercise a complete
supervision on given procurement. To confirm this problem, the Chamber
of Control has brought the example of the procurements organized by
the Penitentiary Service of the Ministry of Justice. Accordingly,
"Tisa" CJSC and "Avangard" LLC non-resident companies are participated
in the procedures on procurement of building materials, household,
sanitary-hygiene, and laundry detergents, and were announced as
winners. Contracts of 127,619.6 thousand drams were signed with them.
The CC has noted that the obligation on income tax calculation,
collection, and transference to the state budget of Armenia for
non-resident companies was assumed by the Penitentiary Service as a tax
agent, which was not provided, resulting in proportional decrease of
RA state budget entries. The CC has also revealed that local companies
are establishing non-resident companies in "artificial way" and thus
participating is the public procurements. "A local company interested
in any tender intentionally establishes a non-resident company
or establishes connections with similar company to be able to be
recognized as a winner by occupying an advantageous position, and sign
a contract. As a result, participation of some non-resident companies
in public procurements is becoming a mere formality; the funds are
transferred out of the republic. The supervision also decreases,"
says the CC report. With the example illustrated by the Chamber of
Control, in 2012, to supply with pedigree heifer, on December 19,
2011, the Ministry of Agriculture is signing contract with "DAKHKHAN"
LLC and P/E Samvel Amirkhanyan consortium. The company acquired the
heifers from Agro-Vest Plus s.r.o. Czech company, which was established
on February 29, 2012, after signing the contract with the Ministry of
Agriculture and transferring the amount. The founder of this company
is Edik Amirkhanyan, who is the brother of the consortium participant
"DAKHKHAN" LLC Director Radik Amirkhanyan and registered in Czech
Republic P/E Samvel Amirkhanyan. "According to the customs declarations
of supplied heifers, the customs value of one heifer was 1,371,195
drams (a total of 287,950.9 thousand drams for 210 heifers), in the
event that the contract value was 270,900.0 thousand drams. Therefore,
the consortium, according to submitted documents, allegedly had a
loss of 17,050.9 thousand drams," said the CC report. In addition,
the Ministry of Agriculture, according to the Chamber of Control,
had signed the contract on procurement of 210 heifers, whereas 230
heifers passed the customs clearance on behalf of the Ministry. The
buyer of these heifers, pursuant to the Agro-Vest Plus s.r.o. Czech
company invoices, is the Ministry of Agriculture of Armenia, and
the buyer is DAKHKHAN Ltd. The CC had disclosed another example of
"taking out" the money from Armenia. The report says that under the 2nd
strategy implementation grant program of the Public Sector Accounting
Standards, for acquisition of full testing of drafts and manuals of
legal acts on accounting and installation of an automated accounting
system, a 704 thousand dollar contract was signed with Cyprus company, and the amount,
excluding the taxes, was transferred to Cyprus to the account of this
company. The Cyprus company in its turn, on the same day of signing
the contract, for providing consulting services stipulated by the
contract, is signing a 288 thousand dollars sub-supply contract with
"PHP Partners" Ltd registered in Armenia, which has implemented the
whole volume of the work under the contract as a sub-supplier.
Nelly BABAYAN
Read more at: http://en.aravot.am/2014/04/09/164591/
From: A. Papazian