The Government Approved the Package of Laws for Disclosure of Beneficial Owners in Armenia

On April 22, at the RA Government session, the Government approved the BO package of laws (item 42). With this legal initiative the Armenian Government aims to expand the scope of entities obliged to disclose their beneficial owners (BOs). The approved package is considered as urgent by the Government.

In the package the amendments of following laws are included:

• The Law on State Registration of Legal Entities, State Record-Registration of the Separated Subdivisions of Legal Entities, Institutions and Individual Entrepreneurs
• The Subsoil Code
• The Energy Law
• The Procurement Law
• The Criminal Code
• The Criminal Procedure Code
• The Code on Administrative Offences
• The Law on Combating Money Laundering and Terrorism Financing

The package consolidates the concepts of “beneficial owner” defined by the RA Law on Combating Money Laundering and Terrorist Financing and the concept of “beneficial (real) owner” defined by the RA Law on State Registration of Legal Entities, Separate Subdivisions of Legal Entities, Institutions and Individual Entrepreneurs, used since 2020 within the scope of the EITI, suggesting the term of "beneficial owner" and applying common criteria in all cases. At the same time, for the legal entities entitled to or seeking a right for geological exploration or extraction of metal ores the stricter grounds and disclosure requirements are preserved for being considered as a “beneficial owner”.

With this legislative package the Government of Armenia, in the framework of implementation of the anti-corruption measures and fulfillment of Armenia's commitments to a number of international initiatives, proposes to expand the scope of beneficial owners’ disclosure in Armenia. To apply the requirement of submission of the beneficial owners’ declaration the following dates are proposed:  1 September, 2021- for the legal entities operating in the regulated sphere of public services, as well as providing audiovisual media services; 1 January, 2022 - for all other legal entities and 1 January, 2023- for LLCs having only natural persons as participants as well as for non-profit organizations.

The amendments proposed by the package also address a list of gaps and international standards’ compliance issues identified by the EITI stakeholders’ analysis of the metal mining beneficial owners’ declarations submitted since February 2020.

On 2 April, prior to the submission of this legislative package to the Government, the EITI Secretariat of Armenia jointly with the RA Ministry of Justice held a video call to present the package to the EITI and OGP stakeholders and discuss the observations of the participants. During the video call the amendments proposed by the package, their nature, rationale, as well as clarifications of the issues indicated by the participants were presented and discussed. A number of comments from the video call’s participants have been reflected in the final edition of legal acts package.

The head photo from Unsplash