The Decision is Flawed and There Are Gaps: Producers' Letter to the Prime Minister

A number of large Armenian companies have addressed an open letter to Prime Minister Nikol Pashinyan today, April 8. Below is the text of the open letter.

“Esteemed Mr. Prime Minister, Honorable Members of the Government of Armenia,

Due to the spread of new coronavirus disease and the circumstances of the pandemic, the Government of Armenia declared a state of emergency in its decision No. 298-N on March 16, 2020. Following this, according to the decision No. 14 by the Armenian Government on March 24, various types of economic activities across the entire territory of Armenia have been subjected to restrictions, and in some cases, the activities of several economic entities have been entirely halted.

As a result, businesses are facing serious crisis situations and challenges; due to not being able to carry out actual operations, they are suffering significant losses and, in the absence of financial influx, are struggling to pay employees' salaries and fulfill tax obligations, as well as repay loans. Given these circumstances, many businesses will report backtracking and will not be able to overcome the crisis and the risks of ceasing operations.

It is commendable and worthy that, considering the aforementioned issues, the Government of Armenia has approved a comprehensive program of measures to counter the effects of the coronavirus in order to support businesses as much as possible, initiating measures to mitigate the economic consequences and launching large support packages for businesses. This will, of course, help avoid some of the catastrophic and destructive consequences of a general economic crisis.

On behalf of a number of economic entities, we feel it is our duty to inform you about other potential risks that are urgent and could be fatal for the continuation of business operations.

We note that several leading and large companies, which have made significant contributions to the development of the Armenian economy for decades, have been conscientious and diligent taxpayers, and are key guarantors of our country's economic and social stability, are effectively unable to benefit from the support measures provided by the Government of Armenia aimed at neutralizing the economic consequences. This is because the Government’s decision No. 355-L on March 26, 2020, is flawed and has some gaps that require a complete review in order to make it more targeted and effective for the recovery of businesses.

In particular, we request that the Government of Armenia amend point 3 of the first measure of the annex to decision No. 355-L to neutralize the economic consequences of the coronavirus, considering that those economic entities which had tax liabilities more than 1% overdue during the past 365 days and whose payment of those overdue liabilities was made more than 30 days late, have already been subject to penalties for unpaid loans.

Therefore, we ask for the amendment of the point so that all economic entities that do not have tax obligations at the time of applying for assistance can also be beneficiaries of the Government's support measures to neutralize economic damages.

Thank you in advance,

Sincerely,
“PROF AL” LLC
“DECOR-GROUP” LLC
“PROSHYAN BRANDY FACTORY” LLC
“VEDI ALCO” LLC
“SIPAN” Canned Goods and Non-Alcoholic Beverages Factory” LLC

The undersigned companies urge all enterprises facing similar issues during this period to join the initiative.