When and How Can UCOM Be Nationalized?

According to the ‘Joghovurd’ newspaper, the possibility of applying the law on the confiscation of illegally acquired property in relation to UCOM can only be considered within the framework of proceedings initiated by a competent authority on legal grounds. This was stated in response to our inquiry by the Ministry of Justice of the Republic of Armenia.

Specifically, ‘Joghovurd’ was interested in whether UCOM could be nationalized under this law, considering that it belongs to the Khachatryan family, whose assets are under arrest and are involved in multiple criminal cases.

It should be emphasized that we sent this inquiry to the ministry prior to the statement released by the press secretary of the Prime Minister of Armenia, Mane Gevorgyan. We also sent questions regarding this company to her, to which she responded through her official communication.

Mane Gevorgyan specifically noted: “As for UCOM, the transfer of its shares can only be done with the consent of the Government of the Republic of Armenia. After a dispute arose among the shareholders of the company and the issue of changing the composition of shareholders came to the agenda, the government’s position has been that the sale of Khachatryans' share will only be possible if all the funds received from that sale are transferred to the state budget of Armenia. This position remains in effect today concerning any property of illegal origin.”

The Prime Minister's standpoint is that if it is found that there were officials who sought personal benefits from this process, they must answer before the law in the same way as representatives of the Khachatryan mafia system.

In response to our query, the ministry clarified under which circumstances property can be confiscated. The draft law on confiscation of illegally acquired property allows for the examination of property, its acquisition, and use, and the presentation of a confiscation claim if the acquisition is not justified by legal income. In this case, the property is considered illegally acquired and subject to confiscation under the law.

The draft introduces a model of confiscation of property without a criminal conviction, focusing on the confiscation of unaccounted wealth. The basis of this civil procedure is the significant discrepancies between a person’s income from legitimate sources and their actual income. Establishing an indirect link with a criminal act is not a mandatory requirement.

In this case, the burden of proof shifts to the respondent, and assets can be confiscated if the legitimate source of their acquisition is not proven. The draft assigns the authority to carry out investigations and file a claim under the confiscation of illegally acquired properties to the Prosecutor General’s office of the Republic of Armenia as a type of public interest claim.

The investigation begins in the presence of certain predetermined signals in criminal proceedings, after which it continues independently of criminal procedures. A claim for confiscation of illegally acquired property can be presented and examined under the civil procedure of the Republic of Armenia.

Taking into account the fact that the evidence regarding the origin of the property, in the extent to which the competent authority cannot access them, belongs to the person who acquired the property, the draft provides for the possibility of satisfying the claim if the competent authority proves that the property belonging to the respondent cannot be justified by any legal income data accessible to the claimant. Accordingly, the respondent can refute the presumption by proving the legal acquisition of the property by presenting the documents that, by law, are only accessible to the respondent.

In any case, illegally acquired property can only be confiscated when the discrepancy between the property and income is significant, i.e., when the market value of the property exceeds the limits outlined by law.

Thus, considering the statements made by the Prime Minister's press secretary, and the request to arrest UCOM’s founder Gurgin Khachatryan, we will witness new developments in the near future.