No Evidence Found Regarding Tobacco Export by MPs and Their Relatives, Armenian Police

On May 12, following Mikhail Minasian's announcement that 40 tons of Armenian tobacco without excise taxes had been seized in Krasnodar, operational activities were carried out in the department for combating corruption and economic crimes of the Main Department of Criminal Police. The Armenian police reported this.

Within this framework, an inquiry was sent to the Russian police through Armenia's Interpol National Central Bureau to obtain complete information about the exporting and receiving companies of the seized tobacco, their authorized persons, transport companies, as well as the batches and varieties of tobacco.

A response from the National Central Bureau of Interpol in Russia indicated that during the inspection of a plane arriving from Yerevan to Krasnodar on April 25, more than 40 tons of excise-free “Zenon” and “Magnus” tobacco, produced by the Armenian Tobacco Company located in the Kotayk region, were discovered.

According to the documents submitted by the pilot, the cargo was supposed to be transported from Armenia to Simferopol in Russia, with an intermediate stop in Krasnodar for border control purposes. The receiving party was reported to be “VOLAX PROMOTIONS,” a company registered in Canada, with the destination being the Islamic Republic of Afghanistan.

According to police information, the shipment was based on a contract between the plane's owner, the Russian Ministry of Emergency Situations’ “АСК МЧС России,” and the Russian transportation company “LLC T-Trans.” According to the delivery scheme, the specified cargo was initially to be transported by plane from Armenia to Simferopol, and then by land through Kazakhstan to Afghanistan. Given the geographical positioning of these locations, this logistics seemed illogical to the Russian authorities.

As a result of these circumstances, the Russian authorities suspected that the tobacco might be intended for illegal sale within Russia, which could potentially lead to a tax evasion of approximately 100,000,000 rubles against the Russian Federation.

Based on the received information, additional measures by the officers of the Main Department of Criminal Police revealed that the Armenian Tobacco Company's shipment was sold to the international distributor “Volax Promotions LP” according to a contract signed on July 4, 2019, with the condition of exclusive rights for export to Afghanistan.

The delivery of the product to the buyer was carried out according to FCA terms, which stipulate that the supplier's responsibilities were limited to delivering the product to the customs warehouse at Zvartnots Airport.

Simultaneously, in accordance with established procedures, a conclusion regarding the product’s origin was provided by the “Armenexpertise” LLC of the Chamber of Commerce and Industry of Armenia on February 26, 2020. Additionally, on April 25, 2020, the Armenian Tobacco Company submitted a declaration regarding the exported product, which was electronically submitted to the customs authorities in accordance with the regulations set by the Government of Armenia.

The external appearance, design, and labeling of the tobacco products were coordinated with the buyer following the contractual terms, and according to Armenian customs legislation and Eurasian Economic Union customs code, there are no labeling restrictions or special requirements for exporting from Armenia to Afghanistan.

All accompanying documents for the shipment were prepared as per Armenian customs legislation, and the product was handed over to the purchasing organization in Armenia, after which the export declaration was carried out in compliance with customs regulations. From the moment the shipment was handed over to the buyer and the export was processed accordingly, the Armenian Tobacco Company bore no responsibility for the subsequent movements of the goods, and the buyer independently determined the methods, routes, transport, etc.

It was also found that the Armenian Tobacco Company had exported a total of products equivalent to $933,940.00 to “VOLAX PROMOTIONS LP” under contracts signed on June 14, 2019, of which products worth $551,070.00 had already been sold and exported per the contract, while another contract involved exports worth an additional $382,870.00, with a prepayment of $202,410.00 made and $180,460.00 pending payment due to incomplete execution of the export obligations under the aforementioned contract.

Attention was also drawn to the reported lower-than-market declared prices of the exported tobacco. It was revealed that according to Article 89, Part 2, Clause 1 of the Tax Code, exports are considered tax-exempt transactions, and if sold within Armenia, would be taxed based on Article 88, Part 1 of the Tax Code at 192.5 drams per pack, regardless of the sale price. According to Article 57, Part 1, and a relevant government decision, there is no obligation to electronically issue an invoice at the time of export, and according to Article 65, Part 2, Clause 1, the VAT rate for exports from Armenia is zero percent.

Moreover, the decryption of electronic correspondence between representatives of the Armenian Tobacco Company and “VOLAX PROMOTIONS LP” supported that discussions were indeed conducted with representatives of the Russian organization, rather than alleged buyers who are citizens of Armenia. The correspondence indicates that the so-called seized goods were merely moved to a temporary storage facility at the Krasnodar airport, but no demands or accusations were brought against the supplying organization by the Russian law enforcement agencies, nor were any restrictions or blockages imposed on the products.

In an interview with the director of the Armenian Tobacco Company, he stated that the company has been engaged in tobacco production since its establishment, and the products are sold both in the local market and exported. The main product is supplied to “VOLAX PROMOTIONS LP,” and according to the contract, the buyer must sell the product only within Afghanistan.

Regarding Mikhail Minasian’s post that claimed 40 tons of Armenian tobacco without excise had been seized in Krasnodar, the director of the Armenian Tobacco Company stated that this is untrue, as their inquiry was responded to by saying that the shipment had not been seized, and according to their information, no criminal case had been initiated since the transaction was carried out within the legal framework, and confirming documents were submitted to the relevant authorities.

Thus, the police confirmed that investigations revealed that the sale, supply, and export of the tobacco batch referenced in the publication were carried out in compliance with the requirements of Armenian and international legislation, and no evidence was found of abuses by Armenian citizens, high-ranking officials, MPs, or their relatives in the export process of the tobacco batch.