Araik Harutyunyan Talks About Partial or Complete Compensation for Citizens' Loans and Debts

The President of the Republic of Artsakh, Araik Harutyunyan, held an expanded working consultation on February 2nd, dedicated to the state support programs planned for the post-war period, which will aim at the partial or complete compensation of obligations arising from citizens' loans and debts.

Minister of State and Finance Minister Grigori Martirosyan presented the draft of the state support program developed by the Government. According to the draft, once approved, individuals and legal entities who have outstanding mortgage, business, and consumer loans received before September 27, 2020, will be entitled to seek state support in the near future.

Specifically, for mortgage loans, all payments scheduled from September 27, 2020, to October 1, 2023, will be compensated by the state for citizens living in Artsakh, up to 30 million drams. However, if the property is sold within five years, the aid amount will have to be returned to the state.

For business loans, debts, or leasing agreements, interest accrued from September 27, 2020, to December 31 will be reimbursed, while payments for the principal amounts scheduled before July 1, 2021, will be distributed across the remaining loan period. In cases where the loan deadline is reached between September 27, 2020, and July 1, 2021, the repayment of the principal is planned to be completed in the subsequent six months, equally.

The compensation program will be available to economic entities operating continuously. There are also plans to subsidize all business loans by setting optimal interest rates based on different sectors.

For individuals with consumer loans (overdrafts) received before September 27, 2020, compensation for obligations is proposed for a period of three years, capped at 3 million drams. According to the draft, only actual residents in the Republic of Artsakh will be able to benefit from this support.

The state support program also includes additional benefits for several categories of recipients. Specifically, obligations arising from mortgages, consumer, and business loans will be forgiven (or compensated) for:

• a) Individuals who participated in the combat operations of the Artsakh Defense Army and were killed (deceased) or became first-category disabled, or their family members, up to 30 million drams;
• b) For citizens considered missing or their family members, obligations from mortgage, consumer, and business loans will be compensated for the entire duration of the missing status, up to 30 million drams;
• c) Second-category disabled individuals, or their family members, will receive compensation equal to 50% of the remaining principal amounts of their mortgage or business loans (no more than 6.8 million drams for mortgages and 10 million drams for business loans), with exemptions for damages or compensations, while those with only consumer loans will receive compensation up to 10 million drams;
• d) Third-category disabled individuals, or their family members, will receive compensation equal to 30% of the remaining principal amounts (up to 4 million drams for mortgages and 6 million drams for business loans), along with exemptions for damages, while those with only consumer loans will receive compensation up to 8 million drams;
• e) Participants in military operations, or their family members, will receive compensation equal to 15% of the remaining principal amounts (up to 2 million drams for mortgages and 3 million drams for business loans), along with exemptions for damages, while those with only consumer loans will receive compensation up to 5 million drams.

For property owners of assets acquired or renovated with credit in communities that fell out of Artsakh's control due to military operations, all types of loans and debts will be subject to forgiveness or compensation, with business loans contingent upon the registration of state property rights on the assets. For economic entities whose property has partially remained in those communities or has been destroyed, provisions for debt forgiveness or proportional compensation are planned.

President Harutyunyan instructed the relevant authorities to finalize the project based on these principles, which may be subject to amendments during discussions, and to submit it for approval. The President emphasized that it is essential to launch state support programs in the shortest possible time while clarifying their monitoring mechanisms to exclude discriminatory or unethical behavior by beneficiaries and state officials.