67 Million Dram Damage Caused by Senior Police Official Involvement

During the investigation of a criminal case examined by the Anti-Corruption Committee of Armenia regarding illegal participation in entrepreneurial activities and tax evasion, sufficient evidence has been established showing that officials from the Armenian police have abused their official powers. They limited competition between two suppliers—European and Russian companies—of vehicle registration plates, resulting in damage amounting to 67,163,790 AMD to the state.

It has also been established that a participant from the European company, along with the head of two interconnected commercial organizations operating in Armenia, failed to pay substantial taxes with the assistance of his brother.

Specifically, the investigation revealed that A.T., the deputy head of the Road Police Service of the RA Police, was aware that a Russian company intended to enter the Armenian market to supply vehicle registration plates. Prioritizing the European company, which had supplied the Road Police for over 20 years, he intentionally took actions to obstruct the entry of the Russian company into the Armenian market through collusion and by imposing illegal requirements on the Russian firm.

A.T. created barriers for the Russian company by including a protective element developed by the European company in the specifications of the procurement process, which had not been required by law. Moreover, he discredited the supplied product during the procurement process and threatened representatives of the Russian company with inspections, despite the fact that vehicle registration plates supplied by the European company had never undergone such evaluations over the past 20 years.

Continuing the anti-competitive behavior, A.T. proposed amendments to the national standards for vehicle registration plates, including the protective feature developed by the European firm to create further legal and technical obstacles for the Russian company.

Additionally, A.K., the deputy head of the Economic Department of the RA Police, while chairing the procurement assessment commission in 2019, included specifications composed in blatant violation of the procurement legislation, which altered the essence of the purchasing process and the principles stipulated by law, due to his personal interest in maintaining good relations with the leadership of the Road Police.

To cover up the unlawful nature of the procurement specifications included by A.T., he delayed the completion of the procurement initiated on December 26, 2018, until after the first quarter of 2019, breaching the laws governing electronic auction processes. As a result, instead of purchasing vehicle registration plates from the Russian company for 3,342 AMD, the RA Police bought them from the European company for 4,380 AMD between January and May 2019 without any legal basis, causing the state significant financial loss.

The investigation also confirmed that A.V., the director of two accounting service companies connected to the mentioned European firm, implemented a scheme with the aid of his brother for non-payment of taxes for an extended period since 2010-2011, leading to non-payment of income tax and value-added tax totaling 276,033,359 AMD (with penalties totaling 577,364,104 AMD) to the state budget.

Criminal charges have been brought against A.T., under part 2, point 3 of Article 195 and part 2 of Article 308 of the RA Criminal Code, against A.K. under part 2 of Article 308, and against A.V. under part 2 of Article 205 and part 2 of Article 325 of the RA Criminal Code. The preliminary investigation of the criminal case has been completed, and the materials have been provided to the parties involved for review.