By Atom Markarian
One of Armenia’s leading importers of coffee said on Monday that it is being driven out of business because of its continuing refusal to cut illegal deals that would enrich Armenian customs officials. Senior executives from the Royal Armenia firm accused the authorities of fabricating tax evasion charges against them in retaliation for their earlier corruption allegations against the leadership of the State Customs Committee.
“We are dealing with a group of officials who set unofficial rules, and if you don’t comply with those rules then you must not operate,” said the company’s executive director, Gagik Hakobian. “If they yield and do things in accordance with the law, they will have problems with other businessmen.”
“They seem to be trying to drive Royal Armenia out of the market,” charged its chief lawyer, Gagik Minasian. “Also, they fear setting a precedent as other businesses could see that Royal Armenia has achieved something through a struggle and similarly revolt against the arbitrary rules of the game set by the Customs Committee.”
The more than year-long dispute centers on the Customs Committee’s controversial discretionary power to determine the market value of imported commodities before levying a fixed 10 percent duty from them. Royal Armenia, which imports, processes and sells coffee, said last year that customs officials offered to grossly undervalue price of its imported coffee beans in return for sharing in the resulting extra profits. The company insists that is being unjustly penalized for rejecting and publicizing the alleged scam.
According to Minasian, the Armenian customs continues to evaluate one kilogram of Indonesian raw coffee imported by Royal Armenia at $1.8, whereas its real purchasing price is only $1.24. He said the value of the same sort of coffee brought in by other importers is set at $1.1 per kilogram or even less.
“If the price set by them is fair then why do they inflict damage on the Republic of Armenia?” Minasian told reporters. “Why aren’t they assigning the same price in other cases?”
The Customs Committee was quick to rebut the allegations. The head of its investigative department, Gevorg Nersisian, called a news conference, saying that his agency trusts invoices submitted by Royal Armenia’s competitors. But he could not explain why they claim to have paid much less for the same product highly popular in the country.
Nersisian instead pointed to accusations of tax evasion and “smuggling” leveled against Royal Armenia by the National Security Service. The company’s chief executive dismissed the case as “ludicrous.”
Royal Armenia itself took the customs to the court late last year and won a ruling obliging the latter to pay a hefty compensation. However, Justice Ministry bailiffs have still not enforced the verdict for unknown reasons.
The increasingly bitter dispute is an extremely rare example of an Armenian business openly alleging high-level government corruption affecting its operations. Local businesspeople often privately complain about harassment by tax and customs authorities, but few of them go public for fear of government retribution.
Corruption among Armenian officials in charge of collecting taxes and import duties is believed to be widespread. President Robert Kocharian himself deplored rampant corruption in the customs agency last January, publicly warning its employees to stop helping importers avoid taxes in return for kickbacks.
The controversial customs chief, Armen Avetisian, admitted in April that all large-scale importers are his “friends.” A former high-ranking police officer, Avetisian is reputed to be a wealthy person and a protégé of Defense Minister Serzh Sarkisian.
(Photolur photo: Armen Avetisian)