Former Armenian Ambassador to the Vatican, Serzh Sargsyan’s son-in-law Mikael Minasyan continues his series of “disclosures”. In a video message released on June 13, the latter referred to the export of scrap metal from Armenia and announced that the shadow leader of this business is the family of Prime Minister Nikol Pashinyan, and as a result the state budget has lost billions in revenue.
“After the revolution, Nikol Pashinyan and Anna Hakobyan were already thinking about how to get rich quick. They and their friends founded “KAP” company ․․․ This company started by robbing the people and the budget, more specifically, exporting scrap metal without payment of dues.
Every time you export scrap metal, you have to pay 80,000 AMD for each ton. The exception is when you prove that the scrap is made of scrap metal of your own production. Only then you do not pay 80,000 AMD,” Mikael Minasyan said.
In the video titled “The feudal lord who escaped from the chains. Robbery by exporting iron”, Minasyan also stated that unlike previous years, when there was little scrap metal exported from Armenia, the number has sharply increased in the last two years. “Everything changes in 2018-2019, when 50,000 tons of scrap metal are exported from Armenia. 50,000 tons of scrap metal were exported without paying 80,000 AMD for each ton.”
According to Minasyan, under the leadership of the Prime Minister’s family and through the Deputy Chairman of the State Revenue Committee Shushanik Nersisyan, there is a mafia in the Customs and Tax Service of Armenia, which allowed to rob 4 billion AMD from the people of Armenia. “This is already direct evidence of direct looting,” Minasyan said.
Studying the processes that have taken place during the last two years, and contacting the representatives of “KAP” company, the Fact Investigation Platform found out that Mikael Minasyan’s claims do not correspond to reality.
True claims by Minasyan
The “KAP” company mentioned by Mikael Minasyan was really founded after the revolution in 2018. It is engaged in accepting, processing and export of scrap metal. We learn from the database of the Statistical Committee that, in fact, the export of scrap metal in the last 2 years has significantly increased compared to previous years, and the data published in Mikael Minasyan’s video message for 2014-2017 are true. During these years, a total of about 830 tons of scrap metal has been exported from Armenia. However, this is where Minasyan’s true claims end.
Minasyan’s false claims about “KAP” and metal exports
Armen Martirosyan, the director of “KAP” company, denied the connection between their company and Nikol Pashinyan or his family, and even mentioned that their truck has been standing at the customs checkpoint for 1.5 months because of the bureaucratic hassle. “If I had connections up there, I would hardly have a problem with my trucks,” said the director of “KAP” company.
The document published in Minasyan’s video message, in which it is mentioned that “KAP” company has signed a contract for the supply of scrap metal with the Russian company Stilko, is very real, which Martirosyan confirmed to Fip.am, but said that the document was signed for 7000 tons. However, they exported only about 3,700 tons of scrap metal. He noted that he does not know how that contract has appeared in Minasyan’s hands.
According to Martirosyan, their company has been exporting scrap metal since the end of 2018. In total, the company has an export license for about 13,200 tons of scrap metal (you can read the reference here), but 9,237 tons have been exported, mainly briquetted iron. According to the director, the lion’s share of exported scrap metal is vehicle frames, and the export volume of heavy metals is 200-300 tons. “We mainly exported vehicle frames, which had been left in landfills for years and were dusting. In other words, in fact, we were cleaning the country from garbage,” Mr. Martirosyan said.
On export volumes
As we have already mentioned, Minasyan’s assertion that the export of scrap metal from Armenia has sharply increased in the past two years is true, but according to the Statistics Committee, the volume of scrap metal exported from the country in the previous two years is not 50,000 tons, but about 36,000 tons. Moreover, only 1,000 tons of scrap metal were exported in 2018, and about 35,000 tons in 2019. And “KAP” accounts for only 26% of exported scrap.
About 50 companies are involved in the export of these products, and it is not accidental that last year’s decision to restrict exports was accompanied by protests, even the entrance to the State Revenue Committee was blocked by trucks loaded with scrap metal.
On the law
Mikael Minasyan’s claim that 80,000 AMD should be paid for every 1 ton of scrap metal exported is true, but as Minasyan says, it does not refer to waste of Armenian origin or to one that is considered to be metal waste of own production.
And the scrap metal collected in Armenia is considered to be metal waste of local origin (for example, obsolete car bodies). And this is what “helped” the businessmen to freely export metal scrap without paying customs duties. In other words, the businessmen of this sphere did not violate any law during their activity.
Such activity of exporting organizations has led to a significant increase in the volume of scrap metal exported from Armenia, after which the government introduced a bill to the National Assembly in the summer of 2019 to amend the Law on State Duty.
During the discussion of the bill in the National Assembly, Babken Tunyan, a member of the “My Step” faction, noted that before 2012 a large amount of scrap metal was exported from Armenia, and there has been a year when up to 200,000 tons of scrap metal were exported.
“In 2012, the government amended the Law on State Duty, and it was decided that the export of scrap metal should be taxed by the state, and a state duty of 80 AMD per kilogram shall be applied. But there was one interesting exception. ” The duty was not applied except for the cases when the country of origin of the scrap metal was Armenia,” Tunyan said.
The MP explained the increase of export volume after 2018 as follows: “There is an accepted rule that if the given product is worn out and turned into scrap in Armenia, then it is considered a product of Armenian origin. For many years, until September 2018, the ban was in force, but in September our businessmen realized that local scrap metal could be presented as a product of Armenian origin, and be exported without paying duties, and, thus, they began to export it in large quantities.”
According to Tunyan, the government was closing the “loophole” by changing the law, setting a state duty on the export of local scrap metal.
Finally, on July 9, 2019, the National Assembly adopted the amendments to the Law on State Duty proposed by the government, which set 60 AMD per kilogram for the export of a number of goods, including scrap metal.
By the way, after the law entered into force, the export of this product sharply decreased, which proves that the growth of export volumes was not the result of protectionism or circumvention of the law, but of its regulations.
Lack of logical connection
Last year, the proposal to amend the Law on State Duty was accompanied by protests in front of the government building, which were also attended by “KAP”, the company mentioned by Minasyan and attributed to Nikol Pashinyan’s family.
When covering the protest, Sputnik Armenia news agency took a comment from Armen Martirosyan, the director of “KAP”, who said that when Prime Minister Nikol Pashinyan announced that the economic revolution would take place, people would recycle and sell garbage and scrap metal, they decided to do that. “A year ago, full of enthusiasm, we rented areas, hired employees, bought equipment on credit and today we are facing this challenge. There are 30 employees in our company, but more than 3,000 people work with us on a contractual basis. In other words, they collect metal waste from the fields and get paid for it,” Martirosyan said.
In other words, the company that was declared Nikol Pashinyan’s business by Minasyan complained about the amendment in the law submitted by Nikol Pashinyan’s government.
Minasyan’s assertion is groundless for yet another reason
Last year, when Nikol Pashinyan repeatedly called on his Facebook page to hand over the bodies of damaged cars for recycling, he mentioned only the name of “Metexim” company. Then the Fact Investigation Platform contacted “KAP” to find out if the only company in the industry was “Metexim”, and we revealed that many companies were involved in the business, one of which was “KAP”. The representative of “KAP” stated that the differentiated approach of the Prime Minister is unacceptable for them. You can read the whole article here.
Thus, we can state that despite the fact that after the revolution the export of scrap metal sharply increased, the companies engaged in this activity exported the goods without paying the state duty, which was not a violation the law. And “KAP” company is not the only one in this sphere, and has nothing to do with Nikol Pashinyan or Anna Hakobyan.
Besides, the government headed by Nikol Pashinyan has initiated legislative amendments, which have limited the export of scrap metal, and this circumstance contradicts the claim voiced by Minasyan that the Prime Minister has a “share” in exports.