ArmInfo.On March 3, the Government of Armenia approved the decision "On the application of temporary restrictions on the export to third countries of copper concentrate, molybdenum concentrate, ferromolybdenum, as well as products from molybdenum (with the exception of the HS code: 8102970000: Molybdenum waste and scrap) from the Republic of Armenia, on the establishment of a licensing procedure export, forms of license applications and licenses".
According to the source, in recent years, the world market has seen an increase in exchange prices for non- ferrous metals, which creates favorable conditions for the growth of income in the mining sector of Armenia and its further development. At the same time, according to the document, this initiative is aimed at protecting the subsoil. In particular, given that the subsoil is the exclusive property of the state, the state establishes the procedure for issuing licenses in order to effectively manage subsoil use.
To this end, the Government of the Republic of Armenia submitted a legislative initiative to amend Article 19.6 of the RA Law "On State Duty" dated December 27, 1997, according to which the export of a number of goods (HS code: 2603000000, 2613, 7202700000, 8102 (except for 810297000) to third country will be considered a licensed activity and a state duty rate is established for this type of activity.
It is noted that in order to regulate the process of exporting these goods, it was necessary to create an authorized body for issuing licenses, which was recognized by the Ministry of Economy of the Republic of Armenia, as well as to determine the procedure for issuing licenses, which will regulate the legal relations between economic entities and the state in this direction.
This procedure provides for the issuance of a general license for the aforementioned exported goods, indicating the quantity of exported goods: the applicant can export them in separate batches during the period specified in the general license, with the completion of the limit specified in the license. According to the authors of the draft law, the aforementioned procedure will make it possible to minimize administration and export different batches on the basis of one license (there will be no need to apply to the Authorized Body each time).
At the same time, given that companies exporting mining products often need to export small batches (up to 50 kg) of products for laboratory analysis to a third country, it is advisable to separate them from the export licensing process so that exporting small batches of products for laboratory analysis is carried out without licenses.
This decision comes into force on March 10, 2022 and is valid until September 10, 2022.
The Minister of Economy of Armenia Vahan Kerobyan recalled that earlier the ministry came up with an initiative to establish an additional duty on the export of copper and molybdenum concentrates, ferromolybdenum and other similar products, so that part of the proceeds from the increase in the cost of exploiting the subsoil would go to the state budget and be spent on the needs established by the government program and budget. "We forecasted that about 35 billion drams would go to the state budget in 6 months, and this is exactly the amount that was collected," he said.
Taking into account the fact that the market situation has not changed - the growth of exchange prices for non-ferrous metals continues on the world market, which creates favorable conditions for the growth of incomes of the mining sector of Armenia and its further development, the Ministry of Economy of the Republic of Armenia proposed to extend the decision taken on September 7, 2021. At the same time, given that the expenses of subsoil users were also growing in parallel, it was decided not to increase the amount of the state duty established on July 12, 2021.
In addition, according to the head of the Ministry of Economy, in parallel, work is underway to change the royalty system in order to provide a common solution that will allow more equitable distribution of profits between Armenian citizens and subsoil exploiters in the coming years.
It should be reminded that on July 12, the Armenian government approved the draft law "On Amendments to the RA Law "On State Duty", the adoption of which is due to the need to regulate foreign trade in goods of strategic importance for the republic (copper and molybdenum concentrates, ferromolybdenum). The state duty was set at 15 % of the international price for the issuance of licenses, permits and certificates for the export of raw materials, in particular ferromolybdenum, copper concentrate and molybdenum to third countries, provided that high international prices for the latter remain. According to the bill, the high profits received from the exploitation of the country's subsoil will be directed to the development of the manufacturing industry, strategic assets in the mining sector and the deepening of production value chains. In particular, it is planned to deepen the copper processing value chain by first producing high-purity copper cathode, and then promote the rapid development of the ecosystem of related products. It was reported that the project is a temporary solution until a complete and deep revision of the policy related to the sector, involving all departments of the sector, and in the long term it is planned to revise the tax policy of the industry in order to ensure the effective taxation of excess profits derived from the use of the country's subsoil.
Some media considered this decision politically motivated, directed against one of the largest enterprises - the Zangezur Copper-Molybdenum Plant ( Syunik region, Armenia), whose owners during the early parliamentary elections supported the Hayastan bloc, headed by second president Robert Kocharyan.
