Armenia`s authorities plan taking out interest-free loans from  businesses for budget 

ArmInfo. The Republican Union of Employers of Armenia (RUEA) is deeply convinced that the purpose of the amendments to the Administrative Procedure Code of the Republic  of Armenia initiated by the Ministry of Justice to review the  procedure for appealing fines is to quickly replenish the state  treasury. Meanwhile, its adoption will have irreversible negative  consequences for Armenian business.

According to the justification for the document, the Ministry of  Justice, in particular, proposes to consider Article 83 of the  Administrative Procedure Code of the Republic of Armenia as invalid.  The latter states that the acceptance of a claim for challenge  suspends the execution of the contested administrative act until the  entry into force of a judicial act resolving the case on the merits  in this case. As stated by legal experts and business  representatives, the draft is unconstitutional and violates the  principle of the presumption of innocence. The Ministry of Justice  countered by stating that the amendments they propose only provide  for the introduction of an additional petition for the application of  measures to secure the claim. That is, a citizen will have the  opportunity to appeal administrative acts, with the only difference  that, if necessary, he will have to justify along with his demand why  the administrative act should be suspended and what consequences may  occur for him if it is not suspended. In other words, in any case,  the court, upon the plaintiff's petition, may consider and apply  security for the claim. However, if the petition for the application  of a measure to secure the claim is rejected and the administrative  act is not suspended, the person brought to administrative  responsibility will be required to pay the fine in the generally  established manner, and after a court decision is issued in his favor  and enters into legal force, file an application for the return of  the amount of the fine paid and wait until the funds paid are  returned to him.

Meanwhile, the Russian Union of Taxpayers notes that it is no secret  that the most common violations in the sphere of economic activity  are tax violations. If the fact of committing a tax violation is  confirmed by a court decision 2 years after the administrative act  was drawn up (statistics show that the average duration of a court  case is 2 years), then taxpayers pay the state 27.4% of the unpaid  tax amount annually. This amount is more than 2 times higher than the  annual interest rates paid by the state on short-term government  bonds issued by the state to finance the state budget deficit. From  the point of view of this combination, there are no grounds for the  Government to give preference to the payment of amounts of even  legally drawn up administrative acts to the state budget before these  acts become final. Therefore, if the Government aims to ensure the  payment of these amounts to the state budget before administrative  acts become final, regardless of the results of their appeal, then  this:

1) gives grounds to believe that the state is trying to limit the  judicial system from making decisions that entail the return of  amounts paid to the state budget, 2) this directly means that the  state has set itself the goal of taking interest-free money from  businesses, directing it to budgetary purposes, and in the event that  an administrative act is recognized as unfounded, simply returning  this money without any additional financial obligations, which is an  extremely unfair and unjustified approach. 3) until the issue of the  required level of education of administrative body specialists and  sufficient professional skills for drafting reasonable and legal  administrative acts is resolved, legislative changes in this  direction or proposals for possible improvement of legislative norms  should be considered exclusively in the logic of maintaining the  current approach to regulation>, the Union noted.

In addition, as the authors of the statement note, if the bill is  adopted, the courts will simply not be able to make objective  decisions on suspending the effect of an administrative act  (satisfying a petition for securing a claim). This is due to the fact  that the validity or invalidity of administrative acts is determined  after the end of the trial, which, according to established practice,  lasts for years. Meanwhile, a petition for securing a claim,  according to the bill, must be considered within a period of no more  than one week and, therefore, the decision made on the petition for  securing a claim will not be based on objective judgments formed  during the trial regarding the validity or invalidity of the  administrative act itself. Consequently, business entities, in  addition to presenting justifications for the invalidity of the  administrative act itself, must also additionally justify what  irreversible consequences may arise for them if the above-mentioned  clearly invalid administrative act is not suspended. This is not only  a violation of the presumption of innocence, but will also have a  devastating impact on both the continuity of current economic  activity (up to and including bankruptcy of the business if the court  does not grant the petition with certain decisions) and on the  adoption of decisions on the implementation of new business  initiatives in the Republic of Armenia.

At the same time, the adoption of the bill, according to the RSRA, is  fraught with the widespread initiation of criminal cases for tax  violations. If at present law enforcement agencies show some  restraint in initiating criminal cases on the basis of administrative  acts that have not yet entered into legal force, then as a result of  the adoption of the proposed amendment, in the event that the court  does not satisfy the petition of an economic entity to suspend the  effect of an administrative act, there is no doubt that the rejection  of the petition will immediately be followed by the initiation of  criminal cases to impose on the economic entity the obligation to pay  the amount of the alleged violation, even if it subsequently turns  out that the administrative act drawn up was completely incorrect. 

The adoption of the draft contains serious corruption risks, the  Union believes. If an economic entity has committed any violation, it  will seek to reach an agreement with the relevant officials, since it  knows that even if it appeals the administrative act, its effect will  most likely not be suspended, and the amount recorded in the  administrative act drawn up in connection with the alleged violation  must be paid to the state budget initially, regardless of the results  of the appeal of the administrative act in court. On the contrary,  officials of administrative bodies will simply dictate their terms  with the same threat in order to reach an agreement with the economic  entity.

The adoption of the draft law also contains a great potential for  arbitrary exercise by administrative bodies.  Based on the urgent  need to ensure the earliest possible receipt of budget revenues on  time, administrative bodies may not pay special attention to the  quality of administrative acts. The initiative will also further  increase the burden on the courts.

, - the RSRA asks.