Security of property be in effect for Karabakh businessmen working in  Armenia - CBA 

ArmInfo. The Armenian authorities want to introduce a mechanism by which financial  institutions will be able to exercise their right to collateral in  the event of default on credit obligations by an unregistered private  entrepreneur or legal entity from Nagorno- Karabakh. At the plenary  session of the National Assembly of the Republic of Armenia on March  25, amendments to the Civil Code and the law "On state registration  of legal entities, state registration of separate divisions,  institutions of legal entities and individual entrepreneurs" are  being discussed in the first reading.

Armen Nurbekyan, Deputy Chairman of the Central Bank of the Republic  of Armenia, who presented the amendments, noted that in November  2023, entrepreneurs from Nagorno-Karabakh were given until December  1, 2024 to register their business in Armenia. Given the expiration  of this deadline, it became necessary to resolve this issue. "Today  we already know exactly which companies decided to register, and we  have a list of those who did not want to do so. Since there are  companies that have not registered in Armenia, but have current  credit obligations, then the collateral for these obligations has  become the pledges of third parties - citizens of Armenia or legal  entities of the republic," the deputy head of the Central Bank noted.

He explained that the basis for cancellation of collateral is being  adjusted in the Civil Code by introducing a clause according to which  private entrepreneurs or legal entities from Artsakh who have not  received state registration or have not registered and who have  current obligations on loans secured by real estate in Armenia  belonging to a third party, but who do not fulfill these obligations,  retain the right of ownership of this (pledged) property for the  third party. The only exceptions are cases when these obligations,  with the consent of the borrower, were partially restored or  compensated for by the allocated state financial assistance.

In total, according to him, we are talking about 30-40 loans to large  companies from Artsakh for 27 billion drams. "We have reason to  believe that these entrepreneurs do not register in the Republic of  Armenia in order not to fulfill their loan obligations," he noted.

Nurbekyan said that in this situation a legal case arises in terms of  the implementation of the requirement regarding the collateral by the  financial organization. It was precisely to solve this problem that  legislative changes were initiated in the Civil Code of the Republic  of Armenia regarding the grounds for the cancellation of the  collateral.

"We are introducing legal clarifications so that banks and financial  organizations, as well as the government, since the authorities have  taken on a certain amount of loans from citizens of Artsakh, can  exercise their rights regarding the collateral," Nurbekyan said.