ANIF embezzled budgetary funds - Transparency International 

ArmInfo.  The Armenian National Interests Fund (ANIF) has embezzled budget funds, which is a serious crime against taxpayers. This was stated by the head of the Transparency International anti-corruption center Varuzhan Oktanyan during a discussion organized by the Public Journalism Club.

In a message received by ArmInfo from the Public Journalism Club, the  discussions touched upon issues related to conflicts of interest and  corruption in the process of state and municipal procurement.

Touching upon the decision of the Constitutional Court, which  recognized the law on confiscation of property of illegal origin as  consistent with the Constitution, Oktanyan expressed his conviction  that this decision will complicate the work of law enforcement  agencies.

He noted that it will now be difficult for them to prove the  illegality of the property, since the Constitutional Court emphasized  the need to establish a link between the acquisition of this property  and the criminal activity of the official during his period of  service in a public office.

"This decision is in line with the latest statement by Armenian Prime  Minister Nikol Pashinyan that there is no need to be bloodthirsty,  but to act according to the law. Let's say someone claims to have  acquired this property in the 2000s. Law enforcement officers must  find out what crime this person committed during that period that led  to the acquisition of this property. It seems to me that it will be  very difficult to prove this," Oktanyan noted.

Touching upon the latest example of such a conflict of interest, the  expert recalled the deal concluded by Vagharshapat Mayor Diana  Gasparyan. As Oktanyan recalled, Gasparyan purchased a gas station  belonging to her husband's father for 13.6 million drams for the  needs of the mayor's office. In this regard, the head of the  anti-corruption center pointed to a systemic problem: not only  companies belonging to officials' affiliates win tenders, but these  companies can also be linked to deeper processes of property  redistribution.  "Here we are faced with a deeper problem, such as  the redistribution of property," Oktanyan explained.

In turn, Tigranuhi Khalafyan, Head of the Department for Supervision  of the Conduct of Public Servants of the Corruption Prevention  Commission, confirmed that corruption is most noticeable in the  sphere of state and community procurement, especially in the  construction sector. In this regard, she emphasized that the  2023-2026 anti-corruption strategy envisages legislative changes and  new mechanisms aimed at revising legal norms in the field of  procurement.

"Of course, there will be no absolute ban on affiliated persons so  that competition is not violated, but a more public environment will  be ensured to minimize actions related to conflicts of interest,"  Khalafyan noted.

Touching upon the situation in ANIF, Khalafyan pointed out  significant risks in government organizations and noted that the  Corruption Prevention Commission has identified a number of gaps in  the formation of governing bodies and the selection of management  personnel.

The discussion was held within the framework of the Fair Judicial and  Legal Reforms program, implemented by a consortium led by the  Democracy Development Foundation, whose members include the Public  Journalism Club, the Vanadzor Office of the Helsinki Citizens'  Assembly, and the NGO "Protection of Rights Without Borders".

On May 23, at a government meeting, a decision was made to dissolve  the Armenian National Interests Fund (ANIF). Until the liquidation  process is completed, the management of the fund has been transferred  to the State Property Management Committee. The reasons and grounds  for the liquidation of the fund are not specified in the  justifications for the resolution, and it is also unclear what will  happen to the investments of ANIF and its subsidiaries. One of ANIF's  largest projects was the creation of the national air carrier Fly  Arna. At the beginning of the year, Prime Minister Nikol Pashinyan  admitted the failure of this program: the airline suspended flights  and the license was revoked. The state invested at least 4.8 billion  drams (more than $12 million) in Fly Arna. In July, information was  released that the Emirati airline Air Arabia was going to file a  lawsuit against Armenia in arbitration court over the national air  carrier, Fly Arna. Earlier, ArmInfo reported on the problems that had  arisen at Fly Arna, caused, first of all, by the failure of the  Armenian side to fulfill the conditions assumed when creating the  airline. The issue was primarily about state compensation for  expenses incurred in carrying out flights. The carrier stopped  flights on January 10. Prior to this, one of the carrier's main  shareholders, Air Arabia, recalled one of its two aircraft.

Another major investment by ANIF was the joint construction of a  solar power plant in the village of Dashtadem in Talin with the Arab  company Masdar. However, the construction did not begin, despite the  planned deadlines.

ANIF also provided co-financing for the opening of the Hard Rock  restaurant in the center of Yerevan, spending at least $500 thousand  from state funds on it. Although the restaurant is functioning, the  International Monetary Fund expressed doubts about the advisability  of such investments, emphasizing that ANIF should not invest in the  catering sector.

In 2022-2023, the Commission for the Prevention of Corruption and the  State Control Service revealed cases of abuse and embezzlement in the  fund. The CPC became interested in ANIF's activities as part of a  case against the current mayor of Yerevan, Tigran Avinyan, regarding  his holding multiple positions. The case was initiated in December  2022. Also in 2023, the International Monetary Fund found reporting  and governance issues at ANIF, which led to the government  restricting its activities.