LEGAL UPDATE

Part 2 of Article 44 of the Tax Code of the Republic of Armenia of October 4, 2016 (hereinafter referred to as the Code) shall be drafted as follows:)

Old version.

As a result of tax control, if violations of the
requirements of the Code and the laws of the Republic
of Armenia regarding fees are detected, tax liabilities
cannot arise if they were imposed on the taxpayer after
the end of the third tax year immediately following the
tax year of committing the violation, and in case of
violations of the requirements of Chapter 73 of the
Code, the fifth after the end of the tax year. Upon
detection of violations of the requirements of the
sections of the Code related to real estate tax and
property tax of vehicles, no tax liabilities may arise if
the given violation is detected after the expiration of
the tenth tax year immediately following the tax year
in which it was committed.

New version.

«As a result of tax control, in case of violations of the
requirements of the Code and the laws of the Republic of Armenia regarding fees, no tax liabilities may arise, if they were presented to the taxpayer after the end of the third tax year immediately following the tax year in which the violation was committed, except for the cases specified in this part. In case of detection of violations of the requirements of Chapter 73 of the Code, tax liabilities may not arise if they were presented to the taxpayer after the fifth tax year immediately following the tax year of the violation. Registered (registered) in countries (geographical areas) with liberal systems of taxation or transactions related to information provided automatically to the tax authority by competent
authorities of foreign countries (territories) (with whom automatic exchange of information about financial accounts is carried out) in accordance with Chapter 80.2 of the Code. in case of violations of the requirements of the Code and the laws of the Republic of Armenia regarding payments as a result of tax control regarding transactions with organizations, no tax liabilities may arise, if they were presented to the taxpayer after the expiration of the tenth tax year immediately following the tax year of committing the violation. Upon detection of violations of the requirements of the sections of the Code relating to real estate tax and property tax of
vehicles, no tax liability may arise if the violation in
question is detected after the expiration of the tenth tax year immediately following the tax year in which it was committed.

Article 134 of the Code shall be supplemented with the following content in part 5.

Presentation of income tax calculations

5. The financial institutions defined by Chapter 80.2 of the Code, which are state-registered (registered) residents in the Republic of Armenia and non-residents with a permanent establishment registered in the Republic of Armenia, until May 10 of the tax year following each tax year, inclusive, in accordance with Article 53 of the Code submit to the body the information defined by Article 443.4 of the Code.

Article 156 of the Code shall be supplemented with the following content in part 6.

Submission of income tax calculations and other documents

6. Financial institutions recognized (registered) as residents in the Republic of Armenia and non-residents with
a permanent establishment registered in the Republic of Armenia, as defined by Chapter 80.2 of the Tax Code,
must submit the information specified in Article 443.4 of the Tax Code to the tax authority in accordance with
the procedures set forth in Article 53 of the Tax Code by May 10 of the following tax year.

To supplement the Code with the following content in Article 402.3:

Article 402.3. Violation of the rules of providing information on financial accounts by a financial institution or
account holders and controlling persons, submitting information about the non-disclosure of account holders
and controlling persons, observing verification (study) procedures.

1. In the case of a financial institution defined by Chapter 80.2 of the Tax Code (hereinafter referred to as
the 'financial institution') failing to provide the information specified in the first part of Article 443.4 of the Tax
Code regarding accountants and controlling persons (hereinafter referred to as 'accountants and controlling
persons') and financial accounts (hereinafter referred to as 'financial accounts') within the timeframe established
by the Tax Code, or providing such information after the deadline, a fine of 500,000 AMD shall be imposed on
the financial institution for each piece of information that was either not provided or provided late.

2. In the event that the financial institution does not provide the information on the financial accounts of the
account holders and controlling persons to the tax authority within 30 days after the date of imposition of the
fine provided for in part 1 of this article or this part, the financial institution shall be charged a fine of 1 million
AMD for each non-provided information.

3. If the financial institution provides incomplete or false information regarding the financial accounts of
account holders and controlling persons, a fine of 1 million AMD will be charged from the financial institution
for each incomplete or false information.

4. In the event that the financial institution fails to submit information on the non-disclosure of account
holders and controlling persons to the tax authority, the financial institution shall be charged a fine of 250,000
AMD.

5. In the event that the financial institution does not comply with the proper inspection (examination)
procedures of account holders and controlling persons defined by the Unified Reporting Standard, the financial
institution shall be charged a fine of 1 million AMD.

6. In case of violations defined by this article, the Central Bank of the Republic of Armenia applies fines in
accordance with the procedure established by the Law "On the Central Bank of the Republic of Armenia".

7. The Central Bank of the Republic of Armenia and the tax authority jointly exercise control over the cases
defined by this article, based on the methodological instructions or impulses given by the tax authority, by the
Central Bank of the Republic of Armenia.

8. The control procedure and methodology defined by part 7 of this article are defined by the joint legal act
of the tax authority and the Central Bank of the Republic of Armenia.

9. In cases of violations defined by this article, fines are not applied, if the financial institution eliminated
them before the initiation of liability measure proceedings, or the violation is of a technical nature, the criteria
of which can be defined by the methodology defined in part 8 of this article.

1. To supplement the Code with the following content of the financial institution defined in Chapter 80.2 of the Code (hereinafter referred to as financial referred)

CHAPTER 80.2

PROCEDURE FOR EXCHANGE OF INFORMATION ON FINANCIAL ACCOUNTS,
AUTHORITIES OF THE TAX AUTHORITY RELATED TO EXCHANGE OF INFORMATION, DUTIES
AND RIGHTS OF FINANCIAL INSTITUTIONS, REPORTERS AND CONTROLLING PERSONS

Article 443:3. General rules for automatic exchange of information about financial accounts with
foreign states (territories).

1. Automatic exchange of information on financial accounts with the competent authorities of foreign states
(territories) in accordance with the Convention "On Mutual Administrative Assistance in Tax Matters" ratified
by the Republic of Armenia (amended by the 2010 protocol) and the Multilateral Agreement of the Competent
Authorities "On Automatic Exchange of Information on Financial Accounts" (hereinafter in this chapter:
Agreements), as well as on the basis of the Unified Reporting Standard published by the Organization for
Economic Cooperation and Development and its interpretation (hereinafter in this chapter: Standard) by the tax
authority to the competent authorities of foreign countries (territories) (with which automatic exchange of
information about financial accounts is carried out ) is the provision of information provided by this chapter and
the receipt of information in an automatic manner.

2. The tax authority ensures the translation of the Standard, as well as its amendments and additions, and
their official publication by placing them on its official website.

3. The terms used in this chapter have the meaning defined by the Standard.

4. The provisions of this chapter apply to resident financial institutions of the Republic of Armenia and non-
resident financial institutions with permanent establishments registered in the Republic of Armenia (hereinafter referred to as financial institutions) as defined by the Standard.

5. The provisions of this chapter apply to account holders and controlling persons considered to be residents
of foreign countries (territories):

1) in the case of a newly opened financial account, regardless of the value of the financial account:

2) in the case of existing financial accounts (except for the cases defined by parts 4-6 of Article 443.6 of the
Code), when there is more than 250 thousand United States dollars or its equivalent Armenian dram or its
equivalent foreign currency at the beginning of the tax year or as of the last day, the sum of the balances of
financial accounts, as well as when the sum of the amounts of inflows (additions) or the sum of outflows
(deductions) of financial accounts during the tax year exceeds 250,000 United States dollars or its equivalent
Armenian dram or its equivalent foreign currency;

3) in the case of existing financial accounts, regarding the regulations defined by parts 4-6 of Article 443.6
of the Code, regardless of the value of the financial account.

6. In the sense of the application of part 5 of this article, when determining the Armenian dram equivalent
to the United States of America dollar or the equivalent foreign currency, the basis is taken as of the beginning
or the last day of the tax year, respectively, as well as as of the date of the relevant inputs (increments) or outputs (decreases) of the central currency of the Republic of Armenia. the average exchange rate formed in currency markets published by the bank. For the purposes of the application of this article, the average exchange rate published by the Central Bank of the Republic of Armenia on the given day and formed in the currency markets shall be taken as the basis for the average exchange rate published by the Central Bank of the Republic of Armenia until 16:00 of the given day.

.

Article 443.5. Powers of the tax authority related to the automatic exchange of information about
financial accounts

1. In connection with the automatic exchange of information about financial accounts, the tax authority
receives from the financial institution information about the financial accounts of account holders and
controlling persons submitted in accordance with this chapter.

2. The tax authority transmits information about financial accounts to competent authorities (reporting
states) of foreign countries (territories) that are included in the list of countries (territories) with which automatic
exchange of information about financial accounts is carried out and whose residents are account holders and
controlling persons. The list of states (territories) with which automatic exchange of information on financial
accounts is carried out is published by the tax authority by placing it on its official website.

3. The procedures for transferring information about financial accounts to competent authorities of foreign
countries (territories) mentioned in Part 2 of this article, receiving information from such competent authorities
by the tax authority, as well as the requirements for maintaining information about transferred financial accounts are established by the Government.

4. The tax authority has the right to use the information on financial accounts received from the competent
authorities of foreign countries (territories) for the purposes defined by the Agreements, as information received
from a third party, defined by Article 350 of the Code.

Article 443.6. Responsibilities and rights of financial institutions, account holders and controllers
regarding automatic exchange of financial account information

1. In order to find out the residence of the account holders and controlling persons, the financial institution
carries out due diligence of the account holders and controlling persons defined by the Standard.

2. Account holders and controlling persons are obliged to submit to the financial institution the information
requested by the financial institution in accordance with this chapter regarding themselves and/or related account holders and controlling persons.

3. If the person does not provide the financial institution with the information required by this chapter and
the Standard when opening a financial account, the financial institution refuses to open a financial account.

4. The financial institution is obliged to obtain a written consent from the person who opens a financial
account or has a financial account to provide the information provided for in this chapter to the tax authority.

5. If the person opening a financial account or having a financial account refuses to provide the consent
specified in part 4 of this article or does not provide the consent within 10 days from the moment the financial
institution submits a request for consent, then the financial institution refuses to open new financial accounts,
and in the case of existing financial accounts previously opened, the financial institution refuses (stops)
transactions with financial accounts, except for transactions of transferring their funds to an account opened in
another institution in their name or providing them with their funds. If the financial institution refuses to make
transactions with financial accounts, it informs that person about it within three working days.

6. If, as a result of the procedures provided for in part 1 of this article, the financial institution discovers the
inaccuracy or incompleteness of the information provided by the account holder or controlling person, the
financial institution refuses to open new financial accounts, and in the case of previously opened existing
financial accounts, the financial institution refuses (stops ) to make transactions with financial accounts, except
for transactions of transferring their funds to an account opened in another institution in their name or providing them with their funds. If the financial institution refuses to make transactions with financial accounts, it informs that person about it within three working days.

Suggestions/ Clarifications

If you are a profit tax payer, by the decision HO-338-N, changes were made regarding the bases of origin of the tax liability defined by the Code. Within the framework of the new law, new provisions have been added regarding the procedures for submitting profit tax calculations, income tax calculations and other important documents. Also, a new chapter has been added to the Code, which defines the procedure for exchanging information about financial accounts. These provisions regulate the duties and rights of both the tax authority and financial institutions, account holders and controlling persons. Therefore, we suggest that you familiarize yourself with the given legislative changes and reduce possible risks.

2. On amending Decision No. 1118-Ն regarding the approval of the procedure for applying the exemption from tariffs, specifically the import customs duty, on technological equipment imported within the framework of an investment project in the priority sector, including their constituent and complementary parts, raw materials, and/or materials, and recognizing the authorized body.

Name of the legislative act:

Decision No. 1574-N on approving the procedure for applying the exemption from tariffs, specifically the import customs duty, on technological equipment imported within the framework of an investment project in the priority sector, including their constituent and complementary parts, raw materials, and/or materials, and recognizing the authorized body.

Change Status:

Effective from 05.10.2024

What other legislative acts will be changed as a result:

The change takes place only in the decision N 1118-Ն.

What the changes are about:

The amendment relates to the requirements of the relevant draft decision of the Government of the Republic of Armenia regarding the granting of customs duty exemption, developed by the Ministry of Economy following the acceptance of an application submitted by the importer in writing or electronically to the Ministry of Economy.

Clause 16 should be written as follows:

Old version.

During the five working days following the date of submission of the application to the Ministry of Economy of the Republic of Armenia, if there are no grounds for rejecting the application provided for in
sub-items 1, 2 and 3 of Clause 21 of this Order, the Ministry of Economy of the Republic of Armenia prepares a request for the granting of customs duty privileges to the Republic of Armenia. The draft of the relevant decision of the Government of the Republic of Armenia (hereinafter referred to as the draft of the decision) and presents the Ministry of Finance of the Republic of Armenia, the Ministry of Justice of the Republic of Armenia, the State Revenue Committee of the Republic of Armenia, the authorized state body coordinating the economic sector covering the given program (hereinafter referred to as the bodies) for a position.

The application is submitted to the bodies
simultaneously with the draft decision.

New version.

4During the five working days following the date of submission of the application to the Ministry of Economy of the Republic of Armenia, if there are no grounds for rejecting the application provided for in
sub-items 1, 2 and 3 of Clause 21 of this Order, the Ministry of Economy of the Republic of Armenia prepares a request for the granting of customs duty privileges to the Republic of Armenia. The draft of the relevant decision of the Government of the Republic of Armenia (hereinafter referred to as the draft of the decision), which also indicates the date of submission of the application to the Ministry of Economy of the Republic of Armenia provided for in point 13 of this appendix, and is submitted with the application to the Ministry of Finance of the Republic of Armenia, the Ministry of Justice of the Republic of Armenia, State Revenue of the Republic of Armenia committee, authorized state body coordinating the sector of the economy covering the given program (hereinafter referred to as the bodies) to take a position.

Suggestions/ Clarifications

The amendment of the law refers to those persons who implement investment projects in the priority sector according to the decision approved by the Government, according to which they are considered to be a person importing goods and benefit from the grounds for receiving the privilege of exemption from customs duty.
In particular, the change is aimed at the submission of the application to the Ministry of Economy of the Republic of Armenia and the requirements of the draft decision on the granting of customs duty privileges by the Ministry.

3. On establishing the procedure for importing medical products into the territory of the Republic of Armenia and the list of necessary documents for the examination carried out for the purpose of importing medical products՚՚ on making amendments and additions to the decision N 429-N

Name of the legislative act

Government Decision N 1619-Ն of the Government of the Republic of Armenia dated March 30, 2023 N 429-Ն "On establishing the procedure for importing medical products into the territory of the Republic of Armenia and the list of necessary documents for the examination carried out for the purpose of importing medical products" Government Decision N 1619-Ն

The status of the change

This decision is effective from 18.10.2024, with the exception of clause 4.1 of the decision N 429-Ն, which comes into force from January 19, 2025.

What other legislative acts will be changed as a result:

As a result of the decision, only the procedure for importing medical products into the territory of the Republic of Armenia and defining the list of necessary documents for the examination carried out for the purpose of importing medical products will be changed" Decision N 429-Ն.

What the changes are about:

The amendment refers to the import of medical products, in particular, the Decision defined the range of products, the import of which is prohibited.
The decision also defined the list of documents to be submitted for import and their types.

Make the Following Changes and Additions in Annex N 1.

After point 4, add point 4.1 with the following content:

4.1. The import of used medical devices is not allowed, except for those medical devices whose compliance with the safety, quality, and efficacy indicators set by the manufacturer is confirmed only by the documents specified in point 1 of subpoint 'a' of point 2 of Appendix No. 2 of this decision, as well as by the documents specified in subpoint 'g' of point 2 of the same appendix, and where the period from the date of manufacture to the time of import does not exceed 5 years.

After the first sentence of point 9, add a new sentence with the following content:

In the application, the applicant fills in the imported medical products according to trade names.

After point 10, add points 10.1 and 10.2 with the following content:

10.1. In case of import of medical products belonging to the 1st risk class (except for sterile and those intended for "in vitro" (in vitro) diagnostics) a certificate of conformity of quality for each series (batch) or another document certifying the quality of the series (batch) may be submitted instead declaration of conformity.

10.2. In the case of import of used medical products, the importer, when submitting the application through the "One Window" electronic system, in the "commercial description of the product" field, must also indicate the fact that it has been used.

Suggestions/ Clarifications

If you are engaged in the import of medical products, we suggest that you pay attention to the above changes, because the bans on the import of medical products and the requirements for the submitted documents have been defined by the change.

4. On making additions to the Order No. 88 of December 6, 2021 of the Minister of Health of the Republic of Armenia to approve the forms of a number of medical documents

Name of the legislative act:

"On approving the forms of a number of medical documents and revoking Order No. 35 of July 3, 2013 of the Minister of Health of the Republic of Armenia" Decision No. 305-N on making additions to Order No. 88-Ն of the Minister of Health

Change Status:

This decision is effective (mandatory) from May 1, 2025.

What other legislative acts will be changed as a result:

The change will take place only in the order of the Minister of Health N 88-N.

What the changes are about:

The change refers to the addition of additional information about the patient, as well as the medical intervention, in the written informed consent form for receiving or refusing medical intervention.

Old version.

Appendix 15
Minister of Health
of the Republic of Armenia
December 06, 2021
Order No. 88-Ն
FORM WRITTEN INFORMED CONSENT TO RECEIVE OR WITHDRAW MEDICAL INTERVENTION

.

Patient's (legal representative or contact
person) Name: Surname: Father's name
Year, month, date.

New version.

Appendix 15
Minister of Health
of the Republic of Armenia
December 06, 2021
Order No. 88-Ն
FORM

WRITTEN INFORMED CONSENT TO RECEIVE OR
WITHDRAW MEDICAL INTERVENTION

Patient's (legal representative or contact
person) Name: Surname: Father's name,
birthday, month, year
Year, month, date, time

Suggestions/ Clarifications

According to the decision, a change has taken place in the written informed consent form regarding receiving or refusing medical intervention, in which the birthday, month, date of the patient receiving medical intervention, as well as the time of the medical intervention must be indicated.
The amendment of the decision concerns both the institutions performing medical intervention and the persons receiving medical intervention.

5. Decision No. 342 on making additions to the RA Tax Code regarding the process of submitting state tax declarations and the calculation of state tax

Name of the legislative act:

Resolution HO-342 on making additions to the Tax Code of the Republic of Armenia

Change Status:

This law enters into force on January 1, 2026.

What other legislative acts will be changed as a result:

According to HO-342, the amendment of the decision will take place in the "Tax Code"

What the changes are about:

The amendment refers to the process of submission of state tax declarations and the calculation of state tax.

To supplement Article 53 of the Tax Code of the Republic of Armenia of October 4, 2016 with the following content in Part 8.1:

8.1. Submitting the declarations specified in clauses 1 and 2 of part 8 of this article is not a basis for not accounting the amounts of the regular annual state tax prescribed by the law "On State Tax". The regular annual state tax obligation continues to be calculated until the date of occurrence of any of the grounds for termination of the obligation to pay the annual state tax defined by Article 6.1 of the Law on State Tax.

Suggestions/ Clarifications

The change will enter into force on January 1, 2026, however, if you are a taxpayer, we recommend that you be consistent with the legal regulations for submitting declarations, as well as the grounds for termination of the obligation established by the "State Tax" law.

6. RA Government Decision No. 1371 of September 28, 2017 on making additions and amendments regarding the grounds for rejecting the application for income tax compensation, as well as the information on the size of the nominal value of the share fund increase

Name of the legislative act:

Government Decision No. 1598 of September 28, 2017 on additions and amendments to the Decision No. 1371 of the Government of the Republic of Armeniaa

Change Status:

This decision enters into force on January 1, 2025.

What other legislative acts will be changed as a result:

As a result of the decision, N 1371 of September 28, 2017 "On establishing the procedure for reimbursing the income tax paid from these dividends from the state budget in the event that the income received in the form of dividends is invested in the statutory or share capital of the same organization that pays dividends and is a resident of the Republic of Armenia in accordance with the law, during the tax year of their receipt" on" provisions of the
Government's decision"

What the changes are about:

From January 1, 2025, in the case of investing the income received in the form of dividends in the statutory or share capital of the same organization, a resident of the Republic of Armenia that pays the dividend during the tax year of their receipt, for the purpose of compensation of the income tax paid from those dividends, persons shall submit to the tax authority, in addition to the documents specified by the Decision, also the share fund of the cooperative ( a certificate issued by the authorized body regarding the increase of the capital, the form of which is defined by the Decision. The decision also clearly defined the grounds for rejecting the application for income tax compensation.

Add the following new sub-clause 4.2:

4.2) a certificate issued by the authorized body regarding the increase of the share fund (investment capital) of
the same cooperative by persons who are residents during the reporting year, according to form N 3.2 of this
order.

NOTICE

ON THE SIZE OF THE NOMINAL VALUE OF THE AMOUNT OF INCREASE OF THE
ORGANIZATION'S SHARE FUND (CROWDING CAPITAL) BY INDIVIDUAL PERSONS

Old version.

If the documents submitted to the tax authority for
income tax compensation are not complete, the tax
authority offers the person who submitted an
application for income tax compensation to correct
the existing deficiencies within ten working days.
The application for compensation of income tax
shall be rejected by the decision of the tax authority, if the documents specified in point 3 of this order have not been submitted within the period specified in this point. In the event that the application for income tax compensation is rejected by the tax authority, the decision of the tax authority to reject the income tax compensation shall be submitted to the person who submitted the application within five working days following the end of the period established by this clause. After receiving the decision of the tax authority to refuse the income tax refund, the person can submit an application to the tax authority again, according to form No. 1 of this order.

New version.

In the event that the documents submitted to the tax authority for income tax compensation are not complete (or) inconsistencies are found in the submitted documents, the tax authority offers the person who submitted an application for income tax compensation to correct the existing deficiencies within ten working days. The application for compensation of income tax is rejected by the decision of the tax authority, if:
1) the documents specified in point 3 of this order were not submitted within the time limit specified by this clause or the inconsistencies in the submitted documents were not corrected;
2) the dividend-paying resident organization of the
Republic of Armenia has had the applications for
compensation of income tax paid from the dividends
distributed from the profits generated from the results of the accounting periods after January 1, 2025, during the tax year including the date of submission to the tax authority or the previous tax year, made unappealable by an inspection or other administrative act recorded:
a. Violation of any of the requirements of Article 408
or 410 or 415 of the Tax Code of the Republic of
Armenia,
b. Two or more violations of the requirements of Article 412 of the Tax Code of the Republic of Armenia,.

c. Three or more violations of the requirements of
Article 416 of the Tax Code of the Republic of
Armenia. In the event that the application for income tax compensation is rejected by the tax authority, the decision of the tax authority to reject the income tax compensation shall be submitted to the person who submitted the application within five working days following the end of the period established by this clause. After receiving the decision of the tax authority to refuse the income tax refund, the person can submit an application to the tax authority again according to the form N 1 of this order, except for the cases specified in
sub-item 2 of this clause.

Suggestions/ Clarifications

If you are considered a resident of the Republic of Armenia paying dividends during the tax year, then we suggest that you pay attention to the list of documents defined by law when submitting documents for the purpose of compensation of income tax paid from those dividends in case of investing in the statutory or share capital of the same organization, in order to avoid grounds for rejection.

7. On making additions and changes to the Labor Code of the Republic of Armenia regarding
compensation for forced layoff

Name of the legislative act:

HO-364-N on making additions and changes to the Labor Code of the Republic of Armenia

Change Status:

The law is in force from 24.11.2024. The requirements of this law are extended to the obligations of compensating the forced layoff that arose as a result of the examination of the claims entered into proceedings after the entry into force of this law and by virtue of the judicial acts that entered into legal force.

What other legislative acts will be changed as a result:

The amendment of the law applies only to the RA Labor Code.

What the changes are about:

The change refers to the rules for calculating the amount paid for forced downtime during the period of labor
relations.

In Article 265 of the Labor Code of the Republic of Armenia of November 9, 2004, add part 1.1 with a
new sentence with the following content:

In all cases where an employee changes to a new job with another employer during the period of forced layoff, an amount equal to the last nine months' salary paid for the previous job for the period of forced layoff is paid, and if the employee has worked for less than nine months, an amount equal to the salary paid for that period, as also the positive difference between the wages received for the new job before and during the given periodof forced idle time.

In part 2, make the following change.

Old version.

In case of economic, technological, organizational
reasons or the impossibility of restoring the future
employment relationship between the employer and
the employee, the court may not restore the employee to his previous job, obliging the employer to pay compensation in the amount of the average salary for the entire period of forced layoff time, until the court decision enters into legal force, and the employee at work compensation for non-recovery - not less than the average salary, but not more than twelve times the average salary.

New version.

In the case of economic, technological, organizational reasons or the impossibility of restoring the employer and the employee's future working relationship, the court may not restore the employee to his previous job, obliging the employer to pay compensation specified in part 1.1 of this article and compensation for not restoring the employee to work, no less than the average salary. but not more than twelve times the average salary.

Suggestions/ Clarifications

The law is aimed at both employers and employees, particularly the order and amount of payment of forced layoff in case of economic, technological, organizational reasons or the impossibility of restoring the employer's and employee's future working relations. Therefore, we suggest that you pay attention to the legal requirements and calculation rules for forced downtime after the termination of the employment relationship.

8. RA Government Decision No. 1268 of October 4, 2007 on making changes and additions to the list of documents to be submitted for obtaining an entry visa to the Republic of Armenia, the application form, and the features of obtaining an entry visa

Name of the legislative act:

The list of documents to be submitted with the applications for obtaining an entry visa and extension of the entry visa of the Republic of Armenia dated October 4, 2007 of the Government of the Republic of Armenia, the procedure for consideration of applications, issuance of entry visas, extension of the entry visa period, issuance of an entry visa of the Republic of Armenia, extension of the entry visa period, rejection , the form of entry in the passport of a foreign citizen about invalidation of the entry visa or refusal of entry, about coding the entry visas of the Republic of Armenia according to the type of visit, about maintaining the data bank of persons who have received an entry visa of the Republic of Armenia, who have extended the period of the entry visa, and about approving the procedure for entering and issuing data" N Government Decision No. 1692-N on amendments and additions to Decision No. 1268-N

Change Status:

This decision enters into force from 25.11.2024.

What other legislative acts will be changed as a result:

With this Decision, only the list of documents to be submitted with applications for an entry visa to the Republicof Armenia and to extend the entry visa period, the procedure for considering applications, issuing entry visas,extending the entry visa period, issuing an entry visa to the Republic of Armenia, extending the visa period, refusal,entry visa "On the form of notation in the passport of a foreign citizen about revocation or refusal of entry, on
coding the entry visas of the Republic of Armenia according to the type of visit, on approving the procedure for data entry and issuance of the data bank of persons who have received an entry visa of the Republic of Armeniaand who have extended the period of their entry visa" N 1268-Н the decision.

What the changes are about:

The amendment specifically refers to the list of documents to be submitted for obtaining an entry visa to the Republic of Armenia, the application form, and the specifics of obtaining an entry visa for foreigners defined by this Decision.

Item 2 of the list (hereinafter referred to as the list) approved by Annex No. 1 of the Decision shall be written as follows:

Old version.

In addition to the documents mentioned in point
1, the following documents can also be submitted to
obtain an entry visa to the Republic of Armenia:
1. Airplane ticket.
2. Hotel reservation.
3. The invitation of the tourist company.
4. Grounds on the availability of financial
resources (bank statement, other proofs).
5. Health (travel) insurance.
6. The pages of the passport that contain valid or
expired visas or residence status cards of other states issued in the last 3 years;
7. Other documents..

New version.

In addition to the documents mentioned in point 1,
the following documents can also be submitted to obtain an entry visa to the Republic of Armenia:
1) Plane ticket (with return).
2) Hotel reservation.
3) Invitation (application, letter, petition) of a given
foreigner, a party interested in visiting the Republic of Armenia, legal entities operating in the Republic of Armenia, state bodies, local self-government bodies, embassies, consular institutions and international organizations accredited in the Republic of Armenia or their representations;
4) Grounds about availability of financial means
(bank statement, other evidences).
5) Health (travel) insurance, the coverage of which is
determined by the Minister of Health.
6) The pages of the passport that contain valid or
expired visas or residence status cards of other states issued in the last 3 years;
7) Other documents.

Item 17 of form No. 1 of the list should be written as follows:

17. Purpose of visit
□ Official

□ Business

□ Private

□ Tourism

□ Education

□ Employment

□ Business

□ Other (specify)

Clause 1.2 of the order (hereinafter referred to as the order) approved by Annex No. 2 of the Decision shall be written as follows:

Old version.

Foreign nationals and travel document holders
(except invitation-only countries) who have the
United States of America, Australia, New Zealand,
the Republic of Korea, the United Kingdom of Great
Britain and Northern Ireland, Canada, the Russian
Federation, Japan, the European Temporary or
permanent residence status or valid entry visa of the countries of the Union, countries of the Schengen Agreement and countries of the Persian Gulf Cooperation Council, an entry visa of the Republic of Armenia can be obtained at the crossing points of the state border of the Republic of Armenia.

New version.

Foreign nationals and travel document holders (except invitation-only countries) who have the United States of America, Australia, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland, Canada, the Russian Federation, Japan, the European Temporary or permanent residence status of the Union countries, Schengen Agreement countries or a valid entry visa or temporary or permanent residence status of the countries of the Persian Gulf Cooperation Council can obtain an entry visa of the Republic of Armenia at the state border crossing points of the Republic of Armenia.

Complete the order with the following content in clause 1.4:

1.4. Citizens of Iraq, Egypt and India can receive an electronic entry visa of the Republic of Armenia if they
have health (travel) insurance and meet any of the conditions specified in point 1.2 of this order or submit the
1-point of point 2 of Annex 1 to this decision. the documents mentioned in sub-items 3, 4 and 5.

Clause 11.7 of the Order should be drafted as follows:

Old version.

If the application is approved, a PDF document
automatically generated by the E-VISA electronic
system is sent to the e-mail address specified by the
applicant, which contains the issued e-visa number,
the application number, the foreigner's name,
surname, travel document number, the name of the
issuing country, the number of visits , visa type, date
of request, visa validity period, visa issuance date,
visa validity, stay period, control number for verification, QR code, link to the unified www.e-
verify.am platform for verifying the validity of documents of the Republic of Armenia, other
necessary information.

New version.

If the application is approved, a PDF document
automatically generated by the E-VISA electronic
system is sent to the e-mail address specified by the
applicant, which contains the issued e-visa number, the application number, the foreigner's name, surname, travel document number, the name of the issuing country, the number of visits , visa type, request date, visa validity period, visa issuance date, visa validity, stay period, verification control number, QR code and other necessary information..

Suggestions/ Clarifications

If you or your company's foreign employees want to apply for an entry visa to the Republic of Armenia, we suggest that you pay more attention to the list of documents defined by the amendment, as well as to the features that are intended for foreigners defined by the Decree.

PART II. NEW LEGAL ACTS

(This section of legal updates includes new legal acts as of October 2024)

1. Resolution N 1591 of the Government of the Republic of Armenia on defining the list of basic activities necessary for the creation of income from the types of activities of the development of software development, the development and application of data infrastructures and information resources, the creation of crypto-assets, bitcoins and other altcoins in operational modes

Name of the legislative act:

Resolution N 1591 of the Government of the Republic of Armenia on defining the list of basic actions necessary for the creation of income from the types of activities of the creation of crypto-assets, bitcoins and other altcoins in the operational mode, development and application of software development, data infrastructures and information resources

Change Status:

This law is effective from 20.10.2024.

What the changes are about:

The RA Government's decision N 1591 approved the list of basic activities necessary for the creation of income from the types of activities of software development, development and application of data frameworks and information resources, creation of crypto-assets, bitcoins and other altcoins in operational mode.

Based on Article 7, Part 3.1, Clause 1 of the Law of the Republic of Armenia "On Free Economic Zones", the Government of the Republic of Armenia decides:

1. Define the list of the main activities necessary for generating income from the types of activities of the
development of software development, the development and use of data frameworks and information
resources, the creation of crypto-assets, bitcoins and other altcoins in operational mode, according to the
application.

Appendix:
2024 of the RA government
to the decision N 1591-N of October 10.

PROCESSING OF SOFTWARE, PROCESSING AND APPLICATION OF DATABASES AND
INFORMATION RESOURCES, OPERATIONAL MODE OF INCOME BY TYPES OF CREATION OF
CRYPTOASSETS, BITCOINS AND OTHER ALTCOINS LIST OF BASIC ACTIONS NEEDED FOR

CREATION

1. PROCESSING THE SOFTWARE

1. Software development includes the creation, modification, testing and support of software, as well as the creation of application programs for customers. Software development involves:
1) implementation of expertise/design research in the field of information technology, design, development of prototypes, including creation of UI/UX interfaces, as well as graphic design;
2) conducting software user behavior research, including UX/UI (UX/UI) interfaces, web pages, and mobile application screens, including both proprietary tools and other software development;

3) developing the structure and content or writing a computer program, including by including third-party services or on the basis of own AI, EML (ML) databases, which are necessary to solve and implement the task, including system software (including updates and fixes) software applications (including updates and patches), databases, web pages/mobile application screens;
4) planning and design of information systems (database, computing power, infrastructure and information network) that combine computer hardware, software and data transfer technologies to ensure the best compatibility with the developed software;
5) translation/localization, adaptation of software for general use for a specific market or customer;
6) publication of software packages, including installation of software code on computing equipment, including their DevOps (DevOps) configuration and DevSecOps (DevSecOps) information security measures;
7) software configuration, i.e. making changes and adapting the existing application so that it works within the given information system (data base, computing power, computer system, infrastructure and information network);
8) software support, including the creation of computing power/computer systems that combine computer hardware, software and communication technologies;
9) interactive management and operation of software development, database, computer system or data processing tools in the interests of the client.

2. PROCESSING AND APPLICATION OF DATABASES AND INFORMATION RESOURCES

1. Development and application of databases and information resources is an organized collection of structured information or data stored electronically in a computer system. A database is usually managed by a database management system (DBMS). The data together with the database management system (DBMS) as well as the applications associated with it is called the database system or database itself. Development and application of data frameworks and information resources implies:
1) Conducting expertise/design surveys and clarification of database development and improvement tasks;
2) design and development of databases (development of concepts, structure, creation of databases);
3) deployment of advanced databases, including distributed, such as computing power;
4) creation and maintenance of databases, including collection of data from one or more sources, as well as
data entry, verification and updating;
5) database management, including the ability to access the database directly or remotely in real time;
6) data search, their selection and sorting according to requests, provision of selected data to users, including
direct access or remote, real-time access mode;
7) database development, customization, modification, database installation, testing and maintenance.

3. CREATION OF CRYPTOASSETS - BITCOINS AND OTHER ALTCOINS IN OPERATIONAL MODE

3. The creation of crypto-assets, bitcoins and other altcoins in operational mode implies:
1) connection to computing power (server and computer equipment) to data networks for interaction with specialized data networks and information resources; ensuring continuous production of computing operations using specialized software compatible with blockchain networks to ensure the best compatibility with blockchain networks;
2) provision of receiving data/tasks for continuous production of calculations, storage and continuous transmission of calculation results through data transmission means necessary for interaction with specialized data transmission networks in the blockchain network;
3) accumulation, processing, transmission, display and storage of data on the results of all computing operations;
4) collection, processing, transmission, display and storage of data on the operation results/parameters of all involved infrastructure equipment, including but not limited to (computing power, data transmission network equipment and access to other networks and systems, data on temperature and weather phenomena, electricity and water consumption)..

Suggestions/ Clarifications

The eligibility determination is specifically aimed at individuals and legal entities engaged in software development, creation of databases and information resources, as well as crypto-assets (bitcoin) activities.
Therefore, if your activity is aimed at any of these areas, we suggest you study the list of the main activities necessary for generating income as a result of the types of activity of creating crypto-assets, bitcoins and other altcoins in operational mode, developing and using data infrastructures and information resources, which is presented also the legislative provisions on the development and use of data frameworks and information resources, the creation of crypto-assets, bitcoins and other altcoins in operational mode.

2. The decision of the Council of the Central Bank of RA on approving the size of the anti-cyclical
capital limit of banks (third quarter of 2024)

Name of the legislative act:

Resolution No. 175-N of the Council of the Central Bank of the Republic of Armenia on the approval of the "Procedure for the definition and calculation of thresholds above the normative limit of banks' capital adequacy"

Change Status:

This decision is effective (mandatory) from May 1, 2025.

What the changes are about:

The change refers to the definition of the countercyclical threshold of banks' capital for the third quarter of 2024.

Council of the Central Bank of the Republic of Armenia:

Decides

Set the countercyclical threshold of banks' capital at 1.75% of risk-weighted assets.

Clarifications:

The Central Bank sets the countercyclical capital threshold every quarter and publishes the amount of the countercyclical capital threshold calculated for the given quarter no later than on the last working day of the first month following the given quarter, the purpose of which is to ensure the stability of the financial system.

PART III. DRAFTS

(This section of legal updates includes those legal acts that were discussed or placed on the single website for the publication of draft legal acts in October 2024)

1. On making amendments to the RA Law "On foreign investments" regarding legal regulation of investments, state registration of organizations with foreign investments

Name of the legislative act:

Draft Law "On Amendments to the Law on Foreign Investments".

Change Status:

The draft was discussed from 16.10.2024 to 31.10.2024 on the website e-draft.am.
https://www.e-draft.am/projects/7794/about

What other legislative acts will be changed as a result:

As a result of the draft, the Law "On foreign investments" will be amended.

What the changes are about:

The purpose of the investment program support function is to facilitate the implementation of investments, clarify the state procedural path, and ensure effective cooperation between the state and the private sector. Beneficiaries of the function are investment projects involving local or foreign capital. With the adoption of the amendment to this law, it is planned to establish in the law "On Foreign Investments" the authorization of the adoption of the Government's decision "On the mechanism of interaction between state bodies and investors within the framework of investments" provided for in paragraph 12 of Appendix 2 of the Government's decision N 1450-L of August 24, 2023.

Article 2 of the Law shall be drafted as follows:

Legal regulation of investments

Old version.

Relations with foreign investments in the Republic
of Armenia are regulated by this law, as well as by
other legislative acts of the Republic of Armenia and
international agreements.
If the international agreements signed by the
Republic of Armenia stipulate other rules than the
contents of this law, then the rules of international
agreements are applied in appropriate cases.

New version.

1. Relations related to investments in the Republic of
Armenia are regulated by this law, as well as by other legislative and sub-legislative legal acts of the Republic of Armenia, as well as by international agreements.
2. If the international agreements signed by the
Republic of Armenia stipulate other rules than those
contained in this law, then the rules of the international agreements shall be applied in appropriate cases.
3. In the territory of the Republic of Armenia, the
functions of investment attraction, support of
investment programs and post-investment service are carried out by the authorized body established by the Government (hereinafter referred to as the Authorized Body). Mechanisms of interaction between state bodies, the Authorized Body and investors within the framework of investments are defined by the Government.

Article 12 of the Law shall be drafted as follows:

Old version.

Establishment and registration of a
foreign-invested enterprise

Enterprises with foreign investments, their
departments, branches, representative offices,
economic associations of enterprises are established
and registered in accordance with the procedure
established by the Law of the Republic of Armenia
"On Enterprises and Entrepreneurial Activities" and
other legislative acts of the Republic of Armenia.

New version.

State registration of foreign-invested organizations or state accounting of their separate units

Enterprises with foreign investments are registered, and their separate subdivisions are registered in accordance with the law "On State Registration of Legal Entities, Separate Subdivisions of Legal Entities, Institutions and State Registration of Individual Entrepreneurs".

2. On making changes and additions to the Tax Code of the Republic of Armenia regarding the process of issuing a certificate on the sources of income, confirmation of tax resident status

Name of the legislative act:

Draft on amendments and additions to the RA Tax Code.

Change Status:

The draft was discussed on 10.10.2024-25.10.2024 on the unified website for the publication of draft legal acts e- draft.am

https://www.e-draft.am/projects/7769

The draft provides that the law will enter into force on January 1, 2025, unless otherwise provided.

What other legislative acts will be changed as a result:

The amendment refers only to the "Tax Code".

What the changes are about:

The draft provides
1) To repeal the sixth part of Article 27 of the Tax Code, in which case the provision defined in the second part of Article 27 will serve as the basis for the establishment of a permanent establishment in the territory of the Republic of Armenia for services related to the provision of labor by a non-resident organization. Specifically,in cases of performing works and/or providing services in the territory of the Republic of Armenia, a permanent establishment is considered to be the location where work is carried out and/or services are provided through employees hired by a non-resident organization or non-resident individuals, if this activity continues in theterritory of the Republic of Armenia for 183 calendar days or more within the tax year, starting from the day the entrepreneurial activity is initiated, within the framework of one or more related projects.
2) To stipulate in the Tax Code that the income paid to employees hired by a non-resident organization for work performed and/or services provided in the territory of the Republic of Armenia is considered income sourced from the Republic of Armenia, if the income paid is considered an expense for the non-resident organization'spermanent establishment registered in the Republic of Armenia and/or if the employees are engaged in the activities of the permanent establishment.
3) To simplify and automate the process of providing certificates regarding the confirmation of tax residency status in the Republic of Armenia.

Repealed part 6 of Article 27 of the Tax Code of the Republic of Armenia of October 4, 2016 (hereinafter:
the Code).

To complete part 1 of Article 144 of the Code with point 5 with the following content:

5) Incomes paid to employees hired by a non-resident organization for work performed and (or) services provided
in the territory of the Republic of Armenia, if the incomes paid are considered expenses for the non-resident
organization's registered permanent establishment in the Republic of Armenia, regardless of the circumstance of
deducting that expense from gross income, and (or ) employees hired by a non-resident organization are involved
in the activities of a permanent establishment.

Article 314 of the Code shall be written with the following content:

Provision of a certificate regarding tax residency status in the Republic of Armenia.

Old version.

1. The tax authority confirms the status of
organizations and individuals as residents of the
Republic of Armenia to ensure the application of valid international agreements (treaties, accords,
conventions) between the Republic of Armenia andother countries.

2. The confirmation of residency status in the
Republic of Armenia is carried out through the
provision of a certificate establishing residency status as defined by the tax authority, or through the
confirmation of the form established by the legislation of a foreign country that verifies the fact of foreign residency. The form established by the legislation of a foreign country is considered a document confirming residency if its content substantively corresponds to the content of the certificate regarding residency status
established by the tax authority.

3. In order to confirm the status of a resident of the
Republic of Armenia, the taxpayer submits the
documents specified in Part 4 of this article to the tax authority. The tax authority provides the certificate confirming the status of the resident of the Republic of Armenia within two working days or rejects its provision in writing, stating the reason.

4. To receive a certificate confirming the status of a
resident of the Republic of Armenia, the taxpayer
submits:
1) in the case of an organization (except for the Central Bank of the Republic of Armenia), information on the type and amount of income received in a foreign country, as well as a copy of documents justifying the receipt of income in a foreign country, in case of income;
1.1) In the case of the Central Bank of the Republic of Armenia, an application to receive a certificate
confirming the status of a resident of the Republic of Armenia.
2) in the case of a natural person:
a. information on the type and amount of income
received in a foreign country, as well as a copy of
documents justifying the receipt of income in a foreign country, if income is available,
b. copies of all pages of the citizen's passport,
c. The table for calculating the period of the person's
stay in the territory of the Republic of Armenia or the justification written in free style about the location of the center of vital interests in the territory of the Republic of Armenia, attaching copies of supporting documents.

5. Confirmation of the status of a resident of the
Republic of Armenia can be carried out both for the
current and previous tax years, if all the necessary
documents relating to the previous tax years and
confirming the fact of residency are available.

New version.

1. The tax authority confirms the tax residency status of organizations and individuals in the Republic of Armenia by providing, in electronic form, a certificate regarding tax residency status in accordance with the form established by the tax authority, or by electronically confirming the form of the certificate established by the legislation of a foreign country that verifies the fact of residency in the Republic of Armenia. The residency certificate established by the legislation of a foreign country is considered a document confirming residency
in the Republic of Armenia if its content corresponds
substantively to the content of the certificate regarding tax residency status established by the tax authority.

b. The date of confirmation of the tax resident status of the Republic of Armenia:
c. the country where the certificate of being considered a tax resident of the Republic of Armenia must be submitted;
d. if necessary, a note confirming the form of the
certificate of residency prescribed by the legislation of a foreign country, attaching the form of the certificate of residency prescribed by the legislation of a foreign country.
2) in the case of natural persons (except for the case
specified in point 1 of this part):
a. name, surname, passport data, public services number plate, address of residence or registration.
b. The date of confirmation of the tax resident status of the Republic of Armenia:
c. the name of the country where the certificate of being considered a tax resident of the Republic of Armenia should be submitted;
d. a note about the period of physical person's stay in the Republic of Armenia for 183 or more days in the tax year or the location of the center of vital interests in the territory of the Republic of Armenia, attaching the justification written in free style about the center of vital interests and copies of supporting documents,
e. if necessary, a note confirming the form of the
certificate of residency prescribed by the legislation of a foreign country, attaching the form of the certificate of residency prescribed by the legislation of a foreign country.

3. The information on being considered a tax resident of the Republic of Armenia is provided electronically, in the cases specified in point 1 of part 2 of this article, immediately after submitting the application, and in the case specified in point 2 of part 2 of this article, two working days after the day of submitting the application during the day. In case of rejection of the application for confirmation of the tax resident status of the Republic of Armenia, a notification of rejection is submitted electronically, indicating the reason. Within two working days following the day of electronically submitting the form of the certificate confirming the fact of residency established by the legislation of the foreign state to the tax authority, the tax authority electronically confirms it, and in case of refusal, submits a notice of refusal stating the reason.

4. The certificate on being considered a tax resident of the Republic of Armenia includes the following information:
1) tax payer's registration number, name, organizational legal type, name, surname, passport data, public service number plate, address of residence or registration place of the taxpayer;
2) The date of confirmation of the tax resident status of the Republic of Armenia.
3) the name of the country where the certificate of being considered a tax resident of the Republic of Armenia must be submitted;
4) note for the purpose of applying the agreement
between the Republic of Armenia and the country of
submission of the reference on the exclusion of double taxation of income and property, if such an agreement exists;
5) a corresponding code generated by the system and a QR code containing the code.

5. Confirmation of the status of a resident of the Republic of Armenia can be carried out both for the current and previous tax years, if the necessary information confirming the residency of the previous tax years is available. Information about being considered a tax resident of the Republic of Armenia by year and country is provided separately.

3. On making amendments and additions to the Law of the Republic of Armenia "On Protection of Economic Competition"

Name of the legislative act:

On making amendments and additions to the Law of the Republic of Armenia "On Protection of Economic Competition".

Change Status:

The draft was discussed from 11.10.2024 to 26.10.2024. e-draft.am on the unified website for the publication of drafts of legal acts.

As a result of the adoption of the project, the amendments to the Law will enter into force on January 1, 2025.

https://www.e-draft.am/projects/7781/about

What other legislative acts will be changed as a result:

As a result of the acceptance of the project, it will be changed. Law "On Protection of Consumer Rights", Law "On Trade and Services", Law "On Advertising", Law "On Organization and Conduct of Inspections in the Republic of Armenia", Law "On Administrative Offenses", Law "On Operative-Investigative Activities", The Law on the Central Bank, the Law on the State Registration of Legal Entities, Separate Divisions of Legal Entities, Institutions and Individual Entrepreneurs, the Law on Enforcement of Judicial Acts, the Civil Code, the Law on Electronic Communications, Bankruptcy Law, Securities Market Law, Criminal Procedure Code, Civil Procedure Code, Administrative Procedure Code, Military Complex Law, Procurement Law, Tax Code , the Law "On Insurance and Insurance Activities".

What the changes are about:

The draft specifically refers to:
a) clarifying the scope of reorganizations, operations or transactions that are not deemed to be a concentration;
b) specification of the deadline for the implementation of proceedings initiated on the basis of undeclared concentrations in case of applying accelerated proceedings;
c) Clarification of the inspection procedure by the commission.
d) Defining the specifics of the procedure for issuing a conclusion by the Commission.
e) In case of submission of false, unreliable, incomplete or misleading information by the participants in the declaration or during the proceedings, or in case of failure to submit the information requested by the Commission, the decision to leave the application without consequences;
f) clarifying the grounds for prohibiting the concentration subject to declaration;
g) specifying the features of the offense of undeclared concentration.
h) clarifying the procedure for considering the reasons for initiating proceedings regarding an offense in the field of economic competition.
i) clarifying the grounds for refusing to initiate proceedings regarding an offense in the field of economic competition.
j) establishing the authority to apply a measure of responsibility for submitting unreliable, false, misleading documents or other information to the Commission on its own initiative.

In Article 3 of the Law, add the following new concepts:

11.1) protection of consumers' interests: to prevent and disrupt a set of measures implemented by the Commission, such behavior, action or inaction, which harms or may harm the interests of consumers or a group of consumers in an indefinite scope:
11.2) purchase decision: any decision of the consumer regarding the purchase of the product or the terms of purchase, payment, storage or disposal of the product or the exercise of contractual rights related to the product, regardless of whether the consumer will purchase the product in question.

Paragraph 32 of the 1st clause shall be written in the following new edition:

32) Body providing state assistance: any state authority, as well as all bodies, organizations, or officials authorized to provide state assistance at the expense of public finances or public resources as defined in this law, or in the case of state assistance provided by a Government decision—the state authority that has submitted the draft decision regarding the provision of the relevant state assistance for consideration by the Government.

After the term 'discount' in the first part, to be supplemented with the following wording for a new concept.

Basic interest: interest payable for the acquisition of agricultural products during the period specified in point 11 of part 3 of Article 12 of the law.

Clause 11 of Part 3 of Article 5 of the Law shall be drafted in the following new edition:

Old version.

3. Horizontal anti-competitive agreements may
specifically refer to:
11) not to enter into contractual relations with certain implementers or acquirers, or to terminate or suspend contractual relations;

New version.

3. Horizontal anti-competitive agreements may
specifically refer to:
11) to enter into contractual relations with certain implementers or acquirers or not to enter into contractual relations with certain implementers or acquirers, or to terminate or suspend contractual relations;

In Article 12, Part 3 of the Law, clause 11 should be written in the following new edition.

Old version.

Other action or behavior that contains the
characteristics of part 2 of this article.

New version.

Having a strong negotiating position
allowing an economic entity acquiring agricultural
products to make payments specified in Article 15.14 of the "Trade and Services" Law after the 30 calendar day period and not paying the base interest during that period;

Article 12 shall be supplemented with a new part 5 as follows:

5. Base interest is calculated throughout the period provided for in Article 12, Part 3, Clause 11 of this Law in
the amount of twice the bank interest calculation rate set by the Central Bank, unless higher interest rates are
agreed upon by contract or in another way established by law.

To supplement the law with a new chapter 9.1 in the following edition:

CHAPTER 9.1

VIOLATIONS AGAINST THE INTERESTS OF CONSUMERS

Article 26:1. Practices that violate the interests of consumers

1. Any behavior, action or inaction of a business entity that affects or may affect the interests of consumers or a group of consumers with an indefinite scope and contradicts this law, other laws, other normative legal acts or business circulation customs is considered a practice that violates the interests of consumers. violates the principles of good faith, honesty, fairness, truth and (or) impartiality towards consumers.
2. Practices that violate the interests of consumers are prohibited.
3. Any behavior, action or inaction that meets the characteristics of part 1 of this article is considered a practice that violates the interests of consumers, including:
1) Unfair commercial practices provided for by the Law "On Protection of Consumer Rights".
2) Advertising that violates the law, including unscrupulous or illegal or in violation of reliability or propriety;
3) Violation of the requirements submitted to the connection contracts concluded with consumers or to the general terms of the contract.
4) Violation of the requirements for the quality, quantity and other characteristics of the product.
5) Violation of the rules for presenting the price of a product defined by the Law "On Trade and Services". The Commission evaluates the question of the presence of characteristics of practices that violate the interests of consumers.

4. This article does not apply to the behavior, action or inaction, as a result of which damage may be caused to the life, health, safety, public or state security of consumers or the environment.
5. The concepts used in point 2 of part 3 of this article are applied within the meaning of the Law on "Advertising".

Article 27 of the Law shall be written in the following new edition:

Article 27. Status and functions of the commission
The Commission is an autonomous body that ensures the freedom of economic activity, free economic competition, the environment necessary for fair competition and the development of entrepreneurship, and carries out the protection of consumer interests.
2. The commission is the central body that protects the interests of consumers.
3. The Commission as a central body implementing the protection of consumer interests:
1) within the limits of its jurisdiction, based on the international agreements of the Republic of Armenia, documents regulating sectoral cooperation, cooperates with international organizations operating for the purpose of protecting the interests of consumers;
2) within the limits of his competence, cooperates with the bodies implementing the protection of the interests of consumers of foreign countries, within the framework of which he is authorized to receive and provide information to them in accordance with the established procedure;
3) cooperates with other competent bodies.

Article 49 shall be supplemented with the new 4th part as follows:

4. Based on the results of the inspection, a protocol is drawn up in the form established by the Commission, in two copies. Photographs, documents, electronic media and (or) other materials may be attached to the inspection report, as indicated in the report. The protocol is signed by the person performing the inspection and the economic entity, the employee who sells goods, provides services and (or) performs cash settlement on behalf of the economic entity, or another representative of the economic entity. In case of objection regarding the inspection results, the person signing the protocol makes a note about it in the protocol. One copy of the protocol is handed over to the economic entity.

Article 59 of the Law shall be supplemented with the following wording with a new part 5:

5. The Commission does not start the procedure of adoption of a conclusion in the event that the issues raised by the submitted application are not of particular complexity or importance, about which the person who submitted the application is informed within ten days by a letter of the Chairman of the Commission.

Article 60, Part 1 of the Law shall be drafted in the following new edition.

1. Upon receiving an application in accordance with the requirements established by the law, the commission starts a procedure for adopting a conclusion on issues related to economic competition and consumer interests, if the issues raised are of particular complexity or importance.

Article 69 of the Law shall be supplemented with new parts 2 and 3 in the following edition:

2. In case of submission of false, unreliable, incomplete or misleading information in the declaration or during the proceedings by the participants of the assessment of the concentration subject to declaration, or in case of failure to submit the information requested by the Commission, the Commission makes a decision to leave the application without consequences.
3. A decision to leave the concentration application without consequences can be made by the Commission at any stage of the proceedings.

Article 79 of the Law shall be supplemented with the following wording with a new part 2.1.

2.1. In case of violation of the obligation to provide information to the Commission within the framework of discussion of reasons for initiation of proceedings by business entities, the Commission may consider confirmed the fact of apparent presence of features of the offense in the behavior or actions of the given business entity and initiate proceedings.

After Article 82, the Law shall be supplemented with a new Article 82.1:

Article 82:1. Giving a warning

1. In the presence of apparent characteristics of behavior, action or inaction leading to the prevention, restriction, prohibition of economic competition or unfair competition or damage to the interests of consumers, or in the presence of a threat thereof, business entities, state bodies or their officials may be issued a warning.
2. The details of the procedure for warning business entities, state bodies or their officials in the presence of apparent features of behavior, action or inaction leading to the prevention, restriction, prohibition of economic competition or unfair competition or damage to consumers' interests, or the presence of a threat thereof, are defined by the working rules of the Commission.
3. Proceedings may be initiated in case of failure to eliminate the apparent characteristics of behavior, action or inaction leading to the prevention, restriction, prohibition of economic competition or unfair competition or damage to the interests of consumers, as described in the warning by economic entities, state bodies or their officials.

After Article 83, the Law shall be supplemented with a new Article 83.1 as follows:

Article 83:1. Decision to apply an interim measure

1. In order to prevent possible significant or irreparable harm resulting from actions or behaviors that exhibit apparent characteristics of violations in the field of economic competition or against consumer interests, the Commission may adopt a decision to apply interim measures, either on its own initiative or based on the request of participants in the proceedings, including
1) to stop the conduct containing apparent features of an offense until the final decision is made in the proceedings, by restoring the situation that existed before the conduct containing apparent features of an offense or in other ways determined by the decision of the Commission;
2) to suspend the process of concluding the contract or its operation.
2. A decision on the application of an interim measure may be taken by the Commission at any stage of the proceedings on the offense.
3. The commission may apply more than one interim measure within the same procedure.
4. The decision to apply an interim measure enters into force from the moment of its adoption and is subject to enforcement by the Enforcement Service, in accordance with the law "On Enforcement of Judicial Acts".
5. The decision to apply an interim measure is submitted to the Enforcement Service by a letter from the Chairman of the Commission, which states:
1) Name of the commission,
2) the year, month and date of submission of the note,
3) the year, month, date and number of the decision to apply an interim measure,
4) the year, month and date of the entry into force of the decision to apply an interim measure,
5) description of the intermediate measure used,
6) the name, patronymic, surname, name of the business entity, state body or official, the name of the legal entity, their registration (location) and, if available, notification addresses, the person's passport data or public service number, the legal entity's tax payer registration number and state registration or state registration number.

The decision to apply an interim measure, the letter on sending the enforcement service is requested to be withdrawn by the letter of the Chairman of the Commission, if:
1) With the decision of the commission, the need to apply an intermediate measure has disappeared.
2) The court made a decision to suspend the operation of the interim measure.
3) The decision of the commission was declared invalid or void.
7. The decision to apply an interim measure can be appealed. The appeal of the decision does not suspend its execution.

To supplement the law with the new chapter 17.1 in the following edition:

CHAPTER 17.1

PROCEDURE ON CONSUMERVIOLATIONS

Article 91.1. The procedure for carrying out proceedings on offenses against the interests of consumers

Proceedings regarding offenses against the interests of consumers are carried out in accordance with the order of proceedings regarding offenses in the field of economic competition under this law, in compliance with the special rules established by this chapter.

Article 91.2. Participants in the proceedings on offenses against the interests of consumers

1. The participants in the proceedings regarding offenses against the interests of consumers are:
1) the defendant in the proceedings.
2) competent authorities.

Article 91.3. The written notice
In the event of the violation of the rules established by the "Trade and Services" Law on the presentation of the product price, the Secretary General of the Commission sends a written notice to the business entity, offering to eliminate the violation and pay fifty thousand drams. The occasions for sending the notification are:

- reports of individuals or legal entities about the violation of the rules established by the Law "On Trade and Services" on the presentation of the price of the product;
- reports of state bodies (including foreign ones) or their officials about the violation of the rules established by the Law "On Trade and Services" regarding the presentation of the price of the product;
- discovery of the fact of violation of the rules established by the Law "On Trade and Services" on the presentation of the price of the product;
- the information published by the mass media about the violation of the rules established by the Law "On Trade and Services" for the presentation of the price of the product;
- any other information received from individuals or legal entities, which allows us to reasonably assume that a violation of the rules established by the Law "On Trade and Services" has been allowed by the business entity.

In the event that the business entity fails to pay the amount specified in the written notice within fifteen days, the Commission may initiate proceedings to determine the apparent existence of the features of the offense in the field of protection of consumers' interests.

Article 91.4. Discussion of the reasons for initiation of proceedings regarding the offense against the interests of consumers

1. As a result of the discussion of the reasons for initiating proceedings regarding the offense against the interests of consumers, the Commission may adopt a decision to initiate proceedings.
2. The Commission may take into account the impact of conduct, action and inaction, the impact of the Commission's decision concluding the proceedings, and the resources of the Commission when considering the reasons for initiating proceedings.
3. The procedure for evaluating the reasons for initiating proceedings regarding the offense against the interests of consumers is defined by the working procedure of the Commission.

Suggestions/ Clarifications:

With the draft of the law "On Amendments and Additions to the Law on Protection of Economic Competition"
1. The authority of the Commission is defined as the central and primary contact body for consumer protection.
2. Clear regulations regarding violations against consumers are defined, including the general characteristics of unfair commercial practices directed at consumers and their most foreseeable manifestations.
3. The conditions for initiating proceedings related to violations against consumers and the specifics of examining those proceedings are outlined.
4. The possibility for the Commission to apply interim measures is provided, along with the specifics of adopting decisions regarding the application of such measures.
5. Responsibility for violations against consumers has been established.
The obligation to pay contractual or basic interest in the case of delayed payments by agricultural producers has been established.
If you are a legal entity or an individual entrepreneur who is engaged in economic activity, we suggest you familiarize yourself with the mentioned legal changes. Moreover, if you implement or plan to implement discounts in the course of your activity, as a result of which you may be affected by the decisions or conclusions
provided by the Commission for the Protection of Competition, then there are also changes in the legislative regulations of the mentioned sector with the draft.

4. On making amendments and additions to the Law "On protection of consumer rights".

Name of the legislative act:

On making amendments and additions to the Law "On Protection of Consumer Rights".

Change Status:

The amendment was discussed on 1110.2024-26.10.2024 on the website e-draft.am

https://www.e-draft.am/projects/7781/about

What the changes are about:

According to the draft law "On amendments and additions to the law on protection of consumer rights".
1) the right of free choice of the consumer, which is of fundamental importance within the framework of the protection of consumer rights, has been fixed;
2) a number of concepts of fundamental importance have been defined, including: "average consumer", "product", "commercial practices of an economic entity towards the consumer", "influence on the economic behavior of the consumer", "code of conduct", "commercial communication", "decision on acquisition" and other concepts.
2) complete regulations on unfair commercial practices of business entities against consumers are provided, in accordance with the regulations defined by the Directive 2005/29/EC, including mechanisms to protect consumers from unfair commercial practices. In particular:
a) the principle of prohibiting the economic entity from exhibiting unfair commercial practices towards the consumer is provided for,
b) the characteristics of behavior considered unfair trade practices are defined,
c) those behaviors, actions and inactions of business entities, which are considered unfair in all cases, are defined.

In part 1 of article 1 of law HO-197 of June 26, 2001 "On protection of consumer rights" (hereinafter: law).

Old version.

Consumer - a citizen who intends to order or purchase goods (works, services) intended exclusively for personal, family, home or other use, not related to entrepreneurial activity;

New version.

"consumer: a natural or legal person acquiring or
potentially acquiring a product for the purpose of
consumption, by whom the purchase of the product is not related to the entrepreneurial activity carried out by him;

After the 12th paragraph, fill in the following edition with new concepts.

Business entity: an individual, a legal entity, an individual entrepreneur, another organization, its representative office or branch, a group of persons or an association of persons; average consumer - a person who is sufficiently informed, who is considered knowledgeable based on social, ultural, linguistic factors or belonging to a certain group of consumers. A certain group of consumers is individualized by age, physical, mental or other characteristics;’

Product: an object of civil law, including property, work, service (including financial); commercial practices of an economic entity towards the consumer: any action, inaction, conduct, commercial communication of an economic entity, including advertising and other measures aimed at the sale of the product, which are directly related to advertising, selling, supplying the product to the consumer, providing the service or performing the work;

Influence on the economic behavior of the consumer - manifestation of commercial practices of the business entity towards the consumer, thanks to which the business entity directly or indirectly influences or can influence the process of making an informed decision of the consumer, thereby inducing the consumer to make such a purchase decision that he would not otherwise make;

Code of conduct - a set of rules of conduct defined by a business entity or a group of business entities or an agreement, to which the business entity that has joined undertakes to observe the rules defined by the code of conduct in relation to the consumer within the framework of its commercial practices; commercial communication - any form of communication aimed at promoting the economic or entrepreneurial activity of an economic entity;

Invitation to purchase: a commercial communication that indicates the characteristics and price of a given product in a manner appropriate to the medium of commercial communication used, thereby giving the consumer the opportunity to make a purchase;

Undue influence - the exercise of pressure by the business entity on the consumer, which can be manifested even without the use of physical force or the threat of using physical force, in such a way that it limits the ability of the consumer to make an informed decision; acquisition decision:

Any decision of the consumer regarding the purchase of the product or the terms of purchase, payment, storage or disposal of the product or the exercise of contractual rights related to the product, regardless of whether the consumer will purchase the product in question or not.

To supplement the law with the new Article 4.1 in the following edition.

Article 4.1. The consumer's right to make a free choice

The consumer has the right to freely choose a product without any pressure or restriction.

To supplement the law with a new chapter III in the following edition.

CHAPTER III

Article 37.1. Unfair trade practices

1. A commercial practice is considered unfair if it contradicts the principles of good faith, honesty, fairness, truth and/or impartiality and has or may have an effect on the economic behavior of the average consumer towards the product to whom the practice is directed, or on the average of the group on the economic behavior of the consumer, when commercial practices are aimed at a specific group of consumers.
2. A commercial practice that has or may have an effect on the behavior of a group of consumers who, because of their mental or physical problems, age or gullibility, are particularly vulnerable to the practice or product in question, which the economic operator could foresee, must be assessed as the average consumer of that group perspective.
3. Unfair commercial practices are the cases provided for in Articles 37.2-37.3 of this law, as well as other actions, inactions or behaviors that meet the characteristics of part 2 of this article.
4. Unfair commercial practices of the business entity towards the consumer are prohibited.

Article 37.2. Misleading action and inaction:

1. An action is considered misleading if it contains any false, unreliable, distorted information or the information is presented in such a way that, although it is factually correct, it may create a false impression of the business entity, its activities or the products it offers, their advertising, which misleads or is likely to mislead regarding measures promoting distribution or sale, the geographical origin of the product or the production or sale process,
their suitability for a particular purpose, quality, quantity or other characteristics, the terms of offer or delivery or the price or the method of its calculation or the rights of the consumer to the average consumer, and induces or may induce the consumer to make a purchase decision that he would not have otherwise made.
2. Failure to act is considered misleading if the business entity does not provide or does not provide information about the business entity, its activities or offered products, activities contributing to their promotion, distribution or sale, the geographical origin or production of the product in a unclear, unclear, incomplete or uncertain manner or not at the right time. or relevant information regarding the sales process, their suitability for a
particular purpose, quality, quantity or other characteristics, terms of offer or delivery or the price or the method of its calculation or the consumer's rights, which the consumer needs to make a purchase decision, which motivates the consumer or may induce him to make an acquisition decision that he would not otherwise have made.
3. In addition to the information provided in part 2 of this article, in the case of an invitation to purchase, the business entity must also provide the following information:
1) the main characteristics of the product.
2) the price of the product in accordance with the procedure established by law, as well as, if necessary, the price of all additional freight, deliveries or postal services, and in case of its impossibility, the fact that it is payable;
3) payment, delivery, complaints procedure and review policy;
4) in the case of transactions that reserve the right of termination or cancellation, the existence of such a right.
1. Either way is considered a misleading commercial practice
1) declaring by a business entity that it is a signatory of the code of conduct, in cases where the business entity is not actually a signatory of the code of conduct;
2) to display a certification mark or other equivalent mark, a declaration of conformity, a certificate of conformity, any other document regarding the compliance of the product with the requirements established by the legislation, without its presence;
3) declaration by the business entity that the code of conduct has been approved by a state body, in cases where the code of conduct has not been approved by any state body;
5) Violation of the obligations undertaken by the code of conduct by the business entity.
6) declaring that the economic entity's commercial practice or product has been approved or permitted by an authorized state body or private company, when in fact it is not, or making such a declaration without complying with the conditions necessary for approval or permission;
7) an invitation by a business entity to purchase the product at a clearly defined price, when the latter had an objective reason to assume that he would not be able to deliver the product personally or through another supplier within a reasonable period of time and in the volume resulting from the advertisement of the product;
8) an invitation by a business entity to buy the product at a clearly defined price, then refusing to show the advertised product to the consumer or take orders for it, to deliver it within a reasonable time, or to show a sample of the product with defects, with the intention of promoting another product;
9) depriving the consumer of the opportunity or sufficient time to immediately make a purchase decision and make an informed choice, creating a false impression that the product will be available for a very limited time;
10) stating or otherwise creating a false impression that the product can be legally sold when in fact it is not;
11) presenting the rights granted to consumers by law as a special feature of the economic entity's offer;
12) using editorial content for the purpose of advertising the product in the media or in other ways of disseminating information, when the economic entity has paid for the advertisement, but has not specified this fact in a clearly identifiable way for the consumer (with images or sound means) in the content;
13) making a false statement regarding the risk to his or his family's safety, its nature and extent in case the consumer does not buy the product;
14) announcing that the business entity is going to stop its business activity or will move to another area, when in fact it is not the case;
15) announcing that the product can help win winning games;
16) creating a false impression or making a statement that a non-medicinal product can help treat diseases, functional disorders or developmental defects;
17) creating, implementing or advertising a marketing pyramid, in which case the consumer gets the impression that the possibility of receiving compensation is primarily determined by the involvement of other consumers in the marketing pyramid, and not by the sale or consumption of products;
18) to convey materially inaccurate information about the market conditions or the possibility of finding the product, in order to induce the consumer to purchase the product under unfavorable conditions, different from the market conditions;
19) announcing a contest or prize promotion without awarding the described prizes or their equivalent;
20) presenting the product as "free", "free", "without money" or in a similar way, if the consumer is obliged to make other payments in addition to the costs associated with receiving the product or its delivery;
21) including an invoice or other similar document in the sales documents of the product, which gives the consumer the impression that he has already ordered it, when in fact it is not the case;

22) announcing or creating a false impression that the business entity does not act based on the goals of its economic activity or falsely presents itself as a consumer.

Article 37.3: Aggressive trading practices:

1. A commercial practice is considered aggressive if, through harassment, coercion, including the use of physical force, or undue influence, it significantly impairs or is likely to impair the right of the average consumer to make a free choice, thereby inducing or likely to induce the average consumer to make a purchase decision , which the latter would not have made otherwise.
2. When determining the circumstances of harassment, coercion, including physical force or undue influence by an economic entity towards the consumer in the framework of commercial practices, the following circumstances are taken into account if necessary:
• Using threatening or abusive language or behavior;
• manipulation by the business entity of an accident or such a circumstance, of which the latter is aware and which may influence the consumer's purchase decision;
• the creation of non-contractual artificial obstacles by the business entity to the realization of the consumer's rights, in the event that the consumer wants to use the rights provided for in the contract, including the rights to terminate the contract or to replace it with another product or to purchase it from
another business entity;
• the threat of taking an illegal action.

1. . In any case, aggressive trading practices are considered:
- creation of the impression by the business entity that the consumer cannot leave the sales area, including the electronic platform (website, electronic application or other similar means), until the conclusion of the contract;
- making personal visits to the consumer's home, without taking into account the consumer's disagreement with this, or making continuous and unsolicited offers for the purchase of goods by telephone, e-mail or other means of communication, except when they are conditioned by the need to fulfill contractual obligations
- requiring a consumer seeking insurance compensation to submit documents that cannot reasonably be considered essential to determining the validity of the claim, or failing to respond regularly to correspondence related to the case, inducing the consumer to waive his rights a direct appeal to a child in advertising to buy the advertised product or to persuade a parent or other adult to buy it.
- delivering an unsolicited product to a consumer by an economic entity and demanding immediate or
delayed payment or its return. informing the consumer by the business entity that the activity of the business entity will be endangered if the latter does not purchase the product.
- creating a false impression that the consumer has already won, will win, or will win a prize or receive another equivalent benefit when performing a specific action, when in fact there is no prize or other equivalent benefit or the action required to receive it involves payment of money or other expenses։

To supplement the law with the new article 38.1 as follows:

Article 38.1: Protection of consumer rights against unfair trade practices

In every case of unfair commercial practices by the economic entity, the consumer has the right to use theprotection structures provided by the law.

To supplement the law with the new article 38.2 in the following edition

Article 38.2: Powers of state bodies exercising control over the protection of consumer interests

The control over the protection of consumers' interests is carried out by the authorized state bodies within the limits of their jurisdiction provided by laws and other legal acts.

To supplement the law with the new article 39.1 in the following edition

Article 39:1. Application of liability measures by state bodies exercising control over the protection of consumer interests

The state authorized bodies exercising control over the protection of consumers' interests have the right to apply liability measures within their jurisdiction in the cases stipulated by the laws.

Suggestions/ Clarifications:

The draft is aimed at the effective protection of consumers' interests, as well as control over the quality of products, services and works.
The amendment of the law is related to the circulation of the draft law on amendments and additions to the law "On Protection of Economic Competition". Therefore, the adoption of the amendment of the above-mentioned laws aims to protect the interests of consumers, as well as to fill the legal gaps that exist in the current legislative
field.

5. On making amendments and additions to the Law on Customs Regulation of the Republic of
Armenia regarding customs inspections, documents related to customs inspection, application of
norms of responsibility as a result of customs inspection.

Name ofthe legislative act:

On making amendments and additions to the Law "On Customs Regulation of RA".

Change Status:

The duration of the discussion of the project is: 25.10.2024-11.11.2024.
The project is being discussed on e-draft.am, a unified website for the publication of drafts of legal acts.

What other legislative acts will be changed as a result:

As a result of the adoption of the draft, the change will take place only in the Law "On Customs Regulation".

What the changes are about:

The purpose of adopting the draft law is to clarify the process of customs inspections, to specify the issues not defined by the current regulations on customs inspections, to fix the provisions of electronic notification of documents related to customs inspection, to establish norms of responsibility based on the results of customs inspection, in relation to additional discovered obligations.