Mar 2023
6th Mar 2023
The US Government Agencies Point Out New Red Flags
The US Government Agencies Point Out New Red Flags that May Signal Evasion of Russia Sanctions. Common red flags can indicate that a third-party intermediary may be engaged in efforts to evade sanctions or export controls, including the following:
🚩Use of corporate vehicles (i.e., legal entities, such as shell companies, and legal arrangements) to obscure (i) ownership, (ii) source of funds, or (iii) countries involved, particularly sanctioned jurisdictions;
🚩A customer’s reluctance to share information about the end use of a product, including reluctance to complete an end-user form;
🚩 Use of shell companies to conduct international wire transfers, often involving financial institutions in jurisdictions distinct from company registration;
🚩 Declining customary installation, training, or maintenance of the purchased item(s);
🚩 IP addresses that do not correspond to a customer’s reported location data;
🚩 Last-minute changes to shipping instructions that appear contrary to customer history or business practices;
🚩 Payment coming from a third-party country or business not listed on the End-User Statement or other applicable end-user form;
🚩 Use of personal email accounts instead of company email addresses;
🚩 Operation of complex and/or international businesses using residential addresses or addresses common to multiple closely-held corporate entities;
🚩 Changes to standard letters of engagement that obscure the ultimate customer;
🚩 Transactions involving a change in shipments or payments that were previously scheduled for Russia or Belarus;
🚩 Transactions involving entities with little or no web presence; or
🚩 Routing purchases through certain transshipment points is commonly used to illegally redirect restricted items to Russia or Belarus. Such locations may include China (including Hong Kong and Macau) and jurisdictions close to Russia, including Armenia, Turkey, and Uzbekistan.
Jan 2023
12th Jan 2023
World Bank forecasts economic growth in Europe and Central Asia
The near-term economic outlook remains especially uncertain, with risks to the baseline forecast tilted to the downside. These risks include an additional tightening of global financial conditions, financial turmoil, and worsening energy shortages.In the South Caucasus, growth in 2023 is projected to halve to 3.3 percent. The forecast deceleration reflects weakening momentum after the strong rebound in 2021-22, the slowdown in the euro area.
The highest economic growth – 10,8% for 2022 in Armenia among European and Central Asian countries. Regarding other regional countries, Azerbaijan’s 2022 growth is at 4,2%, Georgia’s at 10%, and Turkey’s at 4,7%.
The highest economic growth – 10,8% for 2022 in Armenia among European and Central Asian countries. Regarding other regional countries, Azerbaijan’s 2022 growth is at 4,2%, Georgia’s at 10%, and Turkey’s at 4,7%.
11th Jan 2023
New incentives for IT companies in Armenia
Armenia has made the IT sector a priority industry․ The system of granting tax incentives to IT startups first came into force in 2015 based on the law “On State Assistance to the Information Technology Sector”. It is designed to provide IT startups with tax breaks for the first years of their activity. Low rates set under the law are intended to provide motivated behavior for investment and reduce the risk of tax evasion. Tax break certificates are granted on a case-by-case basis by the Special Commission established by the Government.
Companies applying for a certificate must meet certain requirements, particularly:
In December 2022, amendments were made to the law, as a result of which the benefits program was extended:
✔️Certificate applications will be accepted until November 1, 2023.
✔️ Certificates issued up to and including December 31, 2018, are valid for a period of five years from the date of issuance.
✔️ Certificates issued after January 1, 2019, are valid until December 31, 2023, inclusive.
✔️ The possibility was made to establish other types of state support programs at the suggestion of the competent state body․
- They must be trade organizations or Private Entrepreneurs registered in the Republic of Armenia. The certificate cannot be applied to subsidiaries, economic associations, branch offices, or representatives of foreign legal entities.
- The number of employees should not exceed 30
- They shall not sell their fixed assets
- At least 70% of turnover must derive from the types of activities defined above, etc.
In December 2022, amendments were made to the law, as a result of which the benefits program was extended:
✔️Certificate applications will be accepted until November 1, 2023.
✔️ Certificates issued up to and including December 31, 2018, are valid for a period of five years from the date of issuance.
✔️ Certificates issued after January 1, 2019, are valid until December 31, 2023, inclusive.
✔️ The possibility was made to establish other types of state support programs at the suggestion of the competent state body․
Dec 2022
Nov 2022
23rd Nov 2022
Criminal liability of legal entities in Armenia
The concept of corporate criminal liability has developed and permeated into the legal regimes of countries around the world. After the adoption of the new Criminal Code, legal entities are already subject to criminal liability in Armenia.Here you can find some main points of criminal liability of legal entities under the new regulation:
- Without accounting for all the subtleties of application, under the new Armenian Criminal Code, legal entities are subject to criminal prosecution, if the crime is committed by a person who has the authority to affect the actions of a legal entity and who is acting on behalf of a legal entity and in its interests.
- The conviction of an individual does not exclude the criminal liability of a legal entity for the same crime.
- A legal entity is not subject to criminal liability if the shareholders have taken reasonably necessary means to prevent the crime.
- A legal entity is exempt from criminal liability:
- If it has eliminated the causes and conditions conducive to the commission of a crime (if any);
- Compensated for the damage caused and smoothed out other consequences of the alleged crime;
- Returned the property acquired as a result of the crime, including the income received.
- The new Code also provides measures that can be applied to legal entities, such as:
- Fine
- A temporary suspension of the right to engage in a certain sort of activity
- Compulsory liquidation
- Restriction on business activity in Armenia.
8th Nov 2022
FAQ – Venture Capital in Armenia.
The allocation of sufficient funds to support growth is one of the most crucial, if not the primary factors of success, for entrepreneurs and start-ups. One of the most essential forms of funding is venture capital, which enables young founders to transfer the financial risk to the venture capital firm if the business fails. In exchange, the founders give up a part of their equity so that they lose some of the possible returns on a potential exit of their venture.
What type of fund is venture capital?
- PE funds, including VC, are considered specialized funds in Armenia, meaning that at least 30% of their total assets are targeted to be invested in certain types of assets.
What is the legal structure?
- PE funds may function as joint stock companies with fixed or variable capital. In the case of VC funds, a partnership legal structure is also an option.
What is the tax system?
- For investment funds the rate is 0.01% of net assets of the fund.
Are venture funds regulated?
- The investment funds, including venture funds, are regulated by the Central Bank of Armenia.
What are the factors determining venture funds?
- If the PE fund acts as a VC, according to the fund's rules or charter, not less than 50% of the fund's assets shall be invested in:
✔️Securities not allowed for sale in the regulated market and issued by organizations that are newly created; or
✔️Are in the early stage of their development, for the purpose of their growth, development; or
✔️Enabling their securities to be sold in the regulated market.
Oct 2022
26th Oct 2022
The Lawyers Global 2022 Annual Country Awards
We are pleased to inform you that Redbridge has been awarded in The Lawyers Global 2022 Annual Global Legal Awards in the following categories:
- Achievement in the Country category – Armenia as Winner law firm – Band: 1;
- Achievement in the Sub-Region category – Western Asia as Outstanding law firm – Band: 5;
- Achievement in the Continent category – Asia as Outstanding law firm – Band: 20.
See: More
25th Oct 2022
HOW CAN A PERSON GET OFF OF THE OFAC SDN LIST?
THE OFFICE OF FOREIGN ASSETS CONTROL (OFAC) of the U.S. Department of the Treasury manages economic and commercial sanctions based on U.S. foreign policy and national security objectives and implements the necessary procedures. OFAC places individuals and organizations on a list called Specially Designated Nationals And Blocked Persons (SDN) for national security, foreign policy, and SDN sanctions policy purposes.
HOW CAN ONE BE DELISTED FROM THE OFAC SDN LIST?
Filing a Request for Administrative Reconsideration is typically the first step in starting the removal process with OFAC. This request is also called a Petition for Removal and it is likely the most significant filing the applicant will provide to OFAC in any case. The petition may include background facts, legal and policy arguments, and a calculated analysis of why the designated individual or company should be removed from the SDN List. After submitting this petition, OFAC may submit to the applicant a follow-up questionnaire. Whether they do this or not depends on the information they possess relevant to the information and arguments the applicant put in a petition.
EACH YEAR, THE OFAC REMOVES INDIVIDUALS AND ENTITIES FROM ITS SDN LISTS. Reasons for an OFAC delisting include the following arguments and evidence:
- There is an insufficient basis exists for the listing;
- The basis for the listing no longer exists (for example due to a corporate reorganization, the resignation of persons from positions in a blocked entity, or similar steps);
- The OFAC measures have led to a positive change in behavior.
REVIEW TURNAROUND TIME.
The processing time of a removal request to OFAC depends upon a range of factors including (i) whether OFAC needs additional information (ii) how timely and forthcoming the petitioner is in responding to OFAC’s requests and (iii) the facts and circumstances of the specific case.
17th Oct 2022
Armenia Unveils Decision to Offer Citizenship for at least $150,000 Investment
Prospective applicants will have 11 different routes to qualifying for citizenship on the basis of an economic contribution in Armenia:
- A contribution of at least $150,000 to a foundation established to carry out activities in the fields of education or science;
- An investment of at least $150,000 in the shares of a commercial entity for a period of no fewer than 10 years;
- An investment of at least $150,000 in government bonds for a period of no fewer than 7 years;
- An investment of at least $150,000 in real estate “with a cadastral value approximated to the market value of the property” for a period of no fewer than 10 years.
- An investment of at least US$150,000 in any government-approved investment fund for a period of no fewer than 10 years.
- The establishment of a company in a high-tech or IT business with a capitalization of at least $1 million, “provided that the center of vital interests of the founder is located in the Republic of Armenia”;
- The establishment of a branch in Armenia for a foreign information technology company with a capitalization equal to $100 million or more that has at least 500 employees in Armenia;
- The establishment of a venture capital fund with assets amounting to at least $80 million in Armenia;
- An investment of $100,000 or more in a high-tech or venture capital fund;
- Have at least 20 years of work experience in “high and (or) information technology companies listed on the New York, Frankfurt or London stock exchanges”; or
- Having engaged in long-term activity, at least five years, in the international structures of the postal sector, as well as making financial, material, and technical investments in the field amounting to at least $250,000.