Beneficial ownership transparency in Armenia: scoping study
Executive summary
Armenia has made a series of commitments at the international level to improve transparency over who ultimately owns and benefits from its companies. The country is progressing well with plans to produce a centralised and public beneficial ownership (BO) register, beginning with a pilot programme for the extractive industries. The BO information for companies operating in this sector was published in April 2020 and, by the end of the year, the government plans to pass legislation that will require regulated and non-regulated commercial entities to also disclose their BO data. Learning from the extractives pilot will be crucial to maximising the impact of Armenia’s economy-wide disclosures.
Open Ownership (OO) is providing significant support to the Armenian government agencies overseeing the reform process. In December 2019, after previous in-country missions, we provided a series of recommendations to help inform the development of the regulatory framework, software systems, and business processes for collecting and publishing BO data for extractives companies (see Annex). Implementation towards these recommendations is ongoing and includes:
- transitioning from publishing scanned paper forms of BO disclosures to an electronic version with data structured into different fields to facilitate access and analysis;
- developing software for the storage and publication of data that complies with the main elements of OO’s Beneficial Ownership Data Standard (BODS); and
- streamlining reporting requirements for firms operating in the broader economy, down from the especially comprehensive approach applied to the mining sector.
Recommendations
In this report, we provide a more detailed assessment of Armenia’s BO regime, analysing current and planned reforms against OO’s principles of effective BO disclosure. Below we outline a series of recommendations on how to optimise Armenia’s disclosure policies and systems, and will continue to work closely with government agencies to assist with their implementation. Suggested reforms include:
- legislative definitions of BO should be harmonised as much as possible and plans made for periodic reviews of the effectiveness of its selected reporting thresholds;
- Armenia should further improve the accessibility and utility of future BO disclosures by publishing in “open data” format and enabling bulk data downloads;
- Armenia should develop an effective sanctions regime to apply to non-extractive sector firms that fail to comply with BO disclosure requirements;
- plans should be created for future enhancement and expansion of data verification systems in the forthcoming electronic register;
- drafting of economy-wide disclosure regulations should begin as soon as possible and aim to cover the overwhelming majority of companies registered in the country; and
- Armenia should collect and publish information regarding historical changes in companies’ beneficial owners.