Tuesday, July 27, 2004

Radio Free Europe / Radio Liberty
26 July 2004

Coffee Importer Decries Armenian Customs ‘Bribery’ 

By Ruzanna Stepanian 

One of Armenia's leading coffee importers claimed on Monday to have been illegally penalized by the government's customs department for its refusal to pay kickbacks to enjoy more favorable treatment that would allow it to evade taxes.  

Top executives from the Royal Armenia company said senior customs officials had offered to grossly undervalue the price of their imported coffee beans, something which would have considerably reduced the amount of import and other taxes levied from them. They alleged that the deputy chief of the State Customs Committee, Gagik Khachatrian, personally sought bribes from them last year.  

`I prefer making payments to the state budget to enriching them,' the Royal Armenia chairman, Gagik Hakobian, told a news conference. `That's what the problem is all about.'  

`We are up against a banal problem: thieving government officials,' charged Gevorg Movsisian, his chief lawyer.  

In a separate written statement, the company said that the Armenian customs, which have the legal authority to determine the market value of imported commodities, now estimate every kilogram of its raw coffee at an equivalent of $1.8. The statement said that its real purchasing price is only $1.2 and that the same sort of the product imported by other firms is judged to cost less than $1. According to Hakobian, Royal Armenia's taxable imports would have been set at merely 50 U.S. cents per kilogram had it agreed to share the resulting extra profits with senior customs officials.  

The allegations were angrily denied by Suren Fahradian, head of the customs department's tariff setting division who was also personally implicated in the alleged bribery attempt. `Are you from the prosecutor's office?' he said when asked by RFE/RL for comment by phone. `If there is something wrong, relevant bodies will investigate the matter. If that is defamation, then those who make it will be punished.' 

It emerged that Royal Armenia won this year a lengthy court battle with the Customs Committee, with local courts ruling that the government agency is illegally and unfairly discriminating against the company. But Hakobian said the practice is continuing because court bailiffs are declining to force the customs to comply with the ruling that was upheld recently by Armenia's highest court.  

The row is an extremely rare example of an Armenian business openly alleging high-level government corruption affecting its operations. Local businesspeople often complain, in private, about harassment by tax authorities, but few of them make their cases public for fear of government retributions. Corruption among Armenian officials in charge of collecting taxes and import duties is believed to be widespread.  

The latest allegations could deal a further blow to the reputation of Armen Avetisian, the controversial Customs Committee chief whose conspicuous personal wealth has long raised eyebrows in the impoverished country. Avetisian is widely seen as a protГ©gГ© of powerful Defense Minister Serzh Sarkisian.

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