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Yerevan, Armenia

Armenia

Status
Satisfactory progress
Joined
3 September 2017
Latest validation
2020
Latest data from
2019
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Overview and role of the EITI

The metal mining sector is an important contributor to the Armenia’s largely agricultural economy, accounting for 5.4% of government revenues and 39.3% of exports in 2019. The country mainly produces copper, molybdenum, zinc, gold and silver. One of Armenia’s national priorities includes strengthening the culture of responsible mining through application of the best international practices and improving legal regulations.

By fostering cooperation between government, businesses, and civil society, the EITI has helped to introduce a new culture of dialogue in Armenia. Armenia implements the EITI to strengthen implementation of transparency and accountability standards in the mining sector, enhance competitive investment environment for investors, promote systematic disclosure and data use and strengthen public understanding about the sector.

Economic contribution of the extractive industries

5.4%
to government revenues
39.3%
to exports
2.8%
to GDP
5.8%
to employment
  • Step 1
  • Step 2
  • Step 3

Download country data

Download open data on government and company revenues, revenues by revenue stream and indicator, summary data and more.


Innovations and policy reforms

  • In May 2020, the Law “On targeted use of environmental tax paid by companies” was amended to expand the scope of companies required to pay environmental tax to the affected communities. The amendments stipulate that all companies eligible for production of metallic minerals will receive environmental tax deductions.
  • In June 2020, the American University of Armenia (AUA) Center for Responsible Mining disseminated online training sessions and videos on the EITI Standard and responsible mining for local stakeholders. The campaign aimed to strengthen awareness about the EITI process and build capacity among the multi-stakeholder group and other interested stakeholders.

Extractive sector data

Production and exports

Copper

Revenue collection

Level of detail 2

Revenue distribution

2019
Standardised revenue types

Top paying companies

2019

Extractive sector management

Licenses and contracts

Mining exploration and production licenses are awarded on a first come first served basis by the Ministry of Territorial Administration and Infrastructure (MTAI) in accordance with the Mining Code. In cases where there are two or more applicants for a particular production permit, the bearer of the exploration permit for the same area is given a preference.

The government publishes all mining licenses and contracts since 2018. In June 2020, the government approved legislative amendments requiring the publication of non-metallic minerals extraction contracts from 2021. In addition, environmental impacts assessments (EIAs) are available on the Ministry of Environment website.

Beneficial ownership

Since 2020, all companies applying for or holding mining rights are required to submit beneficial ownership information to the State Register of Legal Entities under the Ministry of Justice. A 2020 study by Open Ownership provided a detailed assessment of Armenia’s beneficial ownership legal framework.

Since 2021, beneficial ownership data is submitted through an online register hosted by the Ministry of Justice. Moreover, several amendments to relevant legislation were approved in 2021 to expand the scope of reporting from to all sectors.

In 2021, Armenia joined the Opening Extractives, a global programme that aims to transform the availability and use of beneficial ownership information. 

Revenue distribution

Most mining taxes, royalties and payments are made to the State Revenue Committee and the Ministry of Environment. A portion of environmental payments are further re-allocated to communities affected by their operations based on proposed projects.

Mining companies also make a number of payments are also made to local governments, including rent, payments related to socio-economic development, property tax, land tax, land disposal fee. EITI reporting discloses the total revenues collected by each community from mining companies as well as the total sum collected by all communities for each revenue stream. EITI reporting has helped to clarify further which subnational payments are mandatory and which are provided as charitable donations.


EITI implementation

Governance

Armenia EITI is administered by the Armenia’s Multi-Stakeholder Group (MSG). The MSG is chaired by the Deputy Prime Minister of Armenia. It is comprised of representatives from government, industry and civil society.

Validation

Armenia was found to have made satisfactory progress in implementing the 2016 EITI Standard in July 2020, following its first Validation. The last Validation commenced in July 2023.

Moreover, in June 2020, the EITI Board agreed that Armenia has made satisfactory progress in implementing EITI Requirement 2.5 on beneficial ownership.

Scorecard

Latest Validation: 9 July 2020
Year

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

Analysis of MSG meeting minutes and stakeholder consultations confirmed that the government is fully, actively and effectively engaged in the EITI process.

1.2Company engagement

Metal mining companies are fully, actively and effectively engaged in the EITI process. In addition, the government has ensured an enabling environment for company participation by adopting the legislation on mandatory EITI reporting starting from 2017 fiscal year.

1.3Civil society engagement

The government has ensured an enabling environment for civil society and civil society is fully, actively and effectively engaged in all aspects of EITI implementation in Armenia. Stakeholders, including but not limited to members of the MSG, are able to freely express their opinions on transparency and natural resource governance issues, are substantially engaged in the design, implementation, monitoring and evaluation of the EITI process, and have the right to communicate and cooperate with each other.

1.4MSG governance

The MSG has been established to oversee the implementation of the EITI and all constituencies are actively and equally engaged in the EITI process. The invitation to participate in the group was open and transparent, and all constituencies are adequately represented. Clear MSG Terms of Reference were agreed after the establishment of the MSG and are followed in practice.

1.5Work plan

The publicly-accessible Armenia EITI work plans covering 2017-2018 and 2019-2020 reflect the national priorities and provide measurable and time-bound activities. In addition, according to Requirement 1.5.a, the country has gone beyond the minimum requirements by ensuring that national priorities and the work plan extend EITI implementation to responsible mining.

Licenses and contracts

2.1Legal framework

In accordance with Requirement 2.1.a, Armenia has comprehensively disclosed all required information related to the fiscal regime and information on the roles and responsibilities of the relevant government agencies. In addition, in accordance with Requirement 2.1.b, Armenia has gone beyond the minimum requirements in the comprehensiveness of its overview of anticipated reforms.

2.2License allocations

Information about the permits for exploration and production awarded in 2016 and 2017 is publicly available. Moreover, the permit register includes historic data starting from 2012. The process for awarding and transferring licenses as well as applicable technical and financial criteria are well described, and no significant non-trivial deviations were noted beyond delays in the permitting process.

2.3License register

All information listed under Requirement 2.3 is publicly available for metal mining exploration and production permits.

2.4Policy on contract disclosure

The EITI Report as well as the legislative and scoping studies provide a detailed review of the relevant legislation and conclude that there is some degree of ambiguity with regard to what information can be considered a commercial secret. Prior to the deadline set by the 2019 EITI Standard, Armenia has systematically disclosed all production metal mining contracts.

2.5Beneficial ownership

The Validation of Requirement 2.5 in 2021 focused only on assessing the country’s progress in meeting the initial criteria. Armenia has leveraged the EITI to pilot disclosures in the extractive sector. Beneficial ownership data has been requested from all extractive companies, and first disclosures have been published online in PDF format. Beneficial ownership disclosures cover all extractive companies holding or applying for a mining permit.

2.6State participation

Not applicable

This requirement is not applicable in Armenia in the years under review.

Monitoring production

3.1Exploration data

The EITI Report provides a detailed overview of the extractive industries, including any significant exploration activities.

3.2Production data

The EITI Report provides a comprehensive overview of production data reported by the companies and publicly available on government websites. The 2016-2017 EITI Report notes the limitations related to the level of disaggregation of government production data for precious metals. At the same time, the report provides comprehensively disaggregated information as reported by companies.

3.3Export data

The EITI Report provides export volumes and values for all major minerals exported. The report also provides an overview of data provided by different sources of information, is transparent about the limitations of official export data and comments on the possible reasons for differences.

Revenue collection

4.1Comprehensiveness

The MSG’s decision on material revenue streams and material companies is clearly justified and resulted in comprehensive disclosures. In addition, the online portal includes disclosures from all metal mining companies disaggregated by company and by revenue stream. Corresponding data is disclosed by the government. Although this data is not reconciled, the disclosures are exceptionally comprehensive and backed by legislation.

4.2In-kind revenues

Not applicable

This requirement is not applicable in Armenia in the years under review.

4.3Barter agreements

Not applicable

This requirement is not applicable in Armenia in the years under review.

4.4Transportation revenues

Not applicable

This requirement is not applicable in Armenia in the years under review.

4.5SOE transactions

Not applicable

This requirement is not applicable in Armenia in the years under review.

4.6Direct subnational payments

The MSG established that rent payments from companies to subnational government entities are material and ensured that these payments and the receipt of these payments are disclosed and reconciled in the EITI Report.

4.7Disaggregation

The EITI data is presented by an individual company, government entity and revenue stream, albeit not consistently by project.

4.8Data timeliness

The first EITI Report covering 2016 and 2017 was published in January 2019 and before the deadline set in the EITI Board’s extension to Armenia’s EITI reporting deadline.

4.9Data quality

Reconciliation was undertaken by a credible Independent Administrator, whose appointment was endorsed by the MSG. The IA’s ToRs for the 2016-2017 EITI Report followed the standard template and was approved by the MSG. Data quality assurances are described in the 2016-2017 EITI Report, and they were followed by the reporting entities. The report includes the IA’s assessment of the reliability of data.

Revenue allocation

5.1Distribution of revenues

The 2016-2017 EITI Report and the scoping study disclose which revenues are recorded in national and community budgets and which are directed to special extra-budgetary funds, with an explanation of the use of extractives revenues not recorded in the national budget. Revenue streams are classified according to the IMF Government Finance Statistics Manual 2001.

5.2Subnational transfers

Armenia has disclosed the basis for calculating the total amount of environmental payments to be redistributed to communities and the resulting amounts by year for 2016-2019. Armenia has also disclosed the proportions reserved for each community in 2016-2019. The total amounts assigned for each community, the actual transfers and discrepancies are also provided.

5.3Revenue management and expenditures

Not assessed

It is commendable that the MSG has included information about the budgeting and auditing processes in the scoping study and the 2016-2017 EITI Report.

Socio-economic contribution

6.1Mandatory social expenditures

Armenia has disclosed the nature of in-kind social expenditures and information about third-party beneficiaries by year for 2016-2018. This information includes both disclosures by companies and by beneficiary communities.

6.2Quasi-fiscal expenditures

Not applicable

This requirement is not applicable in Armenia in the years under review.

6.3Economic contribution

The information provided by the EITI Report exceeds Requirement 6.3 in scope and detail. The disclosures and the visualisations of data provide the reader with a comprehensive understanding of the contribution of the extractive sector to the Armenian economy.

Outcomes and impact

7.1Public debate

EITI data is easily accessible in an open format and a wide range of both digital and paper-based communications materials have been produced and disseminated. The national secretariat and the MSG are engaging with media across the country, and several outreach events have been organised in key mining regions. EITI implementation is embedded in public debate about the mining sector and contributes to policy-making.

7.2Data accessibility

Not assessed

It is commendable that Armenia has undertaken activities to ensure that extractives data is accessible.

7.3Follow up on recommendations

The 2016-2017 EITI Report was published in January 2019. Its recommendations have been mostly followed up on by the MSG and relevant government agencies. Concrete changes include improvements to the reporting template.

7.4Outcomes and impact of implementation

The 2018 annual progress report includes all required elements and reflects stakeholder views. Follow-up of recommendations from EITI reporting or Validation is not included, as the first 2016-2017 EITI Report was only published in January 2019. In addition, quarterly progress reports help the national secretariat and the MSG to monitor progress against the work plan.


Key documents


Contacts