Armenia WT/TPR/S/228 
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V. OTHER MEASURES AFFECTING INVESTMENT AND TRADE 
(1) BUSINESS FRAMEWORK AND FOREIGN INVESTMENT REGIME  
(i) General legal framework for businesses 
(a) Type of business structures 
1. Since its accession to the WTO, there has been no significant change to Armenia's general 
legal framework for businesses.  The principal la ws for establishing and conducting business are the 
Civil Code (Chapter 5) and the Law on St ate Registration of Legal Entities of 2001. 
2. Other legislation that affects businesses includes, inter alia , the Law on the Protection of 
Consumer Rights of January 2002, the Law on Foreign Investments of July 1994, and the Law on 
Bankruptcy of December 2006.  Under these rules, fo reign companies and individuals are subject to 
the same procedures and requirements as Armenian nationals.  There are no restrictions for the participation of foreigners in legal entities established in Armenia, except as listed in 
section (ii) below.   
3. In order to start a business, Armenian nationals and foreigners are required to establish a legal 
entity or to register as a private entrepreneur (sol e proprietorship).  According to the Civil Code, a 
legal entity may be either a profit-making commercia l organization, or a non-profit organization.  A 
commercial organization may take the form of a co mpany (limited or supplementary liability, or an 
open or closed joint-stock company), a business part nership (general or limited partnership) or a 
cooperative.  A foreign company may also establish a branch or a representative office in Armenia 
(Table V.1).  
Table V.1 
Principal business structures and selected requirements, 2009 
Type of registration Fee (dram) Selected rules and requirements 
Limited liability companies  
State Register 12,000 Governed by Law on Lim ited Liability Companies of 24 October 2001, as 
amended 
Registration of the company name 
in State Register 5,000 Shareholders are not liable for the obligations of the company 
Tax Service Register Free No minimum capital requirements 
Supplementary liability companies   
State Register 12,000 Governed by the Ci vil Code of 28 July 1998, as amended 
Registration of the company name 
in State Register 5,000 Shareholders bear subsidiary liability for the company's obligations with their 
personal wealth, in a multiple of the value of their contributions 
Tax Service Register  Free No minimum capital requirements  
Joint-stock companies (JSCs)  
State Register 12,000 Governed by Law on Joint Stock Companies of 2001 
Registration of the company name 
in State Register 5,000 JSCs may be open (i.e. with no limit to  the number of shareholders and with 
shares freely traded - referred to as OJSC ) or closed (i.e. with a limited number 
of shareholders – referred to as CJSC).  A closed company may have a 
maximum of 49 shareholders 
Tax Service Register Free  No minimum capital requirements 
Sole proprietorship 
State Register 12,000 Governed by Civ il Code of 28 July 1998, as amended 
Tax Service Register Free No minimum capital requi rement.  No nationality or residency requirements 
Source:  WTO Secretariat, based on Armenian legislation;  and American Chamber of Commerce in Armenia online 
 information, "Company Re gistration".  Viewed at:  http://www.amcham.a m/index.cfm?objectid=7F6CA7F0-4150-
 11DE-90400003FF3452C2. WT/TPR/S/228 Trade Policy Review 
Page 44 
 
 
4. All business entities must apply for registrati on in the State Register of Legal Entities.1  In 
addition, certain activities, such as the produc tion and sale of pharmaceutical products, require 
licences (Chapter III(6)).  Within one month of receiv ing its certificate of registration, a legal entity 
must register with the regional offices of the tax a nd statistical agencies, and companies that wish to 
import goods must also register with their regional cu stoms office (Chapter III(1)).  In July 2009, the 
Government eliminated the mandatory requireme nt for a company's seal, which used to cost 
dram 6,000 (some US$17) at the regional tax office.2  
5. According to the authorities, Armenian le gislation was amended in 2009 and minimum 
charter capital requirements were eliminated for all types of legal entities, with the exception of 
financial institutions (Chapter VI(4)(ii)).  
6. Armenia ranked 43rd out of 183 economies analysed in  the World Bank's Ease of Doing 
Business Index for 2010 (an improvement from 50th place in the 2009 Index).3  According to the 
World Bank the improvement was particularly not iceable in the stages starting a business (ranking 
improved from 65th in 2009 to 21st in 2010) and trading across borders (improved from 136th to 102nd).  
In terms of starting a business, the number of procedures (6) declined (from 9), and the average 
amount of time needed to start a standard medium -size company decreased from 18 to 15 days.  The 
authorities indicate that regulatory changes in troduced in 2009 have reduced the number of 
procedures to 5 and the time needed to 7-9 days.  Moreover, in order to c ontinue to expedite and 
simplify the process of starting a company, the Gove rnment expects to inaugurate a business centre 
providing one-stop-shop services for registration of legal entities.4   
(b) Corporate taxation 
7. A profit tax, at the rate of 20%, applies to a ll commercial organizations.  Resident companies 
are taxed on worldwide profits, while non-resident companies are taxed only on profits generated in 
Armenia or attributable to a business carried out by  a branch in Armenia.  During 2003-07, foreign 
companies were entitled to apply for a profit tax break  consisting of a reduction in the profit tax due in 
the two subsequent fiscal years.  The reduction was for the full amount of the foreign investment in a 
given year.  This tax break was not extended to investments undertaken from 2008.  The authorities 
could not provide information on the number of fore ign companies that benefited from this tax break 
or the amount of tax revenue forgone.   
8. Companies are also subject to property tax on buildings and automotive vehicles.  The 
property tax is based on the cadastral value of the bui ldings as a sliding scale starting at 0.1% of the 
value over dram 3 million and rising to 1% for th e value over dram 40 million.  Property tax on 
vehicles is also a sliding scale based on engine power.  For cars5 the rate is dram 200 per horsepower 
(1 hp = 0.735 kW) up to 120 hp, while, at the top end (i.e. vehicles of 251 hp or more), the rate is set at dram 500 per hp and an additional dram  1,000 per hp for each horsepower over 150 hp.
6  
                                                      
1 State Registry online information.  Viewed at:  www.stateregistry.am.   
2 Ministry of Economy (2008). 
3 World Bank (2009). 
4 Ministry of Economy (2008). 
5 A car is defined as a vehicle capable of carrying ten people or fewer. 
6 Armenian Parliament online information, "The Law of the Republic of Armenia On Property Tax:  
Non official translation", 26 December 2002.  Viewed  at:  http://www.parliament.am/legislation.php?sel= 
show&ID=1917&lang=eng. Armenia WT/TPR/S/228 
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9. Armenia has signed tax treaties for the avoida nce of double taxation with 36 countries.7  
(ii) Foreign investment regime 
10. The Ministry of Economy (ME) is responsib le for implementing investment policy in 
Armenia.  Promotion of foreign and local invest ment is undertaken by the Armenian Development 
Agency (ADA), a government body chaired by the Prime Minister.8  The ADA is the primary contact 
for foreign investors and is responsible for helping them to set up a business in Armenia, by providing 
assistance for project implementation and liaison with  other government agencies, such as the State 
Register of Legal Entities (see above).  It also pr ovides information on investment opportunities in the 
country, and on investment-related regulations.  
11. Foreign direct investment into Armenia is officially encouraged and seen by the Government 
as one of the key aspects of its economic development policy.  During the review period, the Government offered two direct incentives exclusively to  foreign investors:  (i) a profit tax break (see 
above);  and (ii) a tariff exemption on the impor tation of certain capital inputs (Chapter III(4)).  
According to the authorities, Armenia's current investment policy seeks to remove administrative 
barriers, complete the legal framework that regulat es investments, and develop the infrastructure that 
promotes investment.
9  However, despite the infrastructure projects carried out via both public and 
private investments since 2006, key areas, such as transport and telecommunications (Chapter VI) still need to keep pace with the general economic de velopment achieved during the review period.   
12. The Law on Foreign Investments of 31 July 1994 is the main legislation governing foreign 
investments in Armenia.  No significant amendments were made to the Law during the review period.  
The Law guarantees national treatment to foreign investors.  Foreign investment is defined by the 
Law as investments with no less than 30% of foreign participation at the moment of foundation.   
13. There are no legal restrictions to the partic ipation of foreign investors in any economic 
activity in Armenia.  The only exception is set by the Constitution
10, which denies foreign citizens and 
persons without citizenship the right to own land in Armenia.  However, foreigners are allowed to use 
land through lease contracts with an Armenian counter part.  Furthermore, foreigners have the right to 
own real estate properties built on Armenian land,  and to exploit renewable and non-renewable 
natural resources on the basis of concession contracts granted by the Government.     
14. Nevertheless, the legislation gr ants the Government the power to limit and prohibit foreign 
investment for national security concerns.  The aut horities indicated that this provision was not used 
during the review period.  
15. The Law on Foreign Investments guarantees th at, in the event of amendments to the 
legislation on foreign investment, the law in force at the time the investment was made can, upon the 
request of a foreign investor, continue to be applie d for a maximum of five years from the date of the 
investment.  The Law also restricts the ability of  the Government to confiscate or nationalize the 
property of foreign investors and, where it might o ccur, requires full compensation.  Foreign investors 
                                                      
7 Austria, Belarus, Belgium, Bulgaria, Canada, China, Croatia, Czech Republic, Egypt, Estonia, 
Finland, France, Georgia, Greece, In dia, Indonesia, Iran, Italy, Kazakh stan, Latvia, Lebanon, Lithuania, 
Luxembourg, Moldova, Netherlands, Poland, Qatar, Romania, Russia, Switzerland, Syria, Tajikistan, Thailand, Turkmenistan, Ukraine, and United Arab Emirates. 
8 Armenian Development Agency online information.  Viewed at:  http://www.ada.am/. 
9 Ministry of Economy (2007). 
10 Article 28 of the Armenian Constitution. WT/TPR/S/228 Trade Policy Review 
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and employees are guaranteed the right to freely re patriate their property, profits, and other goods 
legally earned as a result of investments or as compensation for services. 
16. Armenia has signed bilateral treaties on recipro cal promotion and protection of investments 
with 44 countries.11  It is also a signatory of the Intern ational Convention on Investment Disputes, 
which allows for resolution of disputes by the Intern ational Centre for the Settlement of Investment 
Disputes (ICSID).12 
17. Under the General Agreement on Trade in Services (GATS) Armenia has scheduled no 
limitations to foreign investment with respect to both market access and national treatment for practically all activities, with the exception of a few specific services activities (Chapter VI(4)). 
(2) S
TATE TRADING , STATE -OWNED ENTERPRISES , AND PRIVATIZATION  
18. Armenia notified the WTO that it does not mainta in any state-trading en terprise in accordance 
with the provisions of GATT Article XVII an d the Understanding on the Interpretation of 
Article XVII.13 
19. During the period under review, Armenia contin ued to privatize its remaining state-owned 
enterprises.  From January 2003 to November 2009, 283 large and medium-scale companies were 
privatized, mainly in the agriculture, transport, communication, energy, and mining sectors.  These 
privatizations generated some US $110 million in public revenues for the State.  At end 2009, state 
participation in the economy was limited to 400 compan ies fully or partially owned by the State:  of 
these approximately 300 are in health care, educatio n, and military activities, while the other 100 are 
non-operational small companies awaiting liquidation.14      
20. Armenia's current privatization policy differs  from the one adopted up to 2002 as it focuses on 
enhancing the competitiveness and efficiency of co mmercial organizations through the divestiture of 
the State's share in them.  Before 2002, the Governme nt sought to maximize cash returns, consolidate 
market reforms, develop the stock market, and introduce corporate governance principles to public 
enterprises.  The authorities state that tendering, open share subscriptions, and direct sales to strategic 
investors were the methods of privatiz ation adopted during the review period.15  Since privatization 
started in the 1990s, 1,937 companies have been pr ivatized through 175 tenders, 677 direct sales, and 
1,085 open subscriptions.   
(3) INCENTIVES  
21. Armenia provides some support to the agriculture sector but this is limited due to scarce 
budgetary resources (Chapter VI(1)).  The Armenian Development Agency promotes Armenian 
exports abroad, but does not provide direct financial or tax incentives (Chapter IV(5)).  Otherwise, the 
authorities indicated that the State does not pr ovide any significant incen tives to its domestic 
producers.   
                                                      
11 The same countries listed in footnote 7 above, with the exception of Thailand, plus:  Argentina, 
Cyprus, Germany, Israel, Kyrgyzst an, Sweden, United States, United Kingdom, and Uruguay.     
12 ICSID online information.  Viewed at:  http://icsid.worldbank.org/ICSID/. 
13 WTO document G/STR/N/12/ARM, 20 June 2008. 
14 Information provided by the Armenian authorities. 
15 Information provided by the Armenian authorities;  and WTO document WT/ACC/ARM/23, 
26 November 2002. Armenia WT/TPR/S/228 
 Page 47 
 
 
(4) COMPETITION AND PRICE POLICIES  
(i) Competition policy 
22. According to the European Commission, Arme nia's legal and institu tional framework on 
competition is relatively well established, but th e powers of the Armenian competition authority 
remain limited.16  Evidence suggests that, in practice, the le vel of competition is low in a number of 
product markets, such as meat, beer, hen eggs, gra nulated sugar, butter, petrol, diesel fuel, cement, 
and other construction materials.17   
23. Armenia's competition legislation comprises the C onstitution, the Civil Code of 1998, and the 
Law on Protection of Economic Competition of 6 N ovember 2000, as amended.  The Law applies 
equally to foreign and domestic companies, incl uding state-owned enterprises, in all economic 
sectors.  Since January 2001, the State Commission for the Protection of Economic Competition (the 
Commission) has been responsible for safeguarding competition;  the Commission is administratively, 
but not financially, independent.18 
24. The Commission is composed of a chairman  and six other members appointed by the 
President of Armenia for a five-year tenure.  According to the Law on Protection of Economic Competition of 2000, the Commission must protect and promote economic competition in order to 
bring about the development of businesses and the prot ection of consumer rights.  In order to achieve 
this objective, the Commission has the authority to, inter alia , disaggregate companies that abuse their 
dominant position, amend or revoke c ontracts between economic agents that contradict the Law, and 
impose penalties on companies and their managers, as well as on public officials, in the event of 
infringement.  In April 2007, a number of ame ndments to the Law were introduced giving the 
Commission the power to inspect, impose stricter sanctions for infringements, and control the impact 
of state aid on competition.  The mechanisms to implement the control over state aid have not yet 
been defined by late 2009.
19  
25. The Commission publishes annual programme repor ts on its activities and keeps a centralized 
register of economic entities with a dominant positi on.  During 2003-08, the Commission adopted a 
total of 794 decisions, some of which resulte d in the imposition of sanctions totalling about 
US$2 million.  The number of decisions adopte d and the value of sanctions imposed grew 
significantly between 2003 and 2005 and stayed fairly  constant thereafter.  In 2008, the courts 
received 22 claims from the Commission to ensure th e enforcement of its adopted decisions (one of 
which was partially rejected), as well as 14 appeals against decisions taken by the Commission.  In 
August 2009, 48 economic entities with dominant positions  in 108 product markets were registered in 
the centralized log20;  some are the same markets identifie d by the Commission as lacking competition 
in 2006 (see above).   
26. The Law on Protection of Economic Compe tition of 2000 defines dominant position as a 
situation where a company: has no competitors;  or is  not exposed to any substantial competition;  or 
has a market share equal to or greater than one thir d.  The parties involved in an act of concentration 
must, before the concentration comes into practice, submit a declaration if, in the preceding fiscal 
                                                      
16 Commission of the European Communities (2009). 
17 State Commission for the Protection of Economic Competition of the Republic of Armenia (2006).  
18 State Commission for the Protection of Economic Competition of the Republic of Armenia online 
information, "History".  Viewed at:  http ://www.competition.am/index.php?menu=137&lng=2. 
19 Commission of the European Communities (2008) and (2009). 
20 Information provided by the Armenian authorities.  The list is available (in Armenian) at State 
Commission for the Protection of Economic Competition of the Republic of Armenia online information, "Register".  Viewed at:  http://www.competition.am/index.php?menu=285&lng=2. WT/TPR/S/228 Trade Policy Review 
Page 48 
 
 
year:  the joint or individual value of assets was at least dram 3 billion (some US$8.5 million);  or 
participants operate in the same product market and the joint or individual value of their assets was 
greater than dram 1 billion.  According to the La w, any concentration leading to a dominant position 
is prohibited except when it promotes consumers interests and/or fosters the development of 
competition in that particular market.  Where a declaration is required, the parties must await the 
decision of the Commission, which must be made  within 90 days if it is to impose terms and 
conditions or prohibit the concentration altogether. 
27. Armenian legislation grants economic entities and government bodies the right to appeal a 
Commission decision before the courts.  It also gives the Commission the right to initiate court 
proceedings if one of its decisions is not implemen ted.  Furthermore, damages that are caused to an 
economic entity or other persons due to anti-compet itive practices analysed  by the Commission must 
be compensated by the infringer. 
28. It could be argued that Armenia's legislati on on intellectual property rights indirectly 
promotes competition as it allows parallel imports of  patented and copyright protected products (see 
section (6) below).  However, there are no studies that measure the economic impact of these 
provisions.  
29. As in other regulatory areas, the Armenian aut horities have been working with the European 
Commission on harmonizing Armenia's competition legisl ation with EU's;  according to the European 
Commission, the process is not yet fully complete.21   
30. Armenia and other 11 CIS member states founde d the CIS Interstate Council of Antitrust 
Policy in 2000 and signed a Contract on "Maintaining of Agreed Antimonopoly Policy".  The State Commission is also collaborating closely with intern ational organizations, such as competition experts 
at the OECD and the International Competition Ne twork.  Moreover, Armenia has signed cooperation 
agreements in the field of competiti on with Moldova, Romania, and Ukraine.
22   
(ii) Price policy 
31. Armenia eliminated all its price controls befo re it acceded to the WTO.  Prices of certain 
services provided by utility companies, including telecommunications, and distribution of electricity, 
gas, and water are controlled by the Government through the Public Services Regulatory Commission, 
in order to correct for externalities caused by natural monopolies (Chapter VI(3) and (4)(iii)). 
(5) GOVERNMENT PROCUREMENT  
32. Since its accession to the WTO, Armenia has adopted a new Law on Procurement and 
implemented its secondary regulations (see belo w).  The Government estimated that public 
procurement represented 10.6% of GDP in 2008, and th at, in nominal terms, it had grown at an annual 
average rate of 22% since 2003.23  Many of the Government's large purchases are connected to 
projects funded by international financial donors.24 
33. Armenia is not a signatory to the WTO Plur ilateral Agreement on G overnment Procurement 
(GPA).  In acceding to the WTO, Armenia indicated  that it would become an observer to the GPA and 
                                                      
21 Commission of the European Communities (2009). 
22 State Commission for the Protection of Economic Competition of the Republic of Armenia online 
information, "International Cooperation".  Viewed at:  http://www.competition.am/index.php?menu= 
197&lng=2. 
23 WTO Secretariat, based on information provided by the Armenian authorities. 
24 U.S. Commercial Service (2007). Armenia WT/TPR/S/228 
 Page 49 
 
 
that it would start negotiations to join the Agreement.25  During the review period, some preparatory 
work was done and it was reporte d that its legislation and practices are GPA-compatible in most 
respects, although some areas require further work , particularly relating to bid protest/domestic 
review procedures and othe r institutional requirements.26  In October 2009, Armenia presented its 
initial offer and started negotiations with other WTO Members to join the GPA.27 
34. None of Armenia's preferential trade agreements contains specific provisions on government 
procurement.     
35. Armenia's main laws governing government pr ocurement are the Law on Procurement, which 
entered into force in January 2005;  Government Decree No. 853-N of 5 June 2008;  and Instruction 
No. 426 of 25 April 2005, issued by the Ministry of Finance.28  The Law states that international 
agreements signed by Armenia, take precedence over domestic provisions.  The Law on Procurement 
covers purchases of all types of goods, works, and services (including rent and lease contracts) 
procured by State and local Government bodies, State or community agencies, non-profit 
organizations, the Central Bank, and enterprises w ith over 50% State and/or community ownership.29  
The authorities state, however, that the Governme nt adopted a new "Procurement System Reforms 
Strategy" in April 2009, seeking to amend the current legislation to include provisions on 
procurement by public-private partnership agreem ents and private utilities companies that operate 
under exclusive rights granted by the State. 
36. The Government's procurement policy aims to broa den the circle of participants and to foster 
a competitive, efficient, transparent and non-discrim inating procurement process.  Armenia has opted 
for legislation that favours the use of the lowest pri ce as the sole award criteri on, mainly in order to 
curb corruption.   
37. The Law does not contain any provision to promot e domestic suppliers or local content, and it 
explicitly guarantees equal rights for foreign provide rs.  However, the choice of procurement method 
(see below) may in certain circumstances disfavour foreign suppliers.  
38. From an institutional perspective, government  procurement is the responsibility of the 
Ministry of Finance;  the State Procurement Agen cy (SPA), which is a semi-autonomous Government 
body under the Ministry of Finance;  and proc uring entities (including local governments).  The 
Ministry of Finance is responsible for procurement policy and regulation.  Th e SPA is responsible for 
the actual conduct of procurement in collaborati on with procuring entities, and for signing all 
contracts concluded through open te nders.  The role of procuring entities (i.e. budget spending units) 
is to:  prepare technical specifications, delivery schedule, and payment terms;  establish tender committees;  and supervise contract performance and contractual payments.  A joint study by the EU 
and the OECD noted that the lack of institutional capacity of procuring entities can justify centralizing 
procurement in the SPA.  However, the study also pointed out that it may be necessary to re-evaluate 
this situation in the future and preferably assign more freedom and responsibility to the contracting 
authorities themselves.
30  Under the "Procurement System Reform s Strategy", the role of the SPA will 
be re-defined in the near future and more freed om and responsibility will be  given to contracting 
authorities, including contract signature. 
                                                      
25 WTO document GPA/M/35, 20 January 2009. 
26 OECD and European Union (2008). 
27 WTO document GPA/103, 12 November 2009. 
28 Law on Procurement of 2005.  Viewed at:  http://www.parliament.am/legislation.php?sel= 
alpha&lang=eng#16.  Government Decree No.853-N of 2008 and Instruction No.426 of 2005 are only available 
in Armenian.   
29 OECD and European Union (2008). 
30 OECD and European Union (2008). WT/TPR/S/228 Trade Policy Review 
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39. Armenian legislation allows for the following methods of procurement:  open tender;  closed 
tender;  restricted tendering;  request for quota tions;  competitive negotia tions;  and single-source 
procurement.  Open tenders can be periodic or ta rgeted.  A periodic tender involves procurement of 
periodically used or recurrent items from a list compile d by the Ministry of Finance.  All other items 
are procured using targeted tendering.  Under the Law, open tender is the preferred method of 
procurement, but the Law also defines exceptions.  Fo r example:  closed tenders may be used if the 
procurement involves state secrets (e.g. military purchases);  restricted tendering may be applied due to technical specifications of the procurement item;   and single-source may be used in cases of urgent 
need, of a complementary order or due to copyright or licence restrictions. 
40. According to official estimates, the use of ope n tendering increased to 78% of the total value 
awarded in 2008 (Table V.2).
31  Nevertheless, according to Transparency International, single-source 
procurement has been abused in the ar eas of education, health, and culture.32  
Table V.2 
Procurement methods, 2006-08 
Procurement processes Share of total value (%) Procurement method 
2006 2007 2008 2006 2007 2008 
Open tender (periodic) 74 98 59 21.0 17.4 23.1 
Open tender (targeted) 448 655 865 50.9 40.9 54.9 
Restricted 0 0 0 0.0 0.0 0.0 
Two stage 7 10 0 .. .. .. 
Competitive negotiations  60 403 124 10.9 32.2 10.9 
Request for quotations 138 146 114 1.1 0.4 0.4 
Single source 703 638 496 16.1 9.1 10.7 
Total 1,423 1,940 1,658 100.0 100.0 100.0 
.. Not available. 
Source:  Information provided by the Armenian authorities. 
41. Contract notices for open tenders must be published in the Official Journal on Procurement  at 
least 30 days prior to the deadline for bid submission.  If the amount is higher than US$7.7 million33, 
notices must be published at least 40 days prior to the deadline, and suppliers are entitled to request 
the invitation to tender in English.  In practice,  open tenders and their respective awarded contracts 
are also published electronically at the SPA's webs ite in Armenian, English, and Russian, as well as 
on TV and radio.  If the price of the procur ement contract is higher than dram 1 million34 (some 
US$2,860) the contracting agency must publish an announcement on the Ministry of Finance website after the contract is signed.  The authorities i ndicate that the minimum periods between publication 
and deadline for bid submission have been respected since 2005.  
42. For periodic tenders the legislation requires a registration system or a permanent list of 
qualified providers.  With regard to qualification criteria, the Law establishes general suitability as 
well as capacity requirements for providers.
35  These criteria must, in principle, be applied equally to 
domestic and foreign suppliers.  Pr equalification procedures are define d in Article 6 of the Law.  
Moreover, Article 12 requires the publication of a "bl ack list" of providers w hose managers have been 
                                                      
31 Information provided by the Armenian authorities. 
32 Transparency International Anti-Corruption Centre (2007). 
33 This value refers to 90 base procurement units (each  unit is equivalent to 1,000 minimum salaries) in 
August 2009. 
34 This value refers to one base procurement unit in August 2009. 
35 OECD and European Union (2008). Armenia WT/TPR/S/228 
 Page 51 
 
 
convicted of wrongdoing in the previous three years.36  In November 2009, the black list, published 
on the website of the Ministry of Finance, listed 13 providers.37 
43. Armenia has been trying to put in place an electronic procurement system since its accession 
to the WTO;  however, the work is still in progress.38  The efficient implementation of an 
e-procurement system will require a significant improvement in the telecom infrastructure, 
particularly broadband accessibility throughout  the country (Chapter VI(4)(iii)). 
44. According to Article 27 of the Law, the evaluation and award criteria must be part of the 
content of invitations sent to suppliers.  Suppliers participating in tendering proceedings must provide 
a tender security of 2% of the proposed contract price,  as specified in the invitation.  No later than 
15 days after the last day for tender submission th e SPA is required to announce the results of the 
tender procedure, publicly, or to declare the tender proceeding invalid.  Unsuccessful bidders have the 
guaranteed right to obtain, on the day of the announ cement of the results, pertinent information, in 
writing, concerning the reasons why they were not selected.39  In 2008, some 20% of all tenders were 
declared invalid.40      
45. The Law determines that any person is entitled to appeal against the actions and decisions of 
the SPA and/or other procuring entity.  The appe al may be made administratively, before the 
authorized procurement appeals body, or judicially, in the courts.  The authorized procurement appeals body, a semi-autonomous body under the Ministry of Finance, must reach a final decision within 20 days of receipt of an appeal.  Possible appeal decisions are set out in Article 53 of the Law.  The authorized body has the power  to suspend the procurement pro ceedings until the appeal decision 
is made.  The "Procurement System Reforms Stra tegy" foresees the creation of an appeal system 
independent from the Ministry of Finance.  The sy stem would include an appeal body with a varied 
membership (including academics, NGO members, re tired judges, and private-sector representatives).  
Such a body would improve confidence in terms of fairness and transparency. 
46. In 2006-08, 79 appeals were filed before the Ministry of Finance (12 in 2006, 14 in 2007, and 
53 in 2008);  51% succeeded in overturning or modi fying the procurement decision.  None of the 
unsuccessful appeals was judicially brought before a court.
41   
(6) INTELLECTUAL PROPERTY RIGHTS  
(i) General aspects 
47. Armenia is a member of the World Intellectua l Property Organization (WIPO) and has signed 
a number of international agreements on intellectual property rights.42  However, it is not a signatory 
of the Patent Law Treaty, the Singapore Treaty on the Law on Trademarks, the Trademark Law Treaty, or the International Convention for the Prot ection of New Varieties of Plants.  The authorities 
noted, however, that recent amendments to Armeni a's Law on Trademark and the new Law on Patents 
(see below) have prepared the way fo r it to join these treaties in the n ear future.  Armenia is a member 
of the Eurasian Patent Office.
43 
                                                      
36 Article 5 of the Law on Procurement of 2005. 
37 The list is available in Armenian only.  Viewed at:  http://www.mfe.am/. 
38 WTO document WT/ACC/ARM/23, 26 November 2002. 
39 Law On Procurement of January 2005. 
40 Information provided by the Armenian authorities. 
41 Information provided by the Armenian authorities. 
42 WIPO online information.  Viewed a t:  http://www.wipo.int/treaties/en/. 
43 EAPO online information.  Viewed at:  http://www.eapo.org/index_eng.html. WT/TPR/S/228 Trade Policy Review 
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48. Armenia has notified the Agency of Intellectua l Property (Agency) as the contact point under 
Article 69 of the TRIPS Agreement.44  The Agency was established as a separate division acting 
within the Ministry of Economy, in 2002, following  the merger of the Patent Office and the National 
Agency of Copyright.  The Agency is responsible for policy formulation and implementation in 
industrial property and copyright, including processi ng applications for patent  protection, and trade 
mark and design registration.  It has a cooperation ag reement with the European Patent Office (EPO).  
The collection and payment of copyright royalties are carried out by the non-governmental organization ARMAUTHOR.
45  All intellectual property (IP) rights disputes are dealt with in the 
courts, in accordance with the legislation.   
49. None of the nine free-trade agreements to whic h Armenia is a signatory contains TRIPS-plus 
clauses or any specific provisions regarding IP rights. 
50. During the review period, trade in IPR-inte nsive goods (i.e. information technology (ITA) 
products, pharmaceuticals, beverages, and copyright based products) as a percentage of total trade 
increased by 3.1 percentage points, to reach 10.9%  of Armenia's total trade in 2008 (approximately 
5.5% of GDP).  This gain was underpinned by signi ficant increases in imports of ITA products and in 
imports and exports of beverages (Table AV.1). 
51. Statistics are not available on the value of royalties and licence fees paid to or received from 
abroad during the review period.   
(ii) Regulatory framework 
52. The general objectives of Armenia's IP right s policy are to promote innovation and IP 
commercialization, and to provide  effective economic rights protec tion to IP owners.  Armenia 
notified its main IP laws to the WTO in 2003 and 200846 and  the legislation was reviewed in the 
TRIPS Council in 2004-05.47  
53. During the review period, Armenia adopted new laws on copyrights and patents, and 
amended its law on trade marks.  Armenia's main IP  legislation covers the major areas referred to in 
the TRIPS Agreement (Table V.3). 
54. The new Law on Copyright and Related Rights, which entered into force in June 2006, 
introduced new provisions to further harmonize Arme nian legislation with EC Directives.  Amongst 
other things, it extended the economic rights from 50 to  70 years after the author's death, and broaden 
the coverage to include the rights of makers of databases.  However, the authorities noted that 
implementation of the new Law remains a challenge. 
55. The Law on Inventions, Utility Models and Indus trial Designs, which entered into force in 
January 2009, replaced the Law on Patents of 2004.  The objectives of the new Law are to modernize 
and simplify Armenian legislation, and to bring it  more into line with provisions of the TRIPS 
Agreement and relevant EC Directives.  
                                                      
44 WTO document IP/N/3/Rev.10, 16 May 2008. 
45 The ARMAUTHOR website has not yet been developed. 
46 WTO documents IP/N/1/ARM/1, 13 August 20 03;  IP/N/1/ARM/C/1, 15 August 2003;  
IP/N/1/ARM/C/2, 11 April 2008;  IP/N/1/ARM/I/1, 15 August 2003;  IP/N/1/ARM/I /1/Add.1, 10 April 2008;  
IP/N/1/ARM/L/1, 15 August 2003;  IP/N/1/ARM/O/1, 15 August 2003¸ IP/N/1/ARM/P/1, 15 August 2003;  
IP/N/1/ARM/P/2, 14 April 2008. 
47 WTO documents IP/C/W/419, 19 February 2004;  IP/C/W/419/Add.2, 16 July 2004;  IP/C/W/422, 
4 June 2004;  IP/Q/ARM/1, 14 April 2005. Armenia WT/TPR/S/228 
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Table V.3 
Overview of intellectual proper ty rights protection, 2009 
Law:  scope Term Comments, limitations, and exclusions 
Copyright and related rights   
Law on Copyright and Related Rights of 
15 June 2006:  litera ry, choreographic, 
audiovisual, decorative, photographic, architectural and scientific works, works of 
fine arts, translations and adaptations of 
works, maps, computer programs and databases Lifetime of author or last co-author plus 
70 years (including audiovisual works and 
computer programs) Collective works, anonymous or 
pseudonymous works, 70 years from 
disclosure or first publication Performers and producers of phonograms 
and films, 50 years fr om date of fixation No registration is required for protection 
By the mere fact of creation, the author 
has original ownership of the right in the work, which includes the economic and 
moral rights defined in the Law 
Expressions of traditional folklore, daily news, official documen ts, state emblems, 
and political speeches are not protected 
Patents (incl. utility models)   
Law on Inventions, Utility Models and 
Industrial Designs of 10 June 2008:  any 
invention susceptible to industrial application, and any new and industrially 
applicable solutio n that concerns 
production or a method (i.e. utility model) 20 years from filing of application, 
extendable for a maximum of 5 years Protection through registration of a patent 
The law does not provide for protection of 
scientific discoveries and theories, conventional signs, algorithms, and mental 
processes 
Plant and animal varieties, use of human embryos and processes of modifying 
genetic identity are not patentable 
Industrial designs   
Law on Inventions, Utility Models and 
Industrial Designs of 10 June 2008:  any 
solution defining the outward appearance of an article, which is novel and original 5 years from date of filing of application, 
possibility of renewal up to a total of 
25 years Protection through registration 
The protection conferred does not include 
elements or characteristics of the design that serve only to obtain a technical effect 
Layout-designs of integrated circuits    
Law on the Legal Protection of 
Topographies of Integrated Circuits of 3 February 1998:  original layout-designs 10 years from the earlier of:  the date of 
first use or the date of registration Protection through registration 
Ownership rights may be transferred by agreement, either fu lly or partially, to 
other natural persons or legal entities 
Trade marks and trade names   
Law on Trademarks, Service Marks and 
Appellations of Origin of 20 March 2000, 
as amended:  any mark, sign, word or combination of these elements capable of 
distinguishing a product or service in trade   10 years from filling of application, 
indefinitely renewable for 10-year periods 
Use of the mark not compulsory The following, inter alia , may not be 
registered:  general designations;  
generally recognized symbols and terms;  marks that are identical,  similar, or alike 
to used marks;  geographical designations 
that individualize wines that have not been produced in the place in question 
Foreigners must manage registration of 
trade marks through patent attorneys registered with the Agency of IP 
Geographical indications   
Law on Trademarks, Service Marks and 
Appellations of Origin of 20 March 2000, 
as amended:  appellations of origin  10 years from filling of application, 
indefinitely renewable for 10-year periods Protection through registration 
Applicants may appeal against an 
examiner's decision 
New plant varieties   
Law on Selection Achievements of 
23 November 1999:  new plant varieties 20 years from date of registration of the 
selection achievement in the State Register 
For varieties of grapevines and ornamental, fruit or forest trees, protection is granted for 25 years Armenia is not a signatory of the UPOV;  
the National Assembly is expected to 
discuss a draft Law on the Protection of New Plant Varieties in 2010 
Protection of undisclosed information    
Articles 141, 1,164, 1,165, 1,166 of the 
Civil Code of 28 July 2000, and Law on 
Protection of Economic Competition of 
15 December 2000:  industrial and commercial secrets Indefinitely Persons who by illegal means have 
received secret information are obliged to 
compensate for losses caused 
Data subject to state registration and contained in state statistical reports may 
not be considered undisclosed information 
Source : WTO Secretariat. WT/TPR/S/228 Trade Policy Review 
Page 54 
 
 
56. The authorities stated that a separate draft Law that will broaden the coverage of rights related 
to geographical indications (GIs) was sent to the Na tional Assembly at the end of 2009.  They also 
noted that the 2008 amendments to the Law on Trad emarks, Service Marks, a nd Appellation of Origin 
of 2000 were not sufficient to clarify certain aspects of the Law and that a draft of an entire new law 
was presented to the National Assembly at the end of 2009.   
57. During 2003-08, applications for the protection of inventions and utilit y models from national 
applicants increased while applications by foreigners  declined;  and applications for the protection of 
industrial designs from national applicants stayed  constant while applications from foreigners 
increased.  The approval rate of applications (i.e. pe rcentage for which a patent was granted) is higher 
for nationals than for foreign applicants of i nventions, and higher for both national and foreign 
applicants of utility models and industrial designs re lative to inventions.  With respect to patents in 
general, it seems that foreigners rushed to appl y for protection after Arme nia independence and lost 
their interest in more recent years.  On the other hand, foreign interest in registering trade marks and 
trade names in Armenia has remained strong throughout  the entire period.  In 2008, nearly half of the 
1,189 trade marks and 8,099 trade names registered we re in the name of foreign applicants (under the 
national procedure48).  At end-2009, four appellations of origin were registered in Armenia for 
different kinds of mineral water;  while alcoholic dr inks were registered as trade marks rather than of 
appellations of origin.  The new Law (see a bove) is expected to change both situations.49  
58. The Agency's fees for legal protection of industr ial property rights are identical for nationals 
and foreigners.50   
59. Compulsory licences to use a protected invention, utility model or industrial design may be 
granted by court decision in cases of:  national security or  health emergencies;  abuse of patent rights;  
or if the rights have not been used for four years after the filling of application (or three years from 
granting of patent certificate).  The person asking for the licence must prove that efforts were made to 
conclude a contract with the right holder on reasona ble commercial terms and that such efforts failed 
within a reasonable period.  Compulsory licences have  a limited duration, may not be transferred, and 
may not be used to export.  In the case of semi conductor technologies, a compulsory licence may be 
granted only for exclusively non-commercial use and for prevention of unfair competition.51  N o  
compulsory licences were granted during 2003-09. 
60. Armenia's current IP legislation has provisions that allow parallel importation of patented 
protected products as well as copies of fixe d performances and of fixation of a film.52  During the 
review period, the authorities received, but did not react to, some complaints against parallel 
importation from distributors that want exclusive rights over their respective product markets.  The authorities state that, given the small scale of Ar menia's economy and the low level of competition in 
numerous consumer product markets (see section (4) above), it may be beneficial to the economy to 
permit parallel imports.  
                                                     
 
48 That is, excluding applications under the Madrid Agreement. 
49 Intellectual Property Agency online information.  Viewed at:  http://www.aipa.am/en/statistics/.  
50 WTO document IP/Q/ARM/1, 14 April 2005. 
51 Chapter 9 of the Law on Inventions, Utility Models, and Industrial Designs of 2009. 
52 Article 19 of the Law on Inventions of 2008, and Articles 45 and 49 of Law on Copyright and 
Related Rights of 2006. Armenia WT/TPR/S/228 
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(iii) Enforcement  
61. Armenia submitted its Checklist of Issu es on Enforcement to the WTO in 2004.53 
62. Armenian civil courts are empowered to order the payment of damages and court expenses, as 
well as other remedies envisioned in the TRIPS Agreem ent.  The Courts of First Instance also have 
authority where necessary, to take the provisiona l measures envisioned in Article 50 of the TRIPS 
Agreement.  Foreigners enjoy the same rights as Armenian nationals.54  Section 10 of Armenia's Civil 
Code establishes provisions for the enforcement of IP  rights protection, with the exception of the Law 
on Copyright, which also carries enforcement provisi ons.  Furthermore, the Criminal Code of 2003 
establishes different fines and prison terms for infringement of each of the main IP rights.  
63. Customs authorities (SRC) do not have ex officio  power to inspect shipments for counterfeit 
goods.  On the other hand, a holder of any IP right may submit a suspension request to the SRC in order to prevent the release of the product from cu stoms;  this measure does not apply to goods in 
transit.
55  The authorities noted that the SRC did not re ceive any such request during the period under 
review.  
64. Although Armenia has adopted extensive and carefully written legislation on IP rights, it has 
been reported that counterfeit goods circulate reasona bly freely within Armenia, and that effective 
enforcement of IP rights remains a challenge.56 
 
                                                      
53 WTO document IP/N/6/ARM/1, 4 June 2004. 
54 WTO document IP/Q/ARM/1, 14 April 2005. 
55 Section 14 of the Customs Code. 
56 Commission of the European Communities (2009);  U.S. Commercial Service (2007);  and Grant 
Thornton (2008).