EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 12.5.2010 
SEC(2010) 516 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Accompanying the 
 
COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIA MENT AND THE COUNCIL 
Taking stock of the European Neighbourhood Policy (ENP) 
  
Implementation of the Europe an Neighbourhood Policy in 2009 
Progress Report Armenia  
 
  
{COM(2010) 207 final} 
{SEC(2010) 513 final} {SEC(2010) 514 final} {SEC(2010) 515 final} {SEC(2010) 517 final} {SEC(2010) 518 final} {SEC(2010) 519 final} {SEC(2010) 520 final} {SEC(2010) 521 final} {SEC(2010) 522 final} {SEC(2010) 523 final} {SEC(2010) 524 final} {SEC(2010) 525 final}   
 
EN 2   EN 1. BACKGROUND AND OVERALL ASSESSMENT  
Armenia and the EU first established contract ual relations in 1996 through a Partnership and 
Cooperation Agreement which entered into for ce in 1999. On this basis, the EU-Armenia 
ENP Action Plan was approved in Novemb er 2006 for a period of five years. 
EU-Armenia meetings took place at the le vel of the Cooperation Council, Cooperation 
Committee, and the subcommittee on Trade, Economic and related Legal matters . The 
strengthening of the EU Delegation in Yereva n, established in 2008, fu rther facilitated the 
enhancement of EU-Armenian bilateral relati ons. The first meeting of the EU-Armenia 
Human Rights Dialogue took place in December 2009. 
This document reports on progress made on th e implementation of the EU-Armenia ENP 
Action Plan between 1 January and 31 Decembe r 2009, although developments outside this 
period are also taken into  consideration when deem ed relevant. It is not  a general review of 
the political and economic situation in Armeni a. In addition, for information on regional and 
multilateral sector processes, please refer to the sectoral report. 
The EU and Armenia agreed to move forwar d with deepening and broadening of the EU-
Armenia relations. In parallel and within the Eastern Partnership framework the EU started 
preparations for upgrading contractual relations with Armenia. Negotiating directives for an 
Association Agreement were adopted by the EU in May 2010. In the framework of the future 
Association Agreement, negotia tions on a deep and comprehens ive free trade area (DCFTA) 
will start once the necessary conditions have been met. 
The EU Advisory Group to the Republic of Ar menia started its activiti es in April 2009 with 
the aim of supporting the Armenian  authorities in the implementation of the key areas of the 
ENP Action Plan such as strengthening demo cratic structures and human rights, anti-
corruption, trade and customs, and fis cal policy including debt management.  
Overall, Armenia made progress in several ar eas of the ENP Action Plan. The launching of a 
regular human rights dialogue with the EU c onstituted good progress in the area of political 
dialogue with the EU. Positive steps were take n to address the internal political crisis 
following the aftermath of the Presidential elections in Febr uary 2008, including the Amnesty 
issued in June, the amendments to the Criminal  Code and the publicatio n of the report by the 
Parliamentary Ad Hoc  Inquiry Committee. Good progress was made regarding improving the 
legislative framework in the area of anticorr uption and strengthening the role of the Human 
Rights Defender. 
The global economic crisis had a deep impact on Armenia, and led to a significant economic 
regression. Overall, the authorities acted rapidly to adopt measures to mitigate the effects of 
the crisis. However, the reduction of state revenu es put some restraints on the overall internal 
economic and social reform process in Armeni a, including the implementation of the ENP 
Action Plan.  
Progress was made in the area of customs and taxation. Armenia continued to implement 
reforms in the fields of financial services and competition policy. Limited progress was noted 
on key reforms recommended by the EU and endor sed by the Armenian authorities after a 
fact-finding mission in  the context of preparations for the DCFTA negotiations. With 
 
EN 3   EN substantial additional efforts on its side, Armenia would become prepared for the start of the 
DCFTA negotiations.  
Armenia took a major step in regional cooperati on and dialogue with Turkey, resulting in the 
historic signature of the two protocols on th e establishment and development of bilateral 
relations in October 2009. In April 2010, Armenia suspended the ratification procedure of the 
two protocols. The EU was pleased to note Ar menia’s continued commitment to pursue the 
process of normalization of Armenian-Turkish  relations but at the same time expressed 
concern about the loss of momentum in this pr ocess. Regarding dialogue with Azerbaijan, 
negotiations on a peaceful resolution of th e Nagorno-Karabakh conflict intensified 
considerably at the highest level.  
Armenia widely aligned itself with CFSP declarations and is generally very active in 
cooperating on CFSP-related issues. 
The Armenian authorities and civil society re presentatives participated actively in the 
multilateral framework of the Eastern Partnershi p, in particular through open dialogue and 
their contribution to the working programmes for the four thematic platforms. Together with 
the bilateral elements of the Eastern Partnershi p, this contributed to the overall strengthening 
of EU-Armenian relations and reinforcement of the follow-up on the priorities of the ENP 
Action Plan. 
In order to fulfil the Action Plan commitment s, Armenia needs further efforts to ensure 
thorough follow-up of the recommendations of the report by the  Ad hoc  Parliamentary 
Inquiry Committee on the events of March 2008, im prove electoral standards and strengthen 
media freedom. In addition, further reforms in the justice sector and the area of the rule of 
law, notably the independence of  judiciary, the reform of the Prosecutor's office and proper 
implementation of adopted legislation in all areas will be of key importance. Enhanced 
dialogue between the ruling political forces  and the opposition would contribute to the 
democratic development of the country.  
2. POLITICAL DIALOGUE AND REFORM  
Democracy and rule of law 
The first elections  to appoint the Mayor and Council of El ders of the City of Yerevan were 
held in May 2009. The Council of Europe (CoE) Congress of Local and Regional Authorities 
concluded that while the organisational framew ork of the elections had been broadly in 
compliance with European sta ndards, the improvement of th e electoral conduct and of a 
genuinely democratic culture remained unaddre ssed by the authorities. Me dia coverage in the 
period leading to the elections  was overall balanced but irre gularities during the conduct of 
the elections occurred, includi ng pre-election violence, instan ces of ballot stuffing, multiple 
voting, and voter intimidation. The opposition boyco tted the newly elected Council of Elders.  
The authorities took a number of steps to address the polit ical crisis linked to the 2008 
Presidential elections and the subsequent violent events of March 2008. An amnesty was 
adopted by the National Assembly in June 2009, wh ich impacted on a large majority of cases 
related to the March 2008 even ts. The Parliamentary Assembly  of the Council of Europe 
(PACE) welcomed the amnesty while expre ssing concern over the ch arges and sentences 
based solely on police testim ony, without substantial corrobor ating evidence. The amnesty 
released a large majority of  persons related to the Marc h 2008 events but some persons 
 
EN 4   EN detained on charges linked to these events st ill remain in detenti on. Amendments to the 
Criminal Code relating to mass disorders and usurpation of power were adopted in March 
2009 in line with recommendations fr om the CoE’s Venice Commission.  
In June 2009, as a result of significant tensions between its members which included the 
opposition and the Human Rights Defender, the President decided to dissolve the Fact-
Finding Group on the March 2008 ev ents after the publication of  its report. In September 
2009 the Ad hoc  Parliamentary Inquiry Committee on the events of March 2008, boycotted by 
the opposition, submitted its final report to th e National Assembly. While the report was 
considered by PACE co-rapporteur s as presenting a largely one- sided description of events, it 
provided a comprehensive set of recommendations, including urgi ng the authorities to step up 
efforts to identify and prosecute the individuals responsible for the deaths. More efforts need 
to be made by the authorities to follo w up the implementation of the report’s 
recommendations.  
The monitoring of trials related to the Marc h 2008 events identified various shortcomings 
regarding the right to a fair trial and the righ t to liberty, including excessive use of pre-trial 
detention, the lack of impartial ity and independence of judges, the use of incriminating police 
testimonies and of unlawfully obtained eviden ce, and holding of a number of trials in 
absentia. Four police officers involved in the March 2008 events were sentenced in December 
2009. The investigations into the 10 deaths have not led to any indictments yet.  
Reforms of the judiciary , including amendments to the Judicial Code, Law on Procuracy and 
law on Academy of Justice continued in 2009. A St rategic Action plan for the implementation 
of judicial reforms 2009-11 was adopted in  April 2009. Good progress was made with a 
considerable increase in judges’ salaries in  2009. However, the independence of judiciary 
remains of concern and further efforts should be made to strengthen it. Overall, more efforts 
are needed to ensure the proper enforcement of legislation in al l areas. The domestic 
protection of the right to property remains of concern, with the majority of cases currently 
pending against Armenia before the European Court of Human Rights relating to alleged 
violations of the right to prope rty. The EU provides considerable  support in the area of justice 
reforms through a sector budget support programme for Justice Reforms (EUR 18 million) and a joint project with the Council of Eur ope on enhancing Access to Justice (EUR 4 
million).  
Important steps were taken to improve the legislative framework in the area of anti-
corruption . An Anti-Corruption Strategy and its action plan for 2009-2012 was adopted in 
October 2009, which includes the establishment of a monitoring and evaluation system. The 
strategy envisages the establis hment of an anti-corrupti on secretariat to support the 
implementation and the monitoring of the acti on plan. The drafting process included civil 
society organisations and relevant interna tional organisations. In September 2009, Armenia 
became a signatory to the OECD Astana Declaration on Good Governance and Fighting 
Corruption. The Prime Minister’s Office elabor ated a concept note on the transparency of 
political activities, regulating c onflicts of interest and creating a public re gister for income, 
property and interest declarati ons of high ranking officials and their close relatives. Efforts 
were made regarding training  of civil servants on antico rruption. However, despite good 
legislative progress, no reduction of per ceived corruption was reported by international 
surveys in 2009, demonstrating the need fo r effective enforcement in this area.  
Steps were taken to strengthen local demo cracy. As reported above, the Mayor and the 
Council of Elders of th e City of Yerevan were for the fi rst time elected through a proportional 
 
EN 5   EN system in May 2009, replacing the earlier system  of presidential appo intment of them. An 
inter-ministerial commission was set up in Ma y 2009 to develop an action plan for creating 
inter-municipal unions and enlarg ing communities to strengthe n local self-government and 
develop networks between municipalities, with a view to rationalize the delivery of services. 
In October 2009 a Working Group on Civil Service Reform  was established under the 
Presidential Administration with the aim of el aborating a Civil Service Reform Programme.  
Human rights and fundamental freedoms 
A regular EU-Armenian Human Rights  Dialogue was launched in December 2009. Work is 
ongoing to draft the first Armenian National Human Rights Action Plan, with a Working 
Group established in autumn 2009 to prepare a c oncept paper and define its scope. However, 
civil society involvement  is still pending.  
The independence of the institution of the  Human Rights Defender  (HRDO)  in the political 
system  and its role for the prot ection of human rights was further strengthened.  Overall,  the 
trend in the  number of complaints received by the HRDO is increasing, confirming growing 
credibility of this institution. The Human Right s Defender prepared a trial monitoring report 
on the prosecution of cases linked to the Marc h 2008 events and assessing the implementation 
of fair trial standards in the Armenian judi cial system in December 2009. Apart from the 
annual report, in 2009 the HRDO also published reports on the implementation by domestic 
courts of the UN Convention against torture, on respect of social right s and on the application 
of disciplinary sanctions in the armed forces. In October 2009 a twinning  project started with 
the aim of supporting the technical and or ganisational capacity of the HRDO.  
In 2009, Armenia submitted a number of repor ts to UN Treaty Bodies, including on the 
implementation of the International Covenant on Economic, Social and Cultural Rights, the 
Convention on the Elimination of  All Forms of Racial Discri mination, the Convention against 
Torture and Other Cruel, Inhuma n or Degrading Treatment or Punishment. The reports on the 
implementation of the International Covena nt on Civil and Political Rights and the 
Convention on the Rights of the Child were prep ared and are expected to be submitted to the 
UN in 2010. The country is late in submitting a tota l of five mandatory periodic reports to UN 
treaty bodies. In May 2009 Armenia submitted its third report on the implementation of the European Social Charter. The conclusions by the Committee were published in January 2010. 
The third periodic report on the implement ation of the CoE Framework Convention for 
National Minorities was submitted in Nove mber 2009. Armenia has issued a standing 
invitation to UN Sp ecial Procedures. 
Cases of torture and ill-treatment in detention facilities and by the police continued to be  
reported in 2009, including in conne ction with detentions related to the events of March 2008 
and among military conscripts, in prison facilities and in police stations. No data on torture and ill treatment are available and lack of investigations of ill treatment allegations is a matter of concern. Armenia continued to take step s towards the implementation of the Optional 
Protocol to the Convention against Tortur e (OPCAT) and submitted the first report on 
OPCAT implementation in December 2009. The legislative basis for civil society’s 
involvement in the OPCAT National Preventiv e Mechanism should be ensured. Further 
amendments to the Law on Alternative Military Service are necessary to fully comply with 
applicable Council of Europe standards and to provide for a genuine civil service.  
Efforts were made towards improving prison conditions . The Concept for the Penitentiary 
Service Infrastructure Reform was adopted in  December 2009, as well as a plan on a new 
 
EN 6   EN penitentiary institution. The construction of a new penitentiary  institution is ongoing. 
However, overall conditions in places of detentio n and the excessive use of pre-trial detention 
as well as the rising number of the prison population remains of concern. Civil society 
representatives are guaranteed access to dete ntion facilities but not to police stations. 
Legislation was amended in the area of freedom of  expression and media . In April 2009, 
four laws were adopted to amend the statutes  of the National Commission of the Television 
and Radio and Public Televi sion and Radio Council, with most recommendations by the 
Council of Europe incorporated. However, the composition and the means of appointment of 
members of the broadcasting regulatory bodi es raise questions regarding their full 
independence. Following the 2008 moratorium on the issuing of radio and television licenses 
until July 2010 on the basis of the ongoing pr ocess of digitalisati on of TV and radio 
broadcasting, the Government released in N ovember 2009 a Draft Con cept on Switching to 
Digital Broadcasting, focusing on technological and economic aspects of the digitalisation 
process.  
The number of reported incidents of violence ag ainst and intimidation of  journalists decreased 
in 2009 but their investigations di d not lead to any conviction. 
In 2009, a few applications to organise rallie s submitted by the opposition were rejected by 
the authorities. The Law on Rallies and Demonstr ations is broadly compliant with Council of 
Europe standards but some of the provisions concerni ng the grounds for prohibiting 
conducting an assembly need further clarificat ion. However, cases of police interference in 
dispersing participants during the rallies and th e partial unavailability of public transportation 
from the regions to Yerevan in coincidence with opposition rallies were reported on a number of occasions in 2009. 
A Public Council for consultation with civil society  organisations was established in March 
2009, aiming at providing a forum for public cons ultation on matters of public interest. The 
independence of the Public Council remains questioned by the opposition and a number of 
NGOs. Overall, consultation with NGOs  by the government on draft legislation and their 
participation in parliamentary hearings increased but still occurs on an ad hoc basis. However, 
civil society organisations we re not consulted on new amendments to the Law on Public 
Organisations, which were prepared by the government. Given the criticism from NGOs,  i.a. 
related to the planned obligatory publicatio n of annual reports of NGO activities, the 
amendments were temporarily suspended in Parliament. 
Implementation of the National Action Plan 2004-2010 on “Enhancing Women ’s status and 
empowering Women in Society” continued ove r the reporting period. However, the revised 
law on equal rights and equal opportunities is no t yet adopted and the draft law criminalizing 
domestic violence is still unde r discussion. An appropriate ge nder equality le gislation, to 
effectively address domestic violence and to im prove women’s participation in political and 
economic life is needed. 
In September 2009, Armenia signed the Optional Protocol to the International Covenant on 
Economic, Social and Cultural Rights. Continued efforts are needed to ensure the rights of 
trade unions and collective bargai ning. Drafting of legislation on  labour rights continued. 
The draft law on amendments to the Labour Code  was sent to the Parliament in December 
2009 after the Government’s approval. 
Cooperation on foreign and security policy, conflict prevention and crisis management  
 
EN 7   EN Armenia continued to align with CFSP declarations on a case by case basis. In 2009, Armenia 
aligned with 108 out of 138 CFSP declarations. There was good political dialogue with the 
Armenian government in 2009, including through two Political and Security Committee Troika meetings in February and December 2009, and an EU Foreign Ministers' Troika visit 
to Armenia in July 2009. 
Armenia pursued cooperation with the UN, part icipated in the NATO Partnership for Peace 
programme and cooperated with experts from  United Nations Office on Drugs and Crime 
(UNODC), INTERPOL, the World Customs Orga nisation, CIS and CoE, in exchanging 
information on terrorism issues. Armenia coope rated successfully with the United Nations 
Counter-Terrorism Committee (CTC) established under UNSC Resolution 1373.  
No progress was made on the signature and ratification of the Rome Statute of the 
International Criminal Court .  
Strengthening regional cooperation  
In October 2009, the Armenian and Turkish Fo reign Ministers signed two protocols on 
establishment of diplomatic relations and de velopment of bilateral relations, including 
prospects for opening a common border, which was a major step towards a normalisation 
between the two countries. The protocols were submitted for ratification to the National 
Assembly in February 2010. In April 2010, Armeni a suspended the ratification procedure of 
the two protocols but confirmed its commitmen t to pursue the process of normalisation of 
relations with Turkey.  
The Southern Caucasus Integrated Border Management (SCIBM) promoted by the EU among 
Armenia, Azerbaijan and Georgia was to star t in January 2009 but was delayed to address 
issues raised by Azerbaijan. Th e conditions for implementation have now been accepted by 
all three countries and implementation started in March 2010 (See chapter 5 on cooperation 
on justice, freedom and security) . 
The South Caucasus Anti-Drugs Programme (S CAD V) came to an end in 2009. Discussions 
continue on how best to bring forward the results of the action and pursue regional efforts in 
the fights against illegal drugs. 
The new management (a Troika consisting of Armenian, Azerbaijani and Georgian executive 
directors) of the Regional Environmental Cent re for Caucasus (REC) took office in January 
2009. It consolidated the REC both financially an d in terms of internal organisation. The REC 
carried out regional activities in 2009 notably in the fields of information and public 
participation, environmental policy and local environmental action plans, the protection and 
sustainable development of mount ain regions. It is an importa nt tool to promote regional 
cooperation and stability  for the future of the South Caucasus.  
In the area of higher educat ion, universities from Armeni a, Azerbaijan and Georgia 
cooperated on a distance and e- l earning project. This is the fi rst time that such regional 
cooperation emerged under the Tempus programme. 
Contribute to a peaceful solutio n of the Nagorno-Karabakh conflict 
Negotiations within the Minsk Group on the peaceful  settlement considerably intensified in 
2009 and contributed to enhanced dialogue, with the Presidents of Armenia and Azerbaijan 
holding six bilateral meetings dur ing the year. In addition, the Foreign Minister s of the two 
 
EN 8   EN countries met a number of times, including duri ng the OSCE Ministerial Council in December 
2009 in Athens. Courageous steps by both sides w ill be necessary to fi nd a resolution to the 
conflict. 
A joint statement by the OSCE Minsk Group at presidential level durin g the G8 Summit in 
L’Aquila in July 2009 urged "the presidents of  Armenia and Azerbaijan to resolve the few 
differences remaining between them and finali ze their agreement on these Basic Principles, 
which will outline a comprehensive settlement." However, overall tensions remain and the situation continues to be fragile . Incidents of exchanges of fire  and casualties on the line of 
contact continued to be repor ted and are cause for concern. 
3. E
CONOMIC AND SOCIAL REFORM  
Macroeconomic framework and functioning market economy 
The global economic downturn and particularly  the rapid deteriorat ion of the Russian 
economy had a deep impact on the Armenian economy in 2009. Economic activity which had 
started to fall in th e last quarter of 2008 contracted by around 15.4% in 2009 representing a 
massive turnaround compared to stro ng growth rates of the previous  years. This was the result 
of the collapse of the construction sector by ar ound 38%, as an immediate consequence of the 
reduction in remittances by around 28%, and the st rong contraction of the industrial output by 
around 10%. 
The authorities acted rapidly and adopted meas ures to mitigate the effects of the sharp 
downfall in output. In March 2009, they reverted to a fully floating exchange rate regime allowing a de facto  devaluation of the Armenian Dram of around 22 % against the euro and 
the USD. This step helped to improve compe titiveness without threatening financial stability 
as the negative effects of the devaluation were largely absorbed. At the same time they 
reached an agreement with the IMF for a USD 790 million (EUR 553 million) Stand-by 
Arrangement while securing additional funding from other multilateral and bilateral donors 
(including USD 500 million - EUR 350 million - stabilisation loan from the Russian 
Federation) to meet the in creasing financing needs.  
Fiscal policy was supportive to the economy w ith expenditure plans focusing on wide-ranging 
anti-crisis measures, increasing foreign-fina nced capital spending and protecting social 
spending. Partly owed to external borrowing, th e authorities accommodate d largely the fall in 
tax revenues by about 15% without cutting signif icantly the expenditures, while taking into 
account financing constraints and de bt sustainability concerns. As a result the fiscal deficit is 
expected to increase to 7.5% of GDP and pub lic debt to 37% of GDP in 2009. At the same 
time the fiscal structural reform agenda a dvanced through improve ments in VAT refund 
processing and introduction of e-filling of tax returns for large tax payers.  
Monetary policy eased and the Central Bank of Armenia (CBA) lowered its policy rate 
gradually from 7.75% in April to 5% in Septem ber 2009 to contribute to  the recovery of the 
economy. It also injected Dram liquidity th rough various channels, including purchases of 
government securities and increasing the matur ity of its repo operations. However, due to 
weaknesses of the transmission mechanism, ba nking lending rates remained at 18% causing 
additional action by the author ities like on-lending of credit resources provided by 
donors/creditors to targeted SMEs and vulne rable industries through the Central Bank and 
 
EN 9   EN commercial banks. The weakness in the transmission mechanism is the high deposit 
dollarisation, which remained at around 70%. 
Average inflation remained at around 3.4% on the back of the weak demand, despite the 
depreciation of the Dram in March 2009. Howeve r, inflation increased to 6.5% in December 
2009 owing to rising internationa l prices, the ongoing expansionary  policies, rigidities in 
domestic prices, and speculative exchange rate  pressures stemming from excess liquidity. At 
the end of 2009, CBA signalled the end to the ea sing cycle and its readiness to act under the 
inflation targeting framework if inflationary pressures emerge. It is  however expected the 
inflation will come down in 2010. 
External trade turnover contracted by around 28% in 2009. Export revenue contracted by 
around 37% influenced by the drop in prices of metallurgical pro ducts, while imports 
contracted to a lesser extent  by around 26%. As a result, th e current account deficit is 
estimated to have widened in 2009 to 13.7% of GDP . Combined with the co llapse of FDI, this 
raises serious concerns about the competitiveness of the Armenian economy. 
Employment and social policy 
As a result of the economic crisis which seriously affected Armenia, the Government decided 
to temporarily suspend the Sust ainable Development Programme on  poverty reduction.   
The official unemployment  rate was estimated at 7.1% at the end of 2009 Young people and 
women continued to be particul arly affected with respectiv ely 20.7% and 70.7% of official 
unemployment. The State employment servi ces continued traini ng activities of the 
unemployed over the reporting period. 
As regards  social dialogue, collective agreements with social  partners were signed in May 
2009. A tripartite committee with representative s of the Government, the trade unions and the 
employers was subsequently established in the same month. The implementation of the 2007-
2011 Decent Work Country Programme continued over the reporting period. 
On social inclusion and protection , the introduction of the new pension system was 
postponed to 2011. 
The implementation of the Agricultural Sustainable Development Strategy is on-going and 
upgrading of rural infrastructure is continui ng with strong support by international donors and 
the Armenian Government.  
In January 2009 the National Council on Sustainable Development  (NCSD) met for the 
second time in accordance w ith the “Sustainable Deve lopment Programme 2008-2021”. 
Further actions were taken to implement the 2009-2012 Sustainable Development programme, especially in the water sector. 
4. T
RADE -RELATED ISSUES , MARKET AND REGULATORY REFORM  
As regards bilateral trade , in 2009, as a result of the globa l slow-down in economic activity 
due to the financial crisis, EU exports to Armenia declin ed by 20.6% compared to the 
previous year, while exports of Armenian produ cts to the EU decreased  by 49.3%. In terms of 
commodity structure, Armenian exports to the EU  still remain quite und iversified and of low 
value added – in 2009, almost tw o third (64.3%) of them consiste d of base metals and almost 
one fifth (18.8%) of pearls and precious stones. 
 
EN 10   EN Armenia benefits from the EU Generalized Syst em of Preferences Plus (GSP+) for the years 
2009-2011, aiming at further diversifying its export structure and improving its export 
performance. Armenian exporters were also tr ained during the reportin g period in using the 
EU Export Helpdesk to allow them to make fu ll use of the GSP+ pref erences. Since April 
2009, the EU Advisory Group supported the Governme nt in a number of tr ade-related areas, 
in particular the efforts to make the best possible use of the GSP+ arrangement and in 
preparing for a future EU-Armenia Deep and Comprehensive Free Trade Area (DCFTA).  
The European Commission carried out a fact -finding mission to Armenia in February 2009 
and established a detailed assessmen t of Armenia's preparedness for a  DCFTA. It made 
recommendations on key reforms which Armenia would need to undertake to become ready for the DCFTA negotiating process ("key recomm endations"). This assessment was endorsed 
by the Armenian authorities in June 2009. In November 2009 Armenia established an 
institutional structure for the preparatory and future negotiating proces s which still needs to 
become operational. As concerns other key recommendations limite d progress was noted. 
With substantial additional efforts on its side, in  order to achieve the ne cessary progress in the 
key regulatory areas including enhancement of  administrative capacity, Armenia would 
become prepared for the start of the DCFTA negotiations.   
Good progress was recorded in the customs  area. The comprehensive  “Customs 
Administration Strategy for 2008- 2012” was further elaborated through the development and 
introduction of a Strategic Action Plan in December 2009, which details, for each strategic 
objective, the actions to be taken, success criteri a, performance indicato rs, and target dates. 
Following the introduction of a code of ethics  in 2008, the Customs administration launched 
an internal corruption risks assessment, with a view to prepare an action plan for combating 
corruption risks. A network of Customs broke rs was established, and 125 brokers received 
training. The Customs administra tion prepared several staff manuals on subjects such as 
customs clearance, classification, passenger cont rols, customs fees, and post-clearance audit, 
and distributed them to all Customs offices. During the re porting period, the Customs 
administration worked on the development of a “risk management di rective” defining the 
activities of Customs officials in headquarter s, regional Customs houses and other Customs 
offices, as well as at the border. This dire ctive will cover not only the clearance and 
examination systems but also warehousing, ot her customs regimes, and post-clearance 
control; it will link with the inve stigation function and will inco rporate the use of  risk profiles 
in all areas. Further improvements are needed in areas such as risk management, integrity, 
cooperation with other enforcement agencies, accession to the main international customs 
instruments, abolition of administrative fees, ve rification of certificates of preferential origin, 
customs valuation practice, as well as the role of customs in IPR protection. 
On the free movement of goods a nd technical regulations, some progress was made. A 
number of new draft laws and amendments to existing laws affecting technical barriers to 
trade were prepared and discussed thr oughout 2009, including laws on standardisation, 
conformity assessment, uniformity of measures, accreditation (amending the 2004 
accreditation law). The selection of the priority  sectors is still on-going. The Ministry of 
Economy coordinated the efforts of various development partners working in the area of quality infrastructure. An awareness event on establishing a national quality infrastructure 
was organised in October 2009. More progre ss will be required to consider opening 
negotiations for an Agreement on Conformity  Assessment and Acceptance of Industrial 
Products (ACAA) in a long-term perspective. 
 
EN 11   EN In the area of sanitary and phytosanitary  issues, Armenia drafted a programme and an 
action plan on the development of the food safety system for th e period 2009-2013. Armenia 
adopted amendments to the phytosanitary law. It  prepared a law on th e registration of food 
establishments as well as amendments to the veterinary law and strengthened its laboratories. The European Commission’s fact-finding mission in February 2009 showed  that Armenia will 
have to progress considerably in this sector. This  is particularly the case as regards legislation 
and coordination among the relevant institutions.  
Armenia has in place a number of relevant laws on business climate,  establishment  and 
company law  including the Civil Code, the Law on Joint Stock companies and the Law on 
Limited Liability Companies. However, while the legislation in place is ranked highly, the issue of implementation of the relevant laws  remains problematic. Moreover, shortcomings 
related to transparency and to disclosure re quirements as well as th e absence of a national 
Gazette have been identified. Compliance with  OECD corporate governance principles should 
be guaranteed, functions of corporate governan ce bodies as well as rights of majority and 
minority shareholders should be  clearly defined and appropria te protection of investors, 
creditors and minority shareholders be ensu red. Competent and independent judicial or 
administrative authorities should be designated to  monitor incorporation or legality of certain 
acts. Good progress was seen with the ongoing wo rk on effective implementation of laws in 
this area, as well as drafting a Corporate Governance Code. 
Armenia was affected by the financial and economic crisis in the field of financial services. 
The Central Bank of Armenia (CBA ) continued its efforts to implement the Basel II principles 
for effective banking supervision. The IMF noted that the banking sector in Armenia is sound 
and well-capitalised, but the econo mic contraction may affect credit risk, as already reflected 
by the increase in non-performing loans. The CBA  took steps to ensure that these risks are 
well-managed. The banking sector represents ov er 90% of the financial system assets. The 
main actors in this field remain foreign ow ned banks with about 65-70% of the overall 
banking capital. In the field of deposit guarantees, in 2009, amendments to the Law on 
Guarantee for Compensation of Bank Deposits of Physical Persons were prepared. A 
legislative package on pension funds is under di scussion by the Govern ment and a draft law 
on mandatory insurance ensued from responsibility of vehi cle use is discussed by the 
parliament.  
Other key areas 
Progress was recorded in the area of taxation . The Ministry of Finance worked on a 
Consolidated Tax Code. The Tax Administra tion already implemen ted several of the 
measures contained in the Tax Administra tion Strategy for 2008-2011. The Supreme Council 
on Revenue Collection was established to monito r progress in this area. Plans for introduction 
of e-declarations and improvements of risk-b ased controls were adopted. The process of 
upgrading human resources is in progress and in cludes also creation of a new training centre 
(both for taxation and customs). The Tax Admi nistration solved the problems related to 
delays on VAT returns and reabsorbed the existing backlog. Armenia developed and adopted a plan for introducing an e-governance system, and 18 working groups were set up to deal 
with the automation of tax administration. In 2009 Armenia reported that agreements on 
avoidance of double taxation are in force with 13  EU Member States and others are signed or 
being negotiated. In line with  its WTO commitments discrimi natory practice regarding VAT 
and excise system on tobacco products needs to be eliminated.  
 
EN 12   EN The State Commission for the Protection of Economic Competition continued its work to 
strengthen the legal and institutional framework for competition policy  in 2009. It prepared 
new draft amendments to the legal framewor k which are expected to be adopted in 2010. 
Effective implementation of the previous amen dments to the law on “p rotection of economic 
competition”, including provisions for state aid, re quires further efforts in the establishment of 
secondary implementation mechanisms. A draft law for the implementation of a leniency 
programme is being prepared. An EU twinning project concer ning state aid and competition 
policy is foreseen in 2010.  
The Government approved in April 2009 a Concept Paper on Implementing Reliable and 
Effective Protection of Intellectual Property . A special committee for the implementation of 
this paper, led by the Minister of Economy a nd including representative s of right-holders and 
relevant NGOs, was set up in August 2009. Armenia also worked over the reporting period on 
amending its legislation on copyrights, geographi cal indications and trad emarks. Armenia still 
needs to ratify the International Convention fo r the Protection of New Varieties of Plants 
(UPOV Convention). A survey on piracy and co unterfeiting was launched during the year and 
is on-going. However, further substantial effort s are needed to ensure sound enforcement of 
legislation by reinforcing th e powers and the administrative capacities of the enforcement 
bodies, including the judicial syst em and by raising awareness of intellectual property issues 
among the general public and the right-holders. 
Armenia continued to wo rk on new legislation on public  procurement . Once adopted, it is 
expected to enter into  force in June 2010. The new law fo resees the transformation of the 
State Procurement Agency into a Procurement A ssistance Centre. Further efforts are needed 
in the area of training and provision of systems to implement e-procurement. 
Armenia completed the translation of Interna tional Financial Reporting Standards (IFRS) in 
the area of accounting.  Armenia also started negotiations with the International Accounting 
Standards Board with a view  to signing an agreement on translation of the accounting 
standards for the small and medium-sized ente rprises. No progress can be reported on the 
establishment of an independent  regulatory body, separate from  the Ministry of Finance, 
responsible for accounting and auditing. 
As regards statistics , Armenia adopted in June 2009 the national classifier for the economic 
activity. Armenia also worked over the reporting period on developing th e national version of 
the classification of territori al units and continued transl ating into Armenian key EU 
regulations in the field of statistics. 
On enterprise policy , the Small and Medium-sized Enterprise Development National Centre 
(SME DNC) continued to support SMEs through the implementation of annual programmes with resources allocated from the state budget. Since its 2008 membership  in the Enterprise 
Europe Network (EEN), the SME DNC has been hosting an EEN Correspondence Centre 
providing business, innovation, technology and re search related serv ices to Armenian 
companies while also rendering assistance to European SMEs seeking business opportunities in the Armenian market. Several amendments in tax legislation for SMEs, adopted in 2009, entered into force just after th e reporting period, in January 2010.  
In the area of public internal financial control  (PIFC) Armenia continued to work on an 
internal audit law. The draft law includes provi sions for establishing a central harmonisation 
function for internal audit. Following a de tailed gap assessment of the existing PIFC 
environment, the Ministry of Finance star ted to work on a PIFC Policy Paper. The 
 
EN 13   EN introduction of principles of managerial accounta bility is still at a ve ry early stage. With 
regard to external audit, the Chamber of Control has established contacts with the European 
SAIs in order to develop ex isting audit practices in line with INTOSAI standards.  
5. COOPERATION  ON  JUSTICE,  FREEDOM  AND  SECURITY 
Armenia continued participating in the Southern Caucasus Integrated Border Management  
(SCIBM) regional programme, formally agreed between Armenia, Azerbaijan and Georgia in 
2007. The programme aimed at enhancing inter-agency cooperation, training and capacity of customs and border guard services in line wi th agreed regional standards and EU norms. 
Despite the regional character of this programme, Azerbaijan  chose to pursue cooperation 
only through its bi-lateral component with Geor gia, which delayed the start of implementation 
until March 2010. Nevertheless, in the framewor k of SCIBM, Armenia’s customs and border 
guard services participated in  preparatory training sessions in  Austria, Croatia, Italy and 
Slovenia alongside representatives  from Azerbaijan and Georgia. 
Further training was provided for border and pa trol police including cr oss-border seminars 
with border officials from bot h Georgia and Azerbaijan in cooperation with the OSCE.  
The State Migration  service commenced started work on a National action pl an on migration 
and asylum in cooperation with civil society and, with EU support, on a draft strategy on the 
regulation of migration.The dr aft law on the regulation of la bour migration, prepared in 2008, 
has not been adopted yet. In addition an elect ronic database for the monitoring of migration 
flows remains to be establis hed. With support from the OSCE and the International 
Organisation for Migration (IOM) , Armenia is elaborating an action plan for the introduction 
of an electronic passport with biometric featur es and electronic ID Cards. Improvement of 
document security is considered by the authoriti es as a necessary step to benefit from visa 
facilitation with the EU. 
With regard to the fight against organised crime , Armenia has yet to accede to the Third 
Protocol to the United National Convention on  Transnational Organised Crime on the Illicit 
Manufacturing and Trafficking of Firearms, their Parts and Compon ents, and is also 
encouraged to sign and ratify the 2007 Council of Europe Convention on the Protection of 
Children against Sexual Expl oitation and Sexual Abuse. 
On trafficking in human beings , the national budget allocated  some EUR 100,000 to finance 
anti-trafficking actions including the establis hment of a National Referral Mechanism and a 
special shelter for victims of trafficking, in cooperation with civil so ciety organisations. 11 
separate prosecutions for crime related to the tr afficking of human beings were recorded in 
2009. 
As stated above, the South Caucasus Anti-Dr ugs Programme (SCAD V) came to an end in 
2009. Discussions continue on how best to bring forward the results of the action and pursue 
regional efforts in the fight against illegal drugs . 
With regard to the fight against money laundering, Moneyval approved the third round 
mutual evaluation report on Armenia in Septem ber, highlighting improvements to the legal 
framework to combat money laundering and the financing of terrorism achieved in 2008. The 
report was published in January 2010. As stated  last year, the continuing development of 
human and technical resources with regard to money laundering, corruption and terrorism 
financing remains an ongoing challenge
  
 
EN 14   EN In the area of  police and judicial cooperation  Armenia ratified the 1997 Additional Protocol 
to the European Convention on Mutual Assi stance on Criminal Matters in March 2009. 
However, its effective implementation will require continued efforts to improve coordination and cooperation between all law enforcement agencies, including inve stments in training. 
Armenia ratified two Additional Protocols to  the UN Convention against Transnational 
Organised Crime at an earlier stage, but the Th ird Protocol against the Illicit Manufacturing of 
and Trafficking in Firearms, Their Parts a nd Components and Ammunition remains unsigned. 
Two important Hague Conventions  on international judicial cooperation, namely, the 1965 
Convention on the service of documents and the 1970 Conventi on on the taking of evidence 
have not yet been signed by Armenia. 
As regards data protection , Armenia has neither signed  the 1981 Convention for the 
Protection of Individuals with regard to Au tomatic Processing of Personal Data in 2009 nor 
the Additional Protocol on supervisory au thorities and trans-border data flows. 
6. T
RANSPORT , ENERGY , ENVIRONMENT , THE INFORMATION SOCIETY , RESEARCH AND 
DEVELOPMENT  
In October 2009 Armenia adopted a transport sector development stra tegy covering the years 
2009-2020. The strategy foresees improved mana gement, infrastructure, and technology to 
maximize the transport sector’s performance until 2020, and envisages long-term prosperity 
through the establishment of efficient, cost-e ffective, and environmentally and socially 
sustainable transport infrastructure and serv ices. The strategy foresees the separation of 
regulatory and oversight functi ons ensuring the independence of  regulatory functions. Further 
short-term policy priorities are to define a road strategy based on sound asset management, 
address worsening road safety as well as th e deteriorating urban tr ansport in Yerevan.  
As regards infrastructure investments, Armeni a started in 2009, with the help of the World 
Bank, to upgrade roads belonging to  the “Lifeline Road Network” (LRN). The capacity of the 
Armenia Road Directorate is being strengthen ed. Armenia decided already in 2004 that each 
community should have at leas t one connecting road to an interstate road. These roads 
comprise some 3,014 km of Armenia’s 7,704 km of non-urban roads and are defined as the 
optimal road network connecting rural communities to the interstate highways.  
In the air sector, the transport strategy 2009-2020 fo resees as a short-term priority to remove 
restrictive commercial and regul atory measures in order to improve aviation efficiency and 
connectivity. Following the signature of the horiz ontal air services agreement, reported last 
year, a further important step towards closer relations between the EU and Armenia in the 
transport field was the signature of the working arrangement between the Armenian 
authorities and the European Aviation Safety Ag ency in July 2009 to st rengthen its regulatory 
cooperation with the Agency and progress towards convergen ce with European safety 
standards. Due to restricted competition, air traffic between the EU and Armenia, although 
increasing, remained limited.  
Armenia further implemented its energy  strategy, inter alia  by completing a tender for the 
selection of a company that will oversee th e construction process of  a new nuclear power 
plant. In October 2009, Armenia adopted a law on constructing a new nuclear power unit. A tender to select the plant constructor is und er preparation. Armeni a plans to close the 
Medzamor Nuclear Power Plant (MNPP) by 2016 and is prepared to close the plant before the 
designed lifetime provided that alternative replacement capacity is available. The EU 
 
EN 15   EN continued to ask closure before  this date. Armenia continued the safety upgrading of MNPP 
on the basis of its 2009-2016 programme. It pursued work towards a spent nuclear fuel and radioactive management strategy  and progressed on the expansion of a dry spent fuel storage 
facility.  Armenia took further steps to prepare a detailed decommissioning plan for MNPP.  It 
continued to fill the Nuclear Decommissioning Fund  and to explore, jointly with the Russian 
Federation, uranium reserves. 
In April 2009, Armenia raised gas and electric ity tariffs following the increase of the gas 
price. It continued the construction of conven tional electricity genera tion units (including 
hydro) and the rehabilitation of electricit y and gas infrastructu re. Armenia pursued 
preparatory work for additional electricity  interconnections with Georgia and Iran.  In March 
2009 Armenia agreed with Turkey  to export electricity once th e grid has been upgraded. In 
May 2009, the Armenia-Iran gas pipeline beca me operational. The deal between the two 
countries aims to export gas to Armenia and electricity to Iran. In  April 2009, Armenia and 
Iran confirmed their plan to cons truct an oil refinery. Armenia pursued the development of an 
energy efficiency and renewable energy programme. 
In the field of climate change, Armenia continued preparing its Second National 
communication to the UN Framework Conventi on on Climate Change (UNFCCC), which 
will include a greenhouse gas inventory, mitig ation and adaptation measures. A report on 
vulnerability of water resources was prepared. Steps to address adaptation to climate change 
impacts in mountain forest ecosystems started. The socio-economic impact of climate change 
was assessed with regard to agriculture, ener gy and forestry, and policy recommendations and 
measures were developed. The UNFCCC rela ted part of the 2004 Government Decision on 
measures for the implementation of a number of  international obligations was reviewed in 
December 2009 and is in the process of approval.
 
Armenia took steps to prepare and approve further Clean Development Mechanism (CDM) 
projects.  One new such project was registered at UN level, bringing the total number of 
registered projects to five. Armenia associ ated itself with the Copenhagen Accord and 
provided information on actions th at it will implement. The European Commission continued 
to support Armenia to implement the Kyoto Protocol. 
Armenia started implementing its environment action plan for 2008-2012, inter alia  with 
regard to the development of the legislativ e framework, capacity building for environment 
monitoring and strengthening of ma nagement of waste and chemicals . The legislative 
framework continues to require further developm ent, in particular as regards implementing 
legislation.  Amendments and changes to  legislation in the fields of air quality, water 
management and environmental fees were a dopted. A Government decision was adopted to 
regulate the process of registra tion of companies whose activ ities have a negative impact on 
the environment and further decisions were adopte d in the field of wate r, nature protection, 
chemicals and waste. An act on environmen tal protection, as well as legislation on 
environmental expertise, genetically modified  organisms and self-mon itoring of compliance, 
are still being prepared.  
A national profile of chemicals a nd waste management was approved.  Preparations for a 
national strategy to reduce risks of hazardous substances on human health and the environment were launched. Contin ued attention is re quired to implement existing strategies 
and plans and to further enhance monitoring and enforcement.  
 
EN 16   EN Some steps were taken with a view to strengthening water resource management.  Further 
strengthening of administrative capacity at all levels of the country remains a major challenge. Coordination between authorities continues to require attention. Some activities were taken 
promote the integration of environmental consid erations into other policy sectors such as 
transport. Some steps were taken to pr epare legislation on integrated permitting. 
There were no significant developments with regard to preparations of state-of-the 
environment reports. Armenia nevertheless conti nued to carry out some other activities to 
provide information to the public. (For the Regional Environmental Centre for the Caucasus, 
please see chapter 2)  
The draft legislation on self-m onitoring of compliance, curren tly under preparation, contains 
provisions on environmental impact assessment, in cluding with regard to  public participation. 
Procedures and consultation w ith the public in the context of environmental assessments 
continue to require particular attention . The Implementation Committee of the Espoo 
Convention requested Armenia to revise its envi ronmental impact assessment legislation to 
align with the Convention as well as to report  back on this. Armenia subsequently submitted a 
satisfactory implementation strategy.  
Armenia took some steps towards accession to the EMEP
1 Protocol to the UNECE 
Convention on Long-Range Transboundary Ai r Pollution. There were no significant 
developments as regards the accession or ratification with re gard to remaining relevant 
UNECE Conventions and Protocols2. Furthermore, the implemen tation of several already 
ratified agreements requires  particular attention. Armenia pa rticipated in the EU Water 
Initiative, including a national policy dialogue.  
Cooperation and exchanges of information took place between the European Commission and 
Armenia, including on water, forestry, wast e management, environmental data, nature 
protection and air quality.   
In the field of civil protection , Armenia participated in th e December 2009 launch event of 
the Eastern Partnership flagship  initiative on prevention on, pr eparedness of and response to 
man-made and natural hazards.   
In order to help the pr eparation of a regulatory  reform in the area of  Information Society , a 
first meeting of the working group on regulati on of communication issu es was held at the 
premises of the Ministry of  Transport and Communication in  June 2009. Representatives and 
responsible executives from both public and private sectors pa rticipated in this meeting. 
In February 2009, eight domestic operators we re granted public network number capacities 
and codes to offer fixed-line telephony in Arme nia. Each company network will be connected 
to the current de facto  monopolist.  
In the audiovisual sector, freedom of reception and retr ansmission of television broadcast 
coming from other countries remains difficult as Armenia has not ratified the Council of 
Europe Convention on Transfrontier Television. 
                                                 
1 Protocol on Long-term Financing of the Cooperative Programme for Monitoring and Evaluation of the 
Long-range Transmission of Air Pollutants in Europe (EMEP) 
2 the Protocol on Strategic Environmental Assessment to the UNECE Convention on Environmental 
Impact Assessment in a Transbou ndary Context, UNECE Convention on the Protection and Use of 
Transboundary Watercourses and International Lakes and the other relevant Protocols  
 
EN 17   EN Armenia's research  investment and capacity remain s relatively modest. However, 
participation in the 7th Fram ework Programme (FP7) has increased in comparison to FP6, 
with 17 research organisations being successful  in their applications, as of November 2009, 
receiving EUR 690,000 of EU fu nding, particularly under the 'international cooperation' 
information and communication technologies and the 'Marie Curie' calls for proposals. 
Armenia continued to participate actively in the International S&T Cooperation Network for 
Eastern European and Central Asian countries (FP7 IncoNet EECA project), which aims to 
support a bi-regional EU-EECA policy dialogue on science and technol ogy and to increase 
EECA participation in FP7. 
7. PEOPLE -TO-PEOPLE CONTACTS , EDUCATION AND HEALTH  
In the area of higher education , the Ministry of Education and Science esta blished five 
working groups with university participation to promote Bologna Process requirements 
covering qualification framew orks, credit accumulation, fi nancial management, quality 
assurance mechanisms, and post-graduate education. The Bologna Process Diploma 
Supplement, providing for greater transparen cy on higher educatio n qualifications was 
introduced in Armenian universities and higher education institutions in the course of 2009.  
Armenia continued its active participation in the Erasmus Mundus scholarship programme as 
well as in the Tempus IV programme, increasing compared to Tempus III. 
Thirteen Armenian students and one scholar were awarded scholarships for Erasmus Mundus 
Masters Courses for the academic year 2009-10 under Erasmus Mundus Action 1 while academic and student mobility was further f acilitated under Erasmus Mundus Action 2 during 
the same period through the award of 35 m obility grants. Armenian universities are 
encouraged to participate in  the Jean Monnet programme. 
With regard to vocational education and tr aining, developments in 2009 focused on the 
consolidation and continuation of reforms initia ted in 2008 in the areas of teacher training, 
refurbishment of vocational training colleges and the development of qualifications standards 
and a draft national qua lification framework with consider able EU support (see chapter 8). 
The concepts of social partnership in vocational education and training a nd life long learning 
were endorsed by the Government in October.  The Ministry of Education and Science 
continued developing a nationa l qualifications framework on th e basis of competence-based 
standards developed by the National Cent re for Vocational E ducation and Training 
Development.  
The Ministry of Culture  pursued implementation of the four year Culture Development 
Strategy (2008-12) focusing on effective coordi nation of cultural polic y, cultural heritage, 
international cooperation, dig italization of non-material cultu re and promotion of popular 
culture. As stated in 2008 in this regard, attent ion would need to be directed at facilitating 
effective decentrali zation of cultural policy while ensuring maximum civic and youth 
participation in the strategy’s im plementation. Armenian cultural organisations participated in 
the Call for Proposals of the 2009 ENP Speci al Action under the Culture Programme.  
Armenian young people and youth organisations continued bene fiting from the opportunities 
offered by the Youth in Action Programme, through exchanges, voluntary service and youth cooperation activities in non-formal education.  
 
EN 18   EN Armenia pursued reform in the health  sector, in particular as re gards primary health care and 
health insurance. The reform should contribut e to reducing out of pocket payments. In 2009, 
the Government endorsed a strategy and an ac tion plan for Child and Adolescent Health and 
Development for the period 2010-2015. Communicab le diseases such as HIV/AIDS and 
tuberculosis  remained challenges.  In October 2009, Armenia participated in the newly 
established EU enlarged health information committee. 
8. FINANCIAL COOPERATION – 2009  KEY FACTS AND FIGURES  
The European Neighbourhood Policy Instrument  (ENPI) envelope for the Armenia under the 
National Indicative Programme 2007-2010 is EU R 98.4 million. The programme is focused on 
three priority areas: 1) Strengt hening of Democratic Structures and Good Governance, 2) 
Regulatory Reform and Administ rative Capacity Building, and 3) Poverty Reduction Efforts. 
The 2007 Annual Action Programme on Vocationa l Education and Trai ning (EUR 16 million) 
is in the final stages of its implementati on. The 2007 sector programme  progressed well, and 
its planned activities were concluded in la te 2009. The final verification mission for the 
second (and final) fixed tranche was deferre d to December 2009 due to supply delays. 
Therefore the final payment is being processe d in the semester of 2010. Furthermore, the 
TA/twinning envelope with a value of EUR 5 million in support of regulatory reform and 
administrative capacity building is  currently being implemented.  
The implementation of the 2008 Annual Action Pr ogramme on Support for the Justice Reform 
programme (EUR 18 million) is underway. The in itial fixed tranche of EUR 8 million of the 
2008 Justice programme was pr ocessed in late 2009. The AAP 2008 TA/twinning envelope 
with a value of EUR 6 million is currently being prepared. 
The first twinning project was launched in  2009 (support to the Ombudsman and Human 
Rights Defender) and a second was launched in 2010 (support to the introduction of the 
Standard Cost Model with the Ministry of Economy). Three twinning projects are currently 
published for Member State proposals (Civil Av iation, Competition, National Statistics). 
In 2009, the European Commission continued to  support the national reform efforts in 
Armenia and programmed assistance for a total amount of EUR 24.7 million under the ENPI. The 2009 Annual Action programme  focused on the continued support for further economic 
development and social cohesion. Within th is envelope, EUR 15 million was allocated to 
pursue the reform of Vocational Education and Training as a sector budget support operation. 
Another EUR 9.7 million was allocated to TA and Twinning operations.  
An indicative financial envelope of EUR 157. 3 million will be available to support co-
operation activities in Armenia in the peri od 2011-2013, based on a European Commission 
decision of March 2010. 
In addition to the bilateral allocation, Arme nia also benefited from cooperation activities 
financed under the ENPI multi-country and re gional programmes, as well as horizontal 
thematic programmes, such as  the European Instrument fo r Democracy and Human Rights 
(EIDHR) and the Non-State Actors and Local Authorities in Development programme (NSA/LA). Armenia is also eligible for the cooperation under the ENPI Cross-Border 
Cooperation (CBC) Black Sea Basin programme.  
 
EN 19   EN The Instrument for Stability provided imme diate support to the post-election stabilization 
efforts in the form of the EU Adviso ry Group for a total budget of EUR 2 million. 
Furthermore, in 2009 the EU took a decision to  grant the Government of Armenia Macro-
Financial Assistance to alleviate the effects of the global financial crisis. The package 
includes a EUR 65 million loan and a EUR 35 million grant. Disbursement is expected to 
begin during the first half of 2010.  
Under the Neighbourhood Investment Facility (N IF) contributions, two projects in Armenia 
were approved in 2009, committing EUR 14.6 m illion in grants and t echnical assistance, 
expected to leverage EUR 23 million in loan s of European Finance Institutions in the 
environment and transport sectors. Furthermore, three regional projects for which Armenia is 
eligible were also approved in 2009, committing EUR 24 million in grants, to leverage a total 
of EUR 372 million in loans/investment from European Finance Institutions in the energy and financial sectors. 
With regards to assistance in the area of Nucl ear Safety, projects provid ing On-Site assistance 
and supply of equipment to the Nuclear Powe r Plant of Medzamor worth EUR 11 million are 
currently being implemented in the framework of the Instrument for Nuclear Safety Cooperation (INSC) Action Program me 2009 (including the support
 to the National 
Regulator). Two other projects aimed at improving the safety cu lture of the Armenian Nuclear 
Regulatory Authority for the overall sum of EUR 2.3 Million, as programmed under previous 
Action Programmes, are still ongoing.  
The European Investment Bank did not sign any lending operations with the Government of 
Armenia in 2009.  
In 2009, the overall donor coordination was fore most done in coordination between the four 
main donors in the lead (WB, IMF, USAID a nd EC) with participation of the Armenian 
Ministry of Economy. These we re arranging genera l donor coordination meetings at least 
every three months, inviting also other donors. Increasingly, the Ar menian side started to take 
the factual responsibility for th e coordination of donor activities.