Source: EURLEX
Language: en
Format: md

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# 52015SC0063

**JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in Armenia Progress in 2014 and recommendations for actions Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Implementation of the European Neighbourhood Policy in 2014 /\* SWD/2015/0063 final \*/**

  

1.         OVERALL
ASSESSMENT AND RECOMMENDATIONS FOR ACTION

This document reports
on the progress made in the implementation of the EU-Armenia European
Neighbourhood Policy (ENP) Action Plan between 1 January and 31 December 2014.
Developments outside this period are taken into consideration where relevant.
This is not a general assessment of the political and economic situation in
Armenia. Information on regional and multilateral sector issues is contained in
the Eastern Partnership (EaP) Implementation Report.

In October 2014 Armenia signed
the Accession Treaty to the Eurasian Economic Union (EEU). In preparation for
signing the treaty, which came into force on 2 January 2015, it implemented a
roadmap with administrative and legislative measures in 20 areas of government
policy. Despite the decision not to initial the negotiated Association
Agreement with the EU in September 2013, including a Deep and Comprehensive
Free Trade Area (AA/DCFTA), Armenia and the EU further continued their
political and trade dialogue in 2014, in areas where this was compatible with
Armenia’s new international EEU obligations. To this end, in November 2014 the
EU and Armenia launched a scoping exercise on possible areas of cooperation for
future relations.

The EU-Armenia Visa-Facilitation
and Readmission Agreements came into force in January 2014. The agreement
allowing Armenia to participate in EU programmes and agencies came into force
in March.

Armenia made limited progress on
deep and sustainable democracy, human rights and fundamental freedoms. In April
2014 the Specialised Commission on Constitutional Reform presented its draft
concept paper proposing a transition from a presidential system to a
parliamentary system, changes related to the electoral system, a better balance
of powers and more human rights protection. However, no broad consensus within
the society and with the political opposition parties exists on this reform.

A Human Rights Action Plan was
adopted in February 2014, an important step forward. However, the Action Plan
does not address areas that should be a priority, such as the compliance with
the UN Convention against Torture (CAT). The right of freedom of association
was generally respected. Comprehensive anti-discrimination legislation is still
missing, although some legislative measures were taken. The anti-discrimination
strategy, which would help making legislative steps more consistent, remained a
draft. There were no tangible developments in the implementation and
enforcement of legislation on human rights and fundamental freedoms. Several
reforms remained at drafting stage and only some steps are missing to make them
legal reality. Shortcomings stated in previous progress reports, such as the
lack of trust in the judicial system and the fight against corruption
persisted.

Armenia made some progress with
regard to the right to free legal aid and limited progress with regard to the
independence of the judiciary, in particular judges. The procedure for
appointing judges was made more transparent, but the public continued to
distrust the judiciary system. Armenia ranks 94 out of 175 countries on
Transparency International’s Global Corruption Barometer 2014.

Armenia continued to implement sound macroeconomic
policies. It made further progress towards achieving
the objectives of the Action Plan in the areas of macroeconomic policy, poverty
reduction and social cohesion. Economic activity continued to decelerate in
2014, affected by the economic slowdown in the Russian Federation and weak EU
demand. Tax administration reforms continued. Not
enough was done to diversify the economy, with overreliance on agriculture and
mining in particular. Diversification would help make Armenia less vulnerable
to external shocks, in particular from the Russian Federation.

Armenia relies heavily on
imported primary energy sources. The only domestically produced primary energy
is electricity from the country’s hydroelectric plants and the Medzamor nuclear
power plant (MNPP). The early closure and decommissioning of the MNPP remain a
key objective for the EU and under the ENP Action Plan. Since the power plant
cannot be upgraded to meet current internationally recognised nuclear safety
standards, it should be closed as soon as possible. The new power plant should
comply with the latest international safety standards. However, the Armenian
Government has announced the life extension of the MNPP until 2026 to ensure
its capacity is replaced. In light of this decision, it is noteworthy that the European Commission
received Armenia's stress test report on the MNPP, with a view to it being peer
reviewed
during 2015.
This is in line with EU objectives in this policy area, which is the promotion
of the highest nuclear safety standards and safety culture worldwide.

Last year it was the 20th
anniversary of the 1994 ceasefire agreement in the Nagorno-Karabakh conflict
against the background of a continued stalemate. The Presidents of Armenia and
Azerbaijan met in Sochi, at the NATO summit in Newport and in Paris,
revitalising the most important channel of communication between the two sides
and exchanges on a peaceful settlement. The security situation on the ground
remained a matter of serious concern amid incidents and casualties on a level
not seen since 1994, an increase in confrontational rhetoric and a continued
arms race. The EU continued to fully support the OSCE Minsk Group Co-Chairs and
peace-building activities. The High Representative for Foreign Affairs and
Security Policy/Vice-President of the European Commission supported continued
peace-making efforts, including through the new EU Special Representative
(EUSR) for the South Caucasus and the conflict in Georgia, Herbert Salber. He
regularly visited the region for high-level meetings and maintained frequent
contacts with relevant interlocutors.

There has been no real
progress in relations between Armenia and Turkey, despite Turkey’s invitation
to the President’s swearing-in ceremony in August 2014. The centennial
commemorations in 2015 will be another test-case for the future of bilateral
relations. The EU continues to support the normalisation of Armenia-Turkey
relations and encourages both sides to remain committed to the process of
normalisation without preconditions.

Overall, Armenia made
limited progress in implementing the ENP Action Plan, with some efforts to
establish deep and sustainable democracy and put sound macroeconomic policies
and structural reforms in place. While it took some strategic steps towards
implementing constitutional reform, more concrete legislative measures and
their implementation and enforcement are recommended. More awareness of human
rights and Armenia’s related obligations across society would be welcome.
EU-Armenia trade relations will need to be re-defined following Armenia’s
accession to the Eurasian Customs Union.

Based on the
assessment of its progress in 2014 on implementing the ENP, Armenia should
focus its work in the coming year on:

·
amending
the electoral legislation in accordance with OSCE/ODIHR (Office for Democratic
Institutions and Human Rights) recommendations in due time before the 2017
parliamentary elections;

·
adopting
and implementing a comprehensive anti-discrimination law; implementing and
monitoring implementation of the law on equal rights and equal opportunities
for women and men, including taking further steps towards harmonising
legislation in this area with the EU acquis; adopting the law on
domestic violence;

·
investigating
the cases of attacks and intimidation of human rights defenders and ensuring
effective law enforcement, including in cases relating to the deaths that
occurred during the clashes of March 2008 and the allegations of ill-treatment
in police custody and violation of due process;

·
finalising
the draft law on freedom of conscience and religion;

·
stepping
up the reform of the judiciary and law enforcement and implementing the related
reform agenda of the Armenian authorities, e.g. making the judiciary more
independent, improving the training of judges, reviewing the Code of Criminal
Procedure and bringing its legislation on torture into line with Article 1 of
the Convention Against Torture; nominating a contact point to Eurojust to
facilitate closer judicial cooperation;

·
continuing
public administration reform by doing more to prevent and fight against corruption;

·
fostering
inter-municipal cooperation and increasing the capacity of municipal councils,
ensuring competences for local authorities and increasing local authorities’
own resources; making the municipal tax mechanism more efficient and reviewing
the financial equalisation mechanism;

·
enhancing
medium-term growth by further improving the business climate and making
investments even more attractive, strengthening the external position of the
country; continuing to mobilise tax revenue in a growth-friendly manner;

·
to
diversify Armenian exports with commodities of higher value added, carrying out
further regulatory approximation with international trade laws and standards;

·
further
intensifying efforts to implement international conventions, such as those
linked to the EU Generalised Scheme of Preferences (GSP); working towards the
earliest possible closure of the Medzamor nuclear power plant and adopting a
detailed decommissioning plan, taking into account the results of stress tests;
meanwhile increasing the safety standards of the nuclear power plant;

·
stepping
up efforts towards reaching a comprehensive peace settlement in accordance with
the commitments made in the Minsk Group; refraining from actions and statements
that could heighten tension and undermine the peace process; creating an
environment conducive to making progress in resolving the conflict and to
encouraging and supporting related peace-building activities; ensuring that EU
representatives working in support of conflict transformation activities have
unimpeded access to Nagorno-Karabakh and the surrounding regions.

2.         POLITICAL DIALOGUE AND
REFORM

Deep and sustainable democracy

The government did not start
amending the Electoral Code at least one year before the next elections as the
OSCE/ODIHR recommended. The next parliamentary elections will take place in
February 2017. Women remained underrepresented in political positions. The EU
continued to support their participation in local decision-making.

In April 2014 the committee for constitutional
reform published a concept paper for comprehensive constitutional reforms,
including changing to a parliamentary system of governance, other changes to
the electoral system, better balancing of powers and greater respect of human
rights. In October 2014, the Venice Commission of the Council of Europe adopted
an opinion on the paper, commending the objectives, while refraining from
commenting on the choice of the governance system.

The government respected freedom
of association. In September it approved the 'Concept on Institutional and
Legal Reforms of Civil Society Organisations’ (CSOs). It says that the Ministry
of Justice should submit the new draft law on public organisations. The draft
law allows flexible regulation of public organisations and increases the role
of their charters. The financial sustainability of public organisations is
addressed by adding instruments that do not exist under current legislation,
such as direct business activity of public organisations, more transparent
state funding and opportunities for new instruments, such as endowment. It
makes public organisations more sustainable, developed and independent,
self-regulated and institutionally strong. A working group composed of CSOs and
staff from the Ministry of Justice drafted the law. Both documents were widely
discussed with many CSOs at public events and round tables and in working
groups.

The current law on freedom of
assembly is in line with EU and other international standards. Its
implementation was marred however, with 17 incidents recorded and 72 activists
arrested. There was a decrease in the number of assemblies the authorities
refused to allow for various technical reasons. In several cases the police
reportedly used force and imposed restrictions on assemblies, stating that they
were not ‘authorised’.

There were no major developments
regarding freedom of expression and the media. Although criticism of the
government and public officials is tolerated in general, and there are no
restrictions on the use of the internet, a number of issues still remained
taboo. Human rights defenders, journalists and other people with minority views
on controversial issues, such as gender issues and the Nagorno-Karabakh
conflict, continued to face intimidation, harassment, threats and abuse. Media
independence remained insufficient and there were no developments regarding
pluralism in the broadcasting media and transparency of media ownership.

Regarding the independence of the
judiciary, the implementation of the Judicial Reforms Strategy 2012–16
continued. Legal amendments to the Judicial Code strengthened the independence
of judges by defining the duties of the self-governing structures, improved the
criteria for evaluating and promoting judges and made the procedure for appointing
them more transparent. However, the amendments formally endorsed the role of
the President in the final appointment of judges. Public distrust of the system
and its integrity remained high. Regarding impunity, there were no
tangible developments in the investigation of the deaths that occurred during
clashes following the March 2008 presidential elections. The EU continued to
help strengthen the independence and professionalism of the judicial system,
including budget support.

There has been progress on the
right to free legal aid. The number of public defenders increased and a
legislative change increased the categories of population groups eligible for
free legal aid. However, the lack of information about the right to free legal
aid continued to impair access to justice.

There were no significant
developments with respect to the right to a fair trial. Discussions on
adopting criteria for randomly assigning cases to judges, taking into account
their specialisation, did not lead to concrete results. With courts still
dependent on the public prosecution service, their independence and
impartiality was not fully guaranteed. The Court of Cassation continued to
influence other judicial bodies. A new Criminal Procedure Code was drafted,
putting presumption of innocence and equality of arms between the defence
and the prosecution at its core. Armenia also started drafting a new Criminal
Code. Armenian authorities expressed their aim to comply fully with Council of
Europe standards when it comes to torture and ill-treatment. However, in 2014 claims about instances of torture and mistreatment
during pre-trial investigations were ignored or not properly investigated.
Decisions on imposing or prolonging pre-trial detention were not well
substantiated by courts.

In April, Armenia approved a
concept paper for the fight against corruption focusing on education,
state revenues, police and healthcare. It led to the development of a draft
strategy and an action plan, presented to national and international
stakeholders in October. The draft documents provide for the participation of
civil society. It is still necessary to strengthen the mandate and functions of
the Ethics Committee for High-Ranking Officials. SIGMA (Support for Improvement
in Governance and Management) continued to provide related policy support. The
anti-corruption council was not established in 2014.

There have been positive
developments with regard to security and law enforcement since the adoption of
amendments to the law on alternative military services in 2013. As of October
all applications from conscientious objectors who applied for transfer were
successful. The 74 applicants are doing their service in elderly homes,
psychiatric institutions and orphanages, or in landscaping/zoning agencies.

Armenia continued to
respect international OSCE Code of Conduct commitments regarding democratic
control over armed and security forces. However, there were concerns about
suspicious deaths under non-combat conditions in the armed forces, the practice
of hazing and other mistreatment of conscripts. The Human Rights Defender
appointed his deputy to deal with military servicemen’s rights.

Other human rights and
fundamental freedoms

Awareness of international
human rights instruments and Armenia’s human rights obligations remained
low among national institutions, including the judiciary and law enforcement
bodies. The government prepared the second national report on the Universal
Periodic Review (review at the UN Human Rights Council in early 2015). Armenia
is a signatory to more than 50 international human rights conventions,
including all fundamental conventions. However, it has not yet ratified the
Optional Protocol to the International Covenant on Economic, Social and
Cultural Rights and the Optional Protocol to the Convention on the Rights of
Persons with Disabilities. The government accepted the Second Optional Protocol
to the International Covenant on Civil and Political Rights, aimed at
abolishing the death penalty, but has yet to ratify it. Ratification of the
Convention on Protection of the Rights of All Migrant Workers and Members of
Their Families is also still pending.

As of June 2014, 1 022 cases
relating to Armenia were pending before the European Court of Human Rights
(ECHR). Out of a total of 47 verdicts of violation issued by the ECHR, action
is pending on 42. The Ministry of Justice set up a separate department to deal
with the follow up to ECHR cases.

The government approved the human
rights national action plan in March, based on the national strategy
for human rights protection. It is a roadmap for coordinated action by public
institutions to fulfil Armenia’s international obligations and can be seen as a
welcome step forward. The government said that it would be revised and amended
regularly. While the adoption of the strategy and action plan is an important
step forward, it failed to address certain priority areas, including the UN
Convention against Torture, electoral rights and ensuring greater respect for
women’s rights. The EU continued its dialogue with Armenia on human rights. A
new EU programme will scale up human rights assistance, in particular in
relation to elections, preventing torture, anti-discrimination, gender equality
and child protection. The government confirmed it would include the conditions
of the programme in the human rights action plan.

Armenian law prohibits torture,
inhuman or degrading treatment. There were no tangible developments on bringing
national law to criminalise torture into line with Article 1 of the Convention
against Torture. This does not feature in the Human Rights Action Plan. The
current definition of torture does not include crimes committed by public
officials.

There were no tangible
developments regarding ill-treatment in police custody. There is concern
about the use of coerced confessions in trials and the failure to investigate
defendants’ allegations that confessions have been obtained using torture.
Reports from monitoring groups confirm that ill-treatment and police violence
continue to take place mostly during arrest and are not properly addressed in
courtrooms.

There was limited progress in
reforming the prison system, with the opening of the first dwelling
building of Armavir Penitentiary. This should decrease overcrowding in criminal
executive establishments. Inhuman treatment in prisons remains a concern.
Improving detention conditions and reducing prison overcrowding would be a step
towards complying with EU and international standards. Although legally allowed
to, in practice judges still did not offer alternatives to prison. A prison
reform action plan was developed in line with the recommendations of the
Council of Europe Commission on the Prevention of Torture (CPT). The draft law
introducing the probation service was discussed with stakeholders and civil
society but was not adopted. The alignment of prison conditions with CPT
standards continued with EU support.

Despite some progress on
religious minorities (especially alternatives to military service for Jehovah’s
witnesses), society’s acceptance of religious minorities remains low. The law
on freedom of conscience and religion has still not been adopted.
Discrimination against minority religious groups in the workplace and the media
continued.

The law on equal rights and equal
opportunities for women and men has still not been implemented efficiently.
There is no way of complaining about inequality. There is concern about deeply
rooted patriarchal attitudes and stereotypes regarding the role of women and
men, coupled with persistently high levels of violence against women. The law
on domestic violence was not adopted. Reforms of the Criminal and
Administrative Codes were scheduled to be completed by the end of 2016 only and
it was unclear how conscience would participate. Despite the increasing
challenges, the visibility of women’s rights defenders increased thanks
to the internet and social media. A side effect of this was an increase in
threats and hate speech against women’s rights organisations, not investigated
properly by the police.

The practice of gender-based sex
selection was still considerable. Legislation on the prohibition of sex
selection was drafted and put in circulation among the government and civil
society.

There was support for making
children an integral part of the wider child care system reform that should
support non-residential services for children. Two institutions were closed and
alternative services were being set up. The monitoring of childcare
institutions brought new cases of abuse and ill-treatment to light.

Children also remained among the
poorest groups in society (36.2 %), with a higher risk of poverty for
children with disabilities, younger children, those with more siblings and
those living in households headed by a woman. There was no clear, legally
binding distribution of tasks between social protection and childcare services.

The human rights action plan
recognised the need to strengthen the protection of the rights of vulnerable
groups. With this in mind, the government submitted a draft law on social
assistance to parliament, aiming to give several vulnerable groups assistance
in various forms.

In January the government
approved the Concept on Determining Disability based on multi-dimensional
assessment in line with WHO classifications.

Some restrictions on the right to
strike, as well as restrictions for some groups (e.g. law enforcement
professionals) on joining trade unions, remained in place.

Armenia still does not have a
comprehensive legal framework against discrimination. The human rights
action plan only suggested assessing the compatibility of relevant Armenian
legislation with international law and weighing the merits of adopting an
anti-discrimination law. No measures were put in place to protect the rights of
LGBTI people, while discrimination and hostility continued to be a major
problem. There was also widespread discrimination against people with
disabilities with regard to their economic, social and cultural rights. People
with disabilities were also socially segregated in all areas.

The government did not enforce
ECHR judgments on property rights and the use of eminent domain in
Armenia.

In January, the Committee of
Experts of the Council of Europe confirmed that Armenia had developed a legal
and institutional framework for protecting and promoting its minority
languages. Its implementation is still not complete in a number of areas.
Minority languages were also little used in dealings with administrative
authorities (including in areas in which minorities were present).

Other governance-related issues

Public administration
reform
continued to be slow. The Government was encouraged to proceed with civil
service regulatory reforms, on the basis of SIGMA’s blueprint, and with the
reform of the training system for civil servants.

Improvements in
territorial and local self-governance continued. In March, the Council
of Europe Chamber of Local Authorities stated that most local services managed
by the state and local authorities had limited service delivery capacity. Local
authorities played a limited role because they did not have full and exclusive
powers. Armenian authorities have not yet defined the powers of local
authorities and how to transfer competences.

Better structured dialogue and
consultation is needed between the government and civil society. There are also
indications that civil society lacks sufficient capacity for policy monitoring
and dialogue with the government. In response to this situation, the EU
continued regular consultations with civil society and launched a new project
on developing capacity and promoting sustainability through social
entrepreneurship.

Cooperation on foreign and
security policy, regional and international issues, conflict prevention and
crisis management

Armenia continued to
align with Common Foreign and Security Policy (CFSP) declarations on a
case-by-case basis. It aligned with 15 out of 49 declarations it was invited to
subscribe to (19 out of 32 in 2013).

On Nagorno-Karabakh, against the
background of persisting stalemate in the Minsk Process, the meetings in Sochi,
Wales and Paris revitalised communication at the highest level between the
sides and the exchanges on the road towards a peaceful settlement. The flare up
of violence on the line of contact and the international border in the summer
of 2014 and the downing of a helicopter on 12 November were unprecedented since
the signing of the cease-fire agreement in 1994. The number of OSCE-reported
casualties on both sides in 2014 sharply rose to 57 servicemen and one civilian
killed, and 57 servicemen and 13 civilians wounded, compared to 14 servicemen
killed, 32 servicemen and five civilians wounded in 2013. Confrontational
rhetoric, continued arms race as well as humanitarian issues further impacted
on the conflict settlement process. The lack of progress continued to have a
serious effect on the population that was displaced as a result of the
conflict.

The EU called on parties to
refrain from actions and statements that could heighten tensions and undermine
the peace process, and promote an environment conducive to help settling the
conflict, while encouraging and supporting peace-building actions. The EU
continued to provide full support to the OSCE Minsk Group Co-Chairs. The HR/VP
supported continued efforts towards peace. The new EUSR for the South Caucasus
and the conflict in Georgia, Herbert Salber, made regular visits to the region
for high-level meetings and maintained frequent contacts with relevant
interlocutors. The EU continued to financially support the ‘European
Partnership for the Peaceful Settlement of the Conflict in Nagorno-Karabakh’
project, bringing together stakeholders across the conflict divide in
peace-building activities. The EU continued to call for unimpeded access for EU
representatives to Nagorno-Karabakh and the surrounding regions as an important
means to support conflict transformation activities and to complement the
efforts of the Minsk Group.

The EU maintained its
support for activities that promote confidence and people-to-people contacts,
promote cultural and educational activities, and facilitate the dissemination
of balanced information in both Armenia and Azerbaijan.

3.         ECONOMIC
REFORM AND SOCIAL REFORM AND DEVELOPMENT

The Armenian
authorities implemented sound macroeconomic policies in 2014. However, the
considerable economic slowdown in the Russian Federation and comparatively weak
demand growth in the EU affected the economy. GDP increased by an
estimated 2.6 %[1]
compared to 3.5 % in 2013. Average inflation receded from 5.8% in 2013 to
an estimated 2.2% in 2014, as a result of the lower gas prices from Russia. The
fiscal deficit is estimated to have widened to 2.3% of GDP in 2014 from 1% of
GDP in 2013. Public debt (85% of which is in foreign currency) was estimated at
49.7% of GDP at the end of 2014, affected by the significant depreciation of
the Armenian Dram in late 2014. The consolidation of the current account did
not advance in 2014. The current account recorded an estimated 8.1% of GDP
deficit in 2014 (from 8% in 2013 and 12.1% in 2012) as a result of a decline in
exports (notably to Russia) and remittances in the second half of 2014.

Unemployment was estimated at
around 17.2 %, with youth unemployment at 24 %. First entry into the
labour market and the lack of university education were specific concerns for
young people. Almost 50 % of women were not
economically active. Informal employment remains very high. According to
the Ministry of Labour and Social Affairs, more than 30 % of the
population lived below the poverty line.

Armenia continued to
implement reforms to integrate social services. It opened 19 integrated
social service centres (out of 57 planned). They operate using a ‘single window
approach.’ Their priorities include more social cohesion, better social
services and consistent implementation and monitoring. Armenia also drafted
legislation on coordinating social services and for social assistance. The
pension reform stalled following the Constitutional Court’s decision in April
to return the legislation to the government for further revision.

The Armenia Development Strategy
(2014–25) was approved, replacing the previous sustainable development
programme. Its main priorities are employment, human capital development,
improving the social protection system and institutional modernisation of
public administration and governance. It identified cross-cutting governance
issues affecting the economy, underlining the need to fight against corruption
and improve the business climate.

With regard to agriculture
and rural development, a mid-term review of the strategy for sustainable
agricultural development was carried out, with significant input from civil
society.

The
government issued a decree in March to make the Armenian Social Investment Fund
an institutional part of the Regional Development Fund as of January 2015. A
comprehensive strategy on regional development and a Regional
Development Fund model are being developed with EU support.

4.         TRADE-RELATED ISSUES,
MARKET AND REGULATORY REFORM

In 2014 the EU-Armenia bilateral trade
amounted to EUR 992 million (EU imports: EUR 276 million; EU exports:
EUR 716 million; EU trade balance: EUR 440 million). The EU remained Armenia’s
main trading partner.

Under the reformed EU Generalised
Scheme of Preferences (GSP), Armenia qualified for the special incentive
arrangement for sustainable development and good governance, GSP+, offering
more advantageous preferential access to the EU market.

The national assembly adopted an
amendment to the current Customs Code in May, in line with the
recommendations of an ongoing EU twinning project. The State Revenue Committee
was incorporated into the Ministry of Finance. Rules on risk assessment for
people carrying goods and an order regarding the amendment of customs
declarations were approved. Armenia became a signatory to the Revised Kyoto
Convention on the simplification and harmonisation of customs procedures.
Although setting up the EEU was expected to have a significant impact on technical
regulations and the free movement of goods, no major changes to technical
barriers have been registered so far.

Guidelines on the regulation of
harmful organisms of plants were approved in February 2014. The government also
developed programmes on residual substance control in fish, honey and meat for
2015. An EU twinning project provided assistance in drafting legislation,
building institutional capacity and raising public awareness of sanitary and
phytosanitary issues and food safety.

Armenia’s foreign
direct investment decreased for a second consecutive year, down by more
than 35 % year-on-year according to the National Statistical Service. The
EU remained the main source of foreign direct investment in the manufacturing
sector.

Regarding financial
services, the Central Bank approved changes in the capital formation and
the structure of the banks in line with Basel III requirements.

Amendments to taxation
laws to encourage people to declare their income came into force. A new law on
turnover tax came into force in October, reducing the rate from 3.5 % to
1%.

In February 2014 a peer review of
the Armenian statistical system confirmed that the National Statistical
Service enjoys a high level of professional independence and professionalism.
The first agricultural census in Armenia was conducted in October, and will
provide essential information for future planning and policy making.

Amendments to competition
law were submitted to parliament, but were not adopted. Nor was any progress
made on the adoption of state aid control legislation. In April the Human Rights
Defender publicly criticised the State Committee for the Protection of Economic
Competition for failing to investigate monopolies.

An EU twinning project to raise
awareness of and support the enforcement of intellectual property rights
(IPR) was completed, resulting in draft IPR enforcement legislation
(modelled on the EU Enforcement Directive). Adoption of the legislation is
still pending.

There were significant
improvements in public procurement procedures, including a considerable
reduction in the use of non-competitive simplified procedures. Framework
procurement increased to 50 %, while open tenders increased to 22 %.
An e-procurement system was launched. The Ministry of Finance launched a
capacity-building process for businesses in relation to procurement procedures
and updated requirements stemming from the WTO Government Procurement
Agreement. The procurement coding system became operational early in the year
and the monitoring system was upgraded. The procurement support centre also
implemented a programme of random monitoring of procurement operations across
the public sector.

An EU twinning project on public
internal financial control, to enhance reforms in public sector management
and performance, started in August.

The government
started drafting a new SME strategy to increase support for SME
development in Armenia. It is expected to be partly based on the 10 principles
set out in the Small Business Act for Europe (SBA). Armenia
took part in the "Supporting SME Competitiveness Reforms in the Eastern
Partner Countries" the objective of which is to implement recommendations
of the first SBA Assessment undertaken in eastern European partner countries.
Armenia also officially requested to participate in the Programme for the Competitiveness
of Enterprises and SMEs.

Consumer protection laws on market
surveillance and the general safety of non-food products entered into force.

5.         COOPERATION ON
JUSTICE, FREEDOM AND SECURITY

Armenia started
issuing biometric passports in January, including for people younger than 18,
for whom biometric passports are optional.

Implementation of the
EU-Armenia visa facilitation and readmission agreements began in
September. Activities under the EU-Armenia Mobility Partnership and the
2012–16 national action plan continued. In March, a referral centre for
reintegrating returning migrants was set up with EU support and an online
information site for returning migrants was launched. In July, Armenia approved the 2014–16
action plan on approximating migration legislation to international standards
(including ‘approaches and principles adopted in the European Union and the
Common Economic Space’). A new department responsible for integration was set
up at the State Migration Service set up to establish a policy for long-term
migrants.

Amendments to the law
on asylum and refugees are pending at the national assembly. Amendments to
the Criminal Code came into force in August, bringing Armenian law more closely
into line with Article 31 of the 1951 Refugee Convention, protecting refugees
and asylum-seekers from penalisation for illegal border crossing. Amendments to
the citizenship law, introducing provisions to prevent and reduce
statelessness, were submitted to the national assembly for discussion in autumn.

With EU support, the asylum
authorities carried out a number of quality assurance activities and continued
to train, coach and mentor asylum staff. Until the end of June, 3 177
recognised refugees arrived in Armenia from Azerbaijan, Iraq, Syria, Iran,
Lebanon, Georgia and various African countries. Reports indicated that an
estimated 16 000 people from Syria, almost all ethnic Armenians, had
arrived in the country since the beginning of the Syrian civil war, of which
about 12 000 remained. A small number of displaced people arrived from
Ukraine and northern Iraq.

Armenia and the Czech Republic signed an agreement on
cooperating in the fight against organised crime. Training workshops on
law enforcement, including crime analysis, investigation skills and the
interrogation of suspects, were held with EU support. Training
activities on money laundering and terrorism financing were organised in
the first half of 2014 with staff from the Financial Monitoring Centre and the
Ministry of Finance.

Armenia started to implement the
2014 programme on drug abuse and illicit drug trafficking. Further steps were taken towards signing the Memorandum
of Understanding on cooperation with the European Monitoring Centre for Drugs
and Drug Addiction.

A new draft law on data
protection was submitted to the national assembly in September. The law
aims to make Armenia fulfil the requirements of the Convention for the
Protection of Individuals with regard to Automatic Processing of Personal Data
of the Council of Europe (Convention 108) and its protocol. The law envisages
the creation of an independent Data Protection Authority.

6.         TRANSPORT,
ENERGY, ENVIRONMENT, CLIMATE CHANGE, INFORMATION SOCIETY, RESEARCH AND
DEVELOPMENT AND INNOVATION

Some
functions of the General
Department of Civil Aviation (GDCA) were transferred to the Ministry of Economy, the GDCA kept technical, safety and security functions. The construction of the North-South road corridor continued and the EU
agreed to support the construction of further sections of the corridor through
the Neighbourhood Investment Facility.

After joining the
Eastern Europe Energy Efficiency and Environment Partnership, Armenia
took steps towards finalising the investment agreement and preparing projects. In July, the Public Services
Regulatory Commission increased electricity tariffs by 10 % on average.
The Ministry of Energy and Natural Resources announced a new investment project
for the construction
of solar stations. A planned electrical interconnection between Georgia and
Armenia will be supported by the EU's Neighbourhood Investment Facility (NIF). With regard to nuclear energy, the early closure and
decommissioning of the Medzamor nuclear power plant remains a key objective for
the EU and the ENP Action Plan.

An EU-funded regional climate
change project was implemented in 2014, providing support for the development of a national adaptation and mitigation
strategy. A pilot project in the Gegharkunik region was also implemented.
Six cities (Artik, Dilijan, Gyumry, Spitak, Vayk and Yerevan) joined the
Covenant of Mayors.

An EU environment twinning
project helped the Ministry of Nature Protection prepare a new policy and
legislation on integrated pollution prevention and control. Armenia also
adopted a national waste management strategy and a law on
environment impact assessment (EIA), however the EIA law needs to be further
improved.

Regarding the information
society, Armenia identified eight electronic communications markets in line
with EU recommendations, made number portability obligatory for mobile
operators and granted a licence to a fourth mobile operator. The government
adopted an e‑government strategy programme and a new 2014–15 e-government
roadmap. With almost all urban areas connected to the internet, efforts to
expand access continued in rural areas. E‑government instruments were
greatly improved with EU support, with amendments to the law on civil status
acts introducing an e-register. Armenia hosted the 2014 meeting of the
Black Sea Economic Cooperation Organisation ICT Working Group. The planned date for
the transition from analogue to digital broadcasting and the granting of
analogue operation licences to regional TV channels was extended to mid-2015.

Regarding research and
innovation, Armenia officially asked to be associated with the 'Horizon
2020' programme. Formal negotiations were subsequently launched at the
beginning of 2015.

7.
        PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH

The Armenia
Development Strategy highlights the education sector’s crucial
importance for the country’s sustainable development.
A law to extend free compulsory education from nine to 12 years, starting from
the 2015–16 academic year, was submitted to the national assembly. The law aims
to counteract students’ tendency to leave school before completing secondary
education. Armenia was actively engaged in higher education reform,
hosting the Bologna Secretariat and Bologna Follow-up Group Secretariat and the
2015 Bologna Ministerial Conference. With EU support, it continued to reform
the national qualifications framework and organise the transition to an
independent quality assurance system.

Vocational education and
training (VET) reform also
continued, bringing it closer to the needs of the labour market. EU support
focused on equal access to high quality education and including young people
with special needs. The revision of qualifications progressed, with a pilot
credit system test for VET during the 2014–15 school year. The number of
students who receive free vocational education increased by 50 %. The
proposed amendments on compulsory education would mean 100 % free
vocational education for students with nine years of basic
education. A management information system covering the whole VET system and
higher education became operational in 2014.

Armenia participated in the Tempus
programme with 29 projects out of which 8 are coordinated by an Armenian
higher education institution. 246 students and staff were selected in 2014 for
mobility within partnerships supported by Erasmus Mundus and five students were
selected for a joint master's degree. Three applications were selected for
funding under the Marie Skłodowska-Curie actions (MSCA) under 'Horizon
2020'. Armenia also
participated in the eTwinning plus action with 23 schools. Young people and youth
organisations benefited from Erasmus+, with 1 443 participating in
mobility projects and 123 in the action for young people and decision-makers.
Armenia was involved as leader or partner in 13 regional projects in the Eastern
Partnership culture programme.

The first version of the
EU-Armenia roadmap to work with civil society for the period 2014‑17
was drawn up on the basis of extensive consultations and discussions with the
EU Member States and civil society. More than 100 civil society representatives
were part of the consultation process, involving meetings and online
consultations.

The
Ministry of Health drew up the 2014–20 draft public health strategy.
Armenia approved a healthy lifestyle programme. The government also identified
health as one of the thematic anti-corruption areas and agreed to provide funds
to setup a system for the secure supply of contraceptives. Armenia continued
its technical cooperation with the European Centre for Disease Prevention and
Control (ECDC) in the context of an EU-funded regional project on preparatory
measures to support the participation of ENP countries in ECDC activities.

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[1]
For sources and detailed figures, see Statistical Annex accompanying the
reports; figures without sources are forecasts by Commission services.

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