The bridge has been chosen as the symbol while designing the Annual Report of Financial System Mediator, since the role of a bridge, like the mission of the Mediator, is to bring together two opposite sites.
TABLE OF CONTENTS
2 Address of Chairman of the Board
3 Address of Financial System Mediator
4 The Office of Financial System Mediator
8 Activities carried out in 2016
14 Activities planned for 2017
16 Statement of Claims
36 Financial Statement and Audit Opinion
44 Precedents/Exemplary Cases
64 Questions and Answers
The cover represents the Kievyan Bridge, which is one of today’s most active 68 Acknowledgements bridges, also known as Hrazdan Great Bridge or Hrazdan Bridge. Despite the long and difficult years of the construction of this bridge (1949-1955), it is considered as one of the greatest achievements of bridge-building history in Armenia. 72 List of organizations which did not sign the covenant FSM, pointing to the fact that the Office of FSM To this end, we have developed a policy of raising has been entrusted with the honor to organizing financial awareness of consumers in the framework the INFO 2016, an annual conference organized by of the program “Financial Consumer Education”. The the International Network of Financial Schemes seminars we conduct in all regions of the Republic of Ombudsmen. Now, as we had the opinions of the Armenia as well as in the Republic of Artsakh usually participants summed up after the event, we are cover a wide range of target groups, including senior proud to say that they gave very high marks to the schoolchildren, students, employees of state-owned content of the conference program and appreciated organizations and employees of large companies. the quality of the organization. In the year under review the Office of FSM received In conclusion, I would like to thank all the stuff of 4735 complaints, 4118 of which regarding the financial the Office of FSM for professionalism and wish them system, of which 1523 were accepted for examination. success and new achievements in their work. Note that 283 complaints and claims of citizens, which were formulated with the help of our staff, had been satisfied by financial institutions without Intervention of the Mediator. This figure followed an upward trend having grown by 116.03% compared to ADDRESS OF CHAIRMAN ADDRESS OF FINANCIAL the relevant indicator in 2015. OF THE BOARD SYSTEM MEDIATOR In the end, let me thank all our customers for their Dear reader, Dear reader, trust, and financial institutions in Armenia and abroad, for cooperation and support. Behind is another year of the activities of the Financial Let me welcome you and present this annual report System Mediators Office. Year 2016 was definitely of the Office of Financial System Mediator for 2016. outstanding for the Office of FSM for many achieve- In the reporting year the Office of FSM posted a ments we had. Committed to established traditions further progress, in line with the strategy objectives and strategy, the Office of FSM continues to protect and goals. Following best international practice and the interests of consumers in the financial sector, trying to be an impartial and trustworthy organization, caring for the respect and trust of the people. we now are in the 8th year of productive activity in the financial system of Armenia to protect the rights Year 2016 had even more growth of complaints and interests of consumers and enhance the public filed to the Office of FSM. In particular, the number confidence in the system. of complaints relating to the financial system had increased by 26.20% over the previous year, and claims The Office of FSM successfully maintains partnership increased by 5.18% in 2016. The dynamic growth of the relations with financial organizations, seeking to complaints submitted to the Office of FSM is due not resolve the dispute between the parties through only to the impartiality and effectiveness the Office of reconciliation in order to give the case a quicker FSM performs, but also to the increasing awareness outcome, find a solution that is preferable to either of our activities, which in turn is a result of the program Sincerely, side and make sure business relations between the “Financial Consumer Education” carried out by the Arkady Khachatryan organization and its customer are maintained. As Yours truly, Office of FSM. we always maintain, nurturing a consumer who is Piruz Sargsyan Chairman of Board of Trustees financially educated and who knows that they are It is noteworthy that international organizations of the Office of FSM protected in the financial market is one key mission Financial System also highly appreciate the activities of the Office of Central Bank of the RA, Board Member of the Office of FSM, which is prescribed by the law. Mediator
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Address of Chairman of the Board Address of Financial System Mediator The Office of Financial System Mediator (FSM) is an GOVERNANCE OF THE OFFICE OF FSM THE OFFICE establishment with independent management system. Its founder is the Central Bank of the Republic of According to the Republic of Armenia Law on Finan- Armenia. The Office of FSM is called to settle out any cial System Mediator, bodies of management of the OF FINANCIAL property disputes that arises between consumers Office of FSM are: as natural person and financial organizations. The SYSTEM MEDIATOR services of FSM are free of charge; the process of • Board of Trustees, and review of complaint is explicit, fast and transparent. • Manager of the Office, i.e. the Mediator.
The Office of FSM was established pursuant to the Republic of Armenia Law on Financial System Me- According to the Republic of Armenia Law on Finan- diator, passed on June 17, 2008. The Office of FSM cial System Mediator, the Board of Trustees of the started its activity in January 24, 2009. Office of FSM consists of 7 members, and they are appointed as follows:
OBJECTIVES OF THE OFFICE OF FSM • one member by the Government of the Republic LORI BERD BRIDGE of Armenia, Spans the Urut River • Protection of consumer rights and interests in • one member by the Board of the Central Bank of The bridge of Lori Berd is a medieval bridge, located the financial market; the Republic of Armenia, in the Lori Berd village, Lori Province. It’s included in • Fast, effective and free of charge review and han- • one member by organizations that advocate the static monument list of the Lori Berd’s history dling of claims of clients; protection of consumer rights, and and culture. • Enhancement of the public confidence in the fi- • four members by unions of organizations. nancial sector.
The Board of Trustees of the Office of FSM is called CORE VALUES OF THE OFFICE OF FSM to approve internal policies and procedures of the Office, hear the Financial System Mediator reports, Effectiveness, competence and openness are very control the status of implementation of the deci- important pillars which determine how well the sions it has made, oversee day-to-day activities of Office of FSM functions and how much public trust the Office and its financial and economic perfor- it has earned so far. The following are core values mance, approve the budget of the Office, any chang- which underlie day-to-day activities of the Office: es made thereto; oversee the performance against the budget, approve annual financial accounts and • Impartiality in case review; take on other functions as required by the law. Ac- • Equality or equal rights for the parties; cording to the law, the Board of Trustees shall not • Caring attitude towards the customers; interfere with the professional activities of the FSM. • Priority to achieving reconciliation of the parties; • Operational effectiveness; According to the Republic of Armenia Law on Finan- • Transparency and openness; cial System Mediator, the Mediator shall be required • Partnership and confidentiality; to have higher education, firm authority and at least • Professionalism and teamwork; five years’ work experience. The Mediator shall not • International cooperation and innovative solu- be a person who has worked in any financial organ- tions. ization in the last three years. The Mediator shall not: i) be engaged in entrepreneurial activity, ii) be
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The Office of Financial System Mediator a member of management at the party, iii) hold STRUCTURE a position in central or local governments, commer- cial undertakings, iv) perform other paid work except for scientific, pedagogical and creative activities; the Mediator must refrain from any actions that cast doubts over their independence and impartiality.
The Office of FSM has an auditor function. The au- ditor is appointed by the Board and reports to the THE BOARD OF AUDITOR Board direct. The auditor carries out independent TRUSTEES and impartial investigation and evaluation of the operations of the Office of FSM through checkups/ examinations.
The Office of FSM has two pillars which make sure the Office operates fluently. These are:
• Support Group which is responsible for adminis- trative tasks to make sure day-to-day activities SUPPORT THE MEDIATOR ASSISTANT TO of the Office are uninterrupted; and GROUP MEDIATOR
• Complaints handling and Investigating Group which makes sure the Office performs its profes- sional duties as prescribed by the law. This group, in turn, consists of:
◉ complaints handling specialists, or otherwise, the front office, which receive the complaints; pro- HEAD OF THE CASE HANDLING vide primary consulting and helps customers to AND INVESTIGATING GROUP put together a claim;
◉ case investigators, or otherwise, the back office, with the main function of claim investigation, legal assistance to the Office, drafting of Media- tor’s decisions, international cooperation, and
◉ support group for the specialists who investi- gate claims; the group is primarily responsible for COMPLAINTS CASE SPECIALISTS helping with claim investigation, making visits to HANDLINGS INVESTIGATORS SUPPORTING CASE schools and getting involved in activities related SPECIALISTS INVESTIGATORS to the consumer education program.
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The Office of Financial System Mediator The Office of Financial System Mediator Measures which the Office of FSM took on in 2016 Vanadzor Basic College, Gyumri High School Nº 2, ACTIVITIES included seminars and get-togethers organized Akhuryan High School named after N. Aghbalyan, within the framework of the program for financial Gyumri High School “Balaton”, Gyumri high schools education of consumers, meetings with local finan- Nº 37, Nº 26 and Nº 1, Artik High School Nº 7, Ka- CARRIED OUT cial institutions, and the annual conference of finan- pan high schools No 9 and Nº 2, Goris high schools cial ombudsmen. Now, a brief statement of what we Nº 1 and Nº 4, involving a total of 3440 senior high IN 2016 have done in 2016. schoolchildren.
HOSTING SENIOR SCHOOLCHILDREN AT THE OFFICE OF FSM PROGRAM FOR FINANCIAL EDUCATION AND INCREASING The program aims to increase students’ awareness AWARENESS OF CONSUMERS of the financial market and general financial litera- cy. A total of 16 schools in the regions were selected under the program in order to organize seminars– JRVANES BRIDGE meetings at the Office of FSM. Specifically, the pro- gram was designed so that seminars were offered Spans the Tumi River SEMINARS AT SCHOOLS to 9th to 12th graders of Abovyan High School Nº 1 The bridge of Jrvanes lies over the river Tumi, 2.8 km In the year under review the staff of the Office named after Kh. Abovyan, Byureghavan School north-east of Tumi village, Hadrout region, Artsakh. of FSM arranged seminars for 11th and 12th grad- named after S. Vardanyan, Gavar High School, Compositional and structural features are typical ers from a total of 44 high schools in the regions Hrazdan School Nº 10, Nor Hajin School Nº 1, schools to the 13th century. of the Republic of Armenia and capital Yerevan, in Yeraskh, Akounq, Armavir, Lernapar communities, in accordance with a preset curriculum and time- Buzhakan High School named after G. Gharibyan, table. Specifically, seminars were held at Yerevan schools in Sarukhan, Avshar, Geghard and Goght high schools Nº 184, Nº 29, Nº 105, Nº 94, Nº 83, communities, Aragatsotn School Nº 1 and Tsaghka- Nº 119, Nº 195, Nº 149, Nº 65, Nº 103; Yerevan Her- ber School named after M. Martirosyan, involving atsi High Medical School Nº 30, High School 726 senior schoolchildren in total. A trip to the Cen- Nº 190 named after G. Gjulbekyan, High School tral Bank’s Visitor Center along with refreshments Nº 189 named after S. Gevorgyan, high schools and a visit to the National Gallery and the History Nº 109, Nº 159, Nº 97, High School named after M. Museum of Armenia has become a standard offer. Abeghyan, High School Nº 16 named after A. Isa- hakyan, High School Nº 182 named after G. Emin, Abovyan High School Nº 1 named after Kh. Abovy- VISITS TO UNIVERSITIES an, Abovyan High School Nº 4, Hrazdan High School Nº 1, Hrazdan High School Nº 13 named In the year under review staff members of the after H. Orbelli, Gavar High School, Vagharshap- Office of FSM visited different universities in Ar- at High School Nº 10 named after M. Khorenatsi, menia to hold a seminar about the activities of Vagharshapat High School Nº 2 named after G. Na- the Office for both students and teaching staff. In rekatsi, Garni High School Nº 2 named after Atom, particular, seminars were held in National Agrar- Yeghvard High School Nº 2 named after G. Hako- ian University, Russian-Armenian (Slavonic) Uni- byan, Metsamor High School Nº 2, Sevan High versity, Yerevan State University, Armenia State School named after Kh. Abovyan, Vanadzor Basic University of Economics and Public Administra- Mathematics and Engineering University College, tion Academy of Armenia.
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Activities carried out in 2016 VISIT TO THE REPUBLIC OF ARTSAKH posit, loan or insurance contract, and how to pre- The TV Company “Yerkir Media” and “Hetq” News TAKING PART IN THE “ONE MONTH vent them. More information about the activities Agency featured the activities and performance OF MY FINANCES” PROJECT In the framework of the program “Increasing Con- of the Mediator and some statistics on investigated of the Office of FSM, the procedure of how com- sumer Financial Education and Awareness” we claims were provided, too. plaints/claims are handled, certain statistics on the This project started on the first day of April 2016 organized a series of seminars in the Republic of complaints received as well as provided a roundup at the initiation of the Central Bank of Armenia. Artsakh with involvement of two different target report of year 2015. A whole month, as organized financial tours were groups. In particular, this year’s seminar held in STUDENT SYMPOSIUM on offer by the Bank, the citizens had the opportu- Stepanakert Palace of Culture on May 17th was des- In the year under review the head and staff of nity to visit different financial institutions, including ignated for the employees of Armenia’s commercial On May 17, 2016 the Mediator initiated a student Claim Acceptance and Investigation Group of the the Office of FSM, among many other measures. banks which have branch offices in the Republic of symposium titled “The Financial System of Arme- Office of FSM were hosts to a radio program “A Those who visited the Office of FSM learned more Artsakh. The activities of the Office of FSM, case nia: problems and ways to solution” at which 10 Consumer’s Hour” at the Armenia Public Radio about the activities of the Office, its structure and handling and investigation and review of prece- students from local universities delivered speech- where they talked about the consumer education what it has done and will do next. dents were the main topic of the seminar. The oth- es on the various segments of the financial mar- program, the risks associated with the use of er seminar–meeting we delivered the next day was ket. The authors of three speeches recognized as payment cards and the ways to avoid such risks, the specifically organized for representatives from the winner by the competition committee received complaints received in connection with third party Government Office, ministries, the Police of Artsakh monetary awards from Armenia State University liability insurance contracts and some statistical and Stepanakert Municipality, involving about 120 of Economics. coverage. The guests answered questions raised by COOPERATION WITH public servants in total. the radio audience. FINANCIAL INSTITUTIONS
AWARENESS CAMPAIGNS VISIT TO YEREVAN MUNICIPALITY DISSEMINATION OF INFORMATION In the year under review an agreement was THROUGH THE INTERNET Quick and proficient investigation of the customer Another seminar–meeting was arranged for nearly reached with a number of TV companies to air AND SOCIAL MEDIA claim is crucial, and the Mediator always endeavors 50 employees of Yerevan Municipality. At the meeting, infomercials about the Office of FSM on television. to resolve the dispute through reconciliation of the an Office specialist talked about the main financial On a television show “Good Morning, Armenians” The website of the Office of FSM as well as online parties. Therefore, sound partnership with financial products available in the domestic financial market, aired by Armenia TV Channel, the specialists of social media and social networking services, such as institutions was what the Mediator tried to do this pointed out the potential risks when signing a de- the Office of FSM talked in their interviews about Facebook and Twitter, remain ideal places for the year, too. The following events were organized in posit, loan or insurance contract, and the ways to loan, deposit contracts, insurance policies and Office to post its regular news updates and other 2016 for that purpose: prevent them. card fraud. relevant information about day-to-day activities, including reports, statements, claim typologies and customary business practices, and so on. A SEMINAR–CONSULTATION A SEMINAR–MEETING WITH THE STAFF OF MASS MEDIA AND WITH CREDIT ORGANIZATIONS THE “SCIENTIFIC CENTER FOR RADIATION THE OFFICE OF FSM MEDICINE AND BURNS”, A COMPANY INTERNSHIP The Office of FSM organized a seminar–consultation UNDER THE REPUBLIC OF ARMENIA In the year under review the Mediator was hosted on with 26 representatives from 12 credit organizations MINISTRY OF HEALTHCARE a television show “Aravot Luso” of Public Television In 2016, as part of awareness campaign for young for discussing a procedure of exemplary case in- Company and, together with the head of Claim people and student involvement in the Office activ- vestigation. At the event the Mediator has provid- In the year under review the Office of FSM con- Acceptance and Investigation Group of the Office ities, we arranged practical training/internship for ed a detailed account of how the customer claims ducted a seminar for the “Scientific Center for Ra- of FSM, on the television show “Morning at Shant” 13 students from various educational establishments and complaints are examined, delivered statistics on diation Medicine and Burns” company employees. of the TV Company “Shant”, speaking about the in Armenia. The internees had an opportunity to claim investigation and talked about the exemplary The seminar participants had an opportunity to activities of the Office, the process of claim inves- obtain theoretical and practical knowledge of what case investigation and the common nature of claims gain important information about what financial tigation, the programs carried out by the Office as the Office of FSM does in particular and the financial filed to credit organizations. products are available in Armenia’s financial mar- well as the INFO 2016 conference. sector of Armenia on the whole. ket, what are the potential risks when signing a de-
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Activities carried out in 2016 Activities carried out in 2016 A ROUNDTABLE EVENT WITH BANKS total, and etc. Based on the 2016 results, the best financial services in the Eurasian Economic Union cooperating bank was ArdshinBank CJSC and best countries and China” was held in Moscow, Russian In October 22-23, 2016 the Mediator organized an- cooperating insurance company, INGO Armenia CJSC. Federation, to which Piruz Sargsyan, the Financial other roundtable meeting in Dilijan, Armenia, with System Mediator, was invited as spokesperson. The commercial banks’ representatives who are respon- For willingness to support the Office of FSM in the conference meant to be a platform for identifying sible for relations with the Office of FSM. A total of process of claim investigation, the Mediator awarded problems related to the protection of consumer 28 participants representing 19 banks attended this certificates “Best Cooperating Officer” to Ms. Shaqeh rights in the financial market and for exchange event. The main subject of for discussion included Manoukyan, a senior law counsel of HSBC Bank of experience by organizations active in this field. creditor liability as established by the Republic of Armenia CJSC, (banking), and Mr. Yuri Paravyan, A total of 46 delegates from 6 countries attended Armenia Law on Consumer Crediting, the procedure head of property claims unit of “Nairi Insurance” LLC the conference. Ms. Sargsyan delivered a speech, for classification of non-collateralized credits, problems (insurance). presenting an impressive track record of the Office that arise in execution of a payment order, collateral of Financial System Mediator from the very start problems, and etc. to nowadays as it has become established as an entity that defends consumer rights in the financial market in Armenia, with all ups and downs along A ROUNDTABLE EVENT INTERNATIONAL COOPERATION the way. The Mediator introduced the importance WITH INSURANCE COMPANIES of international cooperation in the field of consumer protection, and expressed hope that further events In the year under review the Office of FSM initiated in the Eurasian Economic Union member countries another roundtable meeting, an annual event, From the very beginning of activities, the Office would facilitate the implementation of best financial with the domestic insurance market participants in of FSM has been proactive in cooperating with ombudsman practices there. Dilijan, Armenia. The meeting was organized to overseas partners in order to exchange experience host the executive director of the Armenian Bureau and introduce best international practice of media- of Motor Insurers and executive directors of insur- tion industry to Armenia. The Office of FSM seeks to CONFERENCE: ance companies and representatives from insurance integrate innovative methods and approaches brokerage firms, who are responsible for relations to its programs and services, including the claim The annual conference of the International Network with the Office of FSM. Participants at the meeting acceptance and investigation process, in order to of financial Ombudsman Schemes, the INFO2016, addressed issues connected with third party motor increase performance effectiveness. Happily, in took place in capital Yerevan from September 18th liability insurance policy, as well as issues related to recent years, leading field professionals at various to 21st of 2016. The Office of FSM was entrusted health insurance and property insurance. international events have been citing our achieve- for the first time to host the conference. Nearly ments as an example of best international practice. 70 delegates – financial ombudsmen, prominent It is worthwhile mentioning that the Office of FSM lawyers, former judges and politicians – from 29 BEST COOPERATING PARTNERS: has had the honor to organize the annual 2016 countries attended this exciting event. The title of Conference for International Network of Financial the conference was “Defining Individuality - Going Traditions flourish when they are maintained: at the Ombudsmen (INFO 2016). Global” which emphasizes the impact of national event to celebrate seven years into the activities of and cultural characteristics of each country on the Office of FSM, the Mediator had the pleasure the Ombudsman’s professional activities. After the of announcing the winners in the nomination of PARTICIPATION IN THE CONFERENCE event, we summed up the opinion of the partici- “Best Cooperating Company” and “Best Cooperating “PROTECTION OF RIGHTS OF CONSUMERS pants who gave high marks to the content of the Officer”. As always, best cooperating partners are OF FINANCIAL SERVICES IN THE EURASIAN conference program and appreciated the quality chosen based on the criteria developed by the Office ECONOMIC UNION COUNTRIES AND CHINA” of the organization. The Office of FSM received of FSM. These criteria include the level of the organ- many letters and thank-you notes. The INFO Union ization’s involvement in the case review, the share On June 23, 2016 the first international confer- issued a special e-newsletter that featured the of cases ended with reconciliation of the parties in ence titled “Protection of rights of consumers of conference results.
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Activities carried out in 2016 Activities carried out in 2016 FINANCIAL CONSUMER RETHINKING THE PROCEDURES ACTIVITIES EDUCATION PROGRAMS AND TRANSITION TO ELECTRONIC COMMUNICATION The Office of FSM will push forward the implemen- PLANNED FOR 2017 tation of the Consumer Financial Education and The Office of FSM plans to develop a concept for Increasing Awareness Program over 2017. We intend transition to electronic document circulation and to welcome in Yerevan as many as 1000 senior electronic administration of claim handling to increase schoolchildren from different regions of Armenia and the quality and speed for customer service. Case we’ll continue seminars for both target groups, i.e. handling and investigating processes and procedures senior schoolchildren and students. need to be rethought into a simpler and quicker process.
THE NATIONAL STRATEGY FOR FINANCIAL EDUCATION PROGRAM
The Office of FSM will remain proactive in its coop- eration with the Central Bank of Armenia, i.e. further HALEVOR BRIDGE participation in the “One Month of My Finances” project as part of the Program on National Strategy Spans the Ishkhanaget River for Financial Education. The bridge of Halivor lies over the river Ishkhanaget, 2 km south-west of Mets Tagher village, Hadrout region, Artsakh. DISCUSSIONS/SEMINARS
Further roundtable events will be arranged at which domestic financial industry representatives will be expected to address controversial issues relating to the review of typical examples of claims of the clients and other matters of relevance.
PREPARING FOR THE 7TH ANNUAL INTERNATIONAL CONFERENCE
Next year we plan to hold our annual international conference which will carry the title “The Financial Ombudsman Institute Increasing Public Confidence and Enhancing Financial Inclusion”. Participation of hundreds of domestic financial industry specialists as well as representatives of the CIS countries’ central banks and supervisory services in the conference is expected.
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Activities planned for 2017 STATEMENT OF CLAIMS, 2016 in 2015 these indicators were nearly 59.10 percent, STATEMENT 70.50 percent, 73.36 percent, 79.70 percent, 61.30 per- • In 2016 the Office received a total of 4,735 com- cent and 56.32 percent respectively. plaints, including 4,118 complaints related to the OF CLAIMS financial sector, of which 2,989 were eligible • In monetary terms, a total AMD 188,897,125 was under the law to be reviewed by the Mediator. compensated to clients as a result of FSM’s work. 1,129 complaints not eligible for handling were Incidentally, this figure does not consider the associated with the events occurred before the cases which were settled out with no money Law on Mediator had entered into force; some actually reimbursed to the client but rather seeking of the claims ended up with court writ issued to satisfy another claim of theirs, for example, by in respect thereto or with the case pending in changing the terms in the loan contract or having court proceedings; and a few cases were not an overdue loan re-classified in favor of the client, under the jurisdiction of the Mediator since the and so on. The largest compensation in 2016 was consumer didn't qualify as "customer" according AMD 8,008,289 and the smallest, AMD 450. to the law on the Mediator. The rest of com- plaints were of a general nature and these have • In 2015, the total amount of compensation reached not, virtually, contained property-related claims. AMD 198,369,625, in 2014 AMD 199,147,628, in 2013 AMD 204,578,416, in 2012 AMD 134,087,137, in 2011 • Specialists of the Office delivered advice to all the AMD 58,137,847; in 2010 and 2009 these indica- clients who applied as well as helped draw up tors were AMD 29,264,354 and AMD 26,062,886, complaints to the financial organizations concerned respectively. SRANOTS BRIDGE and explained their rights and obligations. Based Spans the Kirants-jur River on the 2016 results, 283 complaints (9.47 percent) • By virtue of our central principle of fast and The Sranots Brigde is located near the Getashen village, Tavush out of a total 2,989 eligible for review were treated effective review and handling of every claim, after Province. It was built on the picturesque Kirants-jur River. The road positively by the organizations without having to a preliminary review we often explained to our of the bridge was leading to the nearby inhabitation located on the file a request in writing to the Mediator; where the clients and made them clear that action of the right coast, the ruins of which are now left. client applied to us for request, we helped them to organization involved was exemplary and that fill in a file against that organization. It should be we would not be going to have success even if noted that in 2015 this indicator was 4.91 percent we took the claim for review. Normally, in such (131 complaints out of 2,668), in 2014 4.87 percent circumstances, our clients trusted our specialists (130 complaints out of 2,667) in 2013 5.65 percent and agreed to our point. This perhaps explains the (92 complaints out of 1,627), in 2012 2.73 percent dynamics of the complaints accepted for review (26 complaints out of 951), in 2011 7.80 percent (43 by the Office. In 2016 out of 4,118 complaints 1,523 complaints out of 551); in 2010 14.70 percent (66 or 36.98% were transformed into cases for further complaints out of 450); and in 2009 20.41 percent investigation. In 2015 out of 3,263 complaints 1,448 (40 complaints out of 196). or 44.38%, in 2014 out of 3,244 complaints 1,276 or 39.33%, 2013 out of 2,003 complaints 818 or 40.84%, • During 2016 a total of 1,523 claims were received in in 2012 out of 1,311 complaints 392 or 29.90%, in 2011 writing, 78.71 percent of which settled out in favor out of 803 complaints 144 or 17.93%, in 2010 out of the client; about 55.55 percent of claims settled of 642 complaints 110 or 17.13% and in 2009 out out in favor of the client were result of reconciliation. of 378 complaints 57 or 15.08% were transformed According to the 2009 results, of claims settled out into cases for further investigation. in favor of the client 61.00 percent had an outcome of reconciliation; in 2010, 2011, 2012, 2013, 2014 and
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Statement of Claims • During the year under review about 56.73% of STATISTICS, total complaints were against insurance companies, among which about 91.01% of complaints were GENERAL PROFILE about MTPLI contracts. Most of the clients did not agree with the estimated amount of damage as well as more complaints were received in The number of complaints received by the Office during 2016, by quarter: connection with non-compensation of the damage The number of complaints relatd to financial system or delayed compensation.
1100
956 1054 1009 1099 0
I quarter II quarter III quarter IV quarter
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Statement of Claims Statement of Claims The number of complaints received by the Office during 2016, by month: The number of claims received by the Office during 2016, by month: The number of complaints related to financial system The number of claims
450 0 180
January 72
February 163
March 174
203 407 346 353 350 351 307 357 345 372 369 358 April 116 0
January February March April May June July August September October November December
May 115
June 115
The number of claims received by the Office during 2016, by quarter: The number of claims July 85
450
August 115
September 124
October 130
November 170
409 346 324 444 0 December 144 I quarter II quarter III quarter IV quarter
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Statement of Claims Statement of Claims The number of complaints filed to and claims received Results/outcome of review for review by the Office during 2016, by quarter of complaints/claims, by percent:
1200 The number of complaints 40.05% 29.81% 19.50% 8.21% 2.23% 0.20% to financial system received 1000 by the Office during 2016
The number of claims 800 received by the Office during 2016 600
400
200 956 409 1054 346 1009 324 1099 444 Claim satisfied through reconciliation Claim declined 0 Claim satisfied Review of the claim suspended I quarter II quarter III quarter IV quarter Claim partially satisfied Reviews declined
Total number of complaints received during 2016, o/w: 4,735 Cases declined and cases settled Claims settled down in favor Number of complaints to financial system 4,118 down in favor of the client, of the client, by percent: presented as a ratio: • Not eligible for review by Mediator 1,129 78.71% 21.29% 55.55% 41.35% 3.10% • Eligible for review by Mediator 2,989
Resolved based on complaint/claim filed against the organization in question 283
Taken in for review upon presentation of a claim in writing 1,523
• Claim satisfied through reconciliation 610
• Claim declined 297
• Claim partially satisfied 454
• Review of the claim suspended 125
• Claim satisfied 34 Claim satisfied through reconciliation Claims settled down in favor of the client Claim partially satisfied • Review of the claim declined 3 Claims declined Claim satisfied
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Statement of Claims Statement of Claims Complaints, by type of organizations: Claims reviewed, by type of organizations:
Number of complaints to financial system received during 2016, 4,118 100% Total number of claims in writing during 2016, 1,523 100 % which were filed against: which were filed against
Banks 1,418 34.43% Insurance companies 1,248 81.94%
Insurance companies 2,336 56.73% Banks 232 15.23%
Credit Organizations 162 3.93% Armenian Motor Insurers’ Bureau 18 1.18%
Pawnshops 19 0.46% Credit organizations 19 1.25%
Armenian Motor Insurers’ Bureau 41 1.00% Pawnshops 5 0.33%
Payment and settlement organizations making remittances 6 0.15% Credit Bureau 1 0.07%
Credit Bureau 6 0.15%
Other financial institutions 130 3.16%
Share of claims filed against selected financial organizations in total complaints accepted Share of complaints filed against financial organizations in 2016 by the Office for review in 2016: in the total number of complaints presented to the Office:
81.94% 15.23% 1.18% 1.25% 0.33% 0.07% 56.73% 34.43% 3.93% 3.16% 1.00% 0.46% 0.15% 0.15%
Insurance companies Armenian Motor Insurers’ Bureau Banks Banks Payment and settlement organizations Credit organizations Insurance companies making remittances Armenian Motor Insurers’ Bureau Credit Organizations Credit Bureau Pawnshops Pawnshops Other financial institutions Credit Bureau
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Statement of Claims Statement of Claims Content of claims filed against banks: Content of claims filed against insurance companies and the Armenian Motor Insurers’ Bureau:
Total number of claims in writing filed against banks during 232 100 % Total number of claims in writing during 2016, which were filed against 1,266 100 % 2016 in connection with: insurance companies and Armenian Motor Insurers’ Bureau, including
Credit operations 146 62.93% Vehicle insurance 60 4.74%
Payment and settlement transactions 40 17.24% Medical insurance 24 1.90%
Depositary operations 32 13.80% Travel insurance 14 1.10%
Other 14 6.03% Accidents insurance 1 0.08%
Property insurance 13 1.03%
Mandatory car insurance contracts (including Armenian Motor Insurers’ Bureau) 1,154 91.15%
62.93% 17.24% 13.80% 6.03% 91.15% 4.74% 1.90% 1.10% 1.03% 0.08%
Vehicle insurance Medical insurance Travel insurance Credit operations Accidents insurance Payment and settlement transactions Property insurance Depositary operations Mandatory car insurance contracts Other (including Armenian Motor Insurers’ Bureau)
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Statement of Claims Statement of Claims Reimbursement: Share of claims, which were settled in favor of the client, in total claims, by year:
Total value of Client reimbursement 188,897,125 100 % 80 during 2016, including:
Reimbursement on claims against banks 33,546,495 17.76%
78 Reimbursement on claims against insurance companies 151,124,449 80.00%
Reimbursement on claims against credit organizations 983,381 0.52% 76 Reimbursement on claims against Armenian Motor Insurers’ Bureau 2,942,800 1.56%
Reimbursement on claims against pawnshops 300,000 0.16% 74
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Share of reimbursements as a result of review of the claims filed against financial institutions in total indemnification provided to the clients in 2016 70
Reimbursement on claims against 17.76% banks 68 80.00% Reimbursement on claims against 0.52% insurance companies Reimbursement on claims against 1.56% 66 0.16% insurance companies Reimbursement on claims against Armenian Motor Insurers’ Bureau Reimbursement on claims against 64 pawnshops
During 2016: 62 78.71% of the cases reviewed were settled in favor of the client; 66.4% 68.75% 67.69% 72.14% 70.44% 76.91% 77.79% 78.71%
• the largest compensation – AMD 8,008,289; 60
• the smallest compensation – AMD 450. 2009 2010 2011 2012 2013 2014 2015 2016
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Statement of Claims Statement of Claims Share of claims, which were settled in favor of the client, Dynamic analysis of some indicators in selected financial institutions claims (%): The number of complaints received by the Office in 2009-2016, by quarter:
0 1200 100 67 185 213 90 249 446 850 80 819
I quarter 956
70 80 164 185 60 345 422 723 50 771
II quarter 1054 86 40 128 212
30 379 445 741 20 828
III quarter 1009 161 10 165 2009 50.26% 83.62% 86.67% 80.0% 66.67% 2010 193 338 0 2011 2012 690 2013 930 Banks Armenian Motor Insurers Bureau 2014 845 Insurance Companies Pawnshops 2015 Credit Institutions 2016 IV quarter 1099
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Statement of Claims Statement of Claims The number of complaints filed to and claims received The number of complaints received by the Office in 2009-2016, for review by the Office in 2009-2016, by year: by type of financial institutions:
0 2500 4500 252 419 434 509 706 Banks 1029 1114 4000 1418 54 63 252 689 1142 3500 Insurance Companies 2014 1964 2336 46 75 60 3000 48 48 Credit Institutions 71 88 162 22 2500 80 42 33 14 Pawnshops 25 14 2000 19 0 0 10 10 18 Armenian Motor Insurers Bureau 1500 28 29 41 0 3 4 1000 1 7 Paymen and Settlement organizations 11 making remittances 6 6 1 500 2 1 0 378 57 642 110 803 144 1311 392 2003 818 3244 1276 3263 1448 4118 1523 0 2009 Investment Companies 3 1 2010 0 0 2011 3 0 2012 2009 2010 2011 2012 2013 2014 2015 2016 0 2013 21 68 2014 Other The number of complaints related to financial system 63 47 2015 The number of claims 136 2016
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Statement of Claims Statement of Claims Client reimbursement in 2009-2016: Share of Client reimbursement in total reimbursements, Client reimbursement (AMD) by type of financial institutions:
250 000 000 0 90
57.85 43.87 37.9 11.69 10.45 13.67 18.26 Banks 17.72
200 000 000 34.77 25.53 39.00 85.89 87.22 82.73 80.90 Insurance Companies 77.92 6.81 11.21 150 000 000 19.1 0.41 0.21 0.41 0.25 Credit Institutions 1.87 0.57 19.37 2.00 100 000 000 1.01 0.66 0.06 0.00 Pawnshops 0.97 0.00 0.00 2.00 1.00 50 000 000 It should be mentioned that the Re- 1.45 public of Armenia Law on Compul- 3.10 sory Insurance against Civil Liability 0.58 Armenian Motor Insurers 2009 1.51 Bureau in Respect of the Use of Motor Ve- 2010 hicles entered into force in January 0.00 2011 0.03 of 2011, and this means that in 2009 2012 26 062 886 29 264 354 58 137 847 134 087 137 204 578 416 199 147 628 198 369 625 188 897 125 0.00 and 2010 no claims against the 0.00 2013 0.01 Bureau of Car Insurers of Armenia 2014 0 0.01 Payment and Settlement were reviewed and compensation 0.01 organizations making 2015 2009 2010 2011 2012 2013 2014 2015 2016 given, accordingly. 0.01 remittances 2016
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Statement of Claims Statement of Claims FINANCIAL STATEMENT AND AUDIT OPINION
OSHAKAN BRIDGE Spans the Kasakh River It consists of 5 spans and is located in Oshakan village, Aragatsotn Province, lying over the Kasakh River. It was built in the 8th century by Nahapet Catholicos.
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Financial Statement and Audit Opinion 38 39
Financial Statement and Audit Opinion Financial Statement and Audit Opinion 40 41
Financial Statement and Audit Opinion Financial Statement and Audit Opinion TABLE OF CONTENTS
2 Address of Chairman of the Board
3 Address of Financial System Mediator
4 The Office of Financial System Mediator
8 Activities carried out in 2016
14 Activities planned for 2017
16 Statement of Claims
36 Financial Statement and Audit Opinion
44 Precedents/Exemplary Cases
64 Questions and Answers
68 Acknowledgements
72 List of organizations which did not sign the covenant
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Financial Statement and Audit Opinion According to Article 14 (3) of the Republic of Armenia The Client asked the Bank to return the funds that PRECEDENTS/ Law on Financial System Mediator, in making decision, were charged unjustifiably, since the transferor party the Mediator shall not only refer to the requirements had fully paid the expenses related with the trans- of the Armenian legislation but also take into account fer, providing the UBS’s letter about that the fee had EXEMPLARY CASES the rules of business conduct and ethics, and custom- been charged from the transferor. ary business practices. This gives the Mediator enough flexibility for decision-making and allows taking as To identify how banks functioning in Armenia deal streamlined an approach as possible to each case to with such a customary business practice, the Media- protect consumer interests. As the Mediator works on tor requested 19 commercial banks to deliver opinion investigating claims, the need to identify a customary on the situation and clarify the procedure when field business practice arises not only when a particular le- 71A of the transfer details of the SWIFT message of gal relationship is not regularized by any act but espe- the transferor bank has an indication OUR and field cially when it requires one and the same application 71A of the transfer details of the SWIFT message of of the provision or there is need to find out whether the recipient bank has an indication SHA, and what that practice is acceptable in any given situation or steps does the bank take in such cases in order to AGARAKADZOR BRIDGE circumstance. Below is a customary business practice protect the client interests. we came across with in the year under review. Spans the Arpa River The Office of FSM received the explanations and Agarakadzor medieval bridge is located in the Vayots Dzor Province, clarifications from 13 commercial banks functioning on the Arpa River. There is a Persian engraving on the frontal part in Armenia, and because almost all banks agreed on of the bridge, which has not been read so far. the same position, it has resulted in the creation of a A CUSTOMARY BUSINESS PRACTICE: customary business practice. PROCEDURE FOR TRANSFER OF MONEY IN US DOLLAR VIA THE • 11 banks indicated that in case of the option SWIFT SYSTEM OUR, the payer’s bank fees, as well as expens- es of all intermediary banks and of the bene- ficiary’s bank are covered by the payer, and in case of the option SHA, the payer’s bank fees When investigating a claim submitted to the Office are covered by the payer and expenses of the of FSM, the Mediator found it reasonable to clarify intermediary banks and the recipient bank are this customary business practice at banks. covered by the beneficiary. The commission fees are chargeable from the amount trans- According to the claim, a sum of USD 1,000 has been ferred. This option of charging fees is applied in transferred through UBS, a Swiss bank, onto the Cli- case of settlements in foreign currency, except ent’s account, using the SWIFT system. According to for transfers in US dollar. When the U.S. banks the transferor bank, all expenses related to the trans- receive the message type MT103 (option OUR) fer were carried out by that bank, and the message via SWIFT, the transfer fee is chargeable from type MT 71A, which had been issued by UBS, had an the correspondent account of the sender bank. indication OUR (the message was submitted to the Then the U.S. bank sends the payment order Office of FSM). The Client went to a commercial bank without charges to the intermediary bank, by functioning in Armenia to take the money transfer to changing the option OUR for SHA in MT103, find out that bank had only USD 988 for him, arguing which is determined by the U.S. Fedwire and that the remaining amount of USD 12 was charged as CHIPS clearing system features. a commission fee, as MT 71A had the indication SHA.
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Precedents/Exemplary Cases Banks indicated that their consultation typical- documents and other deliverables, including expla- ly offers their customers to make an advance nations and objections of the parties, obtained in the notice to the transferring parties so that they process of investigation, the Mediator concluded as choose a guaranteed option OUR (Guaranteed follows: Article 933 of the Republic of Armenia Civil OUR) when making money transfers in US dollar, PRECEDENT 1 Code says that the bank that has accepted a payer’s in which the beneficiary receives the full amount payment order has the duty to transfer the corre- transferred. sponding monetary sum to the bank of the recipi- ent of the funds for deposit into the account of the A bank said that in dealing with such a situation Claiming back the fee which was paid for mon- person indicated in the order within the time period they try to clarify what option has been used to ey transfer established by Paragraph 1 of Article 931 of this Code. send the money – whether OUR or Guaranteed OUR. If the amount has been transferred using The Republic of Armenia Law on Funds Transfer by the option Guaranteed OUR but the intermedi- The Client made a money transfer at the Bank. Be- Payment Order provides that the transfer of funds ary banks have charged a fee, the bank applies to fore that, the Client provided the beneficiary data under the payment order ends when the benefi- the sender bank for compensation. The bank said in writing to the officer of the Bank. However, the ciary’s bank accepts the payer’s payment order there have been cases of compensation. amount did not reach the beneficiary as there has made in favor of the beneficiary. According to Arti- been an error in making the transfer. According to cle 11 (1) of this law, if a payment order was trans- • A bank surveyed said that they have never en- the Client, he has paid a fee for the transfer of the mitted pursuant to a security procedure, and the countered this kind of problem, but when such money and, on top of that, been informed verbally payment order: a) erroneously instructed payment a situation arises, preference will be given to ex- of his responsibility in case the transfer goes to the to a beneficiary not intended by the sender, (…) and isting data rather than the customer. wrong addressee. As a result, the Bank demanded the sender proves that it complied with the secu- a payment from the Client in order to be able to get rity procedure and that the error would have been • Another bank had a completely different position, the money back through the letter and have that detected if the receiving bank had also complied, noting that only 32A rather than 71A of MT103 money re-transferred, using the beneficiary data the the sender is not obliged to pay the amount of pay- can serve a basis for the recipient bank to deter- Client had submitted. The Client paid the fee, re- ment order, (…). mine the amount of money transferred on behalf quested by the Bank, to get a prompt transfer in fa- of the customer. The amount shown in field 32A vor of the beneficiary, but the money never reached The bank that has received the payment order shall will be credited by the bank onto the customer’s the destination, nor has it been refunded. Believing attempt a transfer of funds to the recipient bank in account without any deductions, regardless of that the transfer was executed incorrectly due to order to credit the amount on to the account of the what is stated in 71A of the message type. negligence of the officer of the Bank, the Client filed person so indicated in the order. And if there is an a claim to the Bank but got a negative response. In error in the payment order, in particular, a wrong re- a petition to the Mediator, the Client demands that cipient has been indicated, the recipient bank should Thus, the Mediator states that when making mon- the Bank recompense him the property damage in- be only be liable if it does not comply with the re- ey transfers in US dollar via SWIFT, the beneficiary’s curred as a result of the transfer, particularly to re- quirements of security protocol, and had it complied bank is not responsible for changes to the existing fund the fee charged from him unreasonably and with such security protocols, it would have detected data in MT103 message, which can result in incom- eventually make the transfer of money. the payment error. plete receipt of the money because the intermediary bank/banks or the recipient bank may have charged The Bank noted that there was no fault of the officer In this case, the beneficiary indicated by the Client commission fees subject to tariffs they use. with regard to the claim as all what they tried to do was not the person who the Client had intended to was to fulfill the Client’s order. transfer the money for. The Bank has executed the payment order in a proper way, and thus transferred When investigating the claim, the Mediator request- the amount due. What was wrong though was an ed hearings at the Office, attended by employees error which the beneficiary’s bank revealed in the of the Bank and the Client. Having reviewed all the payment order and admitted no crediting for the
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Precedents/Exemplary Cases Precedents/Exemplary Cases beneficiary’s account. The Client has applied to the to the Client. The Bank also said they would adjust the Bank should have given the notice as soon as Bank for changing the recipient’s name from Com- the wrongly accrued service charge and the changed possible, upon the very first visit of the Client to pany “A” to Company “B” in the payment order and tariff would be binding to the Client only after he the Bank after the entry of the decision into effect. paid a respective fee. No evidence of giving incorrect would have been informed of such change. Whereas the Bank has failed to notify the Client of information to the Client by the officer of the Bank PRECEDENT 2 the change in the rates and tariffs not only before has been confirmed during the hearings. In addition, Thus, for investigation, the Mediator had to clarify but after the entry of the decision of the top man- in his complaint the Client attributed the incorrect the following: agement into force, even though the Client has since transfer to the negligence of the employee, but the visited the Bank many times. hearings supported the evidence that the Client had Failure to properly notify the client of the chan- 1 whether or not the Bank has violated the provi- submitted to the Bank a document containing in- ge in the terms of bank card servicing sion of information, subject to mandatory disclo- The reasoning above infers that the Bank has in- formation on two persons. In an effort by the em- sure, to the Client, as provided for in Article 9 (1) fringed the obligation to provide information, sub- ployee of the Bank to figure out the recipient in the of the Republic of Armenia Law on Attraction of ject to mandatory disclosure, to the customer, as payment order, the Client pointed to Company “A” The Client is a cardholder of the Bank. The Client Bank Deposits; established in Article 9 (1) of the Republic of Armenia as the beneficiary. For a payment via S.W.I.F.T. the believes that his rights have been apparently violat- Law on Attraction of Bank Deposits. Bank charges a respective fee, subject to current ed by the Bank as changes have been made to the 2 whether the Bank’s effort to return the service rates and tariffs of the Bank, which the Client had terms and conditions of card servicing, which the Cli- fees, charged from the Client, to that Client’s ac- As to the question of whether the Bank’s effort to been advised about, and other fees are applicable if ent has not been notified of. The Client thinks that count and not applying the effect of top man- return the service fees, charged from the Client, to changes are to be made in the payment order based the Bank has violated the requirements laid down agement’s decision to the Client exempts the that Client’s account and not applying the effect of on the customer request and for a number of other in Article 9 of the Republic of Armenia Law on At- Bank from the obligation to pay fine, as provided top management’s decision to the Client exempts operations. The information on the rates and tariffs traction of Bank Deposits, so he filed a claim against for in Article 12 of the above-referred law. the Bank from the obligation to pay fine pursuant is published on the Bank’s website, and it was pre- the Bank, demanding that the latter pays a fine of to Article 12 of the above law, the following should sented to the Client before he applied for the change AMD 300,000 as established under Article 12 of the A thorough review of the documentation, explana- be said: in the beneficiary details, prompting him to pay the aforementioned law. tions and arguments of the parties, and looking into fee and apply for the change. the relevant laws and regulations of the Republic of According to Article 12 of the Republic of Armenia The Bank has voiced objection with regard to the Armenia led to conclude as follows: Law on Attraction of Bank Deposits, where the fact The Mediator found that, in this case, the Bank claim, explaining the following: months after the of violation of the rights of depositor as user of the bears no responsibility for an incorrect indication of banking card was issued to the Client, the board of The “available at the bank” option, which the Client bank’s services has been proved, the bank must the name of the beneficiary in the payment order. directors of the Bank decided to make changes to chose as a means of communicating the informa- pay to the depositor AMD 300,000 (three hundred The Client has applied to the Bank for changing the the terms and conditions of card servicing. The Bank tion in this case, does not exempt the Bank from the thousand drams) within 30 days. The first part of beneficiary details and paid a respective fee, sub- said they have duly notified their customers of this obligation to provide the information to the depos- this article cannot be interpreted as provision that ject to current rates and tariffs of the Bank, for that change by post and e-mail communication channels itor as prescribed by law but rather establishes the limits or revokes the depositor’s right to claim com- purpose. The Bank has executed the transfer and as the customers have their preferred way of receiv- way by which the depositor wishes to be informed pensation for damage. the money has been credited with a new account ing notifications from the Bank. The information of what is subject to mandatory disclosure. In this of the beneficiary. has also been published on the Bank’s website. The particular case, the Bank ought to provide the Client The law establishes that, once the fact has been Bank said the Client has chosen the “available at the with information, subject to mandatory disclosure, proved, the bank shall pay to the depositor AMD As a result, the Mediator has rejected the Client’s bank” option for communication, so the Bank could after the adoption of the relevant decision by the 300,000 by virtue of the proved fact of infringe- claim. only have notified of the change if the Client visited top management of the Bank, no later than 7 (seven) ment, irrespective of restoration of the violated the Bank. The Bank has duly performed this obliga- working days prior to the entry of the change into rights of the depositor or of the compensation for tion yet the Client made a complaint thereafter. The effect. However, given that the Client had pointed to damage. In this case, the fact of violation exists. Bank noted that further study made it clear that the the Bank to be the place for receiving information, new tariff would not have applied to the Client as subject to mandatory disclosure, the Bank could, for The Mediator has decided to satisfy the Client’s the latter had not yet confirmed his awareness of objective reasons, have had no possibility to notify claims against the Bank. the changed rates and tariffs of the Bank. However, the Client of the decision of the top management for technical reasons, the new tariff has also applied prior to the entry of the decision into effect. Instead,
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Precedents/Exemplary Cases Precedents/Exemplary Cases The Bank says that in October the Client was grant- In a petition to the Mediator, the Client mentioned In sum, it should be noted that the pledged proper- ed a loan which was secured by jewelry items in that he had not been notified of the Bank preparing ty has been confiscated and possessed by the Bank gold. In December, the loan fell on overdue and no to apply confiscation of the collateral. by violation of the law. Because the Bank did not complete repayment of overdue interest has been have the right to take the ownership of the pledged PRECEDENT 3 done. Months later, the loan has fallen overdue to Yet, the pledgor’s right to be informed about the sei- property without a proper notice to the Client, the the extent of the principal. The Bank sent to the Cli- zure of the item of pledge without resort to court Mediator believes that the Client’s ownership of the ent a notification of the seizure of collateral without and the pledgee’s obligation to inform so are directly pledged property needs to be recognized. resort to court, and a few months after the notifica- connected with how and to what extent the pled- Taking ownership of the pledged property with- tion, the Bank accepted the pledged property under gee’s rights are regularized under the Civil Code. Based on the foregoing, the Mediator found that out duly notifying the client about it its ownership. The proceeds of the sale of the col- Such rights may only be fully exercised if the pledgor taking gold items for ownership by the Bank was lateral were used to cover the Client’s obligations. is given the opportunity to learn about the seizure not lawful, and although the Client’s ownership of The Bank also noted that because the Client was a of collateral by the pledgee without resort to court. the pledged jewelry is recognized, they cannot be The Bank has made a loan to the Client on the private entrepreneur, they carried out the calcula- Therefore, it is the pledgee’s obligation to notify the returned to the Client as they are considered to be pledge of gold. The Client does not deny he has tion of redemption price of the pledge in accordance pledgor of the seizure of the item of pledge, and a pledged in favor of the contractual commitment, been unable to perform obligations in a timely with Article 15(17) of the Republic of Armenia Law on pledgee failing to do so cannot exercise his right of which involves the payment of AMD 555.700. fashion. He has eventually paid off the liabilities Value Added Tax. seizure of collateral without resort to court. plus all other penalties/fines due under the loan So, although the Client’s right of ownership to the contract. The Client said he had already made After a comprehensive review of the documenta- Given the aforementioned, in order for a notifica- above-mentioned property continues, it is consid- the interest payment and had only had to pay the tion and deliverables related to the claim as well as tion to be such as to prove to the pledgor that the ered an item of pledge and shall not be refunded to principal. A few days later, a security officer of the based on the requirements of the law, the following pledgee has delivered a notice of seizure of collateral the Client until full performance of his contractual Bank made a phone call to the Client saying he can be concluded: without resort to court, it must be delivered to him obligations. The circumstance that the Client has ought to pay some more money, which makes up by hand or by mail, with acknowledgment of receipt, suffered damage due to the violation of his rights re- 20% of a sum, which, however, the Client does not A handful of provisions of the Republic of Armenia including by way of confirming of the receipt by the mained groundless in the investigation of the claim, agree with. An explanation of the Bank officer, the Civil Code establish that if the borrower fails to prop- pledgor. In this particular case, the notice of seizure so that part of the claim has not been satisfied. Client says, was that such extra money was due as erly perform his obligation, which is secured by collat- has been sent to the Client by post yet the Bank did the pledged items of jewelry had been handed to eral, to the bank, that bank will be entitled to exercise not present to the Mediator any evidence that the the Bank under ownership and, to return them to confiscation of the collateral and sell the item of col- notification had been received by the recipient, i.e. the original owner, the Client would pay a further lateral without applying to court, including to place the Client. The letter was handed to the recipient’s 20% of money. The matter was that the Client had the pledged property, to the extent of the debt owed, family member while the signature as a recorded been functioning as private entrepreneur, and the under the ownership of the pledgee or any third par- fact of a received letter very easily appeared to have liability has arisen as a result of recent amendment ty as designated by the pledgee, if so provided for in been different from the ones, shown in the Client’s to the laws. the collateral agreement or there has been a verbal loan contract and other documentation. agreement between the pledgee and the pledgor. The Client notes that the Bank did not properly no- The bank’s right to sell the collateral without resort to The facts existing in the context of the case make tify him of their intention of taking possession of the court arises only two months after it has made a due it clear that the notice of seizure, which the Bank items of collateral. The Client adds that, by the time notice in writing to the debtor. The investigation of sent via the postal service did not reach the Client the petition had been submitted to the Mediator, he the claim made it clear that the Client has improperly but another person. With reference to the receiv- did not receive extracts to the contract, either. The fulfilled his contractual obligations, which prompted ing of the notice by a family member, the Republic Client applied to the Mediator, demanding that the the Bank to send a notice of seizure of collateral to of Armenia Court of Cassation noted that, in this Bank returns him the jewelry, stops claiming more the Client. According to the appraisal carried out by particular case, the pledgee’s obligation to notify money unreasoningly and recompenses him the the Bank, the price of items of jewelry in gold totaled cannot be considered as a properly performed duty losses he has incurred as a result of infringement AMD 555.700. The Bank took the pledged jewelry un- because, while members of the family could have of the rights. der its ownership and used the money to repay the received the notice, they might have failed to pass it liabilities of the Client. over to the addressee.
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Precedents/Exemplary Cases Precedents/Exemplary Cases ing lien by the CESJA, so the money in the account the CESJA. As for the Bank, it should be noted that the Client has referred to. This can imply that there of the Client was blocked again. The Bank had not Article 71 of the law establishes that the decisions are no grounds for holding the Bank responsible received the C ESJA decision on the partial removal taken by the enforcement officer are binding to the under law, in which circumstance this claim of the of the injunction so far. Bank, and failure to comply with the decisions of the Client will be rejected, too. PRECEDENT 4 enforcement officer will serve a ground for holding After a comprehensive review of the documentation the Bank liable in accordance with the provisions of Thus, in applying lien to and confiscations from the and deliverables, related to the claim as well as Article 73 of the law. Client’s account the Bank has performed in imple- based on the requirements of the law, the following mentation of imperative decisions issued as re- A lien applied to the funds on the client’s card can be concluded: What this can imply is that the Bank’s action to quired under law and pursuant to the Republic of account pursuant to the decision by the Com- blocking the account of the Client and confiscating Armenia Law on Compulsory Enforcement of Judi- pulsory Enforcement Service of Judicial Acts According to Article 5 of the Republic of Armenia funds therefrom is lawful because it ensues from cial Acts. The documents and other deliverables in Law on Compulsory Enforcement of Judicial Acts, in- the messages duly communicated in compliance the case do not point to any such damage to the struments of compulsory enforcement include: 1) the with an established procedure under law, and be- Client the occurrence of which would have resulted An account servicing contract was signed between confiscation of property of the debtor through the cause the funds confiscated from the Client’s ac- from infringement by the Bank of any provision of the Bank and the Client in order use the account attachment and exercise thereof, and 2) the confisca- count do not exceed the accepted threshold as the law and would have obliged the Bank to com- to accept transfers of funds which constituted the tion of the debtor’s salary, retirement pension, educa- established under the decisions of the compulsory pensate the Client. Client’s salary. The Client says that the Compulso- tion benefit and other types of income. Article 43 (3) enforcement service. ry Enforcement Service of Judicial Acts (hereinaf- of the same law says that the confiscation on a basis The Mediator has rejected the claim of the Client. ter, CESJA) has made a decision to apply a lien to of the writ of execution shall apply to the debtor’s As to the second part of the Client’s claim where- the cash money on his account. For months, after monetary funds in the first place. Article 46 (4) of the by the Bank would be penalized by paying a fine the CESJA decision to impose injunction on the ac- same law says that in case the debtor has monetary under the Republic of Armenia Law on Compul- count entered into effect, there had been regular funds, the bank or other credit institution in charge sory Enforcement of Judicial Acts, subparagraph transfers of salary onto the Client’s account but of servicing the debtor’s accounts shall, within three 2.1 of Article 46 provides that in case the debtor the Client had been unable to withdraw it due to days after receipt of the decision of the CESJA, trans- has monetary funds the bank or other credit in- the injunction. According to the Client, the Bank fer such funds to the deposit account of the local unit stitution in charge of servicing the debtor’s ac- had only the right to freeze the use of his account of compulsory enforcement service of the capital Ye- counts shall apply lien to the debtor’s funds only in the amount not exceeding 50% of the salary revan. Further, according to Article 58 (1), in exercising to the extent specified in the decision of the en- due. The Client notes that he has only been given the writ of execution no more than 50% of the debt- forcement officer. In case of non-compliance with the two months’ salary in the specified timeframe. or’s salary and salary equivalents can be withheld up the requirements of this subparagraph, the bank In his letter to the Mediator, the Client demanded until full repayment of the amounts to be confiscat- or other credit institution in charge of servicing that the Bank returned the money which it had ed. Then, subparagraph 2.1 of Article 46 of the same the debtor’s accounts must be penalized for mon- failed to make available to the Client in the above- law provides that in case the debtor has monetary ey extra withheld by paying a fine of 0.1% of the mentioned period of time, in the amount of AMD funds, the bank or other credit institution in charge specified amount for each day. This norm implies 440,000, and payed the fines as provided for in the of servicing the debtor’s accounts shall apply lien to that holding the Bank responsible under the above Republic of Armenia Law on Compulsory Enforce- the debtor’s funds only to the extent specified in the referred provision requires for the Bank to have im- ment of Judicial Acts. decision of the enforcement officer. posed lien on the monetary funds of the debtor in excess of the limit specified in the decision of the The Bank wrote in response that the funds avail- The norms as referred to above surmise that apply- enforcement officer. As was mentioned above, the able on the bank account of the Client had been ing of lien to the property, which is aimed at securing CESJA had communicated dozens of their decisions blocked since July 2014, according to the decisions its possible confiscation in future, is an action that to the Bank about applied lien to the Client’s cash to impose injunction by the CESJA. Then, on Febru- restricts the turnover of that property. Moreover, available on the accounts with the Bank; the total ary 2015, the CESJA took another decision whereby the requirement for withholding no more than 50% sum of the amounts under injunction as indicated the injunction had been removed. However, start- from the debtor’s monetary funds on his account in in the said decisions has exceeded the cash funds ing from May, there were new decisions on impos- applying the lien to the mentioned funds refers to in the Client’s account in the questionable period
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Precedents/Exemplary Cases Precedents/Exemplary Cases event, by phone or otherwise so as to verify the So, the case diagnosed with the insured person fact of reported information. In the course of in- (the Client) is not considered an insurance event vestigation, no evidence was provided in support and shall not be included in the insurance cover- of the fact that the Company or service companies age. Also, because the Client didn’t report about PRECEDENT 5 had been notified of the above event. In view of the accident to the support organization and failed PRECEDENT 6 the circumstance that nothing was done to report to match up the costs, the Mediator finds that the about the insurance event to the servicing compa- decision of the Company to refuse to pay insur- ny immediately after the occurrence of such event, ance compensation is reasonable and the Client’s Refused compensation under travel assistance by phone or otherwise so as to verify the fact of request must be rejected. Insurance indemnity rejected on the grounds insurance reported information, it should be noted that the of the letter signed by the drivers of the in- Company had had the right to refuse to provide sured event insurance compensation. However, the damage of The Client had a leg kink while walking outdoors in up to 250 conventional units can be indemnified in Paris. Because of acute pelvic pain caused the Cli- case the rule to report to the insurance company A traffic accident occurred and as a result damage ent was unable to walk farther. The Client visited or supporting organization is not complied with, was caused to the Client’s motor vehicle. The ad- a hospital in Paris where she underwent a medical if there is an insurance event, except for accidents ministrative proceedings carried out declared that checkup which included an MRI examination. The provided for in the Rules. According to the report the Client is partially in fault. The Client applied to Client has paid EUR 1,900 for these services. The issued by the expert engaged by the Mediator, the the insurance company (the Company) to get in- Client filed a request to the insurance company (the case in question is not included in the list of events surance compensation to the extent of the damage Company) for reimbursement of the medical costs specified in the Rules. However, to the question of caused to the motor vehicle. The damage caused to but was rejected. In a letter to the Mediator, the whether or not the accident is an insurance event, the motor vehicle was an estimated AMD 97,000, Client demanded that the Company provided insur- the expert went on the details, as follows: a med- according to the Company, which infers that the ance indemnity in the amount of EUR 1,900. ical examination has revealed dystrophic-degener- amount of compensation to be provided would ative changes in the spine, early osteoarthritis of have amounted to AMD 48,500. Yet, the Compa- According to the Company, the Client was paid the right knee, moderate tendinobursitis to the ny refused to provide compensation. The Client did AMD 17,000 for reimbursement of the cost of trans- right posterior, left Coxalgia. According to the claim not agree with the decision of the Company since, lation of the documents but the Client’s request for of the Client, the incident occurred as a result of according to him, the Company was responsible for insurance indemnity had to be rejected since, as twisted leg. What the expert thought was that the providing a partial compensation of AMD 48,500. the Company noted, spinal examination could have Client had developed an illness or sudden health Discordant with the position of the Company, the nothing to do with a leg kink. disorder – left Coxalgia, which comes not as chron- Client turned to the Mediator with a request to ic disease and nor is it life-threatening. The leg kink make the Company pay insurance compensation of In the course of investigation, the Mediator has can be of a traumatic nature, but according to the AMD 48,500. engaged a doctor-specialist to listen to their ex- results of medical examination, the injury did not pertise opinion, and after the explanations and lead to the disorder of anatomical integrity of the The Company presented its views with regard to objections of the parties, review of the documen- body (any part thereof) and change in the struc- the Client demand, as follows: the Company rep- tation and deliverables related to the claim and ture of tissues. The health condition of the Client, resentative has arrived at the scene of accident af- of the requirements of the law came up with the therefore, shall not be considered as traumatic inju- ter having received an alarm call, had the accident conclusion, as follows: ry, since, according to the Rules, traumatic injuries protocoled and drawn up an act of traffic accident. happen as and when the accident causes a disorder According to paragraph 14 of that act, the parties The insurance company has the right to reject the of anatomical integrity of the body (any part there- of the traffic accident signed a statement by which application for insurance indemnity, subject to the of) and change in the structure of tissues, which they refuse using the Company’s services and are Rules, as and when the policyholder has failed to is accompanied by disruption of their functions. In not going to apply to the Company for indemnifi- report about the insurance event to the servicing this case, there is no disorder of human anatomical cation against the damage caused. As a result, the company immediately after the occurrence of such integrity and change in tissue structure. Company did not take any further action to clarify
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Precedents/Exemplary Cases Precedents/Exemplary Cases the circumstances of the accident. The Company re- “Mercedes-Benz”, reference should be made to the According to Article 1017 (1) of the Republic of Ar- ferred to Article 431 of the Republic of Armenia Civ- said paragraph 21 of the operational rules RL 1-017 of menia Civil Code, and of subparagraph 7.1 of Chap- il Code, which says that the obligation terminates the Armenian Bureau of Motor Insurers by conclud- ter 7 of the operational rules RL 1-001 “Compulsory when the creditor frees the debtor of the obligation ing that both drivers involved will have to be consid- Insurance Against Civil Liability in Respect of the resting upon it (forgives the debt), provided that it ered unintentionally guilty in the accident and the PRECEDENT 7 Use of Motor Vehicles” of the Armenian Bureau of does not violate the rights of other persons with re- damage caused to each other’s property will be an Motor Insurers (as approved under the Decision spect to the property of the creditor. By reference to estimated 50 percent. Nº 10-L, dated 13.09.2010, by the Board of the Bu- paragraph 14 of the act of traffic accident, signed by reau), under a non-life assurance contract the pol- the drivers involved in the accident, the Article 431 As for the rejection to pay insurance indemnity by Using the right of subrogation on the grounds icyholder must after the insurance event has been of the Civil Code, as well as the Terms of the Motor the Company and the grounds for rejection, it should of late notification of the accident made known to him notify promptly (in a reason- Third Party Liability Insurance, the Company made be noted that one way an obligation terminates is able timing) the insurer or its representative of a decision to reject insurance indemnification. when the debtor is being exempted of their duties this. Article 19 (2) of the Republic of Armenia Law or the debt is being rebated (forgiven). On the other In an accident, a motor vehicle hit the citizen who on Compulsory Insurance Against Civil Liability in After a comprehensive review of the documentation hand, the legislation has established that a person died immediately. As reported by the Client, relevant Respect of the Use of Motor Vehicles establishes and deliverables related to the claim, analysis of the has the right to exercise their discretion, while re- authorities soon arrived at the scene of accident and that a motor third party liability insurance contract explanations and objections of the parties, as well as fusing to exercise the right cannot be regarded as had the incident protocoled. According to the Client, shall specify exceptions from provisions of part 1 based on the requirements of the law, the following termination of that right. he did not contact the insurance company (the Com- hereinabove, for cases where policyholder and (or) can be concluded: pany) as he was in shock at the time, so he could other person legally possessing the car, has lost As shown by the facts in this case, the Client has only call them the next day to report the accident. consciousness because of the accident or were in Paragraph 21 of the operational rules RL 1-017 of signed where it clearly states that he refused the The Client added that the victim’s successor has ap- a state which made impossible for them to advise the Armenian Bureau of Motor Insurers says that services of the Company hence pledged to withhold plied to the Company for compensation and received insurance company about the accident in accord- in case of unintentional guilt of the injured party from filing any compensation request thereto. In a sum of AMD 950,000. After a short while, the Cli- ance with conditions and timeframe as defined by in the insurance accident or of the person in com- other words, this fact can be considered as a waiv- ent received a notice saying that he should reimburse the contract. Further, the Company referred to Ar- mand of the injured party’s motor vehicle (parties er of exercise of the right but it does not terminate the Company the sum of AMD 950,000, which the ticle 27 (1) 2 ‘b’ of the same law, which maintains involved in the accident, except those that have the person’s entitlement to compensation, therefore victim’s successor had received therefrom, as the that an insurance company has the right to subro- been recognized as innocent in such accident by there will be no way for termination of the obliga- Company has acquired the right of subrogation on gation in respect of the owner (the Policyholder) of the results of expertise, shall be considered un- tion. In this case, the Company has turned down the grounds that the Client had reported about the the motor vehicle as party having caused the dam- intentionally guilty in the occurrence of the acci- the Client’s request for compensation by refusing accident not the same day but the next. The Client age if the insurance company has not been notified dent also in the event where the fault of any of one-sidedly to perform an obligation, which is pro- said he has contacted the Company upon the first of the occurrence of insurance event in accordance the parties involved in the accident has not been hibited by law. We therefore believe that the Client’s possibility after the accident, since he was at the hos- with conditions and timeframe as defined by the confirmed) the share of guilt of the injured party right to receive compensation does exist and the ob- pital to pass a sobriety check then taken to the Police MTPLI contract. in the insurance accident or of the person in com- ligation did not terminate. station. On top of that, because he was in a state of mand of the injured party’s motor vehicle shall be shock, it made him unable to call. In a letter to the The Company said the Client didn’t mention any equal to 50 percent, while the fault of the parties In summary, the Mediator believes that the Client Mediator the Client pleaded the arbitration of the circumstances, nor provided evidence that would considered unintentionally guilty in the occurrence is entitled to receive insurance compensation to the Mediator to urge the Company to withhold from de- justify the impossibility to inform about the acci- of the accident with regard to other persons will extent of 50 percent of the damage caused, which manding the sum of AMD 950,000. dent immediately to the Company, whereas the be shared equally, unless the court establishes oth- makes up AMD 48,500 (97,000 * 50% = 48,500). Client maintained in his explanation that “…no spe- erwise by legitimate court decision. The Company’s position in respect of the claim was cific period of time had been established under the The Mediator has satisfied the Client’s claim. that the right of subrogation has been justified and in contract, but the Company made a call at the first Because it’s been impossible to figure out which compliance with the requirements of the law while opportunity”. Combining the imperative rules and/or action of the drivers had led to the occurrence of the Client’s request unfounded and the circumstanc- regulations with the actual case makes it clear that the accident and who of the drivers had violated the es as referred to in the request not supported by ev- the Client has not properly performed his obliga- traffic rules even though there were two expertise idence. In the outcome, the Company turned down tions of promptly notifying the insurance company opinions about the clash between “Opel Vectra” and the request of the Client for the following reasons: of the accident.
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Precedents/Exemplary Cases Precedents/Exemplary Cases According to the Republic of Armenia Investigative 1. Whether or not the motor vehicle of the Client sation is unfounded, so the Client has the right to Committee’s report, the accident occurred on 27th had on winter tires at the time of the accident, insurance indemnity. of April, 2014, at 5:40 pm. The company’s contact based on the photos from the site of the acci- center registered the call about the accident on dent, The claim of the Client has been satisfied in part, in 27th of April, 2014, at 8:14:43 pm. In other words, PRECEDENT 8 the amount of AMD 892.000. the difference between the accident and the re- 2. What is the indication “M+S ” shown on the porting makes about 24 hours, which suggests that tires of the motor vehicle of the Client? the Client has failed to perform his reporting obli- gation immediately. Turning down insurance compensation under The inspection showed that the tires were fit for the CASCO contract for not using winter tires use in wintertime while the indication “M+S ” on Thus, a comprehensive review of the documents the tires read as MUD AND SNOW, which means related to the claim and relevant legislative require- that the tire is designed for driving in mud and ments prompted the Mediator to conclude, as follows: The Office of FSM received a letter in which the Cli- snow conditions. In addition to the conclusion, the ent had lodged a claim against an insurance com- specialist invited attention to the iron pins on the In his letter to the Mediator, the Client said that pany. According to the claim, while driving on an icy tires, which are specifically designed for driving in he was in a state of shock after the incident; after road in February, the Client lost the driving control a wintertime weather. According to the results of a while he was at the hospital to pass a sobriety and hit a tree, resulting in damage to the vehicle. the commodity expertise as delegated by the Me- check then taken to the Police station. The proto- The damage was estimated by the insurance com- diator, the damage caused to the Client’s car to- col of checking the condition of sobriety said the pany (the Company) to amount to AMD 436.000. taled AMD 892.000. Client had been clearheaded. The Client was rec- The Client did not agree with the estimation as ommended to sign as a precautionary measure to he thought it was approximately AMD 1.800.000. After a comprehensive review of the documenta- stay around, and on top of that, was asked to tes- The Company, however, refused to provide com- tion and deliverables related to the claim, analysis tify as a suspect… This proves the fact that the Cli- pensation at all, because the Client drove using no of the explanations and objections of the parties, as ent has been at a hospital to pass a sobriety check winter tires at that time of the year. The Client did well as based on the requirements of the law, the after the accident and then was asked to testify not agree with the Company’s position, as he was Mediator concluded, as follows: about the accident. The reference information driving on winter tires, which could be verified. In issued by the Police also confirmed the wherea- a letter-complaint to the Mediator, the Client de- The Client’s motor vehicle has been insured under bouts of the Client after the accident and that he manded from the Company to provide insurance the insurance policy. The Terms which are an in- was taken to the Police station to testify, and that indemnity for the damage to his car, in the amount dispensable part of the Policy establish the Policy- he lingered there up until 11:00 pm that day. In of AMD 1.800.000. holder’s liability that they will operate the insured this case, there should be a judgment that the fa- motor vehicle only if it has on tires corresponding tal accident and long hours under the surveillance In response to the claim, the Company said it de- to the particular weather and road conditions, and by the Police left the Client in complex emotional cided to reject the insurance compensation because non-observance to this obligation shall be seen as and overwrought condition. the driver was not driving on winter tires, and if the violation of the Terms and lead to the ground for Client didn’t agree with the amount of damage, he rejection of insurance compensation. In this par- The Mediator has decided to satisfy the Client’s ought to use expertise assessment of damage and ticular case, the Company refuses to provide insur- claim lodged against the Company. provide the one to the Company for consideration. ance compensation by basing upon the fact that the motor vehicle operated on a snowy road in To get ahead with the investigation, the Mediator winter without winter tires. needed a qualified independent expert to deter- mine the amount of damage caused to the Client’s The final conclusion is that the tires of the motor ve- car as a result of the accident, as well as to get an hicle of the Client were fit for use in wintertime, ac- expert opinion on the following considerations and cording to the expert invited by the Mediator, while questions: the Company’s decision to reject insurance compen-
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Precedents/Exemplary Cases Precedents/Exemplary Cases in the proposed situation is not possible in terms of In a technical point of view, the circumstances as de- contracts for performing their duties and obliga- Traffic Rules Requirements. The mechanism of oc- scribed in the explanation by the driver of “Mercedes- tions, the insurance companies shall respect the pri- currence of the accident described in the materials Benz” do not match with both the mechanism of macy of the terms set forth by these rules. and the circumstances which the drivers mentioned occurrence of the accident and the traffic situation PRECEDENT 9 in their explanations of the traffic situation before before the collision. So, in case of a standard compensation after the the accident do not technically correspond to the request for insurance compensation is received, the real mechanism of how the collision happened and In the course of investigation, the Mediator also expertise should be carried out and duly notified to the traffic situation that existed before the acci- had the document of the specialist involved, which within 10 working days, after which 5 more work- Turning down insurance indemnity on the dent and these cannot, therefore, serve a basis for supported the impossibility of drawing up a con- ing days are provided for reaching an agreement on grounds of providing false or inaccurate in- examination”. clusion. According to the document mentioned carrying out extra expertise or making a claim for formation above, the mechanism of occurrence of the ac- double expertise. After this, if there is no claim for The Company has also referred to subparagraph cident described in the materials provided to the conducting extra or double expertise, the decision to 8.3.8 (“c”) of the Motor Third Party Liability Insurance expertise and the circumstances that the drivers grant or to refuse insurance indemnity shall be made There has been a traffic accident that caused dam- Terms, which says that “…the insurer shall reject the involved in the accident mentioned in their expla- within 1 working day after an established date. age to the Client’s own motor vehicle (“Mercedes- payment of insurance compensation if the suffered nations of the traffic situation before the accident Benz”). The Client turned to the insurance compa- party or its legal successor has not submitted all the do not technically correspond to the real mech- The investigation of the case revealed that the ny (the Company) to get insurance indemnification required documents, subject to the subparagraph anism of how the collision happened and to the conduct of expertise and communicating its find- to the extent of the damage. The Traffic Police rep- 8.2.7 of the Terms, within a 3-month period after re- traffic situation that existed before the accident. ings by the Company had run with a 43-day delay. resentative arrived at the site of accident, listened ceiving the list of documents, or if the documents These explanations cannot serve a basis for exami- So, the Company having arranged for the expertise to the explanations of the parties involved and contain false or inaccurate information…”. Because nation, and which was why the issues raised by the and made a notice thereof 43 days later from an drew a map of the traffic accident. Then, the Client the information contained in the documents sub- Mediator were left unanswered. established timeframe for these activities shall be turned to the insurance company (the Company) mitted by the Client was viewed as untrustworthy, obliged to pay to the Client a penalty of AMD 77,400 to get insurance indemnification to the extent of the Company has made a decision to reject the in- Because the explanations given by the drivers on the (43 x (1,800,000 x 0.1%) = 77,400). the damage. surance compensation. mechanism of occurrence of the accident did not match with the real mechanism of how the collision The Mediator believes that the claim of the Cli- The Company has arranged an auto-technical ex- To get ahead with the investigation, the Mediator happened and with the traffic situation that exist- ent must be refused on part of compensation for pertise and made a decision to refuse to pay com- had to involve experts in order to clarify the following: ed before the accident, as were mentioned in two damage caused to the motor vehicle but must be pensation based on the results of the expertise. The expert conclusions (one from the Company and the satisfied with regard to the penalty levied as a re- Client has voiced his disagreement with the decision • Technically speaking, whether or not the car other from the specialist invited by the Mediator), sult of breached terms, as established by the law of the Company, arguing that he’s been a suffered drivers as parties to the accident committed ac- one may conclude that the information the Client and relevant rules of the Bureau, in the amount of party, while the explanation he provided entirely tion contrary to the Traffic Rules Requirements provided to the Company with regard to the mech- AMD 77.400. matched with how the accident occurred. The Cli- in a given situation. If they did, in what manner anism of occurrence of the accident and the traffic ent has filed a complaint to the Company but re- such action could be linked to the occurrence of situation that existed before the accident is non-re- ceived no response therefrom within the time peri- the accident in the technical point of view. liable. Under such circumstance, the insurance com- od prescribed by law. Disagreed with the decision of pensation must be rejected by virtue of subpara- the Company, the Client appealed to the Mediator, • Whether or not the drivers had an opportunity graph 8.3.8 (c) of the Rule RL 1-001 of the Armenian demanding that the Company provide insurance in- to prevent the accident in a given situation in the Bureau of Motor Insurers. demnity in the amount of AMD 850,000 as well as technical point of view. incur the penalties provided for by law and the rules As to the Client requiring that a fine be levied as of the Armenian Bureau of Motor Insurers. After a comprehensive review of the documentation a result of breached terms, as provided for under the and deliverables related to the claim, analysis of the law, it should be noted that where policies and/or The Company has outsourced the services of the ex- explanations and objections of the parties, as well as procedures of insurance companies provide a time- pertise which said the following: “…evaluating the ac- based on the requirements of the law, the Mediator frame which is shorter than the terms established tions of the drivers of “Kamaz” and “Mercedes-Benz” came at the following conclusion: under law and motor third party liability insurance
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Precedents/Exemplary Cases Precedents/Exemplary Cases ny (the Bureau) has made a down payment (ear- Rather, what it did was to satisfy the Client’s civil for insurance indemnity but fails to pay it within ly compensation) prior to making a statement (in suit which is pertinent to part of personal damage. 5 (five) working days; in this case, the Bureau did this case, before filing the application), since the In such circumstances, the other damages incurred not make a decision for paying insurance compen- sufferer may think of a situation whereby all the by the Client should also be considered. sation of AMD 1,499,300 but decided on paying PRECEDENT 10 money is (will be) paid. Also, considering that the AMD 2,410,700 instead. This means that the pen- invoices as specified in section ‘damages subject The investigation revealed that the Client was in alty would be applicable if the Bureau took a de- to compensation for health rehabilitation’ of a rel- a state of disability according to the disability tick- cision to pay insurance compensation on the part evant Bureau decision were presented directly to ets issued by the relevant medical institutions for of AMD 1,499,300, i.e. the Client’s claim, and failed Claim against the Armenian Bureau of Motor the Bureau for payment, the Bureau decided to pay the following periods: 4th to 23rd October 2015, 1st to transfer it to the Client or the relevant medical Insurers for disagreement with the amount of the insurance indemnity of AMD 2,410,700. Of this November 2015 to 3rd January 2016 and 4th January institution within 5 (five) working days. insurance compensation sum, AMD 610,000 has been paid to the sufferer as to 23rd March 2016. However, the state of disabil- compensation for the damage caused as a result of ity granted by a disability ticket for the period 4th Thus, given the foregoing and by virtue of Article a crime-inflicted accident and AMD 1,800,700, as January to 23rd March 2016 has not been backed 14 (1) of the Republic of Armenia Law on Financial The Client has been hit by a car. Initially, the Ar- expenses incurred for the recovery of the sufferer’s by medico-social examination, and because it hap- System Mediator, the Mediator has taken a deci- menian Bureau of Motor Insurers (the Bureau) cov- health, paid to the relevant medical institutions. pened three months after the accident, it must sion to honor the Client’s claim lodged against the ered the relevant health rehabilitation costs. In the For the Client demanding that the Bureau pay have been backed by such examination. So, while “Armenian Bureau of Motor Insurers”, ULE, partially, framework of criminal case instituted in connec- a fine for the delayed days, the Bureau noted that the following periods of 04.10.2015 – 23.10.2015 and which makes up AMD 589.300. tion with the accident, the Client ran a civil suit, re- the motivation to making such a request is unclear 01.11.2015 – 03.01.2016 could be considered a time of questing indemnification from the guilty party an since the process of insurance indemnification has disability according to the disability tickets, the ticket amount of AMD 610,000 in order to pay patient been within an in due time. issued three months after the accident cannot serve caregiver costs (AMD 520,000) and the difference as proof of disability. As to the loss of income for of hospital fee of AMD 90,000, which is not sub- After a comprehensive review of the documentation the remaining period, the Disability Group 2 granted ject to reimbursement by the Bureau. The Court and deliverables related to the claim, analysis of the to the Client on a basis of the medico-social exam- has granted the request. All other costs related to explanations and objections of the parties, as well as ination should be considered, in which case the loss the treatment, rehabilitation and lost income shall based on the requirements of the law, the Mediator of ability to work is calculated to be 75% (with the be reimbursed by the Bureau in accordance with came at the following conclusion: disability established for a one-year period). Next, its charter. The Client found that the abovemen- the Client’s average salary needs to be determined. tioned amount of AMD 610,000 has nothing to do Where a civil, criminal or administrative proceed- According to a standard procedure, the sufferer’s av- with compensating the treatment costs and lost ings is brought about in connection with an insur- erage monthly salary shall be calculated by dividing income and pleaded the Mediator to take strong ance event, the extent of personal damage and the the Client’s salary of the twelve months preceding measures to urge the Bureau to reimburse the degree of the person’s fault should be determined harm to the health by twelve parts, and if the suffer- rehabilitation costs, lost income of a total AMD under the substantive court decision that has en- er has worked for less than twelve months, the av- 1,499,300 plus a payment of fine of 0.1% of the said tered into effect, and where no such proceedings is erage monthly salary shall be calculated by dividing amount of AMD 1,499,300 0.1 to be calculated for brought about or in the absence of such a substan- the total sum of salary for months actually worked each day in delay. tive court decision, the extent of personal damage by the number of these months. After calculations, it should be determined by the medical institution turned out that the sum subject to compensation by In response to the claim, the Bureau noted that or another institution or a specialist having offered the Bureau was AMD 589.300. the direct damage to the Client caused as a re- medical assistance or a package of medical rehabili- sult of crime-inflicted accident amounted to AMD tation to the injured, whereas the degree of the per- Referring to the Client demanding that a 0.1% fine 610,000. At the same time, the Bureau added son’s fault should be determined by the expert. be calculated against AMD 1,499,300, it should be that they shared a position along with the Me- noted that Article 23 (1) of the Republic of Arme- diator and insurance companies at the meeting For the case in review, the Mediator admits that the nia Law on Motor Third Party Liability Insurance that there’s no point of refusing compensation for extent of all personal damage caused to the Client says that the penalty is calculated when the Bu- that part of costs on which the insurance compa- has not been determined under the court decision. reau or the insurance company made a decision
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Precedents/Exemplary Cases Precedents/Exemplary Cases ject to the terms and conditions as defined under QUESTIONS the Republic of Armenia Law on Public Auctions. Further, Article 251 (2) provides that if the amount realized on the sale of the pledged property or the AND ANSWERS QUESTION 1 value of the property transferred under the own- ership of the pledgee or a person designated by the pledgee is not sufficient to cover the claim I opened a bank account and got a plastic card of the pledgee, he is entitled to receive the short to receive salary. Left the work a year ago, but amount from other property of the debtor, unless haven’t closed my bank account and, on top otherwise provided by the contract. We are talk- of that, lost my plastic card. What can be the ing cases when the pledgee is a bank or credit in- consequences in such a case? stitution. Thus, as the property sells through pub- lic auctions it is possible that the property value Payment card is an instrument attached to your be smaller than the market value at the time of MELIK TANGI'S BRIDGE bank account, by which you can manage your funds signing of the loan contract. In this particular case, Spans the Vorotan River on your account. To close your bank account, you you must pay the difference between the selling Melik Tangi's bridge is 20 km east of the city need to visit the bank and write a request for ac- price of the property and your obligations under of Sisian. Built in 1855 օn the Vorotan River, near count closure, otherwise the bank may charge ser- the loan contract. the village of ancient Vorotan, by Tangi, who vice fees, if so has been provided for in the account was the Melik of the Syunik Province. servicing contract.
As for the loss of the card – again, you need to contact the bank, otherwise it is possible that your QUESTION 3 card be used for carrying out transactions and you incur losses. Signed a contract for consumer credit but, be- cause of failure to pay within an established timeframe, been classified in the borrower clas- sification table by the bank. Can I take a loan QUESTION 2 from another bank or credit institution?
The lender (bank or credit organization) is free Signed a loan contract with the bank and offered to decide who a loan contract to sign with. This the real estate as security. Failure to make pay- means that the lender will first evaluate your cred- ments under the contract resulted in the selling itworthiness, ability to repay, then decide if they of my home through the auction. Yet, the sum want to sign a loan contract with you or not. To im- obtained from selling at the auction was not prove your credit history, you’ll need to fully repay enough for full repayment of the loan. May the your previous credit obligations (which have fallen bank require for the remaining amount? overdue), while any overdue debt on your current loan(s), even as small as the debt fallen overdue for one day, must be excluded. If we refer to Article 250 (1) of the Republic of Ar- menia Civil Code, it says that the pledged property shall be marketed (sold) at a public auction, sub-
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Questions and Answers QUESTION 4
As a cardholder, I used my card to withdraw some cash from an ATM of another bank, for which I paid a withdrawal fee equal to 50 per- cent of the cash. Is the bank entitled to charge a fee like that?
Card servicing tariffs of the bank are specified under the contract signed between you and the bank and subject to terms/conditions attached to the contract. If such a fee is offered for withdrawing cash from other banks’ ATMs in accordance with the table of tariffs of the bank, charging from your account is legitimate.
TABLE OF CONTENTS
QUESTION 5: 2 Address of Chairman of the Board
3 Address of Financial System Mediator I am guarantor under a loan contract. A few months after getting the loan, the borrower has 4 The Office of Financial System Mediator moved from his place of residence and failed to make payments for months. The bank has filed a 8 Activities carried out in 2016 claim with the court and the court issued a res- olution that the guarantor must pay the debt in 14 Activities planned for 2017 full. Is this a case in which my rights are violated? 16 Statement of Claims When you sign a guarantee agreement with the bank, you agree to carry responsibility for the borrower’s 36 Financial Statement and Audit Opinion fulfillment of the obligations, in full or in part, in re- spect of the bank. Therefore, the bank has the right 44 Precedents/Exemplary Cases to request judicially from the guarantor to repay the loan, in full or in part, even if an item of collateral has 64 Questions and Answers been offered or other guarantors are in place in the framework of the loan contract. You have the right to 68 Acknowledgements request judicially from the borrower to reimburse you for the payments and expenses you incurred. 72 List of organizations which did not sign the covenant
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Questions and Answers ACKNOWLEDGEMENTS A thank-you message A thank-you message I express deep gratitude to the Financial System Me- Piruz Sargsyan diator for assistance in solving the problem related The Financial System Mediator to the bank. Indeed, the Office of FSM helped me return the money which the bank had carelessly Dear Ms. Sargsyan, collected through a double-charged fee for servicing It is my pleasure to say that I am content with the my time deposit account. service provided by the Office of Financial System Mediator, with the friendly and professional approach Slavik Karakozyan, 24.02.2016թ. your staff takes to meet the customers. I would like to single out Mr. Ghochikyan for he did everything so proficiently to get the problem resolved.
SRANOTS BRIDGE A thank-you message S. Verdyan, 25.07.2016թ. Spans the Kirants-jur River The Sranots Brigde is located near the Getashen village, Tavush So much touched by what the specialists of the Province. It was built on the picturesque Kirants-jur River. Office of the Financial System Mediator did for The road of the bridge was leading to the nearby inhabitation me. Ombudsman. I wish them good health and located on the right coast, the ruins of which are now left. vigor to continue behaving honestly and fairly as A thank-you message they do. Mane Babajanyan Marine Asatryan Claim Handling specialist
This is to say thank you for your effort in helping find a positive outcome for me.
A thank-you message Elen Khachatryan, 03.08.2016թ.
Emilia Harutyunyan and Rafik Grigoryan Case Handling and Investigating Specialists A thank-you message I would like to express my deepest gratitude to the staff of the Office of the Financial System Mediator, Piruz Sargsyan Emilia Harutyunyan and Rafik Grigoryan in particu- The Financial System Mediator lar, for professionalism and, above all, for their atti- tude as compassionate as they are. I express my deep gratitude to you, Ms. Sargsyan, and your staff, for an impeccable, accurate and fair S. Sargsyan, 01.06.2016թ. work. I wish you good health and further success in your activity.
Samvel Safaryan, 23.09.2016
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Acknowledgements A thank-you message
Mane Babajanyan Claim Handling specialist
It was very kind of Mane Babajanyan, your colleague at the Office of FSM, who did her best to explain to me all strange aspects with regard to a loan product provided by the bank. I am so pleased and express my gratitude.
Rubik Grigoryan, 19.10.2016թ.
A thank-you message
A letter which I received from the bank in 2016 made me very upset as it was urging me to fulfill arbitrary obligations. I applied to the Financial System Medi- ator for help and very soon we achieved a positive TABLE OF CONTENTS solution, for which I express my deep gratitude to Mane Babajanyan, Hayk Hovhannisyan and Piruz 2 Address of Chairman of the Board Sargsyan. It was really nice that I was approached very warmly. 3 Address of Financial System Mediator
Lusik Martirosyan, 23.12.2016թ. 4 The Office of Financial System Mediator
8 Activities carried out in 2016
14 Activities planned for 2017
16 Statement of Claims
36 Financial Statement and Audit Opinion
44 Precedents/Exemplary Cases
64 Questions and Answers
68 Acknowledgements
72 List of organizations which did not sign the covenant
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Acknowledgements BANKS PAWNSHOPS LIST OF ORGANIZATIONS 1. “Pan-Armenian Bank” JSC 1. “Aghdagh” LLC 2. “Alexworld” LLC CREDIT ORGANIZATIONS 3. “Amalik Credit” LLC WHICH DID NOT SIGN 1. “AGROLEASING Leasing Credit Organization” LLC 4. “AMS” LLC 2. “ANIV” UCO LLC 5. “Amuni Group” LLC THE COVENANT 3. “AREGAK” UCO LLC 6. “Amuni Credit” LLC 4. “Arfin” Credit Union LLC 7. “Ar-Et” LLC 5. “BLESS” UCO LLC 8. “Arag Finance” LLC 6. “CARD AgroCredit” UCO CJSC 9. “Arangel Provider” LLC 7. “CILICIA” UCO LLC 10. “Arbon” LLC 8. “Credit Corp” UCO CJSC 11. “Arman & Gnel” LLC 9. “Credo Finance” UCO CJSC 12. “Armenuhi Arakelyan” Private Entrepreneur 10. “ECLOFF” UCO LLC 13. “ARS ELITE” LLC 11. “Export Finance” UCO CJSC 14. “AS MASTER” LLC 12. “Express Credit” UCO LLC 15. “Ashot Frangulyan” Private Entrepreneur 13. “Fides Mortgage Company” UCO CJSC 16. “Art Credit” LLC 14. “FINCA” UCO CJSC | Komitas ave. bld. 23, 4/1, Yerevan, Armenia | 15. “First factoring company” CJSC 17. “ART CREDIT” LLC 16. “G & A” UCO LLC | P. Sevak str. 51/1, Kanaker-Zeytun, Yerevan, Armenia | 17. “GARNI INVEST” UCO CJSC 18. “Artiom Ghahramanyan” Private Entrepreneur 18. “GOODCREDIT” UCO CJSC 19. “Artzate Gavat” LLC 19. “Housing for Youth” RCO CJSC 20. “AUTO CREDIT” LLC 20. “KAMOURJ” UCO CJSC 21. “Best Credit” LLC 21. “Nor Horizon” UCO LLC 22. “Cartush-AT” LLC 22. “Parvana Credit” UCO LLC 23. “Cay-Man” LLC 23. “SEF International” UCO LLC 24. “Credit Alliance” LLC 24. “Unileasing” UCO CJSC 25. “Credit City” LLC 25. “Varks AM” UCO LTD 26. “Diamond” LLC ASHTARAK BRIDGE 27. “DIAMOND CREDIT” LLC INSURANCE COMPANIES | Arshakuniats, 35, office area Nº 53, Yerevan, Armenia | Spans the Kasakh River 1. “Armenia Export Insurance Agency” CJSC 28. “Diamond Credit” LLC The th-century bridge of Ashtarak on Kasagh River is among the 17 2. “ARMENIA INSURANCE” LLC | Gorki str. bld. 68, office area Nº 3, Gyumri, Armenia | interesting sites of the town. It is located in the gorge just below 3. “ISG” LLC 29. “Dega” LLC the church of Saint Sarkis. It was built in 1664 by the efforts of 4 “NAIRI INSURANCE” LLC 30. “Dramatun” LLC Mahdesi Khoja Grigor 5. “RESO” CJSC 31. “Easy Credit” LLC 6. “RosGosstrakh - Armenia” CJSC 32. “EuroCredit Capital” LLC 7. “SIL INSURANCE” CJSC 33. “Express VIP Service” LLC 34. “Fast Cash” LLC INSURANCE BROKERS 35. “First Pawnshop” LLC 1. “RESOLUTION INSURANCE BROKER” LLC 36. “Five Minute” LLC 37. “Garrant Credit” LLC 38. “Gev–Star” LLC 39. “Gevasar Credit” LLC
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List of organizations which did not sign the covenant 40. “Gevorgyan and Company” LLC 82. “Proffinance” CJSC 4. “Anahit Virabyan” Private Entrepreneur 48. “Gazprom Armenia” CJSC 41. “Gold Cash” LLC 83. “Real Credit” LLC 5. “Anatoly Sahakyan” Private Entrepreneur 49. “Gegham Arqa” LLC 42. “Gold City” LLC | Khorenatsi str. bld. 1, Gyumri, Armenia | 6. “Andaco” LLC 50. “GIANT TRADE” LLC 43. “Gold Consulting” LLC 84.“Real Credit” LLC 7. “Andranik Hakobyan” Private Entrepreneur 51. “GNTUNIK” LLC 44. “Gold Credit” LLC | Sayat-Nova str. bld. 9/9 a, Basement No. 16, 8. “Andranik Mkrtchyan” Private Entrepreneur 52. “Gorik Stepanyan” Private Entrepreneur 45. “Gold Idea” LLC Gyumri, Armenia | 9. “Andrey Shaqaryan” Private Entrepreneur 53. “GROSS REALTOR” LLC 46. “Gold & G.B” LLC 85. “Royal Credit” LLC 10. “ANN. PA” LLC 54. “Gvidon Lazaryan” Private Entrepreneur 47. “Gold & Money” LLC 86. “ROYAL FINANCE GROUP” LLC 11. “Anush Zaqaryan” Private Entrepreneur 55. “Hakob Hovhannisyan” Private Entrepreneur 48. “Goodavi” LLC 87. “S.U.R. - 72” LLC 12. “Aram Araqelyan” Private Entrepreneur 56. “Hamlet Barseghyan” Private Entrepreneur 49. “Gr-Av-Mo” LLC 88. “Sargis & Nana” LLC 13. “Aram Barseghyan” Private Entrepreneur 57. “Harutyun Arsenyan” Private Entrepreneur 50. “Hot Credit” LLC 89. “Sedrak Gagik Muradyan” Private Entrepreneur 14. “Ardzaganq” LLC 58. “HASARA” LLC 51. “Huso Lusniak” LLC 90. “Serve - Edar” LLC 15. “Aristakes Atoyan” Private Entrepreneur 59. “Harutyun Harutyunyan” Private Entrepreneur 52. “Jangai” LLC 91. “Shogh” LLC 16. “ARM & ART CHANGE MARKET” LLC 60. “Hasmik Balasanyan” Private Entrepreneur 53. “Julieta Ohanyan” Private Entrepreneur 92. “Sicor” LLC 17. “Arman Baghdasaryan” LLC 61. “Hasmik Tadevosyan” Private Entrepreneur 54. “Inrim Credit” LLC 93. “Simnor” LLC 18. “Arman Qosyan” Private Entrepreneur 62. “Hayastan Trade Center Hayrapetyan Brothers” CJSC 55. “Invest Service Group” LLC 94. “SSS Credit” LLC 19. “Armen Bairamyan” Private Entrepreneur 63. “Hovhannes Khachatryan” Private Entrepreneur 56. “Karen Mets” LLC 95. “TER-YESAYAN ASSOCIATION” LLC 20. “Armen Hamik Brithers JE” LLC 64. “Hovsep Harutyunyan” Private Entrepreneur 57. “Karen Yaralyan” LLC 96. “Trader” LLC 21. “Armen Maleryan” Private Entrepreneur 65. “Hrachia Araqelyan” Private Entrepreneur 58. “Klouzh” LLC | Tigran Mets., office area No. 13/10, 22. “Armen Yenoqyan” Private Entrepreneur 66. “Hrachia Hakhverdyan” Private Entrepreneur 59. “Legat Credit” LLC Yerevan, Armenia | 23. “Armen Mkhitaryan & Friends” JSC 67. “Hrachia Minasyan” Private Entrepreneur 60. “Leylo” LLC 97. “Trader” LLC 24. “Armenia” Hotel Complex CJSC 68. “Hrachik Hakobyan” Private Entrepreneur 61. “Lianna Danielyan” Private Entrepreneur | Tigran Mets ave., bld. 43, office area No. 11, 25. “Armenia” International Airports 69. “Jemma Baghramyan” Private Entrepreneur 62. “Lombardia” LLC Yerevan, Armenia | 26. “Armine Marabyan” Private Entrepreneur 70. “Julieta Gabrielyan” Private Entrepreneur 63. “LombardStreet” LLC 98. “Trust Credit” LLC 27. “Arpine Taguhi” LLC 71. “Khachatur Ghahramanyan” Private Entrepreneur 64. “LOMBARD PLUS” LLC 99. “Umoneyline” LLC 28. “Arsen Papyan” Private Entrepreneur 72. “Khachatur Petrosyan” LLC 65. “Malen” LLC 100. “Ustr Geghamik” LLC 29. “Artak Yesayan” Private Entrepreneur 73. “KAREN ANNA & FAMILY” LLC 66. “Mamma-Mia” LLC 101. “V.I.A” LLC 30. “Artiom Davtyan” Private Entrepreneur 74. “Karen*-5” Commercial Enterprise 67. “Manioka” LLC 102. “VARD GRIG” LLC 31. “Arthur Araqelyan” Private Entrepreneur 75. “Karin Gohar” LLC 68. “MARIUS” LLC 103. “Vagr” LLC 32. “Arthur Danielyan” Private Entrepreneur 76. “Karine Araqelyan” Private Entrepreneur 69. “Marlia” LLC 104. “Vantig” LLC 33. “Arthur Qochinyan” Private Entrepreneur 77. “Kon-Brosel” LLC 70. “Max Credit” LLC 105. “Venus Athena” LLC 34. “Arsen Bareghamyan” Private Entrepreneur 78. “KRPAK” LLC 71. “Megatron” LLC 106. “Via-Gold” LLC 35. “Arsen Galstyan” Private Entrepreneur 79. “Manuk Sargsyan” Private Entrepreneur 72. “Micro Capital” LLC 107. “Voske Luma” LLC 36. “Ashot Harutyunyan and Sons” LLC 80. “Mill AG” CJSC 73. “Musoyan-AAA” LLC 108. “Voske Vtak” LLC 37. “AUTO PLAZA” LLC 81. “Nairi Matinyan” Private Entrepreneur 74. “MVM Anna” LLC 109. “White-Soliter” LLC 38. “Azat Khachatryan” Private Entrepreneur 82. “Norayr Martirosyan” Private Entrepreneur 75. “MVM-FINANCE” LLC 110. “Wilmar Mek” LLC 39. “Azatuhi Blikyan” Private Entrepreneur 83. “Parandzem Hakobyan” Private Entrepreneur 76. “Narine Arzumanyan” Private Entrepreneur 111. “Yana-Gor” LLC 40. “BASENI GOVQ” LLC 84. “PARMA” LLC 77. “Ninella” LLC 112. “Zhirair Aharonyan” Private Entrepreneur 41. “BEGO TRANS” LLC 85. “PLAZA SYSTEMS” CJSC 78. “Nomidisc” LLC 42. “Berkut 555” Commercial Enterprise 86. “PRETTY WAY” LLC | Hanrapetutyan str. bld. 11, No. 1/1, Abovyan, Armenia | FOREIGN EXCHANGE DEALERS 43. “CAPITAL TRADER” LLC 87. “PSR” LLC 79. “Nomidisc” LLC AND EXCHANGE OFFICES 44. “CATRINE GROUP” LLC 88. “R.G.A.T” LLC | Hatis str. commercial area No. 1/69, Abovyan, Armenia | 1. “Albert Papoyan” Private Entrepreneur 45. “EUROPARK TRADE CENTER” JSC 89. “REGENTS CAPITAL” LLC 80. “Number One Pawnshop” LLC 2. "Alex-Holding" LLC 46. “Gagik Jndoyan” Private Entrepreneur 90. “Rudik Khachatryan” Private Entrepreneur 81. “Pawnshop777”LLC 3. “ALS Erzrumtsi” LLC 47. “Gayane Askaryan” Private Entrepreneur 91. “Ruzanna Araqelyan” Private Entrepreneur
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List of organizations which did not sign the covenant List of organizations which did not sign the covenant 92. “Sahak Hagoyan” Private Entrepreneur INVESTMENT FUND MANAGERS 93. “Samvel Amirjanyan” Private Entrepreneur 1. “Ameria Asset Management” CJSC 94. “Samvel Ghazaryan” Private Entrepreneur 2. “Amundi-ACBA Asset Management” CJSC 95. “Sedik Sahakyan” Private Entrepreneur 3. “C-Quadrat Ampega Asset Management 96. “Sergei Aghayan” Private Entrepreneur Armenia” LLC 97. “Sev Kakach” Commercial Enterprise 98. “SIMAO” LLC MONEY REMITTANCE ORGANIZATIONS 99. “Smbat Aslanyan” Private Entrepreneur 1. “EASY PAY” LLC 100. “SPARAPET” LLC 2. “HayPost” CJSC 101. “Stoic” LLC 3. “IDRAM” LLC 102. “TASHIR INVEST GROUP” CJSC 4. “Mobi Dram” CJSC 103. “Transdealer” LLC 5. “MONEYTUN” LLC 104. “Tigran Sargsyan” Private Entrepreneur 6. “TELL-SELL” CJSC 105. “Tigran Vahradyan” Private Entrepreneur 106. “TSIATSAN” LLC CREDIT BUREAU 107. “TUNAR” CJSC 1. “ACRA Credit Reporting” CJSC 108. “TUREX GOLD” LLC 109. “VAGHARSH & SONS CONCERN” LLC INSURERS՚ BUREAU 110. “Vahagn Khachatryan” Private Entrepreneur 1. Armenian Motor Insurers՚ Bureau 111. “Valery Navasardyan” Private Entrepreneur 112. “Vardan Baghdasaryan” Private Entrepreneur 113. “Vardan Ghazaryan” Private Entrepreneur 114. “Vardan Vardazaryan” Private Entrepreneur 115. “VARDAN & MONIKA” LLC 116. “Varouzhan Avetisyan” Private Entrepreneur 117. “Vatou” LLC 118. “VHM” LLC 119. “VLV CENTER” LLC 120. “VOSKE GETAK” LLC 121. “Yotniak” LLC 122. “Zaven Chagharyan” Private Entrepreneur
INVESTMENT FIRMS 1. “Alpha Securities” LLC 2. “ARMENBROKE” JSC 3. “Capital Investments” CJSC 4. “Divisa AM” CJSC 5. “Future Capital Market” LLC 6. “KUB Invest” CJSC 7. “Prime Capital Investment” LLC 8. “Renessa” CJSC 9. “Tonton Investment” LLC
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List of organizations which did not sign the covenant "Elite Plaza" Business Center 7th floor 15 M. Khorenatsi street, 0010 Yerevan, Armenia
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