GOVERNMENT OF THE REPUBLIC OF ARMENIA

DECSION

No 276-L of 3 March 2022

Based on part 4 of Article 146 of the Constitution of the Republic of Armenia and point 15 of the Annex to the Law of the Republic of Armenia “On the structure and activities of the Government”, the Government of the Republic of Armenia hereby decides:

1. To approve the pilot programme on providing assistance to the investment programmes being implemented in the branch of animal husbandry in the Republic of Armenia, according to the Annex.

2. This Decision shall enter into force on the day following its official promulgation.

THE PILOT PROGRAMME ON PROVIDING ASSISTANCE TO THE INVESTMENT POGRAMMES BEING IMPLEMENTED IN THE BRANCH OF ANIMAL HUSBANDRY IN THE REPUBLIC OF ARMENIA

CHAPTER 1. PROGRAMME DESCRIPTION

1. The goal of the pilot programme on providing assistance to the investment programmes being implemented in the branch of animal husbandry in the Republic of Armenia (hereinafter referred to as "the Programme") is to contribute to increasing the investments made in the branch, raising the level of self-sufficiency of animal husbandry product, boosting domestic production, raising the level of attractiveness of the branch by means of partial compensation of investments made for increasing the volumes of production of domestic animal husbandry product in the Republic.

2. The programme will start in 2022 in all the marzes of the Republic of Armenia.

3. Participants of the programme shall be:

(1) The Ministry of Economy of the Republic of Armenia (hereinafter referred to as "the Ministry");

(2) in the branch of animal husbandry - resident legal persons making investments in the areas of cattle farming, pig farming and poultry farming, including legal persons affiliated thereto (within the meaning of this Programme, persons shall be considered as affiliated as prescribed by the Tax Code of the Republic of Armenia) (hereinafter referred to as "beneficiaries"), which

a. have favourable credit history, i.e. according to ACRA information, have not had overdue credit obligations for 60 and more days in total during 12 months preceding the day of submission of application or do not have any credit history built;

b. have had favourable credit history, i.e. no administrative proceedings with regard to charging outstanding tax liabilities has been initiated during 365 days preceding the day of submission of application or, as of 31 December 2021, there are no overdue tax liabilities on the day of submission of application;

(3) the financial institution having evaluated the investment programme (hereinafter referred to as "FI");

(4) The Big Four Professional Consulting and Auditing companies evaluating the implementation of the investment programme (Deloitte Touche Tohmatsu Limited, PricewaterhouseCoopers, Ernst & Young Global Limited, KPMG International Limited) (hereinafter referred to as "the Company").

(point 3 amended by No 1500-L of 29 September 2022)

4. The economic operators implementing an investment programme of at least AMD 2.5 billion in the branch of animal husbandry, particularly in the areas of cattle farming, pig farming and poultry farming (an animal husbandry complex, which should include livestock buildings, auxiliary structures, technological support equipment; it may include also capacities of livestock products and manure reprocessing, organising of forage production) may be the beneficiaries of the Programme. Moreover, the investment structure shall not include procurement from affiliated persons, and the share of the capital investments must make up 70 percent and more, at least 60 percent of which must be the expenditure on construction or reconstruction of buildings and structures and technological support thereof. More than one area, in the amount of at least AMD 2.5 billion together, may be concurrently involved in one investment programme.

(point 4 edited by No 819-L of 26 May 2022, supplemented by No 1500-L of 29 September 2022)

5. The process of partial compensation of expenses shall be carried out by the Ministry in two stages based on the opinion given By the Company regarding the compliance of investments to the Programme requirements and the amount (volume). The aggregate amount of compensation provided to one beneficiary shall make up maximum 40% of the total capital investments made, but not more than AMD 3,5 billion.

(point 5 edited by No 819-L of 26 May 2022)

6. Each beneficiary may benefit the assistance provided within the framework of the Programme only for one investment programme.

7. To participate in the Programme, the beneficiaries shall, by 30 September 2023 inclusive (the day of entry of the application to the Ministry), apply to the Ministry electronically or in hard copy, submitting the identification document (copy), the documents (copies) certifying the registration and establishment, the document provided by the FI (FIs) certifying the creditworthiness and solvency (in case of full or partial implementation of the investment programme with credit resources), a report from the Credit Bureau on the positive credit history, a statement of information on favourable tax history provided by the State Revenue Committee, the investment programme (with performance indicators for at least 5 post-investment years), positive opinion provided by the Company (the opinion shall particularly include information on application of the international best practice related to the investment programme, the expected volumes of the productivity and production, reprocessing capacities (where applicable) and on the taxes to be paid during the upcoming years and the proceeds received from the activities envisaged by the investment programme), or positive opinion on the investment programme provided by the FI(FIs), in case of buildings and structures — the architectural and construction plan and the estimate (may be submitted within 6 months following the conclusion of the contract as well). Moreover, the beneficiary shall pay for the services provided by the Company or the FI (FIs) within the framework of the Programme.

(point 7 supplemented, amended by No 819-L of 26 May 2022, amended by No 1500-L of 29 September 2022)

8. The Ministry shall, within ten working days following the receipt of the application, conclude a Programme Participation Contract only with the beneficiaries having submitted the documents referred to in point 7. In case of failure to submit the architectural and construction plan and the estimate referred to in point 7 within six months following the conclusion of the Contract, the Contract shall be deemed to be rescinded.

(point 8 amended by No 1500-L of 29 September 2022)

9. Following the conclusion for the Contract, during the time period referred to in point 10 of the investment programme implementation, the beneficiary may not benefit other assistance programmes envisaged for the same purpose being implemented in the sector of agriculture, as well as may not alienate the invested fixed assets in the course of implementation of the investment programme (starting from the moment of the entry into force of the Contract till the operation and for 4 years starting from the moment it is ready for operation).

(point 9 supplemented by No 819-L of 26 May 2022)

10. The beneficiary shall be obliged to complete the implementation of the investment programme (ready for operation) within two years following the entry into force of the Contract referred to in point 8 (in case of failure to complete the investment programme within established time period due to force majeure, the time period may be extended for the period of the force majeure upon the consent of the Ministry).

11. Following the completion of the investment programme (ready for operation), the beneficiary shall apply to the Ministry, submitting the positive opinion on monitoring and evaluation performed by the Company (it must necessarily include provisions on compliance with the time periods for implementation of the investment programme and indicators and requirements characterising the investment programme, transactions made with the affiliated persons, as well as the volumes and the areas of investments made, including capital investments), the copy of the certificate of immoveable property acquired or constructed within the framework of the investment programme, statement of information on bank account, after which the 2/3 of the compensation amount calculated in accordance with point 5 based on the contract concluded as stated in point 8, but not more than AMD 2.3 billion, and in the second stage, in case the amount of proceeds received from the activities planned by the investment programme during the next full financial year exceeds 1/3 of the remaining compensation amount twice, 1/3 of the compensation amount, but not more than AMD 1.2 billion, shall be transferred to the beneficiary's account within a period of one month.

(point 11 edited by No 819-L of 26 May 2022)

12. Within 6 month after the next full financial year following the implementation of the investment programme (operation) is completed, the beneficiary shall submit to the Ministry the positive opinion of the audit and evaluation performed by the Company (including information on the fact that, during the full financial year, the amount of proceeds received from the activities planned by the investment programme exceeds the 1/3 of the remaining compensation amount twice ), after which the 1/3 of the compensation amount , but not more than AMD 1,2 billion, shall be transferred to the beneficiary's account within a period of one month, based on the contract concluded as stated in point 8.

(point 12 edited by No 819-L of 26 May 2022)

13. The negative opinion on monitoring and evaluation provided by the Company and failure to submit the documents referred to in point 11 of the Programme shall be a basis for rejecting the first stage of compensation, and in case of the second stage - the negative opinion on audit and evaluation provided by the Company, the fact that the amount of proceeds received from the activities planned by the investment programme does not exceed the 1/3 of the remaining compensation amount twice.

(point 13 amended by No 819-L of 26 May 2022)

14. During the implementation of the investment programme (after the second stage), the beneficiary shall, for three years, submit to the Ministry, electronically or in hard copy, an annual report (within five months following the completion of the calendar year) on annual indicators included in the investment programme, including those on the livestock population by age-sex composition, the changes in number and productivity.

(point 14 edited by No 819-L of 26 May 2022)

14.1. Within one month following the receipt of the report referred to in point 14, the Ministry shall perform annual monitoring for three years as prescribed by the Ministry, which shall include verification of compliance to all conditions. In case of failure to submit the report referred to in point 14 of the Programme, alienation, unauthorised use of the invested fixed assets observed by the Ministry, as well as further inefficient use of the invested assets observed by the Ministry (failure to ensure 80% of the aggregate annual indicators presented by the investment programme on average), the amounts compensated for stages 1 and 2 shall be subject to return to the state budget within a period of three months.

(point 14.1 supplemented by No 819-L of 26 May 2022)

15. Financing of the Programme shall be carried out from the state budget of the Republic of Armenia. (sentence removed by No 819-L of 26 May 2022)

(point 15 amended by No 819-L of 26 May 2022)

16. The expected outcomes from the implementation of the Programme shall be as follows:

(1) existence of 5 big and modern animal husbandry complexes in the Republic;

(2) increasing the volumes of fresh and reprocessed animal husbandry product;

(3) raising the level of self-sufficiency of beef, pork and poultry, milk;

(4) improving the quality features of milk;

(5) creating additional new work places;

(6) in case of investment of about AMD 30,0 billion in the branch of animal husbandry, i.e. in the areas of cattle farming, pig farming and poultry farming, about 6000 tonnes of poultry (with live weight) - gross product of about AMD 7,0 billion, about 2000 tonnes of pork - gross product of AMD 5,7 billion on average, about 340 tonnes of beef - gross product of about AMD 1,0 billion and 10000 tonnes of milk and dairy product - gross product of about AMD 4,3 billion will be produced per year on average. As a result, the level of self-sufficiency in poultry will increase for about 6 %, in pork — for about 14,5 %, in beef — for about 0.6 %, and in milk — for 0.2 %.

(point 16 edited by No 819-L of 26 May 2022)

(Annex edited, supplemented and amended by No 819-L of 26 May 2022, amended and supplemented by No 1500-L of 29 September 2022)

Date of official promulgation: 4 March 2022.

Published on a joint site 06.06.2024