GOVERNMENT OF THE REPUBLIC OF ARMENIA

DECISION

No 1220-L of 4 August 2022

Taking as a basis part 8 of Article 11 of 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 Programme of Support for the Consolidation of Agricultural Lands in the Republic of Armenia for 2023-2025, pursuant to the Annex.

2. To assign the Minister of Economy of the Republic of Armenia to adopt legal acts arising from the Annex approved under point 1 of the Decision within a one-month period following the entry into force of this Decision.

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

1. Implementation of the Programme of Support for the Consolidation of Agricultural Lands in the Republic of Armenia for 2023-2025 (hereinafter referred to as "the Programme") is conditioned by the need for reduction of the level of fragmentation of lands, increase of productivity, maintenance and increase of fertility and engagement of investments. The aim of implementation of the Programme shall be the following through the consolidation and enlargement of small and fragmented agricultural land areas:

(1) to foster increase of productivity in the agricultural sector and contribute to sagging-off of the cost prices of agricultural products;

(2) to foster the creation of new workplaces in the agricultural sector;

(3) to foster the targeted use and effective management of lands;

(4) to contribute to the increase of volumes of investments in the agricultural sector;

(5) to contribute to the increase of competitiveness in the agricultural sector.

2. The participants of the Programme shall be:

(1) natural and legal persons, individual entrepreneurs (hereinafter referred to as the "beneficiary");

(2) the Ministry of Economy of the Republic of Armenia (hereinafter referred to as the "Ministry").

3. Beneficiaries may also benefit from other state support programmes being implemented in the agricultural sector, except for programmes implemented on the same land parcel for the same purpose.

4. The beneficiaries will be provided with state support in the form of reimbursement of expenses actually made for the works carried out by the beneficiary, as provided for in Table No 1 of the Programme, but not more than in the amount of 50% of the cost envisaged for each work in Table No 1, pursuant to the requirements of this Programme. The state support envisaged by this Programme shall be provided on the basis of a reimbursement contract being concluded between the beneficiary and the Ministry (hereinafter referred to as "the reimbursement contract"). The sample form of the reimbursement contract shall be established by the order of the Minister of Economy of the Republic of Armenia. The sample form of the reimbursement contract must define a restriction according to which, within at least 5 years following the moment of receipt of reimbursement, the entities entitled to registered ownership over the consolidated land plot:

(1) may not divide the consolidated land plot pertaining thereto by the right of ownership (joint ownership, shared ownership) into separate units;

(2) may not change the designated purpose of the consolidated land plot;

(3) shall be obliged to ensure mandatory use of the consolidated land plot for agricultural purposes;

(4) shall be obliged to not alienate the consolidated land plot (the portion belonging thereto by joint or shared ownership).

5. The Programme envisages fostering enlargement of fragmented agricultural land parcels existing in the Republic through the acquisition of certain property units of agricultural land plots (except for the requirement of sub-point 3 of point 7 of this Programme) and the consolidation of the boundaries thereof (except for the cases provided for by point 6 of this Programme), according to the total surface area provided for by this point (hereinafter referred to as "the consolidated land plot"). To receive state support in the amounts prescribed by point 4 of the Programme, the total surface area of the consolidated land plot must comprise at least 30 ha; moreover, the support shall be provided in exchange of works carried out in a consolidated land plot that is not more than 200 ha (included).

6. Where the boundaries of certain property units of agricultural land plots being consolidated for ensuring the surface area provided for by point 5 of this Programme are divided into other land types of agricultural significance (unused land areas or midfield roads) or facilities that make the requirement for including them in one unit with one common boundary impossible (impossibility of consolidation), the separate land plot which is not consolidated due to impossibility of consolidation for the reasons referred to in this point may also form a part of the consolidated land plot. Moreover, due to impossibility of consolidation, the total number of property units of unconsolidated land plots may not be more than 3 units within the composition of the consolidated land plot.

7. In the total surface area of the consolidated land plot:

(1) the total of the surface areas of land plots which are separate property units, including the land areas required for construction of water basins, must not be less than the amount prescribed by point 5 of this Programme;

(2) the number of units of the land plots which are separate property units (including the number of property units of unconsolidated land parcels due to impossibility of consolidation as provided for by point 6 of this Programme) must be at least 10 units in case of 30-100 ha (100 ha included) consolidated land plot, and at least 20 units in case of 100-200 ha (200 ha included) consolidated land plot; moreover, the specified units shall not include the number of units of land plots belonging to the beneficiary by right of ownership prior to the conclusion of the reimbursement contract;

(3) the size of the total surface area of the land plot(s) belonging to the beneficiary by the right of ownership prior to the conclusion of the reimbursement contract may not exceed 20% of the total surface area of the consolidated land plot;

(4) acquisition of every land plot which is a separate property unit must be carried out upon conclusion of the reimbursement contract, except for the land plots prescribed by sub-point 3 of this point;

(5) the rights of ownership over land plots which are consolidated separate property units must be registered at least 2 years preceding the day of conclusion of the contract referred to in point 8 of the Programme.

8. To conclude the reimbursement contract in order to benefit from the Programme, the beneficiary shall submit to the Ministry an application (the form of the application shall be established by the order of the Minister of Economy of the Republic of Armenia) and a statement of information from the Cadastre Committee with regard to his or her registered rights over immovable property units in his or her name. The Ministry shall study the application within 5 working days following the receipt thereof and, in case of absence of the grounds for rejection provided for by this point, conclude a reimbursement contract with the beneficiary. In case of detecting obvious mistakes, deletions, scratches or misprints in the submitted documents, the Ministry shall be obliged to draw the attention of the beneficiary to them and recommend correcting them within the limits of the time period for study referred to in this point. In case of existence of the grounds referred to in this point, the Ministry shall reject the application and notify the applicant thereon in writing within 3 working days. The application shall be rejected, where:

(1) it does not comply with the requirements of this point;

(2) false information or documents have been presented in the application.

9. To benefit from the Programme, the beneficiary shall be obliged to carry out the works referred to in Table No 1 or a part thereof on the consolidated land plot. The time periods for implementation of the works provided for in Table No 1 on the consolidated land plot shall be established under the reimbursement contract. In case of failure to carry out the works within the prescribed time period, the expenses shall not be subject to reimbursement.

10. Upon conclusion of the reimbursement contract, on the last working day of every quarter, the beneficiary shall submit to the Ministry a report (the sample form of the report shall be established by the order of the Minister of Economy of the Republic of Armenia and shall be published on the website of the Ministry), which shall contain information on the processes of acquisition and consolidation of land plots carried out by the beneficiary during the quarter concerned, and on implementation of the works provided for in Table No 1 on the consolidated land plot upon completion of the consolidation processes in accordance with this Programme and as prescribed by the legislation.

11. Besides point 9 of this Programme, the beneficiary shall be obliged to:

(1) ensure state registration of consolidation of the boundaries of separate property units in his or her name or with his or her participation as common ownership over the consolidated land plot (hereinafter referred to as "the consolidation of land plots");

(2) complete the consolidation of land plots and the works referred to in Table No 1 or a part thereof in the course of maximum 2 years from the day following the day of conclusion of the reimbursement contract;

(3) build the water basin(s) with a volume of not less than 1000 cubic metres of water for each 1 ha surface area of the consolidated land plot, to ensure access to water resources.

12. The risk of the expenditures made by the beneficiary within the scope of the Programme shall be borne by the beneficiary.

13. The Programme may be implemented both by a contractor and without it. The amount of the sum reimbursed shall not be subject to changes, depending on co-operation with the contractor. While making payments for goods acquired, services provided and works carried out, the beneficiary must be guided by the requirements prescribed by Article 5 of the Law of the Republic of Armenia "On non-cash operations".

14. The works not included in Table No 1 of the Programme shall not be subject to financing, and the amount of reimbursement of the expenses actually made by the beneficiary for the works provided for in Table No 1 shall comprise 50% of the sum actually paid for every work carried out for every 1 ha of the consolidated land plot, but not more than 50% of the cost provided for in Table No 1 for the work concerned.

15. In case the beneficiary has carried out consolidation of the land plots without carrying out one or a few of works referred to in Table No 1, the beneficiary shall attach to the application provided for by point 16 of this Programme written justifications regarding the absence of the need for carrying out the work concerned. In case there are no written justifications referred to in this point or the Ministry deems them to be insufficient, the expense provided for in Table No 1 for the remaining work(s) carried out shall not be subject to reimbursement. To consider the submitted written justifications as satisfactory or unsatisfactory, the Ministry may conduct studies, laboratory expert examinations of the consolidated land plot, etc.

16. Upon completion of the process of consolidation of land plots and carrying out the works (a part thereof) provided for in Table No 1, the beneficiary having concluded a reimbursement contract shall submit to the Ministry a written application for receiving reimbursement, by attaching the following to the application:

(1) the carbon copy of the identification document;

(2) the carbon copy of the certificate of state registration of the right to immovable property for the consolidated land plot, and in the cases provided for by point 6 of this Programme — also for separate land plot(s) which are not consolidated due to impossibility of consolidation;

(3) in case there is right of common (joint or shared) ownership over consolidated land plot, the written consent of participants of the common (joint or shared) ownership on granting the reimbursement to the beneficiary having concluded a reimbursement contract;

(4) the documents justifying the expenses actually made for carrying out the works provided for in Table No 1 or a part thereof, including the documents certifying payments for the liabilities having emerged as a result of execution of the contracts on the goods acquired, services provided and works carried out. Moreover, those works must be carried out upon conclusion of the reimbursement contract provided for by the Programme;

(5) in the cases provided for by point 6 of this Programme, a document certifying impossibility of consolidation, issued by the Cadastre Committee (document on rejecting consolidation of the property concerned).

17. The Ministry shall, within 10 working days upon the receipt of the application provided for by point 16 of this Programme and the attached documents, conduct a study, as well as exercise monitoring in order to assess the reliability of the submitted information (through the procedure established by the Ministry). Based on the results of the monitoring, an opinion shall be drawn up on compliance (positive opinion) or non-compliance (negative opinion) of the outcomes of consolidation of lands and carrying out of the works provided for in Table No 1 with the requirements of the Programme within 5 working days.

18. In case of positive opinion of monitoring, the Ministry shall, within 10 working days, transfer to the bank account of the beneficiary the sum of reimbursement calculated in accordance with the requirements of this Programme. In case of negative opinion, the Ministry shall inform the beneficiary thereon within 5 working days. After granting reimbursement, the Ministry shall also conduct monitoring in the course of five years. Where, as a result of the monitoring, it is revealed that the beneficiary has violated the requirements of the Programme and the contract, the reimbursed sums shall be subject to return to the State Budget within a one-month period.

19. The Programme will be financed from the State Budget of the Republic of Armenia.

20. The prediction that the total surface area of the consolidated lands will make up 1000 ha in 2023, nearly 1500 ha in 2024 and nearly 2000 ha in 2025 has been taken as a basis for the financial assessment of the Programme.

21. The evaluated cost for implementation of the Programme in 2023 will comprise up to AMD 1.38 bln, in 2024 — up to AMD 2.07 bln, in 2025 — up to AMD 2.76 bln.

22. The beneficiaries shall be exempt from paying the state duty in the bodies carrying out notarial operations, as well as the state duty for registering the right of ownership for ratifying contracts for consolidation of lands within the scope of the Programme, pursuant to the requirements in point "n" of part 1 of Article 24 and part 11 of the first part of Article 29 of the Law "On state duty". To be exempt from paying the state duties provided for by this point, the beneficiary shall submit to the body carrying out the relevant notarial operations and the body carrying out registration of property rights the reimbursement contract, which must contain data on the land plots acquired.

23. The following outcomes are expected from implementation of the Programme:

(1) reduction of the level of unused agricultural lands by nearly 4500 ha;

(2) reduction of the level of fragmentation of agricultural lands by nearly 0.84%;

(3) increase of the gross agricultural product by nearly 2-3 times;

(4) increase of fertility of agricultural lands;

(5) increase of irrigable land areas by nearly 2500 ha;

(6) increase of the revenues and improvement of the solvency of economic entities participating in the Programme;

(7) development of the land market;

(8) creation of new workplaces;

(9) increase of volumes of investments in cultivated land areas;

(10) reduction of expenses for agricultural machinery and workforce by at least 11%.

24. The potential risks related to implementation of the Programme shall be:

(1) problems associated with the legal documents for acquisition of consolidated lands (absence of owners, process of recognition of inheritance, absence of registration of rights, unknown owners, etc.);

(2) rise of the market price of agricultural lands;

(3) technical impossibility of consolidating separate lands into one property unit.

Table No 1

Works being carried out in every 1 ha on consolidated land and maximum expense to be reimbursed

Published on a joint site 06.06.2024