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Seda Hergnyan

Edik Baghdasaryan

The Offshore Roots of Armenia’s Jewelry Production and Export

On June 9, 2016, Neltax Holding LTD ("Neltax Holding LTD") was registered in the Seychelles, which is considered an offshore zone. 

The sole shareholder is Alexey Spirikov, a Russian citizen who lives in the city of Vladimir. Neltax Holding LTD appears in the scheme of Russia-Armenia gold import and export of large quantities of gold jewelry and jewelry products from Armenia to the United Arab Emirates in 2023.

Year-end jewelry"boom"

In December 2023, about 22 580 kg of jewelry (jewelry products and their parts) were produced in Armenia with a total value of 82 billion drams (US$203 million). Compared to the same month of the previous year, that amount increased 9.4 times.

In November 2023, 19 807 kg were produced, the value of which was 82 billion drams, increasing 13.7 times compared to the same month of the previous year.

Founded in December 2021, Yerevan Jewelry Factory LLC produced a record amount of jewelry at the end of 2023.

In parallel, in the fourth quarter of 2023, compared to the same quarter of the previous year, the export of jewelry products from Armenia increased seven times. There is a hypothesis that this is gold imported from Russia, which is broken up locally and exported as jewelry made in Armenia or as unfinished jewelry. It is not excluded that these data not only distort the image of the jewelry market, but also the economic growth index of Armenia.

To understand what a large volume of jewelry and object production we are talking about in the last two months of 2023, we have separated the monthly indicators for the last year in the infographic. Even with the naked eye, the November-December "boom" is noticeable.It should be emphasized that the line of jewelry products in the statistical reports has no other opening, but it should be noted that this indicator includes not only finished gold jewelry, but also unfinished jewelry or other items, as well as jewelry that contains silver.

This growth of the jewelry sector had a significant role on the entire industry of Armenia at the end of the year, as well as on economic growth.

The Statistical Committee, which presented these indicators, did not elaborate on which enterprises produced so much jewelry. It is not the function of the Committee to publish it.

Yerevan Jewelry Factory, linked to the Sukiasyans, caused the "boom"

Although official sources do not report the source of such an unprecedented figure in the jewelry sector at the end of the year, Hetq found that it was provided by Yerevan Jewelry Factory LLC.

The factory was officially opened two years ago, in a new building at the "Yerevan" market. The ribbon was cut by former Minister of Economy Vahan Kerobyan, chairman of the board of Sil Kapital Eduard Sukiasyan, brother of Civil Contract deputy, businessman Khachatur Sukiasyan, and Hrach Avagyan, who introduced himself as the co-founder of the factory in interviews with journalists. The latter's family was engaged in jewelry making in Russia.

In his opening speech, Vahan Kerobyan noted that this is a joint initiative of Avagyans and Sukiasyans. "This joint initiative of them (meaning the Avagyans, ed.) and the Sukiasyan family, I am sure, will significantly increase the volume of export of ready-made jewelry in a very short time and will significantly reduce the share of imported goods in the local market," Kerobyan said.

In footage of the opening ceremony, it can be seen that the factory represents the Adamant brand. This brand was founded in Russia by Hrach Avagyan and his son, Sergey Avagyan. There are many publications in the Russian media that the company was declared bankrupt in 2016 according to the application of the former deputy director of the factory.

In photos of the opening of the factory, it can be seen how Sergey Avagyan presented their products to Vahan Kerobyan.

The opening of the factory was also attended by businessman Artak Baghikyan, whose family members are registered in the name of diamond processing, major importer, and re-exporter A.D.M. Diamonds LLC. As mentioned above, the Baghikyans are close to Khachatur Sukiasyan, a Civil Contract deputy and businessman.

 Yerevan Jewelry Factory’s offshore roots and links to persons related to the Sukiasyans and Avagyans.

According to Armenia’s State Registry, Levon Gagiki Sargsyan owns 50% of Yerevan Jewelry Factory LLC, while the other half belongs to Mirelis Limited, registered in Cyprus.

Levon Sargsyan is the director of Magnit 2020, a well-known flower market in Yerevan. The market is located at 43/2 Shirak Street. 

 Levon Sargsyan told Hetq he did not want to comment on what he has to do with Sukiasyans and Avagyans, or ifs he follow the activities of the Factory. He told Hetq to get answers directly from Yerevan Jewelry Factory.

On Levon Sargsyan's Linkedin page, we see that he once worked in Sil Insurance, a company owned by the Sukiasyans, as the head of the claims settlement department.

Mirelis Limited, owner of the other 50% of Yerevan Jewelry Factory, was founded in January 2017. According to the Cyprus registry documents, the shareholders are Artak Meltonian (330 shares) and Neltax Holding LTD (Neltax Holding LLC, shares-670) registered in the Seychelles, which is considered an offshore zone.

This is the company we mentioned at the beginning of the article.

Artak Meltonian is the owner of several companies in Armenia, the most famous of which is Dzulakentron OJSC, which produces steel grinding balls. Persons affiliated with the company are registered as real beneficiaries of the company. In the interview given to the Russian media, Meltonian introduces himself as the Chairman of the Board of Directors of Dzulakentron OJSC. The foundry is in the city of Charentsavan.

Artak Meltonyan is the son of Sanasar Meltonyan, deputy of the first convocation of the Supreme Council of Armenia.

Hetq also tried to contact Artak Meltonyan. Dzulacentr said that he is not in Armenia. Our questions were answered by his deputy, who assured us that Artak Meltonyan has nothing to do with either the Avagyans or the Sukiasyans. In other words, he is the real owner of the shares. The deputy didn't know why the factory registered such a big production increase.

Despite his assertion that Meltonyan has nothing to do with the Sukiasyans and the Avagyans, we learn from Russian sources that Meltonyan has partnership ties with the Avagyans. In an interview given to the Russian magazine Навигатор ювелирной градний, Meltonian introduces himself as a shareholder of the Russian Adamant jewelry factory. The factory was founded by the Avagyan family. As can be seen, Meltonian later became a shareholder.

The names of both Levon Sargsyan and Artak Meltonyan were not mentioned in any way at the opening of the factory. It is noteworthy that in some of the messages spread by the media, Yerevan Jewelry Factory reported that it’s a part of the Sil Capital group of companies.

The director of Yerevan Jewelry Factory LLC is Boris Hovhannisyan. He is also a board member of Sil Insurance, a closed joint stock insurance company owned by Sukiasyans.

In addition to Artak Meltonyan, Neltax Holding LTD registered in Seychelles, is also a shareholder of Mirelis Limited. As noted above, the company was founded in June 2016.

From information available in Russian open sources about the activities of the Avagyans, it can be concluded that Spirikov is a confidant of the Avagyans. According to the data of the Russian registry, Spirikov was involved in six business companies of the Avagyans as a founder or general director.

Two months after its establishment, in August 2016, Neltax Holding LTD, owned by Spirikov, , registered Vardi Invest LTD in Cyprus.

The International Consortium of Investigative Journalists (ICIJ) and media collaborating with it, including Hetq, have been publishing leaked documents (Pandora Papers) from various offshore zones since October 2021.

According to the data available in the Pandora Papers, Vardi Invest Ltd., on August 31, 2016, decided to acquire 100% of the Russian construction company ООО Stroitel through its parent company, Neltax Holding LTD. Russian registry data show Spirikov was the director of the company until May 22, 2018.

Spirikov was also the founder and executive director of the Russian 6th TV company in the Russian town of Vladimir (2018-2020). The company now belongs to Artur Avagyan, a friend of the Avagyans, who is also involved in other businesses owned by Hrach and Sergey Avagyan.

According to Pandora Papers data, on January 18, 2018, Neltax Holding LTD allowed its subsidiary company, Mirelis Limited, to acquire the Russian Unity LLC (ООО "ЮНИТИ" ) 100% and 100% of Dial LLC (ООО "Диал"). According to Russian open sources, these companies are engaged in real estate rental and management.

Meltonyan, Spirikov and Avagyan are involved in dozens of companies, transferring shares, management and leadership to each other. Some of those companies have been liquidated.

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Gold Silver Chain Company LLC, registered in Armenia in July 2019, is also a part of this chain. Here we also see the name of Prosperous Armenia party leader Gagik Tsarukyan.  

Gold Silver Chain Company rented space in Tsarukyan's Multi Gold and launched jewelry products. Later, when Tsarukyan left the company, a dispute arose between him and Hrach Avagyan regarding the company's property. In an interview with "Number 1 Media", Hrach Avagyan said that after Tsarukyan left the list of shareholders of Gold Silver Chain Company, he did not allow other shareholders of the company to remove raw materials and property from Multi Gold.

Hrach Avagyan's lawyer Tigran Martirosyan told Hetq that Avagyan and Tsarukyan finally reached an agreement (without court intervention), and Avagyan removed the property from Muti Gold.

The current director of Gold Silver Chain Company, Eduard Ghazaryan, was the director of Yerevan Jewelry Factory from June-December 2023.

Of note is that according to the declaration of real beneficiaries of this company, the direct owner of 50% of the company is currently Edgar Harutyunyan, and the other 50% is owned by Margarita Avagyan with indirect participation. Margarita Avagyan is the daughter of Sergey Avagyan. In January 2020, the Adamant stall was opened at Multi Gold owned by Tsarukyan, and Margarita Avagyan introduced herself as the general director of the Russian Adamant company.

Yerevan Jewelry Factory partially reports the list of real beneficiaries

Yerevan Jewelry Factory has been operating since the day of its establishment in an area leased from Yerevan Market, managed by Sil Capital LLC.

In response to Hetq’s inquiry, the factory said Sil Capital provides factory support throughout its activity in consulting, legal and organizational areas, "because the primary goal of Sil Capital is the creation of new jobs in the Republic of Armenia, separate economy the development of sectors, active support to the sectors aimed at increasing the volume of foreign investments".

As for the reflection of the participants in the registration documents of Yerevan Jewelry Factory LLC, the factory notes that the Armenian citizen Levon Gagiki Sargsyan is a participant, and the foreign participant is Mirelis Limited, in which Hrach Avagyan's granddaughter Margarita Avagyan is a participant.

However, the names of Artak Meltonyan and Alexey Spirikov are not mentioned in this list. And the name of Hrach Avagyan's granddaughter Margarita Avagyan was not found in any list of shareholders of these companies mentioned in the article.

The export of jewelry also increased sharply. Main exporter is Yerevan Jewelry Factory

According to the data of Armenia’s State Revenue Committee,  in the last three months of 2023 alone, 9591 kg of jewelry products (made of precious metals, coated with precious metals or not coated) were exported from Armenia with a total value of about 419 million USD. This in just three months. Moreover, most of it was exported in November and December.

By value, 93% of exported jewelry (about $391 million) was exported to the United Arab Emirates.

For comparison, let's note that in the same period of 2022, only 1290 kg of jewelry was exported from Armenia, the total value of which was about 24 million dollars.

Thus, in the fourth quarter of 2023, compared to the same quarter of the previous year, the amount of jewelry exported from Armenia increased seven times, and the value – some eighteen times.

According to Armenia’s State Revenue Committee (SRC), Yerevan Jewelry Factory is on the list of the three major exporters. SRC does not detail how much the company exported. However, judging from the data that the main part of the product goes to the factory, it is also the largest exporter.

It is noteworthy that during the same period, in the fourth quarter of 2023, 13 561 kg of jewelry products were imported into Armenia, the total value of which was about US$22 million.The import statistics by country are even more interesting. In the fourth quarter of 2023, 13 284 kg of jewelry were imported from Russia, the total value of which was only $1.3 million (1 kg is $100).

161 kg of jewelry worth about $17 million (1 kg – $103,000) was imported from the UAE.

Yerevan Jewelry Factory, along with the Fancy Jewelry and VTP Trade companies, is in the top three importers.

Suren Parsyan: "We don't have the resources to produce that much jewelry."

Economist Suren Parsyan observes that Armenia lacks the technical resources, equipment, and   human labor to produce that volume of jewelry in one month.

"We don't have enough resources to increase production volumes fourteen times in one month. In essence, not so much jewelry or items were produced, but imported gold ingots were broken up and exported from Armenia under the name of jewelry," the economist believes.

Parsyan says Armenia imports Russian gold, which is exported to the United Arab Emirates, India, etc.

As to why the exported product isn’t in the form of ingots, the answer is Western sanctions. "Russian gold is under Western sanctions, and their buyers will also be under sanctions. The export of jewelry is no longer under sanctions," says Parsyan.

According to the economist, Armenia's economy provides all this with money circulation. In particular, the companies involved in it benefit.

Thus, interesting but at the same time suspicious developments, are taking place in the jewelry market in Armenia. The manufacturer shows a large amount of production, which, according to experts, cannot be provided with Armenian resources.

Apart from the fact that production and export data raise several questions, all of this also distorts the statistical picture of economic growth.

This large production of jewelry ‘contributes’ to high industrial growth, which in turn contributes to economic growth.

However, if it is not actually Armenian production, but an imported and re-exported product (which is already the job of the economic sector departments and law enforcement officers to find out), a statistical ‘fraud’ is taking place, as a result of which false indicators of economic growth are recorded.

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