Current legislation in Armenia allows mayors to sign contracts with companies owned by their relatives without legal obstacles. Although such situations are examples of obvious conflicts of interest, the law does not adequately regulate them.

In 2022-2024, Hrazdan Mayor Sevak Mikayelyan signed contracts worth AMD 156 million with Largo-Winch LLC, owned by his brother. Mikayelyan was fined after Hetq published the story, but in 2025, declaring a conflict of interest, he signed another contract worth AMD 54 million and avoided liability.

In 2021, the Kapan Municipality signed a contract with Grig-Business LLC for the supply of compressed natural gas. The contract value was AMD 4.5 million, but the company was paid AMD 3.9 million. The owner of the company is Grigori Parsyan, the brother of community leader Gevorg Parsyan.

In the following years, the same company was also the supplier of compressed natural gas. In 2022, the community municipality paid a total of AMD 6.4 million   to Grig-Business, in 2023 – AMD 6.3 million drams, and in 2024 – AMD 5.5 million.

In 2025, the Kapan community municipality signed another contract with Grig-Business for AMD 7.5 million, the payment for which has not yet been made.

During 2021-2025, the community municipality purchased compressed gas worth some AMD 30 million, of which 29.7 million was paid to the company owned by the community leader’s brother.

The Law on Procurement does not regulate such cases. The law provides for conflict-of-interest restrictions only for members of evaluation committees.

On the other hand, Article 33 of the Law on Public Service obliges officials to avoid actions or decisions that may lead to a conflict of interest.

The law, however, provides for only administrative liability for such cases. If an official, before signing a contract, informs his superior (or, in the absence of a superior, the Corruption Prevention Commission), he/she can be exempted from liability. Otherwise, they face a fine of up to 300,000 drams, which virtually allows them to evade liability legally.

And there are many such examples.

Talin Mayor Tavros Sapeyan signed two contracts with Sapeyan Brothers LLC in 2023 for a total of AMD 15.7 million. The shareholders of the company are the mayor’s father and uncle. After being fined, in 2024, he signed another contract, this time for AMD 6.6 million.

In February 2024, Radio Liberty wrote that Vagharshapat Mayor Dianna Gasparyan signed a contract with her father-in-law, Ashot Mirzoyan, obliging him to supply the community with AMD 13.6 million worth of compressed natural gas.

Ministry of Finance representatives have recently talked about the need to amend the Law on Procurement. They want to clearly define who are the people related to an official, as well as prohibit the signing of contracts with them.

However, until the adoption of new legislation, the current law allows community mayors and other officials to sign contracts with companies owned by their family members or relatives without significant legal consequences. 

The current regulations, by not protecting the public interest, effectively legalize conflicts of interest.