Alert 46
Proposed Amendments on the Law on Joint-Stock Companies: Safe Agreements
The legislative draft approved by the Government of Armenia introduces the concept of Safe agreements into Armenian legislation.
Under the proposed legislation, safe agreements are defined as a method to attract investment in companies. Essentially, the agreement allows investors to invest funds with the condition that if the company succeeds (the definition of success to be determined by mutual agreement), the investor will receive a predetermined number of shares in exchange for their investment. However, if the company does not succeed, the investor will receive a refund of the invested funds.
Safe agreements differ from other investment mechanisms such as acquiring shares in the company's authorized capital or using convertible bonds. Unlike these methods, safe agreements do not require the company to pay interest nor do they grant immediate managerial authority to the investor. Additionally, in the event of the company's bankruptcy, investors are given priority in the return of their investments over regular shareholders.
The draft has been approved by the Government of the Republic of Armenia.
Find more here.
Fundamental Changes in Regulation of Winning Gaming, Internet Winning Gaming, Casinos And Lotteries
At a meeting on December 21, 2023, the Armenian Government approved a package of draft amendments to a number of laws, which were proposed to restrict the advertising of internet winning games and lotteries organized in foreign countries on the territory of Armenia or in the entire internet available in Armenia, as well as the creation of opportunities for participation in internet winning games and lotteries in foreign countries.
At the same time, the bill stipulates that operators of public electronic communication networks providing internet access services are obliged to block websites of internet winning games and lotteries organized in foreign countries and by organizations that do not have the appropriate license defined by Armenian legislation. The list of websites to be blocked, as well as the procedure and terms of blocking, are to be established by the competent authority.
For non-fulfillment of this obligation, administrative liability is envisaged for the operators, in particular, in case of committing a violation for the first time, a warning with an order to eliminate the violation may be imposed, and in case of repeated commission within one year after the warning, a fine in the amount of 500,000 AMD to 1,000,000 AMD for each violation. Repetition of the same action within a year or failure to comply with a previously committed violation within a month after being brought to administrative responsibility may entail a fine of AMD 3,000,000.
Another fundamental change allows individuals who are not citizens of Armenia to place bets and receive winnings in foreign currency under certain conditions.
It was also proposed to establish certain standards for the persons who audit the financial statements of the organizers of winning games, internet winning games casinos and lotteries, taking into account the high risk level of the sector.
The bill has received the approval of the Armenian Government and, shortly, would be included in the agenda of the RA National Assembly.
Find more here.