YEREVAN, 15 November. / ARKA /. In “Crisis and Transition: The People’s Perspective” report the European Bank for Reconstruction and Development (EBRD) says throughout the second half of 2010 and into 2011, the authorities of Armenia have undertaken various measures to improve the business environment.

It says a new electronic business registration system and single window registration procedures were introduced in 2010, aimed at reducing the cost of business registration. The number of licences required for various business activities has been reduced substantially, and the time of obtaining construction permits declined from an average of 137

days to 27 days. Risk-based approaches to selecting enterprises for audit are being introduced in the tax and customs bodies and the labour inspectorate.

In October 2010 the authorities eased the certification of origin requirements and simplified import procedures, measures that should reduce the cost of cross-border trade. A small and medium-sized enterprises (SME) council was established in July 2011 to address policy issues pertaining to this sector. In cooperation with the European Union (EU), the authorities are working to reform customs and are targeting better governance, compliance, and speeding up clearance.

The amendments to the Law on Protection of Economic Competition introduced in April 2011 should help strengthen the Competition Commission (CC), through improved methodologies, increased penalties for monopolistic behaviours and strengthened inspections. However, excessive regulations remain a difficult obstacle to investment with over 25,000 legal norms in effect at the national level.

The report says although many of these legal norms are well designed, there are inconsistencies, contradictions and complexities in the legal framework that are burdensome for citizens and businesses. A regulatory guillotine,

announced by the government in June 2011, should help reduce obstacles to doing business and further improve the business environment.

A mandatory funded pension system is expected to come into force in 2014. According to new legislation, adopted by the parliament in December 2010, the existing “pay-as-you-go” system will be replaced by a multi-pillar system, including a state pillar and a private pillar, with a fully funded second pension pillar available on a voluntary basis from 2011.

The funded system would require that employees transfer 5 per cent of their salaries into the fund until they reach retirement age, and that this will be matched by an equal government contribution (capped at 25,000 drams per year). These funds will be invested predominantly in locally traded securities. The reform should help contribute to the development of long-term investments and a local capital market. The motor liability insurance introduced in January 2011 has boosted development of the insurance sector and is expected to strengthen the local securities market. -0-