Failure to Submit or Publish Financial Statements

The amendments pertain to violations of the procedure for submitting and publishing financial statements, as well as the hiring of a chief accountant who does not meet the qualification requirements stipulated by law.A detailed analysis of the amendments is presented below.

Amendment 1. Failure to Submit or Publish Financial Statements (Article 169.12 in the New Edition) The new regulations establish a sharply progressive, three-tier system of fines.

What is Considered a Violation:

• Failure to submit financial statements to state bodies within the prescribed timeframes,

• Failure to publish them in accordance with the procedure and within the timeframes stipulated by legislation,

• Failure to publish the hyperlink to the website where the financial statements are published on the official website for public notices of the Republic of Armenia www.azdarar.am,

• Failure to provide the financial statements or their hyperlink within the prescribed timeframes upon the request of physical or legal entities.

Amounts of Fines:

• In the event of an initial violation, a fine is imposed in the amount of 150 times the established minimum wage.

• If the violation is not rectified within 30 days after the decision to impose the first fine becomes unappealable, a fine is applied in the amount of 1500 times the minimum wage.

• If the violation is not rectified within 30 days after the imposition of the second fine, the amount of the fine shall be 4500 times the minimum wage.

Amendment 2. Hiring a Chief Accountant Failing to Meet Qualification Requirements (Article 169.13 in the New Edition) Oversight regarding the quality of an organization's accounting practices has also been tightened.

To Which Organizations Does It Apply:

• Public-interest, large, and medium-sized organizations,

• Public sector organizations defined by the Government.

What is Considered a Violation:

• Hiring a chief accountant in the aforementioned organizations who does not satisfy the qualification requirements stipulated by the Law "On Accounting", or failing to rectify such a violation within the prescribed timeframe.

Amounts of Fines:

• In the event of an initial violation (hiring an accountant who does not satisfy the requirements), a fine is established in the amount of 100 times the minimum wage.

• If the violation is not rectified within 30 days after the imposition of the fine, a fine is applied in the amount of 1000 times the minimum wage.

Main Conclusions։ As a result of these legislative amendments, direct liability is established for the head of the organization, and the scale of the financial sanctions has been substantially increased. The law will apply to administrative proceedings initiated after its entry into force. Consequently, organizations must review their procedures to ensure compliance with the new, more stringent requirements.

A detailed analysis of the amendments is presented below.

Amendment 1. Failure to Submit or Publish Financial Statements (Article 169.12 in the New Edition) The new regulations establish a sharply progressive, three-tier system of fines.

What is Considered a Violation:

• Failure to submit financial statements to state bodies within the prescribed timeframes,

• Failure to publish them in accordance with the procedure and within the timeframes stipulated by legislation,

• Failure to publish the hyperlink to the website where the financial statements are published on the official website for public notices of the Republic of Armenia www.azdarar.am,

• Failure to provide the financial statements or their hyperlink within the prescribed timeframes upon the request of physical or legal entities.

Amounts of Fines:

• In the event of an initial violation, a fine is imposed in the amount of 150 times the established minimum wage.

• If the violation is not rectified within 30 days after the decision to impose the first fine becomes unappealable, a fine is applied in the amount of 1500 times the minimum wage.

• If the violation is not rectified within 30 days after the imposition of the second fine, the amount of the fine shall be 4500 times the minimum wage.

Amendment 2. Hiring a Chief Accountant Failing to Meet Qualification Requirements (Article 169.13 in the New Edition) Oversight regarding the quality of an organization's accounting practices has also been tightened.

To Which Organizations Does It Apply:

• Public-interest, large, and medium-sized organizations,

• Public sector organizations defined by the Government.

What is Considered a Violation:

• Hiring a chief accountant in the aforementioned organizations who does not satisfy the qualification requirements stipulated by the Law "On Accounting", or failing to rectify such a violation within the prescribed timeframe.

Amounts of Fines:

• In the event of an initial violation (hiring an accountant who does not satisfy the requirements), a fine is established in the amount of 100 times the minimum wage.

• If the violation is not rectified within 30 days after the imposition of the fine, a fine is applied in the amount of 1000 times the minimum wage.

Main Conclusions։ As a result of these legislative amendments, direct liability is established for the head of the organization, and the scale of the financial sanctions has been substantially increased. The law will apply to administrative proceedings initiated after its entry into force. Consequently, organizations must review their procedures to ensure compliance with the new, more stringent requirements.