The political will to follow through on corruption investigations is sorely lacking in Armenia, particularly when those under suspicion are well-connected to the political elite. The Armenian law enforcement bodies must have more independence and more backbone.

In April 2016 the release of the Panama Papers showed how a law firm in Panama City helped clients from around the world set up secret offshore companies. This included the names of a number of Armenian citizens. The Armenian citizen named in the papers who holds the highest position in the government was Mihran Poghosyan, Major General of Justice, Chief of Compulsory Enforcement Office.

Poghosyan appeared to be the shareholder of three companies registered in Panama — Sigtem Real Estates Inc., Hopkinten Trading Inc. and Bangio Invest S.A. The first two were set up in March 2011, when he was already the Chief Compulsory Enforcement Officer.

On April 4, 2016, upon the publication on hetq.am — the electronic news website of investigative journalists — Armenia’s Special Investigative Service (SIS) initiated a criminal proceeding against Poghosyan under Article 310 of the Criminal Code of Armenia (illegal participation in entrepreneurial activity).

Within two weeks, Poghosyan resigned from his position. He did not admit wrongdoing but said he did not like appearing on a list that included the president of Azerbaijain, Iham Aliev and his family. The Alievs were also mentioned in the Panama Papers; over the years there have been reports of the extreme wealth of the Azerbaijani ruling family.

This all happened at a time when there was an escalation of the conflict between Armenia and Azerbaijan following the four-day war on the border of Nagorno-Karabagh Republic and Azerbaijan in the beginning of April 2016.

After about eight months of examining the case, on January 23 2017, the SIS dropped criminal proceedings against Poghosyan citing a lack of evidence. The SIS said it had not received the information it requested from the respective authorities of the Republic of Panama and the Swiss Federal Department of Justice.

Not surprisingly Poghosyan claimed that the whole offshore scandal was a nonsense and has said he plans to run for the parliament in 2017 April elections as a district candidate from the ruling Armenian Republican Party. He is already on the party’s list, and it is quite likely he will be elected and then gain a high position in the government.

The case against him should not have been shelved. The SIS, for whatever reason, did not follow the correct procedures. Armenian investigative journalists who asked the Swiss Federal Department why the SIS request was refused, were told that the requests for information were not submitted correctly, not that they had refused to supply information.

This is the second offshore scandal in Armenia related to high-ranking officials that has come up against a dead end. The first one, in 2014, involved then Prime Minister Tigran Sargsyan (former chairman of the Central Bank of Armenia), Archbishop Navasard Kjoyan and entrepreneur Ashot Sukiasyan. They had a joint business registered in Cyprus, which is considered an offshore jurisdiction.

Criminal proceeding were launched and then closed because the SIS said there was a lack of evidence (corpus delicti) for the former prime minister and the archbishop. (The proceedings against Sukiasyan continued.)

The Prime Minister stayed in his position long after the scandal and then was appointed Ambassador to the US and later chairman of the board of the Eurasian Economic Commission.

Despite the fact that Armenia talks about fighting corruption and even promotes anti-corruption legislation, there appears to be a lack of political will when high-ranking officials are alleged to have broken the law.

We would recommend that the SIS resubmit its requests for information from both Panama and Switzerland in the proper format. That way the people will know if there is a real basis on which to drop the case of not.