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Monday July 15 2024

EBRD's involvement in financing Armenian separatism: will bank honor business ethics? [PHOTO]

8 July 2024 10:00 (UTC+04:00)
EBRD's involvement in financing Armenian separatism: will bank honor business ethics? [PHOTO]

A few days ago, we found out that the Bank of Georgia, which is considered the leading bank of the neighboring Republic of Georgia, was actively involved in financing the non-governmental organization "The Union for Protection of the Interests and Rights of the "Artsakh" People", established under the leadership of Karabakh separatists, Azernews reports.

According to information, the mission of this organization is to advocate for the collective rights of Karabakh Armenians who continue to live as "migrants" in Armenia and around the world, to represent their interests on international platforms, and to revive separatism by drawing the world's attention to the problems of Karabakh Armenians.

The funding of the organization stems from donations from citizens, and this process is carried out through "AMERIABANK", which operates in Armenia. While 90 percent of the shares of "AMERIABANK", which provides funding for the newly initiated separatist activities, belong to the leading bank of the Republic of Georgia - Bank of Georgia, the remaining 10 percent of the shares are owned by the European Bank for Reconstruction and Development (EBRD).

Exhibit 1: Number of AMERIABANK shares held by the European Bank for Reconstruction and Development

Exhibit 2: Purchase of shares in AMERIABANK by the European Bank for Reconstruction and Development, 2015

The negotiations on the purchase of shares between AMERIABANK and the European Bank for Reconstruction and Development first started in 2015. The EBRD acquired a 20.6 percent stake in AMERIABANK in December of that year in exchange for a $40 million investment. Although for a long time "AMERIABANK" belonged to the Armenian billionaire Ruben Vardanyan, who lived in the Russian Federation, the sale of the bank's shares occurred in February this year.

Meanwhile, for reference, before the change of shareholders, 48.82 percent of the bank's shares were owned by "Imast Group (CY) Limited", 17.71 percent by EBRD, 13.91 percent by Asian Development Bank (ADB), and 12.05 percent by ESPS Holding Limited. Even though the EBRD's stakes have decreased since the change earlier this year, it is clear that the aforementioned bank continues to maintain its position as a shareholder.

Cooperation between the EBRD, headquartered in London, and the Republic of Azerbaijan began in 1992, and currently, bilateral cooperation is governed by the country's Strategy document for 2019–2024.

The involvement of the EBRD, which operates within a fairly broad framework with Azerbaijan and is directly engaged in financing projects in the energy and other sectors considered strategic, in a project aimed (even if indirectly) at reviving Armenian separatism is unacceptable.

The European Bank for Reconstruction and Development is an international financial institution that is officially committed to promoting integrity and high ethical standards in all business operations following international practice. The EBRD's Office of the Chief Compliance functions to investigate allegations of corruption, money laundering, and fraud filed by the bank and to address these issues.

The involvement of "AMERIABANK", whose shareholder is the EBRD, in the financing of separatist activities claiming the sovereign territories of Azerbaijan, is an international crime. Also, this activity of the mentioned bank is a violation of international compliance rules. Taking into account corporate business ethics and international financial principles accepted in the world, the participation of the European Bank for Reconstruction and Development in financing the project formulated against the territorial integrity of Azerbaijan is unacceptable.

We hope that this step, incompatible with the spirit of strategic relations established between the Republic of Azerbaijan and the European Bank for Reconstruction and Development, will soon be eliminated by the General Compliance Office of the Bank.

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