Customs:

In the US, as well as a great number of European countries, delivery of goods purchased via e-commerce is primarily implemented by postal and courier services. However, the postal system currently available in Armenia is both inefficient and unreliable; and the international courier services operating in Armenia, charge very high rates for delivery of packages. Furthermore, the lacks of transparency of Armenian Customs rules and regulations, as well as burdensome and bureaucratic paperwork requirements, pose a great barrier to the development of e-commerce in Armenia.

Ideally, the consumer should have very little involvement between the time he orders the goods on the Internet, until he receives them. It is the responsibility of the supplier and the distributor to address safety, security and prompt delivery of goods ordered. However, with confusing administrative regulations, and unpredictable custom duties, suppliers and distributors cannot accurately calculate the Customs duties, necessary paperwork and the time necessary to clear goods through Customs. Other problems such as lack of adequate facilities for storage of perishable goods and inappropriate mechanisms for the determination of customs value, just add to the inconvenience of shopping in the global market.

A lack of consistency exists in procedures used at different points and Customs houses. The customs regulations change very frequently creating inconsistency and confusion in operation of businesses. For example, recently, the license for “custom brokers” was revoked, for clearance of both imports and exports. The revocation of broker licenses adds a significant load on small companies who are generally unfamiliar with the detail and complexity of customs procedures. Although the Ministry of State Revenue officials has stated that the licenses will be reissued in the near future, if such unpredictability persists in the sphere of laws and regulations, many companies will be discouraged to use e-commerce to conduct regular transactions.

The simplification and clarification of customs rules and regulations, and improvement of delivery services for both domestic and international products and services will facilitate the development of e-commerce in Armenia, and will attract investment in the distribution and transportation infrastructures of Armenia.

There is no exemption available for goods and services physically delivered to purchasers in Armenia; however, this does not seem to pose a significant obstacle to the development of e-commerce in Armenia.

Foreign Exchange Regulation:

Armenia has eliminated the Foreign Exchange Regulation, removing all restriction in transfer of funds. Rule 5 of the Regulation No.8 of the Central Bank of Armenia expressly all individuals and businesses in Armenia to open and maintain bank accounts abroad and effect payment. Even though, under Regulation No.8, the Central Bank has reserved the right to impose certain emergency restrictions on foreign exchange transactions related to movement of capital, the foreign exchange regime has been one of the most liberal in the Commonwealth of Independent State since 1995 and no such restrictions exist today. Moreover, under the Regulation such restrictions can be imposed only by providing a notice one month in advance.

Armenia has also joined Article 8 of the International monetary fund Articles of Agreement, prohibiting a member nation to restrict current account transactions. Therefore, the foreign exchange regulation does not pose any restrictions that could hinder the development of e-commerce. However, the low level of sophistication of the banks, the lack is technology, and the slow pace of processing credit payments must be addressed in order to expedite and simplify the payment procedures.