Editorial Note:
The author of this article worked at the Ministry of Education, Science, Culture and Sport of the Republic of Armenia from April 15 to November 27, 2024, including at certain technical stages (editorial and legal compliance level) of the drafting process of this decision. In fulfilling their professional duties, the author did not have direct involvement in the conceptual formation or decision-making process related to the adoption of the program.
Taking into account the current public significance of the field’s development, the analysis presented in this article is based solely on the press release issued by the Armenian National Film Center, the publication in the IRIS bulletin, the international investigation by Film Industry Watch, and Hetq’s article. It reflects the author’s journalistic standpoint. The article does not use any non-public information or official data.
On April 10, 2025, the Cash Rebate program (Decision No. 412-N) approved by the Government of Armenia, aimed at partial reimbursement of film production investments, was included in IRIS Merlin, the international legal database operating under the European Audiovisual Observatory.
As reported in the June 5 press release of the Cinema Foundation of Armenia, the information was published after the material was submitted to IRIS’s editorial team and reflects international attention toward the program.
Officially acknowledged, in reality initiated by the very system
From the IRIS website publication, it is evident that the article’s author is a current employee of the Cinema Foundation of Armenia. This does not violate the official rules of the Observatory, but it casts doubt on the legal material’s representation and the interpretation of “international attention.” In such cases, the article functions more as an official notice from the country rather than an independent expert opinion.
According to the same press release, the Cash Rebate provides reimbursement of 25% of direct film production expenses in Armenia and up to an additional 10% depending on the degree of promotion of Armenia as a filming location. The program is open to both residents and non-residents.
Main flaw: who can actually receive reimbursement?
At first glance, this may appear to be an expansion of investment attractiveness. However, as follows from the current regulations, the program indeed allows participation of non-residents without requiring a service contract with a legal entity registered in Armenia or mandatory registration of a legal entity in Armenia. The only condition is: “For the purpose of cash rebate, filmmakers must acquire products, services, and works directly related to filmmaking from resident taxpaying organisations and individual entrepreneurs of the Republic of Armenia.” This is confirmed by the absence of any requirement for tax residency or a local taxpayer identification number in the program’s terms.
Such an approach may formally align with the desire to remain open to international partners, but simultaneously puts into question the economic rationale of the program. Public funds allocated to cinema from the Armenian state budget may be redirected to projects that do not create sustainable economic activity in the country — without a production service contract with a resident organization, without legal entity registration, without hiring local staff, and without participation in the local system of taxes, social payments, or infrastructural legacy.
Moreover, the program’s openness to non-residents without requiring legal presence in the jurisdiction creates a favorable basis for the participation of offshore and “empty shell” structures that use transnational financing schemes. In the absence of mandatory beneficiary disclosure, transparent audits, and accessible information on the final recipients of funds, zones of uncontrolled state resource leakage emerge, presenting real risks under the appearance of “international film cooperation”.
Thus, the key issue is not accessibility for non-residents itself, but rather the lack of institutional mechanisms that ensure the return of investments into Armenia’s economy and protection against the use of the program by bypassing transparent procedures.
The continuation of ANIF: international reaction and investigation
As Hetq previously reported, in 2023 the ANIF investment fund — founded with government participation — invested 1.5 billion AMD in “CFW” CJSC, a company registered just eight days before receiving the funds. According to investigations, its shareholders are companies registered in the offshore jurisdiction of Delaware (USA), and its director is Karine Andreasyan, a close friend of then – Yerevan Mayor Tigran Avinyan’s wife.
Despite the fund’s liquidation, the Government of Armenia decided in May 2025 to pay ANIF’s 2024 profit tax using state budget funds — amounting to approximately 84.5 million AMD (around USD 220,000). Against this backdrop, Armenia continues to face reputational risks related to the use of public resources by not transparent structures.
On May 30, 2025, Film Industry Watch published the investigation “Armenia’s cash-rebate plan for foreign films faces legal and ethical challenges,” questioning both the legal framework of the program and its institutional implementation. Among the primary concerns was the legality of the decision: the reimbursement rate set by the decision contradicts the legal framework, as Article 18 of the Law on Cinematography clearly defines a range of 10–40%. Any changes, according to the organization’s legal experts, must go through Parliament. Nevertheless, the decision sets a different range — 25–35%.
The investigation paid particular attention to the director of the Cinema Foundation. It stated that David Banuchyan, director of the Cinema Foundation of Armenia, is also co-producer and tax rebate supervisor of the production company People of Ar. According to the authors, this same company appears in a quadripartite memorandum with state bodies signed before the legal framework of the rebate program was adopted. The memorandum between state institutions and People of Ar was signed in December 2023 — before the necessary sub-legislative acts were passed and before the Cinema Foundation was officially established.
The investigation by Film Industry Watch is also based on the IRIS Merlin publication submitted by the Foundation, which had already been available on the Foundation’s website since May 26.
This case illustrates the real risks associated with the absence of a mechanism to verify ultimate beneficiaries and the use of state support through formally acceptable but institutionally questionable channels. In a context where the Cash Rebate program does not require non-residents to enter a production services contract with a resident organization or to register a legal entity in Armenia — and lacks a full-fledged ownership disclosure system — such threats arise: public funding may be redistributed in favor of offshore, nominal, or affiliated structures that provide no systemic benefit to the local economy.
Silence is not an argument. The press release of the Cinema Foundation of Armenia makes no mention of international criticism. This creates the image of program recognition, while the legal and institutional ground underneath remains unstable.
The Cash Rebate program in Armenia is potentially an important tool for attracting international capital and developing the local film sector. However, the imitation of openness and formal recognition — without proper institutional depth — can undermine trust and turn a state mechanism into yet another source of risk.
What is IRIS?
IRIS (Legal Observations of the European Audiovisual Observatory) is the legal bulletin of the European Audiovisual Observatory of the Council of Europe, which has been covering key legislative developments in media, film, streaming, and television across 41 European countries on a monthly basis since 1995. Materials are published in English, French, and German and are available free of charge.
The main purpose of IRIS is to ensure transparency and regular exchange of legal information in the audiovisual sector. Within the bulletin, the IRIS Merlin database operates, which compiles articles and documents.
Information for IRIS is submitted by national correspondents selected within the IRIS network. These may be representatives of public agencies, regulatory authorities, or specialized institutions. The European Audiovisual Observatory edits and publishes the submitted materials while maintaining a neutral and legalistic tone. Thus, publication in IRIS does not imply evaluation or endorsement by the Council of Europe, but merely records a legally relevant event for the field.
Armenia joined the European Audiovisual Observatory in 2012. The Observatory is a non-profit intergovernmental organization operating in the field of information. Membership in the European Audiovisual Observatory ensures the visibility of the Armenian audiovisual field in the international arena.
