US embassy cable - 04YEREVAN2565

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 002565 
 
SIPDIS 
 
EUR/CACEN FOR SIDEREAS 
 
E.O. 12958: DECL: 11/18/2014 
TAGS: EAIR, ECON, PREL, AM, EK 
SUBJECT: CIVAV:  ARMENIA REGISTERS AIRLINES OPERATING 
EXCLUSIVELY IN AFRICA 
 
REF: YAOUNDE 01234 
 
Classified By: DCM A.F. Godfrey for reasons 1.4 (b) and (d). 
 
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SUMMARY 
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1.  (C) The November 26, 2004 sentencing of six Armenians (a 
pilot and crew) in Equatorial Guinea for aiding the overthrow 
of President Obiang's government (reftel) is a reminder about 
the business-end of Armenia's "don't ask, don't tell" policy 
on airline registration.  Armenia's Directorate of Civil 
Aviation licenses a dozen cargo airlines that operate 
exclusively outside Armenia -- more than the number of 
airlines that operate inside Armenia.  According to the GOAM, 
cargo airlines find it "convenient" to register their 
companies and planes in Armenia even though they operate 
between Russia and African states or solely between African 
states.  Not least of these conveniences is that Armenia 
lacks the resources to carry out inspections or to oversee 
the airlines operating abroad, letting these planes fall into 
a regulatory black hole.  Suddenly worried that accidents 
abroad could call attention to their nonfeasance, Armenia's 
Civil Aviation authorities are trying to make agreements with 
aviation authorities of various African states to assume 
partial regulatory oversight of the aircrafts.  We see little 
legitimate benefit to Armenia from licensing these airlines, 
but the reputation risk could be great should too many of the 
planes prove unsafe or turn up being used for criminal 
purposes.  End Summary. 
 
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ARMENIA: A LIBERIA FOR AIRLINES? 
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2.  (C) The Director of International Relations for the 
Directorate of Civil Aviation, Karen Zadoyan, told us that 
many private cargo airlines operating Russian aircraft in 
Africa find it easier to register their planes and businesses 
in Armenia than elsewhere.  This creates a problem for the 
Directorate of Civil Aviation because they lack the resources 
to oversee the operation of the planes, which occurs 
exclusively outside Armenia.  According to Zadoyan, Armenian 
planes are filling an international niche, because Armenia 
still has the Soviet-trained pilots and crew to operate cheap 
Russian aircraft.  He said that he does not believe that lack 
of oversight is a factor in why these airlines choose to 
register in Armenia. 
 
3.  (C) According to Zadoyan, these cargo companies have 
similar origins:  middle-men from United Arab Emirates find 
Armenian business partners to set up airlines in Armenia. 
Although Zadoyan would not specifically name the Armenian 
owners of these airlines, he commented that airline companies 
must have partial Armenian ownership and frequently have 
Armenian pilots and crew.  Zadoyan added that the planes 
should periodically fly to Yerevan for servicing and 
inspection.  When we mentioned that the managers of 
Zvartnots, Yerevan's only commercial airport, didn't know 
anything about the airlines, Zadoyan replied that many of the 
airlines "find it more convenient" to land at Erebuni, 
Yerevan's military airport.  (Comment:  Among the 
conveniences at Erebuni airport are the lack of customs 
facilities and the denial of access to the public.  End 
Comment.) Although Zvartnots International Airport should 
have a monopoly on all commercial cargo traffic, an airport 
official at Erebuni recently told the DATT that the airport 
had improved its runway for use for commercial cargo traffic. 
 
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WHAT ARE THESE PLANES CARRYING? 
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4.  (C) Zadoyan said that his office doesn't ask or check 
what the cargo is on these planes, but he assumes it is 
mostly "clothes and food."  Zadoyan said they would only 
investigate the cargo in the event that something happened. 
For example he mentioned that when an Armenian flagged plane 
crashed in the Sudan two years ago, its cargo was two tons of 
(unspecified) currency.  As for the Armenian-registered AN-12 
aircraft seized by the government of Equatorial Guinea 
resulting in the November 26 sentencing of six Armenian crew 
members to 14 - 24 years of imprisonment, Zadoyan said that 
he did not know what their cargo was.  Tiga Airlines' 
director, Boris Avagian, has made a public statement that the 
plane was carrying Russian supplies to oil companies 
operating in Equatorial Guinea. 
 
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COMMENT 
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5.  (C) Armenia's self-aknowledged lack of resources to 
oversee these airlines risks making Armenia an attractive 
country of registry for those airlines seeking to avoid 
government oversight.  Because these airlines do not fly 
cargo to or from Armenia, the Armenian government receives 
little legitimate benefit from licensing these airlines. 
Doubtless, Armenia's well-developed custom of turning a blind 
eye in exchange for bribes may have given it a comparative 
advantage in the registration of aircraft. But Armenia's 
civil aviation authorities have put their reputation and that 
of other Armenian flagged airlines at risk should one of 
these airlines turn out to be usafe or used for criminal 
purposes. 
EVANS