According to the reliable information at the Haykakan Zhamanak (Armenian Time) newspaper’s disposal, the relevant agencies of the European Union (EU) and World Trade Organization (WTO) decided to initiate proceedings against Armenia for violating free trade regulations.

The point is the difference in tax rates for tobacco and vodka imported and produced in Armenia. In defiance of its commitments, Armenia has set higher tax rates for imported tobacco and vodka than for their home-made counterparts.

The Armenian Parliament has lately amended a number of laws thereby reducing the difference between the tax rates for imported and home-made products. The EU and WTO do not appear to consider the measure sufficient. If the case goes to the International Court of Arbitration, sanctions may be applied against Armenia.

To avoid problems, the Armenian authorities will have to reduce the difference in tax rates.