CoG: Judicial reforms, data protection and privacy in Armenia (#12 - Sep 5, 2020)

Armenian News Network - Groong: Week In Review Podcast

Armenia has European grade laws in the areas of finance, business, data protection and privacy. What is preventing Armenia from achieving its full potential in foreign direct investment (FDI)? Why do many Armenian startups incorporate in foreign countries, and use Armenia as their offshore labor resource?

Guest

Our guest today is David Sandukhchyan, who is an Armenian lawyer with 20 years of experience in telecommunications, cyber law, media and personal data protection. He started his legal career as an Internet freedom advocate and made substantial contributions to the development of media, telecommunication and technology legislation in Armenia.

David was Chief Counsel for over 8 years at Beeline, one of the leading Armenian telecom operators. From 2005 to 2007 he was a member of the Council of Europe expert group on human rights in information society and committee of experts on electronic democracy.

Today David lives in Toronto, Canada and as a private consultant he is involved in many Internet freedom, data protection and telecommunications development projects. He holds a BA degree in law and a Master’s in physics. He is a certified ISO information security auditor with a Certificate in Advanced Cyber Security from York University in Toronto.

Analysis and Discussion

What were some of the major headaches of the chief counsel for one of the largest telecom operators in Armenia?

How did the government’s relationship with large companies evolve over your nearly a decade at Armentel?

Are there citizen initiatives like the EFF to champion privacy protections in Armenia?

Armenia prides itself as the “Silicon Valley of the former USSR” and we have seen some successes where a number of Armenian startups eventually got a significant amount of VC investment in Armenia. Some of the major success stories pride themselves in having a value that’s measured in the hundreds of millions or even billions of dollars. For instance, the best-known startup PicsArt has received $65 million VC investment so far according to Crunchbase. Another popular startup Krisp is in the Series A funding stage with $8.5 million so far, and there are more examples.

But there is a common pattern we’re seeing. In both cases, we’ve seen these startups re-incorporate in the US (specifically Silicon Valley) prior to getting investments. What this means in reality is that these companies become US companies and the value of the company largely transfers from Armenia to the US, leaving the Armenian branch as an outsourcing center for the US company.

Armenia is compliant with EU regulations, so the laws are pretty good. But the way Armenina works is not great because it works on the basis that people should trust the government. But the basis for this trust is not in place. What are the causes for this?

- Lack of trust by foreign investors because their capital is not protected;
- Judiciary: personalities & processes;
- Kompromat as part of “the system”;
- Armenian government's stance on the issue of privacy, media freedoms.
Guest: David Sandukhchyan
Hosts:
- Asbed Bedrossian
- Hovik Manucharyan

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