This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 YEREVAN 000147 
 
SIPDIS 
 
COMMERCE FOR 3150 
COMMERCE FOR 4201/ITA/IEP/OEERIS/BISNIS 
EMBASSIES - PLEASE PASS FCS 
DEPT FOR EUR/CACEN, EB/CBA 
PASS TDA, OPIC, EXIM 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KTDB BBSR BEXP AM
SUBJECT:  ARMENIA COMMERCIAL NEWS SUMMARY: 
JANUARY 2006 
 
------- 
SUMMARY 
------- 
 
¶1.  This cable summarizes press reporting on commercial 
developments in Armenia for January 2006.  Major headlines 
include: 
 
-- Armenian Central Bank establishes a new Unified Financial 
Control Body; 
 
-- World Bank (WB) approves second Poverty Reduction Support 
Credit for Armenia; 
 
--Global Gold acquires gold and uranium exploration 
property; 
 
-- Cascade Bank, CJSC, finalizes acquisition of Emporiki 
Bank - Georgia S.A.; 
 
-- December 2005 Economic Data. 
 
END SUMMARY. 
 
--------------------------------------------- 
CENTRAL BANK ESTABLISHES UNIFIED CONTROL BODY 
--------------------------------------------- 
 
¶2.  The Armenian Central Bank's Unified Financial Control 
Body officially began operations on January 1, 2006. 
According to Chairman of the Central Bank Tigran Sargsyan, 
the new body would oversee all segments of the financial 
market including banks, non-banking financial institutions, 
insurance companies and the local stock exchange (replacing 
the recently dissolved Securities Commission).  The Central 
Bank notes that having unified oversight would make it 
easier for financial institutions to comply with 
regulations.  Sargsyan told the press that the new body 
would have fifty staff members including many former 
Securities Commission employees. 
 
--------------------------------------------- ------ 
WB APPROVES SECOND POVERTY REDUCTION SUPPORT CREDIT 
--------------------------------------------- ------ 
 
¶3.  On 19 January, the World Bank approved a second Poverty 
Reduction Support Credit (PRSC) for Armenia worth USD 20 
million.  According to a World Bank press release, the Dutch 
Government had agreed to provide an additional EURO 4.7 
million co-financing grant for this project.  The project is 
designed to assist the government with implementation of its 
Poverty Reduction Strategy Program (PRSP), and has four 
themes:  consolidating macroeconomic discipline and 
strengthening governance; sharpening competition and 
entrenching property rights; addressing social and 
environmental risks; and supporting the rural economy.  The 
World Bank loan has an annual interest rate of 0.75 percent 
and was made on standard International Development 
Association (IDA) terms. 
 
--------------------------------------------- ---- 
GLOBAL GOLD ACQUIRES URANIUM EXPLORATION PROPERTY 
--------------------------------------------- ---- 
 
¶4.  On January 25, Connecticut-based Global Gold Corporation 
(GGC) announced the acquisition of a 27 square kilometer 
gold and uranium exploration property in northeastern 
Armenia.  Under a share purchase agreement, GGC issued 
100,000 shares of common stock in exchange for an 80 percent 
stake in Athelea Investments, the Armenian company that had 
exploration rights for the site which is located in the 
Gegharkunik Province near the village of Getik.  According 
to Global Gold Mining Regional Director Ashot Boghossisan, 
previous research at the site indicated that there might be 
exploitable gold and uranium deposits on the property.  The 
GGC now has a three-year exploration and drilling license 
which will allow the company to better assess the viability 
of these deposits.  If the exploration proves successful, 
GGC plans to begin a full-scale mining operation in the 
area.  Global Gold currently operates a number of gold and 
polymetallic mines in northeastern and southern Armenia. 
 
--------------------------------------------- ----- 
CASCADE BANK, CJSC AQUIRES EMPORIKI BANK - GEORGIA 
--------------------------------------------- ----- 
 
¶5.  Cascade Bank, CJSC, a subsidiary of Cascade Capital 
Holdings, CJSC, purchased Emporiki Bank Georgia in late 
December 2005.  While the financial details of the deal are 
not yet publicly available, a Cascade press release quotes 
General Director of Cascade Bank Levon Levonyan as saying 
"with this acquisition, Cascade Bank will further strengthen 
its positions in the financial markets in Georgia and 
Armenia, and actively promote cross border financial 
solutions for regional and international businesses." 
Cascade Capital Holding was established in Armenia in 2004 
by the Cafesjian Family Foundation.  In addition to Cascade 
Bank, the holding company includes:  Cascade Credit, 
supporting trade finance facilitation and leasing; Cascade 
Investments, offering a broad range of private and corporate 
wealth management programs; and Cascade Insurance, providing 
comprehensive Life and Non-Life insurance protection to 
individual and corporate clients. 
 
---------------------------- 
DECEMBER 2005 ECONOMIC DATA 
---------------------------- 
 
¶6.  According to the preliminary data from the National 
Statistical Service, Armenia's real GDP from January to 
December 2005 grew by 13.9 percent year-on-year to USD 4.9 
billion.  Industrial production totaled USD 1,422 million, 
showing an increase of 7.5 percent compared to the same 
period last year.  Gross agricultural output for the year 
2005 grew by 11.2 percent compared to 2004, and amounted to 
USD 933 million.  The highest growth rate was in the 
construction sector which grew by 34.2 percent compared to 
2004 and was valued at USD 931 million.  Foreign trade 
turnover reached USD 2,718 million, with imports of USD 
1,768 million and exports of USD 950 million.  The average 
USD/AMD exchange rate was 457.69. 
EVANS