Government Blacklisted Businessman Deny Role in Alleged Iran Deals

YEREVAN (RFE/RL)–The Armenian government and a businessman who has apparently been subjected to US sanctions on Friday denied any involvement in the alleged transfer of sensitive equipment and technology to Iran.

President Robert Kocharian said the authorities are not responsible for activities of a private Armenian chemical factory and businessman Armen Sargsyan listed in the Federal Register Thursday along with eight Chinese and two Moldovan firms and individuals punished by the United States.

"It is not a state-run company and the state has nothing to do with all that," Kocharian told reporters–referring to the company called Lizin. "But we should clarify [the situation]."

"We already know pretty much what this story is all about and how it happened," he added without elaborating.

The blacklisted Armenian entrepreneur appears to be the youngest brother of Vazgen Sargsyan–the former prime minister murdered in the 1999 terrorist attack on Armenia’s parliament. But Armen Sargsyan on Friday vehemently denied reports that he purchased Lizin in 1997 by capitalizing on his powerful brother’s political clout.

"I want to state to everyone that I have never–not a single time–had any connection with that enterprise," he said in an interview with RFE/RL. "I never bought that factory; it’s never been mine. This is a misunderstanding."

He also made it clear that no other member of the Sargsyan family–including the late prime minister and his second brother and successor Aram–could have had any links to Lizin. "Rest assured that neither me–nor Vazgen–nor Aram or any of our relatives has never had anything to do with that enterprise."

Aram Sargsyan–who headed the Armenian government in 1999-2000–issued a similar denial through a spokesman.

However–two different well-informed sources that had pointed to such a link insisted on Friday that the Sargsyan brothers did win control over Lizin–which is located in the industrial town of Charentsavan 30 kilometers north of Yerevan. But they both suggested that Armen Sargsyan and his brother were hardly involved in last year’s sale of Lizin’s equipment to the Iranians–the main apparent reason why the US imposed the sanctions.

Lizin–which has stood idle for much of the past decade–used to produce a biochemical substance that is added to animal fodder to increase its calories. Experts say the substance was in turn used for the production of "anti-radiation proteins" that increase blood resistance to nuclear radiation–cancer and other disease. It is not certain whether its technological lines could be used for developing biological weapons.

According to data provided to RFE/RL by the government’s Securities Commission–Lizin has been controlled by two businessmen’since 1999: Armenian national Ashot Ohanian and an Iranian citizen of Armenian descent–Varujan Andreasian. They own 43 percent and 31 percent of the company’s stock respectively. The rest of the equity is in the hands of 174 small shareholders.

The data show that in mid-2001 Lizin sold the bulk of its equipment to the Al-Ahd Sadeq Trading company registered in the United Arab Emirates for almost $102,000. The company management argued that the facilities are obsolete and can no longer be used for cost-effective production operations.

But other specialists–including a former Lizin engineer–insisted that they were quite sophisticated and unique.

A source close to the government said the US embassy in Yerevan alerted the Armenian government to the deal last year–warning that Lizin’s biochemical equipment could be used for military purposes. It is not clear whether it was listed on multilateral export control lists that seek to curb the transfer of longer-range missiles and prevent the spread of chemical–biological and nuclear weapons.

The US government gazette did not specify what technology and equipment the Armenian and other entities allegedly sold to Iran in breach of US and international regulations. It said only that the sanctions were imposed under the Iran Nonproliferation Act of 2000–which prohibits the sale of chemical and biological weapons components and missiles and missile technology to the Islamic republic. The companies in question will be barred from doing business with the US government or entering US government programs or getting export licenses for certain goods.

A senior US official told Reuters earlier this month the companies and individuals in Moldova and Armenia might be a "front" for Russian entities–given those countries’ status as former Soviet republics. But State Department spokesman Richard Boucher effectively denied that when he officially announced the penalties on May 9.

On Thursday Boucher reiterated that the governmen’s of Armenia and Moldova have been "helpful" in US nonproliferation efforts despite the embarrassing affair. "We are in touch with those governmen’s about this situation," he said. "We’ll keep talking to them."


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