ANALYSIS - Unscrupulous profiteers of Armenia’s Nagorno Karabakh occupation

Armenian occupation turned Karabakh into hotbed of illegal and criminal activities, not to mention stunted growth in every sector

Turan Gafarli  | 12.11.2020 - Update : 16.11.2020
ANALYSIS - Unscrupulous profiteers of Armenia’s Nagorno Karabakh occupation

*The writer is an Assistant Researcher at the TRT World Research Centre. Gafarli holds a Bachelor of Arts in History and Politics from the Queen Mary University of London and a Master of Arts in Transnational Studies from University College London.


A short clip [1] from an interview aired by the German television ARD was quick to make the rounds on social media recently. ARD’s Oliver Mayer-Rüth asked Azerbaijani President Ilham Aliyev why Karabakh was essential for Azerbaijan, and whether this territory was important for its resources or its symbolism. The president’s answer was clear: “It is a matter of justice; it is a matter of national pride, and it is a matter of international law.”

To many viewers, the German journalist’s question may have seemed unnecessary or misplaced. However, the war of narratives waged by Armenia has always branded Azerbaijan as an aggressor that targeted “peaceful Armenian civilians” with the aim to deprive them of “their resources”.

Needless to say, these narratives are blatant lies. Azerbaijan is a prosperous country, and its natural resources are concentrated in Baku and its surrounding territories. The reality is that the Armenian occupation of Karabakh condemned it to extremely low growth rates in every sector compared to the rest of the region. What is worse, however, is that they turned it into a hotbed of illegal and criminal activities.

Certain groups affiliated with the de-facto military junta regime profited extensively from the occupation. It is well-known that the Kalbajar, Lachin, Zangilan, and Tartar districts have substantial amounts of precious deposits, such as gold, silver, mercury, copper, lead, and coal. Zangilan’s gold mines, for example, were operational in the Soviet times.

After the liberation of the Zangilan district, a particular gold mine in the village of Vejnali was investigated. It became evident that the Armenian occupiers had illegally exploited this mine for a long time. To add insult to injury, Yerevan was not the only actor benefitting from the illegal profiteering that went on for so long. Certain elements within the Armenian diaspora were also implicated in this criminal scheme. In the case of Vejnali, Vartan Sirmakes, the CEO and co-founder of the world-famous Swiss luxury watch brand Franck Muller, is a key culprit [2].

Sirmakes’ meeting [3] with the Armenian prime minister in 2015 marked the official beginning of his “investments” in Karabakh. While Sirmakes promised to increase the economic activity and create jobs in Karabakh, it is claimed that he merely intended to profit from the gold deposits there.

After Sirmakes attended the opening of the Vejnali gold mine in Zangilan, Azerbaijan’s prosecutor general appealed [4] to its Swiss counterparts to prosecute the Swiss-Armenian businessman.

Between 2009-2017, the Switzerland-registered Vallex Group managed by Vartan Sirmakes, and Base Metals JSC, headed by Valeriy Mejlumyan and Arthur Mkrtumyan, made a declared profit of $177.5 million from the occupied Karabakh’s precious metal deposits. As such, it is claimed that the brand Franck Muller is indirectly involved in the breach of international law and the financing of the illegal occupation of the territories in question.

The Swiss-Armenian businessman planned to build a plant in Armenia to process the precious metals extracted in Karabakh. He signed a memorandum with the Armenian government in 2014, according to which the plant was slated to become operational by 2020. As Switzerland remains the second biggest importer of Armenian products, Sirmakes planned to label the gold, illegally obtained from the occupied Azerbaijani territories, as “Armenian precious metals”.

Hikmet Hajiyev, an assistant to the Azerbaijani president, stated [5] that the gold mines of Zangilan had been liberated and that further legal prosecution awaited Vartan Sirmakes. His acts constitute not only a violation of international law but also tarnish Swiss neutrality and image. Azerbaijan already applied [6] to INTERPOL to arrest the people involved in illegal economic activities in the occupied territories of Azerbaijan.

Tofig Husein-Zadeh, a brand strategist and business writer, stated that “the leaks about these illegal investments triggered a brand scandal which will turn into a reputational crisis.” He added, “further investigation of Vartan Sirmakes’ illegal gold mining and other corporate crime or unlawful investments will bring new and greater consequences.”

Sirmakes is only one example of hundreds of occupation profiteers. Moreover, gold is not the only contraband that passed through the occupied territories.

After the successful military operations conducted by the Azerbaijani army in the last month, Baku now controls all of its southern borders and has liberated important checkpoints between Karabakh and Iran.

Tehran has also benefited from the occupation through the illegal cross-border transport routes. For many decades, Tehran generated substantial foreign currency flows by transporting goods across the border. Even though the Iranian officials denied the trade [7], it is well-known [8] that the separatist regime in Nagorno-Karabakh has received steady fuel supplies, delivered along the same route for years.

The US “Maximum Pressure” strategy [9] against Tehran forced Iranian officials to contrive ways to bypass the sanctions. Iran built a money-laundering scheme both in Yerevan and in the de-facto Nagorno-Karabakh Republic. Financial institutions, such as Mellat Bank and the Markel Closed Joint Stock Company, along with the Yerevan Telecommunications Research Institute, have already been blacklisted and sanctioned [10] by Washington. Iran also re-labeled goods that came from the occupied territories, which were then sold as Armenian products in Russian and European markets.

The stolen wealth of Karabakh is a matter of justice, and the prosecution of illegal business activities is a matter of international law.

Whether these illegal economic activities will be prosecuted by the different countries involved and Baku will eventually be paid reparations remains to be seen. One thing is certain, though: the Azerbaijani army has successfully concluded its military campaign and Baku will make sure that such crimes will never take place again.

* Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Anadolu Agency.


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