Following the publication of our reader-submitted reports on May 30 and July 7, 2025, regarding Armenia’s new cash rebate scheme and broader developments in the country’s film sector (here and here), the Cinema Foundation of Armenia (CFA) has issued the following official response.
The CFA challenges key claims made in the reports, particularly those regarding the legality of Government Decision 412-N and the alleged conflict of interest involving its Executive Director. The Foundation defends its processes as legally grounded, transparent, and in line with international practice. It also clarifies the nature of its collaboration with international partners such as Netflix.
As always, Film Industry Watch remains open to publishing a range of perspectives, and we welcome further responses, documentation, or commentary from any individuals or institutions with relevant insight. The text of the CFA’s statement appears below:
Dear Editorial Board,
The Cinema Foundation of Armenia, in response to the articles published by you on May 30, 2025, titled “Armenia’s Cash Rebate Plan for Foreign Films Faces Legal and Ethical Challenges” and on July 7, 2025, titled “Armenia: Turbulence in the Local Film Industry”, finds it necessary to clarify a number of facts and to refute the one-sided and unfounded claims made in the publications.
The decision of the Government of the Republic of Armenia No. 412-N of April 10, 2025, “on approving the procedure and conditions for issuing, rejecting and terminating the cash rebate in the field of filmmaking, as well as the list of products, services, and works directly related to filmmaking that are included in the expenses eligible for cash rebate, along with the conditions and standards for defining and calculating the amount of financial expenses subject to rebate” stems from the terms of the Law of the Republic of Armenia “On Cinematography” and has been developed by the RA Ministry of Education, Science, Culture and Sports, the body implementing the sectoral policy, along with the involvement of other state administrative bodies, which have provided their opinions on the draft decision. The version submitted to the government took into account all opinions. The 35% rebate threshold falls within the legally permitted range (10–40%) and is implemented as an incentive mechanism, consistent with international practices.
Second, the article’s assumptions regarding a conflict of interest between the Executive Director of the Cinema Foundation and the company “People of Ar” do not reflect reality. Legally, the above-mentioned memorandums were preparatory and did not confirm any funding or support. Moreover, by the time of the project’s development and implementation, Davit Banuchyan had not yet assumed the position of Executive Director of the Cinema Foundation of Armenia, and therefore, no discriminatory decision was made. Additionally, the Foundation’s decision-making processes are governed by transparent oversight procedures involving independent experts and industry representatives.
Regarding the comments made about collaboration with Netflix, we must clarify that international partnerships are subject to confidential agreements and phased negotiations. Any information is published only upon mutual consent of the parties, with corresponding documentation in place. The Cinema Foundation of Armenia is not a party to those agreements. Therefore, the idea presented in the article that the Cinema Foundation operates through a closed or limited mechanism is fundamentally contrary to our mission and mode of operation. The Cinema Foundation functions based on the principles of open governance, professional assessment, and legal transparency, and will continue to ensure fair, professional, and legally defined funding procedures in the cultural field.
Respectfully,
Department of Public Relations
Cinema Foundation of Armenia
Address: 3A Teryan Street
Email: info@cfarmenia.am / pr@cfarmenia.am
Phone: +374 10522032
www.cfarmenia.am
Analysis of response:
Legality of Government Decision 412-N (10 April 2025)
CFA’s claim: The 25–35% rebate framework in Decision 412-N was developed lawfully, falls within the 10–40% range set by the Law on Cinematography, and incorporated feedback from relevant state bodies.
Analysis:
This is partially true, but slightly evasive.
The issue raised in the original report was not that 25–35% is outside the legal range, but that fixing the rebate within a narrower sub-range by government decision—rather than leaving it to project-specific evaluation—may contradict the law’s intent, which envisages a flexible 10–40% band.
Furthermore, internal Ministry of Finance documents (as cited in the original report) warned against adopting the fixed-range model without a corresponding amendment to the law. CFA’s response does not directly engage with that legal tension—nor with the procedural question of whether a subordinate act (412-N) can supersede the higher-ranking statute without a formal legislative change.
Conflict of interest regarding Davit Banuchyan and People of Ar
CFA’s claim: No conflict of interest exists. The memorandums were non-binding. Banuchyan had not yet taken office when they were signed, and decisions are made with expert input and oversight.
Analysis:
This glosses over key facts without fully resolving the concern.
It is correct that the four-party MoU involving People of Ar was signed in December 2023, and Banuchyan became acting director in May 2024. But the concern raised in the reports is about:
- The continuing public appearance of Banuchyan being listed on People of Ar’s website (as of 2025) as “Co-producer / Tax Rebate Supervisor”;
- The unusual alignment between the memorandum’s terms and the subsequent rebate rules;
- The close professional ties between Banuchyan and Arman Nshanian (People of Ar CEO), reinforced by documented joint appearances at closed-door meetings and site visits.
Even if no formal conflict exists under Armenian law, there remains an unresolved perception of overlapping roles that CFA’s statement does not address in detail. Simply asserting “no discriminatory decision was made” doesn’t disprove potential bias.
Netflix collaboration and confidentiality
CFA’s claim: Netflix-related negotiations are confidential; CFA is not a party to those agreements.
Analysis:
This is plausible and largely fair.
International partnerships often involve NDAs and staged negotiations. The original report criticized the vague and premature announcements of such deals, not the existence of confidentiality clauses per se.
Still, the CFA’s distancing itself from the process (“we are not a party to those agreements”) is notable—especially since its own public materials in late 2024 and early 2025 highlighted high-level talks with international streamers, giving the impression of active participation.
Conclusion
The CFA’s reply addresses some technical issues (legal range of rebates, signing dates), but largely sidesteps the core concerns: whether decision-making has been unduly influenced by private interests, whether rules were legally and transparently adopted, and whether public trust in the process has been sufficiently protected.
