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Legal Commentaries

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Parliament activity, February 23-27, 2004
5 March 2004

Last week Parliament continued examining requests filled by the Prosecution to suspend the immunity of some opposition deputies. This time however, a "Braghis Alliance" deputy joined the company of Christian-Democrats whose parliamentary immunity was previously suspended. It's illegal privatisation, rather than protest rallies that served grounds for suspending his immunity.

Previously, Christian-Democrats were liable of administrative offence, now they are liable of penal offence for profaning Russian Federation state symbols. Under Penal Code, profaning national or state symbols (flags, coat of arms, anthem) of the Republic of Moldova or any other state - is sanctioned by penalties worth 500 units (10,000 Lei) or from 2 to 6 years in prison.

It is still not clear whether authorities would manage to prosecute opposition, one thing is for sure majority faction gave green light to Prosecution to persecute the four deputies.

Besides those issues, the Parliament adopted a series of important legal acts.

I. Law on VAT exemptions of imported vine

ADEPT Comment: The law is aimed to support the revival of vine plantations, by exempting from VAT vine imported to Moldova. The law was lively debated, there were voices claiming that the law would affect the state budget and that Government should have come with the initiative before 2004 budget was adopted. In the end, majority faction voted in favour of the draft, as did opposition deputies. The law does not provide for concrete mechanisms of overseeing the law enforcement.

II. Law on publishing international treaties

ADEPT Comment: Parliament re-voted the law sent back by the President of the Republic of Moldova. The law provides that international treaties ratified by Moldova should be published in Official Monitor within one month of entering in force. Ministry of Foreign Affairs should oversee this. Noteworthy, under Moldovan Constitution international acts Moldova is part to, have the same force as the domestic legislation and are to be enforced likewise. However, unless the treaties are published they have no legal effect.

III. Law on supplement to the pension for residents of Copanca commune

ADEPT Comment: According to the law, pensioners residing in Copanca commune, situated on the left bank of Dniester, should be entitled to a supplement ranging from 50 to 100 Lei so as to bring their pension in line with those paid in break-away region. The estimated cost of the law is over one million Lei, which is to be covered from state social security. Therefore, Government is to come with concrete recommendations and mechanisms on how to cover the costs.

Noteworthy, this is the first act aimed to improve the welfare of the residents to the left of Dniester, region controlled by Chisinau. Previously similar laws were passed for residents of Cosnita, Palanca, Cocieri etc. This string of laws is aimed at giving at least some protection to the residents facing huge pressure from Tiraspol regime.

IV. Draft law on the modification of the privatisation plan

ADEPT Comment: The modifications excluded a number of enterprises specialised in constructions from privatization programme, so that they would remain under state control.

Again, there were a lot of debates and arguments around the draft law. Opponents pointed that the enterprises excluded from the privatisation are not entirely state-run, having a share of private capital. Majority faction neglected those arguments and passed the law. Throughout 2001-2003 the Parliament passed a total of 8 laws excluding various enterprises from the privatisation list.

V. Draft Title VII "Local taxes" of the Fiscal Code

ADEPT Comment: The draft passed in the first reading regulates local taxes. Initially, some local taxes were to be excluded from the title, namely 6 of them:

  • For car parking;
  • For dog owners;
  • For the right of cinema and TV shooting;
  • For providing local transportation services;
  • For crossing the state border;
  • For the right to trade in the customs area.

Deputies agreed on excluding only two out of the six recommended by Government, namely for the right to cinema and TV shootings and for the right to trade in customs area. The other four would be preserved, so as not to impair local budgets.

Another key element of the Title is that the new structure would grant more responsibilities to the local government in exploiting every opportunity to secure revenues to the local budget. When drafted, lawmakers studied carefully the experience of other transition countries and the freedom granted to local authorities there to establish local taxes.

Local taxes would be introduced, changed or annulled upon adoption or modification of relevant budgets of the administrative-territorial units (Art.297(3)).

Under the draft, legal and natural entities "residents or non-residents that do business on the soil of the Republic of Moldova; non-resident natural entities, citizens of the Republic of Moldova, foreign citizens or stateless persons" are subjects of the law. The draft also proposes to preserve the procedure of establishing, calculating and paying local taxes. Taking into account the ceiling of local taxes, local public administration bodies would set the amount of taxes to be paid.

The draft also proposes to preserve current exemptions to the payment of local taxes for public authorities, state-funded institutions, diplomatic missions, missions of international organisations. In addition, new exemptions are proposed, i.e. for organisers of auctions held to reimburse debt on credits, damages, debt to the state budget, or to sell state or municipal patrimony. At the same time, first level representative and deliberative bodies are entitled to grant exemptions in addition to those provided by law.

To ensure consistency of the Fiscal Code, local taxes ceiling shall be provided for in Title VII. They were developed by taking into consideration the existing ones.

VI. Draft law on energy

ADEPT Comment: The draft passed in the first reading stirred a lot of debates. It outlines the principles regulating the production, transportation, distribution, delivery and use of heating. The law is intended to:

  • Increase the efficiency of the heating system;
  • Boost a large scale competition on the market;
  • Boost private enterprise and consolidate the private sector in the field;
  • Attract domestic and foreign investments in the energy sector;
  • Diversify forms of property in the energy sector;
  • Regulate the activity of energy manufacturers holding monopoly on the energy market;
  • Foster sustainable development of the energy system in the Republic of Moldova;
  • Establish fair relations between supplier and consumer.

The draft law outlines a number of specialised notions, fundamental principles for the operation of the energy system, and responsibilities of specialised bodies. Separate chapters are reserved for licensing, guaranteeing property rights, and legal relations between the actors on the energy market, tariffs on energy.

Given the harsh debates we may expect that the final wording would undergo quite a number of modifications, therefore ADEPT promises to follow closely the developments.






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