Parliament activity, March 8-19, 2004
22 March 2004
Parliament convened only on two session during the aforesaid period, thereby engaging mainly in politics rather than legislative activity. As media outlets rightly pointed out political debates knew an apathy lately which was mainly due to the "coalition building" among centre and centre-right political parties initiated firstly by Christian Democrats and then taken over by "Moldova Noastra" Alliance. It's hard to predict the outcomes of the negotiations especially since certain discord has already occurred among the participants to the negotiation table and even some of its long-term supporters left (see in this respect the declarations of the Centrist Union of Moldova and recent statements by Victor Selin - one of the sponsors of the Moldova Noastra Alliance). To conclude, legislature did more of a technical work during the aforesaid period and examined less important legal acts.
I. Law on Investments in Entrepreneurship
ADEPT Comment: Currently investments are regulated by the Law on Foreign Investment passed back in 1992. The law protected and fostered only foreign investments and therefore was severely criticised by domestic businesses. They argued that they should enjoy a preferential treatment when investing at home and should not be forced to register joint ventures as to run businesses in the country.
The law passed by the Parliament provides legal, social, and economic principles of investment activity, investor's rights and responsibilities, mandate of pubic authorities in the field, guarantees provided by the state to domestic and foreign investors, and procedures for joint ventures operation.
The law defines a number of terms and types thereof. Investments could have various forms:
- right on property over movable and real estate;
- rights on stocks, on registered capital in a commercial partnership;
- right on claim;
- right on intellectual property etc.
The law also provides basic principles for investing:
- Freedom to invest;
- Non-discrimination of investments (investors' equality);
- Complying with the obligations undertaken (investor).
Also mechanisms of protecting investments are provided for:
- guaranteeing observance of investors' rights;
- guarantees against expropriation;
- guarantees to compensate damages incurred.
Opposition parties criticised the last chapter on the grounds it were just nice words in reality though, they had not been backed up by adequate policies and investors were persecuted (Union Fenosa, Farmaco, Megadat, expropriation of "Dacia" hotel).
The law includes special provisions on foreign investors and foreign investments. Generally speaking, the law did not add any new guarantees or methods of fostering investors. The latter shall be included in the fiscal, customs, and property law. It only establishes the general framework, the foundation for the state policy on investments. The latter will be developed and enforced by the Government, in particular through the Ministry of Economy.
II. International acts ratified by Parliament
1. European Convention on transferring indicted persons and Additional Protocol to the Convention ratified by Parliament on March 11, 2004
ADEPT Comment: Several reasons were cited in favour of the document, namely:
Political - protection is provided to citizens during the sentence and also to facilitate his/her social reintegration in their origin social environment. Also, a legal framework is established enabling other states to protect their citizens convicted on the soil of the Republic of Moldova, which would be saluted by European countries.
Normative - Convention does not breach rights or obligations provided for in the extradition and other international treaties that provide for the transfer of detainees.
Organisational - Ministry of Justices in the contracting countries would be responsible for enforcing the Convention and its additional protocol so as to co-ordinate transferring procedures.
Financial - Enforcing countries would bear the cost of incidental expenses. To cover those expenses (translation of documentation, transfer) special funds are to be allocated.
Other - once the law is enforced it is expected that a great number of applications will be filled to Republic of Moldova. Currently there is quite a number of Moldovan citizens convicted abroad who want to serve the sentence in their home country for various reasons.
2. Convention between Republic of Moldova and Slovak Republic of eliminating double taxation and prevention of fiscal evasion on income and asset tax
ADEPT Comment: Convention for eliminating double taxation and prevention of fiscal evasion is intended to create fiscal systems that would exclude double taxation of legal and natural entities. The Convention is aimed at: eliminating double taxation, preventing fiscal evasion, sharing the right on taxation among contracting countries, eliminating fiscal discrimination under any for. The two countries signed the Convention so as to attract foreign investments, assist residents to place investments abroad and solve any fiscal litigation. Convention is based on the following principles:
- non-discrimination of tax payers regardless of the form of property;
- stability of taxes that would boost investor confidence and would establish a stable basis for budgetary revenues and fostering entrepreneurship;
- simple, understandable, easy readable procedures of taxation;
- boosting entrepreneurship, encouraging a rational usage of natural resources and economic activities by providing incentives.
To enforce the Convention the two countries would have to conclude a number of agreements and conventions.
3. Protocol on ceasing the Agreement on establishing an Eurasia Union "Coal and Metal"
ADEPT Comment: In 1993 many of the CIS countries signed the Agreement on establishing an Eurasia Union "Coal and Metal" with an eye towards establishing favourable conditions for the efficient development of the coal and metallurgical industry and developing co-ordinated policies in the field.
After seven years of activity, several flaws and violations in the administration of funds by its leadership were found after a financial and economic evaluation. Most importantly, it was found out that Union didn't fulfil the very purpose it was established for.
On September 19, 2003 leaders of CIS member states signed a protocol on its abrogation. Noteworthy, "Coal and Metal" union was one of the first institutions established in CIS to be liquidated and the process is likely to continue and this mainly due to CIS institutions inefficiency and huge costs, that after all not all the countries allocate.
III. Law on cancelling penalties and fines to rayonal thermo-enterprises
ADEPT Comment: The law annulled the penalties and fines incurred by rayonal thermo-enterprises as of January 1, 2004. Their debt is estimated at 22.5 million Lei. Another 22.5 represent the fines and penalties. The enterprises have no chance whatsoever to pay the debts incurred, whereas by annulling them the state hopes to boost the sector.
IV. Draft law on approving the regulation on the procedure of publishing and re-publishing normative acts and corrections to them in the Official Monitor
ADEPT Comment: The regulation was developed so as to enforce the provisions of the Law on Normative Acts issued by the Government and central or local public administration. It includes provisions on publishing the normative acts, responsibility of the persons designated to edit the documents prior to publishing. It also refers to the procedure of republishing legal acts that undergone modifications or completions.
One of the goals of the law was to eliminate any possibility of operating changes to the edited and published normative acts, as well as to systemise the normative acts published in the Official Monitor of the Republic of Moldova.