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Legal Commentaries

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Parliament activity, November 29 - December 3, 2004
13 December 2004

During this period, the Parliament examined two drafts of great social significance: The Strategy for Economic Growth and Poverty Reduction and the Law on the optimization of legal framework for the business activity (the so-called "economic guillotine").

Also, a great interest represented the examination and adoption in its first reading of the draft law aimed to facilitate the deployment of young teachers in rural areas.

The Parliament examined a draft law in the first reading establishing essential facilities for the IT enterprises in order to facilitate their extension and promote research in this field.

I. Law on the Approval of the Economic Growth and Poverty Reduction Strategy (EGPRS)

ADEPT Comment: The Economic Growth and Poverty Reduction Strategy is a complex document, which includes strategies for the development of different sectors in order to accomplish the general objectives and priorities regarding the country's development on a medium term (2005-2007) and in a longer perspective.

The main objectives regarding the long-term development of Moldova are:

  1. Assurance of a socially-oriented and sustainable development;
  2. Reintegration of the country;
  3. European integration.

In order to achieve these objectives, the medium-term socio-economic policy must:

  1. Ensure economic growth;
  2. Reduce poverty and inequity, extend the participation of the poor population in economic development;
  3. Develop human resources.

The preservation of constant high pace of economic growth must be accompanied by a substantial improvement of the qualitative components of the development - increase the absolute volume and share of capital investments within GDP, increase economic openness towards innovations, increase the role and share of technologically-advanced branches of production, accelerate development of regional economy and infrastructure. The solution of these problems will be determined largely by the efficiency of the policies for the development of the private sector, regional development and successful implementation of the public administration reform whose results must lead to a significant increase of the quality of state policy, acceleration of the decision-making process and improvement of the professionalism of the employees working in central and local public structures.

The country's social policy needs to be improved substantially in order to create conditions to increase employment opportunities, facilitate the access of the people in need to employment, education, healthcare etc.

In order to decrease the irrationally high social gap, one plans to optimize the distribution of resources in the favor of the vulnerable citizens and families and increase the nominal character of the social security system.

Thus, the priority areas/sectors of SEGPR are:

  1. Private sector;
  2. Public administration;
  3. Social protection;
  4. Healthcare and education;
  5. Infrastructure;
  6. Regional development;
  7. Environment.

A part of the costs of these actions will covered from the public budget, the remaining part will be paid from grants and technical assistance offered by donors.

Some planned activities have no financial coverage, therefore requiring attraction of additional means.

It is considered that the transparency of the SEGPR implementation process, the participation of the civil society in the monitoring and evaluation, continuous social dialogue, and collaboration with different partners are, to a great extent, the guaranties of a successful development of the economic growth and poverty reduction policy.

Through the adopted Law the Parliament approved the Strategy itself, which was recently appreciated positively by the international financial institutions. The Government was authorized to make decisions that do not conflict with the content of the Strategy, regarding the operation of changes and amendments to some of its chapters.

The Law also stipulates that the Government, within one month from the effective date, shall adjust the effective social and economic development programs and the plans of actions to the objectives, priorities and the policies expressed in the Strategy.

Annually, the Government shall submit to the Parliament a report on the implementation of the Economic Growth and Poverty Reduction Strategy.

II. Law on the Rectification of the State Budget for 2004

ADEPT Comment: The respective law provides for a 4.5 million Lei increase of budget allocations for the State Agency for Forestry. These resources shall be used for the regeneration and extension of the forests. They are covered from the budget allotted for the payment of the state external debt, as well as from the national environmental fund.

The allocation of funds for the State Agency for Forestry "Moldsilva" shall develop the State program for the regeneration and development of forests for 2003-2020.

The reserves for the payment of state external debt were formed after adjustments made by the external creditors.

III. Law on Special Courier Service

ADEPT Comment: The law adopted by the Parliament established the legal framework, the principles of activity, the prerogatives, the rights and duties of the State service of special couriers, and the means for supervision of its activity.

The State service of special couriers is defined as a part of the state security forces and represents an independent body with special destination of the state executive power, aimed to ensure the preservation, dispatch and operative distribution of the country's official correspondence.

The Law stipulates:

  • Principles of the activity of the Service;
  • Structure of the Service;
  • Collaboration of the Service with the bodies of the executive power.

A separate chapter is dedicated to the prerogatives, duties and rights of the employees of the Service. Thus, the prerogatives of the Service include:

  • Timely contract-based and free of charge distribution of presidential, parliamentarian, governmental, diplomatic correspondence, classified correspondence issued by the state, public administration authorities, presidents, prime-ministers of the states under the intergovernmental Agreement regarding the Service of special couriers of the Commonwealth of Independent States;
  • Contract-based and paid distribution of the correspondence of the public administration authorities and economic structures (including classified correspondence).

The Law includes provisions regarding the personnel and the means of the Service; social and legal protection of the employees equal to those established by the legislation for the employees of the Ministry of the Internal Affairs.

The provisions of the relevant law substitute the existing Government provisions and decisions previously applied in the field, this fact will exempt the state budget from immediate additional expenditures.

IV. Draft Law on the Optimization of the Legal Framework regulating Business Activity

ADEPT Comment: The draft adopted in the first reading was aimed to establish the principles and activities necessary for the revision of the legal framework to eliminate the inefficient regulations which are not market-oriented, as well as to establish the future mechanism for assurance of stability and quality of the regulations regarding business activity in order to avoid the barriers in the Moldovan business environment.

The text includes a series of principles, which lay the foundation for the business activity:

  • Transparency and stability of the regulations governing business activity;
  • Presumption of observing the legal acts by the business agents;
  • Noninvolvement of public authorities and servants in business activity;
  • Financing from the budget of the ministries, departments, local public administration, other administrative authorities, as well as the inspectorates, agencies, services and other related and/or subordinated institutions with regulatory, control and state inspection functions;
  • Delimitation of regulatory, control and inspection functions of the administrative authorities from the functions of rendering services of assessing the conformity and other paid services;
  • Non-admittance of establishing and collecting by administrative authorities of other payments for services of issuing licenses, authorizations and other documents regarding the business activity, except the payments established directly by laws and/or Government decisions;
  • Non-admittance of establishing and requesting other documents for issuing the licenses, authorizations and other documents regarding the business activity except the those established directly and exhaustively by laws and/or Government decisions;

The Law also provides that all the legal acts of the Government and other administrative authorities are subject to revision, analyzing their content to evaluate the compliance with the market economy principles.

Each official document will be examined based on the following criteria:

  • Correspondence of the principles of business activity;
  • Compliance of hierarchically superior official acts, published in Monitorul official;
  • Introduction of the revised acts in the Register of official acts regulating the business activity.

The revision of official acts will be performed in several stages:

  1. Each administrative authority examines the official acts from its field of activity based on the criteria established by the law and makes the list of the official acts.
  2. The national group examines the official acts and the informative notices, presented by the administrative authorities according to the established criteria and decides the introduction of each act in the Register.
  3. The national group elaborates the final version and the National Commission approves the draft of the Register and submits it to the Government for approval.

It is also provided that from the effective date no official act of the administrative authorities can be invoked and has no legal power if not published in Monitorul official.

With the approval of the special Register, the Government will repeal the official normative acts that are not included in the Register.

It is also suggested that, within six months from the effective date of the respective law, the ministries and the departments examine the laws that regulate their fields of activity in order to evaluate their compliance with the principles of the regulation of the business activity.

The need to adopt the respective law is determined by the fact that nowadays the prerogatives of the institutions with the functions of control and provision of paid services are stipulated in about 350 different official acts - laws, Government decisions, regulations, ministerial and departmental orders.

Many of these official acts are out-dated and, thus, incompatible with the principles of market economy.

Others, although containing useful and appropriate provisions, do not make up a coherent, transparent and foreseeable framework.

The international experience in the field shows that the proposed method will:

  • Avoid the delay in the implementation of the reform;
  • Assure the transparency of the process as a result of the dialogue between the public and private sector;
  • Obtain the expected results in a an extremely reduced term (approximately 7 months from the effective date of the draft law);
  • Harmonize automatically the national legislation in the field, as well as its enforcement mechanism, with the international and European rigors and requirements of a functional market economy.

The discussions on the respective draft provoked the negative reaction of the representatives of the parliamentarian opposition. They considered that it was not the right time for the respective reform because a vacuum could remain in the control prerogatives during the parliamentary elections, when the Parliament would not be able to modify the legislation and the Government would exercise the operative conduct of public affairs.

This concern was explained by experts by the alleged hope of the opposition to overtake power and lack of the administrative possibilities to consolidate their positions and establish a certain control over businesses in the situation when this control is performed by the current government.

Although with several objections, the idea of this draft was appreciated positively.

V. Draft law for amending the Law on Education

ADEPT Comment: The Parliament passed a draft law in the first reading designed to stimulate young teachers to seek employment in the primary or secondary educational institutions from rural areas.

Thus, the law provides for the institution of decrees according to which the graduates of higher education institutions as well as specialized secondary education institutions who agree to be employed in educational institutions from rural areas will benefit from the following facilities during the first three years:

  • Free housing provided by the local public administration for their activity in the relevant area;
  • Terrain for those who want to build their own house (upon request);
  • Long-term credits with minimal interest for those who decide to build a house;
  • Unique indemnity equivalent to 4 minimal salaries corresponding to the relevant category of wages;
  • 50 percent increase of the salary;
  • Work experience will be calculated as 2 years for one year worked in rural areas;
  • 50 percent discount for 6 internal round trips;
  • Monthly compensation of the cost of 30 kWt of electricity and free distribution of 1 sq. m. of firewood and 1 tone of coal;

The law will be implemented starting with 2005 requiring 7500 lei annually per each young specialist.

VI. Draft law on stimulation of the activity of IT companies

ADEPT Comment: The draft provides that the commercial societies whose activities correspond to the "Program accomplishment" service after the constitution of the social capital as provided by the legislation and the declaration of the first income are exempt from income tax for 7 consecutive years, starting from the first day of the year when the agreement on tax exemption was concluded with the Main State Tax Inspection of the Ministry of Finances.

The above-mentioned exemption will be provided if the societies will comply with the following requirements:

  • The enterprises shall not have arrears towards the national public budget;
  • The enterprises shall possess a license issued by the National Agency for Communications and Information for the relevant type of activity;
  • The employees of the specified commercial societies and the researchers from the R&D institutions in the field of IT shall benefit from exemption of income tax if the following requirements are met:

    • Their job positions are in compliance with the laws;
    • The job position is part of a specialized department in information technologies, highlighted in the organization structure of the company, such as IT center, direction, department, section or other similar departments;
    • The company provides the justification papers (act of creation of the enterprise, license, organization chart, job description, graduation diploma issued by a higher education institution; status of payments for the employees of the enterprise, the internal order confirming the name of the position, etc.).






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