Activity of the Parliament on April 25-29, 2005
5 May 2005
The Parliament has examined several draft legislative documents in this period, with most of them being part of the package of drafts submitted to the precedent legislature. Also, the legislature adopted several complex drafts, including the new leasing law aimed to introduce a new regulation framework in this sector.
Some laws on activity of investment funds provoked controversial talks, with the need to review their functioning being earlier highlighted more than once.
A draft seeking the exemption of imports of equipment for construction of energy plants in the southern and northern regions of Moldova from certain taxes also provoked controversial discussions.
I. The leasing law
Commentary by ADEPT: The law adopted by Parliament aims to establish juridical bases for regulation of leasing relations, object of leasing, participants in leasing operations, their obligations and responsibilities.
The law explains a number of notions, including the following:
leasing - an ensemble of relations established for and by a leasing contract;
leasing contract - a contract through which one side called locator pledges at the request of another side named lodger to ensure possession and temporary use of goods purchased or produced by locator, in exchange for a periodical payment (leasing instalments), and to respect the right to option of lodger to buy the estate when the contract runs off, to prolong the leasing contract, or to stop the contract-based relations;
leasing instalment - a periodical sum paid by lodger to locator which represents the share from the original value of leased goods and leasing interest (in case of financial leasing) or share of payment calculated in line with normative documents in effect, and a benefit established by contracting sides (in case of operational leasing).
The law defines several types of leasing:
financial leasing - any leasing operation which complies with at least one of the following conditions: - most of risks and benefits afferent to the right to property on the asset which is object of leasing are transferred to lodger when the leasing contract is signed; - the sum of leasing instalments represents at least 90 percent of the original value of leased goods; - leasing contract stipulates express the transfer of the right to property on estate which is object of leasing to lodger when the contract runs off; - the leasing period exceeds 75 percent of the useful functioning duration of estate which is object of leasing;
operational leasing - any leasing operation which does not meet any conditions of the financial leasing contract;
barter-leasing - leasing operation within which the lodger pays the leasing instalments through his goods;
compensatory leasing - leasing operation through which the locator receives the proposed goods with equipment which is object of leasing on account of leasing instalments;
consumer leasing - leasing operation within which the lodger has the quality of consumer explained by legislation on protection of consumer;
international leasing - leasing operation with participation of a locator or lodger who is not a resident of Moldova.
Any chattels or real estate can be object of leasing, except for the following categories of goods:
- goods withdrawn from civil circuit or whose circulation is limited by law;
- consumer goods;
- objects of intellectual property which cannot be ceded.
Under the law, the leasing contract must establish at least the following elements: - contracting sides; - description of estate which is object of the leasing contract; - original value of the asset in case of financial leasing contract; - overall value of the contract; - value of leasing instalments and their payment term; - term of the contract; - clause on the right of lodger to option to buy the estate, to prolong the leasing contract, or to stop the contract-based relations; - convention of parties regarding the insurance of the estate which is object of leasing (insurance of the asset which is object of leasing is mandatory only in case of consumer leasing).
The law also establishes:
- The rights, obligations and responsibilities of the sides. Stimulation of leasing and protection of rights;
- measures to encourage the leasing;
- measures to protect the patrimonial rights;
- methods to claim the asset, etc.
Adoption and enforcement of the new law aims to encourage this business sector and individuals and enterprises to buy goods. The law will encourage the deals with goods which can be object of leasing, so that to establish an intensive circuit of values, development of different production processes, and growth of internal trade.
II. The law for modification of the law on investment funds
Commentary by ADEPT: The law adopted after controversial debates comprises a number of norms aimed to restore the normal activity of investment funds, as well as the control of shareholders on functioning of funds.
The law establishes the following:
1. The information about general meetings of shareholders of investment funds, with official announcement about reorganisation, must be released through radio and television programmes of national audience
2. The non-mutual investment funds will turn into other types of investment funds; - or will give up the quality of professional participant in the securities market;
3. The non-mutual investment fund which will approve one of the procedures mentioned above at the general meeting of shareholders will have to receive applications for redemption of shares for the price approved by general meeting of shareholders, but not lower than 50 percent of the nominal value or value established when a share was placed.
If not, these funds will self-close in line with a decision of the meeting of shareholders.
The law obliges the executive and the National Commission for Securities to approve a regulation on redemption of shares of reorganising non-mutual investment funds in limited terms.
III. The law for modification and completion of the law on securities market
Commentary by ADEPT: This law obliges the fiduciary companies to undertake a series of actions till the end of this year, including:
- to adjust the constitution documents to the Civil Code, law on securities market, and normative documents of the National Commission for Securities regarding the fiduciary management of investments;
- to inform management founders through a recommended letters about state of their accounts, and to propose them amendments and completions to existing trust contracts through an additional document, in order to comply with the type-contract approved by the National Commission for Securities.
The fiduciary companies will be lifted from their licences and will be closed up, if they violate these provisions.
Also, the fiduciary companies were told not to sell the assets of their clients or to vote for sale or taxation of assets of joint stock societies in which they represent the interests of founders of fiduciary management, as long as the new norms are not implemented.
IV. Law on importation of equipment for construction of energy plants under preferential conditions
Commentary by ADEPT: The law adopted by Parliament exempts the installations, equipment, materials and generating sets imported for construction of energy plants of about 450 MW each near the village of Burlaceni, in Cahul district, and near the Balti municipality, from value-added tax in 2005-2007.
It is expected that these facilities speed up the construction works, reduce the cost price, and lower the electricity tariffs. Implementation of these investments projects will create new jobs, will compensate the deficit of generating power of the southern and northern energy stations, will boost the own electricity generating capacities of Moldova, and will consolidate the energy security of the country.
Many representatives of opposition accused the executive that the investment companies had not been selected on a transparent enough way and this fact throws doubts on transparency of this business in general. As a result, the competent authorities were told to present soon an additional information in this regard.
V. The law for modification and completion of the Code on Administrative Contraventions
Commentary by ADEPT: The Code on Contraventions was completed with several new articles and regulations regarding:
1. Violation of rules of the state border regime and state border crossing regime (breaches requiring fines between 10 and 20 minimum salaries).
2. Destruction or deterioration of border signs (breached requiring fines of between 50 and 75 minimum salaries).
3. Assignment of water objectives for separate use, with violation of legal provisions, use of water objectives without a state title for separate use or use of water without a special authorisation (breaches requiring fines of 300 minimum salaries).
4. Violation of legislation on market of oil products (breaches requiring fines of 150-700 minimum salaries).