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Democracy and governing in Moldova

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No. 10, 4 July 2003

Activity of public institutions

Studies, analyses, comments

I. Activity of public institutions

1. Parliament

Law on the Amendment of the 2003 State Budget

This law was adopted following the application of the territorial administrative reform and is to cater for the redistribution of resources allocated for the territorial administrative units of second tier. At the same time, the quantum of expenditure grew by 62 million lei which is to be covered from the raising returns of state tax and income tax payments by entrepreneurs. The 62 million lei can be regarded as the first part of additional expenditures related to the said reform.

Law on the Amendment of the Budget of Social Insurance

This law establishes the means necessary to implement the provisions of a number of legislative acts such as raising the monthly allowances for certain pensioners, residents of the localities on the left bank of Nistru river; indexation of pensions starting 1 April 2003; increasing the fund of labour retribution and, respectively, the amount of accumulated contributions; partial maintenance of youth sports schools; increasing, on the account of the extra income, the reserve fund of the social insurance budget to over 150 million lei etc.

Law on the Amendment of Certain Legislative Acts on Entrepreneurship

The law provides for the mandatory publishing in the Monitorul Oficial of announcements about changes in the name of enterprises or payment sanctions of damage-interests; the procedure of determining by the court of the liquidator of an enterprise in the event of legal liquidation; the method of registration of the suspension of activity by an enterprise or organisation; the simplified procedure of erasing enterprises and organisations from the state register etc.

Conception on the Orientation and Professional Training of Human Resources

The Conception adopted by the Parliament determines the aims, tasks, principles and fundamental directions of the state policy in the field of efficient capitalisation of human resources.

Draft Law on Completions to the Code of Commercial Maritime Navigation of Moldova

Via this law the right of navigation under Moldovan flags will be granted to ships registered with the ship register and which are owned by Moldovan or foreign physical or legal persons and are used according to the ship renting or leasing contract.

Law on Inspection before Expedition

Despite the substantial opposition from the deputies, the Government succeeded in persuading the parliamentary majority to vote for the law on inspection before expedition i.e. for the draft proposed by the Government and previously negotiated with the IMF. According to this law, the "inspection before expedition" refers to the totality of actions of control of the quality, quantity, price, financial conditions and customs classification of goods on the territory of the exporting country.

Within less than one month the Government will have to select a company with the right to carry out the inspection before expedition. The last IMF mission to Moldova decided that funding to Moldova would be resumed if the inspection before expedition was applied by 21 July 2003. Considering the short term, one can assume that the Government will not look for a new company for these services but will hire "SGS" Company, which have catered these services to date.

One of the problems that might arise upon the implementation of the law and of the inspection could be an eventual appeal to the Constitutional Court that had cancelled the obligation to carry out the inspection before expedition and that could rule again to the same effect. In case such a thing happens, especially interesting will be the reaction of the international organisations, which on the one hand insist that their recommendations are applied and, on the other, demand form our authorities to respect justice and the rule of law, in particular with regard to the execution of decisions of all judicial bodies (all the more so of the constitutional ones).

Law on the Application of Mandatory Health Insurance

The application of mandatory health insurance is another requirement of the international financial organisations, but in this sense the Moldovan authorities have managed to secure a series of delays and even the permission to apply a pilot project, for the first time in the modern history of the country. The law provides for the application of mandatory health insurance in the district Hincesti, starting 1 July 2003.

The total amount of means that are to be accumulated is estimated at 14 million lei. If the project goes well, then the law will be applied nation-wide starting 1 January 2004.

The problems that might arise upon the application of the law might be the changes in the addresses of some firms which would continue to work in the Hincesti district but would register in other places. Another problem could be the decrease in the salary of state employees, who might protest against the new tax and ask raises equal to the respective quantum (considering that recently some trade unions have demanded raising salaries of state employees by 100 percent, the fight for the 2 percent might be even tougher).

Law on Cancellation of Financial Penalties and Sanctions

Via this law it was established that the agricultural producers who suffered losses as a result of the natural calamities of 2002 and 2003 would be exempted from paying penalties for debts to the budget and would not be penalised of fined for late payments of taxes.

The Parliament, through this law, is trying to help the agricultural producers. However, due to this summer's drought, more and more producers have turned to the authorities for full exemption from the land tax, which would be the only real help the farmers can get this year.

The Government cannot cancel the taxes because the tax returns stipulated for in the budget amount to a huge sum and there is no way other means could be found to cover them this sum in the near future. In addition, the international financial organisations do not allow for exemptions because the budget already has a considerable deficit, which no one knows from which sources it could be paid for.

Law on the Methodology of Calculation of Payments for Notary Services

This law is intended to reduce the fees on notary services by state notaries. According to the information presented to the legislative body, 50% cuts will be operated on the fees for a series of services, which will be of great benefit for the low-income categories.

At the same time, however, it is planned that starting 2004, for transactions on fixed assets the notary fees will be calculated according to the market price of the fixed asset and not the price estimated in the documents of the cadaster body. Thus, in Chisinau Municipality and in other big cities, really complicated situations might arise, such as when for losing ownership or inheriting a house it will be necessary to pay huge taxes. As a result, the private notaries will have the chance to lower the fees below the ones set by the state notaries and thus boost their earnings.

Decision on the Report of the National Bank of Moldova

Upon hearing the National Bank report, the Parliament adopted a decision whereby the National Bank was tasked to help enhance the banking system and bank services, as well as to work with the Government and the commercial banks in order to improve the banking climate, in particular with a view to lower the interest rates on loans to economic agents.

The Parliament charged the Government to attract local and foreign investors and foster the judicial system i.e. co-operation with the banks in the procedures of granting credits and paying them back. contents previous next

2. Government

Personnel Changes

Even if earlier some media outlets forecast important changes of personnel following the May local elections, the dismissal of the Minister of Education Gheorghe Sima and the Deputy Prime Minister and Minister of Economy Stefan Odagiu was somewhat surprising. Their dismissal was decided by President Voronin, who also decided to dismiss the head of the State Service of Protection and Guard Vladimir Preguza, who was replaced by Alexandru Ursachi.

Also, the Deputy Minister of justice Victor Cretu and the Deputy Minister of Culture Sergiu Cuciuc were dismissed after they had submitted letters demanding to be released of duties. Vasile Carafizi was appointed general Director of the Executive Board of the National Agency for Energy Regulation (ANRE), and Nicolae Triboi, who held this position previously, was appointed Director of the Executive Board. Vasile Carafizi was PRCM deputy in the Parliament of 14th legislature. During the same government meeting of 21 June 2003, Mihai Manoli, Moldova Ambassador to USA was appointed Moldova Ambassador to Mexico. More or less surprising has been the destitution of the Geneal Director of the News Agency "Moldpres", Ion Coretchi, who was replaced by Mihai Belous. During the same period, Mircea Galusca was dismissed from the position of Deputy Head of the Secretariat Department of the State Chancellery.


On 16 June 2003, Government approved the norms of drafting the structure and scheme of staffing central public administration and their deconcentrated sub-divisions, as well as their structure and the minimal staff. Thus, there will be 25 types of subdivisions of deconcentrated central administration, to employ 17,453 personnel - public officers and technical employees.

To improve the activity of small and medium enterprises and the system of microfinancing in Moldova, Government adopted the action plan "Microcredit-2005". The plan envisages drafting a law on microcrediting small businesses and another blueprint on insuring the deposits by the members of loan and savings associations.

On education, a number of decisions were adopted related to the regulation of the activity of branches of foreign universities in Moldova by the Government, covering the expenditure necessary for training orphans and children from low-income families by higher education institutions, the 10% quota of students with extra-budgetary funds out of the number of students admitted on the basis of contracts for each speciality. Apart from these, the Regulation on training foreign citizens and apatrides in the Moldovan education institutions was amended. According to statements by Government members, the regulation of the activity of foreign universities in Moldova by the Government is necessary to induce the former to train in subjects that are necessary for the national economy. Also, the higher education institutions will not be allowed to raise their tuition fees.

"In order to support the activity of exhibitions in Moldova and increase the impact on the promotion of local exports", was created the State Enterprise "Moldexpo", through the merge of the International Exhibition Centre and "Moldoexpo" and the Organisation for the Promotion of Exports in Moldova. Also, a plan of measures for a more efficient application of public purchase was adopted. Through this decision, the Government has obliged the ministries, departments, local public administration bodies to submit reports during the purchase procedure, use the pre-selection procedure, organise repeated auctions when there is only one bid etc. As a consequence of the new territorial administrative organisation, the State Fiscal Service will be re-organised to have in subordination 32 district fiscal offices, 4 offices in the Municipality of Chisinau and 2 offices in the municipalities of Balti and Gagauzia.

Last week changes were made whereby the Ministry of Culture will be entitled to interfere with the editorial activity of publishing houses, regardless of their form of ownership, and the Government will have the task of regulating the installation of monuments, busts and commemorative plates. Government representatives justified these changes by the need to avoid overlaps in published works and installation of monuments of doubtful artistic values. Some heads of publishing houses and representatives of artists' community believe that these new regulations are but another form of censorship.

Thus, both the regulation of the activity of foreign universities in Moldova, installation of monuments, busts and memorial plates by the Government, and the amendments whereby the Ministry of Culture will have the right to interfere with the activity of publishing houses show a trend opposed to the decentralisation of competencies of central authorities. Moreover, one can easily observe that some of these new regulations on education, although apparently well-intentioned, are of a somewhat restrictive nature. Worthy of our interest is the interest of the Executive to support the low-income children even if covering the expenditure necessary for their training will create problems for some higher education institutions. contents previous next

3. Presidency

On 23-24 June, President Vladimir Voronin undertook a work visit to Brussels, where he met a number of European officials. During the meeting with Guido Podesta, deputy chairman of the European Parliament, Voronin expressed his satisfaction at the support that the EU institutions are granting Moldova and mentioned that the 5 June 2003 EP Resolution and the recommendations of the 4th Parliamentary Conference of SEESP countries on 22 May 2003 which requests that the EU institutions examine the possibility of including our state in the Stabilisation and Association Process in the South Eastern Europe. Voronin then met Romano Prodi, President of the European Commission and Christopher Patten, European Commissioner for Foreign Affairs, who assured the Moldovan official of the fact that in the context of the recent EU initiative towards its new neighbourhood following the 2004 and 2007 enlargements, an individual EU plan for Moldova will be drafted. In his turn, Voronin reiterated the priority option of Moldova for European integration and stressed that soon the Conception on European Integration of Moldova is to be drafted and the Department for European Integration is to be created.

Apart from the state of confusion that has been created by the equivocal statements of the Moldovan authorities among the civil society and the mass media, for which it is not yet clear whether at present a concept or strategy of European integration is being drafted, the statements of the head of state have increased this confusion. Victor Stepaniuc, co-chair of the EU-Moldova Parliamentary Co-operation Committee told his EU counterpart Jan Marinus Wiersma, during the recent meeting of the committee that "the strategy of integration of our country to the EU has been drafted and will be discussed in the Parliament in the nearest future". The only plausible explanation of using these two different terms - strategy and conception - could be a parallel drafting of both documents which will lay the basis for the future EU-Moldova relations. It would be logical for the conception to be drafted first so that it is a foundation for the strategy. Besides, if one is to believe the statements of the President, then we can believe that he ignores his own decree where he has used the term strategy and not conception.

President Voronin also met with NATO General Secretary Sir George Robertson, Kees Van Rij and Karl Hartzell, advisors to the EU High Representative for the CFSP, Javier Solana, as well as the Minister President of French Community in Belgium Herve Hasquin, and the King of Belgium, Albert the 2nd. contents previous next

II. Studies, analyses, comments

1. The project of federalisation of the Republic of Moldova
by Igor Botan

1. One year after the launch of the Kiev project

One year ago, on 3 July 2002, the OSCE project on the resolution of the Transdnistrian conflict through the federalisation of the Republic of Moldova was launched in Kiev. The optimism of the authors of the project, who intended to see the conflict resolved by the end of 2002, has taken the public opinion by surprise. During the 10 years while the conflict has been frozen on the two banks of the Nistru River two different state entities have been built. Therefore, one could hardly imagine that the existent status quo could be changed quickly. In addition, a number of experts believe that in Transdnistria multiple economic and other obscure interests held by various Moldovan and CIS neighbouring subjects and organisations converge.

Judging by the articles of the OSCE project one could assume that Moldova was to be turned into a classical federation by the model of the Russian Federation. Likewise, Transdnistria was to be granted, as a result of Moldova's decentralisation, the status of federation subject; a delimitation of competencies between the federal centre and the subjects was to be worked out within the proposed federation. The things that have prompted most questions have been the lack of any indication as to the number of subjects that the proposed federation was to include, as well as the fact that the OSCE project was to have primacy over the Moldovan Constitution right after its signature by the President of Moldova and the leader of Tiraspol administration. But the most important objection related to the fact that the likely political and financial conflicts between the federal subjects and centre were to be solved not via the Constitutional Court and the Court of Accounts, which the OSCE draft does not even mention, but via the guarantor states. Obviously, the opposition had well founded reasons to protest as it saw in the above deal a surrender of the Moldovan sovereignty to the guarantor states, which have never denied the fact that they do hold certain interests in Moldova.

Therefore, from the start, the OSCE project was subjected to criticism by the political opposition in Moldova, which, in its turn, was criticised by the official mass media for its adverse position. In reply, the opposition parties dedicated a special meeting of the Round Table with Permanent Status to the topic, during which they adopted a Proclamation envisaging a series of alternative actions for solving the conflict. Curiously, for a long period of time the Moldovan authorities avoided to express their own position with regard to the issue of federalisation of Moldova and have thus shown that they were interested to see the reaction of the opposition first.

In Transdnistria things have been pretty clear since a long time. After the head of the Tiraspol foreign department expressed his positive view of the OSCE project, immediately after it was made public in Kiev, he fell into the disgrace of the Transdnistrian leader Igor Smirnov.

It was only on the eve of the OSCE Summit in Porto in December 2002, when the Moldovan and Transdnistrian authorities were expected to express their official position with regard to the OSCE project, did things clear up a bit. First, it became clear that, in general terms, neither the Moldovan nor the Transdnistrian authorities approved of the OSCE project provisions, save for their principle agreement to solve the conflict through federalisation. This has manifested in the diplomatic victory of Tiraspol that succeeded, on the very eve of the Porto summit, to persuade the Head of the OSCE Mission to Moldova and the representatives of guarantors (Russia and Ukraine) to sign a protocol whereby they committed to support the creation of a "contractual federation" between two equal subjects: Moldova and Transdnistria. This meant, in fact, giving up the initial OSCE draft, which allowed for granting Transdnistria the status of subject of federation through the de jure decentralisation of Moldova. De facto, Transdnistria has not been part of Moldova for a long time and, therefore, it was logical for the Transdnistrian leaders to invoke the provisions of the 8 May 1997 Memorandum signed between Chisinau and Tiraspol, which refers to the equality of parties to the conflict. Hence the obsessive idea of building a "contractual federation" between two equal subjects.

In consequence, only in February 2003, President Voronin overcame yet another critical stage and proposed to draft the new Constitution of the federation, together with Transdnistrian representatives. Thus, all that has been taken from the OSCE project was the notion of "federal state". However, as expected, the process of drafting the new constitution got into a stalemate. More than two months have passed since the constitution of the joint Moldovan-Transdnistrian commission tasked with the drafting of the Constitution, but the activity thereof remains blocked. A number of causes for this have been invoked, such as the lack of co-ordination in determining the number of representatives of the two parties, the working site etc. If such things have not been co-ordinated in advance, then neither were the principle of functioning and decision making of the commission. But these are purely functional problems, the important thing is that even if these issues had been settled well in advance, the commission would still have not been able to function normally. This is due to the simple reason that the "architects" of the new constitution have not been provided with the basic parameters of the new state entity that the two "beneficiaries" from Chisinau and Tiraspol would like to craft.

On the one hand, both "beneficiaries" crafted in the territories controlled by them their own "vertical axes of power", which they do not want to give up. Therefore, it is practically impossible to make the two axes coaxial. Judging by all appearances, for President Voronin the reintegration of the country is synonymous with creating an "asymmetrical federation", that is annihilating the Tiraspol "vertical axis of power". For the Tiraspol leader, Igor Smirnov, the "common state" that is to be created by Moldova and Transdnistria on equal terms could be a "contractual federation" where there would not be much interference between the competencies of the two "vertical axes of power". The most curious thing is that following the May 2003 seminar organised by the OSCE Parliamentary Assembly for Moldovan and Transdnistrian MPs, one of the deputy chairs of the Moldovan Parliament said that the most important conclusion of the seminar was that before starting to draft the federal constitution it is important for the parties to sign a "political document" to set by joing agreement the basic principles of the future Moldovan federation. Only then could the experts in the joint commission proceed with the drafting of the federative constitution itself. It would be naive to believe that before the OSCE seminar these things were not known. It is believed that the joint commission is but a cover that the parties to the conflict use until the changes in regional political configuration offers them new opportunities to impose their points of view.

In the meantime, things are getting worse. The Transdnistrian leader Igor Smirnov threatens to stop co-operating with Moldova in solving the conflict. On 30 June 2003 he addressed the Transdnistrian citizens and threatened to take measures in response to what he calls "economic blockade" by Moldova. From the point of view of the Tiraspol leaders, by "economic blockade" they mean the obligation of Transdnistrian economic agents to respect the Moldovan customs rules for import-export operations and the requirement that the Transdnistrian economic agents register with the Moldovan Chamber of Commerce to be issued certificates certifying the country of origin of exported goods. From Smirnov's statements one can conclude that only out of "respect for the guarantors (Russia and Ukraine) and the OSCE" he does not block Moldova's transport and energy supply networks, as he did during the 1992 armed conflict. The Transdnistrian authorities have already blocked the process of withdrawal of the Russian army from the region, breaching Smirnov's decree on "ensuring the necessary measures for honouring by Russia of its obligation to withdraw its army from the eastern region of Moldova".

2. Possible consequences of the new crisis

In this extremely tense situation, the news about the recent meeting in Tiraspol of the Transdnistrian leader Igor Smirnov with the newly elect General Mayor of Chisinau Serafim Urechean is presented by the state TV channel as an act of undermining the political stability in the country. There are a number of reasons for such unhealthy reaction. Firstly, both Smirnov and Urechean are regarded as the main "political foes" of President Voronin. Evidence to this is the fact that the governmental press has not hesitated to label both of them as Mafia guys and corrupted bandits etc. Obviously, the co-operation of the main "political foes" raises concerns. Secondly, due to circumstances, Serafim Urechean has really become the main political opponent of the Communist Party and President Voronin following his victory over the communist candidate in the recent elections for general mayor of Chisinau. The threat that President Voronin made at Urechean in his recent address to the citizens have forced the latter to take measures of protection. The threats have manifested in the permanent harassment and appeals against the results of elections in courts of highest rank.

Obviously, for the representatives of the ruling party and the state press it is quite shocking that the main opponent of the head of state goes to Tiraspol to discuss with the secessionist leader "socio-economic issues", while Vladimir Voronin is declared there persona non grata. Finally, Urechean's visit to Tiraspol has taken place practically at the same time with the visit to the region of the two socialist parties, who stated that the conflict needs to be solved on the basis of equality of the two subjects. This could have been a mere coincidence, but also co-operation.

One of the most interesting questions refers to the advantages that the Mayor of Chisinau Serafim Urechean might gain from his co-operation with the secessionist leader Igor Smirnov. First, this co-operation may be interpreted as an elementary measure of protection against the harassment by the CPM. The co-operation between Urechean and Smirnov has taken place exactly when the CPM started to dispute the results of Urechean's re-election to Mayor of Chisinau. Under these circumstances, an eventual declaration of the results of elections null and the announcement of repeat elections in Chisinau could increase Urechean's rating with the most disciplined part of the Moldovan electorate, the Russian speaking voters. Most of the Romanian speaking population considers Urechean, as compared to the communist candidate, as the "least evil". Therefore, the ostentatious action by Urechean might be aimed at discouraging the CPM representatives to cancel the results of the election. It is true that there are other factors that should calm down the vengeful spirits of the CPM. Right after the end of elections, during which the ruling party made great promises, things have taken an opposite turn. The price of bread has risen, as did tariffs on gas and electricity. But this is an immediate task.

Urechean's move could be a long way shot too. In any case, one can assume that Moldova will be imposed the resolution of the Transdnistrian conflict through federalisation. The right wing political forces are opposed to this scenario in any case, yet the guarantors (Russia and Ukraine), the OSCE, the Council of Europe, the European Union and the USA have all supported the resolution of the conflict through federalisation of Moldova. At present, Voronin's "asymmetrical federation" and Smirnov's "contractual" one seem to be two extremes of the federalisation process. Although Urechean has evasively expressed his point of view on the federalisation of Moldova, it is not excluded that Urechean puts forward a middle solution of a classical federation. For this, there's no need for a special effort. It is only necessary to reanimate the OSCE project, made public a year ago, which includes the main provisions about the constitution of a classical federation. This assumption is based on the fact that the media affiliated to the mayor of Chisinau has already reported that it would be convenient for Chisinau to become a subject of the proposed federation, and the governmental and state press have blamed the mayor of Chisinau of "economic secessionism". This sort of clashes have emerged during the recent electoral campaign when the mayor of Chisinau had to face attacks by the pro-Communist press which blamed him of the disastrous state of Chisinau. The answer of the mayor was that the Government leaves less than 1/3 of returns accumulated in Chisinau to cover the needs thereof.

If things were to go in this direction it is certain that Urechean would win the sympathies of the citizens from the autonomous region Gagauz Yeri, whose leaders have long talked about the need to grant the region the status of a subject of the federation. For the secessionist leaders in Tiraspol, restrained by the "economic blockade", a compromise with Urechean to the disadvantage of the CPM would not seem to be too offensive. The constitution of a classical federation might lead to the unravelling the "vertical axis of power", both in Tiraspol and in Chisinau, and its replacement with a clear delimitation of political and economic competencies between the federal subjects and the centre, the vertical and horizontal organisation of the law enforcement bodies, the constitution of the singe monetary and customs space, a single foreign policy and army etc. Obviously, the unravelling of the "vertical axis" might endanger the CPM power monopoly and be a first step towards the de-communisation of Moldova. Indeed, the international experience has shown that communist regimes can exist only in hypercentralised states, even when these are federations or "asymmetrical federations". This could be one reason why President Voronin has reduced the OSCE project to an "asymmetrical federation".

There are also great risks related to this. First, this could endanger the constitution of the Social Liberal Alliance made up of three parties: Alliance of Independents (AI) (led by Serafim Urechean), Social Democratic Alliance (SDA) and Liberal Party (LP), as the main political opposition formation that could provide a real alternative to the communist force. In any case, for the merger of AI and SDA, federalisation is not an obstacle. SDA has often expressed its public consent to the plan of federalisation of Moldova. Beyond doubt, in the LP there could emerge problems related to accepting federalisation in general and Urechean's contacts with Smirnov in particular. Without the LP, the would be united formation would gain votes from the Russian speakers, at the expense of the CPM, but will lose a considerable number of votes of Romanian speakers to the right-wing parties. In any case, the ones with limited possibilities seem to be the CPM. It is possible that this is the ultimate aim sought by Urechean and his entourage. Two years ago, the press affiliated with the ex-president Lucinschi, currently supporting the AI and SDA wrote that in Moldova it is imperiously necessary to set up a democratic political force of pro-Russian orientation in order to avoid Russian support exclusively to the CPM, which declared itself of pro-Russian orientation. That things are so the statements of high Russian officials show with reference to the results of the recent local elections in Moldova.

At the first sight, the risks that Urechean has assumed are not so big. First, the most important right-wing parties have been vehemently criticising him already. Secondly, his real influence on the process of federalisation is at present an insignificant one to attribute him certain responsibility for the possible consequences. Therefore, Urechean's recent move seems to entail certain political prospects. On the other hand, an eventual federalisation of Moldova on the condition of giving Transdnistria the right to influence Moldova's foreign policy could seriously endanger the far-off prospects of Moldova's integration into the EU, which thing would have extremely negative consequences. contents previous

2. The custom's stamps drama
by Galina Selari

It seems that tension in relations between Chisinau and Tiraspol has become stronger once more, and again because of the export - import transactions control. It is understandable, if we take into consideration the extreme dependence of small open economy of Transnistrian the same as Moldova's one) on external trade. Since the middle of 90-s, as it is well known, the external trade of PMR was realized under the "cover" of customs stamps of the Republic of Moldova, resulted in USD 817.7 million external trade turnover in 2000 or per capita 3 time higher as compared to Moldova.

The Republic of Moldova introduced new customs procedures and revoked stamps after its joining to the WTO (May 2001), consequences of these for Transnistrian economy were extremely unfavorable, including reducing exports by 36% and import by 17% in 2002. The Transnistrian Administration has considered this fact as "an economic blockage" which resulted, according to their own estimations, in USD 170 million losses.

The idea of a federative state proposed by OSCE so unexpectedly at the end of 2002 was backed up by both parties and raised new hopes, including those for economic cooperation as well. The advantages of joint appearance at world markets, investors attracting, and participation in regional projects for South-East Europe were absolutely evident.

Mr. Vladimir Voronin, initiating the elaboration of the new Constitution of the Republic of Moldova (February 2003) pointed out that "the people of Moldovan won't be able to improve their life drastically only until two armies, two customs and two banking systems exist".

And now the situation has become aggravated anew. The ground was the Moldovan-Ukrainian Protocol on May 15, 2003 according to which goods can be transported through the customs points on the Ukrainian-Moldovan border including Transnistrian only on the basis of the waybills, commercial and customs documents of the official Chisinau. The last action was followed by invitation to registration of Transnistrian enterprises in State Registration Chamber and receiving certificates of origin in the Chamber of Commerce and Industry of the Republic of Moldova.

Mr. Igor Smirnov in his Appeal to the people of Transnistria (June 30, 2003) considered these as "new cases of blockage of external economic activities of Transnistrian enterprises". He also mentioned that "categorical requirement to register our enterprises is related with Moldovan official's desire to control privatization process. And in the near future they will ask for payments of all taxes to Moldovan budget, in order to bereave the Transnistrian population of its economic basis".

Leaving policy aside, we will try to clarify these two violently discoursed problems, namely providing Transnistrian goods and cargoes intended for export with Moldovan customs stamps and validity of privatization processes in PMR.

Creation of customs points on Ukrainian-Moldovan border. Both for Moldova and Ukraine as future EU neighbors economical practicability of operational customs border is evident because it leads to cutback of "shadow" export-import flows, suspension of smuggling, illegal migration, etc.

In May 2001 the Protocol on Harmonization of Tax and Customs Legislation was already signed by Moldova and Transnistria, according to which the regulation of export-import transactions is based on "tax and customs legislation considering both requirements of World Trade Organization and World Customs Organization and CIS and European countries legislation" . The joint customs control on Ukrainian-Moldovan border should be established beginning September1, 2001.

Moldovan tax and customs legislation in force, in the whole, corresponds with the international requirements and norms, and this fact is recognized by the Transnistrian Administration. Therefore the use of Moldovan legislation requirements for issuing customs documentation fully satisfies the Protocol's provisions. The decision of the question was delayed for two years, but even now the Transnistrian authorities consider the joint customs points as "economic blockage" on the side of Moldova. But why only on the side of Moldova, why not on the side of both Moldova and Ukraine?

The negative attitude of the Administration of TMR to the regulation of customs rules for all economic agents could be explained by the lack of credit to the official Chisinau in terms of the letter's unwillingness to consistently carry out its obligations. We can mention that the Moscow Memorandum on the Basis for Normalization of Relations between the Republic of Moldova and Transnistria states that Transnistria has the right to independently establish and maintain international contacts in the fields of economy, science and technology, and culture, and thus is considered an independent economic agent. The offered temporary registration in Moldova of economic agents from the eastern region and maintenance of their ties with the budget of TMR are far from guaranteeing that this system of relationships with regional budget will be kept after the permanent registration (January 1, 2004).

Constructive solution of inter-budget relations problem by the parties, assumption of the related mutual obligations and, what is the most important, their efficient fulfillment could create a basis for the solution of other important economic problems, such as unification of requirements of enterprises registration, avoidance of double income taxation, and some others. Under such approach the creation and management of the common register of economic agents would turn from the "stumbling block" into the "corner stone" of a single economic system. So far the parties have preferred to use the language of statements.

A few words on the legitimacy of the privatization of enterprises. Transnistria demanded (July 3, 2003) that Moldova recognize privatization in the region legitimate as a condition for its further participation in the joint Constitutional Commission. Therefore an Act on Ownership is to be signed, "which will legally guarantee the absence of pretensions of Chisinau to Transnistrian ownership".

Let us turn to the existing agreements. The Protocol on Guarantees for Attraction and Protection of Foreign Investments and Cooperation in the Field of Investments Activity says, "the activity of foreign investors and entrepreneurs on the territory of Transnistria is guaranteed by the laws of the Republic of Moldova, Transnistria and international laws". By this, as we can see, the right of the Transnistrian Administration to carry out privatization basing on their own legislation in force is recognized. It is especially important that the Protocol stipulates the elaboration of the joint project of investment strategy, but actual work on realization of such a vital for both parties decision has not yet been started. What a pity!

Today official Chisinau supports legal (?) privatization, at the same time speaking about probable consequences for the investors who have already privatized some property in Transnistria the Prime-Minister of Moldova doesn't exclude that some problems may arise if the buyers had not consulted the Moldovan authorities beforehand. What is not quit clear here is what kind of investors may face with the problems: local (from Transnistria) and/ or foreign ones. And what about the guarantees mentioned in the bilateral Protocol?

Duplicity and inconsistency of official Chisinau's statements on such an important question can do nothing but alarm not only Tiraspol but also potential investors intending to realize their projects on both banks of the Dniester.

It should be mentioned that "TirPa", the first enterprise with foreign (Italian) capital was registered in Transnistria as far back as 1988. Besides, "Itera International Eenergy Group L.L.G." registered in the State of New-Jersey (USA) is a co owner of the Moldavian Steel Works in Ribnita (MMZ) the main industrial-financial donor to the region. Moreover, this company is interested in investment projects in Moldova as well. The latest example is the privatization of "Buket Moldavii" winery in Dubosari. On the request of the Ministry of Economy of Transnistria the pre-sale assessment was done by an audit company from Chisinau. The tender was won by "Aroma" Trade House, a Russian investor that already owns some companies in Moldova.

Common sense and economic interest as we see, have already lead to the bilateral agreements mutual realization of which opens the horizons of creative development as opposed to economic confrontation.

The time calls for the negotiation, not for exchange of declarations in "strong language". No political compromise can be reached without agreement in the field of economy. That is why now, since it hasn't been done before, specialists in the different fields of law and economy should joint their efforts aiming at approximation of tax, banking and trade legislation, standards, social security system. We have to go this complex way and it will be shorter if we go towards each other.


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Results of the first round of elections in Gagauzia
The first round of elections to the People’s Assembly of Gagauzia ended on September 9, 2012 with the election of 13 out of 35 deputies. Representatives of the three main political parties from the region were satisfied both with their results and with the way the campaign developed »»»

/Igor Botan, September 13, 2012/

Illegal visas to maintain legality
At its sitting of April 8, 2009, immediately after the verbal instruction of the outgoing Moldovan President was made public, the Government adopted Decision no. 269 on imposing visa regime with Romania »»»

/Sergiu Grosu, 15 April 2009/


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