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Activity of the Parliament on November 5–18, 2001

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November 5–9, 2001

During this week numerous public officials declared that the Republic of Moldova had respected all the conditions stipulated in the Memorandum signed with IMF and there was no obstacle in resuming the external crediting of our country. The respective declarations have been accompanied by a febrile parliamentary activity. Parliament continued the examination of those draft laws that Moldova is to adopt according to its obligations in order to obtain the favorable vote of the IMF. Thus, during plenary sessions of 8–9 November Parliament examined and passed Law on Insolvency, Law on modifying the Law on financial institutions, and did away with decision that prohibited the wood export.

Also, Parliament paid much attention to the legislative acts from social, financial and fiscal domains as well as to some complex acts developed by Government according to its program of activity.

Legislative acts finally passed:

Law on modifying and completing the Law on financial institutions that provides the introduction of new regulations regarding the following

  1. Definition of these notions: “administrator”, “affiliated to some person”, “crediting documents”, etc.
  2. Right of the National Bank of Moldova (NBM) to refuse the release of authorization when the capital of the solicitant doesn’t correspond to the quantum established and expenditures related to the creation of the bank.
  3. Foreign bank’s obligation to notify NBM about the opening of a representation in the Republic of Moldova as well as these branches to operate just in the domains of informing, linking and representing.
  4. It is necessary that NBM approved beforehand the opening of commercial banks’ branches and representations in the Republic of Moldova.
  5. It is necessary that NBM gave a written permission for concluding transactions with shares from the bank’s capital.
  6. Power of the executor of bank credit contract’ s title.
  7. Hardening the sanctions that might be applied by the NBM in order to punish the banks that committed illegal acts as well as expanding the list of actions that may be considered as illegal, etc.

The initiative of adopting the respective modifications belong to NBM that thus strengthens its positions and obtain additional tools to control the bank system of the country. Evidently this thing caused vehement protests among the representatives of commercial banks. They individually or through the Banks Association of Moldova expressed their deepest dissatisfaction with the new regulations calling them unconstitutional and discriminatory.

Draft law on modifying and completing the Law on Promoting and Protecting Small Business that provides establishing new regulations regarding the following:

  1. criteria of relating industrial units to micro and small industrial units (based on the number of employees and sums of sells);
  2. excluding some types of industrial units from the sphere of applying the law: financial institutions, fiduciary and ensurance companies, funds of investments, Lombard loans etc.
  3. funds for supporting and developing small business (goal of creation and way of activity, use of sources and control on their use);
  4. regulating planned controls by representatives of state control bodies ( not more than once a year), etc.

We want to remind our readers that the necessity of supporting and promoting small business has been mentioned by the majority of the last 5 Governments, but just the I. Ciubuc (1997) Government succeeded to promote efficient and substantial amendments in the legislation that regulates the activity of the respective economic agents. Tarlev Government succeeded to promote the first essential amendment to the respective law. This is in line with governmental program that stipulates support for the representatives of middle and small business.

Law on completing the Code of Civil Procedure and Law on State Tax through which the district councils have been exempted of paying state taxes when the administrative-territorial units that they represent adopted measures for their patrimonial interests.

This amendment has its logic and motivation. It will create a situation favorable to industrial units administered by public authorities that unlike private economic agents will be exempted of paying considerable sums of money and thus will have the opportunity to appeal to courts when they don’t have sufficient reasons and are not sure of legality of their acts.

Legislative acts passed in the first reading

We would like to especially mention several drafts passed in this period:

Draft law on forestalling and fighting money laundering that contains important provisions referring to the following:

  1. notions of “money laundering”, “illegal incomes” and “suspicious financial operations”;
  2. procedure of recording suspicious and limited financial operations
  3. limiting the action of commercial secret
  4. statute of National Office for Forestalling and Fighting Money Laundering;
  5. international cooperation in this domain, etc.

This is one of the most important laws in the field of fighting corruption and organized criminality, and the delay of its adoption was enough to form an inadequate public opinion and suppositions that “somebody” didn’t want this law.

Draft law on Diplomatic Service that include important and new provisions referring to the following:

  1. diplomatic service and its objectives;
  2. system, basis functions of diplomatic institutions;
  3. personnel of diplomatic institutions, its rights, specific obligations, social benefits and wages;
  4. diplomatic rank, etc.

It is important to mention, in the context of this law, the situation created between Presidency Apparatus and Ministry of Foreign Affairs (MFA) after some representatives of MFA disclosed the new concept of external policy of the Republic of Moldova.
If so far the diplomatic activity was a closed circuit, for “intimate people”, now, once this law has been adopted, the way and conditions of activity of the diplomatic service shall have a more transparent character and possibly more accessible for people with merits who really deserve it.

Draft law on recounting pensions. It provides an increase, from December 1, 2001, for age limits, invalidity and successors pensions.

It is said that there will be an increase on average by 36 percent of the established pensions’ quantum according to the provisions of the Law no 156/XIV of 14.10.1998.

Draft law on modifying art. 10 of the Law on Petitioning. It stipulates the application of new regulations that would allow the examination of the anonymous petitions when they contain information related to state and public interests.

This draft has been submitted by the President of the Republic of Moldova. Government negatively evaluated it, and its examination caused a lot of discussions in Parliament. Numerous deputies declared that this law would signify a return to the practices of totalitarian regime.

Draft law on control over alcohol, educating people in the spirit of abstinence and eliminating the consequences of alcohol abuse and unauthorized use of drugs and other psychotropic substances.

The name of the draft clearly reflects its contents. Its authors propose new administrative and social measures to fight harmful social phenomena.

November 12–16, 2001

The Parliament was very productive during November 12–16. The Law on insolvency and Law on Preventing and Fighting money Laundering were the most important laws examined, accordingly we would give them due consideration.

Legal acts passed in the final reading

Law on insolvency, no.632-XV of 14.11.2001 (Official Monitor no.139–140 of 15.11.2001)

There has been a lot of controversy around the law from the first reading, especially as for the aims and tasks of such a law. In brief, this law combines and completes the provisions of the Law no 786-XIII of 26.03.1996 on Bankruptcy and Law on Enterprise Restructuring no. 958-XIII of 19.07.1996. Furthermore the law includes provisions related to judicial procedures (specific to the Code on Civil Procedures), which are to be enforced by the courts in bankruptcy cases.

The aim of this law is specified in Article 1, namely to establish a legal framework for restructuring enterprises in view of their financial and economic recovery, as well as for initiating bankruptcy procedures in view of settling creditors’ claims from the debtors patrimony. Further the law is more specific:

  1. Subjects to the law;
  2. Restructuring stages: selecting the enterprises, debt moratorium; establishing Restructuring Commission; developing restructuring plan; converting debts into shares, etc.
  3. Rights and obligations of the enterprise leadership and creditors’ council;
  4. Initiating bankruptcy procedures and participants to the process;
  5. Consequences of the bankruptcy process;
  6. Administering liabilities;
  7. Settling simple contract creditors’ claims;
  8. Restructuring plan;
  9. Disqualifying debtors;
  10. Particularities of bank, farm, insurance companies, and security market bankruptcy;
  11. Responsibility of the debaters’ leadership.

The Law no.633-XV of 15.11.2001 on Preventing and Fighting Money Laundering is aimed at preventing and fighting money laundering. Money laundering is defined as “premeditated actions, aimed at legalizing illegally acquired money, goods or income via violation or fraud; or non-disclosure, disguise or altering of information about the source, flow and ownership of the money, goods or income known by a citizen to be acquired though violation or fraud; knowingly acquiring, owing or using goods acquired by fraud, taking part in association, agreement or complicity by providing help or advice in view of committing such actions.”.

Noteworthy, initially the draft law provided that financial institutions should fill in certain forms for any cash or wire transactions exceeding 1800–3600 Lei (for natural entities) and 9000 (for legal entities). During the debates the Parliament decided to raise the amounts to 100.000 — 200.000 lei (natural entities) and 300.000 (legal entities).

Also, on the grounds of lack of funds, the Parliament gave up the idea of establishing a specialized office on money laundering. This fact displeased the authors of the draft as well as some other MPs who supported the idea of an autonomous specialized body with large competencies but answerable to the Prosecution Office. Many experts consider that giving up the idea of a specialized body and granting extra competencies to the General Prosecution might hinder the law enforcement. It is a common practice for documents to be submitted to the General Prosecution for them to take actions specified in the legislation, but those materials seldom end in a penal case, and all the investigations and violations of the law depicted by the Court of Accounts remain unpunished.

Anyway, given the hurry in adopting the law and the complexity of the issue it is expected that the law will be modified and completed in the nearest future.

Law on completing and modifying the Law on Entrepreneurial Licenses.

This law prohibits entrepreneurs to conduct the following activities based on an entrepreneurial license: sale in commercial centers, sale of tobacco and alcohol. Also the holder of the entrepreneurial license is obliged to submit documents on the origin of merchandise. The mayoralties are obliged to issue licenses in territories where there are no fiscal bodies.

It is likely that entrepreneurs selling goods in commercial centers will protest as they used to have high earnings and pay symbolic amount of taxes.

The Law on the modification and completion of Article 11 of the Law on Government.

Under the law, an additional Government responsibility would be to support national communities “of Moldovans and Gagauz” residing outside the Republic of Moldova. Previously the law stipulated just support for “Moldovans”.

The Law on interpreting Article 10 of the Law on Amnesty on the occasion of the 10th anniversary of the Republic of Moldova independence.

This law is not applied in the case of:

  1. Persons whose term ended prior to the enforcement of the Law on Amnesty;
  2. Persons whose cases are under investigation, preliminary investigation, first hearing, or appeal; or persons who serve their term based on the final court ruling.
  3. Persons who committed offences after July 26, 2001.

Laws passed in the first reading

The most important laws considered this month are:

Law on Ratifying the Convention on Refugee Status.

There have been a lot of debates around the ratification, many deputies fearing that it would attract considerable flow of refugees to the country and Republic of Moldova is unable to provide them social and medical security. Another fear has been that national security might be under threat.

On the other hand the supporters of the law claim that there would be no flow of refugees as Republic of Moldova is not an attractive country with regard to social security and does not offer sufficient security guarantees. Expenses related to the enforcement of the Convention may be covered in the initial stage by the United Nations’ High Commissariat for Refugees, later on, though, the guarantees offered to the refugees wouldn’t exceed those provided to foreign citizens which are less than those for the Republic of Moldova citizens.

Law on modification and completion of the Law on the Production of ethylic alcohol and alcohol.

Business will be obliged to register their products with the State Agency for Industrial Production Protection.

In addition, the law prohibits:

  1. pharmacies to deliver and sell ethylic alcohol engross or in quantities exceeding 10 liters.
  2. companies lacking appropriate production equipment and storage facilities to produce ethylic alcohol;
  3. companies to set prices running counter to the minimal prices established by the Government for the respective products.
  November 19 – December 2, 2001