Activity of the Parliament on May 31 – June 13, 2004

May 31 — June 4, 2004

The latest Parliament session held on June 3, 2004 had two major goals:

Overview of the outcomes of administrative-territorial reform;
Unable deputies from all parliamentary factions to raise questions and issues.

Both issues were fiercely debated with administrative-territorial reform proponents proving the efficiency of the undertaken measures and opponents arguing that it was useless and served only subduing local government. Senior Deputy Prime Minister Vasile Iovv that reported on the issue mentioned that both economic growth and GDP growth, surge in volume of exported goods, as well as gaz supplied to numerous localities were the concrete outcomes of the administrative-territorial reform. He concluded that the reform was a successful one and that it had a positive impact on the country development.

Opposition deputies viewed the revision of local public administration system as an anti-reform, they argued that the money spent on its enforcement were unjustly high as the reform failed to bring local government closer to people. In this respect, they cited many problems related to limiting the number of local officials, financial dependence of administrative-territorial units on central government and rayon authorities, politicization of administration structures, lack of material resources, etc.

In the time allotted for questions and answers deputies engaged in mutual criticism, with majority faction blaming opposition leaders for promoting their economic and financial interests, whereas opposition blaming ruling party of frauds and corruption. In addition, opposition once again called on information they had previously demanded from the Government to be finally made public.

During the plenary session a number of legal acts of major importance were examined, some of which shall be given a due consideration below.

Law on Establishing Insolvency Procedure for Financial Institutions

The law passed by the Parliament provides some exemptions from the Law on Insolvency, thereby insolvency procedures against certain financial institutions started until February 15, 2002 shall be undertaken in compliance with the law in force at the time the procedures were started.

The reason for passing the law was the fact that throughout 1996- 2002 National Bank withdrew a number of licenses to financial institutions and appointed ex officio administratios to oversee liquidation procedures. Due to the fact that insolvency procedures continued even after the enforcement of the new Law on Insolvency it was necessary to provide for their settlement under the previous legal provisions.

Noteworthy, on November 14, 2001 Parliament passed the Law on Insolvency, thus abrogating the Law no. 786-XIII of March 26, 1996 on Bankruptcy and the Law on Restructuring Enterprises no. 958-XIII of July 19, 1996.

Law on Deducting the Amounts Wired to the Fund for Guaranteeing Bank Deposits

The law provides that financial institutions that contribute to the Fund for guaranteeing bank deposits, shall be allowed to deduct the obligatory contributions set by the Law on Guaranteeing Natural Entities Bank Deposits in the Banking System.

On December 26, 2003 Parliament passed the Law on Guaranteeing Natural Entities’ Bank Deposits in the Banking System aimed at guaranteeing bank deposits of natural entities in banks authorized by the National Bank of Moldova. Upon the enforcement of the law a Fund for Guaranteeing the Deposits in the Banking System was established as a legal entity. Banks authorized by the National Bank are obliged to pay fees to the fund.

Law on canceling the penalties and sanctions incurred but not paid by “Fabrica de brinzeturi din Leova”

Parliament cancelled the penalties and sanctions due by the Leova Cheese Factory to the state social insurance budget, amounting to 1.2 million Lei. The state had to intervene as the company failed to pay back the credit, due to the fact that the major suppliers of raw material disappeared from the market.

Draft law on the amendment of legal acts in the field of telecommunications

The draft passed by the Parliament in the first reading provides for including a new article in the Code of Administrative Offence, namely on Using numbering resources without an authorizations or transferring those resources to other persons. The sanction proposed for such violations would represent a fine of up to 36 thousand Lei. In addition, National Agency for Regulations in Telecommunications and IT shall be responsible for applying those sanctions.

The amendment stems from the fact that numbering resources are in the exclusive property of the Republic of Moldova, and are subject to a special administration and assignment procedure. Under the law telephone numbers may not be used by legal entities at their own will, as this might incur damages to the state domestically and on international scale.

Already, there are cases of procedure violations, therefore it is recommended to complet the Code of Administrative Offence with a new Article 142/6 “Using numbering resources without an authorization or transferring numbering resources to other persons”.

June 7–11, 2004

During the aforesaid period deputies worked mainly in commissions and factions, therefore the plenary session struck a time record, while the issues on agenda were harshly debated.

Law on the Amendment of Article 49 of the Fiscal Code

The law was an initiative of the President and was presented as major step in supporting the small-too-middling business. The law provides that certain businesses would be entitled to total exemption from the income tax for a three-year period, namely:

Whose annual number of employees does not exceed 19 persons, whereas the turnover does not exceed 3 million Lei, regardless of the legal form or type of activity;
Farms established in line with the Law on Farming Associations;
Agricultural cooperatives providing services in line with the Law on Entrepreneurial Cooperatives, provided that at least 75% of the production/ services are provided to their own members and/or benefits are procured from the members in an amount of at least 75% of the production purchased by the cooperative.

Leading businesses on the market, where the quota of shareholders who are not representing the small business exceeds 35%; manufacturers and importers of goods subject to excises; fiduciary companies and insurance companies; investment funds; and banks shall not be entitled to the aforesaid exemptions.

A business would be entitled to the exemption once it concludes a special agreement with the State Fiscal Inspectorate. The law also outlines the case when the exemption may cease, in particular:

On the date the application is filled it did not meet the requirements;
During the time exemption is in force, the business is joined by one or more entitles, which are not subject to this law;
The business joins one or more of the entities, which are not subject to the law, etc.

Law on the Ratification of International Acts in the Telecommunications

The Parliament ratified the following documents:

Instrument for the modification of the Convention of the International Telecommunication Union.
Instrument for the modification of the Statute of the International Telecommunication Union.

The aforesaid documents were adopted by the Union back in 2002. Modifications refer to the election and activity of Union governing bodies, access to the plenipotentiary conferences, etc. They also refer to the responsibilities, obligations and methodology of the Council, General Secretariat and Committee for Regulations in Radio-communications within the Union. Finally, modifications referred to the membership quota to be paid by each member country.

Law on the Ratification of the Resolutions of the Council of CIS Chief of States

The law ratified the resolution passed in 2003 thereby amendments to the CIS statute were operated. In particular those modifications referred to alphabetical rotation of the chairmanship (Council of the Chief of States, Chief of governments and Foreign Ministers).

Noteworthy, the amendment was necessary as several years in a row Russia hold the chairmanship, fact that raised some criticism among member states.

Draft law on the subsidized insurance of the risks of agricultural production

The draft passed in the first reading is aimed at ensuring stable production in agriculture by means of subsidized insurance of the risks of production in agriculture. It regulates the relationships between insurance companies and legal or natural entities, i.e. agricultural producers and fisheries in the process of insuring risks of production, insurance interests being subsidized by the state.

Draft law on completing the Law on Privatization

The draft passed in the first reading introduces a new provision thereby the state would not guarantee the right on property on the entities located on the territories controlled by the separatist regime from the left of Dniester, if they are privatized without prior agreement of the Government.

The need to amend the law stems from the fact that secessionist authorities in Tiraspol launched a wide-scale privatization of the industry (over 75 enterprises). While the draft was debated both opposition and majority faction engaged in fierce debates on whether the amendment is appropriate or not.

Draft law on the modification of the laws on issuing IDs to minors upon exiting the country

President of the country submitted the draft in view of combating the trafficking of children. It recommends certain measures:

Minors shall be allowed to leave the country only accompanied by the designated person in the presence of the notary (so as to keep a record of the persons accompanying children).
Minor should consent in full knowledge to going abroad.
Minors shall obligatorily hold IDs (foreign passports) that would allow them to exit the country.

This last requirement gathered a rich harvest of criticism from deputies on the grounds it incurs additional costs to the families.

Draft law on single agriculture tax

The draft provides for testing a single agriculture tax in certain localities of the country. The experiment will serve basis for deciding whether the mechanism is efficient and whether the tax should be applied throughout the country.

Single agriculture tax is to include income tax for entrepreneurship, VAT except for VAT on imports, real estate tax, taxes to the road fund, tax on water and on territory planning. The other taxes and fees shall be paid as provided by the law.

Single tax quotas are to be established on a yearly basis, as follows:

2.1 Lei — for a l hectare of plots subject to cadastre indicators;
1.50 Lei — for 1 hectare of plots not subject to cadastre indicators.

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