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Chișinău Airport is building a new 2,4 km runway to renovate the old 3590 m one

On March 20th, “Avia Invest”, the company that manages the Chișinău International Airport, announced about building a new 2400 m runway until May 2017.

The D 2400 meters long and 45 wide runway is being built, so that starting from May 2017 the old 3590 meters runway can be repaired without disturbing the air traffic at the airport.

The new runway is built by the German “Strabag Grup” together with the Moldovan “Exfactor-Grup”. According to Avia Invest manager, Petru Jardan, the runways will not work at the same time when both are ready.

The project costs are estimated at 15-16 million euros, but Jardan refused to name who is the investor, stressing to ask for information at the State Registration Chamber.

The International Airport of Chișinău concession to Avia-Invest under dubious conditions in 2013 has been a subject of controversy in the Moldovan society as a case of high-level corruption. Avia-Invest is considered to be an off-shore company with dubious shareholders and almost no experience in the aviatic services industry. The even more dubious businessman and mayor of Orhei, Ilan Shor, is the head of the administration council of Avia-Invest. Shor’s Air Klassica, a service provider in the airport, received a 40,4 million lei loan from the defrauded Unibank in 2014.

Even if the AntiCorruption Center recommended the cancelling of the contract in August 2015, the Justice Minister Vladimir Cebotari found no reasons for that and the prosecutors didn’t do anything to investigate the concession of the Chișinău airport, in the context of its rapidly growing traffic and profit.

Currently studying International Relations at the University of Pécs, Hungary. Study focus: Transnistrian conflict settlement, Moldovan statehood, Moldovan democracy.

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Economy

Moldovan foreign investors advocate the government to pass the reform on the control bodies! Investors proposed additional recommendations

Dear colleagues, representatives of the business community, civil society, state-owned institutions, citizens,

Foreign Investors Association, established in 2003 and which includes some of the largest foreign investment companies in the Republic of Moldova, actively promotes actions aimed at improving the investment climate. The Government and the Parliament have recently adopted a series of reforms of the regulatory framework, in particular in the field of state control over the business activity and permissive acts.

However, these reforms have less covered an important segment of state interference in business activity – the law enforcement bodies. Today, the law enforcement bodies, in particular the Economic Fraud Investigation Division, subordinated to the Ministry of Internal Affairs, and the National Anticorruption Center, enjoy a range of competences such as to seize goods, documents, information systems, to arrest, make proposals to preventively arrest and others, which may lead to a stop in the business activity and laying off of employees. Abusive enactment of such measures may cause major losses to the entrepreneurs and may ultimately determine the decrease in the potential to attract investments to Moldova, as a result of the deteriorated image of the investment climate.

Therefore, the Association welcomes, in principle, the initiative of the Ministry of Justice to promote the draft law amending and supplementing certain legislative acts (Criminal Code, Criminal Procedure Code, Contravention Code and other legislative acts) aimed at improving the investment climate by introducing less repressive criminal norms related to economic crimes and establishing additional procedural safeguards against abuses by the law enforcement and control bodies.

The draft was discussed in several meetings organized by both the Ministry of Justice as well as the Economic Council to the Prime Minister. The last meeting, with the participation of the Prime Minister, was held on 08.12.2017. Given the publicly launched suspicions referring to the recent high profile banking fraud cases, the participants to that meeting wanted to make sure that all the persons involved in these cases would not also benefit from the provisions of this initiative.

We understand and commend the fact that the Ministry of Justice has accepted to make changes, which would guarantee that this does not happen, and proposed to organize an additional technical meeting to discuss further proposals from the stakeholders with the subsequent completion of the draft.

To follow up on the above, we believe it is opportune to expressly provide for in the draft the manner in which the acts of the control bodies can be challenged, which would avoid putting the individual/legal entity in the situation of having to tacitly accept the accusations which are brought up to them and accept the starting of the criminal case.

We also draw your attention to a series of other provisions, which raise concerns among the business community, such as for instance:

  • Applying criminal liability for not obtaining any permissive act required for business operation, including regardless of the damages caused;
  • Applying criminal liability for concluding any anticompetitive agreement which causes extremely large scale damages or which generate extremely high profits (in international practice, such liability applies only in case of cartels, not vertical agreements);
  • If, during a control, a control body identifies that a crime had been committed, it has to mention in its control act the exact amount of damages caused by the crime and the actions which must be undertaken to remedy the violation. The act of control cannot be challenged in the court and serves as evidence for the criminal prosecution. There is the risk that common procedural safeguards, applicable to collecting evidence in the course of a criminal prosecution (including against self-incrimination) be disregarded by the control body;
  • Applying criminal liability for doing business in violation of the intellectual property rights and not indicating the fiscal code in the documents or indicating it with mistakes (it is not clear how these two issues can be combined).

In relation to the above, we express our readiness to continue the consultations with the authorities of the Republic of Moldova for finalizing the respective draft, taking into account the relevant comments, and we kindly call upon the Government, the Parliament and the President of the Republic of Moldova to support the respective legal initiative of the Ministry of Justice, that will substantially improve the business and investment climate in the Republic of Moldova.

The Foreign Investors Association also urges the representatives of other business associations and business community to join this call.

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Economy

Conditions that the European Union imposed to Moldova before disbursing tranches of €100 million assistance

On 23 November 2017, the Republic of Moldova signed the agreement with the European Union regarding the macro-financial assistance of 100 million euros: 40 million of grants and 60 million as a loan.

The so-called MFA was requested in August 2015 and in March 2016 by the Moldovan authorities. After long debates on the conditionality, the European Parliament, and the EU Council came to an agreement to offer Moldova the macro-financial assistance for 2 years and a half in three tranches, whose disbursement is conditioned by a certain list of criteria. According to the agreement, the European Commission will monitor the progress on key reforms together with the International Monetary Fund.

Technical criteria

Unlocking the first tranche of the macro-financial assistance will require Chișinău to implement 10 reforms in five different domains:

Public sector governance:

  • implementing the new reform strategy of the public administration;
  • ensuring the efficient functioning of the National Agency for Solving Contestations;
  • adopting the law on the state and municipal enterprises with the aim of increasing transparency and responsibility of the latter;
  • adopting the new law of the Court of Accounts and creating a Parliamentary Committee of Public Accounts.

Fight against corruption and money laundering:

  • adopting the law on preventing money laundering and combatting terrorism financing;
  • selection of the president and vice-president of the National Authority of Integrity by the Integrity Council;
  • ensuring the efficient functioning of the Agency for Recovering the Defrauded Goods by the Parliament through sufficient funding and personnel.

Reforms of the energy sector:

  • adopting a new Energy Law with the aim of consolidating the governance and regulation of the energy sector, including the independence of the National Agency for Reglementation in Energetics.

Business climate and DCFTA implementation:

  • implementing measures to reduce the administrative tasks needed to start and manage a business;
  • adopting the new law on the Customs Service.

Respect to multi-party system and the degree of implementation of the recommendations of the Venice Commission

According to ZdG.md, the agreement stipulates that the European Union will also take into the consideration the respect to efficient democratic mechanisms- a multi-party parliamentary system, rule of law, respect for human rights-, but also progress in improving liberal, independent and pluralist governance,  consolidation of the independence of the judiciary system and the implementation of the Association Agreement, including the Deep and Comprehensive Free Trade Area. A special focus is drawn upon the fact that the EU Commission and the External Action Service will also particularly monitor how the Moldovan authorities implement recommendations formulated by the Venice Commission and the OSCE/ODIHR in regard to the recent change of the electoral system.

If the Commission gives a negative evaluation to the work of the Moldovan Government, it reserves the right to stop the payment of the tranches until Moldova proves the respect of conditionality.

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Economy

2018 budget plan adopted in first reading by Moldova Parliament

On December 1st, the Parliament of Moldova adopted in the first reading the Law on the state budget for 2018.

The plan forecasts a GDP growth of 3% in 2018 up to the level of 160,1 billion lei (9,3 billion USD). The annual inflation rate is expected to be 6%.

In 2018, the Government expects incomes of 56,9 billion lei- 7,8% more than in 2017-, and expenditures of 61,7 billion lei (8,2% more than in 2017). Thus, the budgetary deficit is estimated to be 4,7 billion lei.

The main source of income would be the income taxes, while the external grants meant for the budget and for public projects are expected to cover around 2,8 billion lei- 1,6 billion lei more than in 2017.

The general budget plan for 2018 is adopted in the first reading, while the specific articles of the law on public finances and fiscal responsibility are voted on separately in the second reading.

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