Connect with us
"
"

Economy

The Citizenship by Investment Program in Moldova – embracing great opportunities or risks?

Published

on

Dubai, November 5th – The Citizenship by Investment Program in the Republic of Moldova was officially launched at the 12th annual Global Residence and Citizenship Conference in Dubai. Since the very first moment when the legislative initiative was registered in the Parliament (December 2016), the law of citizenship by investment gained support, along with a lot of criticism. The government presented the program as an opportunity to attract new investments, whereas the opposition and some experts argued that granting citizenship to foreign investors involves major risks to the state security and could affect the liberalized visa regime with the EU, as reported by Ziarul de Gardă.

The law adoption outlines

The law of citizenship by investment was adopted and promulgated in record time without waiting the results of the anti-corruption expertise report published by the National Anticorruption Centre (NAC). One week after the final voting of the bill, the results of NAC report stated that “the promoted interests through the law of citizenship by investment are detrimental to the public interest, and imply major risks to the safety and security of the citizens and the state of the Republic of Moldova, , in the context of the emigration crisis in EU and the global terrorism threat.”

In March 2018, the Ministry of Economy and Infrastructure (MEI) has published a decision to amend the Regulation on Acquisition of Citizenship by Investment. According to the Transparency International Moldova experts,  the changes to the selection procedure of candidates for granting citizenship were made without public debates and a preliminary notification. The procedure was simplified by omitting the governmental institutions from the examination process.

A series of law amendments came next, enabling the persons who would obtain the Moldovan citizenship by investment to be exempted from the obligation to know the provisions of the Constitution of the Republic of Moldova and to speak the Romanian language. Moreover, the name and other personal data of the candidates would be kept in secret, only the applicant file number being published.

The ex-president of the Parliamentary Commission for national security, defence and public order, Roman Boţan, qualified the amendments as doubtful. “It’s strange that the names of the candidates for granting the Moldovan citizenship by investment is concealed. It is plausible that such investments could come from fraud, and premises of decriminalizing illegal assets could be created,” declared Boţan.

Vlad Ţurcanu, a political commentator and a former presidential adviser, mentioned that the relationship Moldova – EU could be negatively affected in the light of a non-transparent citizenship granting process. Furthermore, such problematic future citizens could create crises which would be very hard to be managed by the Moldovan institutions.

In July 2018, MEI signed a partnership contract with the Moldovan Investment Company (MIC) Holding and with Henley & Partners Government Services Ltd. The stated scope of the contract was the development, implementation and international promotion of the Citizenship by Investment Program. The official MIC Holding website presents neither the name of the founding persons or companies nor the contact address of the holding.

MEI signing the partnership contract with the MIC Holding| Source: mei.gov.md

The Henley & Partners Government Services Ltd appears in an investigation article written by The Guardian that presents the company as doing business with ‘golden’ passports.  “For a few hundred thousand dollars, the right passport, from the right place, can get its owner into almost any country,” is stated in the article. The company was involved in the Maltese program of citizenship by investments and was accused of intimidating the investigative journalist Daphne Caruana Galizia. The journalist examined the scheme of offering the Maltese citizenship but was assassinated in October 2017.

The Henley & Partners’ perspective

In an interview for Newsmaker, the president of Henley & Partners, Christian Kälin and the Group Public Relations Director at Henley & Partners, Paddy Blewer talked about the candidate selection process of Moldovan citizenship granting and the benefits of the program.

First, it is important to mention that the Henley & Partners company, as a part of the MIC Holding, is responsible for the consultancy and the strategy implementation for the Moldovan Citizenship by Investment Program.

When asked about the possible applicants for the Citizenship by Investment Program, Christian Kälin clarified that they would be wealthy people that want to enlarge their possibilities of traveling and moving around the world.

“It is not about a Russian oligarch with lots of money and relationships in the political world. It is more about an UAE citizen who is not sure he wants to stay in his country in the next 15 years or an American citizen that can’t enter an Arabic country using his American passport and needs the second citizenship for security reasons.”

According to Kälin, the applicants would be interested in being protected and moving around, not tax evasion. He admitted that among the beneficiaries of the program could be not well-intended people: “It’s like in the bank. There are thousands of clients and among them there could be 5,7,10 delinquents. Still, that’s not a reason for the bank to cease its activity.”

“The most important benefit for a country that implements a program of citizenship by investment is the possibility to attract new investments,” as Paddy Blewer stated. In the case of the Republic of Moldova there is a possibility, at the moment, to invest in the Public Investment Fund. The law of citizenship by investment stipulates for now only the opportunity of real estate investments, according to Christian Kälin. He also added that the real estate sector is a key one in the economy of any country and that most programs of granting citizenship in return for investment provide such a component. “Real estate investments have a considerable positive effect on the economy of a country. They increase the number of transactions and develop the construction industry. The real estate sector has many intersections with other sectors of the economy. Thus, it will be a driver of job creation,” said Kälin.

According to the officials’ declarations at the Moldova Business Week of this year, the industries that should have priority when it comes to investments in Moldova are the tourism and information technologies sectors. Also, the automotive and manufacturing industries need the government’s support in order to be developed as the country’s strategical sectors.

The expert’s perspective

The expert and activist Sergiu Tofilat explained for Moldova.org several important aspects regarding the law of citizenship by investment. First, “some European countries are trying to attract investment by selling citizenship. Such programs are interesting for wealthy people who want to be able to travel visa-free in the EU and the US, who would like to easily open bank accounts in western banks,” said Tofilat. He highlighted the serious issues in verifying the source of the ‘invested’ money for acquiring citizenship, but also national security issues when different criminals or terrorists get foreign citizenship.

In case of the Republic of Moldova, “there are problems related to politically subordinate justice, labour shortages, the lack of predictability of public policies as when the government changes the law, and this affects the business environment that can’t plan its activity for at least 3-5 years,” as Tofilat mentioned. Taking into consideration these circumstances, “the Citizenship by Investment program raises suspicions of money laundering, especially since nothing of the stolen billion has been recovered,” stated Tofilat. He indicated that the program in question must be analysed together with the so-called tax amnesty law, which allows the legalization of any dirty money for a 6% tax. “As a result, the beneficiaries of the bank fraud can decriminalize their money through certain foreign citizens who will receive citizenship by granting loans to the Moldovan Government, after which the new Moldovan citizens will benefit from the tax amnesty,” explained Tofilat.

“The authorities stated that the objective of the citizenship program is to attract foreign investments in Moldova. It is absurd to believe that foreign investors queue up for investing their money in Moldova and that getting citizenship is the biggest obstacle for them.”

According to the Tofilat’s opinion, “a special attention should be paid to the dangerous similarities of the Moldovan program with the programs in Hungary and Malta.” Just as in the case of Hungary, the names of those who will receive the citizenship of the Republic of Moldova will be classified under the pretext of protecting their personal data.

An international inquiry from September 2018 revealed that especially Russian officials are interested in receiving the Hungarian citizenship for being able to travel without any visa and to leave Russia in case they need it.  “It’s the case of Russian deputies, heads of state-owned enterprises, and even Serghei Naryshkin’s family, the head of the Russian espionage service, who received the citizenship of Hungary. This happened despite the fact that some officials appear on international sanctions lists,” specified Tofilat.

Featured image source: anticoruptie.md

Politics

The effect of Russia’s constitutional changes on the Transnistrian region

Published

on

A nationwide referendum is held in the Russian Federation between June 25 and July 1 in order to amend the constitution of the country.

Due to the coronavirus pandemic, the opportunity to vote during several days was provided. The voting process is held outside and, in addition, contactless voting at home, electronic voting and voting using the Mobile Voter mechanism are available.

In the Transnistrian region, voting was allowed for three days, from June 28-30, the whole process being organised under similar conditions as in Russia, the Tass News Agency announced.

According to a survey conducted at 800 Russian polling stations from June 25 to June 28, the majority of voters opted for the amendments, 23.6% opposed them and 0.4% invalidated the ballot paper,

Beside the amendment offering the possibility of prolonging the presidential term of Vladimir Putin (until 2036 instead of 2024), there are a a few controversial amendments to the Russian fundamental law.

Source: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

Russian federal territories

One of the most important articles of the Constitution of the Russian Federation that could be amended is article no. 67,  which provides for creation of federal territories in Russia and introduction of the expression “subjects of the Russian Federation”.

“By making this change, Putin wants to make sure that certain federal subjects do not leave the Russian Federation, such as Chechnya, Tatarstan or Crimea, the latter being illegally occupied by the Russian Federation. The territory of the Republic of Moldova doesn’t belong to  the Russian Federation. However, taking into consideration the priorities that President Dodon and socialist have, one could draw a parallel.

During the propagandist Moscow parade, Putin mentioned in his speech that all neighbours ‘are part of the Russian world’. Moldova, according to Vladimir Putin, is part of his strategic interest. The fact that 11% of the Moldova’s territory is hosting occupation troops proves it one more time,” said security policy expert Rosian Vasiloi.

Previously, President Igor Dodon claimed that federalisation is the only solution to solving conflicts in the Republic of Moldova, including the Transnistrian one.

Source: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

Russia as the legal successor to the Soviet Union

In the same article, a paragraph was introduced, saying that the Russian Federation is the legal successor of the Soviet Union. Another amending paragraph states that the Russian Federation honours the memory of the “Fatherland’s defenders” and ensures the protection of historical truth. “The diminution of the importance of the act of heroism in the defence of the Fatherland is not allowed.”

Historian Andrei Cusco mentioned that the victory in World War II is a myth that represented the main pillar of the regime’s ideology after Putin came to power in 2000. “Russia has taken certain moments from the Soviet communist narrative and reinterpreted them to serve the interests and visions of the current regime,” Cusco said.

The Criminal Code of the Russian Federation prohibits the dissemination of information that expresses a clear disrespect regarding the days of military glory and memorable dates in Russia related to the defence of the Fatherland, as Meduza informed.

A good example is the reaction of the Embassy of the Russian Federation in the Republic of Moldova to the TVR Moldova declaration that June 22, 1941 was the day when Romania entered the World War II to liberate the Russian-occupied lands in the summer of 1940. “For Romanians, this date went down in history as the day of starting the fight for the reunification of the nation. The President of the Republic of Moldova, Igor Dodon, is not of the same opinion, as he stated that today is the day when the occupation of Bessarabia began,” it is said in the article.

The Embassy of the Russian Federation qualified the material as “uncivilised and extremely dangerous, because it justifies the war criminals.”

“Such tricks offend most Russian citizens who remember the common heroism of the Red Army that saved Europe from the Nazi plague.”

The perfect Russian child

One more completion to the constitution refers to children education, namely patriotism, citizenship and respect for the elderly.

The same approach existed during the USSR, when the principles of a very cultured man were considered love for the socialist homeland, friendship, companionship, humanity, honour, love for socialist work, etc.

 Marriage of a man and a woman

Another newly introduced amendment provides for the protection of the family, maternity, paternity and childhood, defending the institution of marriage as a union of a man and a woman, creating the conditions for a decent upbringing of children in a family, as well as for the fulfilment of the obligation to take care of parents.

Yet, another video promoting the amendment of the constitution promotes homophobia as well.

Crime against Russians

The Russian journalist Vladimir Pozner believes that the way of voting the amendments is not democratic. “There are many proposed amendments. Among them, there are those that I would be willing to support, but there are those that I am against of. Unfortunately, everything is organized in such a way, that either you order the entire dinner or none of the dishes,” he said.

Liubov Sobol, a Russian politician and lawyer at the Anticorruption Foundation, claimed that resetting Putin’s mandates to zero is a crime against Russians. “20 years were enough to implement all the reforms needed for our country. We saw that Putin failed. Corruption is flourishing in the country, we have a low level of education. There must be a change of power, and all eligible candidates must be allowed to run for president. People have to make a choice.”

This text is a translation. The original article here.

Photo: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

Continue Reading

Environment

A natural water cycle? The floodwater dangers that are neglected in Moldova

Published

on

Due to heavy rains in Ukraine, Romania and the Republic of Moldova, the employees of the General Inspectorate for Emergency Situations (GIES) were working during the entire week to eliminate the consequences of the floods in the whole country.

The water level in the Dniester River increased by up to 3.5 m in some northern localities, while the State Hydrometeorological Service forecasted further increases of water level by July 2. Therefore, residents were evacuated from the villages at risk of flooding both from the Dniester and the Prut riverbeds, cleaning works were performed, protection dams were build or fortified, according to a note of the Government of Moldova.

However, beside the problem of flooded households and farmlands, there is also a critical ecological problem. Moldova is still a country with a limited access to centralised sewerage systems. The majority of population (especially in rural areas) still use an improvised toilet placed in the yard (latrine). Moreover, there are still localities in Moldova with no access to a centralised water supply systems, the water from local reservoirs being consumed. The floodwater accelerates the transfer of dangerous pollutants from various sources of pollution (including latrines) to the water that gets in the supply systems or local wells.

Source: gov.md

No water supply systems

According to the National Bureau of Statistics (NBS) data, 81.8% of population  had access to the public water supply service in 2019. 53 cities and 724 rural localities had access to the public water supply system in the last year, which represented only 50.7% of the country’s localities.

About 51% of Moldovan villages do not have access to drinking water supply from public systems.

The localities from Chisinau (88.6%) and Gagauzia (78.1%) have the highest level of connection to the public water supply network. The lowest level is recorded in the North (35.5%). The water is usually captured from surface sources – 64.6%, from underground sources – 25.5%, or from other sources – 9.9%, informed the NBS.

Floods can lead to a higher risk of running out of drinking water for all localities in the Prut and the Dniester riverbeds, which do not have access to centralised water supply systems. Moreover, even those that do have access to such systems risk to drink contaminated water, if the water is captured from sources that came in contact with floodwater.

The National Agency for Public Health (NAPH) reported high levels of non-compliance of  the water from local wells, concerning both chemical and microbiological parameters. “This situation is determined by the lack of centralised sewerage systems, unsanitary conditions, the location of latrines and landfills in the immediate vicinity of wells,” noted the agency.

It also warned that the contaminated water from wells need to be pumped out and walls need to be cleaned in case if floods. When the water in the natural reservoirs is back it needs to be disinfected and tested. The question is how many flooded localities from Moldova respect the NAPH recommendations.

Source: gov.md

No sewerage systems

reportage of Moldova.org disclosed that seven out of ten households in the Republic of Moldova do not have a toilet in the house. On average, 21 out of 30 people use a latrine.

Only 126 out of 1682 localities have sewerage systems and only 73 of them have functional sewage treatment plants. Without a sewage treatment plant, wastewater reaches the soil and rivers, causing serious pollution.

Only 7.6% of Moldovan localities are provided with public sewerage system (95.0% of cities and 4.4% of rural localities).

The highest share of localities with access to the public sewerage system is registered in the capital city area (71.4%) and Gagauzia (15.6%), while the localities in the South and North have almost no access to such systems ( 5.4% and 4.7%), said the official NBS data for 2019.

Only a few localities from Moldova have access to decentralised sewerage systems with attached treatment plants and there are rare cases of households where home treatment plants attached to the individual sewerage system are built.

“In the 21st century, latrines must go down in history,” claimed the NAPH. In case the improvised toilets, built in the yards, are flooded, that could cause a real ecological catastrophe.

No sewage treatment plants

The rivers in the Republic of Moldova are highly polluted due to sewage that is discharged in rivers, as the National Environmental Center (NEC) warned. “The level of pollution and degradation of rivers is so high that we risk causing irreversible damage to the environment, which in turn endangers human life,” said the NEC representatives.

In 2019, 97.15% of the total volume of wastewater discharged in the central sewerage system was treated, as the national statistics reported. While in big cities this share was 99.55%, only 26% of the wastewater was treated in small villages. Let’s not forget also that only 4.4% of the rural localities in Moldova are provided with centralised sewerage system. That means that the biggest quantity of discharged wastewater in rural areas doesn’t reach sewerage systems and national statistics’ reports.

The polluted wastewater gets to the surface and underground waters and from there back to the water supply sources. Floodwater drastically worsens the situation, as even more pollutants reach the water Moldovans drink or use in agriculture.

Photo: gov.md

Continue Reading

Diaspora

Record remittances sent to Moldova during the COVID-19 pandemic – expert’s explanation

Published

on

The remittances sent by Moldovans from abroad reached a record level in May 2020. The last time there was a larger amount of money transferred from abroad was only in October 2014.

The economic policy expert Veaceslav Ioniță believes that the significant increase is, paradoxically, due to the COVID-19 pandemic. According to his estimations, during the period of April-May, when there were quarantine and closed borders, Moldovan citizens could not bring into the country around $150 million. Part of this money were transferred through official transfer systems, that reducing the amount of unofficial transfers, is noted in the opinion published on the page of the Institute for Development and Social Initiatives (IDSI) “Viitorul”.

According to the expert, one third of all money from abroad are usually transferred to Moldova through informal ways, without using any official money transfer channels. “Each year, Moldovans receive almost $1.2 billion through official transfers, but also they sell on the foreign exchange market about $2.1 billion. The difference of 900 million dollars per year is the money that is introduced into the country through informal ways,” said the expert.

The total recorded transfers between April to May amounted $227 million, that being $14 million more than in 2019. At the same time, the foreign exchange sales during this period represented only 50% of the last year’s amount – $259 million. “April and May 2020 were the only two months in the history of transfers, when the money came almost exclusively through official channels. This explains this ‘miraculous’ growth,” concluded Veaceslav Ioniță.

The number of Moldovan citizens aged 15 and over who were working or were looking for a job abroad was 352 700 in 2018, according to the National Bureau of Statistics (NBS) data. That represented 35,68% of the total available workforce of the country in the same year.

People living in the Republic of Moldova, along with the whole economy of the country, are greatly dependant on the remittances sent by the Moldovan citizens who live abroad. About 20% of all families with children in Moldova are supported by a family member who is a migrant. The concentration of such families in rural areas is three times higher than in urban areas, according to data from the NBS cited by the UNDP Moldova.

This money represent not only an important source of income for people living in Moldova, but also contribute to the increase of GDP nominal value. In 2018, the Republic of Moldova has been listed the 9th in a world ranking of remittances related to GDP, with a share of 16,1%, according to the World Bank data.

See also: Who? How? Where? Why? The migration profile of the Republic of Moldova

Due to the negative impact of COVID-19, remittances sent to Moldova are expected to decrease by 24-27% in the future, informed the UNDP Moldova. Decreasing remittance flows were predicted by the World Bank in the whole world. It was estimated that about 17% of all migrants have already stopped remitting to their families. In such a way, 23,4% of Moldovan households risk to be placed below the poverty line if they did not receive remittances.

Photo: Sharon McCutcheonUnsplash

Continue Reading
Advertisement

Latest News

Politics2 days ago

The effect of Russia’s constitutional changes on the Transnistrian region

A nationwide referendum is held in the Russian Federation between June 25 and July 1 in order to amend the constitution...

Environment5 days ago

A natural water cycle? The floodwater dangers that are neglected in Moldova

Due to heavy rains in Ukraine, Romania and the Republic of Moldova, the employees of the General Inspectorate for Emergency...

Diaspora7 days ago

Record remittances sent to Moldova during the COVID-19 pandemic – expert’s explanation

The remittances sent by Moldovans from abroad reached a record level in May 2020. The last time there was a...

Important1 week ago

The state of Public Health Emergency was prolonged until July 15. Restrictions that remain in place

The National Extraordinary Public Health Commission (NEPHC) decided, on June 23, to extend the state of Public Health Emergency until...

Reintegration1 week ago

The OSCE representative: “Earlier gains in the [Transnistrian] settlement process must not be lost.”

Last week, several discussions were held between Special Representative of the OSCE Chairperson-in-Office for the Transnistrian Settlement Process, Thomas Mayr...

Politics2 weeks ago

75 Moldovan soldiers will participate in Moscow’s parade. The WHO warned about the taken risks

75 soldiers from the Honour Guard Company of the Moldovan National Army were sent to Moscow on June 14 in order...

Important2 weeks ago

Global Peace Index 2020: Is Moldova a peaceful and secure country?

This year, the 14th edition of the Global Peace Index (GPI) Report was published. The index is world’s leading measure of global...

Advertisement

Opinions

Advertisement

Trending