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Moldova likely to pay $58 million debt to Platon-associated energy company, case returns to Paris Appeal Court

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The government of the Republic of Moldova is likely to be obliged to pay a $58 million award to Komstroy, an Ukrainian energy company closely associated to now-imprisoned oligarch Veaceslav Platon.

As Law360 reports, the award was reconfirmed by the U.S. District Judge Christopher R.Cooper on 23 August, when Moldova was rejected the claim that it had “been denied due process” in an arbitration case within an ad-hoc arbitral tribunal in Paris. Back in 2013, the tribunal concluded that Moldova had violated an investment commitment under the Energy Charter Treaty (ECT) by not paying debts owned to Komstroy’s predecessor (LLC Energoalliance- based in Ukraine) on the deliverance of electric power in 1999-2000. Thus, the Moldovan government was allegedly owing around $46,5 million. The tribunal’s decision was disputed by the Moldovans at the Paris Court of Appeal, which subsequently ruled in 2016 that the ad-hoc tribunal “misinterpreted the subject debt as an “investment” under the ECT” (Case No. 14-cv-01921 (CRC)). In its attempts to find recognition of the tribunal’s decision, Komstroy asked the D.C. Court to examine the case, even though the French Cassation Court returned the case to the Appeals Court in 2018.

Notwithstanding the ongoing proceedings in Paris, the US Court ruled in late 2018 that the award can be enforceable and more importantly, its amount could be increased to nearly $58 million, considering the exchange rate from the award date.

After the ruling on 23 August, Gene M.Burd, attorney for Komstroy, told Law360 that it’s “pleased” with the US Court’s decision to determine the Paris ad-hoc tribunal’s right and scope to act upon the role demanded by Moldova and the Ukrainian energy company.

Moldova’s Justice Minister, Olesea Stamate, rushed (on 11 September, when the US court decision got out into the wild) to explain that the payment of the award can be enforceable only after the Paris Appeals Court issues a final ruling at the end of the month. As quoted by Ziarul de Garda, Stamati dismissed Komstroy’s claim as a a “scheme that was applied by some persons to milk the public budget”, describing the debts as “bogus”, “sold at double price”. In addition, the Minister announced that Moldova contested the US court decision.

As Sic.md explains in a fact checker, Moldova’s problems began back in Paris, where lawyer Victor Volcinschi was reportedly defending the position of the Ukrainian company instead of the Moldovan side. Additionally, the new law firm, Bukh Law Firm, subcontracted in December 2018, was not paid between February and April 2019 by the previous Democrat government, putting the whole defence at risk.

According to sic.md, LLC Energoalliance is associated with the more-than-controversial oligarch Veaceslav Platon and his involvement in the even more famous Russian Laundromat.

Important

All you need to know about the local elections held in Moldova on October 20th

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898 mayors, 10 472 local councillors, as well as 1108 district and municipal councillors run in the local elections held in all administrative-territorial units (municipalities, district, cities and villages), except for the localities on the left bank of the Dniester and the municipality of Bender on October 20th.

According to the data provided by the electoral authorities (Central Electoral Commission), there are 3 285 894 people in the State Register of Voters, out of whom 2 818 228 are voting citizens. The voter turnout was 41.68% at the national level, therefore the local elections were validated.

Local elections’ results

In the first round, 518 mayors were elected in Moldovan localities: 191 mayors from the Democratic Party, 124 represent the Socialist Party, while the political bloc ACUM has 82 mayors. The Liberal Democrat Party has 26 mayors, the “Șor” Political Party -13, while “Our Party” is represented by 10 mayors. 4 elected mayors are from the Communist Party, 2 represent the Party of National Unity, whereas the Romanian Popular Party and the Liberal Party are represented by one mayor each. At the same time, 64 elected mayors were running as independent candidates.

Such big cities as Bălți (Renato Usatîi, the candidate of “Our Party”), Cahul (the independent candidate Nicolae Dandiș) and Orhei (the candidate of “Șor” Political Party Pavel Verejan) already elected their mayors.

As mayors shall be elected with 50% plus one vote, some of the candidates didn’t manage to cross the threshold. Therefore, the second round of elections will be organised in 380 localities (including in Chișinău) on November 3rd.

The candidate of the Socialist Party Ion Ceban, who has accumulated 40.19% of the votes, and the candidate of ACUM Andrei Năstase, who was elected by 31.08% of voters will be running in the second round.

It is interesting to note that the elections results in Chișinău follow the same pattern as in June last year, when the same two candidates run for mayor of the capital city, obtaining almost the same results in the first round.

More about the local elections’ results here.

Snap parliamentary elections’ results

In parallel with local elections, snap parliamentary elections were held for 4 single-seat constituencies, after Andrei Năstase, Maia Sandu, Viorel Melnic and Vladimir Plahotniuc gave up their parliamentary mandates.

After processing all minutes, it was established that the mandates were distributed as follows: one to the Democratic Party, one to the Socialist Party, and two to the political bloc ACUM, according to the preliminary data presented by the Central Election Commission (CEC).

Observation Missions

The Promo-LEX Observation Mission for the general local and new parliamentary elections found 743 incidents reported by its observers, including cases of observers’ intimidation, cases of presence of advertising materials, posters, electoral displays within the precinct (100 meters from the polling station), cases of electoral/ negative campaigning to influence the choice of voters, cases of rumours, attempts or even cases of material or monetary rewards offered to voters to influence their choice, cases of organised transportation of voters, cases of unjustified presence of unauthorised persons in the polling stations or within 100m of it, cases of acts of violence or intimidation of voters, cases of unjustified group voting, as well as cases of photographing of the ballot papers or other violations of the secret of voting, etc.

As compared to the parliamentary elections of February 2019, when the members of the Promo-LEX Observation Mission reported 1020 incidents, the current number of reported incidents was lower.

At the invitation of the Moldovan authorities, the Congress of Local and Regional Authorities of the Council of Europe delegated 11 teams of 24 observers to observe the local elections around 180 polling stations across the country.

“Generally, the elections were organised by well-prepared committees, the voting was conducted in an orderly manner and the counting was done in a professional manner,” declared Vladimir Prebilic, the Head of the Congress delegation, at a press conference, reported the official Council of Europe page.

The budget

The Central Election Commission has planned a budget of 84 million lei for the first round of local elections. The second round could cost almost 27 million lei, according to the CEC Decision no. 1874 of November 14th, 2018 regarding the approval of the budget of the Central Election Commission for 2019.

More about the elections’ process and candidates here.

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Economy

EU4Moldova.md – the platform of EU-funded technical assistance projects in Moldova was launched

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The Delegation of the European Union to Moldova has launched a new platform – EU4Moldova.md, which displays information about the projects realised and funded by the EU in the Republic of Moldova in various sectors, such as DCFTA (Deep and Comprehensive Free Trade Area), Agriculture, Economy and Business, Energy, Transport and Infrastructure, Environment and Sustainable Development, Justice and Police, PA (Public Administration), Culture, Science and Education, Health Care, Civil Society and Human Rights, as well as Cross Border Cooperation.

On October 15th, the presentation of the platform took place. The head of the EU Delegation, Peter Michalko, mentioned that during the entire period of cooperation, over 1 000 projects were carried out in Moldova, which had a direct impact on about 500 000 citizens and, indirectly, almost on the entire population of the country, reported INFOTAG News Agency.

“There have been projects in the field of economy, small and medium-sized enterprises, which have created about 15 000 jobs. We provided significant assistance to businesses, local public organisations, and offered young people opportunities to establish contacts and relationships with their European peers,” said Michalko.

The head of the EU delegation noted that the platform is a representation of the fact that the EU support encompasses all localities and all citizens of the republic.

“We provided assistance to the consolidation of state institutions. At the same time, the field of justice is important, […] so that citizens can live in a country where fair justice, equality before the law, fight against corruption and money laundering are priorities.”

At the same time, the Minister of Foreign Affairs and European Integration, Nicu Popescu, considers that Moldova must set its strategic objective to move from the consumption of external financial assistance to its granting. As Nicu Popescu stated, it is necessary to increase budget revenues through implementation of the budget reforms, corruption fight and investment attraction. The budget surplus must be directed towards the self-development of social and economic infrastructure, afterwards to support of other countries.

“We, as a society, must not end up in the situation when we ask for help. Our partners in foreign capitals kindly offer their help. But I do not feel comfortable in such a situation and we, as a society, must not perceive the fact that we always ask for help as a normal situation. Our task is to use external assistance, but also to ask ourselves the question: how can we help achieve EU priorities?” he said.

Source: eu4moldova.md

According to EU4Moldova.md, Moldova is the largest recipient of EU aid per capita in the European Neighbourhood, receiving more than 600 million euros from the EU funds. The largest amounts were directed to the Transport and Infrastructure, Justice and Police, and Energy sectors.

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Economy

Unaffordable prices for low quality transportation services in Moldova or the apple of discord among carriers and the Government

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The Employers Association of Car Transport Operators from Moldova organised a protest yesterday and today. More than 250 transport units have been brought to the city centre of Chișinău, and about 250 other units are stationed in villages and district centres. That means 586 trips of 124 regular routes were suspended.

The carriers require the adjustment of the tariffs for transportation by doubling them (from 0.48 lei/km to 0.92 lei/km). On the other hand, the Government officials consider that only after providing decent transport conditions for passengers, the request of tariff adjustment can be discussed. In the meantime, people have to wait for hours for public transportation all over the country.

The <<Marshrutka>> phenomenon

The public transportation in Moldova is not expensive at all from an outside perspective. There are few countries on the European continent where one can travel from the airport to the city centre of a city for 0.10 euro. The prices for longer distance travel using mainly the so-called marshrutkas (fixed-route minivans) and sometimes buses may also look more than affordable. Nonetheless, due to low income, these prices seem high for the main client segment – the local population.

Moreover, passengers in Moldova accept and tolerate to travel standing and ‘packed like sardines’ (as local people like to say) sometimes their whole route. Some people still approach the driver to pay, that meaning their ticket money are not officially recorded and paid. The schedule of busses and minivans is sometimes confusing and not accurate, the transport services being provided on old and insecure vehicles.

The protest of transportation companies

According to protesters, the last change of tariffs took place six years ago and they incur losses because of this. Oleg Alexa, the president of the Employers’ Association of Car Transport Operators, explained for Moldova.org that there is a Government decision, approved ten years ago, which provides for the adjustment of tariffs in the transportation area once a year. However, the decision was not respected. The last adjustment of the tariffs was made six years ago, in November 2013, and was obtained by addressing the matter to the court. That time, the tariffs were increased from 0.38 to 0.48 lei/km.

“We are basically all bankrupt and we have a staff shortage of 3,000 employees.”

At the same time, during the negotiations with the representatives of the Ministry of Economy, the carriers have presented a list of proposals that could cause the tariff not to increase so much. That means carriers require partially maintaining the current conditions of passengers’ transportation, namely reusing transport units, transporting passengers standing up to 50 km, combating illicit passenger transport, importing transport units up to a certain age, eliminating abusive tax controls, etc. If the authorities will consider the carriers’ proposals, they would be willing to accept a lower tariff than the one requested during the protest, as Oleg Alexa stated.

At the same time, the Ministry of Economy and Infrastructure declared that the Government is against increasing the tariffs on transport, specifying that the adjustment of the tariffs can only be discussed after the passengers will be provided with civilised travel conditions.

In a press release, the Government disapproved the decision of the carriers to suspend 600 trips, thus blocking the movement of citizens, motivating the strike by the refusal of the Ministry of Economy and Infrastructure to increase the tariffs on national road services.

The experts’ opinion

Economic experts say that the request of the carriers is justified, but the tariffs should be increased gradually, in order to not affect the citizens.

The economic expert Veaceslav Ioniță declared that the carriers have at least 50% higher costs as compared to six years ago. This is mainly due to the basic components of tariffs – employees’ salaries, the cost of spare parts and fuel price, which have all increased.

According to him, the authorities impose more and more stringent requirements on the carriers, which means that the carriers can no longer use old cars, but have to buy well-maintained cars, that implying additional costs.

As for the requested increase of tariffs, the expert claims that it is obvious that the carriers “requested an exaggerated tariff, hoping that they will reach a middle ground at the negotiations.” In the same context, he noted, however, that the current government has a reason to be upset about the carriers. This is because they have not taken such actions in the past, during the six years since the tariffs were maintained.

At the same time, Ioniță warned that tariffs are politicised in Moldova. “They are approved by the authorities. It is not an independent regulation. Because of this, carriers are also vulnerable,” claimed Ioniță.

As it seems, the protests of the carriers will continue and the public transportation problem in the Republic of Moldova will not be so easy to be solved, as several contradicting interests exist. One thing is clear: Moldovan passengers of national and international routes have to suffer in this situation.

Photo: ipn.md

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