● MONDAY, December 12

Kazakhstan obliged to pay half a billion US dollars to Ascom group

The Svea Court of Appeal in Stockholm, Sweden, made a decision by which the Republic of Kazakhstan was obliged to pay half a billion US dollars to the companies “Ascom-Grup” and “Terra Raf Trans Traiding”. The court upheld the decision of the Arbitration Institute of the Stockholm Chamber of Commerce by which it was ascertained that Kazakhstan violated the provisions of the International Energy Charter Treaty. The Tribunal’s decision shows that Kazakhstan abusively expropriated and then managed the companies of Ascom group that explored and exploited oil and gas resources in this country. “The damage caused to the group as a result of the abusive and illegal expropriation of the companies “Kazpolmunay” and “Tolkynneftegaz” was assessed at US$1.5billion,” says a press release of Ascom group.

Patent holders dissatisfied with bill proposed by Government

The patent holders are dissatisfied with the fact that after the negotiations held within the Prime Minister’s Economic Council, where they asked to be allowed to trade based on patent for ten years, the Government proposed a bill that sets a period of two years only, until December 31, 2018. President of the Small Business Association Eugen Roscovanu said that if this deadline is also modified when the bill is debated in Parliament, the patent holders will mount protests. Eugen Roscovanu said the national economy is monopolized and the way in which the problems of patent holders are discussed show that the economic conceptions drafted by the Ministry of Economy are designed for large, transnational companies. On the one hand, this is not bad, but the national small and medium-sized enterprises should also be supported because they are the main provider of jobs. The president of the Small Business Association noted that in the negotiations held at the Government, the patent holders asked for a period of ten years during which to work in the old conditions, but conceded and agreed to five years. However, the authorities proposed a period of two years and the patent holders ultimately accepted. But these do not agree to work in markets only. They ask to be allowed to sell in places authorized by the local authorities.

Amendments to 2017 draft fiscal and customs policy approved

The tax levied from private individuals who lease out realty to other private individuals will be of 7%, as opposed to 5% at present, quoting amendments to the 2017 draft fiscal and customs policy proposed by MPs and approved by the Government. The drafter policy, adopted by Parliament in the first reading, proposed that this tax should be of 10%. By another amendment, a reduced VAT of 8% is imposed on biofuel used also to generate electricity. In the initial variant, the bill said the reduced VAT will be imposed only on the biofuel used to produce hot water and heat.

● WEDNESDAY, December 14

Business sector encouraged to use mediation services

Representatives of the business sector are encouraged to use mediation services as these are a swifter and cheaper method of settling disputes outside court and without needing a lawyer. According to experts, mediation can have a rather great impact on the national business sector, especially at the level of top companies that lay emphasis on image and confidentiality of internal conflicts. Iuliana Rotari, authorized mediator at the Chamber of Trade and Industry accredited by the Center for Effective Dispute Resolution, has told that mediation is an alternative form of dispute settlement between two or more parties, with the assistance of a third person. The mediator has the obligation to ensure the equality of rights in the mediation process. Though this service has been implemented in Moldova for many years, few people use it because its advantages are not known. Iuliana Rotari said the mediator is a qualified, equidistant and impartial person from outside who helps the parties reach a consensus so that both of the parties gain. The mediator does not intervene with decisional elements, but facilitates the communication so that the sides suggest proposals that meet their interests. This does not happen in a court trial, where the decision is taken by the judge. A court trial can last for one year to three years, while in case of mediation the dispute can be resolved in a day. Iuliana Rotari said the period of three years for an economic entity means a lot in terms of time and of costs, including for the services of a lawyer. Dispute settling by mediation offers the businessmen the possibility of avoiding the vulnerability that can be witnessed in a court trial.

Moldova borrows money from EIB for building Ungheni–Chisinau gas pipeline

The Government approved the signing of the financing agreement between the Republic of Moldova and the European Investment Bank (EIB) for building the Ungheni – Chisinau gas pipeline. Under the financing contract, the EIB will offer Moldova €41 million as a sovereign loan that will be on-lent to VestMoldTransGaz for making the investment. The pipe will be 120 km long and will enable the country to fully use the Iasi – Ungheni gas pipeline that was put into operation in 2014.

Deadline for presenting report on public property administration modified

 

The time limit for presenting the report on the administration and denationalization of public property was modified from June 15 to June 20. The extension of the deadline by five days forms part of the steps taken to correlate the activities of the Ministry of Economy and the Ministry of Finance, which ensure the financial monitoring of state-owned enterprises and joint stock companies in which the state has controlling interest or owns 100% of the shares.

● THURSDAY, December 15

Civil society formulates suggestion on capital liberalization and tax stimulation

Civil society is dissatisfied with the hurry in which the bill on the liberalization of capital and tax stimulation is promoted and suggests working out mechanisms for motivating the honest taxpayers who paid all the contributions to the state so far. Another suggestion is to separate the liberalization of capital from tax stimulation. The suggestions were formulated in public debates staged in the Parliament Building on December 14. Speaker of Parliament Andrian Candu said that under the bill, the capital will be liberalized on a voluntary basis and only those who want to take part will do this. “It is a right, not an obligation. The capital that can be liberalized includes financial resources and particular funds in national and foreign currencies in Moldova or abroad that are transferred at an exact time to the accounts of financial institutions in Moldova and abroad. The measure also refers to property that is underestimated and to units of transport that belong to commercial organizations and the private individuals are only co-owners,” stated the Speaker. He explained that the capital will be liberalized by two stages. At the preliminary stage, the people will declare what they intend to liberalize and there are models of applications showing how this is done. At the second stage, the liberalization application form is compiled and the liberalization tax of 2% of the value of the undeclared property or the difference between the declared and real value of tangible or intangible assets is paid.

● FRIDAY, December 16

Forecasts concerning investments in Moldova

The Government will make the largest investments in Moldova next year. The internal private investment depends too much on the banking system and does not have growth sources, while the foreign investors need time to gain confidence as regards the safety of investment in Moldova, considers project manager at the German Economic Team Moldova Jorg Radeke.The expert has told that the situation regarding private investment in Moldova is not very good because there are sources only from the banking system, but this is not in the best state. Jorg Radeke reminded about the theft committed in the banking system and about the fact that two thirds of the banks are under special supervision. These banks do not expand lending activities. On the contrary, they reduce them. They choose to close the loans when these were repaid without offering the clients the possibility of extending them if they needed. As regards foreign investment, the situation can improve next year, especially because Moldova has a new program with the IMF and this is a very good signal for potential investors. The condition is to ensure macro-economic stability and show wish to clean up the banking sector. The political situation in Moldova has improved and this will contribute to a higher level of foreign investment during the next few years.

Over 35 companies present select wines at Wine Show

More than 35 companies presented hundreds of select wines – red, desert and sparkling – at a Wine Show staged at the Palace of the Republic in the evening of December 15. The ninth show of the kind was held in an artistic atmosphere, with theater décor, living sculptures, mime artists and jugglers, under the rich tone of The Nutcracker. The visitors received by a glass with the logo “Wine of Moldova” to discover and correctly appraise the taste and aroma of good wines and by a tasting brochure with the exhibited wines. Furthermore, the visitors could purchase special wines directly from producers and take part in raffles. Gheorghe Arpentin, director of the National Office of Vine and Wine, said the Palace of the Republic was transformed into a real show window of authentic and quality wines. “You, dear producers, make our country famous through its wines and contribute to the formation of national treasures and to the creation of jobs,” he stated.

Wine declared food product

The wine was declared food product and the wine market will be liberalized, while the advertising of wine products will be permitted. The MPs adopted a relevant initiative proposed by unaffiliated MP Ion Balan in the first reading. The author of the bill said Moldova’s population during the last few years has consumed more strong alcoholic beverages with a concentration of over 40 degrees. They annually consume more than 150 million liters of beer, over 70 million liters of beverages with a high alcohol content and only 15 million liters of wine. In most of the cases, it’s not clear from what raw material the strong alcoholic beverages are produced.

Patent-based trade allowed by Dec. 31, 2018

Retail trade based on patent will be possible until December 31, 2018, but only in the perimeter of markets. The deadline was extended for two years for the reason that a transition period is needed for the patent holders to be able to adjust to individual entrepreneurial activity. The patent tax will be adjusted to the market requirements. A bill to this effect was passed by Parliament in two readings on December 16. Socialist MP Grigore Novac said in May the Socialist group registered a bill that was supported by patent holders. Afterward, the working groups constituted within the parliamentary commission and the Government agreed one thing, but in the bill there was introduced another thing. Until there is no alternative for this category of entrepreneurs, they should return to this initiative and agree how these traders will work when the deadline expires.

Parliament passes law on capital liberalization and tax stimulation

The draft law on capital liberalization and tax stimulation was adopted by the MPs by a majority of votes in the first reading. This provides that the Moldovans will be able to liberalize the capitals maintained in the underground economy and those from outside the system. One of the bill authors, Speaker of Parliament Andrian Candu said the bill does not provide for the institution of tax amnesty. The fines and penalties will be forgiven only if the business entities pay the main debt to the state budget. Over 105,000 taxpayers have debts of about 880 million lei to the state budget in the form of overdue fines and penalties. The main debt to the state totals 1.1 billion lei. Even if the state loses the 880 million lei, it will gain another 1.1 billion lei as the people will be stimulated to pay the main debts. The Speaker noted it is estimated that the underground economy represents over 30% of the GDP in Moldova and mechanisms are needed to make this economy legal. The liberalization of capital is one of these mechanisms. If the people want to assess property at the market value and sell it, this law will enable them to do this by paying a tax of 2% of its value as liberalization tax.

● SATURDAY, December 17

Law on subsidization in agriculture and rural development adopted

As of 2017, the subsidization system will be regulated by the Law on the principles of subsidization in agriculture and rural development. The law, which is a priority of the Ministry of Agriculture and Rural Development, was adopted by Parliament in the second and final reading by the votes of 81 MPs on December 16. The Ministry, in concert with the Agency for Intervention and Payments in Agriculture, had worked on this law for over two years. The authors of the bill said this way the system for subsidizing agricultural producers will be improved and adjusted to the European good practice. In particular, it will be possible to plan and agree support measures that can be subsidized in accordance with the national agriculture and rural development strategy for a period of at least five years, ensuring thus the continuity of the support measures. The law also specifies the principle of forming the subsidization fund and stipulates benefits for young farmers and measures to stimulate the national producers of equipment.

Export tendencies in Transnistrian region

Almost one third of Transnistria’s exports are directed to the EU member states, where goods to the value of over US$152 million were delivered in January – November this year. Exports to Russia came to slightly over US$41 million, which is 8.5% of the total. The author of an analysis published on the website of the agency Novosti PMR says that even if these data cover 11 months, they are relevant for deducing the trends for the whole year 2016. In general, the commercial exchanges of the Transnistrian region declined by 22% compared with the corresponding period last year. Exports in 11 months came to US$489 million, while imports amounted to US$764 million.

Forecasts for exchange rate in 2017

Next year the Moldovan leu could appreciate against the euro and dollar given that money from the International Monetary Fund, the World Bank and the European Union is expected to come to Moldova, said project manager at the German Economic Team Moldova Jorg Radeke. The German expert said the National Bank most often addresses the German Economic Team Moldova with the question if the exchange rate was set in accordance with the market trends. According to him, the current exchange rate corresponds to the macroeconomic trends in the country and the region.