● MONDAY, July 10
Marculesti International Airport to be managed by Ministry of Economy
The state-run company “Marculesti International Airport” will be transferred under the management of the Ministry of Economy. A decision to this effect was taken by the Government. Deputy Prime Minister Octavian Calmac, Minister of Economy, said the company “Marculesti International Airport” was founded in 2004 and occupies an area of over 265 hectares. It has complex infrastructure and this is the reason why a free economic zone was decided to be created on the airport’s territory. “Despite the taken measures, the economic and financial situation of this company has worsened. Only eight resident companies were registered in the free economic zone and only one of these the past few years. During the last three years, the company reported losses. Last year these totaled 54 million lei,” stated Octavian Calmac. According to him, the delimitation of the airport’s activities and the activities based in the free economic zone and the removal of the shortcomings in the management process can help improve things at this company. The Ministry of Economy was empowered to promote policies to attract investments to free economic zones.
Activity of state-owned and municipal enterprises to be regulated by new law
The activity of state-owned and municipal enterprises will be regulated by a new law whose draft was approved by the Cabinet and is to be passed by Parliament. The bill regulates the foundation, functioning and closing of state-owned and municipal enterprises, the management of property transferred to these, the reorganization or dissolution process, the composition, powers and responsibility of administrative bodies, etc. The draft law sets a share capital minimum of 5,000 lei for these enterprises and institutes a special legal distinct registration regime for public and social property so that this could not be sold. The powers of the administration board will be extended. The board will determine the performance indicators of enterprises and assessment criteria, will approve the business plan and will monitor its implementation, and will also select the enterprise’s manager at a contest. The powers of founders and managers of state-owned and municipal enterprises will also be extended. In particular, the founder is to authorize the purchase of property whose values exceeds 25% of the value of net assets or the sum of 400,000 lei. There will be set up censor commissions that will examine the economic and financial activities of enterprises, including the procurement procedures, each semester. The document also regulates the voluntary dissolution of state-owned and municipal enterprises given that about 320 state-owned enterprises now do not work and are to be liquidated. A two-year time limit is set for reorganizing state-owned and municipal enterprises into commercial organizations or public institutions. In 2016, the local public authorities managed 550 municipal enterprises, while the central public authorities ran 250 state-owned enterprises.
● THURSDAY, July 11
Johannes Hahn in Chisinau: Energy efficiency offers economic growth opportunities
Energy efficiency will be included in the agenda of the Eastern Partnership Summit of November 24. This will enable Chisinau to prove its determination to transpose the whole package of EU legislation to the national legislation, Deputy Prime Minister Octavian Calmac, Minister of Economy, said in a news conference given together with Johannes Hahn, Commissioner for European Neighborhood Policy and Enlargement Negotiations, and Dominique Ristori, the European Commission’s Director General for Energy, after the ninth informal EaP dialogue held in Chisinau on July 10. Commissioner Hahn said energy efficiency is a sector that offers economic growth opportunities, reduces dependence on foreign suppliers and increases security. “Energy efficiency is today a topical subject in large cities as well, not only in the EaP states. The EU assumes responsibility for following the direct impact of this sector so as to improve the situation in the region. This will enable to reduce greenhouse gas emissions and protect the environment,” stated Johannes Hahn. For his part, Dominique Ristori, said gas emissions are a problem that now affects everyone. “Not only the national governments, but all the key players in the region should become involved. Energy efficiency is crucial for security. These subjects will be discussed in the Brussels EaP Summit of November 24,” stated the Director General for Energy. Ministers of Foreign Affairs and Ministers in charge of energy efficiency from Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine had a meeting on the sidelines of the ninth informal EaP dialogue in Chisinau. The event was hosted by the Ministry of Economy.
Fuel price ceilings raised
After decreasing the ceilings for fuel prices two weeks ago, on July 11 the National Agency for Energy Regulation announced higher ceilings. Thus, as of July 12 the price ceiling per liter of gasoline will be by 0.30 lei higher, while per liter of diesel fuel by 0.37 lei higher. A liter of gasoline 95 will be sold for at most 16.32 lei, while a liter of diesel fuel for at most 13.98 lei. The new price ceilings will be in force until July 25. The National Agency for Energy Regulation requests to report cases when gas stations post higher prices than the ceilings on the green line +373 800 10 800 or through the email address anre@anre.md.
●WEDNESDAY, July 12
Personal exemptions for private individuals will be higher in 2018
The personal exemption for private individuals (incomes on which no tax is paid) in 2018 will rise to 11,280 lei, as opposed to 10,620 lei in 2017. The exemption for maintained persons will increase from 2,340 lei this year to 2,530 lei next year, with reference to the draft fiscal and customs policy for 2018 presented by the Ministry of Finance for public consultations with the business and expert communities. The taxation rates remained at the same level as now: 7% and 18%. But the taxable income rates increased. Thus, the tax of 7% will be imposed on taxable incomes of up to 33,000 lei, as opposed to 31,140 lei at present, while the tax of 18% on incomes larger than this sum. The amounts received in the form of financial assistance from trade unions will not be taxed if they do not exceed the forecast average official salary. Under the draft fiscal and customs policy for 2018, the legislation on the imposition of VAT and excise taxes will continue to be adjusted to the EU directives. The tax and customs concessions provided to duty-free shops will be gradually eliminated. The income tax will be imposed not only on luxury property as in 2017, but also on cars worth over 1.5 million lei. The public consultations will continue until July 17. Minister of Finance Octavian Armasu said effort will be made for this document and the 2018 draft budget law to be examined and adopted by the end of this year.
Six managers of Moldova Agroindbank fined
The Executive Committee of the National Bank of Moldova fined six managers of the commercial bank “Moldova Agroindbank”. The fines vary between 99,000 and 165,000 lei and come to over 760,000 lei. According to the central bank, the penalty was imposed as a result of an inspection at the bank during which there were identified violations of the Law on Financial Institutions and of regulations of the National Bank of Moldova. The identified violations refer to the non-meeting by the bank of the prudential requirements applying to lending, risk concentration, classicization of assets, etc. The fines will be transferred to the state budget. The members of the bank’s Administration Committee and of the Board were warned that harsher punishments will be imposed if the identified violations are not removed by the agreed date or if similar violations are committed again.
●THURSDAY, July 13
Over 6 tonnes of Moldovan apricots returned from Russia
More than 6 tonnes of Moldovan apricots were sent back by inspectors of Russia’s foot safety watchdog Rosselkhoznadzor as a result of phytosanitary inspections at the international checkpoint “Novyie Yurkovichi”. According to a press release placed on the website of the Federal Service for Veterinary and Phytosanitary Surveillance, oriental fruit moth was discovered in the 6.5 tonnes of Moldovan apricots. Therefore, the whole consignment was returned to the exporter. Contacted by IPN, head of the mass media section of the National Food Safety Agency of Moldova Constantin Rotaru said the Agency hasn’t been yet officially notified of this case. The Agency will react when it is informed about it.
Financial-banking system remains exposed to fraud, experts
The financial-banking system of the Republic of Moldova remains exposed to increased risks of fraud. Independent experts signaled attempts by the authorities to legalize embezzled funds, Transparency International Moldova and the Institute for Development and Social Initiative “Viitorul” say in a report on the monitoring of developments in the sector during December 2016-May 2017. In a news conference on July 13, ex-minister of finance Veaceslav Negruta, who is one of the report authors, said the memorandum signed by Moldova with the International Monetary Fund in November 2016 includes a series of recommendations that the Moldovan authorities should respect. Some of the set terms are not met, while the non-fulfillment of the undertaken commitments could endanger the dialogue with the IMF at the next meetings. Veaceslav Negruta noted that the authorities were obliged to carry out an audit at each of the commercial banks, centering on shareholder transparency, observance of the prudential lending norms, etc. The dialogue with the IMF could be also affected by the non-fulfillment of the commitment to ensure transparency in the case of the holdings that were put up for sale: 41% at Victoriabank, 42% at Moldova Agroindbank and 64% la Moldinconbank. “These shareholdings were blocked by the decision of the National Bank of Moldova. Transparency ensuring is a problem, probably the biggest one, and this can create big difficulties in the dialogue with the IMF,” stated Veaceslav Negruta. Transparency International Moldova president Lilia Carasciuc said the government informed the development partners that the commitments in the financial-banking sector were fulfilled, but civil society ascertained a different situation. At the insistence of civil society and the development partners, the draft law on capital legalization and fiscal stimulation was withdrawn as this favored the legalization of ill-gotten gains. Currently, the legalization of embezzled funds could take place if 40% of the state securities of the National Bank’s portfolio were purchased by investors with dishonestly obtained money, which could be later used to get financial resources from the state. “The burden would be borne by society again. The danger of fraud in the banking system persists. A similar risk exists in the insurance system, which is insufficiently transparent and is not in the focus of the state bodies. The financial sector develops absolutely non-proportionally to the current realities. We risk becoming a state that causes destabilization not only here, but also all over the world,” stated Lilia Carasciuc. The report on the monitoring of developments in the sector during December 2016-May 2017 was compiled by Transparency International Moldova and “Viitorul” within the project “A Case Based Approach to Fighting Grand Corruption”.
Investigation into banking fraud is slow, report
The investigation into the banking fraud committed in the Republic of Moldova is slow and the process is rather simulated. Nothing has been returned of the stolen funds, says a report presented by Transparency International Moldova and the Institute for Development and Social Initiative “Viitorul”. Ex-minister of finance Veaceslav Negruta, one of the authors of the report, in a news conference on July 13, said the steps taken by the authorities to recover the funds embezzled from the banking system haven’t yet proved their efficiency. The main finding is that the investigation of the theft of the US$ 1 billion hasn’t even started. “The investigation will start when the Kroll report I will be treated seriously by the authorities and these will begin to analyze what the report says. This gives names of players, information about operations, data transfer,” said the former minister. According to the expert, the investigation is stagnant and the money will not start to be recovered soon. “The promotion of the law on the creation of the Crime Assets Recovery Agency arouses concerns. The provision saying the institution’s employees will benefit from a particular percentage of the recovered assets is senseless,” stated Veaceslav Negruta. “A long period passed and particular assets can no longer be recovered. The state institutions intentionally delay the investigations and pretend to be taking measures. In reality, they created a corridor for other state budget frauds.” Veaceslav Ionita, co-author of the report, said the Government earlier announced that 1 billion lei of the embezzled funds was recovered. But this money actually has nothing to do with the bank fraud. 80% represents money paid by people who took out loans, while 20% was collected as a result of insolvency procedures from companies that encountered particular problems in repaying the money. “Nothing has been recovered of the stolen money until now,” he stated. Mariana Rata, of the Journalistic Investigations Center, said the judges who try the cases that involve Banca de Economii, Unibank and Banca Sociala and companies with toxic loans continue to make ordinances by which they legalize transfers of money from companies that raised loans to offshore areas. “By court, the procedure for confiscating pledged property is blocked,” stated the journalist. Transparency International Moldova president Lilia Carasciuc said the investigation is simulated. “Each day of delay in this investigation diminishes the chances of recovering the money. There is no other way out than to seek an international investigation,” she noted. The report on the monitoring of developments in the sector during December 2016-May 2017 was compiled by Transparency International Moldova and “Viitorul” within the project “A Case Based Approach to Fighting Grand Corruption”.
Parliament ratifies new IFAD agreement to support farmers
The MPs on July 13 ratified the financing agreement between the Republic of Moldova of the International Fund for Agricultural Development and the Fiduciary Fund for the implementation of the Rural Resilience Project (IFAD VII), which was signed in Rome on April 11, 2017. The value of the project is of US$ 23.7 million, US$ 5.5 million of which is in the form of grant. According to Deputy Minister of Agriculture and Food Industry Vasile Luca, the loan of US$ 18.2 million is repayable in 25 years, with a grace period of five years, at an interest rate of 1.25% and a service commission of 0.75%. As part of the project, there will be built 24 water supply networks for irrigation intended for 75 agricultural producers, with a potential to irrigate 1,400 ha. More than 700 jobs will be created to cultivate high value added crops on irrigated areas, 280 of which will be permanent. Also, there will be rehabilitated 12 road segments to facilitate the farmers’ access to production areas. These will benefit 50 enterprises and over 1,200 families from 12 villages. About 420 farmers will benefit from grants to implement climate change resilience measures, while over 450 micro entrepreneurs, 150 young entrepreneurs and at least 20 SMEs will get loans in preferential conditions. The treaty will take effect after the ratification law is promulgated by the President. The implementation period of the agreement is of six years, until 2022.
● FRIDAY, July 14
Results achieved by SMEs in 2016
The sales revenues of small and medium-sized enterprises (SMEs) last year came to 125 million lei, which is 41.5% of the total revenues in the economy. The SMEs numbered 51,600, an increase of 1,000 enterprises on 2015. These represent 98% of the total enterprises. The employees of SMEs in 2016 amounted to over 300,000 or 61% of the total number of employees in the national economy. According to the Ministry of Economy, 40% of the SMEs worked in trade. These accounted for about 49% (61 million lei) of the total sales revenues of SMEs. The SMEs in the processing industry represented 8.5% of the total. In 2016, 65% of the SMEs were situated in Chisinau municipality, 15% in the central districts, 12% in the northern districts, while 5% in the southern ones. The SMEs in Chisinau municipality reported sales revenues of 81 million lei (65%). Throughout the implementation of the program to attract remittances to the economy PARE 1+1, the investments were financed with the support of the EU. The provided grants added up to 152 million lei, while investments in the economy totaled e about 550 million lei. Thus, each leu provided in the form of a grant generated about 3.6 lei invested in the economy. Of the total number of beneficiaries, 57% invested in agriculture, 24% in the service sector, while 19% in production. The current ten business incubators host 144 companies that cumulatively employ 600 people. The turnover of these companies came to over 94 million lei on December 31, 2016.
● SATURDAY, July 15
Road tax for vehicles registered abroad to be decreased
The MPs adopted in the final reading a law that provides for the gradual reduction by 30% of the road tax for motor vehicles registered abroad. The informative note to the law says the given tax is now not imposed on vehicles registered in the states with which Moldova signed bilateral and multilateral agreements on road transport free from road taxes. It was established that despite the existence of such agreements on freight transportation, which envision reciprocal exemption from any type of road tax, the partner states do not fulfill the obligations deriving from these accords. Therefore, Moldova exempts practically all the foreign motor vehicles that enter or cross it and use its roads, but the vehicles registered in Moldova pay the road tax on the territory of the partner states. Also, the road tax for motor vehicles registered abroad is much higher compared with the similar tax in the countries of the region and this tax is paid by a low number of vehicle owners. According to the bill authors, now the foreign motorists bypass Moldova because the transit tax here is of €85, while in Romania and Bulgaria is of €11. Therefore, the tax will be gradually reduced by 30% so as to make Moldova more competitive. The law also envisions higher road taxes for large trucks registered in Moldova or abroad whose total weight or size exceeds the legal limits.
Law on credit bureaus passed in final reading
The MPs adopted the draft law to amend and supplement a number of legal acts that refer to credit bureaus in the final reading, by 74 votes in favor. The list of sources for forming the credit history was extended to ensure a broader financial profile of the applicant for a loan. Under the changes, the period for presenting information by the sources for forming the credit history was decreased from seven to five years. A series of provisions were introduced to protect the rights and interests of borrowers, such as the possibility of inserting a message in the credit history at the request of the borrower, in case of disagreement with the information included in the credit history, and of a warning message, if the identification papers are stolen or lost. If the lender refuses to grant a loan because of a negative history, the applicant will be able to get free a copy of the credit report. Changes were also made in the Contravention Code and the Penal Code. There were introduced penalties for non-observance of the legal rules and regulations of the National Commission for Financial Markets by the sources for forming the credit history and by credit history users and for non-implementation of the Commission’s recommendations following the identification of violations in their work.
