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Besides Council of Europe Ministerial Committee reunion in Chisinau, which was a formal but rather prestigious event for Moldova, protest rallies staged by the opposition in front of the Russian Federation Embassy in Chisinau demanding evacuation of the Russian ammunitions from the left of Dniester - took the center stage last week. The on-going protest rallies determined Russian Foreign Ministry release a statement, which might be interpreted quite differently.

On the one hand, the negative reaction of the Russian Foreign Ministry to the protest rallies and their slogans might be well understood. On the other hand, opposition accused Russian Foreign Ministry that in its statement they were giving "instructions" on the way of handling protest rallies. This refers in particular to an excerpt of the Statement reading that Russian authorities were deeply concerned by the fact, that despite numerous official appeals, Moldovan Ministry of Foreign Affairs had failed to take measures to protect Russian diplomats.

One of the issues debated during the Parliament sessions was the draft state budget for 2004, which was passed in two readings after long debates. Opposition tried to prove that the budget figures were not realistic and insufficient for attaining economic, social, cultural objectives, etc. Majority faction in Parliament and the Government justified both the much-contested figures as well as the forecasts for next year economic growth.

Besides the draft Law on the State Budget, the Parliament examined a series of less important legal acts.

I. Law on Sample-Statute of the Village and City

ADEPT Comment: The law is part of the package of laws regulating the activity of local public administration created as a result of May 2003 local elections and replacing the old law on the sample-statute of the village and city passed back in 1995.

II. Draft law on the State Budget for Year 2004

ADEPT Comment: After many debates the Parliament finally approved the state budget in two readings, thus approving the concept and its main figures, as follows:

• revenues worth 5,647,000 MDL;
• expenses worth 5,307,000 MDL.

It is worth mentioning that for the first time in the last couple of years the Government came up with a budget proficit, needless to say, though, that it is not realistic, as the difference between the revenues and expenses - 340,000 MDL - is to be used to service foreign debts.

It is worth mentioning that Parliament passed a law amending the fiscal policy for the next year, thereby rejecting Government initiative to increase the land tax and cancel VAT reductions on the import of seeds, agricultural machinery and raw materials for drugs production. The Government thereby hoped to gain 300,000 MDL. However, the move met severe criticism from farmers and could have led to wider protest rallies, which obviously the incumbent ruling party could not afford a year before elections.

III. Draft law on establishing administrative sanctions for illegal actions of state representatives in economic units

ADEPT Comment: The draft adopted by the Parliament in the first reading completes Article 17423 with a new administrative sanction ranging from 200 to 300 minimal salaries for the following actions or offences:

• violation of state rights and legal interests in the process of establishing, operation, reorganization and liquidation of the company, where the state has a limited or additional liability or thereby its quota in the social capital is reduced, if the law does not allow for that;
• concealing the terms whereby state representative holds or has acquired patrimonial interest in the economic society and failed to notify the relevant state authority;
• concealing the information on economic and financial activity or any other kind of information from the state authority entitled to demand such information;
• failure or poor fulfillment of certain tasks granted by legal acts in the field.

If those actions are take in order to gain a profit, the sanctions would range from 2,000 to 3,000 minimal salaries. However, the draft does not clarify on whether the person perpetrating the said wrongdoings shall be able to preserve his/her position in the company, nor in the public service. This legislative gap might be addressed during the second reading of the draft law, however for this to happen deputies would have to come up with already ready amendments.

IV. Draft law on the modification of the Law on Compulsory Medical Insurance

ADEPT Comment: The draft defines the subjects due to pay compulsory medical insurance as of July 1, 2003:

• enterprises, institutions, organizations (hereinafter units) based in Hincesti rayon, regardless of the form of property or legal status, except for their branches, representations and other subsidiaries in other rayons of the Republic;
• employees of the units based in Hincesti regardless of the form of property or legal status, except for those working in branches, representations and other subsidiaries in other rayons of the country;
• units regardless of the form of property or legal status, based in other rayons of the country, namely branches, representations and other subsidiaries based in Hincesti rayon;
• employees of the units, regardless of the form of property or legal status, based in other rayons of the country, namely branches, representations and other subsidiaries based in Hincesti rayon.

Noteworthy compulsory medical insurance has been enforced in Hincesti since July 1, 2003 and is recommended for enforcement in the entire country. This is already provided for in the Law on State Budget for Year 2004 stipulating the collection of more than 500,000,000 MDL from the compulsory medical insurance. Needless to say, international organizations monitoring the implementation of compulsory medical insurance in Hincesti pointed to certain drawbacks in the even application of the law, which should be addressed prior to the enforcement of the system throughout the entire country. So far, Government did no commented on this.

V. Draft law on exemption from VAT devices for the assembly of glass heating furnace

ADEPT Comment: The draft adopted by the Parliament in the first reading exempts from VAT the devices necessary for assembling and reassembling glass furnaces in the property of domestic glass companies.

The fact that the draft refers exclusively to the state companies lead to severe criticism from foreign investors who own similar companies, but who have to pay all the taxes on furnace assembly.

One of the reasons for the adoption of the law was the fact that domestic factories were not modernized for a long time, whereas foreign investors pledged to renovate the factories immediately after their privatization in 1998-2000. They failed to do so and now are modernizing the factories without enjoying any insensitives.