1. Parliament
All three plenary sessions of the Parliament covered in this issue of the e-Journal (1-4 July, 7-11 July and 14-18 July) were boycotted by the faction of the Social Democratic Alliance (SDA), which holds 15 out of the 101 deputy seats. The boycott came as a sign of protest against the failure of the Moldovan rulers to meet the SDA's demand to re-employ the individuals who had been earlier fired for collecting signatures in support of the legislative republican referendum on changing the electoral system. With the social democrats absent, the debates in the Parliament have been held between representatives of the Communist Party of Moldova and the People's Christian Democratic Party. Among the most important legislative acts adopted are the following:
Via the Decision on the Participation of National Army Military in Humanitarian Actions in Iraq, the Parliament decided that Moldovan military who are employed in the National Army on contractual basis will be deployed for humanitarian actions in Iraq, along with their equipment, machines and weaponry. Allegedly, this decision has been preliminarily agreed with the US Military Department that seems to favour the military from the "new Europe" over those from the "new Europe" for such actions. Presumably, Moldova will enjoy considerable technical and material benefits from the deployment of its troops to Iraq.
Through the Law on the Amendment of the Fiscal Code the Parliament has introduced a series of fiscal facilities for enterprises with foreign investment. The law provides for a number of conditions under which such enterprises are exempted from the income tax fully or partially and for a certain period of time.
The draft of the Law on the Status of Military Force, adopted in the first reading, provides for the entry, provisional stationing, transit and exit of foreign military troops on the soil of the Republic of Moldova. The law expressly prohibits the political activity of any foreign military force or of its civil component on Moldovan soil. The contents of the draft law is problematic for a number of reasons, the most important being a clause in the Moldovan Constitution expressly prohibiting the deployment of foreign troops on Moldovan territory. At the same time, the new law might allow for the legalisation of the stationing of Russian troops on the left bank of Nistru River should a bilateral agreement to that effect be concluded. The opposition has interpreted this as another attempt at the independence and constitutional norms of Moldova.
The draft of the Law on the Amendment of the Constitution of Moldova, adopted in the first reading proposes to introduce a few amendments to the Constitution in relation to the status of the territorial autonomous unit Gagauz Yeri. The most important amendments provide for granting the Gagauz People's Assembly the right to legislative initiative and for granting the Gagauz Yeri autonomy the right to self-determination in the event that Moldova loses its independence. Both provisions have been called into question by the parliamentary opposition, the one related to the right to legislative initiative being deemed an especially dangerous one given that at present there is no institution to legally challenge or cancel the decisions taken in Comrat.
The main change made through the Law on Amending the 2003 State Budget Law relates to raising the budget revenues by over 600 million lei ($1 ~ 14 lei) and establishing a budgetary increment of 298 million lei. The main source for the raise will be a loan from the National Bank of Moldova worth over 590 million lei, which will be used to pay off the public foreign debt. These new provisions have caused the suspicion of certain opposition MPs with regard to the correctness of the Government proposals. In response, the Finance Ministry has claimed that a series of grants have already been negotiated to pay back the National Bank loan.
The Law on Granting the Government the Right to Issue Decrees enables the executive to issue decrees in fields that do not fall in the category of organic laws, for the period in-between the parliamentary sessions. The Government will be able to issue decrees in fields related to ensuring the food, power and national security, as well as public order and emergencies. Many analysts have pointed out that there has been no need for a special law to enable the Government to issue decrees, given that for more than three years, a constitutional norm on legislative delegation, which confers the Government the said powers, has been in force in Moldova. The fact that the Government has used this norm only once is explained by many as a sign of unwillingness to assume responsibility in important issues, even when it is essential for the fulfilment of its immediate objectives, in order to avoid confrontation with the parliamentary majority.
Law on the Normative Acts of the Government and of Other Public Authorities determines the rules of initiating, developing, examining, approving, drafting and issuing of normative acts subordinate to laws, except for individual and political acts and those that do not include legal provisions. The said normative acts will be issued on the basis of a series of principles, including those of coherence and subordination to the law, succession and balance of regulations, scientific foundation, transparency, publicity and accessibility etc. The general purpose of the law has been to introduce clear regulations on the procedure of initiation and issue of normative acts so that the process is as transparent as possible and lobby or department interests, that do not correspond to the general interests of the society, are prevented from being promoted.
Earlier, at the end of 2001, the Parliament adopted the Law on Legislative Acts that provided for the same objectives and tasks. However, an analysis of the process of elaboration of legislative acts during the past year does not reveal an essential improvement in this field, the procedure of drafting and promotion of legislative acts is still far from being a transparent one and their grounding is still deficient. This can be explained by the fact that the parliamentary majority often has to approve of drafts submitted by the Government, since these are part of the policy promoted by the majority, and the economic, social, environmental or other sort of expertise might not approve of the given drafts. On the other hand, the deputies submit and promote legislative drafts that do not meet the above norms because the deputies do not have the necessary skills and abilities to undertake the legally required expertise and argument of their drafts.
The Parliament adopted in the final reading the Code on the Railway Transports. The adoption of an organic law in the field of railway transports is welcome, given that until now the field functioned on the basis of a regulation adopted dozens of years ago and which is largely inapplicable in conditions of market economy, even though the enterprise has retained its public status. On the other hand, the lack of clear regulations to date has created leeway for abuses by railway authorities and satellite enterprises have been found to exist and to harness considerable revenues that would normally belong to the state budget.
The main objective of the Law on Declaring the Wine Making Factory from Cricova as National Cultural Patrimony has been to protect this site and remove it from the list of enterprises liable for privatisation. Earlier, international financial bodies had asked to include the factory in the list of enterprises intended for privatisation as one of the conditions for resuming foreign funding to Moldova. To date, no information has been published whereby the IMF or the WB has given up on its condition. A number of assumptions can be made in relation to why the deputies have voted for this law: they either have already secured foreign funding, or they hope to persuade the foreign donors that Cricova factory is an object of national patrimony, or they hope that this decision will pass unnoticed by September, when the IMF is to examine the resumption of funding to Moldova or that the IMF will not look into Moldova's relations with the World Bank.
The draft of the Law on the Amendment of the Law on the Status of the Local Elected Officer, adopted in the first reading, proposes to bring the said law in line with the new Law on Local Public Administration. In particular, the amendments envisage changing the definition of the local elected officer, the incompatibilities and restrictions in exercising the mandate of local elected officers, the procedure of control of legality of the acts of the local public administration etc. A series of provisions refer to the social guarantees to be created for the former mayors and the local elected officer who held leadership posts in county councils and district executive committees.
2. Government
Personnel changes
Raisa Apolschii was appointed Parliamentary Attorney, and Nicolai Kalin was appointed Head Administrator of the Chisinau Free Trade Area. Nicolae Cernomaz, Moldova's Ambassador to Ukraine, according to a governmental decision, will cumulate the position of Ambassador to Georgia.
Decisions
In issue no. 9 of the E-journal we reported that following the signature of a Protocol between the customs offices of Moldova and Ukraine, whereby the Ukrainian authorities undertook to recognise only the customs stamps of Chisinau, the Government decided to allow the economic agents from the left side of Nistru River to register provisionally with the State Register of Enterprises and Organisations of Moldova to facilitate their import-export operations. This requirement was qualified by the Transdnistrian leaders as an "economic blockade" as well as an attempt to "acquire Transdnistrian property in order to privatise it later". Moreover, the Tiraspol leaders have threatened that they will withdraw from the negotiation process and will apply a "complex of measures in reply to the adverse moves of Moldova". Under these circumstances, the Government of the Republic of Moldova has issued a statement in which it argues for the need to introduce the above procedure and deplores the non-constructive attitude of Tiraspol, which is being blamed for misinterpreting the essence of actions took by Chisinau. In response, the Tiraspol administration introduced on 14 July 2003 a customs tax worth 100% of the price on all goods imported from Moldova. The Ministry of Economy of Moldova declared this decision of Tiraspol as one which is not founded on economic motives given that the deliveries from Transdnistria are internal rather than of import and one that will affect negatively the negotiation process. Later the Chisinau officials decided to provide new facilities for the registration of economic agents from Tiraspol who are engaged in import-export operations and have pleaded for cancelling the 20% value added tax on goods delivered from Transdnistria.
The Government instructed ministries, departments, local public authorities etc. to ensure the efficient preparation of the national economy for the winter season. According to this decision, during one week, special commissions are to be set up in municipalities and districts, which will be responsible for the supply of energy and heat and ensure a rigorous control over consumption. The decision also provides that the electric and thermal energy and natural gas will be supplied to consumers on the basis of contracts and only to those who have paid off their consumption debts.
The Government approved the draft law on the amendment and additions to the 2003 State Budget Law, which provide for an increase of revenues by 635.5 million lei and of expenditure by 163.3 million lei. Most of the revenues to the budget will originate from the extra payments of the VAT by 299 million lei, an increase in non-fiscal payments by 63 million lei, of fines and sanctions by 25 million lei, and from grants worth 303 million lei, negotiated with the EU, the Netherlands and Sweden. At the same time, the returns from excises will drop by 118 million lei, and the revenues from the privatisation of certain economic units - by 636.7 million lei. Thus, it is to be mentioned that the budget deficit will be 298.2 million lei, which is 97.2 million lei more than initially foreseen, and the amount foreseen for paying off foreign loans will increase by 608.5 million lei this year, and reach 1, 354 million lei, while the internal state debt has risen by 785.9 million lei, reaching 3,616.4 million lei. These figures show that the GDP is on rise not due to an increase in local production, but as a result of massive imports, and that upon the drafting of the 2003 budget the revenues from privatisation have been overestimated.
On 9 July 2003, the Government decided to merge the National Agency for Regulation of Energy and the National Agency for Regulation of Telecommunications and Information Technology into the National Agency for the Protection and Development of Competitiveness, and at the same time suspended the former's decision to increase, as of 1 July, the fees on electricity and natural gas. The merged institution might reconsider the fees on communal services in one month, during which time the regulations for the activity of the new agency are to be worked out.
The Government decided to apply for 200 as of 1 August 2003 an anti-dumping tax worth 40% on sugar imports. The move was requested by the State Authority for Anti-dumping Measures, which followed up on a request by the union of Associations of Agricultural Producers "Uniagroprotect" and the Union of Sugar Producers. According to another government decision, the economic agents have been obliged to apply by 1 January 2004 to the field offices of the State Registration Chamber for a Single State Registration Code. This measure is intended to manage adequately the data on the activity of the Moldovan economic agents.
3. Presidency
President Vladimir Voronin chaired on 1 July 2003 the National Council for Sustainable Development and Poverty Reduction, which examined the first draft of the final version of the Strategy for Economic Growth and Poverty Reduction. The President mentioned that the Strategy should include the application of programmes of gas provision and recovery of the winemaking industry as prerequisites for economic growth. Mr. Voronin also mentioned the need to draft a long term proposal on the development of the state to include the strategy, which, in its turn, is to meet the budgetary constraints, identify clear medium-term priorities and be tightly correlated with a corresponding action plan. The strategy was to be drafted by 31 March 2003, yet due to the lack of clarity with regard to its priorities, its financial inconsistency and the poor participation of the civil society in its drafting, it has been delayed for another half a year, upon the agreement of international financial institutions. In this context, during one of its meetings, last week the Government proposed to draft the final version of the strategy by 31 July, put it up for public debates by 4 October, and finalise it by 30 November 2003.
Vladimir Voronin took part in the meeting between the central executive authorities and the chairmen of district councils. President Voronin assured the chairmen of central power's full support and asked them to contribute to the social and political stabilisation in districts through the resolution of issues faced by the local public administration, the permanent co-operation with the mayors, the recovery of the system of consumption co-operation, including in purchases of wheat, and through the promotion of consolidation of agricultural lands on the basis of the free association of farmers and in accordance with the requirements of the market economy. The head of state also asked the chairmen of districts to observe the structure of leadership bodies of the territorial administrative entities, although it seems that these will have to undergo many more changes and adjustments even if the Parliament votes for the draft amendments to the Code on Administrative offences. These amendments have been adopted by the Government on 9 July 2003 and provide for fines worth 70 to 100 minimal salaries for the central and local budget institutions that will exceed the legally established personnel quota.
On 8 July 2003, the President met Aleksandr Voloshin, the Head of the Administration of the President of the Russian Federation, with whom he discussed about the upcoming official visit of the Russian President Vladimir Voronin to Chisinau, the economic relations between Moldova and Russia, as well as the Transdnistrian issue. In the context of the latest developments in relations between Chisinau and Tiraspol determined by the inclusion in the State Registry of Enterprises and Organisations of Moldova of 573 economic agents from the left bank of Nistru River, President Voronin assured the Russian official that the actions of the Moldovan authorities will not affect the interests of the Transdnistrian population or the rights of Transdnistrian enterprises. Reiterating the option of Chisinau authorities for an asymmetrical federation, the head of state declared that in the near future he will initiate the adoption by the Parliament of a Conception of National Policy, which will contribute to the widening of the rights and opportunities of participation in the public life of representatives of all national minorities.
The President of Israel, Moshe Katsav, paid an official visit to Moldova upon the invitation of President Vladimir Voronin. The two Presidents met on 10 July and signed two bilateral agreements on fighting illicit drug trafficking and abuses and on technical co-operation in the field of transports. Given the occasion, an economic forum of Israeli and Moldovan businessmen was held in Chisinau, during which President Voronin held a speech. He mentioned three factors that one could build on with a view to deepening the economic relations between the two states. The Moldovan President singled out the economic successes achieved by the current Moldovan Government and the favourable legislative framework for foreign investments, and encouraged the Israeli business people to invest in the Moldovan transports, communications, agriculture, tourism and high technologies spheres.
II. Studies, analyses, comments
1. Export Promotion: on Paper
by Anatolii Gudim
Under the IMF trade restrictions classifications scheme, Moldova's regime is rated "1" - the most liberal category. This is what is called "trade on paper". But in Moldova there is also "trade in practice" that the state hampers through its ministries, departments and agencies by creating multiple barriers and traps - officially and unofficially, in order to feed the corruption. This has to be fought somehow. And the Government does that… on paper.
Recently, a grateful domestic producer discovered the following document in the "Monitorul Oficial al Republicii Moldova" (The Official Monitor of the Republic of Moldova), No. 41-145 of 11 July 2003:
Decree No. 72-p, 7 July 2003
Reaching sustainable economic growth depends on favourable investment climate that guarantees the lack of any official and unofficial obstacles to the activity of economic units engaged in export. With a view to fulfil this task and a more effective execution of the Decision of the Government of the Republic of Moldova No. 478 of 22 April 2003 "On the elimination of obstacles to the export of commodities", ministries, departments and agencies are to take the necessary actions to facilitate exports and provide for the necessary support to economic units-exporters. The above-mentioned bodies and their employees are to guide their actions upon the norm that stipulates that decisions on export, price and its method, including purchase of commodities through the Commodity exchange, is reserved to economic units only.
Prime-Minister of the Republic of Moldova
This masterpiece of the State Chancellery shows that even after 12 years of transition to market economy, when more than 85% of GDP is formed by the private sector, not all employees of ministries, departments and agencies realise that "decision on export, price and its method" does not belong to them, but to economic units! What did the previous decision of the Government stipulate in this regard? Quote:
Decision No. 478, 22 April 2003
On elimination of obstacles to export of commodities
With a view to achieve sustainable economic growth, facilitate export of domestic products through creation of favourable conditions for economic units, eliminate all technical obstacles to export, as well as to introduce some new restrictions of this kind, the Government decides:
- Ministries and departments are prohibited to set any restrictions through departmental normative acts, inquiry of additional documents, besides those determined by normative acts regulating external trade, and establishment of indicative prices for export and other actions making export activity of domestic economic units more difficult.
- Central public administration bodies are to:
- revise departmental normative acts to bring them into accordance with requirements of the first paragraph of this decision and inform the Government about the actions made in 30 days;
- imperatively publish in the Monitorul Oficial the internal normative acts that affect negatively or regulate external trade regime, after preliminary co-ordination with the Ministry of Justice.
- Ministry of Economy is entrusted with the control over execution of the given decision.
Prime-Minister of the Republic of Moldova
So, the Government issued two decisions (identical by implication) on the same problem - overcoming bureaucratic barriers to export. These decisions, unfortunately, are not executed at all. Let us remember that not long ago, the Government approved Strategy for export promotion in 2002-2005 (Decision of the Government No. 80 of 29 January 2002). Its goal was to "enliven export and increase confidence of exporters to the policy of the state".
And even still earlier (April 2001), there was the Programme of the Government that stated emotionally and clearly that export is the Moldovan economy's driving force, the main source of budget incomes providing for payment under external debt and so on. However, all this exists only on paper…
The realities are that despite the fact that exports have been growing over the last three years, their volume in 2002 was only US$666 million - still 25.2% less than in 1997, and trade balance deficit (import exceeding export) accounted for US$414,2 million. Structure and geography of our exports have been changing slowly. Agriculture, food processing and textile products account for more than a half of all exports. Traditionally, due to the bilateral free trade agreement, Russia and other CIS countries remain the main importers of Moldovan products.
Despite better terms of trade with the European Union (in comparison with those with the CIS) Moldova's turnover with this region is still modest. Thus, if share of the EU and CEE in Moldovan export was 21.2% in 1997, in 2002 it accounted for 37.8%; as regards import - 38.6% and 49.5% respectively. Growth of import to Moldova of European goods is preconditioned by the consumption growth. Return growth of export, though, is hindered by both low competitiveness of the Moldovan industry and large food and textile components of Moldovan export, which come up against the EU protectionism in these sectors.
Obstacles that state bureaucracy creates to export are multiple and diverse. In opinion of Ion Mushuc, the president of the "Timpul" business club, "image of entrepreneurs as enemies is being propagated in the society and, as a result, business activity decreases, business retreats into the shadow, many entrepreneurs begin to fear for the future of their business and the country". The "Timpul" club came out on July 15 of this year with an appeal to the President Vladimir Voronin in which the entrepreneurs suggest the President to express his own attitude towards arbitrariness of the bureaucracy to legal business, create a permanent committee for protection of entrepreneurship within the Parliament, amend the Law on the Centre for Fighting Economic Crime and so bring it into accordance with the Constitution of the country and international legal norms.
It was July as well when the IMF resident representative, Edgardo Ruggiero, reminded that the IMF Executive Board would not release external financing to our country unless Moldova cancelled export restrictions and restored pre-shipment inspection.
Parliament Assembly of the Council of Europe has been also caring for promotion of our exports. The other day, it approved resolution "On Economic Development of Moldova: Plans and Perspectives" that recommends the country's leadership to stimulate entrepreneurship, remove all export restrictions, implement informational technologies more widely in customs, tax administration, financial service and develop trade infrastructure - standardisation and testing systems, marketing, transport services and communications.
Thus, we are urged to practical actions to promote the export. This applies both to a more active utilisation of Moldova's accession to the WTO, Stability Pact and Free Trade Area and elimination of formal and informal trade barriers within the country. As for the Government decisions "on elimination of obstacles to export', such decisions are necessary, of course, but they have to be executed instead of being multiply cloned.
2. Normative aspects of the lawyer profession in Moldova
by Vitalie Nagacevschi
On 13 May 1999, the Parliament of the Republic of Moldova adopted the Law No. 395-XIV on Lawyers. According to this law, practising of the lawyer profession was conditional upon a given lawyer's membership of the Union of Lawyers of the Republic of Moldova, the Union being a professional organisation of public right, instituted by the same law.
During the constitutionality control of the Law on Lawyers of 1999, the Constitutional Court, in its Ruling No. 8 (February 15, 2000), stated that through the conditioning of the lawyer profession on the membership of a single professional organisation, the access to this activity is prevented for the professional jurists - non-members of this organisation, but who do hold licenses entitling them to provide juridical assistance, which fact confirms their juridical qualifications. So, the compulsory membership of a single organisation is nothing else but the setting up of the monopoly of the professional organisation members on the lawyer profession. The said law also contained some other provisions that did not correspond to the constitutional norms.
The above mentioned ruling of the Constitutional Court surpassed in a positive sense the jurisprudence of the European Court for Human Rights, that had catalogued some professional associations as organisations of public right, these being founded by the legislators with the purpose of ensuring the public supervision of the respective professions and the jurisprudence allowing, in these cases, to condition practising in some professions on the membership of these associations. For these categories, the European Court for Human Rights established that conditioning some profession activities (including that of lawyers) on the membership in legally instituted professional organisations of public right does not constitute a violation of the negative right of the professional not to associate; the mentioned right is guaranteed by article 11 of the European Convention on Human Rights.
Analysing the judgements of the European Court of Human Rights, in which the Convention on Human Rights is interpreted, we could say that the respective decisions are establishing the minimum limit that should be observed by the states-signatories of the Convention. At the same time, the mentioned decisions, in no case, ban the right to establish much more democratic norms, that is to say, the states-signatories are not banned to go much further in their exercise of democracy.
To give some examples, we could say the following:
Protocol 6 of the Convention allows the states-signatories to have in their legislation the capital punishment for some categories of criminal acts committed during wartime or during the time of war imminent danger. But this provision cannot be interpreted as a provision that bans the States to abolish the capital punishment during the war or in time of war imminent danger.
From this point of view, the decision of the Constitutional Court of 2000 could be interpreted as more democratic than the norms established by the European Court of Human Rights, in the interpretation of article 11 of the Convention.
On 19 July 2002, the Parliament of the Republic of Moldova adopted a new Law on Lawyers, which, in essence, contained the same provisions - conditioning the lawyer profession on the membership in professional organisations, the Bar.
Upon the adoption of this law, the Parliament ignored the jurisprudence of the Constitutional Court, as well as the provisions of the Law on Legislative Acts - provisions, according to which, upon the elaboration of legislative acts the legislator should take into consideration the constitutional jurisprudence.
On the basis of these considerations, the deputies of the parliamentary opposition fraction of the People's Christian Democratic Party (PCDP) submitted to the Constitutional Court a complaint requiring the control, in light of the constitutional jurisprudence, of the constitutionality of the Law on Lawyers, adopted in 2002.
The Constitutional Court decision of 19 June 2003 surprised, it recognised the mentioned Law to be absolutely constitutional, and the jurisprudence of the European Commission and European Court for the Human Rights was put forward to argue the case.
When considering this decision in the light of the jurisprudence of Strasbourg European organs, we could affirm that the decision conforms to the mentioned jurisprudence. At the same time, for the absolute correctness of this affirmation, the Constitutional Court, before pronouncing the mentioned decision, should have revised its decision of 2000, and this thing didn't happened. So, we found ourselves in the situation when there are two decisions of the Constitutional Court, which contradict each other.
The argument, contained in the recent decision of the Constitutional Court, saying that by the date of coming into force of Law No. 1260-XV, the Law No. 395-XIVof 13 May 1999, had been abrogated", is not quite correct. The sense of this argument is that the Constitutional Court decision of 2000 can be referred to the Law of 1999; that is absolutely incorrect. By its decisions, the Constitutional Court sets forth principles that are applicable to all legislative acts, and by no means, to some selective legislative acts. In conclusion, in order to be able to pronounce a decision containing principles other than those enunciated in the precedent decision (or decisions), the Court has to revise its previous decision.
Besides, the last decision contains a number of mistakes that contravene to the Law on Lawyers and, if it had been as it was stipulated in the respective decision, it would have been impossible to invoke the jurisprudence of the European Court of Human Rights.
For example, the Constitutional Court stipulates that "The Bar is created at the will of lawyers, expressed at the Congress, considered to be legally gathered, if the majority of the lawyers of the Republic of Moldova take part in the Congress." It is an wrong statement, as the Bar is instituted not at the will of the lawyers, but at the will of the legislator, and this is exactly the thing that makes a professional organisation an organisation of public right. If the Bar had been instituted at the will of lawyers, that would have meant an organisation constituted on benevolence principles and, as a result, the negative right of the lawyers not joining the Bar would have been respected.
We can not overlook the fact of recognising as constitutional the legal provisions, establishing a length of service term in the lawyer profession, for those persons that want to be members of the Bar Council or the Ethics and Discipline Commission. The most frequent argument for the need to select highly-experienced and professional candidates is not the right argument, as among the lawyers with less than a 5-year length of service there could be ex- judges of the Constitutional Court (after the end of their mandates); in such cases nobody can state that these candidates have low professional qualifications or experience.
Generalising the above mentioned, we can say that the Constitutional Court decision No. 12 of 19 June 2003, in general lines, complies with the jurisprudence of the European Court of Human Rights, when it conditions the practising of the lawyer profession on the membership in the Bar, but is incompatible with the Constitutional Court decision No. 8 of 15 February 2000.
At the same time, we cannot agree to the provision on the lawyer profession retaining the length of service requirement as one criteria of eligibility for the Bar Council or/and the Ethics and Discipline Commission, as such provisions are discriminatory.
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