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Activity of public institutions

Parliament
Government
Presidency

Pre-election configuration by Igor Botan
Despite the constant economic growth, people think they are poorer by Iurie Gotisan

I. Activity of public institutions

1. Parliament

1.1. Official visits

On May 11-12 Parliament Speaker, Eugenia Ostapciuc, headed an official Moldovan delegation to Italy. During her visit Eugenia Ostapciuc met the Presidents of both Italian Parliament Chambers, Minister of Labour and Social Security, other high rank officials as well as a group of Moldovan citizens working in Italy.

One week later, representatives of Moldovan legislature to PACE attended its reunion. On this occasion they met with PACE President Pieter Schieder, Council of Europe Secretary-General Walter Schwimmer, Chairman of the German Bundestag Wolfgang Thierse etc. Eugenia Ostapciuc, also in Strasbourg, attended the European Conference of Speakers of Parliament.

1.2. Legal acts

Law on Amending the Law on Judicial Organisation has increased the number of judges in the Botanica District Court, Chisinau Municipality as it investigates more cases than other district courts.

Law on the Exemption of Monument Construction Works from the VAT provides for the exemption from the value added tax (VAT) of works of technical expertise, planning, design, construction and restoration financed from donations by physical and legal entities. The list of eligible objects is to be approved by the Parliament.

Law on Additions to the Law on State Security added to threats to state security the cases of organised crime and corruption, which are likely to undermine state security. According to these provisions, the following represents major challenges to state security:

• Actions aimed at changing through violence the constitutional regime, undermine or suppress the sovereignty, independence and territorial integrity of the state;
• Activity that contributes, directly or indirectly, to military actions against the state or leads to civil war;
• Military actions and other violent actions that undermine the foundations of the state;
• Actions conducive to emergencies in transports, telecommunications, the activity of economic and other vital sites;
• Espionage, transmittal of information regarded as state secrets to other states, as well as obtaining or illegally owing information that is regarded as state secret with a view to turn it over to other foreign states or anticonstitutional structures;
• Treason by assisting other states in carrying out activities against the Republic of Moldova;
• Activities that are aimed at usurping power through violence from the legally elected public authorities;
• Activities likely to harm the constitutional rights and freedoms of citizens and thereby endanger the security of the state;
• The preparation and deployment of terrorist acts, attempts against the lives, health and inviolability of top officials, state officials and leading public figures of other states residing in the Republic of Moldova;
• Theft of weapons, munitions, arms, explosives, toxic substances, etc., smuggling in these, production, use, transportation and storage thereof, where interests of state security are harmed;
• Setting up or taking part in the work of organisations or illegal groupings that endanger the state security.

Law on the Amendment of the Law on Preparing Citizens for Defence of the Motherland added provisions that allow students at private higher and secondary education institutions to defer their service in the army. Current law allows this only to state and accredited higher education institutions.

The Law on the Amendment and Completion of the Penal Code was adopted in the final reading. It provides for the amendment of provisions related to:

1. Forgery, import, transportation, storage, sale of products, provision of services dangerous for the life or health of consumers (Art.216, Criminal Code). It is provided that the above activities, depending on the gravity and damages caused to the consumers, as well as the method in which they have been caused, will be applied penalties ranging between fines from 900 MDL to imprisonment of up to 7 years. Also is provided such a penalty as banning activities or even liquidating guilty enterprises.

2. Sale of low quality products, or products not meeting current standards (Art.254, Criminal Code). For intentional sale of goods of low quality or not meeting current standards, penalties will range between fines of 6,000 MDL to imprisonment for up to seven years.

Via the Law on the Amendment the Law on State Awards and the Decision on Instituting the Anniversary Award "60 Years of the Liberation of Moldova from the Fascist Occupation" Parliament endorsed the President's proposition to institute the medal "60 Years of the Liberation of Moldova from the Fascist Occupation" to mark on 24 August 2004, 60 years of the liberation of Moldova from the fascist occupation and to thank those who participated in the liberation operations.

Law on the Amendment of the Law of Joint Stock Ventures provides for the obligation of joint stock ventures to pay as dividends at least 30% of the net profit that they make after they fulfil other obligations according to current laws. This draft was criticised by representatives of joint stock ventures as one limiting the autonomy of enterprise administration and freedom of economic activity. On the other hand, the authors of the draft said the draft was aimed at supporting minority shareholders, whose number is considerable, but who often are treated in an unfair manner by not receiving their yearly dividends or receiving them in small amounts.

Via the Law on the Amendment of the Law on Declaring "Cricova" as National Cultural Heritage Parliament excluded a number of its units from the list of heritage that would enable the company to use them for its technological development and get credits, etc.

Law on the Amendment of Legal Acts Regulating Oil Products extends the prerogatives of the National Agency for Regulation in Energetics, thereby entrusting it to regulate the prices and tariffs on oil. The law includes a number of provisions aimed at increasing the responsibility of the licence holders; their compliance with the technical norms, standards and licence terms, consumer rights, price estimation methodology, etc.

Law no. 461-XV on Oil Products Market was passed on July 30 2001 and was hailed by the governing as the major breakthrough in fighting oil smuggling and a mechanism able to ensure energetic safety. Since its adoption the law attracted a storm of criticism and even protest rallies by importers and retailers that led to its amendment several times already. Nevertheless, oil prices are on the rise, while the quality remains quite power. As for the revenues to the state budget, they still fall short of expectations.

(For further details on Parliament activity see http://www.e-democracy.md/en/comments/legislative/)

2. Government

2.1. Reshuffles

On May 26, Lilia Dumitras was appointed as Councillor to Senior Deputy Prime-Minister Vasile Iovv, whereas Ion Moraru was appointed as Deputy Director of the Migration Department. Also, Government ousted Gheorghe Caraivanov from his position as administrator of "Tvardita" Free Economic Zone and appointed Ion Borov as interim.

2.2. Decisions

• On May 19, Government approved UN Convention on fighting transnational organized crime and Additional Protocol to the Convention on illegal traffic of emigrants by land, air, or water. Given the ever-growing scale of human trafficking, Republic of Moldova being one of its main sources in Europe, adoption of this kind of legislation is a must. Once these documents are ratified by Parliament, corresponding amendments shall be operated to the national legislation. However, more importantly those documents should not gather dust but rather be enforced. For this to happen political will and persistent efforts of the state institutions and civil society are paramount, which are to be backed up by ongoing assistance of the international organizations in the field.

• Same day Government approved the draft law on special couriers state service. Under the draft, the service shall be part of security services and would be an independent body of special destination government liaison, entrusted to store, ship and distribute operatively state official correspondence.

• On May 26, Government endorsed the Action Plan on celebrating 645th anniversary since the Moldovan feudal state was established. A special commission set up in this respect by the Government shall be responsible for the celebrations.

• Under another Governmental motion Article 116 of the Law on Supreme Court of Justice is to be amended, thereby setting a 4 year mandate for the Court Chair and Deputy Chairs. If voted by the Parliament, the mandate of the Court Chair and Deputy Chairs shall be equalled to that of other courts.

• Of special interest is the Government drawn list of units, departments and services whose employees shall not be allowed to go on strike. This restriction introduced in Article 369, Chapter IV of the Labour Code refers to: employees of the apparatus of the Parliament, Presidency, State Chancellery, internal affairs bodies, Information and Security Service, Centre for Combating Economic Crime and Corruption, military, Department of Penitentiary Institutions, Department of Emergency Situations, Department of Border Guards, judges. In addition, employees of "Moldtelecom", "Apa-Canal Chisinau", emergency guard in hospitals, employees of air traffic control and some employees of the Customs Department may not go on strike as well.

3. Presidency

3.1. Decree on establishing Supreme Security Council

President Vladimir Voronin signed the Decree on establishing Supreme Security Council (SSC), no. 1824-III of 24.05.2004. After the number of SSC dropped from 12 to 10 in 1997, via a similar decree no. 237-III of 19.09.2001 the Council was enlarged by including more public officers. The evolution of the SSC structures may be seen in the following table.

Decree on establishing SSC, no. 162 of 20.08.91 Decree on establishing SSC, no. 332-II of 08.10.97 Decree on establishing SSC, no.237-III of 19.09.2001 Decree on establishing SSC, no.1824-III of 24.05.2004 SSC Members (members/positions): SSC Members (members/positions): SSC Members (members/positions): SSC Members (members/positions): 1. President of RM - Chairperson of SSC 1. President of RM, Commander in Chief - Chairperson of SSC 1. President of RM, Commander in Chief - Chairperson of SSC 1. President of RM, Commander in Chief - Chairperson of SSC 2. Presidential Councillor - SSC Secretary 2. SSC Chief of Service of the Presidential Apparatus - SSC Secretary 2. SSC Chief of Service of the Presidential Apparatus - SSC Secretary 2. Parliament Chairperson (excluded) 3. Parliament Chairperson 3. Prime Minister 3. Prime Minister 3. Prime Minister 4. Prime Minister 4. Minister of Foreign Affairs 4. Minister of Foreign Affairs 4. Minister of Foreign Affairs 5. Minister of Foreign Affairs 5. Minister of Internal Affairs 5. Minister of Internal Affairs 5. Minister of Internal Affairs 6. Minister of Internal Affairs 6. Defence Minister 6. Defence Minister 6. Defence Minister 7. Defence Minister 7. Chairperson of the Committee for State Security (excluded) 8. Chair of the Parliament Committee for State Security and Military (excluded) 7. Chair of the Parliament Commission for National Security 8. Chair of the Parliament Commission for National Security 9. Chair of Parliament Commission for Legal Issues (excluded) 8. Chair of the Parliament Juridical Commission for Appointments and Immunities (excluded) 10. Chair of Parliament Commission for Human Rights and National Relations (excluded) 11. Chair of the Parliament Commission for fighting crime (excluded) 12. Chair of the Parliament Commission for Local Administration and Economy (excluded) 7. Minister of Finance 9. Minister of Finance 9. Minister of Finance 8. Director Information and Security Service 10. Director Information and Security Service 10. Director Information and Security Service 9. Director Department for Civil Protection and State of Emergency 11. Chief of State of Emergency Department 11. Chief of State of Emergency Department 10. Chief of staff, Senior Deputy Defence Minister 12. Chief of staff, Senior Deputy Defence Minister (excluded) 12. Minister of Economy 13. Chair Moldovan Academy of Science 14. National Bank Governor 15. Director Centre for Combating Economic Crime and Corruption 16. Prosecutor General 17. Gagauz-Yeri Governor

Besides SSC enlargement, the Decree no. 1824-III of 24.05.2004 adds a new article on the procedure of filling vacancies. The Decree also establishes a new Commission on antiterrorism that would work along Commission for internal policy, Commission for foreign policy, Commission on economy and financial policy, Commission for social security and environment and Analysis and Information Centre.

II. Economic polies

1. Moldovan energetic dependence

As of 1 June 2004, Republic of Moldovan debt for natural gas supplied by "Gazprom" amounted to 1.2 billion USD, including fines. According to "Moldova-Gaz" press service, Moldova's debt on expired payments together with fines on them amounted to 305.2 million USD, whereas that of Transdnistria - 961.2 million. Electro-energetic companies, such as CET-1, CET-2, "Termocom" continue to be the major debtors.

Gazprom Deputy Chair Aleksandr Reazanov stated during the annual shareholders meeting of "Moldova-Gaz" that "Moldova-Gaz strategic objective in 2004 should be developing a scheme for restructuring previously incurred debts to Gazprom". Reazanov said such a scheme should provide for restructuring the debt for 5-10 years, thereby paying back the debts in money or transferring into Gazprom property Moldovan industrial assets.

"Moldova-Gaz" President indicated that the fines for expired payments exceed 2.5 times Moldova's debt for gas supplied in 2003. Independent domestic observers point that Moldovan authorities are well aware of the fact that imports from Russia are more than "imports" and that those relations may not be explained by simple maximization of profit since Russian part is more insistently demanding the majority stake in a domestic company in exchange for its debt. Therefore, political considerations seem to dominate the economic ones.

III. Transdnistrian Conflict

1. New round of talks held on 25-26 May

A new round of talks on the Transnistria issue in the five-sided format including representatives of Moldova, Transnistria and the mediators took place in Tiraspol and Chisinau on 25-16 May. The two parties circulated at the meeting their written opinions on each other's proposals on the political plan drafted by the mediators under the OSCE aegis last autumn. Assisted by the mediators, the parties discussed the structure and institutions of the future federation.

William Hill, Head of the OSCE Mission to Moldova, summed up the results of the talks at a press-conference on 26 May. According to Basa-press, he stated that the parties still remain on divergent positions with regard to the structure of the future federation. Although the meeting produced no written documents, it helped parties reach agreement on some important issues, Hill added, although he did not name any such issues. Asked to comment on views expressed in Moldova, Transnistria and elsewhere that no significant progress is to be expected prior to the parliamentary elections in Moldova in March 2005, Hill said those views were "exaggerated", and that any time is a good time to seek compromise and try to reach agreement. The next round of talks was provisionally scheduled for w/c 21 June.

In a TV talk show broadcast on Moldovan National Television immediately after the negotiations and joining Moldovan Minister of Reintegration and Head of Moldovan delegation at the talks Vasile Sova, the Transnistrian "foreign minister" Valeri Litkai and the OSCE Head of Mission William Hill, the parties reiterated their embedded divergences, but showed committed to continue the talks. Notably, this has been the first ever TV show to feature a TV debate on the Transnistrian issue by top Moldovan and Transnistrian leaders.

2. Public Opinion Barometer, May 2004

The public opinion barometer commissioned in April-May 2004 by the Chisinau based Institute of Public Policies on a national representative sample, excluding the Transnistrian region, found that the territorial reintegration of the country is thought to be Moldova's primary task by only 2.9% of respondents (up by only 0.3% since November 2003), after the consolidation of the state and order (30.6%), economic development and upgrading of living standards (30.3%), ensuring peace and accord among people (15.3%), fighting corruption (8.3%) and improving the education, science and cultural spheres (4.1%). At the same time, asked whether they find acceptable the proposal to turn Moldova into a federal state, 17.1% of those questioned said yes (21.20% in November 2003), 32.6% said they would not accept it in any case (37.80% in November 2003), 14.3% said this question did not concern them (13.10% in November 2003), and 32.7% did not know how to answer this question (25.50 in November 2003). Notably, the data for the November 2003 barometer was collected in early November, i.e. prior to the Kozak Memorandum events. The comparison of November 2003 and current results shows no significant differences, which makes one believe that the Kozak Memorandum events have left no lasting impression on the Moldovan public opinion and the popular attention to the Kozak Memorandum events last November was small-scale and short-lived.

3. Small arms and light weapons in Moldova

The South Eastern Europe Small Arms and Light Weapons Monitor, funded by the South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons and prepared by the UK based NGO Safeworld, was published at a round table organized at the UNDP office on 17 May in Chisinau (the full report may be found at: http://www.seesac.org/target/salw_monitor.htm). According to the monitor, "Moldova's small arms problems, including illicit production and sale of SALW, large stockpiles of surplus weaponry and the lack of controls over a wide segment of the country's external border, are inextricably linked to the political and security challenges emanating from the 'frozen' conflict in the breakaway region of Transnistria". The Monitor takes on allegations made elsewhere that Transnistria is a haven of organized crime and a virtual arms' dump containing within its boundaries large quantities of mines, ammunition and small arms, as well as that the Transnistrian regime has the capability to manufacture and export different models of SALW, and argues that the SALW issue is further complicated by the lack of actual border and customs control along the Moldovan-Transnistrian and the Transnistrian-Ukrainian borders, which facilitates smuggling, arms transfer and other illegal activities. In conclusion, the report acknowledges that the problem if SALW cannot be fully mitigated unless the Transnistrian problem is solved, referring to the findings of the IGC "No Quick Fix" whereby one cannot develop effective collaborative actions to improve legislation, law enforcement training and awareness-raising campaigns related to trafficking issues when a country is not recognized internationally.

IV. Foreign affairs

1. Visit to Bulgaria

On May 19-21 President Voronin paid an official visit to Bulgaria. During his visit Vladimir Voronin met Bulgarian President Gheorghi Pirvanov; Bulgarian Prime-Minister Simeon de Saxa Coburg-Gotha; Chair of the Bulgarian Peoples' Assembly Ognian Gerdjikov; Bulgarian Minister of Foreign Affairs and OSCE Chairman-in-Office Solomon Passy etc.

A raft of important documents were signed during the visit, among others: Free Trade Agreement; Cooperation Agreement in postal communication, telecommunication and information technology; Cooperative Agreement on fighting organized crime, traffic of drugs and psychotropic substances, terrorism and other types of offences; Memorandum on cooperation in the field of social security and labour market, Cooperative Agreement in the field of youth and sports, etc.

Noteworthy, Free Trade Agreement signed with Bulgaria is the last one Moldova signed with the Stability Pact for South-Eastern Europe member states that would gradually lead to the liberalization of foreign trade with those countries by 2007.

2. XI Summit of the Central European heads of state

On May 27-28, Romanian resort of Mamaia hosted the Summit of the Central European heads of state, with Moldovan President Vladimir Voronin in attendance. According to the Presidency press service, topping Summit's agenda were: effects of the first EU accession round; EU expansion, regional co-operation and stability in the Balkans; investment climate in Central and South-eastern Europe.

Of special interest to the Moldovan public opinion was the meeting of Moldovan and Romanian Presidents, especially given the ever worsening relations between the two countries. The Two considered the current status of bilateral relations with Vladimir Voronin "pointing to the need of continuing political dialogue at all levels and concluding some agreements equal to the status of international law mutual engagements" he also opted for "resuming consultations between expert groups working on the Basic Treaty and package of documents on the frontier regime". Moreover President Voronin proposed a mechanism of scholarship exchange in education to be established between Moldova and Romania and called on his Romanian counterpart to issue a declaration supporting Moldovans in their efforts to build an independent state and referring to the "Moldovan language" as an element of their national identity. In the eyes of many the mere fact that Romanian President invited his Moldovan counterpart to the commemoration of Stefan the Great at Putna on July 2, 2004 was a clear sign that he would issue such a declaration.

3. Moldova - Romania Neighbourhood Program

The third session of the Joint Committee on Moldovan-Romanian Cooperation was held in Chisinau on May 11. Committee looked at projects that are to be implemented as part of the Moldova - Romania Neighbourhood Program launched within EU "new neighbours" policies. According to governmental sources, Memorandum on funding the projects for years 2004-2006 is due to be signed in September 2004. It is expected that Moldova would get 5 million Euro in aid as part of this program that would go for implementing projects in the field of cross-border cooperation, environment, healthcare, preventing and fighting organized crime, border security, encouraging interpersonal cooperation, etc.

V. Studies, analyses, comments

Pre-election configuration
Igor Botan, 2 June 2004

The configuration of the main electoral contestants in the upcoming elections has become quite clear in May. The main parties represented in Parliament, namely Communist Party and Christian-Democratic People's Party already held plenary assembly (the former) and the congress (the second)

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Despite the constant economic growth, people think they are poorer
Iurie Gotisan, 2 June 2004

On May 19 Government approved PRSP, a document including social economic policies to be implemented over 2004-2006 to ensure sustainable economic growth and reduce poverty. In the eyes of many Republic of Moldova is the poorest country in Europe

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