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WT/ACC/MOL/3 13 May 1997 ORGANIZATION (97-2002)

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WT/ACC/MOL/3 13 May 1997 ORGANIZATION (97-2002) RESTRICTED WORLD TRADE WT/ACC/MOL/3 13 May 1997 ORGANIZATION (97-2002) Original: English ACCESSION OF THE REPUBLIC OF MOLDOVA Questions and Replies to the Memorandum on the Foreign Trade Régime (Document WT/ACC/MOL/2) In a communication, dated 12 December 1995 (WT/ACC/MOL/1), the Government of the Republic of Moldova applied for accession under Article XII of the Marrakesh Agreement Establishing the World Trade Organization (WTO). Having regard to the Decision adopted by the General Council on 31 January 1995, the existing Working Party on the Accession of the Republic of Moldova to the GATT 1947 continued as a WTO Working Party with the following terms of reference: "To examine the application of the Government of the Republic of Moldova to accede to the WTO Agreement under Article XII, and to submit to the General Council recommendations which may include a draft Protocol of Accession." The membership is open to all WTO Members indicating their wish to serve on the Working Party. In document WT/ACC/MOL/2, Members had been invited to submit questions in writing concerning the foreign trade régime of Moldova. The initial questions submitted by Members and the replies thereto provided by the authorities of Moldova are reproduced hereunder. The attachments mentioned in this document submitted to the Working Party are listed in document WT/ACC/MOL/3/Add.1 and are available in the Secretariat (Accessions Division, Room 1126) for consultation. Replies to the additional questions submitted by Members will be circulated in document WT/ACC/MOL/4. Delegations wishing to raise additional questions concerning the foreign trade régime of Moldova might inform the authorities of Moldova (with a copy to the Secretariat) of such questions in advance of the next meeting of the Working Party, so that considered replies can be made available by Moldova to Members at the time of the Working Party meeting. WT/ACC/MOL/3 Page ii TABLE OF CONTENTS Page Question No. No. II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 2. Economic Policies (a) Main directions of current economic policies 1 1-5 (b) Monetary and fiscal policies 2 6-7 (d) Foreign and domestic investment policies in Moldova 3 8-10 (e) Competition policies 5 11-12 III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING FOREIGN TRADE IN GOODS AND TRADE IN SERVICES 2. Government Entities Responsible for Making and Implementing Policies Affecting Foreign Trade 6 13-14 3. Division of Authority Between Central and Sub-central Governments 7 15-16 4. Programmes or Plans to Change the Regulatory Regime 7 17 IV. POLICIES AFFECTING TRADE IN GOODS 1. Import Regulation (a) Registration requirements for engaging in importing 8 18 (b) Characteristics of national tariff 8 19-20 (c) Tariff quotas, tariff exemptions 12 21-24 (d) Other duties and charges 13 25-26 (e) Quantitative import restrictions 14 27-28 (f) Import licensing procedures (Annex 3 refers) 14 29-41 (h) Customs valuation 18 42-43 (j) Pre-shipment inspection 19 44 (k) Application of internal taxes on imports 19 45-54 (l-m) Rules of origin and Anti-dumping régime 21 55-59 (o) Safeguard régime 22 60-61 2. Export Regulation (a) Registration requirements for engaging in exporting 23 62 (b) Customs tariff nomenclature 23 63-64 (c) Quantitative export restrictions 24 65-69 (d) Export licensing procedures 25 70-84 (e) Other measures 30 85-88 (f) Export financing, subsidy and promotion policies 31 89 3. Internal Policies of Moldova Affecting Foreign Trade in Goods (a) Industrial policy, including subsidy policies 31 90-93 (b) Technical regulations and standards (Annex 5 refers) 32 94-103 WT/ACC/MOL/3 Page iii Page Question No. No. (c) Sanitary and phytosanitary measures 37 104 (e) State-trading practices 37 105-106 (f) Free zones 37 107-108 (g) Free economic zones 38 109-110 (j) Government-mandated counter-trade and barter 38 111-112 (l) Government procurement practices 39 113-136 4. Policies Affecting Foreign Trade in Agricultural Products 48 137 (c) Export prohibitions and restrictions 48 138 V. TRADE RELATED INTELLECTUAL PROPERTY REGIME 1. General 49 139 2. Substantive Standards of Protection (a) Copyright and related rights 50 140-141 (b) Trademarks 51 142-145 (c) Geographical indications 52 146-148 (d) Industrial designs 52 149-150 (e) Patents 53 151-154 (f) Protection of plant varieties 54 155 (g) Layout designs of integrated circuits 54 156 (h) Protection of undisclosed information 54 157 4. Enforcement 55 158-160 VI. TRADE-RELATED SERVICES REGIME 1. General 55 161-164 Financial services 57 165-168 Telecommunications services 58 169-176 Audiovisual services 61 177-178 Professional services 62 179-180 Accounting and auditing services 63 181-187 Transport services 64 188-191 VII. INSTITUTIONAL BASE FOR MOLDOVA'S TRADE AND ECONOMIC RELATIONS WITH THIRD COUNTRIES 67 192-197 WT/ACC/MOL/3 Page 1 II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 2. Economic Policies (a) Main directions of current economic policies Question 1. Are there any restrictions to foreign participation in the privatization programme (e.g. specific sectors from which foreign participation is excluded, general restrictions such as ceiling levels of foreign participation)? Answer: The 1997-1998 Privatization Programme has been submitted to Parliament and is now in its second reading. Except for companies in which a foreign State holds a share of 10 per cent or more which are excluded from participating in the Programme, there are no restrictions to foreign participation. Once approved by Parliament, Moldova will submit a copy of the Privatization Programme to the Working Party. Question 2. Are any sectors excluded from the privatization programme? Answer: No sectors are excluded from the privatization programme. A list of enterprises and other objects which are not subject to privatization is currently being discussed in the context of the 1997-1998 Privatization Programme. The list will be submitted to the Working Party as soon as it comes available. Question 3. Are there any conditions attached to the participation of foreign investors in the privatization programme? If so, do these restrictions also apply to potential domestic investors? Answer: No specific conditions other than those for domestic investors are attached to the participation of foreign investors in the privatization programme. All units to be privatized are offered through public tenders open to both domestic and foreign investors under the same terms and conditions. Question 4. Can foreigners own land? Answer: Foreigners can become landowners in Moldova as a result of a legacy or of a purchasing contract. At present there is a moratorium on the sale of land except for built-up land, which can be traded freely. However, a draft law on the sale of land is now in preparation and Moldova will make a copy of the draft text available in due course. WT/ACC/MOL/3 Page 2 Question 5. Are any goods or services subject to price control? Answer: There are no price controls for the private sector. The Government sets, however, the prices for energy supplied by State-owned utilities (which are monopoly providers), housing in State-owned buildings, and subsidizes the bread price. The prices set by the Government are lower than cost-of-service prices for social reasons. The energy prices are gradually raised to cost recovering level in the framework of an agreement with the IMF. (b) Monetary and fiscal policies Question 6. The Moldovan definition of profit does not fully acknowledge the costs of labour. Is this definition applied equally to foreign and domestic enterprises? How is the deduction for cost of labour calculated? Answer: In the past, labour costs could only be deducted up to an average of six minimum salaries per employee. Corporate taxes of companies were assessed on the profit thus calculated. Companies could pay higher wages and salaries but the amount exceeding six minimum salaries had to taken out of the net profit. However, this practice has been discontinued. Now labour costs can be fully deducted and companies are assessed for corporate tax after all labour costs have been deducted. Foreign and domestic enterprises are treated in the same way in this respect. A copy of the new Tax Code which has been adopted by Parliament in January 1997 is available for consultation in the Secretariat (Accessions Division, Room 1126). Question 7. We note that Moldova applies the principle of country of origin on trade with CIS countries and the principle of country of destination on trade with non-CIS countries. Could Moldova explain the reasons behind this? Does Moldova plan to remove this inconsistent application? Could Moldova confirm that excise taxes are applied equally to domestically produced and imported goods? Are imported raw materials used in footwear and textiles production exempt from VAT? Answer: (i) The principle of origin was initially applied by all CIS countries with regard to trade between them. In 1996 Ukraine has moved unilaterally to the principle of destination which has created some problems in bilateral trade relations, notably double taxation for Moldovan exports and tax exemption for Ukrainian products. WT/ACC/MOL/3 Page 3 Intergovernmental talks between CIS countries were held, e.g. in Chisinau in May 1996 and in Yerevan in October 1996, to prepare a draft decision for all CIS countries to apply the principle of destination. Moldova supports this proposal and its Government approved a tax reform concept which includes the application of the principle of destination for VAT purposes in all of its foreign trade, including with CIS countries. The Ministry of Finance is currently preparing a new draft law on VAT which will establish the principle of destination.
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