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. It is expected that the principle of destination will come into effect no later than January 1998.

(ii) As for excise taxes, Moldova is also applying the principle of origin in its trade relations with CIS countries. There are two exceptions. First, Russian oil and oil products are subject to excise tax in Moldova. Second, Moldovan products are subject to Russian excise taxes according to Russian excise regulations.

The switch to the principle of destination with regard to excise taxes is also addressed in the intergovernmental talks referred to under (i). Moldova supports the proposal to move to the principle of destination.

The Ministry of Finance has set up a task force to prepare the legislative measures to establish the principle of destination for excise duties in Moldova's trade relations with CIS countries. It is expected that the principle of destination will come into effect no later than January 1998.

At present different levels of excise duty are charged for domestically produced and for imported goods. Moldova recognizes that this practice is incompatible with the provisions of Article III of the GATT 1994. Moldova will adjust its legislation accordingly. The changes should take effect no later than January 1998.

(iii) Under the present VAT regulations (Article 5 of the Law on VAT) imported raw materials, including those used in footwear and textiles production, are VAT exempt. The VAT is levied on the final product. If the final product is exported, however, no VAT is payable. This system is sometimes referred to as 'co-operational contract between enterprises' or as 'temporary import'. The reform of the VAT system referred to under (i) will, however, include the setting up of a full invoice/credit system, whereby VAT is levied at each stage of production.

(iv) The exemption of imports from Romania from excise duty has been discontinued. In its trade relations with Romania Moldova now applies the principle of destination.

(d) Foreign and domestic investment policies in Moldova

Question 8.

Are any additional incentives (other than the tax holiday) to foreign investment being considered by the Government or by the Parliament?

Answer:

Other than those stipulated by the Foreign Investment Law and its subsequent amendments, there are no additional incentives for foreign investment being considered by the Government or the Parliament. WT/ACC/MOL/3 Page 4

Question 9.

Is there any domestic legal protection for foreign investors in cases of expropriation?

Answer:

According to Article 39 of the Foreign Investment Law, in case of expropriation,nationalization or other equivalent measures, compensation should correspond to the value of alienated investment. Compensation has be paid not later than three months after the measure had been taken including accrued interest calculated on the basis of an appropriate interest rate.

The amendment to the Foreign Investment Law grants the foreign investor the right to challenge in court the lawfulness of the expropriation, nationalization or equivalent measure and the amount of the compensation.

Moreover, Moldova is a member of the Multilateral Investment Guarantee Agency (MIGA).

Question 10.

Moldova states that the establishment of a company with foreign investment “generally” does not require approval. Under what circumstances, additional to those referred to in section (d), is approval required?

Section (d) suggests that the agricultural sector is treated differently for the purposes of foreign investment. Is this correct? If so, please provide details.

The Moldovan Government has reserved the right to limit or prohibit activities or to establish certain fields of activity where the undertakings of foreign firms are limited or prohibited. Do these restrictions apply to firms with some foreign investment? What is the level of foreign investment allowed in a domestic firm before it is classified as a foreign firm?

Are there any criteria/conditions additional to those specified in the Memorandum for companies to benefit from the tax and customs incentives offered in the Foreign Investment Act? Are domestic firms eligible for “tax and customs incentives”? If so, please provide details of the incentives offered and eligibility criteria.

Answer:

(i) There are no additional conditions to register a company with foreign investment other than those mentioned in section (d). The term "generally" refers to the restrictions with regard to State security, anti-trust legislation, environmental protection, public health and moral norms.

(ii) The regulations stipulated in the Law on Foreign Investment cover all economic sectors, including agriculture. However, as agricultural land cannot yet be sold the possibilities for foreign investment in agricultural (primary) production are somewhat limited compared to the industry or services sectors. The restriction on the sale of agricultural land applies to all kinds of potential buyers, be they natural or legal, foreign or domestic persons. Like their domestic counterparts, companies with foreign capital have, nonetheless, the right to exploit rented agricultural land. WT/ACC/MOL/3 Page 5

(iii) The areas of activity for which the Moldovan Government reserves the right to restrict the operations of foreign firms are only those mentioned in section (d) and repeated under (i) above. They apply also to domestic firms or firms with mixed capital.

(iv) Moldova grants companies with foreign investment, be they wholly or partially foreign owned, the same rights as domestic companies. In addition to these, companies with foreign investment enjoy certain privileges not available to domestic firms. With regard to these additional privileges the Foreign Investment Act provides for two sets of incentives.

First, there are incentives available to all firms with a foreign investment share. No minimum level of foreign investment, in absolute or in relative terms, is required. This set of incentives includes:

- exemption from customs duty for goods used in the production of goods to be exported; - guarantees in case of expropriation, coercive suspension of activities, for the free transfer of funds in foreign currency, and against future amendments of legal acts.

Second, there are further incentives available only to companies with a foreign investment share of US$ 250,000 or more and which earn at least 50 per cent of their income from their own production. These are:

- a five year exemption from 50 per cent of the profit (corporate) tax; - exemption from tax on investment for new capital construction.

(e) Competition policies

Question 11.

Please list the enterprises included in the State Register of companies which are major producers in the domestic market and indicate what each of these companies produces.

Answer:

At the beginning of the transition process large former State companies were automatically considered monopolists because they were the only Moldovan supplier in their domains. In reality they had, however, often only a small share of the market, especially as more and more foreign products were imported.

Against this background the Government no longer compiles this list. The last list of this type was compiled for 1994. A copy of that list is available for consultation in the Secretariat (Accessions Division, Room 1126).

Question 12.

How does Moldova’s Law “On Monopoly Activities Limitation and the Development of Competition” deal with vertical and horizontal restraint arrangements?

What recourse do foreign firms have if opportunities are impaired by such arrangements?

Do foreign firms have access to competition authorities? WT/ACC/MOL/3 Page 6

Are exclusive dealership arrangements allowed under the Competition Law? If so, do any exclusive dealerships exist in Moldova, in what form and for what products?

Answer:

(i) Vertical and horizontal restraint arrangements are forbidden by the Moldovan Law "On Monopoly Activities Limitation and the Development of Competition":

- if one of the parties has a dominant market position, i.e. a market share of 35 per cent or more; and - if the arrangement leads or can lead to restricting competition.

Article 4 (1) bans horizontal arrangements; Article 4 (2) vertical arrangements. The decision whether or not specific arrangements violate the Law is taken by the Committee on Economic Reform (CER). Proceedings may be initiated by businesses, regulatory authorities, consumers associations, trade unions or the CER on its own initiative.

(ii) Foreign firms, like domestic firms, have the right to file complaints at the Public Prosecutor's Office.

(iii) Competition is monitored by a unit in the Ministry of Economy to which foreign firms have access.

(iv) Exclusive dealerships are allowed by Moldovan Law if they do not contravene the provisions of Article 4 (2) mentioned above. As for existing exclusive dealerships, such arrangements need not be registered and the Government does not keep a register of such arrangements.

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

Question 13.

Please explain more precisely the role of the “Governmental Commission for Regulation of Foreign Trade, Technical Assistance and Humanitarian Aid” in relation to the development and implementation of Moldova’s foreign trade policy.

How is co-ordination between the Department for Foreign Economic Relations and the Governmental Commission assured?

Answer:

The Governmental Commission for the Regulation of Foreign Trade, Technical Assistance and Humanitarian Aid no longer exists. At present, no decision has been taken whether, in connection with the formation of the new Government, a new Commission will be created.

Question 14. WT/ACC/MOL/3 Page 7

What process will be needed to complete national procedures relating to WTO accession? Will implementing legislation be required?

Answer:

The accession protocol will have to be ratified by the Moldovan Parliament and no further implementing legislation for the accession will be required.

3. Division of Authority Between Central and Sub-central Governments

Question 15.

Does the Gagauz-Yeri region have any authority to regulate trade in any way or to impose any taxes (particularly on goods)? If so, please specify.

Answer:

The Gagauz-Yeri region has no authority to regulate trade or impose VAT or excise taxes. However, the regional authorities may, according to the Law on Local Taxes, impose local taxes. If and when such taxes are imposed these charges will be applied on a national treatment basis in conformity with the relevant WTO provisions.

Question 16.

Does any other sub-central entity have any authority to regulate trade in any way or to impose any taxes (particularly on goods)? If so, please specify.

Answer:

No other sub-central entity has any authority to regulate trade or impose taxes.

4. Programmes or Plans to Change the Regulatory Regime

Question 17.

Does Moldova intend to submit to WTO Working Party members for comment any legislation (particularly the new Foreign Trade Law) whilst it is still in a draft form?

Answer:

Moldova welcomes any comment by WTO Members on proposed legislation related to its foreign trade regime. Together with these answers Moldova has submitted the texts or copies of the drafts of the following laws or Government Decisions which are available for consultation in the Secretariat (Accessions Division, Room 1126):

- Law on Foreign Trade Activity (draft); - Law on the Customs Tariff (draft); - Resolution No. 99 on Customs valuation (already adopted by the Government); - Law on Government Procurement (draft); - Decision on the Mechanism of Public Procurement (already adopted by the Government); WT/ACC/MOL/3 Page 8

- Law on Standardization (already adopted by Parliament); - Decision on the Organization of Standardization and Metrology Activities (already adopted by the Government); - Tax Code (already adopted by Parliament); - Law on VAT (already adopted by Parliament); - Extract of the Budget Law for 1997 (draft); - Law on Audio-Visual Services (already adopted by Parliament); - Law on Trademarks and Appellations of Origin (already adopted by Parliament); - Copyright Law (already adopted by Parliament); - Patent Law (already adopted by Parliament); - Law on Plant Variety Protection (already adopted by Parliament); and, - Law on Securities (already adopted by Parliament).

Moreover, Moldova submits a policy paper on its tax reform entitled "Concept of the Tax Reform". Copies of further laws and regulations will be submitted as they become available or translated, respectively.

IV. POLICIES AFFECTING TRADE IN GOODS 1. Import Regulation (a) Registration requirements for engaging in importing

Question 18.

Can natural persons engage in importation activities? If not, why not?

Answer:

Natural persons can engage in importation activities. Under the current law goods subject to import licensing can only be imported by firms.

(b) Characteristics of national tariff

Question 19.

When does Moldova intend to bring its tariff nomenclature into line with the HS 96 system?

Answer:

Moldova intends to introduce the HS 1996 system from 1 January 1998.

Question 20.

Could Moldova please provide the following information on the m.f.n. rates in its national customs tariff: the simple average; the trade weighted average; and the minimum and maximum tariff rates, on a chapter-by-chapter basis?

Answer: WT/ACC/MOL/3 Page 9

Moldovan National Tariff Average Tariff Rates

Description Year Percentage Simple average 1995 9.5% Simple average 1996 n.a.* Trade weighted average 1995 5.9% Trade weighted average 1996 4.8% (using 1995 weights)*

* A simple average for 1996 has not been calculated as the 1996 tariff included a number of relatively high fixed duty rates. When calculating the weighed average these could be ignored as there have not been important import volumes in these tariff lines.

Minimum and Maximum Tariff Rates by Chapter (as of 31 December 1996)

Chapter Minimum in % Maximum in % 1 0 20 2 20 20 3 0 20 4 0 20 5 20 20 6 20 20 7 0 20 8 15 50 9 0 10 10 0 0 11 0 0 12 0 0 13 0 0 14 20 20 15 0 20 16 20 20 17 0 20 18 0 40 19 30 30 20 20 20 21 20 20 22 0 20* WT/ACC/MOL/3 Page 10

Chapter Minimum in % Maximum in % 23 0 0 24 15 15* 25 10 20 26 5 5 27 0 0 28 5 5 29 0 5 30 0 0 31 0 0 32 0 0 33 0 15 34 5 5 35 10 10 36 20 20 37 0 15 38 0 0 39 0 0 40 0 0 41 0 0 42 20 20 43 20 20 44 0 20 45 0 0 46 20 20 47 0 0 48 0 20 49 0 0 50 0 0 51 0 0 52 0 0 53 0 0 54 0 0 55 0 0 56 0 20 57 20 20 58 15 15 59 15 15 60 0 0 WT/ACC/MOL/3 Page 11

Chapter Minimum in % Maximum in % 61 20 20 62 0 20 63 0 20 64 0 15 65 20 20 66 0 20 67 20 20 68 15 20 69 0 20 70 10 20 71 5 30 72 0 0 73 0 0 74 0 0 75 0 0 76 0 0 77 0 0 78 0 0 79 0 0 80 0 0 81 5 5 82 10 10 83 0 10 84 0 20 85 0 30 86 0 0 87 0 10** 88 0 0 89 0 0 90 0 0 91 20 20 92 15 15 93 20 20 94 0 30 95 0 20 96 5 20 97 0 20

* These chapters also include fixed rates. See Customs Tariff for details. WT/ACC/MOL/3 Page 12

** This chapter includes special rates for motor vehicles. See Customs Tariff for details.

Question 21.

Are tariff exemptions (except those applied in the context of a Customs Union or Free Trade Agreement) applied on an m.f.n. basis?

Answer:

Tariff exemptions other than those provided for in the context of a customs union or a free trade agreement are applied on an m.f.n. basis, except for the exemption of goods originating from least-developed countries which is in conformity with the "Enabling Clause" (Decision of the Contracting Parties of 28 November 1979).

Question 22.

With regard to the exemption granted to some products originating in CIS countries; Article I of the GATT 1994 requires application of the m.f.n. principle, whilst Article XXIV allows for exceptions for regional integration initiatives where these are compatible with the requirements of Article XXIV and of the Understanding on that Article. Is Moldova prepared to undertake that exemptions will only be given to third countries in the context of a WTO-compatible free trade agreement or customs union agreement?

Answer:

Moldova is prepared to undertake that exemptions will only be granted to third countries in the context of WTO-compatible free trade or customs union agreements, except for goods originating in least-developed countries referred to in the previous answer.

Question 23.

Please provide a full list of the types of imports which benefit from tariff exemptions and which are alluded to in the last sentence of this section.

Answer:

Charitable donations are goods offered free-of-charge to recognized charity institutions such as orphanages, churches, centres for the disabled, etc. Charitable donations may come from organizations such as the Red Cross, Caritas, Kolping-Werk, Brot-für-die-Welt or from individuals. Goods donated for charitable purposes are exempt from customs duty. For goods imported under co-operational contracts see next answer.

Question 24.

Please clarify what is covered by the exemption for imports of “goods under co-operational contracts”.

Answer: WT/ACC/MOL/3 Page 13

‘Co-operational contracts’ refers to the GSP system of the European Union and agreements of technical cooperation between Moldova and its partners. The term 'co-operational contract' is sometimes also used to refer to contracts between enterprises in the context of temporary imports. For these refer to section II.2(b).

Goods imported for the use in projects of technical cooperation are exempt from customs duty and VAT in accordance with the immunities granted to foreign diplomatic missions and agencies of technical assistance. Upon completion of technical assistance projects such goods are transferred to State-ownership for government use and the receiving government institution does not pay customs duty or VAT.

(d) Other duties and charges

Question 25.

As an ad valorem fee, the Customs User Fee is not consistent with Article VIII of GATT, which requires that fees and charges related to importation are limited to the cost of services rendered. What steps does Moldova intend to take to bring its system in line with GATT practice?

Could Moldova explain how the ad valorem rate customs user fee is consistent with the requirement of GATT Article VIII that such fees shall be limited “in amount” to the approximate cost of services rendered?

Answer:

Moldova is aware of the GATT panel decision of 1988 that the use of an ad valorem system of customs user fees is inconsistent with the provisions of Articles II.2(c) and VIII.1(a) of the GATT to the extent that it causes fees to be levied in excess of the approximate costs of customs processing for individual entries in question.

The Government of Moldova intends to change its system so that the customs user fee will either be incorporated in the customs tariff or a flat fee reflecting the average cost of processing a customs declaration will be introduced. Moldova expects the amendment to enter into force no later than January 1998.

Question 26.

Does Moldova apply any seasonal duties? If so, please provide full details of the product coverage, level, etc.

Answer:

Moldova does not apply any seasonal duties.

(e) Quantitative import restrictions

Question 27.

Annex 3, section III.3 of the Memorandum seems to indicate that Moldova does maintain some import prohibitions. Is this the case? If so, please list the products subject to such a prohibition and justification for imposing that prohibition. WT/ACC/MOL/3 Page 14

Answer:

Moldova is not maintaining import prohibitions. The reference in Annex 3 of the Memorandum refers to a situation where import prohibitions may be imposed under the Law on Foreign Trade Activity.

Question 28.

Can Moldova confirm that it does not intend in the future to introduce import prohibitions?

Can Moldova confirm that it does not intend in the future to introduce import quotas?

Can Moldova confirm that it does not intend in the future to introduce restrictive import licensing?

Answer:

Moldova confirms that it will only apply import restrictions, quotas and restrictive import licensing in conformity with the relevant WTO provisions.

(f) Import licensing procedures (Annex 3 refers)

Question 29.

Please confirm that the import licensing system applies also to imports from CIS countries and/or countries with which Moldova has a preferential trade agreement.

Answer:

The import licensing system applies to all imports irrespective of their origin, including imports from CIS countries and other countries with which Moldova has a preferential trade agreement.

Question 30.

Could Moldova please state the rationale behind including “precious metals, minerals, precious stones and articles made from them” in the list of goods subject to licensing in Annex 3(a).

Answer:

The Government is currently redrafting the Decision governing the licensing system. Moldova will submit a copy of the new Decision to the Working Party as soon as a draft text becomes available.

Question 31.

It is not entirely clear to whom an application for an import licence should be made. It would appear that except “in cases concerning agriculture”, the application is made to the Department for Foreign Economic Relations in the Ministry of Economy.

Please confirm whether or not this understanding is correct.

Answer: WT/ACC/MOL/3 Page 15

An application for an import licence must always be made to the Department of Foreign Economic Relations in the Ministry of Economy, except for fertilizers and the other products mentioned in the table below for which the State Centre for Testing of Chemical and Biological Products used for Protection and Growth Stimulation of Plants which is part of the Ministry of Agriculture issues the licence.

Products for Which Import Licences are Issued by the Ministry of Agriculture

Product Group HS Code Products of the chemical and allied industries 28.01 - 28.51 Organic chemicals 29.01 - 29.42 Fertilizers 31.01 - 31.05

Question 32.

Please provide a full list of products (including the HS code where possible) where the application for a licence should be made to the Ministry of Economy.

Answer:

For the following products or product groups the application for a licence should be made to the Ministry of Economy:

Product Group HS-Code * Weapons, ammunition, military equipment, kits to produce such 93.00 equipment, works and services in the field of technical-military cooperation Explosive substances 36.01 -36.03 Nuclear materials, technologies, equipment and installations to 28.44, 84.01 produce such materials Ionic radiation sources - Pharmaceutical products 30.00 Equipment and tools for general medicine, surgery, stomatology 90.18-90-22 and veterinary purposes, including devices for scintigraphy and other electric medical devices; equipment for sight testing; Diagnostic tests and chemical reactives 38.22 Medical and optical equipment 90.01-90.04 Drugs, substances with psychotropic effects; materials to produce 29.21-29.26 such substances Poisons - Precious metals, including gold and silver, minerals, precious 71.00 stones and objects made thereof, alloys, semifabricates, wastes containing precious metals (except electronic articles containing precious metals) Textiles (exported to EU countries) - WT/ACC/MOL/3 Page 16

* The list of HS codes covered by the licensing provisions is in the process of being completed. Moldova will in due course submit a final list.

Question 33.

For medications, drugs and medical equipment it would appear that authorization to import has to be sought from the Ministry of Health BEFORE an application for an import licence is made to the department for Foreign Economic Relations.

Is our understanding on this point correct?

Answer:

Moldova confirms that the authorization from the Ministry of Health must be sought in advance.

Question 34.

Is this a mandatory requirement or can a licence application be submitted without this authorization (e.g. the DFER submits the application for authorization to the Ministry of Health itself)?

Answer:

The prior authorization from the Ministry of Health is a mandatory requirement.

Question 35.

How would an importer go about obtaining the prior authorization from the Ministry of Health?

Answer:

In the Ministry of Health there is a special commission to consider requests for authorizations to import medications, drugs or medical equipment. Importers may address themselves to this commission.

Question 36.

Why is the authorization of the Ministry of Health required both when applying for the licence and the time of actual importation?

Answer:

The authorization is required only once when applying for a licence. Upon importation only the licence issued by the Ministry of Economy on the basis of a valid authorization from the Ministry of Health must be presented.

Question 37.

Please explain the reason(s) why the documents to be submitted when applying for a licence include “the mandate of the applicant organization, given to the person authorized to obtain the licence” and “copies of incorporation documents” (see Annex 3 of the Memorandum)?

Answer: WT/ACC/MOL/3 Page 17

With the entering into force of the new Regulation on External Economic Activity, which is currently being drafted, the requirement of submitting a mandate of the applicant organization will be abolished.

The requirement concerning the submission of incorporation documents has already been abolished.

Question 38.

When an application for a licence is refused, does the applicant have recourse to an independent appeals body?

Answer:

If an application for a licence has been refused, the applicant can challenge the decision in the courts. No special appeals body has been set up.

Question 39.

There is an administrative charge for issuing a licence of 180 lei (10 minimum wages). Could Moldova give more precise indications on how exactly these charges are calculated to cover the services rendered (GATT Article VIII)?

Answer:

The fee was calculated to cover the printing costs of the application and licence forms and estimated depreciation of equipment. Over time these costs have increased but the licence fee has not been adjusted. Therefore the current licence fee covers only part of the actual expenses related to the processing of licences.

Question 40.

Does the Government of Moldova make public the information concerning import licensing procedures, such as the conditions for granting a licence so that foreign traders can clearly understand the system?

Answer:

The Government has published the rules and regulations,including the procedures, for obtaining import licences in the Monitorul Official (official bulletin of the State) in Government Resolution No. 371 of 6 June 1995.

Question 41.

In the case where import licence is not granted, are the reasons shown to the applicant?

Answer:

There are clear rules contained in Government Resolution No. 371 of 6 June 1995, under which import licences will not be issued. The applicant will be informed about the reasons.

(h) Customs valuation WT/ACC/MOL/3 Page 18

Question 42.

Please provide the Working Party with a copy of Government Decision No.99 of 27 February 1996 on Customs Valuation, which will enable the Working Party members to assess the compatibility of Moldova’s Customs Valuation scheme with WTO rules.

Answer:

A copy of an English translation of Government Decision No. 99 of 27 February 1996 has been submitted and is available for consultation in the Secretariat (Accessions Division, Room 1126).

Question 43.

We understand that Moldova is currently preparing a new Customs Valuation Decision which is expected to come into force by April 1997. Would it be possible to see a copy of this new Decision whilst it is still in draft form, to enable the Working Party members to comment on its WTO compatibility?

Answer:

The new regulation on Customs Valuation is part of the draft "Law on the Customs Tariff", a copy of which is available for consultation in the Secretariat (Accessions Division, Room 1126).

(j) Pre-shipment inspection

Question 44.

Will Moldova undertake that, should any pre-shipment inspection system be introduced in the future, the operation of such a system will be consistent with the relevant WTO Agreements, in particular, on Pre-shipment Inspection and Customs Valuation?

Answer:

Moldova is prepared to undertake that any future system of pre-shipment inspection will be consistent with the relevant WTO Agreements, including the Agreements on Pre-shipment Inspection and on Customs Valuation.

(k) Application of internal taxes on imports

VAT

Question 45.

Article XXIV of the GATT does not exempt regional integration agreements from application of the m.f.n. principle with regard to internal taxation. Please indicate when Moldova intends to bring its system of VAT application into line with Article I of the GATT 1994, so that it is applied equally to imports from all third countries, including from CIS countries.

Answer:

In the context of the reform of the fiscal system, which is now ongoing, Moldova will move to the principle of destination for VAT purposes in its trading relations with all countries. The WT/ACC/MOL/3 Page 19

Government expects these changes to enter into force by January 1998. Imports from CIS countries will then be subject to VAT in Moldova as are imports from all other countries and domestically produced goods. In its trading relationswith all other countries Moldova is already applyingthe principle of destination for VAT purposes.

Question 46.

Please confirm that VAT exemptions are applied with full respect for the national treatment and m.f.n. principles?

Answer:

Moldova confirms that in future all VAT exemptions will be applied in accordance with the m.f.n. and national treatment principles.

Question 47.

Are there any VAT exemptions for particular importers (as opposed to particular products)? If so, please provide full details.

Answer:

A special VAT exemption exists only for the American company REDECO according to the concessional agreement on prospecting and exploitation of oil and gas.

Excise taxes

Question 48.

Does Moldova apply full national treatment to its excise tax system, both in terms of the level of the taxes and in terms of the method of calculation of the taxes? If not, please provide details of the tax levels for both domestic and imported goods.

Answer:

At present different rates of excise tax are being charged for domestically produced goods and for imported goods. Moldova recognizes that this system is incompatible with the provisions of Article III of the GATT and will adjust its legislation accordingly. The Government expects that new, uniform rates will come into effect no later than January 1998. The rates charged for domestically produced and for imported goods were submitted with the Memorandum as part of the 1996 Budget Law and are available for consultation in the Secretariat (Accessions Division, Room 1126).

Question 49.

Please complete the table on page 9 (WT/ACC/MOL/2) by including all products which are subject to excise tax, indicating the level of the tax for both domestic and imported products.

Answer:

The extract from the 1996 Budget Law referred to above contains the complete list including all products subject to excise tax and both, the rates charged for domestically and for imported goods. WT/ACC/MOL/3 Page 20

Question 50.

The table listing goods subject to excise taxes (page 9, WT/ACC/MOL/2) includes “sparkling wine”, but does not state the level of the excise tax levied on this product. Could Moldova please add this information in the table .

Answer:

The rates for sparkling wine are included in the extract from the 1996 Budget Law referred to above.

Question 51.

“Spirits used in pharmacology and veterinary products are exempt from excise tax”. How does Moldova ensure that there is no abuse of this exemption?

Answer:

Manufacturers of pharmaceuticals or veterinary products are granted exemption from excise taxes for imported spirits on a bona fide basis if they declare that the imported spirits will be used for the production of pharmaceuticals or veterinary products. However, exemptions from excise taxes are being monitored and unusual supplies which cannot be explained may give rise to an investigation.

Question 52.

Do any other internal taxes (other than VAT and excise duty) apply to imports?

Answer:

In addition to VAT and excise taxes there are no other internal taxes on imports.

Question 53.

The Memorandum mentions Moldova’s policy on national treatment on internal taxation but not on regulatory aspects of sale, offering for sale, purchase, transportation, distribution or use. What is the content of Moldova’s policy in this area? Please explain how it complies with Article III.4 of GATT?

Answer:

Moldova grants national treatment to imported products in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use, as provided for in Article III of the GATT.

Question 54.

The exemption of excise tax on imports from Romania and CIS States is inconsistent with Article III of the GATT. Does Moldova have plans to remove this exemption?

Answer: WT/ACC/MOL/3 Page 21

The exemption of imports from Romania from excise taxes has been discontinued. For CIS countries and planned changes in the overall excise regime see the answer to question on value-added tax above.

(l-m) Rules of origin and anti-dumping régime

Question 55.

Please clarify whether proof of origin is required for products originating from all countries or only from those countries exporting to Moldova under a preferential scheme?

Answer:

Proof of origin is required only for goods imported from those countries which export to Moldova under a preferential trade agreement and from least-developed countries.

Question 56.

Where proof of origin is required, what constitutes that proof?

Answer:

The proof is constituted by a valid, official certificate of origin.

Question 57.

How is the country of origin currently ascertained?

Answer:

The country of origin is ascertained by verifying whether the certificate of origin which is submitted coincides with the merchandise to be imported.

Question 58.

Moldova is in the process of preparing a law on rules of origin. Would it be possible to see a copy of this law in draft form, to enable the Working Party members to comment on its WTO compatibility?

Answer:

A copy of the proposed new rules of origin has been submitted and is available for consultation in the Secretariat (Accessions Division, Room 1126) as part of the draft "Law on the Customs Tariff".

Question 59.

Can Moldova give a commitment that their laws on anti-dumping and rules of origin will comply with the WTO Agreements on Rules of Origin and Anti-Dumping?

Does Moldova intend to develop safeguards legislation. If so, can it give an undertaking that it will comply with the WTO Agreement on Safeguards? WT/ACC/MOL/3 Page 22

Answer:

The Government of Moldova has prepared new draft laws on the rules of origin and customs valuation; a copy of the draft text is available for consultation in the Secretariat (Accessions Division, Room 1126). The Government is preparing a law on anti-dumping, countervailing and safeguard measures which willcomply with the respective WTO regulations. Safeguard measures are contained in Article 15 of the draft "Law on Foreign Trade Activity".

(o) Safeguard régime

Question 60.

Could Moldova please confirm that no safeguard legislation is in force/in preparation

Answer:

Safeguard measures are contained in Article 15 of the draft "Law on Foreign Trade Activity". In addition, the Government is preparing a law on anti-dumping, countervailing and safeguard measures which will comply with the respective WTO regulations.

Question 61.

If this is not the case, please provide a copy of its legislation/draft legislation in a WTO language.

Answer:

A copy of the draft Law on Foreign Trade Activity is available for consultation in the Secretariat (Accessions Division, Room 1126).

2. Export Regulation (a) Registration requirements for engaging in exporting

Question 62.

Can natural persons engage in exportation services?

Answer:

Natural persons can engage in exportation activities. Under the current law goods subject to export licensing can only be exported by firms.

(b) Customs tariff nomenclature

Question 63.

As an ad valorem fee, the customs user fee is not consistent with Article VIII of GATT 1994, which requires that fees and charges related to exportation are limited to the cost of services rendered and that they shall not represent a taxation of exports for fiscal purposes.

In the light of this, please explain the purpose of the customs user fee in the context of exportation activities. WT/ACC/MOL/3 Page 23

Answer:

The customs user fee finances the activities of the Customs Department. At present proceeds from both imports and exports are entered into a single operating budget of the Department. Expenditure for export-related services need not coincide with receipts from customs user fees charged in connection with exports.

Question 64.

What steps does Moldova intend to take to bring its system into line with GATT practice?

Answer:

Question 65.

Please provide more details about the temporary export restrictions on unbottled wine.

Does this restriction still apply?

Answer:

The restriction no longer applies.

Question 66.

When did it/will it expire.

Answer:

It expired on 30 September 1996.

Question 67.

What was/is the nature of this restriction?

Answer:

The restriction consisted of an export ban for unbottled wine.

Question 68. WT/ACC/MOL/3 Page 24

What was the reason for imposing the export restriction?

Answer:

The restriction was introduced for two reasons. First, the Moldovan Government intended to promote the image of Moldovan wine, one of Moldova's most important export products. Domestic quality controls are one way of ensuring that bottles of Moldovan wine meet certain quality standards. Second, bottled wine has a higher value-added which, in turn, yields higher corporate tax revenues. Against a background of strained public finances, tax revenues are a high priority concern of the Government. However, the measure proved ineffective and was therefore removed.

Question 69.

Does Moldova intend to make use of (a) export prohibitions or (b) export quotas in the future for any product?

Answer:

Moldova confirms that it will only apply export restrictions and export quotas in conformity with the relevant WTO provisions, in particular Article XI of the GATT.

(d) Export licensing procedures

Questions asked about the import licensing system which also apply to exports:

Question 70.

Please confirm that the export licensing system applies also to exports to CIS countries and/or countries with which Moldova has a preferential trade agreement.

Answer:

The export licensing system applies to all exports irrespective of their destination, including exports to CIS countries and other countries with which Moldova has a preferential trade agreement.

Question 71.

Could Moldova please state the rationale behind including “precious metals, minerals, precious stones and articles made from them” in the list of goods subject to licensing in Annex 3(a).

Answer:

Export licensing for precious metals and minerals, precious stones and articles made thereof has been introduced in accordance with Article XX(c) of the GATT.

Question 72.

It is not entirely clear to whom an application for an export licence should be made. It would appear that except “in cases concerning agriculture”, the application is made to the Department for Foreign Economic Relations in the Ministry of Economy.

Please confirm whether or not this understanding is correct. WT/ACC/MOL/3 Page 25

Answer:

An application for an export licence must always be made to the Department of Foreign Economic Relations in the Ministry of Economy, except for fertilisers and the other products mentioned in the table below for which the State Centre for Testing of Chemical and Biological Products used for Protection and Growth Stimulation of Plants which is part of the Ministry of Agriculture issues the licence.

Products for Which Export Licences are Issued by the Ministry of Agriculture

Product Group HS-Code Products of the chemical and allied industries 28.01 - 28.51 Organic chemicals 29.01 - 29.42 Fertilizers 31.01 - 31.05

Question 73.

Please provide a full list of products (including the HS code where possible) where the application for a licence should be made to the Ministry of Economy.

Answer:

See previous answer.

Question 74.

For medications, drugs and medical equipment it would appear that authorization to export has to be sought from the Ministry of Health BEFORE an application for an export licence is made to the department for Foreign Economic Relations.

Is our understanding on this point correct?

Answer:

Moldova confirms that the authorization from the Ministry of Health must be obtained in advance.

Question 75.

Is this a mandatory requirement or can a licence application be submitted without this authorization (e.g. the DFER submits the application for authorization to the Ministry of Health itself)?

Answer:

The prior authorization of the Ministry of Health is a mandatory requirement.

Question 76.

How would an exporter go about obtaining the prior authorization from the Ministry of Health? WT/ACC/MOL/3 Page 26

Answer:

In the Ministry of Health there is a special commission to consider requests for authorizations to export medications, drugs or medical equipment. Exporters may address themselves to this commission.

Question 77.

Why is the authorization of the Ministry of Health required both when applying for the licence and the time of actual exportation?

Answer:

The authorization is required only once when applying for a licence, and the same document must be presented upon exportation.

Question 78.

Answer:

The requirement to submit a mandate of the applicant organization will be abolished shortly after the new Law on Foreign Trade Activity will come into force. The requirement to present incorporation documents when applying for a licence has already been abolished.

Question 79.

When an application for a licence is refused, does the applicant have recourse to an independent appeals body?

Answer:

If an application for a licence has been refused, the applicant may challenge the decision in the courts. No special appeals body has been set up.

Question 80.

Answer:

The fee was calculated to cover the printing costs of the application and licence forms and estimated depreciation of equipment. Over time these costs have increased but licence fee has not been adjusted. Therefore the current licence fee covers only part of the actual expenses related to the processing of licences. WT/ACC/MOL/3 Page 27

Questions asked specifically about section 2 (d):

Question 81.

Please confirm that the export licensing system applies also to imports from CIS countries and/or countries with which Moldova has a preferential trade agreement.

Answer:

See above.

Question 82.

Does the principle of national treatment apply for issuing export licences?

Answer:

The principle of national treatment does apply for issuing export licences.

Question 83.

For each product subject to export licensing, please provide the WTO justification for requiring such licensing.

Answer:

The licensing requirement for goods listed in Annex 3(a) of the Memorandum is in accordance with the provisions of Article XX and XXI of the GATT. The following table provides an overview of the WTO justifications for each product group:

WTO Justifications for Each Product Group

Product Group Subject to Reason for Licensing GATT Reference Licensing Weapons, ammunition, military National security Art. XXI(b)(ii) equipment, kits to produce such equipment Explosive substances National security Art. XXI(b)(ii) Nuclear materials, technologies National security Art. XXI(b)(ii) equipment and installations to produce such materials Ionic radiation sources National security Art. XXI(b)(i) Drugs, psychotropic effect Protection of human, animal Art. XX(b) substances and preparations, or plant life or health materials to produce such substances and preparations, poisons WT/ACC/MOL/3 Page 28

Product Group Subject to Reason for Licensing GATT Reference Licensing Precious metals, minerals, Special role of gold and silver Art. XX(c) precious stones and articles made from them (except for electronic articles that contain precious metals) Lottery-type inventions, means and Protection of public morals Art. XX(a) equipment for different types of lottery; slot machines, fortune games Chemical substances (including Protection of human, animal Art. XX(b) fertilizers and plant protection or plant life or health substances) and industrial rejects subjects to international control Medicines, medical appliances and Protection of human, animal Art. XX(b) equipment or plant life or health

Question 84.

What is the reason for applying the different system of fees depending on the country of destination of the export?

Answer:

There are no different fees applied depending on the country of exportation, except in the context of the special situations of exports to the EU:

- in the context of the EU GSP system; and - Moldova's textile agreement with EU.

The licence fee structure is as follows:

Licence Fee Structure

Licence Type Import/Export Fee General licence, valid for one year Import and Export MDL 180 specifying a monetary equivalent Regular licence, valid for one Import and Export 0.1% of the value of the shipment, issued on the basis of a merchandise contract GSP licence for export to the European Export - MDL 18 for the licence Union in the GSP framework - DM 1 for the licence form - 0.1% for the certificate of origin (Form A) Textile licence for export to the Export - MDL 18 for the licence European Union in the framework of - DM 2 for the licence form the Textile Agreement WT/ACC/MOL/3 Page 29

(e) Other measures

Question 85.

Please confirm that the list in Annex 3(b) contains the complete list of goods subject to registration upon export, as this list does not contain “waste paper” which is, however, covered in section 2(e) of the Memorandum (WT/ACC/MOL/2).

Answer:

Waste paper is included in Annex 3(b) of the Memorandum which contains the complete list.

Question 86.

What is the purpose of registering export contracts?

Answer:

The export registration requirement does not constitute an export restriction or prohibition for agricultural goods. Moreover, the Government has the intention to abolish the registration requirement as soon as possible.

The purpose of registering export contracts has been to safeguard the public interest in the field of external economic relations. The first issue is the prevention of tax evasion. Companies' proceeds from exports are registered and later compared with these companies’ tax returns.

Secondly, the registration requirement has been part of the Government's efforts to ensure that export earnings are fully repatriated. Export prices which are significantly lower than world market prices may give rise to an investigation. Initially, the Government reserved the right not to register export contracts if the stated price was significantly below world market prices but now registration can no longer be withheld for that reason. The Government is currently redrafting the relevant Government Decision to reflect this liberalization.

Thirdly, the registration of export contracts permits easy monitoring of export prices and volumes of key Moldovan products.

Question 87.

Is registration of export contracts an automatic process which does not affect the ability of the exporter to proceed with exportation?

Answer:

If the exporter submits all documents required, and export of the goods in question is not subject to licensing or banned, the contract is automatically registered.

Question 88.

It would appear from this section that there is some sort of system providing for minimum export prices. WT/ACC/MOL/3 Page 30

Please provide a full list of products for which there are minimum export prices, giving the level of the minimum export price.

For each product, what is the reason for applying minimum export prices?

Please explain how the minimum export prices were calculated.

Answer:

As there is no longer a system of minimum export prices, these questions do not apply.

(f) Export financing, subsidy and promotion policies

Question 89.

Could Moldova confirm that it does not maintain, and has no intention of introducing in the future, any export subsidies?

Answer:

Moldova is not currently maintaining export subsidies. If Moldova, in the future, introduces export subsidies, it will do so in accordance with the relevant WTO provisions, such as the SCM and Agriculture Agreements. The Government may adopt measures such as:

- providing access to information; - training of personnel in all aspects of foreign trade; - improving the private banking and insurance systems; - improving communications; - simplifying administrative procedures for export.

3. Internal Policies of Moldova Affecting Foreign Trade in Goods (a) Industrial policy, including subsidy policies

Question 90.

Could Moldova please specify the sectors allowed to benefit from “tax incentives” and “priority loans”.

Answer:

The sectors referred to in this section are being restructured with the help of international aid agencies such as the World Bank and the EBRD which provide so-called sectoral loans. These loans finance infrastructure investments, technical assistance or credit lines which are channelled through the banking system and lent out to beneficiaries at market rates.

Such loans have been contracted to restructure the following sectors: energy, agriculture, transport, road building and telecommunications. In addition, loans for the development of the private sector have been contracted which benefit the private sector as a whole. Loans for education, water, cadastre and social development are currently in preparation. WT/ACC/MOL/3 Page 31

Question 91.

Please confirm that no forms of support are afforded to any sector producing goods which could be contrary to the SCM Agreement.

Answer:

For current support payments see information provided in WT/ACC/MOL/2/Add.2. As for the future, Moldova confirms that no forms of support will be granted to sectors producing goods which could be contrary to the SCM Agreement.

Question 92.

Please expand on the tax incentives it grants to such sectors.

Answer:

In addition to the infrastructure investments, technical assistance and credit lines which are financed from loans provided by international aid agencies, the Government of Moldova facilitates the adjustment process through the following tax-related measures which are awarded on a case-by-case basis:

- rescheduling of tax arrears for companies in restructuring; - forgiving of penalties for late payment of taxes; - rescheduling of social insurance contributions; - forgiving of penalties for late payment of social insurance contributions; - write-off of tax liabilities of former State companies in the framework of liquidations and break-ups.

Question 93.

Please clarify whether the priority loans are granted upon terms and conditions differing from those prevailing on the market.

Answer:

The loans referred to in this section as "priority loans" are the sectoral loans mentioned above. Some of these include a credit line component. Credits to beneficiaries are granted at market rates and conditions.

(b) Technical regulations and standards (Annex 5 refers)

Question 94.

When will Moldova complete the TBT Questionnaire?

Answer:

The following is an update on the answers provided in WT/ACC/MOL/2, Annex 5.

1. Description of relevant laws, regulations, administrative orders, etc, relating to implementation and administration of technical barriers to trade. WT/ACC/MOL/3 Page 32

The legal basis for technical regulations and standards applied in Moldova are the following legislative acts:

- Law on Protection of Consumers' Rights; - Law on Standardization; - Decision on the Organization of Standardization and Metrology Activities.

A copy of the Law on Protection of Consumers' Rights was submitted in WT/ACC/MOL/Add.1. Copies of the Law on Standardization and the Decision on the Organization of Standardization and Metrology Activities are available in the Secretariat (Accessions Division, Room 1126) for consultation.

2. Information regarding:

(a) Names of publications, if any, on work relating to draft technical regulations or standards and procedures.

The names of publications relating to draft technical regulations or standards and procedures are:

- "Buletunul Standardisari" published once every three months (Moldova); - "Standardizarca" published monthly (Romania); - "Standarti i Kacestvo" published monthly (Russian Federation).

(b) The name and address of the enquiry point(s) foreseen in Articles 10.1 and 10.3 of the WTO Agreement on Technical Barriers to Trade (the Agreement) with an indication as to whether it is/they are fully operational.

A proposal to fund the establishment of an enquiry point has been prepared and is currently under review. Moldova expects to set up the enquiry point with assistance from an international aid agency in time for accession.

The enquiry point will be located at Moldovastandard, Coca Street 28, Chisinau.

Consultations as foreseen in Article 14 of the Agreement will be dealt with by the Ministry of Economy and by Moldovastandard.

(d) The name and address of agencies that are dealing with other specific functions foreseen in the Agreement.

The agency which deals with other specific functions foreseen in the Agreement is Moldovastandard.

(e) The scope of responsibility of the central government authorities in the area of notification requirements foreseen in Article 10.11 of the Agreement and of individual government authorities, if the responsibility is divided among two or more such authorities.

The responsibility is not divided between two or more authorities. WT/ACC/MOL/3 Page 33

(f) Measures and arrangements to ensure that national and sub-national authorities preparing new technical regulations or substantial amendments to existing ones, provide early information on their proposals.

The National Fund for Documents on Standardization publishes all information in this field.

Question 95.

Moldova will have to accede to the TBT Agreement from the first day of accession to the WTO. What practical steps is Moldova taking or planning to take to prepare for the accession to the TBT Agreement?

Answer:

Moldova is taking the following measures to prepare its accession to the TBT Agreement:

- newly developed standards are harmonized with relevant international or european standards; - all norms and standards are revised every five years. In the course of the revision norms and standards developed previously are being harmonized with international or european standards; - a proposal to fund the establishment of an "enquiry point" has been prepared and is currently under review. Moldova expects to set up the enquiry point with assistance from an international aid agency; - the introduction of voluntary standards is being considered.

Question 96.

Could Moldova please provide more detailed information on the laws constituting the legal basis for technical regulations and standards: (i) Law of 25 May 1993 on consumer security, (ii) Law No. 90-XIII of 22 September 1995 on standardization, and (iii) Regulation on State supervision of documents and norms with regard to standardization.

Answer:

The "Law on Consumer Security" of 25 May 1993 has been submitted and is available in the Secretariat (Accessions Division, Room 1126) for consultation under the title "Law on Protection of Consumers' Rights." The "Law on Standardization" and the regulation, the English title of which is "Decision about the Organization of the Activity of Standardization and Metrology", are also available in the Secretariat (Accessions Division, Room 1126) for consultation.

Question 97.

Could Moldova please provide an overview of regulations relating to different products/product areas.

Answer:

At present there are rules for the following products or product groups in force in Moldova: WT/ACC/MOL/3 Page 34

Regulations relating to Different Products/Product Areas

Rules Products/Product Groups Medico-biological requirements to ensure that food Food products products are safe and meet minimum nutritional value requirements, issued by the Ministry of Health Sanitary standards as part of product standards, issued Broad range of non-food products by Ministry of Health Safety and compatibility standards Construction and building activity Safety norms and labour standards Services provided at the work place Environmental standards, including radiation safety General

Question 98.

Are the standards used in Moldova voluntary or mandatory; if mandatory, could Moldova please state the rationale behind this?

Answer:

Of the above all safety and sanitary standards are mandatory. A complete list of goods for which certification is mandatory, both if imported and domestically produced, is available in the Secretariat (Accessions Division, Room 1126) for consultation.

Against a background of a difficult economic situation, the absence of other obligatory technical requirements, product shortages and limited purchasing power of the population, Moldova considers mandatory safety and sanitary norms the only way to keep out poor quality or dangerous products.

Question 99.

Has Moldova the intention of gradually moving from the use of GOST-standards to the use of international standards; if so, what is the timetable and the priorities for this change-over?

Answer:

Moldova is a member of the EASC, a regional standardization organization within the ISO framework. In 1997 Moldova joined the ISO. As explained under point (ii) above, newly developed standards are harmonized with ISO standards and existing standards will be harmonised over time, in a process of periodic revisions. In the foreseeable future, Moldova will use GOST and ISO standards in parallel.

Question 100.

Could Moldova please provide more in-depth information on the procedures and requirements connected with the mandatory and/or the voluntary system of certification. For example, does the Moldovian certification system contain the possibility of using a manufacturers’ declaration? Does Moldova use pre-market certification in any product areas? WT/ACC/MOL/3 Page 35

Answer:

Imported goods are certified as part of the importation procedure. Goods accompanied by a certificate from a recognized foreign certification body receive their certificate without further examination on the basis of the foreign certificate. At present, only certificates from certification bodies of CIS countries are recognized. Other goods are examined by one of the official 15 certification bodies.

Domestically produced goods receive their certificate upon clearance by one of the official certification bodies. The 15 official certification bodies are independent, public institutions. They cooperate with 40 authorized laboratories.

Certification on the basis of manufacturers' declarations is permitted for a limited number of products. A complete list of goods for which certification on the basis of manufacturers' declaration is permitted is available in the Secretariat (Accessions Division, Room 1126) for consultation. Such certification is preliminary and subject to random controls.

All certification is pre-market certification.

Question 101.

Does Moldova accept as equivalent certificates from third country certification bodies?

Answer:

At present, Moldova only recognizes certificates from official certification bodies of CIS countries. Negotiations for the recognition of foreign certificates are ongoing with a number of countries including Romania, Poland, Germany and France.

Question 102.

Has Moldova developed a quality assurance system? Could Moldova please provide further information on this system or on any plans to develop such a system?

Answer:

Moldova is in the process of developing a quality assurance system.

Question 103.

Could Moldova also please provide further information on its accreditation system or plans to introduce such a system?

Answer:

Moldova has a National Accreditation Board for certification bodies and testing laboratories. Rules governing the activities of the Board and of certification bodies and testing laboratories meet the requirements of the EN45000. To coordinate the activities of the 15 official certification bodies and laboratories a coordination division has been set up within Moldovastandard. WT/ACC/MOL/3 Page 36

Question 104.

Does Moldova anticipate any difficulties in applying the SPS Agreement in full from the date of accession?

Answer:

Moldova does not anticipate any difficulties in applying the SPS Agreement in full from the date of accession.

(e) State-trading practices

Question 105.

Does Moldova intend to notify any enterprises under Article XVII of the GATT 1994 or Article VIII of the GATS?

Answer:

Moldova does not engage in State-trading in the sense of Article XVII of the GATT. Detailed information relating to barter trade has been provided in tables 3-5 of section 1.2. of WT/ACC/MOL/2/Add.2.

There is no State-trading with regard to services so that Moldova does not intend to notify any enterprise under Article VIII of the GATS, except for telecommunication services and public utilities.

Question 106.

We note Moldova’s advice that there are no State trading enterprises covered by the provisions of Article XVII. Are there any Moldovan products traded by State trading enterprises? If so, please advise which goods and the names of the enterprises.

Answer:

Moldova does not engage in State trading in the sense of Article XVII of the GATT. Detailed information relating to barter trade has been provided in tables 3-5 of section 1.2. of WT/ACC/MOL/2/Add.2. We reiterate that the Government only concludes a framework treaty with the other governments concerned, whereas actual sales contracts are made by Moldovan companies.

(f) Free zones

Question 107.

Does Moldova have any legislation relating to free zones?

Answer:

The Moldovan legislation relating to free zones is the Law No.1415-XII of 25 May 1993. WT/ACC/MOL/3 Page 37

Question 108.

Does Moldova have any intention of establishing any free zones in the future?

Answer:

A free zone (as defined by the World Customs Organization) exists already in Chisinau (see WT/ACC/MOL/2, page 20). Further free zones are foreseen in the future.

(g) Free economic zones

Question 109.

Please confirm whether or not free economic zones will be fully subject to the coverage of Moldova’s future commitments as a WTO Member.

Answer:

Free economic zones will be fully subject to future WTO commitments of Moldova.

Question 110.

Please indicate whether or not goods produced or imported into free economic zones under the special tax and tariff regimes envisaged to these zones are subject to normal customs formalities, taxes and tariffs when entering the rest of Moldova.

Answer:

Normal customs formalities, taxes and tariffs apply to goods which enter the rest of Moldova from a free economic zone and a free zone.

At the present time, a free economic zone exists at Tvardita; for details see page 20 of the Memorandum (WT/ACC/MOL/2).

(j) Government-mandated counter-trade and barter

Question 111.

Is all countertrade and barter trade subject to customs formalities, tariffs, taxes and licensing in the same way as other imports?

Answer:

Moldova confirms that all countertrade and barter trade is subject to customs formalities, tariffs, taxes and licensing as are other imports.

Question 112.

What agricultural products are used by Moldova in counter-trade and barter-trade? WT/ACC/MOL/3 Page 38

Answer:

A complete list of products, including agricultural products, traded by Moldova under Government-sponsored barter trade has been provided in document WT/ACC/MOL/2/Add.2.

(l) Government procurement practices

The following answers are based on the draft procurement law which has been elaborated by the Ministry of Economy in 1996. The Government expects that the draft procurement law will be adopted by the Moldovan parliament within the first half of 1997 without any substantial changes.

General

Question 113.

Does Moldova intend to join the GPA? If not, why not?

Answer:

Moldova will take a decision in this respect in due course.

Statistics

Question 114.

What statistics, if any, does the Moldovan Government collect on procurement?

Answer:

The Moldovan Government does not collect statistics on government procurement.

Question 115.

Could the Moldovan Government provide a breakdown of the public sector procurement market both by contracting entity and by product type?

Answer:

There are three domains of public procurement:

- procurement in connection with loans from international aid agencies such as the World Bank, the European Bank for Reconstruction and Development, which are subject to specific procurement regulations of these agencies; - procurement for security and defense purposes; - other government procurement.

Presently, there is no breakdown of the public sector procurement market by product type available. WT/ACC/MOL/3 Page 39

Question 116.

What is the overall value of public sector purchasing in Moldova, and which are the major procuring entities?

Answer:

The estimated overall value of central government purchasing in 1996 was MDL 200m.

The major procuring entities are the Government, Ministries and Departments, State institutions, and economic State agents.

Question 117.

Could the Moldovan Government make these statistics available to the Working Party, as well as a copy of their most recent law on public procurement?

Answer:

A copy of the most recent regulations on public procurement, i.e. the Government Decision "On the Mechanism of Public Procurement" from 20 September 1995, and the draft procurement law are available in the Secretariat (Accessions Division, Room 1126) for consultation.

Management Structure

Question 118.

What is the management structure of Moldova’s system of government procurement ?

Answer:

According to the Moldovan draft procurement law (Article 2; Article 45) the following institutions are involved in the procurement process:

- procuring entities, engaged in the acquisition of goods, construction and services; - the Bureau for Project Assistance and Public Procurement (the Bureau will be renamed “National Agency for Public Procurement”, hereinafter referred to as NAPP), which shall bear responsibility for the management of the procurement for the State needs.

More specifically, the NAPP shall be responsible for the:

- normative regulation of the organisation and implementation of procurement procedures; - formulation of procurement regulations, submitting them to the Government of Moldova for approval; - provision of guidance and methodological assistance to procuring entities in the conduct of procurements; - conduct review on complaints of suppliers,interaction with internationalinstitutionsand foreign entities; and - coordination of foreign technical assistance in the field of public procurement, and the monitoring and inspection of records and procedures of procuring entities. WT/ACC/MOL/3 Page 40

Question 119.

Is there a central agency that purchases on behalf of all central government agencies, or do individual government departments hold their own procurement budgets?

Answer:

There is no central agency that purchases on behalf of all central government agencies. Individual government departments hold their own procurement budgets.

Question 120.

How is purchasing managed for local government agencies and for other publicly-controlled bodies such as State-trading enterprises?

Similarly, how is procurement managed by utilities (entities operating in the oil and gas, electricity, transportation and water sectors)?

Answer:

Like central government agencies, local government agencies and other publicly-controlled bodies as well as utilities hold their own budgets for acquisitory purposes. The required budgetary resources are allocated to the procuring entities according to governmental priorities.

Monitoring authority

Question 121.

Is there a central agency which controls the application of the legal system or monitors infringements of procurement law?

Answer:

The NAPP is supervising and monitoring procuring entities in the conduct of procurements and oversees their compliance with the provisions of the procurement law and other legislative requirements such as regulations, rulings, and orders of general application in this area (Article 45).

Legal Remedies

Question 122.

Can suppliers who dispute the award of a contract seek redress through national courts or a tribunal system?

Answer:

There are three levels on which suppliers that claim to have suffered, or that may suffer, loss or injury due to a breach of a duty imposed on the procuring entity may seek redress (Article 54). Appeals can be submitted directly to the respective procuring entity and the NAPP (Article 55). Furthermore, the decisions of the NAPP are subject to review by the court (Article 59). WT/ACC/MOL/3 Page 41

Question 123.

What remedies (for example damages or re-tendering of contract) are available?

Answer:

The NAPP may cancel in full or in part an unlawful act or decision of the procuring entity, or revise an unlawful decision by the procuring entity. The NAPP may require the payment by the procuring entity of compensation for any reasonable costs actually incurred, but not for lost profit or opportunity costs, by the supplier. Moreover, the NAPP may order that the procurement proceedings be terminated (Article 56).

Advertising

Question 124.

Do detailed rules exist on the requirement to publish tender and contract award notices? If so, what information must these notices contain, and where are they published?

Answer:

A procuring entity must solicit tenders, or if applicable, applications for preliminary qualification, by publishing an invitation to tender or an invitation for preliminary qualification in the Romanian and Russian languages in the Public Procurement Bulletin (PPB) issued by the NAPP. In particular situations (for further details see Article 18), the invitation to tender or invitation for preliminary qualification shall also be published in the English language in mass media of wide international circulation (Article 26). The PPB also contains other announcements relevant to public procurement and advertisements thereof, as well as other information related to the procurement procedures (Article 45).

The invitation to tender contains, inter alia, specifications of the goods, construction and services to be supplied in terms of nature, quantity, place and time, the criteria and procedures to be used for evaluating the qualifications of suppliers, place and deadline for the submission of tenders, means and place of obtaining the solicitation documents (Article 27).

As to the contract award notices, the procuring entity shall publish notice of procurement contract awards within thirty calendar days after such awards are made. The notice includes at a minimum the name of the supplier, and the subject as well as the amount or the estimated amount of the contract. Procurement contract award notices shall not be published if national security or defense is concerned or if the contract price is less than twenty five hundred minimum monthly wages (Article 15).

Procurement procedures

Question 125.

Does the current procurement law stipulate requirements for pre-selection of candidate suppliers? If so, what are they?

Answer:

The procuring entity may engage in prequalification proceedings with a view towards identifying qualified suppliers prior to the submission of tenders. The procuring entity shall then provide a set WT/ACC/MOL/3 Page 42 of prequalification documents to each supplier that requests them, including a summary of the principal required terms and conditions of the procurement contract to be entered into as a result of the procurement proceedings, any documents or other information that must be submitted by suppliers to verify their qualifications, the manner and place for the submission of applications to prequalify and the deadline for the submission, and the criteria for prequalification. Only suppliers that have been prequalified are entitled to participate further in the procurement proceedings. For further details see Article 7.

Question 126.

Does the law stipulate procedures and conditions for different forms of contract award procedures (for example, limited, open or negotiated tendering procedures)?

If so, what are the procedure and criteria for each type of contract award procedure?

Answer:

A procuring entity shall engage in procurement of goods or construction by means of open competitive tendering proceedings as the preferred method of procurement. Under special conditions, a procuring entity may use the following methods of procurement (Article 19):

- two-stage tendering; - restricted tendering; - specialized restricted tendering; - request for quotations; and - single-source procurement.

The procedures and criteria for each type of contract award procedure are as follows:

- two-stage tendering (Article 20; Article 40):

A procuring entity may engage in two-stage tendering if

- it is not feasible to formulate detailed specifications for the goods or construction, or to identify the characteristics of services;

- the procuring entity seeks to enter into a contract for the purpose of research, experiment, study or development;

- the circumstances exist to engage in specialised restrictive tendering; or

- tendering proceedings have been engaged in but no tenders were submitted or all tenders were rejected by the procuring entity and engaging in new tendering proceedings would be unlikely to result in a procurement contract.

In the first stage, the solicitation documents shall call upon suppliers to submit initial tenders containing their proposals without a tender price. In the second stage, the procuring entity shall invite suppliers which participated in the first stage and whose tenders have not been rejected, to submit final tenders with prices with respect to a single set of specifications.

- restricted tendering (Article 21; Article 41): WT/ACC/MOL/3 Page 43

A procuring entity may engage in restricted tendering if

- there is only a limited number of suppliers; or

- subject to approval by the NAPP, where the value of the procurement contract is estimated to be less than twelve thousand minimum monthly wages and the time and cost required to evaluate a large number of tenders would be unreasonably high in comparison with the value of the goods, construction or services to be procured.

The procuring entity shall solicit tenders from all suppliers from whom the goods,construction and services to be procured are available.

- specialised restricted tendering (Article 22; Article 42):

A procuring entity may engage in specialised restricted tendering if the subject of the procurement involves armament or goods, construction or services for national security or national defense of such nature as to require secrecy or confidentiality.

- request for quotations (Article 23; Article 43):

A procuring entity may engage in procurement by means of a request for quotations for the procurement of readily available goods or services that are not specially produced or provided to the particular specifications of the procuring entity and for which there is an established market, so long as the estimated value of the procurement contract is less than twenty-five hundred minimum monthly wages, or other amount as may be stipulated in the procurement regulations issue by the NAPP.

- single-source procurement (Article 24; Article 44):

A procuring entity may engage in single-source procurement if

- there is an urgent need for the goods, construction or services, and engaging in tendering proceedings or any other method of procurement would therefore be impractical;

- there is only one particular supplier for the goods, construction or services to be procured;

- the procuring entity, having procured goods etc. from a supplier, determines that additional supplies must be procured from that supplier for reasons of standardization or compatibility;

- the procuring entity seeks to enter into a contract with the supplier for the purpose of research, experiment, study or development; or

- where procurement proceedings have been engaged in and only one tender, proposal, offer or quotation was received by the procuring entity in response to the solicitation documents, and engaging in new proceedings would be unlikely to result in a procurement contract.

The procuring entity may procure the goods etc. by soliciting a proposal or price quotation from, and engaging in negotiations with, a single supplier. WT/ACC/MOL/3 Page 44

Criteria for awarding contracts

Question 127.

How are bids evaluated?

Is price the only criterion in evaluating bids, or are contracts also evaluated by reference to an "economically most advantageous offer" approach?

Answer:

Tenders for goods and construction shall be evaluated on the basis of the following criteria (Article 37):

- the tender price;

- other criteria, including the cost of operating, maintaining and repairing the goods or construction, the time for delivery of the goods, completion of construction or provision of the services, the functional characteristics of the goods or construction, and the terms of payment and of guarantees; and

- provision of national defence and security.

The solicitation documents shall specify the evaluation criteria and their relative weight in the evaluation procedure or be expressed in monetary terms wherever practicable.

As to the evaluation of proposals for services, the evaluation criteria include (Article 48):

- the qualifications, experience, reputation, reliability and professional and managerial competence of the supplier and of the personnel to be involved in providing the services;

- the effectiveness of the proposal in meeting the needs of the procuring entity;

- the proposal price, including any ancillary or related costs; and

- national defence and security considerations.

The procuring entity shall determine the relative weight of the criteria and notify the suppliers about the manner in which they are to be applied in the evaluation of the proposals.

Question 128.

If so, under what conditions are the different evaluation methods used?

Answer:

As explained above, price is not the only criterion in evaluating bids. WT/ACC/MOL/3 Page 45

Preferences

Question 129.

Does Moldovan procurement law make provision for a system of domestic and price preferences?

Are these mandatory or optional?

How, precisely, do they operate?

How are they managed?

Answer:

If approved by the NAPP, a procuring entity shall have the right to grant a margin of preference for the benefit of tenders for construction by domestic contractors or for the benefit of tenders for domestically produced goods. The margin of preference shall not exceed 10 per cent (Article 37).

Question 130.

Does a policy exist to support local industry in Moldova?

Answer:

In 1996, an industrial development programme has been adopted by the Parliament, stipulating priority sectors for industrial development. Among such sectors are energy, transport, road building and telecommunications.

There are no special provisions for the support of local industry.

Question 131.

Is the procurement of certain products reserved for local industry?

Answer:

No products are reserved for local industry.

Offsets

Question 132.

Can foreign suppliers participate in tenders?

Answer:

Foreign suppliers are permitted to participate in procurement proceedings.

Question 133.

Does Moldovan procurement law make provision for any offset requirements, such as technology transfer or buy-back arrangements? WT/ACC/MOL/3 Page 46

If so, how often are offset arrangements negotiated on a case-by-case basis?

Answer:

The draft procurement law does not make provision for any offset requirements.

Information technology

Question 134.

Has a system of electronic tendering for public procurement been set up in Moldova?

If so, how does this system operate?

If not, are there any plans to set up such a system?

Answer:

A system of electronic tendering for public procurement has not been set up in Moldova yet, but the establishment of a database system for availability of data/information on tendering is foreseen.

International involvement

Question 135.

Does Moldova have any existing purchasing agreements with third countries?

If so, with which countries?

Could the Moldovan side also provide the Working Party with copies of those agreements?

Answer:

Moldova has not concluded any such agreements.

Discrimination of foreigners

Question 136.

Are there any provisions in Moldovan law which discriminate against the participation of foreigners in public procurement contracts?

Answer:

The procuring entity has no right to establish any criterion, requirement or procedure with respect to the qualifications of suppliers that discriminates against or among suppliers or against categories thereof on the basis of nationality (Article 6). Suppliers are permitted to participate in procurement proceedings without regard to nationality, except in cases in which the procuring entity decides to limit participation in procurement proceedings on the basis of nationality (Article 8). WT/ACC/MOL/3 Page 47

4. Policies Affecting Foreign Trade in Agricultural Products

Question 137.

Please provide the information requested in WT/ACC/4 on domestic support and export subsidies.

Answer:

Moldova indicates that it has no export subsidies or domestic support measures. However, it seems from document WT/ACC/MOL/Add.2 that Moldova is seeking to have commitments on domestic support which do not reflect current levels of support and is seeking to increase these levels of support. Can Moldova provide details of current levels of support and an indication that these levels will be reduced, not increased.

Moldova has given details of support levels provided in 1995 and the anticipated levels for 1996 and the total for the two years. We expect that these totals will be averaged for the AMS commitment (using the average of a three year representative period).

As no subsidies for agriculture were paid in 1994, Moldova has given details of support levels provided in 1995, the anticipated levels for 1996 and the total for the two years.

The table below gives the actual figures for 1996. We expect that these totals will be averaged for the AMS commitment.

Level of Subsidies in the Agricultural Sector in 1996

Measure 1996 Amount in Million MDL Soil Conservation 3.4 Viticulture Improvement 9.5 Fruit-growing Improvement 6.0 Farmer Support Payment 0.0 Livestock Subsidy 8.0 Milk Subsidy 0.0 Total 26.9

Question 138.

Are theregistration requirements forexport contracts covering certainagricultural products export restrictions or export prohibitions? Could Moldova explain such a measure? How long will the registration requirements be in existence?

Answer:

Thirdly, the registration of export contracts permits easy monitoring of export prices and volumes of key Moldovan products.

V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 1. General

Question 139.

Does Moldova intend to become a party to international conventions other than those mentioned in WT/ACC/MOL/2, such as the Rome or Berne Conventions?

Answer:

Moldova is a member of both the Rome and the Berne Conventions. Moreover, Moldova intends to become a party to the following international treaties:

- Madrid Agreement for the Repression of False or Deceptive Indications of Sources on Goods; - Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989); - Lisbon Agreement for the Protection of Appellations of Origin and their International Registration (1958); - Strasbourg Agreement Concerning the International Patent Classification (1971); - Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (1957); - Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (1973); - Locarno Agreement Establishing an International Classification for Industrial Designs (1968); - UPOV Convention.

Moldova states that pursuant to Article 19 of its Constitution, foreign nationals have the same rights and responsibilities as the nationals of Moldova, but there exist some exceptions. Please explain in more detail what these exceptions are.

Moldova applies the principle of national treatment with regard to intellectual property. The exceptions stipulatedin Article 19 of the Constitution refer to the rights to vote and to be elected, military service and related issues. WT/ACC/MOL/3 Page 49

2. Substantive Standards of Protection (a) Copyright and related rights

Question 140.

How are computer programs and compilations of data protected?

Answer:

Computer programs and compilations of data are protected by the Law on Copyright and Neighbouring Rights. The Law grants the holder of a copyright the exclusive right to exploit his work in any form and by any means. (Article 6, 10, Law on Copyright and Neighbouring Rights).

Question 141.

How are performers, producers of phonograms and broadcasting organizations protected?

Answer:

Under Moldovan law, the producer of a phonogram has the exclusive right for its use in any form, including the right to obtain remuneration for its use, i.e. to permit or prohibit:

- the play-back of the phonogram; - the distribution of copies of the phonogram (selling, renting); - the modification or change of the phonogram; - the importation of copies of the phonogram in order to broadcast it.

The producer may also transfer the right by means of a contract to another person (Article 28, Law On Copyright and Neighbouring Rights).

The performer of a phonogram has the exclusive right to permit or allow:

- the recording of an unrecorded performance; - the play-back of the recorded performance; - the transmission of the performance by radio-electronic means, cable or other means of communication; - the rental of a published phonogram. as well as the right to defend the performance against any disfigurement or contortion or undermining of the reputation of the performer, and to transfer the right by means of a contract to another person (Article 27, Law On Copyright and Neighbouring Rights).

Broadcasting organizations have the exclusive right to use phonograms in any form, including the right to obtain remuneration for the use of the phonogram, i.e. to permit or allow:

- the recording of the performance; - the play-back of the performance; - simultaneous broadcasting of the broadcast by another broadcasting or cable distribution organization; - communication of the broadcast to the public over the air or by cable; - communication of the broadcast to the public in places to which a charge is made for admission (Article 29, Law On Copyright and Neighbouring Rights). WT/ACC/MOL/3 Page 50

Foreigners enjoy national treatment with regard to these provisions.

(b) Trademarks

Question 142.

What are the rights conferred by a trademark under Moldovan law?

Answer:

Moldovan law grants the owner of a registered trademark throughout the term of the validity of the trademark an exclusive right to dispose of and exploit it as well as the right to prohibit other persons from using it on the territory of Moldova. No person shall be entitled to use a trademark protected in Moldova without the consent of its owner (Article 6(1), (2)).

The following acts constitute an infringement of the rights of the trademark owner if carried out without his consent: the manufacture, use, import, offer for sale, sale or any form of marketing, or holding for such purposes, of a trademark or a product designated by such trademark, or the use of a similar sign liable to mislead the consumer, in relation to goods or services of the same type (Article 6(3)).

Moldova has submitted to the Working Party a copy of the Law On Trademarks and Appellations of Origin which is available in the Secretariat (Accessions Division, Room 1126) for consultation.

Question 143.

How are well-known marks protected?

Answer:

In the Republic of Moldova well known marks are protected without registration in compliance with Article 6-bis of the Paris Convention for the Protection of Industrial Property (Article 7(4)) of the Moldovan Law On Trademarks and Appellations of Origin.

Question 144.

Are there any exceptions to the protection of a trademark?

Answer:

The exclusive right does not extend to elements of the trademark which, when taken separately, cannot be registered as trademarks (Article 6 (4)).

Question 145.

Is use of the trademark a condition, for example, for filing an application and to maintain registration?

Answer:

The use of a trademark is not a condition for filing an application or to maintain a registration. WT/ACC/MOL/3 Page 51

Question 146.

Does the definition of a geographical indication also comprise criteria, such as the quality, reputation or other characteristics of a product?

Answer:

The definitionof a geographical indication("appellation of origin") comprises natural properties of the product which derive essentially or exclusively from the natural or human factors specific to that geographical area. It may also be a word derived from a country or an administrative or territorial subdivision of a country (Article 3, Law on Trademarks and Appellations of Origin).

Article 7 (2,a) of the Law stipulates grounds for refusal to register a trademark or an appellation of origin in case they are deceitful or liable to mislead the consumer.

Question 147.

Could the Government of Moldova explain in more detail how geographical indications are protected (e.g. against unfair competition, misleading the public)?

Answer:

The use of a registered geographical indication, even if accompanied by a statement of the true place of origin of the product or in translation or in association with words such as "kind", "type", "imitation", or other similar notices is prohibited for any person who is not the holder of the registration certificate. The use, for products of the same type, of similar designation liable to mislead consumers as to the place of origin and special properties of the products is also prohibited (Article 22 (2), Law on Trademarks and Appellations of Origin).

Question 148.

How are wines and spirits protected?

Answer:

There are no specific provisions for the protection of wines and spirits other than those mentioned in the preceding answer.

(d) Industrial designs

Question 149.

Do the criteria for protection incorporate the independent creation of an industrial design as well as the condition of being new and original? Does it have to differ from known designs or combinations of known design features?

Answer:

The criteria for protection of industrial designs include the independent creation of an industrial design as well as the condition of being new and original. In order to be protected industrial designs WT/ACC/MOL/3 Page 52 have to differ from known designs or combinations of known design features (Article 4; Article 6(1) of the Law On Protection of Industrial Designs).

Question 150.

How are textile designs protected?

Answer:

Textile designs are protected in the same way as industrial designs.

(e) Patents

Question 151.

What rights are conferred to a patent holder?

Answer:

The holder of a patent has the exclusive right on the invention protected by the patent which consists of the right to use the invention, provided the usage does not interfere with the rights of other patent holders, to dispose of the patent and to forbid others to use the invention protected by the patent (Article 22(1), Law On Patents for Invention)

Question 152.

Is there a condition to work a patent? If so, does importation of the patented product fulfil this condition?

Answer:

Under Moldovan law there is no condition to work a patent.

Question 153.

Are there any provisions on compulsory licensing and government use? If so, please explain.

Answer:

If the invention has not been used for three years since the patent has been issued, or it has not been sufficiently used by the holder, the person who is ready to, and wishes to utilize the invention, in case the holder refuses to conclude a licensing contract with that person, the latter can submit a request to the court or arbitrage to be awarded a non-exclusive obligatory licence.

In the interest of national security, the Moldovan Government has the right to authorize the use of the invention by third parties without the consent of the patent holder, paying the latter an adequate financial compensation. The holder has the right to contest the amount of compensation in the court (Article 33(4), Law On Patents for Invention).

Question 154.

Are processes protected under Moldova's patent law? WT/ACC/MOL/3 Page 53

Answer:

Processes are protected under Moldovan law on the same basis as products.

(f) Protection of plant varieties

Question 155.

In its answer Moldova says that at present plant varieties are protected like inventions. Does the Government of Moldova intend to change its actual protection system? If so, in what respect?

Answer:

Moldova adopted a "Law On Plant Variety Protection" which entered into force on 28 November 1996 and provides for special protection of plant varieties. Protection is granted on the basis of certificates issued by the State Commission for the Testing of Plant Varieties. The Law grants the exclusive rights of exploitation to the patentee which are listed in Article 13 (Law on Plant Variety Protection). Moldova also became a member of UPOV.

Moldova has submitted a copy of the Law On Plant Variety Protection which is available in the Secretariat (Accessions Division, Room 1126) for consultation.

(g) Layout designs of integrated circuits

Question 156.

What is the scope of protection?

Answer:

Presently, there are no provisions governing layout-designs of integrated circuits. A Draft Law on Layout Designs of Integrated Circuits which will comply with relevant international agreements is currently in preparation and will be submitted to the Working Party in due course.

(h) Protection of undisclosed information

Question 157.

Does Moldovan law require the submission of undisclosed test or other data as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities? If so, how is such data protected against disclosure?

Answer:

The marketing of pharmaceuticals and agricultural chemical products which utilize new chemical entities without registration of intellectual property rights is only subject to approval by the Ministry of Health or the Ministry of Agriculture, respectively. WT/ACC/MOL/3 Page 54

4. Enforcement

Question 158.

What are civil and administrative procedures and remedies available under Moldovan law to protect intellectual property?

Answer:

A rightholder who believes that his intellectual property rights are injured may initiate a civil, penal or administrative case in the courts. In cases of fraud or similar cases the public prosecutor may, in addition, initiate a separate case under the Penal Code of Moldova.

The person found guilty of an infringement can be sentenced to pay a fine, damages or compensation. If appropriate, the injured party may also request that the goods or the equipment used to produce the goods concerned be destroyed or rendered incapable of the use which infringes on his rights.

The exact provisions governing legal remedies for specific intellectual property rights are included in the laws, copies of which Moldova submits together with these answers (see Article 25, Trademark Law).

Question 159.

Could the Government of Moldova explain in more detail how a rightholder can avail of provisional measures?

Answer:

A rightholder in Moldova can request from a court that an injunction be issued which would prevent further infringements of his right. This procedure is governed by the normal provisions of Moldovan law.

Question 160.

Moldova explains that the adoption of appropriate standards with regard to border measures is foreseen. Could the Government of Moldova give some indications about the possible time-frame?

Answer:

At the present time, no indication of the time-frame for adoption of provisions on border measures can be made.

VI. TRADE-RELATED SERVICES REGIME 1. General

Question 161.

Moldova is requested to provide the Working Party as soon as possible with a substantial initial offer on services in the GATS framework, binding liberal market access conditions and national treatment guarantees on an m.f.n. basis for foreign service suppliers. WT/ACC/MOL/3 Page 55

Answer:

The Government of Moldova will in due course submit an initial offer on services in the GATS framework.

Question 162.

Document WT/ACC/MOL/2 notes that there is a requirement for foreign investors to seek approval from anti-trust authorities for any investment over $5 million. Could Moldova explain the criteria applied for such approval?

Answer:

The requirement for foreign investors to seek approval from anti-trust authorities for investments in Moldova exceeding $5 million aims at preventing the establishment of dominating enterprises which would limit competition and infringe on interests of other enterprises or citizens. The criteria for the denial of such approval are listed in Article 3.1 of the Law Concerning Restrictions on Monopolistic Activities and Development of Competition which was submitted in WT/ACC/MOL/2/Add.1.

Question 163.

Could Moldova explain what legal provisions govern the entry and stay of foreign key personnel working in the services sector and of foreign natural persons providing services?

Answer:

The provisions governing the entry and stay of foreign key personnel working in the services sector and of foreign natural persons providing services are contained in Articles 16 and 17, respectively, of the Law on Foreign Investment, which is referred to in WT/ACC/MOL/2/Add.1.

Question 164.

It is stated on the one hand that a de facto monopoly exists in several sectors. On the other hand it is also stated that there are no legal entry barriers for the for the supply of these services nor do these monopolies enjoy specific monopoly rights. These two descriptions seem to contradict each other. Could Moldova explain the relationship between the two?

Answer:

The reasons why there are no further suppliers of services in the domains mentioned is a combination of too low prices which in turn are a result of low purchasing power of the users and high incidence of default on payment by users. In fact, Moldova welcomes foreign investment in these areas and it is hoped that as wage arrears will be reduced, economic growth accelerated and the legal framework developed further that more foreign investment will come to Moldova, including in these areas.

For telecommunication services refer to the replies provided in response to specific questions on Chapter VI of the Memorandum (WT/ACC/MOL/2) later in this document. WT/ACC/MOL/3 Page 56

Financial services

Question 165.

It is noted that both the banking and insurance sectors are open to foreign companies with the sole condition that they fulfil the licensing requirements - could the Moldovan authorities please provide a summary of the licensing requirements in force in the banking and insurance sectors and confirm that both domestic and foreign companies are required to meet the same requirements - i.e. that there are no special conditions for foreign companies?

Answer:

Moldova confirms that the licensing requirements governing the banking sectors are the same for foreign and domestic companies.

The detailed rules governing the licensing requirements for banks are contained in Articles 4-11 of the Financial Institutions Law which was submitted together with the Memorandum and are available in the Secretariat (Accessions Division, Room 1126) for consultation. The following is an overview:

Every business engaging in banking activity in Moldova must have a licence issued by the Central Bank of Moldova (National Bank).

Licence applications have to be addressed to the National Bank and must provide information on the following:

- qualifications and experience of the administrators of the proposed institution; - the amount of the proposed paid-in capital; - a business plan; - details of those persons proposing to own more than 10 per cent; - any additional information prescribed by regulation of the National Bank.

The licence application for a branch office of a foreign bank must be made by the foreign bank. The foreign bank must have the right in its home country to establish a foreign branch and must be adequately supervised on a consolidated basis in the foreign country.

Initially, there was open competition for the supply of insurance services. However, the amendment to the Law on Insurance from 20 June 1996 stipulates that foreign insurance companies can operate in Moldova only in a joint venture with Moldovan partners. The foreign share in such a joint venture must not exceed 49 per cent.

Every company supplying insurance services must have a licence issued by the Ministry of Finance. The detailed rules governing the licensing requirements for insurance companies are contained in the Regulation "On the Issue of Licences for Insurance Services" from 17 November 1995 which is available in the Secretariat (Accessions Division, Room 1126) for consultation.

The licence application has to be addressed to the State Insurance Service at the Ministry of Finance and must provide detailed information on the company, including the management and the financial record.

Question 166.

What rules govern the sale and purchase of securities? WT/ACC/MOL/3 Page 57

Answer:

The sale and purchase of securities in Moldova is governed by the Law "On Securities Circulation and Stock Exchange" and by regulations introduced in accordance with this law. A copy of the law is available in the Secretariat (Accessions Division, Room 1126) for consultation.

Question 167.

Are foreign legal and natural persons permitted to participate in the sale and purchase of securities on the same basis as Moldovan nationals?

Answer:

Foreign legal and natural persons are permitted to participate in the sale and purchase of securities on the same basis as Moldovan nationals.

Question 168.

Are foreign institutions permitted to buy and sell on their own account and on behalf of others?

Answer:

Foreign institutions are permitted to buy and sell on their own account and on behalf of others.

Telecommunications services

Question 169.

On page 32 of document WT/ACC/MOL/2, it is said that there is a de facto monopoly for telecommunication services. This does not explain clearly what the actual situation is - are services de jure liberalized?

Answer:

De jure, the Moldovan Telecommunications Law of 1995 contains regulations for the liberalization of the market for telecommunication services. These regulations are outlined in the table below.

Question 170.

Would other operators be permitted to operate in competition with Moldtelecom if they wished to?

Answer:

No other operators are permitted to compete with Moldtelecom in the sectors of international telecommunications, telegraph and telex, as well as basic domestic telecommunication services and leased circuit provision via the public telecommunications network, where Moldtelecom has exclusive authorization at least until 2005. WT/ACC/MOL/3 Page 58

Question 171.

Could the Moldovan authorities please specify the current regime in each aspect of the telecoms sector e.g. for public voice, facilities, data, mobile, value-added services and resale?

Answer:

The following table shows the current regime in the different telecommunications sectors:

Regimes in the Telecommunication Sector

Telecommunication Sector Regime International telecommunications, Exclusive authorization for the supply of services in telegraph and telex. this sector is held by Moldtelecom, the country’s national operator of the public telecommunications network. Domestic basic telecommunication Exclusive authorization for the provision of these services and leased circuit provision via services is at present also held by Moldtelecom, the public telecommunications network. scheduled to last until 2005. After 2005, open competition will introduced. Local telephone operators will be awarded operating licences on the basis of public tenders. Such licences will be issued only for those districts where there is sufficient demand. Mobile telephone services and mobile One company has been awarded a licence for radio connected to the public establishing a mobile telephone system. Another four telecommunications network. companies have been awarded licences to operate trunk type systems. Further mobile radio licences shall be awarded only if justified by demand and subject to existing undertakings and availability of frequencies. Independent local networks connected There are a number of licence holders for such with the public telecommunications networks. The award of licences is without restriction network. of number but licences have limited scope. Radio paging. There are currently three local suppliers, each of them holding a licence. The award of licences is subject only to the availability of radio frequencies. Networks requiring the use of radio There are presently many suppliers, each of them frequencies but not connected to the holding a standard licence or an authorization to use public network, such as taxi radio, certain frequencies. The award of licences is subject ambulance car radio etc., and only to the availability of radio frequencies. independent networks not connected to the public network. Other services, e.g. conceive, create These services are presently provided by several and maintain telecommunications suppliers, each of them holding a standard licence. networks. The award of standard licences is without restriction of number based on open competition. WT/ACC/MOL/3 Page 59

Telecommunication Sector Regime Customers' premises equipment. There are many suppliers, each of them holding a standard trading licence for the sale of approved equipment. The award of standard trading licences is without restriction of number on the basis of open competition.

Question 172.

Which of these services are currently covered by a monopoly?

Answer:

Moldtelecom is presently holding a legally sanctioned monopoly in the sector of international telecommunications, telegraph and telex, and domestic basic telecommunications and leased circuit provision via the public telecommunications network. Mobile telephone services and mobile, trunk-type radio services connected to the public telecommunications network are provided by private local operators.

Question 173.

Are there any plans of reform ?

Answer:

The Government has launched an international tender for the privatization of Moldtelecom, supported by an international aid agency.

Moreover, in the sector of mobile telephone services and mobile radio connected to the public telecommunications network, the establishmentof another cellular mobile telephone system is envisaged in 1997. To this end, an international tender has been launched in 1996. The successful tenderer will set up a joint venture and receive a licence for the establishment of a GSM standard mobile telephone system.

Question 174.

What is the definition of “private cellular telephone networks”?

Answer:

"Private cellular telephone networks” is a mobile radio system, operated by a private firm, consisting of a multitude of geographically distributed receiving units/boxes in order to transmit electromagnetic signals (e.g. emitted by a handy) into the public telecommunications network.

Question 175.

Are any elements of an independent regulatory framework in place in this sector e.g. for interconnection, for leased lines? WT/ACC/MOL/3 Page 60

Answer:

At present, there is no independent regulatory framework in place. However, a regulation concerning interconnection is currently in preparation.

Question 176.

It is stated in the Memorandum that there are limitations on the number of service suppliers in certain telecommunications services - which services are covered by these limitations?

On which basis is provision of these services permitted - availability of frequencies?

Answer:

The limitation on the number of service suppliers in certain telecommunications sectors mentioned in chapter VI.3.(a) of the Memorandum (WT/ACC/MOL/2) refers to the monopoly of Moldtelecom in the sector of international telecommunications, telegraph, and telex, and domestic basic telecommunication services and leased circuit provision via the public telecommunications network, where no further licences for the provision of services will be awarded at least until 2005.

The number of service suppliers is also limited in the sector of mobile telephone services and mobile trunk-type radio connected to the public telecommunications network. In 1997 a new mobile telephone system of the GSM type will be established on the basis of a public tender. Additional mobile radio and radio paging licences will be awarded only if justified by demand and subject to existing undertakings and availability of frequencies.

Audiovisual services

Question 177.

Could the Moldovan authorities please supply a copy of the "Law on Audio-Visual Services" No.603 XIII of 3 October 1995?

Answer:

A copy of the Law on Audio-Visual Services is available in the Secretariat (Accessions Division, Room 1126) for consultation.

Question 178.

Could Moldova explain the basic operation of the audio-visual sector and possibilities for participation by foreign companies?

Answer:

The State company "Teleradio-Moldova" is the public audio-visual institution and cannot be privatized (Article 7.1 Audio-Visual Law)

Audio-visual public or private institutions have the right to rent audio-visual communication networks, irrespective of whose property they are. They can also own emission stations and lines for the transmission of audio-visual programmes (Article 8.1, Audio-Visual Law). Cable distribution WT/ACC/MOL/3 Page 61 networks for audio-visual communications are the property of the public or private audio-visual institutions (Article 9, Audio-Visual Law).

An audio-visual institution can be created by one or more natural or legal persons of the Republic of Moldova under any form of legal organization in accordance with the legislation. Foreign natural or legal persons, except in a joint-venture with Moldovan persons, do not have the right to create audio-visual institutions in Moldova (Article 5.1 and 5.2, Audio-Visual Law).

A natural or legal person can hold more than 50 per cent of the statutory capital only at one audio-visual institution, but no more than 20 per cent at other institutions (Article 5.3, Audio-Visual Law).

Audio-visual institutions must have a licence to broadcast. Licences are issued by the Coordination Council on a competitive basis (Article 15.2, Audio-Visual Law). They are issued for a period of five years for television and three years for radio transmission. Broadcasting licences are non-transferable, and their modification requires the approval of the Coordination Council (Article 17, Audio-Visual Law).

Professional services

Question 179.

Could Moldova explain what possibilities are open to foreign lawyers to offer legal services?

To what extent are foreign lawyers permitted to practice Moldovan law?

Answer:

In order to be licensed as a lawyer a person has to pass two law examinations in the Romanian language. Such examinations are conducted by the Ministry of Justice and the Bar. There is no discrimination on the basis of nationality. Everyone who passes the examination will be granted the licence.

Lawyers holding a licence issued by the competent authorities in CIS countries or in Romania can practice law on the basis of that licence, in accordance with bilateral agreements concluded with these countries to that effect. Moldova is anxious to conclude similar agreements with other, especially European countries.

Question 180.

Are foreign lawyers permitted to give advice on their home country law and international law?

Answer:

Foreign lawyers are permitted to give advice on their home country law and on international law. WT/ACC/MOL/3 Page 62

Accounting and auditing services

Question 181.

Are there any restrictions on the operation of foreign companies?

Answer:

Foreign and domestic companies can carry out accounting and auditing services subject to the same rules and regulations.

Question 182.

Are there any restrictions as to the form a company should take if it is to participate in the Moldovan market - e.g. is it required that the company should take the form of a partnership?

Answer:

There are no restrictions as to the form a company should take.

Question 183.

Is there a requirement to employ Moldovan citizens?

Answer:

There is no requirement to employ Moldovan citizens.

Question 184.

What are the requirements for foreign auditors and accountants in terms of licensing/registration?

Answer:

Both, foreign and Moldovan nationals need a licence to carry out auditing or accounting services. In order to get a licence they have to submit a document from the Ministry of Finance certifying that the applicant has passed the examination for auditors or accountants. Instead of this document, foreign nationals may also submit an auditing licence or certificate from their country of origin.

Auditing or accounting firms have to submit, in addition, the following documents:

- registration as a business from the Ministry of Justice; - registration number from the Tax Collection Service; - seal/stamp; - company charter.

Question 185.

What is the situation regarding the participation of foreign natural persons and companies in other professional services - e.g. architectural services, engineering services? WT/ACC/MOL/3 Page 63

Answer:

There are no restrictions or special provisions governing the participation of foreign natural persons or companies in other professional services. Foreigners enjoy national treatment.

Question 186.

What is the situation regarding the participation of foreign natural persons and companies in the business services sector?

Answer:

There is no restriction regarding the participation of foreign natural persons (Articles 16 and 17, Foreign Investment Law) and companies (Article 4, Foreign Investment Law) in the business services sector.

Question 187.

It is stated that licences by the Finance Ministry are required in order to establish accounting firms. What are the criteria to issue such licences? Are there any restrictions on the activities of foreign accounting and auditing firms, which are different from the restrictions on those of domestic firms?

Answer:

In order to get a licence to carry out auditing and accounting services a company has to submit the following documents to the Ministry of Finance:

- registration as a business at the Ministry of Justice; - registration number from the Tax Collection Service (Fiscal Code); - seal/stamp; - document from the Ministry of Finance certifying that the applicant (the physical person) has passed the examination for auditors or accountants. Foreign companies may submit an auditing or accounting licence/certificate from their country of origin instead of the document of the Ministry of Finance; - company charter.

All firms submitting the above documents will be issued a licence.

Transport services

Question 188.

Could the Moldovan authorities explain the current situation vis-a-vis the different modes of transport (road, rail, air) and transport auxiliary services? WT/ACC/MOL/3 Page 64

Answer:

(a) Privatization

Privatization is a key element of economic reform in the transport sector. Today the total private capital share in the transport sector is estimated at more than 50 per cent: 56 per cent in road transport, 39 per cent in river transport, 45 per cent in road transport facilities, 35 per cent in the transport industry.

The private sector share increases and private enterprises successfully compete with the State enterprises.

As a resultthe process of the privatization and demonopolization of the transport services market there are more and more road transport facilities. In a short time the system of strict public regulation and State monopolies was liquidated and a new economic environment based on competition and entrepreneurship was created.

The experience of 1996 proved that services provided by the private sector meet the clients‘ requirements to a greater extent and are cheaper than these ones provided by public sector. As an example, the share of transportation services provided by the private sector in road transport accounts for 95 per cent and has an upward trend. More than 11,000 private companies operate in the country, 40 of them are medium and large ones.

Therefore, the strategy and transport development programme for 1997 envisages further privatization in the transport sector except for State monopolization (e.g. railways and bus stations).

(b) Road transport

In Moldova, road transport is under the responsibility of the Roads Department of the Ministry of Transport (MoT). The MoT is responsible for the administration, construction and maintenance of the public (national and local) road network, while individual municipalities are responsible for the urban network. Agricultural enterprises administer agricultural and forestry roads.

Road transport is estimated to carry more than 76 per cent (71 million tons) of Moldovan total domestic freight transport (92.6 million tons), while the share of road passenger transport, including international, intercity, suburban and urban bus transportation as well as taxis, is estimated at more than 83 per cent (75.4 million passengers) of total domestic passenger transport (90.7 million passengers) in 1997.

Like the Roads Department, Moldovan Railways are a department of the MoT. The percentage of Moldovan Railways in total domestic freight transport is estimated at 23 per cent (21.3 million tons) and in total passenger transport at 16 per cent (15 million passengers) in 1997.

Today, the rail transport sector faces great financial difficulties, as transport costs have sharply increased due to raising energy costs. In addition, rails are in a poor technical state and the obsolete locomotives and cars of which the majority was inherited from the former Soviet Union do not meet modern transportation requirements. WT/ACC/MOL/3 Page 65

(d) Air transport

At present, there are 10 aviation companies registered in Moldova. Passengers are carried by the State-owned Air Moldova and two private ones - Air Moldova International and Moldovan Airlines. The other companies - Renan, Vichi, Valan, Aeriantur-M, NTA, AirTrans NGGgroup, and Micma ITL - are cargo and mail carriers, of which Renan is the most important.

There are three foreign aviation companies, including Tarom of Romania, and Aeroflot and Transaero of Russia, which have opened their representations in Chisinau.

Estimates for 1997 indicate a share of 1,7 per cent (1.6 million tons) of total domestic freight transport and a share of 0.1 per cent (0.11 million passengers) of total passenger transport.

(e) River transport

In Moldova there are two internal waterways, the Nistru and the Prut, which are included in the European Agreement on Internal Waterways (E-90-03 and E 80-07).

The estimated share of river transport of total domestic freight transport in 1997 is 0.3 per cent (0.32 million tons) and 0.3 per cent (0.32 million passengers) of total passenger transport.

Question 189.

Are foreign operators offered national treatment in these different modes?

Answer:

Foreign operators are offered national treatment. A draft law is in preparation.

Question 190.

Does Moldova intend to include transport in its services offer?

Answer:

See reply to question under chapter VI.1. - General.

Question 191.

Could the Moldovan authorities explain what provisions (if any) govern the maritime sector?

Answer:

At present, there are no provisions governing the maritime sector. However, a draft law on internal naval transport as well as a draft code on commercial maritime navigation is has been prepared by the MoT. These codes incorporate the basic principles of the relevant international conventions, public and private law. WT/ACC/MOL/3 Page 66

VII. INSTITUTIONAL BASE FOR MOLDOVA'S TRADE AND ECONOMIC RELATIONS WITH THIRD COUNTRIES

Question 192.

It is stated that Moldova and eight CIS countries signed a framework agreement towards the creation of a customs union. What is the view of Moldova on the prospect for the creation of such a customs union? How will consistency with the WTO Agreement be ensured?

Answer:

Moldova supports economic integration within the CIS. The Government of Moldova cannot predict when and how the customs union will come about. It is Moldova's intention to ensure that the customs union and the steps leading to it will be in conformity with the provisions of Article XXIV of the GATT.

As all potential members of the future customs union are in the process of acceding to the WTO consistency with the WTO provisions will be ensured.

Question 193.

Which trade agreements does Moldova consider will need to be notified under Article XXIV of the GATT 1994 or Article V of the GATS?

Answer:

Moldova will in due course notify all agreements on customs unions and free trade areas into which the country has entered. At the present time, free trade agreements in the sense of Article XXIV of the GATT and Article V of the GATS have been concluded with the nine CIS countries listed on page 57 of WT/ACC/MOL/2 (Annex 8(a)) and with Romania.

Question 194.

Please provide the Working Party with the texts of all Free Trade Agreements to which Moldova is a party.

Answer:

The texts of the free trade agreements mentioned in the preceding answer are available in the Secretariat (Accessions Division, Room 1126) for consultation.

Question 195.

For each Free Trade Agreement, please provide details of the percentage trade overall and in each major sector which is excluded from the free trade regime.

Answer:

In principle, the free trade agreements cover the total trade and no product sector is excluded. However, parties may introduce customs duties for individual products on a temporary basis. WT/ACC/MOL/3 Page 67

Question 196.

Moldova says that goods originating from its free trade agreement partners are exempt from "all customs tariffs, taxes and fees that bear the equivalent effect on exports and imports". What taxes and fees are covered? Do they include excise taxes and customs user fees?

Answer:

The free trade agreements concluded with Romania and CIS countries provide for exemption from customs duties. Separate agreements were concluded with the CIS countries which established the principle of origin for VAT and excise purposes. Romanian goods are subject to VAT and excise taxes. Customs user fees have to be paid in both cases.

The above notwithstanding Russian oil and oil products are subject to excise taxes.

As described in response to the questions on VAT above, the VAT and excise tax regime is in the process of change.

Question 197.

Please explain in more detail the provision in the Trade Agreement with Iran relating to "mutual non-tariff facilities".

Answer:

Article 10 of the Trade Agreement between Moldova and Iran of 1994 provides that in order to promote commercial relations between the two countries, they will examine the possibility to accord each other "non-tariff facilities". There has been no follow-up to this provision.