JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in the Republic of Moldova Progress in 2011 and recommendations for action Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Delivering on a new European Neighbourhood Policy
Date: 2012-05-15
Institutions: European Commission, High Representative of the Union
Subjects: European neighbourhood policy, Moldova, administrative reform, cooperation in the field of education, democratisation, economic reform, environmental cooperation, institutional reform, job creation, judicial cooperation, judicial reform, trade cooperation

EUROPEAN COMMISSION 

HIGH REPRESENTATIVE OF THE
EUROPEAN UNION FOR 
FOREIGN AFFAIRS AND 
SECURITY POLICY

Brussels, 15.5.2012  
SWD(2012) 118 final 

JOINT STAFF WORKING DOCUMENT 

Implementation of the European Neighbourhood Policy in the Republic of Moldova 
Progress in 2011 and recommendations for action 

Accompanying the document 

JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, 
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

Delivering on a new European Neighbourhood Policy 

{JOIN(2012) 14 final} 
{SWD(2012) 110 final} 
{SWD(2012) 111 final} 
{SWD(2012) 112 final} 
{SWD(2012) 113 final} 
{SWD(2012) 114 final} 
{SWD(2012) 115 final} 
{SWD(2012) 116 final} 
{SWD(2012) 117 final} 
{SWD(2012) 119 final} 
{SWD(2012) 120 final} 
{SWD(2012) 121 final} 
{SWD(2012) 122 final} 
{SWD(2012) 123 final} 
{SWD(2012) 124 final} 

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1. 

OVERALL ASSESSMENT AND RECOMMENDATIONS 

This  document  reports  on  overall  progress  made  in  implementation  of  the  EU-
Republic  of  Moldova  Action  Plan  between  1  January  and  31  December  2011. 
Developments outside this period are also considered when deemed relevant. It is not 
a general review of the political and economic situation in the Republic of Moldova. 
For information on regional and multilateral sector processes, readers should refer to 
the Eastern Partnership report. 

The political crisis centring on the election of a new President continued throughout 
2011 and threatened the sustainability of the reform process. The new President took 
office on 23 March 2012. Despite some delays in the adoption of important legislation 
and  a  considerable  number  of  implementation  problems  following  important  law-
making activity in 2010, the Republic of Moldova made good progress in almost all 
areas of the Action Plan.  

Negotiations on a future EU-Republic of Moldova Association Agreement continued 
at  good  pace  and  the  EU  agreed  in  December  to  launch  negotiations  on  the 
establishment of a Deep and Comprehensive Free Trade Area (DCFTA) as an integral 
part of the Association Agreement negotiations. The Republic of Moldova concluded 
negotiations  with  the  EU  on  a  number  of  other  important  matters,  such  as  customs 
cooperation, the setting-up of a common aviation area, the protection of geographical 
indications  and  association  to  the  7th  Framework  Programme  for  Research  and 
Technological Development.   

Implementation  issues  were  actively  tackled  in  particular  when  this  was  a  pre-
requisite  for  opening  DCFTA  negotiations  or  for  pursuing  the  dialogue  on  visa 
liberalisation.  The  reform  of  the  public  service  helped  to  solve  some  of  the 
administrative capacity problems highlighted in previous reports. The reforms of the 
justice  and  law  enforcement  systems  initiated  during  the  year  appear  to  be  essential 
for  dealing  with  issues  linked  to  the  enforcement  of  fundamental  rights.  However, 
there were problems with the new law on freedom of expression and no progress was 
made  on  the  adoption  of  anti-discrimination  legislation.  The  Republic  of  Moldova 
also needs to tackle corruption more decisively and efficiently.  

The Republic of Moldova made important progress in the implementation of the first 
phase  of  the  action  plan  on  visa  liberalisation,  as  reflected  in  the  two  assessment 
reports  on  the  implementation  of  the  action  plan  in  September  2011  and  February 
20121.  

A promising step was made towards the peaceful resolution of the Transnistria issue 
with  the  resumption  in  December,  under  the  Lithuanian  OSCE  Chairmanship-in-
Office, of the work of the “Permanent Conference on political issues in the framework 
of the negotiating process on the Transnistrian settlement” (the ‘5+2’). 

In  2011,  the  economy  recovered  quickly  and  macroeconomic  stability  was 
maintained.  Because  of  this,  the  country  was  able  to  continue  its  successful 

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SEC (2011) 1075 final and SWD (2012) 12 final. 

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cooperation  with  the  international  financial  institutions.  Growth  became  more 
sustained and poverty was further reduced, as stipulated in the Action Plan. However, 
economic performance slowed down in the final quarter due to the worsening external 
environment.  

At  the  same  time,  the  Republic  of  Moldova  took  further  steps  towards  becoming  a 
functioning market economy by improving the investment climate and implementing 
structural  reforms  in  the  energy  and  education  sectors.  Preparations  for  some  large-
scale privatisations - another Action Plan priority - were started. The country topped 
the list of reformers in the World Bank’s ‘Doing Business’ Report 2012. However the 
business  and  investment  climate  remains  difficult.  Flawed  judicial  practices  allowed 
raiders’  attacks  to  be  made  on  major  banking  and  insurance  institutions  in  the 
summer, which harmed the image of the country as a safe place for investments. 

The  Republic  of  Moldova  successfully  held  the  rotating  Energy  Community 
Presidency and progressed towards meeting its Community obligations. 

On the basis of this year’s report, and with a view to sustained implementation of the 
EU-Republic of Moldova Action Plan in 2012, the Republic of Moldova is invited to:  

• 

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Step up efforts to implement the justice and law enforcement reform strategies, 
with a focus on human rights protection and the urgent need to curb corruption; 
finalise the investigations and judicial action in connection with the April 2009 
events. 

Engage pro-actively in a pragmatic dialogue with Tiraspol with a view to setting 
up  effective  mechanisms  to  implement  confidence  building  activities  and 
the 
making 
Transnistrian conflict. 

towards  a  comprehensive  settlement  of 

tangible  progress 

Step  up  the  reform  of  public  administration,  including  focusing  on  the 
enforcement of the laws on transparency and access to information. 

Accelerate  the  privatisation  process,  in  particular  for  remaining  large  state-
owned  enterprises  in  telecommunications,  transport,  energy  and  the  financial 
sectors. 

Continue  the  long  term  reforms  being  undertaken  in  the  areas  of  social 
assistance, health and education (including vocational and educational training). 
Further  facilitate  social  dialogue.  Strengthen  monitoring  and  enforcement  of 
labour standards and step up harmonisation with ILO standards. 

Continue  to  advance  sector  reforms  and  regulatory  approximation  to  the  EU 
acquis in trade and trade related areas, based on the recommendations identified 
in the preparation for the DCFTA. 

Continue  with  energy  sector  reform,  including  strengthening  the  Agency  for 
Energy Efficiency and implementing the energy efficiency strategy. 

Reinforce competition and state aid legislation. 

Finalise  the  remaining  steps  under  the  first  phase  of  the  EU-Republic  of 
Moldova action plan on visa liberalisation. 

Step  up  institutional  reform  of  the  aviation  sector  and  clearly  define  the 
reporting responsibilities of the Civil Aviation Administration.  

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2. 

POLITICAL DIALOGUE AND REFORM 

Towards deep and sustainable democracy 

In  spite  of  the  deadlock  over  the  election  of  a  President  of  the  Republic  in  2011 
(resolved only in March 2012), the Republic of Moldova continued to make progress 
towards  compliance  with  democratic  principles  and  the  rule  of  law.  Training  and 
organisational measures were actively implemented to strengthen the key institutions 
of parliament and the Central Electoral Commission.  

In June, the country engaged in local elections. They confirmed the improvement of 
the  electoral  environment  (the  Election  Code  was  amended  in  March  and  April),  in 
line  with  some  of  the  recommendations  of  the  Organisation  for  Security  and 
Cooperation  in  Europe  -  Office  for  Democratic  Institutions  and  Human  Rights 
(OSCE/ODIHR) issued following the two nationwide polls held in 2010. However, in 
some  places  the  lack  of  appropriate  polling  equipment  affected  the  secrecy  of  the 
vote,  and  more  generally  electoral  and  political  party  legislation  still  needs  to  be 
improved  with  regard  to  the  funding  of  parties  and  electoral  campaigns,  complaints 
and appeals procedures, and voter registration. At the same time, the Central Electoral 
Commission  set  up  a  Continuous  Training  Centre  to  train  staff  involved  in  the 
organisation of elections.  

On  freedom  of  expression,  judicial  practice  did  not  catch  up  with  the  recent 
legislative  improvements,  with  rulings  continuing  to  refer  to  the  Civil  Code  rather 
than to the new law on freedom of expression. The media thus did not enjoy the level 
of  protection  guaranteed  by  law.  On  media  freedom,  the  public  broadcaster, 
Teleradio  Moldova  is  being  internally  reformed  into  a  genuine  broadcasting 
establishment. But it has shifted Russian-speaking news broadcasts from prime time 
to  a  late  slot,  causing  some  inconvenience  to  Russian  speakers.  The  license  of  the 
opposition TV channel NIT was withdrawn in March 2012.   

The legal provisions in force provide a guarantee to the freedom of association and 
assembly. Violations of this right have become an exception. Upon application by the 
Chisinau  City  Hall,  the  Chisinau  Court  of  Appeal  relocated  the  Equality  Parade 
organised by the Lesbians, Gay, Bisexual and Transgender (LGBT) groups from the 
centre  of  the  capital  city  to  a  place  where  it  would  not  attract  attention.  The  group 
decided to call off the parade and referred that case to the European Court of Human 
Rights to enforce their right to freedom of assembly. 

Progress  can  be  reported  on  justice  sector  reform.  A  comprehensive  justice  sector 
reform strategy was adopted in October, and the related Action Plan was approved by 
parliament  in  February  2012.  This  set  the  scene  for  a  large  EU  technical  assistance 
and budget support (EUR 62 million). During the year, reform of the justice system 
continued to receive support through the EU-funded Democracy Support Package.  

The  ranking  of  the  Republic  of  Moldova  in  the  Transparency  International  2011 
corruption perception index fell from 105th place in 2010 to 112th in 2011. About one 
quarter  of  the  recommendations  made  by  the  Council  of  Europe’s  Group  of  States 
against Corruption (GRECO) have still to be implemented, including the introduction 
of; legislation on special investigation measures; criminal liability of legal entities for 
corruption  offences;  whistleblowers’  protection;  an  efficient  system  of  control  over 

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the  assets  and  private  interest  declarations  of  public  officials;  and  the  offence  of 
misrepresentation  of  accounting  data  associated  with  acts  of  corruption.  In  July,  the 
parliament  adopted  a  national  anti-corruption  strategy,  which  was  complemented  by 
an action plan in February 2012; this still needs to be supported by a clear allocation 
of resources. At the same time, a comprehensive legislative and policy anti-corruption 
framework,  aimed  at  aligning  the  country  with  the  main  European  and  international 
instruments,  is  at  an  advanced  stage  of  consolidation.  However,  the  high  number  of 
legislative  amendments  could  affect  legal  certainty  and  create  difficulties  in 
implementation if no coherent vision is ensured. 

In  July  the  parliament  passed  a  law  establishing  the  National  Integrity  Commission, 
which will be responsible for monitoring the assets and private interest declarations of 
public officials, handling conflict of interest complaints, and checking observance of 
the rules on limitations and incompatibilities in the exercise of public office. By the 
end of 2011, the law had not yet entered into force.  

Substantial  reform  of  the  Centre  for  Combating  Economic  Crime  and  Corruption 
(CCECC)  was  initiated  in  order  to  address  concerns  about  the  latter’s  powers, 
organisation  and  independence.  In  mid-November,  an  EU  technical  assistance  anti-
corruption project was launched to support the reforms under way in the Ministry of 
Interior, the CCECC and the National Centre for Data Protection. 

No significant progress could be reported on security sector reform, including police 
reform.  The  Ministry  of  Interior  started  to  implement  its  internal  reform  strategy, 
adopted in December 2010, with the assistance of an EU high-level adviser.  

Conflict prevention and confidence-building 

Good  progress  can  be  reported  as  regards  cooperation  on  the  Transnistrian  issue. 
Official  talks  in  the  ‘5+2’  format  resumed  in  Vilnius  on  30  November,  with  active 
participation of the EU. The political representatives from Chisinau and Tiraspol met 
regularly, and the Prime Minister met with the Transnistrian leader a number of times, 
most importantly in September in the margins of an OSCE-sponsored conference on 
confidence building measures. In December a major political and generational change 
took  place  in  Tiraspol,  when  Mr.  Shevchuk  replaced  Mr.  Smirnov  as  leader  of  the 
breakaway  region.  This  may  have  in  the  medium  term  a  positive  impact  on  the 
negotiating process. 

EU  support  to  confidence  building  between  the  two  sides  was  successfully 
implemented through concrete projects such as the renovation of a blood transfusion 
centre  and  that  of  a  perinatalogy  clinic  in  Tiraspol.  A  new  package  in  support  of 
confidence building measures, worth EUR 12 million, was launched at the beginning 
of  2012,  building  on  previous  achievements  in  the  fields  of  business  development, 
environment, social infrastructures and civil society development. 

The  Republic  of  Moldova  continued  to  be  committed  to,  and  participated 
constructively in, the work of the EU Border Assistance Mission to the Republic of 
Moldova  and  Ukraine  (EUBAM).  With  EUBAM  support,  the  customs  authorities 
and  border  guard  service  of  the  Republic  of  Moldova  continued  to  enhance  their 
professional  capacities,  as  well  as  inter-agency  cooperation  within  the  country  and 
with Ukraine. EUBAM continued to support the demarcation of the central segment 

5

 
 
of  the  state  border  between  the  Republic  of  Moldova  and  Ukraine,  which  started  in 
December  2009,  and  coordinated  the  successful  ‘Akkerman’  joint  border  control 
operation.  In  December,  the  Ukrainian  government  approved  the  long-awaited 
decision to authorise joint patrolling of the border between the Republic of Moldova 
and Ukraine in the pilot border section of Rososhany/Briceni. EUBAM also facilitated 
talks to resume rail cargo traffic through the Transnistrian region. 

Other human rights and governance-related issues 

Limited  progress  has  been  made  on  the  protection  of  minorities.  Discrimination 
against the Roma population in education, employment, housing and healthcare takes 
place  with  impunity.  However,  the  government  has  put  in  place  Roma  Community 
mediators, with the help of UNICEF and the Council of Europe, and adopted in July 
an  Action  Plan  on  Roma  Inclusion  2011-2015,  which  was  subsequently  reviewed. 
Proper costing and budgeting will be key to ensuring efficiency. 

The  draft  law  on  combating  and  preventing  discrimination  has  yet  to  be  adopted. 
Discrimination  on  the  ground  of  sexual  orientation  persisted.  Limited  progress  was 
made as regards the integration of persons with disabilities. After the adoption of the 
UN  Convention  on  the  Rights  of  Persons  with  Disabilities  (CRPD),  the  government 
approved  a  number  of  concepts  for  new  social  services  for  adults  with  mild  mental 
disabilities.  The  Optional  Protocol  to  the  CRPD  was  not  ratified. A  governmental 
decision  taken  in  July  regulates  the  provision  of  special  technical  means  to  persons 
with disabilities. 

On  children’s  rights,  progress  was  limited.  Largely  due  to  insufficient  budget 
resources, the situation of children deprived of parental care remained a concern. The 
number  of  children  in  residential  care  is  decreasing,  but  remains  high  (6,900 
according  to  UNICEF).  Despite  major  legislative  changes  in  2010,  issues  such  as 
child  labour  and  juvenile  justice  have  not  been  adequately  addressed.  The  juvenile 
justice system fails to meet recognised international standards and the vulnerability of 
children  to  trafficking  and  sexual  exploitation  is  still  a  significant  problem.  Current 
legislation  does  not  address  computer-facilitated  offences  as  required  by  the 
international standards set out in the Council of Europe Cybercrime Convention 2004 
and the Council of Europe Convention on the Protection of Children Against Sexual 
Exploitation and Sexual Abuse 2007 (which the Republic of Moldova has signed but 
not ratified). 

The government continued to implement the National Programme on gender equality 
2010-2015. Labour legislation was amended in accordance with the revised European 
Social  Charter,  to  include  the  concept  of  sexual  harassment.  However,  women 
continued  to  be  under-represented  in  both  the  central  and  local  governments,  even 
though the number of female mayors slightly increased following the local elections. 
Despite the improved legal framework, the mechanisms designed to prevent domestic 
violence  remained  inefficient  due  both  to  lack  of  enforcement  of  courts’  protection 
orders,  and  absence  of  a  rehabilitation  system  for  the  perpetrators.  The  above-
mentioned  draft  anti-discrimination  law  also  includes  gender  as  an  area  where 
discrimination is prohibited. 

Progress  was  made  as  regards  freedom  of  religion.  The  law  on  religious 
organisations  was  adopted  by  parliament  in  December.  In  March  the  Ministry  of 

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Justice registered for the first time an Islamic organisation, the Islamic League of the 
Republic of Moldova. Members of religious communities can generally practice their 
religion freely and without fear of undue government interference. Still, there remains 
a certain ambiguity in the legal framework potentially hindering the right of all people 
to practice their religion or belief, alone or in community with others, in public or in 
private,  regardless  of  their  registration  status.  Likewise,  limitation  on  the  rights  of 
foreigners  to  practice  religion  is  not  in  conformity  with  European  and  international 
standards. The frequent interference, and in some instances provocative speeches, by 
representatives  of  the  predominant  religion  were  not  addressed  by  the  public 
authorities,  giving  that  church  a  privileged  status  at  variance  with  the  constitutional 
practice of a secular state.  

Public  administration  reform  continued  to  focus  government  attention.  Strategic 
development  plans  for  key  institutions  were  developed  in  the  framework  of  the 
Comprehensive Institution Building programme under the Eastern Partnership. At the 
same  time,  the  laws  on  access  to  information  and  on  the  transparency  of  the  public 
decision  making  process  continued  to  be  poorly,  or  selectively,  enforced.  On 
decentralisation,  the  government  and  local  authorities  started  to  implement  the 
National Strategy for Regional Development under the auspices of the new National 
Coordination  Council  for  Regional  Development.  However,  progress  is  being 
hampered by lack of resources at the local level. 

Regional  cooperation,  cooperation 
prevention and crisis management 

in  foreign  and  security  policy,  conflict 

The  political  dialogue  between  the  Republic  of  Moldova  and  the  EU  intensified 
further in 2011, with many high-level visits and contacts in the bilateral or multilateral 
format.  The  Republic  of  Moldova  aligned  itself  with  63  out  of  the  EU’s  82  CSFP 
declarations during 2011. 

In June, Ukraine and the Republic of Moldova found a negotiated solution to almost 
all their disagreements over the demarcation of the northern and southern segments 
of their common border. Further efforts are needed to find solutions to the remaining 
border issues in particular as regards the Novodnistrovsc hydroelectric power station. 

The Republic of Moldova, as part of the Danube macro-region, played an important 
role  in  achieving  the  objectives  of  the  EU  Strategy  for  the  Danube  Region.  It  also 
participated actively in the European Regional Development Fund South-East Europe 
and Central Europe trans-national cooperation programmes. 

3. 

ECONOMIC AND SOCIAL REFORM 

Macroeconomic framework and functioning of the market economy 

After a severe downturn in 2009, the economy staged a robust recovery and grew by 
7.1  %  in  2010  and  by  about  6.4  %  in  2011.  The  economy  was  supported  by  a 
financing arrangement with the International Monetary Fund (IMF) and a high level 
of donor assistance (including an EU Macro-Financial Assistance grant worth EUR 90 
million). In 2011, growth was driven both by strong domestic demand and booming 
exports that grew at about 44 % year-on-year. Private consumption increased due to a 

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double-digit rise in both remittances and domestic credit. The financial turmoil in the 
euro area and its recessionary effects on the EU economy may affect the Republic of 
Moldova either directly via trade with and remittances from the EU, or indirectly via 
the impact of the crisis on Russia.  

The average inflation rate in 2011 reached 7.6 % (it was 7.4 % in 2010), driven by the 
increase in global and domestic food prices and higher electricity and gas costs. The 
fiscal consolidation process continued in 2011 with a budget deficit of 2.4 % of GDP 
that would be further reduced to a targeted 0.9 % of GDP in 2012. A number of excise 
taxes will be increased together with the reintroduction of a 12 % corporate income 
tax.  

The  current  account  deficit  rose  to  about  11.5  %  of  GDP  in  2011,  but  its  financing 
improved due to higher foreign direct investment and better access to external finance 
by the private sector. Official reserves increased to around USD 1.96 billion (EUR 1.5 
billion) covering 4.5 months of imports. The banking system remained stable and well 
capitalised  with  a  capital  adequacy  ratio  above  30  %.  The  rate  of  non-performing 
loans declined, but balance sheet vulnerability still remains. 

Employment and social policy 

The unemployment rate declined to 6.6 % (from 7.4 % in 2010) driven by job creation 
in  industry  and  agriculture.  The  government  approved  a  National  Action  Plan  on 
Employment  in  February.  An  Action  Plan  to  tackle  ‘illegal  work’  was  launched  in 
June. 

In September, the Republic of Moldova ratified the International Labour Organisation 
(ILO) Convention No. 160 on labour statistics.   

In  the  area  of  social  protection,  the  number  of  beneficiary  households  for  the  new 
cash-benefits system of social aid was extended to reach around 72.000 people at the 
end  of  2011  (there  were  47.000  in  the  period  March-May  2011).  Social  allowances 
paid  to  families  with  children  were  increased  in  June.  In  March  and  November 
respectively,  authorities  introduced  a  heating  allowance  for  vulnerable  persons  and 
strengthened the system of cash benefits in case of sick leave. A new National Social 
Inspectorate was set up in October.  

The Republic of Moldova raised the minimum guaranteed income from MDL 530 to 
575  (being  equivalent  to  EUR  37)  as  of  July.  In  June,  the  Republic  of  Moldova 
adopted  legislation  on  pension  reform  with  the  aim  of  increasing  the  minimum 
duration of mandatory contributions and the retirement age for certain categories.  

No  progress  was  registered  in  the  area  of  labour  standards  and  trade  unions' 
rights,  and  monitoring  and  enforcement  of  labour  standards  should  be  substantially 
strengthened. While the existing law on trade unions provides for basic social rights, a 
number of its provisions restrict the registration of unions. Rules on arbitration do not 
fully comply with ILO standards and there are no sanctions for violations of the right 
to association.    

Social dialogue needs to be strengthened; there is not yet an institutional mechanism 
for regular consultations with social partners. 

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In  the  area  of  agriculture,  the  Agreement  between  the  EU  and  the  Republic  of 
Moldova on the protection of Geographical Indications was initialled in April 2011. 

4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM 

In  2011  the  EU  was  the  Republic  of  Moldova’s  main  trade  partner.  In  2011,  the 
volume of bilateral trade between the EU and the Republic of Moldova increased by 
27.9%.  EU  imports  from  the  Republic  of  Moldova,  which  were  dominated  by 
agricultural  products  (32.4%),  clothing  (21.0%)  and  machinery  and  transport 
equipment  (10.3%),  increased  by  44.5%.    EU  exports  to  the  Republic  of  Moldova, 
which  consisted  mainly  of  machinery  and  transport  equipment  (32.9%),  fuels  and 
mining products (15.1%) and chemicals (12.4%), increased by 21.6%.  

The  Republic  of  Moldova  continued  its  preparations  for  negotiation  of  a  Deep  and 
Comprehensive  Free  Trade  Area  (DCFTA),  through  the  implementation  of  the 
DCFTA  related  key  recommendations.  In  December,  the  EU  concluded  that  the 
progress  made  by  the  country  was  sufficient  to  launch  the  negotiations.  The  first  
round of negotiations took place in March 2012. However, the Republic of Moldova 
is  expected  to  continue  to  conduct  reforms  in  the  trade-related  areas,  if  it  is  to  fully 
benefit from the future DCFTA. 

In order to ensure the use of the preferential tariff rate quotas offered by the European 
Union  under  the  System  of  Autonomous  Trade  Preferences,  the  Moldovan 
government prepared a decision on the administration of tariff quotas for the export of 
goods to the EU. 

The  Customs  Service  underwent  a  modernisation  process  in  2011.  A  Strategic 
Programme  for  2012-2014  is  being  drafted,  with  the  main  emphasis  on  the 
development  of  the  performance  management  system.  The  Republic  of  Moldova 
the  Automated  System  for  Customs  Data 
implemented  a  pilot  project  on 
(ASYCUDA).  As  of  August  2011,  the  Republic  of  Moldova  grants  privileges  to 
authorised  operators  that  comply  with  specific  requirements.  A  simplified  local 
clearance procedure providing for minimal control of import/export transactions was 
implemented. The EU and the Republic of Moldova signed a Strategic Framework for 
customs  co-operation  in  October.  The  Republic  of  Moldova  drafted  amendments  to 
the Customs code,  the  law on customs tariff and the law on free economic zones in 
order to align its customs legislation with EU standards by abolishing domestic origin 
and  the  exemption  from  payment  of  customs  duties  on  foreign  components  of 
products produced in the free economic zones. The Republic of Moldova participated 
in  the  "FIREBLADE"  joint  customs  operation  targeting  trafficking  of  counterfeit 
goods at the EU Eastern border. 

The Republic of Moldova made significant progress in reducing technical barriers to 
trade.  It  adopted  17  international  and  European  standards  and  a  timetable  for 
transposition  of  additional  standards,  transposed  the  New  Approach  directives  and 
withdrew  conflicting  national  standards.  The  Republic  of  Moldova  progressed 
towards  affiliation  to  the  European  Committee  for  Electrotechnical  Standardisation  
and  became  an  affiliated  member  of  the  International  Electro-technical  Commission  
in November. Furthermore, the government submitted to the parliament amendments 

9

 
 
to  the  law  on  Standardisation,  a  draft  law  on  Accreditation  and  Conformity 
Assessment Activity, and amendments to the law on Metrology. 

The  Republic  of  Moldova  continued  gradually  to  move  closer  to  EU  sanitary  and 
phytosanitary (SPS) standards. In October, it adopted a food safety strategy for the 
period 2011-2015, which includes the establishment of a food safety authority and a 
plan  for  approximation  with  EU  standards.  The  strategy  was  subsequently 
complemented  through  an  accompanying  document  and  an  action  plan  for 
approximation to the EU acquis in the SPS area.  The Republic of Moldova adopted 
sanitary and phytosanitary and border controls related legislation. It trained staff, with 
EU  support.  In  October,  the  European  Commission’s  Food  and  Veterinary  Office 
carried out a mission to the Republic of Moldova on residue control in live animals 
and  animal  products  and  control  of  veterinary  medicinal  products.  The  mission 
showed  that  further  progress  was  being  made.  The  Republic  of  Moldova  needs  to 
implement fully its food safety strategy. 

The  Government  began  drawing  up  a  National  Development  Strategy  ‘Moldova 
2020’, focusing on economic growth. One of the seven priorities of the strategy aims 
at improving the business environment. In this area the Republic of Moldova made 
progress  in  2011.  Reforms  included;  the  establishment  of  a  one-stop  shop  for 
businesses  at  the  State  Registration  Chamber;  more  efficient  enforcement  of 
judgments; amendments to the insolvency law; and the establishment of the country’s 
first private credit bureau.  

In  the  domain  of  financial  services,  the  government  submitted  to  the  parliament  in 
August  amendments  to  53  legislative  acts,  including  the  law  on  the  National  Bank. 
They  set  out  sanctions  and  remedial  measures;  regulate  the  procedure  for  detecting 
violations and associated sanctions and remedies; and regulate the implementation of 
decisions.  The  parliament  approved  the  Strategy  for  the  Development  of  the  Non-
banking Financial Market for 2011-2014 with an action plan. In May, the government 
proposed  amendments  to  the  laws  on  Insurance  and  on  Compulsory  Motor  Third 
Party  Liability,  approximating  to  the  EU  Directive  on  insurance  mediation.  The 
National  Commission  of  Financial  Markets  approved  in  July  the  integration  of  the 
National  Securities  Depositary  into  the  Automated  Inter-banking  Payment  System. 
The government set up a national committee for financial stability (crisis management 
team). The National Bank and the Ministry of Finance signed in December an action 
plan on the capitalisation of the National Bank. 

Company  law,  movement  of  capital  and  accounting  rules  did  not  undergo 
substantial changes. Amendments to the Law on auditing introduced the International 
Standards on Auditing and the Code of Ethics as of 1 January 2012. 

Other key issues 

The tax reform produced results in line with commitments to the IMF. The Republic 
of Moldova made some progress in harmonising the national tax policy with EU tax 
policy. The threshold for mandatory registration for Value Added Tax was doubled. 

The  Republic  of  Moldova  prepared  draft  competition  laws  covering  anti-trust  and 
mergers  as  well  as  state  aid.  The  Republic  of  Moldova  will  need  to  continue 
improving and effectively implementing the competition rules, including through the 

10

 
 
adoption  of  secondary  legislation,  and  to  clarify  which  authority  is  responsible  for 
state aid control.  

In  August,  the  legislation  was  amended  to  allow  the  authorities  to  take  ex-officio 
action  to  protect  intellectual  property  rights.  As  of  November  2011,  the  Customs 
Service  had  accepted  right-holder  applications  to  protect  310  intellectual  property 
rights,  as  compared  with  172  in  2010  and  including  250  registered  by  foreign  right 
holders.  In  April,  the  Republic  of  Moldova  ended  its  membership  of  the  Eurasian 
Patent Convention. In December, the country’s request to the European Patent Office 
for a Cooperation and Extension Agreement was approved. The Republic of Moldova 
drafted,  with  a  view  to  approximation  with  EU  rules,  amendments  to  the  laws  on 
medicines and on pharmaceutical activity.   

The  government  approved  a  public  procurement  action  plan  for  2011-2013.  The 
Agency  for  Public  Procurement,  benefiting  from  an  EU  funded  twinning  project, 
drafted a Regulation on the common vocabulary of public procurement, a law on the 
exclusion  of  local  preferences  and  a  guide  for  contracting  authorities.  The 
development of e-Procurement was put on hold due to lack of funds. 

The  National  Bureau  of  Statistics  submitted  to  the  Ministry  of  Economy  detailed 
trade  statistics  for  the  last  three  years,  converted  to  the  current  year's  tariff 
nomenclature  of  the  Republic  of  Moldova,  including  an  estimate  of  the  data 
concerning  Transnistria.  In  spring  2011,  the  first  general  agricultural  census  was 
conducted on the whole territory of the Republic of Moldova; first results were made 
public  in  July.  The  new  version  of  the  national  Classification  of  Activities  in  the 
Economy of the Republic of Moldova, compliant with the EU statistical nomenclature 
for  economic  activities,  was  approved  and  is  being  implemented.  Efforts  in  2012 
should focus on the proper implementation of the population census, data processing 
and publication as well as on the start of implementation of the Strategic Plan for the 
development of the statistical system. 

The regulatory framework for enterprise policy saw no substantial changes in 2011. 

The law on public finances improving the budget preparation and execution and the 
law  on  public  internal  financial  control  entered  into  force  in  November.  The 
government  submitted  in  October  the  draft  law  on  Fiscal  Management  and 
Accountability  to  the  parliament.  Updates  to  the  Standards  for  Internal  Audit  in  the 
public sector were approved in May. The Ministry of Finance passed a public sector 
audit reporting regulation in September. 

External audit was reinforced in July, as the parliament approved an increase in the 
number of the Court of Accounts’ staff. The Court completed the shift from external 
financial control to regularity audit, in accordance with international standards. 

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

In  2011,  the  EU  and  the  Republic  of  Moldova  cooperated  intensively  on  justice, 
freedom and security matters, with a strong focus on mobility.  

11

 
 
Following presentation by the EU to the Republic of Moldova of the Action Plan on 
Visa  Liberalisation  in  January  2011,  a  First  Progress  Report  on  implementation  by 
the Republic of Moldova was issued in September 2011. The Second Progress Report 
was issued in February 2012.   

Implementation of the EU-Republic of Moldova Visa Facilitation and Readmission 
Agreements  continued,  and  was  monitored  at  the  meetings  of  the  respective  Joint 
Committees  in  May.  The  negotiations  on  amendments  to  the  EU-Republic  of 
Moldova Visa Facilitation Agreement were concluded in February 2012.  

Cooperation between the EU and the Republic of Moldova further evolved under the 
Mobility  Partnership.  A  number  of  new  initiatives  were  launched  in  areas  such  as 
strengthening mobility of health professionals or tackling the social consequences of 
migration. Work continued on the development of an Extended Migration Profile. A 
high level Mobility Partnership meeting took place in November 2011 and focused on 
reviewing the progress made so far and on identifying areas for future cooperation. 

The  Republic  of  Moldova  made  good  progress  in  adopting  migration  and  asylum 
related  legislation  and  establishing  an  efficient  migration  management  system.  A 
comprehensive strategy on  migration and  asylum was adopted in July, accompanied 
by  an  action  plan  in  November.  The  Republic  of  Moldova  established  a  ‘one-stop 
shop’  within  the  Bureau  for  Migration  and  Asylum  aiming  at  facilitating  visa, 
residence and work application procedures. The law on integration of foreigners and 
the  law  on  accession  to  the  Convention  on  the  Status  of  Stateless  Persons  were 
adopted  in  December,  as  was  the  law  on  accession  to  the  Convention  on  the 
Reduction  of  Statelessness.  An  important  remaining  gap  in  the  asylum  procedure 
concerns the lack of travel documents for refugees. 

Key steps were taken towards establishing a modern border management system. In 
May, the Republic of Moldova approved an action plan for the implementation of the 
National  Strategy  on  Integrated  Border  Management  for  2011-2013  and  in 
November  it  adopted  the  law  on  the  State  Border.  The  law  on  Border  Police  was 
adopted  in  December.  Legislation  adopted  in  June  added  provisions  to  improve  the 
security  of  biometric  passports.  The  EU  provided  support  to  buy  equipment  for  the 
introduction of biometric passports.  

Final  adoption  by  parliament  of  a  framework  law  on  preventing  and  fighting 
organised  crime  is  pending;  in  June  and  November  respectively,  the  government 
adopted a strategy and an action plan for 2011-2016 in this area. Implementation of 
the  2010-2011  action  plans  to  counter  trafficking  in  human  beings  continued. 
Increased action is required to raise public awareness and provide assistance to, and 
protection of, victims of trafficking. The institutional framework is well established. 
The Centre for Fighting Trafficking in Human beings is fully operational.  An updated 
action  plan  for  2012-2013  on  combating  trafficking  in  human  beings  is  being 
prepared.   

In  April,  the  Republic  of  Moldova  adopted  a  new  law  on  preventing  and  fighting 
money  laundering  and  the  financing  of  terrorism.  The  April  2011  report  of  the 
Council  of  Europe’s  Moneyval  Committee  acknowledged  the  steady  progress  of  the 
Republic of Moldova in the areas of customer diligence and reporting. Since July, the 

12

 
 
Republic  of  Moldova  is  no  longer  subject  to  special  monitoring  by  the  Financial 
Action Task Force.   

In  January,  the  Republic  of  Moldova  launched  a  National  Anti-Drug  Strategy  for 
2011-2018  and  an  action  plan  for  2011-2013.  Implementation  is  the  task  of  a  new 
National  Anti-Drug  Committee,  established  in  June  2011,  which  also  coordinates 
actions  with  civil  society  organisations.  The  September  EU-Republic  of  Moldova 
Drugs  Dialogue  explored  further  cooperation  avenues.  In  October  the  Republic  of 
Moldova  indicated  its  interest  in  enhancing  cooperation  with  the  European 
Monitoring  Centre  for  Drugs  and  Drug  Addition  through  a  memorandum  of 
understanding.   

The  Republic  of  Moldova  revised  its  data  protection  legislation  in  July  2011,  with 
the  aim  of  aligning  it  to  the  EU  acquis  and  Council  of  European  conventions.  The 
2011 Additional Protocol to the Council of Europe Convention for the Protection of 
Individuals  with  regard  to  Automatic  Processing  of  Personal  Data  was  signed  and 
ratified in June. Work started on assessing new legislation with a view to concluding 
cooperation agreements with EUROPOL and EUROJUST. 

With  regard  to  judicial  cooperation  in  civil  matters,  there  has  been  no  progress  on 
accession of Moldova to some Hague Conventions such as the conventions on judicial 
assistance  (1965  Convention  on  the  Service  Abroad  of  Judicial  and  Extrajudicial 
Documents  in  Civil  or  Commercial  Matters  and  1970  Convention  on  the  Taking  of 
Evidence  Abroad  in  Civil  or  Commercial  Matters)  and  on  child  protection  (1996 
Convention  on  Jurisdiction,  Applicable  Law,  Recognition,  Enforcement  and  Co-
operation  in  respect  of  Parental  Responsibility  and  Measures  for  the  Protection  of 
Children).  

6. 

TRANSPORT,  ENERGY,  ENVIRONMENT,  THE 
RESEARCH AND DEVELOPMENT 

INFORMATION  SOCIETY, 

In  the  transport  sector,  after  initial  delays,  implementation  of  the  Road  Sector 
Programme  Support  Project  Agreement  co-financed  by  the  EU,  the  European 
Investment  Bank,  the  European  Bank  for  reconstruction  and  Development  and  the 
World Bank was finalised in 2011. The procurement procedures were completed and 
the  relevant  contracts  were  signed.  A  new  law  on  Road  Transport  is  being  drafted. 
Road safety remains an issue of concern. During 2011 preparatory work for the major 
restructuring  of  the  railways  started  with  the  separation  of  accounts;  it  also 
encompasses  transfer  of  assets  and  functions  not  related  to  core  business  to  the 
municipalities  and  other  entities.  As  a  first  result  of  management  reforms,  revenues 
from freight traffic started to increase substantially in 2011. In October the Republic 
of Moldova and the EU initialled a comprehensive air services agreement, which will 
open up and integrate their markets and strengthen cooperation on safety and security. 
The  Republic  of  Moldova  needs  to  take  corrective  actions  in  order  to  address  a 
number  of  aviation  safety  problems  identified  by  the  European  Aviation  Safety 
Agency in 2009 and 2011. Institutional reform of the aviation sector has been slow, 
and the reporting responsibilities of the Civil Aviation Administration still need to be 
defined. The Moldovan fleet continued to figure in the high risk category of the black 
list of the Paris Memorandum of Understanding on port state control.  

13

 
 
2011 was a significant year for the energy sector in the Republic of Moldova, which 
held  successfully  the  rotating  Presidency  of  the  Energy  Community.  To  meet  its 
Energy  Community  obligations,  the  Republic  of  Moldova  further  developed 
legislation. It pursued work to update its energy strategy and took steps to improve the 
difficult financial situation in the energy sector. The regulator increased heat, gas and 
electricity tariffs and adopted a methodology for transmission tariffs. The Republic of 
Moldova  decided  to  merge  the  combined  heat  and  power  plants  with  the  district 
heating  company  Termocom.  It  also  decided  to  reorganise  Moldovagaz  into  three 
companies (supply, transmission and distribution).  

The Republic of Moldova continued to engage with Gazprom on the accumulated gas 
debts,  including  in  relation  to  Transnistria.  The  Republic  of  Moldova  and  Gazprom 
initiated negotiations on new gas supply and transit contracts. Feasibility studies were 
completed for the construction of the Ungheni-Iasi gas pipeline and the Balti-Suceava 
high-voltage  electric  line.  Together  with  Ukraine  and  Romania,  the  Republic  of 
Moldova  requested  EU  financing  for  a  feasibility  study  on  the  synchronous 
interconnection of the Moldovan and Ukrainian power systems to the European Network 
of  Transmission  System  Operators  for  Electricity  (ENTSO-E),  the  continental 
European  power  system.  In  November,  the  Republic  of  Moldova  adopted  an  energy 
efficiency programme for the period down to 2020. An Agency for Energy Efficiency 
was set up. The EU launched in December 2011 a budget support programme of EUR 
42.6  million  to  help  the  reform  of  the  energy  sector.  The  programme  focuses  in 
particular on energy efficiency and renewable energy. 

Regarding  climate  change,  the  Republic  of  Moldova  has  completed,  but  not  yet 
adopted, strategies on low emissions development and on adaptation. No new Clean 
Development Mechanism projects were registered at the UN level, leaving the overall 
number of registered projects at four. The Republic of Moldova is encouraged to build 
capacity and engage in the new carbon market mechanism to be developed following 
the United Nation Framework Convention on Climate Change 17th Conference of the 
Parties. It is also encouraged to fully implement the Cancun and Durban agreements 
and  in  particular  devise  a  low  carbon  development  strategy  including  updated 
information on targets to be met or actions that it will implement. 

The Republic of Moldova started preparing an environment strategy for 2012-2022. 
Framework  legislation  on  environmental  protection  as  well  as  on  environmental 
impact  assessment  is  still  pending.  Strengthening  of  administrative  capacity  at  all 
levels  remains  a  major  challenge.  A  state-of-the-environment  report  was  published 
and the Ministry of Environment adopted a communication strategy. The Republic of 
Moldova also adopted a plan for 2011-2015 to implement the Aarhus Convention. In 
June, the Republic of Moldova hosted the Convention’s Meeting of the Parties. There 
were  no  significant  developments  on  the  ratification  of,  or  accession  to,  relevant 
environment  related  protocols  of  the  United  Nations  Economic  Commission  for 
Europe (UNECE). The Regional Environmental Centre continued its activities in the 
Republic  of  Moldova  as  a  small  scale  entity,  with  support  from  the  Ministry  of 
Environment. The EUR 50 million EU-financed sector budget support programme in 
the field of water continued to be implemented. In that context, a new Water law was 
adopted. 

In  the  field  of  civil  protection,  the  Republic  of  Moldova  intensified  its  cooperation 
with  the  countries  from  the  region  and  the  exchange  of  best  practices  with  the  EU 

14

 
 
through  its  participation  in  the  EU  Programme  for  Prevention  of,  Preparedness  for, 
and Response to natural and man-made disasters). 

In  the  information  society  sector,  the  Republic  of  Moldova  approved  in  June  2011 
the National Plan for Number Portability, to be implemented in three stages between 
2011  and  2013.  This  will  promote  competition  on  the  electronic  communications 
market, in particular the fixed telephony market. The National Regulatory Agency for 
Electronic Communications and Information Technology  pressed on with regulatory 
reform  and  the  market  analysis  process,  approving  a  set  of  ex  ante  obligations  for 
Moldtelecom  (the  incumbent  operator)  due  to  its  significant  market  power  on  a 
number  of  markets,  in  particular  allowing  for  better  access  to  the  network  of  the 
incumbent operator. 

The Audiovisual Coordination Council is implementing an action plan in accordance 
with  the  government  programme  of  support  for  democracy.  The  digital  TV  switch-
over  policy  and  regulatory  framework  is  in  place.  New  broadcasting  licences  are 
subject to open tender. 

In  the  area  of  research  and  innovation,  a  Memorandum  of  Understanding  for 
associating the Republic of Moldova to the 7th Framework Programme for Research 
and Technological Development (FP7) was signed in October and entered into force 
in  January  2012.  The  Republic  of  Moldova  became  the  first  Eastern  Partnership 
country to associate to FP7 and the second ENP country, after Israel, to associate to 
the  Programme.  The  Academy  of  Sciences  of  the  Republic  of  Moldova  has 
implemented a comprehensive action plan to prepare the research community for the 
opportunities  that  association  to  FP7  will  offer;  further  actions  are  needed  to  ensure 
that  such  association  is  successful.  At  the  same  time,  the  Republic  of  Moldova  has 
continued  to  increase,  albeit  at  a  moderate  level,  participation  in  FP7.  Currently,  27 
Moldovan research organisations participate in 22 FP7 projects, receiving over EUR 
1.95 million of EU funding. This includes the participation of six institutions and 11 
individual  researchers  from  the  Republic  of  Moldova  in  researcher  mobility  actions 
under the Marie Curie scheme. The network of FP7 National Contact Points has been 
strengthened considerably over the last year; the Republic of Moldova is encouraged 
to appoint further National Contact Points to ensure that all areas of FP7 are covered.  

As  regards  Regional  Policy,  a  number  of  regional  policy  dialogue  initiatives  have 
been  undertaken  since  an  agreement  with 
in 
2010. Improvement  of  regional  statistics  and  the  development  of  regional  planning 
and regional development projects pipelines in 3 regions are the objectives of the Pilot 
Regional Development Programmes to be supported from 2012. 

the  Commission  was  signed 

7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

The  Republic  of  Moldova  drew  up,  following  public  discussions,  a  revised  Code  of 
Education, which is in its final stages of adoption. Work progressed on developing a 
National  Qualification  Framework  for  Higher  Education,  in  line  with  the  European 
Qualifications  Framework  (EQF).  Further  reforms  are  necessary  on  the  third  cycle 
(doctoral  studies)  where  the  Bologna  Process  requirements  have  not  yet  been 
extended.    

15

 
 
Higher education reform continued to benefit from EU cooperation through Tempus 
IV programme support and one additional project involving the Republic of Moldova 
was selected in 2011. The country continued its active participation in the Erasmus 
Mundus programme in the academic year 2011-2012, with the award of a total of 182 
scholarships and mobility grants. Two additional European integration modules were 
selected  under  the  2011  Jean  Monnet  Programme,  which  fosters  teaching  and 
research in the field of EU integration studies.  

In 2011 the vocational education and training sector became a priority, in line with 
the new National Development Strategy 2012-2020. Progress included the launch of 
two  working  groups  led  by  the  Ministry  of  Education  to  prepare  a  National 
Qualification  Framework;  the  finalisation  of  a  national  format  for  occupational 
standards;  and  the  elaboration  of  a  concept  on  the  validation  of  non-formal  and 
informal learning.  

Preparations began for the participation of the Republic of Moldova in the eTwinning 
component  of  the  Comenius  programme,  the  EU  programme  for  interconnecting 
schools,  planned  for  2012,  with  the  selection  of  the  partner  support  agency  and  an 
assessment of potential beneficiaries/schools.  

Substantive  progress  was  made  on  cultural  policy  regulation.  The  government 
prepared  or  approved  regulations  concerning  the  conservation  and  restoration  of 
the 
historic  monuments, 
export/import of cultural goods. A law on protection of the national movable cultural 
heritage is under preparation. The Republic of Moldova participated in four projects 
under  the  2010  Special  Action  for  ENP  countries  under  the  Culture  Programme, 
which are running until 2012.  

the  organisation  of  archaeological  excavations  and 

Very  positively,  the  number  of  young  Moldovan  citizens  and  youth  workers 
benefitting  from  the  exchange  opportunities  under  the  Youth  in  Action  programme 
increased from 247 in 2010 to 329 in 2011. 

Health sector reform continued in the Republic of Moldova, with EU budget support 
(EUR  43  million).  The  country  reconstructed  (primary)  health  care  facilities, 
strengthened  its  health  information  system  and  improved  its  surveillance  of 
communicable  diseases.  The  availability  of  sufficient  financial  means  and  health 
workers remain a particular challenge. The Republic of Moldova adopted rules on the 
transplantation of organs, tissues and cells of human origin in line with EU standards. 
It also adopted programmes to fight diabetes, to strengthen the public health service, 
and to enhance emergency care. It continued addressing HIV/AIDS and tuberculosis 
challenges, and participated in the Commission’s HIV/AIDS think tank. 

16