Chapter 2.4 Trade-related issues, market and regulatory reform

2.4.1 Movement of GoodsTrade Relations

1. Full implementation of PCA commitments in title III, and fulfilment of allobligations linked to WTO membership.

The actions in this regard were directed to the following activities:- adjustment of the national legislation to the requirements of WTO,- monitoring of the fulfilment of the obligations undertaken with international organisations and the WTO countries, - fulfilment of the decisions undertaken under the new rounds of multilateral trade negotiations after the Ministerial Conference at Doha in 2001,- participation at the process of adherence to WTO of other states, in special of the Russian Federation and Ukraine, which are trade partners of the Republic of Moldova. The acceptance for Russian Federation and Ukraine adherence to WTO was signed.

At the same time, the additional protocol to the Agreement of 29 th of May 2001 was signed between the Republic of Moldova and the Government of Russian Federation on the levy of indirect taxes in bilateral trade. The draft country report was developed, that describes the trade policy of the Republic of Moldova, to be presented to WTO secretariat (dead line for presentation of this report has been extended).

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2.Successful implementation of the WTO obligations (including the TRIPs agreement) and PCA obligations

The activity regarding the implementation of the obligations undertaken with WTO was from the beginning oriented to the request of extending the terms of implementation of the obligations undertaken with WTO from the moment the Republic of Moldova became a member of WTO. In this context, to the diplomatic mission of the Republic of Moldova to Geneva, was sent a notification by which the RM is reserving the right to modify the obligations undertaken at the moment of signing the WTO Agreement for a period of three years starting 1st of May 2006, implying as base the provisions of the art.XXVIII:5 of GATT – the General Agreement on Tariffs and Trade of 1994. Obligations agreed with WTO constitute the direction lines for formulation of trade policies of each country and specifies the modalities of liberalisation of trade as well as the priority activities for negotiation, namely: agriculture, access to market of a non agricultural products; services and measures for trade facilitation.

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3. Gradual removal of licensing requirements which are not in conformity with Moldova’s WTO and PCA obligations and transparent management thereof

At the present moment Moldova is applying in a transparent way the system of licensing the external trade transactions. Are subject to licensing the import and export of certain products for the scope of consumer protection and adjustment to the internal standards, as well as for security reasons and health protection.

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4. Efforts to increase transparency of application of regulatory measures

All the legislative and normative acts elaborated by the Ministry of Economy and Trade and/or together with other public authorities can be accessed on www.mec.gov.md.

Transparency of regulatory measures related to trade is ensured by:- approving of all normative/legislative acts by the line ministries and institutions as well as their

coordination with the public and private sector representatives. During the activity of the Working Group of the Regulatory Reform, all the legal and normative acts are coordinated with the Association of Foreign Investors;

- publication in the Official Journal of the RM of all the normative and legal acts

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(25) Promote Moldova’s exports capacity and diversification of export products

1. Promotion of Sectoral groups of producers for joint action for promotion of Exports on foreign markets, as foreseen in MEPO’s programme

The Strategy for Investments Attraction and Export Promotion for 2006 – 2015 was adopted by GD 1288 as of 09.11.2006 (published in the Official Journal nr. 181 as of 24.11.2006), based on a complete new vision of socio-economic development of the country, for a coherent policy framework on investment attraction, that have as base the liberal approach and fulfilment of the structural reforms.

For the promotion of the local products on the foreign markets and support the undertakings to participate at international exhibitions, during the VI edition of the National Exhibition „Made in Moldova”, on 7th of February 2007, a round table was organised with the topic „New approaches of state investment policies in the context of the Strategy for investment attraction and exports promotion for the years 2006 – 2015”.

With the objective of promoting local product on foreign markets, with the support of Chamber of

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Commerce and Industry and Moldovan Investment and Export Promotion Organization (MIEPO), economic agents participate regularly in different international exhibitions: ex. “Green Week” – Germany, Berlin, 19th of January 2007; “Pro Wein” – Germany, Dusseldorf , 15 th March 2007; „Prodexpo“ – Russian Federation, Moscow , on 12th February 2007, “FruitLogistica” – Germany, Berlin, 7th of February 2007; “Biofach” – Germany, Berlin, 15th of February 2007; “Modeexpo” – Romania, Bucureşti, 15th of March 2007 etc.

MIEPO regularly organises economic missions of country image promotion, business bilateral forums, during these events the Moldova’s export potential is promoted (ex. Economic Mission of promoting country’s image „Moldova Presents”, 13-15th of May 2007, Sofia, Bulgaria; „Moldova Presents”, 25th of June 2007, Hague, Holland; The Moldo-Italian forum „The Agro-industrial sector: Opportunities for Business and Investments”, 18-19th of April 2007, Chişinău; Moldo-Slovac forum of business men – 20-21 of June 2007, Slovakia etc.)

2. Ensure effective control of the origin of goods in order to be able to fully benefit from the Generalised System of Preferences

Twenty-five economic operators, including eight residents of the Transnistrian region, requesting origin of goods certificates Form A in 2007 were audited in accordance with the Customs Service Order nr.4-O of 03.01.2007 concerning the planning of audit measures towards economic operators (including Transnistrian region) requesting certificates of origin, Form A.

The implementation of the „SPECIMEN” information system, which contains the database with the signature and stamp specimens used for the determination of the certificates of origin authenticity by other states, was finalized at the Customs Service Headquarters and Chisinau Municipal Customs Office. On 22-23.01.2007 and 7-8.06.2007 an evaluation and monitoring missions of the EC Commission took place in Moldova, with the objective to evaluate the reforms of the system of the controls and certification of preferential origin of goods.

As a result of positive evaluation of EC missions, on 14th of November, Council of EU Commissioners approved the Regulation introducing ATP for Moldova, which provides for duty free access to the EU market for all products originating in Moldova, except for certain agricultural products for which limited concessions are given. On 21st of January 2008, Council of Ministers of the European Union (EU) adopted the Regulation introducing Autonomous Trade Preferences for the RM.

In order to disseminate information about the new origin of goods certification and control system, as well as about the modifications made to the GD nr. 185 as of 02.08.2005, a round table with the

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participation of economic operators (including residents of the Transnistrian region), an expert from the Customs Department of Lithuania and experts of the Ministry of Economy and Trade, was carried out in the framework of the Bender Customs House on 26.04.2007. The information system „SICOM” and „SPECIMEN” were integrated into the „ASYCUDA World” IS.

3. Improve institutional framework and procedures on control of origin byreinforcing customs and reviewing the division of responsibilities for the issuing and verification of both preferential and non-preferential certificates of origin with the Chamber of Commerce in order to build a solid basis for possible AutonomousTrade Preferences.

Beginning with 1st of July 2006 the competences of issuing the certificates of origin Form A (for the goods exported to the EU under Generalised System of Preferences Plus (GSP+)) were transferred from the Chamber of Commerce and Industry to the Customs Service (GD 866 as of 01.08.2007 ) Beginning with 26th of July 2007, Competences of issuing of certificates of origin Form EUR.1 (for the goods exported under CEFTA regime) were transferred from the Chamber of Trade and Industry to the Customs Service.

Starting with 1st January 2008, Customs Service is the only authority responsible for issuing all certificates of origin, including certificates Form ST1 for the goods exported under preferential regime to the CIS states (stipulated in GD nr.1599 from 13.12.2002 concerning rules of origin of goods)

In order to permanently improve the control over the origin of goods, as well as for the professional development of the customs officers authorized to certify and control the origin of goods, a series of events were organized, as follows:

study visit for 4 customs officer to the Latvia Customs Department with the aim of exchanging experience in the field in the period 13-19.05.2007, with the support of the European Union “Border Management – Simplification and Harmonization of Customs Procedures in the Republic of Moldova” Project;

seminar on origin of goods with the participation of the Romanian expert, in the period 25-29.06.2007;

training on “The implementation of the SICOM module in the ASYCUDA World Information System”;

training on “The implementation of the Central European Free Trade Agreement (CEFTA, 2006) and the issuance of EUR.1 transportation certificates”;

seminar “Rules of origin of goods”, organized in Belgrade, Serbia, by the General Extension Directorate of the European Commission, with the participation of 2 customs officers of the Customs Service;

14 round tables with the participation of economic operators on “Issues related to the certification of origin of goods” organized in the period 10-21.09.2007;

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seminar on “Origin of goods – the provisions of the European Union Customs Code” organized in the period 24-25.10.2007 with the support of the EU “Border Management – Simplification and Harmonization of Customs Procedures in the RM” Project; etc

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(26) Implementation of customs legislation aligned with international and EU standards

1. Implement provisions of the Customs Code as well as provisions on customs control of precursors, counterfeit and pirated goods, dual use goods, and culturalgoods.

The draft of the Regulations regarding the clearance of cultural values was elaborated. the draft was sent to the Ministry of Culture and Tourism for examination and approval.

The draft Law for the amendment and completion of several legislative acts was adopted by the Government of the RM. This draft includes proposals regarding the modification and completion of the Customs Code (regarding the intellectual property rights, correction, modification and invalidation of the customs declaration, etc.), the Law 1380-XIII of November 20, 1997 regarding the customs tariff, the Law nr. 820-XIV of 17.02.2000 regarding the antidumping, compensatory and safeguarding measures, and of the Code regarding the administrative contraventions of 29.03.1985.

In order to identify the attempts and cases of legislation breech with regard to the intellectual property rights protection, a new selectivity criteria nr. 14193 was introduced in the selectivity module of the ASYCUDA World system in order to protect the trademarks, individual and tridimensional, at the border. The risk criteria system, aimed at alerting the employees from the customs houses regarding the obligatory observance of the norms on the comercial trademarks rights, is permanently developed. Based on the reports of the unit responsible for the intellectual property protection (IPR), new selectivity criteria are permanently created and introduced in the ASYCUDA World selectivity module regarding IPR protection at the border. In 2007, 15 of such criteria were created.

The electronic register of the intellectual property rights objects for the period 2001-2006 was finalized. The electronic register of intellectual property objects protected at the border by the Customs Service of the RM is being updated on a quarterly basis. Seventeen new comercial trademarks, were introduced in 2007.

Requests regarding the verification of the authenticity of data declared during customs operations were submitted to the SECI Center, Poland, Belgium, Switzerland, Italy, the Ukraine, Japan, Austria, Belarus, Russian Federation.

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2. Moldova to adopt and keep up to date the HS in use, with a view to adopting the CN

Combined Nomenclature of the RM approximated in accordance with Harmonised System of codification and classification of goods was adopted by GD 1525 as of 29.12.2007 and entered into force starting with 1st January 2008.

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3. Implement the principle of risk based customs control and set the necessary organisational framework

Through Customs Service Order nr.148-o as of 14.04.2006, starting with 17.04.2006 the process of introducing risk criteria in the selectivity module of the ASYCUDA World Information System was initiated. Starting with 25.04.2006 the selectivity principle was applied in the process of control of goods and clearance.

Through Customs Service Order nr.228-o of 22.06.2006, the Instructions on the cargo selectivity were approved and, starting with 23.06.2006, the Customs Service switched to the goods clearance process using the cargo selectivity system, the customs declarations flow being, thus, routed on the “red”, “yellow” and “green” corridors.

The risk analysis and management system in pemanently developed, particularly with regard to the optimization of the percentage of declarations routed on the red corridor; the analysis of non-conformities detected as a result of aleatory routing on the “yellow” and “red” corridors verification and the establishment of corresponding criteria that would eliminate the respective non-conformities.

Following World Bank’s recommendations, the Customs Service is permanently improving the flow of declaration selected by the ASYCUDA World IS pn the selectivity corridors. Having established the percentage of 35% for the “green” corridor, 25% for the yellow and 40% for the red one, it is being worked on the selectivity criteria that would constantly distribute the customs declarations correspondingly to the respective type of corridors, as foreseen by the ASYCUDA World IS.

In the framework of the ASYCUDA World information system, the list of “coverage goods” was created and is permanently updated. The need for such a list was dictated by the fact that, it was discovered during the controls that there are goods which are totally different from the ones indicated in the suporting documents. Thus, in order to establish some measures to combat illegal actions, materials of glass were introduced in the list of coverage goods (as a result of the attempt of cigarette contraband covered in glass). Also, a selectivity criteria establishing the re-routing of the customs declarations of the economic operator, that would have 100% exports through the red corridor, was created.

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92 national selectivity criteria were created in 2007. The aim of these criteria was to optimize and make efficient the customs declarations selection process by the ASYCUDA World IS, as well as to increase control over the correctitude of the import-export transactions, to dicrease the aleatory rate of selecting customs declarations on the red corridor, to increase control over the import/export of coverage goods, the intellectual property rights protection, etc. From the beginning of 2008, 8 national selectivity criteria were created. To facilitate the signing of memoranda of understanding with the main associations of economic operators – subjects of foreign economic activity, the Customs Service of the RM organized a meeting on 14.06.2007 with representatives of the Republican Businessmen Club „Timpul”. First memorandum of understanding was sighened in February 2008, in view of combating illegal cigarette trafficking and conterfeit. In order to combat the ilicit trafficking of goods by air, the Customs Service is working on the elaboration of a draft memorandum of understanding concerning cooperation of the Cusotms Service of the Republic of Moldova with the International Airport Chişinău.

(27) Improve functioning of customs service; simplify and modernise customs proceduresat borders and inland

1. Strengthen the overall administrative capacity, in particular to ensure effective control of the origin of goods and the correct implementation of customs valuation rules, and provide the customs administration with sufficient internal or external laboratory expertise as well as sufficient operational capacity in the IT area

The Customs Service continues the implementation of the Customs Service Action Plan of 07.09.2006 concerning the implementation of the Recommendations of EUBAM mission, cooperation ties with this Mission being established both at the central and regional levels. Through Customs Service Order nr. 5-o of 05.01.2007, a Working Group of liaison officers with EUBAM was constituted in the framework of the Customs Service Headquarters.

Three scanners were purchased for the physical control of goods, one of them being installed at the Ungheni Customs House, the other two – at the Airport Customs Office. The minimal reference prices were modified for the goods classified under 07 and 08 tariff positions in the Goods Nomenclature of the Republic of Moldova.

The Customs Service Order nr. 68-o of 27.02.2007 with regard to the implementation of new modules and the development of the ASYCUDA World customs information system was issued. Two new modules: Transit Surveillance Module and the SICOM Module, were elaborated and introduced in this system in July 2007.

Through Customs Service Order nr. 346-o as of 14.09.2007 the Action Plan for implementation of the New Computerized Transit System (NCTS) in the RM was approved in the framework of the

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“Millenium Challenges” Program.

In order to implement the provisions of point 3 of the GD nr. 870 as of 03.08.2007 regarding the monitoring of import commercial transactions and in order to combat fiscal evasions in the field of customs valuation, the Customs Service Order nr. 361-o as of 25.09.2007 was elaborated.

In order to develop the professional skills of the customs officers’ authrized to control the customs valuation of goods, a number of seminars on “Customs valuation” were organized (11-15.06.2007 and 8-12.10.2007) by the experts from France and Lithuania.

On November 1, 2007, the testing of bilateral preliminary information exchange (XML messages by means of e-mail) was carried out in 4 road crossing points (Ocniţa-Sokireanî, Mirnoe-Tabaki, Vulcăneşti-Vinogradovka, Giurgiuleşti-Reni). In the period of November 20-27, 2007 a training course regarding the use of the WebSphere MQSeries for Windows software for preliminary information exchange was carried out in Moscow by the IBM company and with EUBAM support for IT experts of the Customs Services of Moldova and Ukraine.

In order to provide the Customs Service of the RM with sufficient laboratory expertise, specialized structures are in the process of being created and priorities for the procurement of the necessary laboratory equipment are being established. Following the diagnostic mission of the World Customs Organization (WCO) experts, a series of priorities were established, among which the endowment of the customs laboratory with the necessary equipment and with the WCO assistance.

Over 40 customs assistance requests for the verification of the customs valuation data authenticity were submitted in 2007 by means of the SECI Center.

2. Develop a single window approach for all international trade relateddocumentation and control starting by increased co-operation between customs

Through Customs Service Order nr. 131-o as of 23.04.2007 the single window approach has been approved for the border crossing and goods clearance. The single window principle is being viewed as a component part of the integrated system of the RM state border management. This fact signifies the reformation of the state control services and agencies activity in the customs control sector, efficient collaboration and the simplification of the border crossing procedures by applying the “one stop shop” principle.

Through a Government Dispozition as of 28.09.2007, an interdepartmental commission was created with

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services and other agencies working at the border (e.g., State Border Guards, Police, and Veterinary Service).

the aim to simplify the procedure of customs acts issuance at the state border crossing points, to reduce the number of control bodies located in these points and to adjust the national legislation to the international standards. After this Committee meetings, the Customs Service submitted proposals for the amendment and completion of the current legislation in order to implement the „single window” concept.

Through GD nr. 29 of 18.01.2008 the Draft Law for the modification and completion of several legislative acts, which foresees the undertaking by the Customs Service, in the border crossign points, of the competences of the State Fitosanitary Quarantine Service, State Ecologic Inspectorate and AMTAI, was approved. This draft law was submitted to the Parliament for examination. At the moment, a draft of the GD for the modification and completion of several legislative acts, which foresee the undertaking by the Customs Service, in the border crossing points, of the competences of the Sanitary-Epidemiologic Service and the State Veterinary Service for the Border and Transportation, is being elaborated.

In order to improve the cooperation between the customs bodies and other agencies working at the border, it is foreseen to initiate a procedure of adjusting the national legislation in order for the Republic of Moldova to adhere to the International Convention regarding the harmonization of goods control at the border (signed in Geneva on October 21, 1982). The analysis of the national legislation provisions which need to be modified prior to the adherance to this Convention was carried out. As a result of this analysis, a complex draft of modifications to both Laws and GDs will be elaborated. The adherance to this convention will be carried out together with the implementation of the “single window”.

3. Set up a Mechanism to ensure regular consultation/ information of the trade community on import and export regulations and procedures.

The Customs Service is permanently updating the web site www.customs.gov.md with information in the customs field.

A new project for publishing the magazine of the Customs Service „VAMA” was elaborated. This magazine will replace the newspaper „Curierul Vamal”. It constitutes the information source for the general public on all the aspects of customs activity and facilitates access to the information regarding the new procedures and requirements in the customs field. The first issue of this magazine was published in December, 2007. The magazine will be published once in two months.

The Trade Consultative Committee was created, the aim of which is to enhance the dialogue between customs service and trade community/private sector and to facilitate trade through the simplification of customs procedures.

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Informative events are organized with representatives of the trade community in order to discuss and solve concrete customs issues. Thus, on 20.09.2007, in the Customs Service Headquarters premises, a seminar was organized for Customs Service employees and economic operators in the framework of the EU “Border management – simplification and harmonization of customs procedures” Project, with the invitation of international experts who shared their suggestions and recommendations for the simplification and harmonization of customs procedures, the customs brokers’ activity, the intellectual property rights observance, the implementation of the “single window” and “one stop shop” concepts in the RM etc., in conformity with the EU standards. On 28.09.2007 a round table was organizeed with the members of the International Club „Trade-Club Moldova”.

4. Adopt and implement a Customs Ethics Policy based on internationallyrecognised standards (Arusha Declaration).

Through Customs Service Order nr.334-c of 18.04.2005 the Ethics Code of the customs worker was approved. This Code is totally compatible with the Arusha Declaration of the World Customs Organization. The Code is displayed in visible places in all regional customs bodies. The level of the Code implementation is under permanent monitoring process.

Through Order nr. 110-o of 02.04.07 of the Director General of the Customs Service, the Regulations regarding the verification of the title holders and candidates for public functions in the Customs Service bodies were approved. These Regulations constitute the normative basis for the imporvement of procedures and techniques aimed at verifying the staff probity vis a vis the observance of the provisions of the Ethics Code of the customs worker.

Through Order nr. 754-p of 28.06.2007 of the Director General of the Customs Service, the Regulations regarding the competition-based hiring conditions for the Customs Service, were approved in order to determine the modality of organizing, carrying out and hiring staff for the vacant positions in the framework of the Customs Service of the RM.

Through Order nr. 755-p of 28.06.2007 of the Director General of the Customs Service, the Regulations of the Customs Ethics Commission were approved. The aim of this Commission is to monitor, examine, record, and, depending on the case, verify the correctitude of investigations carried out with regard to the customs officers who did not observe the norms of the Code regarding the ethical behavior of the customs officer.

Through Customs Service Order nr. 824-p of 09.07.2007, the instructions regarding the regulation of the cusotms officers attestation system were approved.

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5. Develop EU-Moldova co-operation with regard to risk based customs control, including safety and security of goods imported, exported or in transit.

Close cooperation ties were established between the European Union Border Assistance Mission to Moldova and Ukraine (EUBAM) and the Customs Service of the Republic of Moldova in the field of risk analysis and management. An EUBAM risk analysis consultant is working permanently in the Customs Service. Two special compartments are filled in every month in the framework of the common monthly reports on the results of the Moldo-Ukrainian border protection.

In order to establish flexible ways of determining the potential breeches of the customs legislation, a working session on “The use of the analytical software – i2” was carried out on 26.01.2007 with the participation of EUBAM experts and specialists of the Risk Analysis and Management Section of the Customs Service Headquarters.

In the context of cooperation with the EUBAM Mission, a visit of the customs officers of the Customs Services of the RM and the Ukraine was organized in May 2007 in Turkey. The aim of this visit was to learn about the pratices and techniques used by the Turkish customs bodies in the field of risk analysis and management.

In the period 13-14.06.2007, EUBAM carried out a training for the Customs Service officers on “Fight against corruption”, and in the period 16-26.06.2007, by means of the „Molico” (Counsil of Europe) project, a training was organized on “Prevention and fight against money laundry and terrorism funding”.

Consultations with EUBAM and Border Guards Service experts were carried out in order to implementa the intelligence EU CAFAO database, as well as to examine the possibility of interconnection this system with the FRAUDE program. Thus, in July 2007 a presentation was made on the FRAUDE program and its plan of updates.

Together with the representatives of the EUBAM Mission, the topics, structure, theoretical and practical aspects of a training planned for October 2007 for customs officers (Mobile Teams Sector, Customs Anti-Fraud Department) and Ministry of Interior employees, were established. At the same time, it is planned to organize meeting with the participants of this training (mobile teams) and the employees of the risk analysis sectors/sections, in order to make a retrospective of this training and the to establish the possibility of using the risk analysis process in the mobile teams’ activity.

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In order to increase the analytic capacities in the field of risk analysis and management, meetings with international institutions are organized on a permanent basis, especially with the risk analysis specialists of the EUBAM Mission. As a result of these meetings, new methods and ways of risk management process, which is in a continuous evolution, are established.

In the period of 12-17.11.2007, customs officers from the risk analysis and management subdivisions, together with representatives of the State Customs Service of the Ukraine, benefited from a study visit to Belgium (Antwerpen). The study visit was supported by EUBAM and constituted a good occasion to establish new contacts with the analytical structures of the Belgian customs bodies.

Cooperation with EUBAM has a permanent character and is currently manifested through the cooperation with Mr. Svend Erik Sorensen (expert in human resources management), with regard to establishing modalities of making the risk analysis and management activity more efficient by introducing new principles in the activity of the risk analysis subdivisions.

It was solicited from the EUBAM Mission to ensure several common meetings with the representatives of the risk management section representatives of the similar structures of the Ukraine. At the same time direct contacts are established with the analytical structures from Great Britain and other EU states in order to ensure an efficient mutual assistance in different security issues.

Standards, technical regulations and conformity assessment procedures (EU harmonised areas)

(28) Move toward EU and international legislative and administrative practices for standards, technical regulations and conformity assessment

1. Jointly identify priority industrial sectors for legislative approximation (with the possibility to be included in an Agreement on Conformity Assessment and the Acceptance of

The priority industrial sectors were identified by the National Competent Authorities and approved by the Government Decisions:

- Strategy on Industry Development until 2015, approved GD no.1149 from 05.10.2006- Strategy on Agroindustrial Development 2006-2015, approved GD no.1199 from 17.10.2006 - Energy Strategy of the Republic of Moldova until 2020, approved GD no. 958 from 21.08.2007 Also, identified priority industrial sectors for legislative approximation was realized by approval of Government Decision no. 873 from 30.07.2004 regardin the approval of National Programme of Development of Technical Regulations, which includes 105 technical regulations, with indication of Directives and EU Regulations in the base of which was or needs to be harmonized.

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Industrial Products, ACAA, provided that all the required conditions are accepted and fulfilled) including through consultations with producers and exporters. Continue the revision of existing Moldovan standards, removing the mandatory elements and harmonising them with international and European standards.

In order to create premises for signing of the Agreement of Conformity Assessment and Acceptance of Industrial Products in the Republic of Moldova a series of institutional and legal adjustments was undertaken:1. The strategic documents which stipulate actions for harmonization of the quality infrastructure in the

Republic of Moldova with EU practices and principals – by GD no. 859 from 31.07.2006 was approved the Quality Infrastructure Conception in the Republic of Moldova. Were elaborated 3 laws which stipulate a series of new principal aspects: Law no. 420 – XVI from 22.12.2006 “on technical regulation activity”, Law no. 421 – XVI from 22.12.2006 on amendments of Law no. 590 – XIII from 22.09.1995 on standardization” and Law no. 422 – XVI from 22.12.2006 “on general products safety”.

2. The draft Law on amendment of Law on conformity assessment of the products no. 186- XV from 24 April 2003 was elaborated. Amendments operated are done for the adjustment of the present legal framework to the international standards ISO/CEI 17000, Relevant Guide ISO, Council Resolution on Global Approach from 21.12.1989 and Council Decision 93/465/EEC.

3. Government Decision no.395 from 17.04.2006, which was harmonized with Council Decision 93/465/CEE from 22.07.1993 was approved.

4. According to the National Programme of Development of Technical Regulations (Government Decision no. 873 from 30.07.2004) by the regulatory authorities 58 drafts of technical regulations harmonised with EU Directives are in the process to be developed.

5. In order to sign in 12-16 of November 2007, Paris, at the 23rd Meeting of the General Conference of Measure and Weight of the “Mutual recognition arrangement of national measurement standards and of calibration and measurement certificates issued by national metrology institutes signatory of the Convention of Metre” (Arrangement CIPM MRA) a lot of actions were undertaken.

6. By the national competent institution was signed the cooperation contract with European Accreditation Organisation (European Accreditation), the first step to become a wholly member and signing the Mutual Recognition Agreement with EA (EA MLA).

7. There has been obtained the authorization from Germany for the body of certification of products and testing laboratory of food products within the frame of National Institute of Standartization and Metrology and from Certify Body TGA from Germany for Certify Body Management Systems within (NISM). At the moment the Quality System Documents are being improved for reauthorization of certify GOST R.

8. Continue the development and renovation of the Standards Base through realization of the Government Decision of the Republic of Moldova no. 1169 from 29 September 2003 on “Developing Programme of the National Standards System of the Republic of Moldova for 2003-

2008”, GD no. 859 from 31.07.2006 on Quality Infrastructure Conception in the Republic of Moldova.Thus, by the SSM Decision no. 2116-M from 04.06.2007 was approved national standard of unit of temperature.

According to the Law no. 421 –XVI from 22.12.2006 on amendment of the Law on standardization, the principals of assurance of the transition process from the compulsory application of the standards for the volunteer application of that was implemented.

By carrying out of the transition process from compulsory standard to the compulsory volunteer standards and technical regulations was done the national programme of elaboration of the technical regulations. This Programme is the base for creation of the technical legislative framework and includes the responsible institutions, the terms of implementation, also EU legislation of reference for each regulation in part.

The Standardization and Metrology Service of the Republic of Moldova has done integral this Programme in the part of it competence 9 technical regulations was elaborated and approved.

In this regard the Law no. 420-XVI from 22.12.2006 on technical regulation activity, elaborated for assurance of the harmonization of the established process of the regulation requires was approved.

With a view to elaborate the national programme of adoption of the international and european standards as national standards was carried out the selection of the standards of the other countries (member-state EASC and Romania) the same with European standards harmonized with New approach Directives. Was identify standards which presents national adoption of the European standards and which entered in the National Found of Standards for examination of the possible adoption of that in quality of national standards.

Was formed the automatized data base of the european standards taken over by other countries and European directives entered in the National Found with the purpose of informational assurance of the regulations authorities in the process of elaboration of the technical regulations.

With the purpose of harmonization of the national standards system with international and european requires in the period of 2005-2007 years as national standards 108 European Standards (EN) and 517 International Standards (ISO/CEI) was adopted, as well as the Newspaper on standardization no.5 and 6.

2. Reinforce institutional capacity on standardisation, accreditation, conformity assessment, metrology and market surveillance, integrating the Moldovan institutions, to the extent possible, in the European structures, namely the European Cooperation for Accreditation (EA), CEN, CENELEC and ETSI. Full membership of the International Standards Organisations ISO, IEC and ITU. Revise the institutional arrangements in this area to avoid the concentration of functions within a single institution.

With the purpose of reinforce of the institutional capacity on standardization within the framework of the project TACIS „Harmonization of the national standardization system in Moldova” was done study tour in the EU countries (Italy, Austria, Germany, Great Britain, and Romania) and training course with the personnel of DSM, NISM and regulation authorities from the country. Totaly over 200 persons was trained.

Law no. 421 – XVI from 22.12.2006 on amendment of the Law on standardization no. 590 – XIII – stipulates creation of the independent National Institution of Standardization and designation of the central specialty body of the public administration responsible of the Quality Infrastructure. In the same time, by the GD no. 13 from 17.01.2008 SMS was designated as competent national authority responsible for quality infrastructure.

The Parliament approved Law no. 222-XVI from 25.10.2007 for amendment of the Law on metrology no. 647 –XIII from 17.11.1995 regarding the approximation of the national legislation in the field of metrology with the EU and international requirements, as well as creation of the National Institute of Metrology and institution of the Central Authority of Metrology.

With the purpose of reinforce of the institutional capacity on conformity assessment, within the framework of the project TACIS „Harmonization of the national standardization system in Moldova”, was endowed with modern equipment 2 laboratories (food stuff products and petrol products) from National Institution of Standardisation and Metrology and Technical Center for Industrial Safety and Certification, as well as practical trainings of the experts from the respective tasting laboratories. Experts from the laboratories have done practical trainings in the European laboratories. Also, in the period of implementation of the projects was done a series of seminars and study tours with the subjects bounded up by tasting the electrodomestical products, practical implementation of the requires of the standards ISO 17025 and internal audit, uncertainty and measurement traceability for the tasting laboratories. Integration, in the possible limits, in the relevant international structure:

At the 01.03.2007 Republic of Moldova became partner member at the European Committee of Standardization (CEN) (Law nr. 119 –XVI from 04.05.2007, Official Monitor of the Republic of Moldova nr. 70-73/328 from 25.05.2007) with the right to participate at the 4 technical committee CEN (CEN/TC):

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CEN/TC 224 Personal identification, electronic signature and cards and their related systems and operations;CEN/TC 275 Food analysis. Horizontal methods;CEN/TC 302 Milk and milk products. Methods of analysis and sampling;CEN/TC 338 Cereal and cereal products. In the purpose of participation and signing of the different agreements at the international level through the Law nr. 327 – XII from 15 December 2005 Republic of Moldova joined General Conference of Measure and Weight of the International Organization of Metrology „Convention of Metre”.

In the context of harmonization with administrative and legislative of EU and international practices through the Law nr. 186 – XV from 24.04.2003 on conformity assessment products and Government Decision nr. 1646 from 31.12.2003 was created Accreditation System of the Republic of Moldova, and as Unique Accreditation Body was assigned State Enterprise “Accreditation Center in conformity assessment products field” (ACCAF) and was transferred as subordinated to Department of Standardization and Metrology under jurisdiction of Ministry of Economy and Trade in the purpose of the respecting the principles of fairness and independence.

Assessment of ACCAF to conformity of the international standards of reference for accreditation body also the requirements of EA done by European experts demonstrated the necessity of revision and elaboration a new draft law on accreditation harmonized in accordance with the European and international reference documents requires in the purpose of signing EA MLA (mentioned in the action plan of the Infrastructure Quality Conception)

At 09 June 2005 at the General Assamblee of European cooperation for Accreditation (EA), unfolded in Helsinki (Finland) was signed the cooperation contract, the first step to become a wholly member and signing the Mutual Recognition Agreement with EA (EA MLA). By signing EA MLA by ACCAF, the results of the activities of conformity assessment accredited (conformity certificates, testing reports) will be recognized by member state of EA.

3. Approximate legislation on liability for defective products

In order to approximate national legislation with the the Directive 85/374/CEE on the liability of the producer for defective products, the Law no. 422-XVI of 22.12.2006 on the general product safety was adopted by the Parliament (Published in the Monitorul Oficial no.36-38/145 of 16.03.2007)

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and general product safety.4. Simplify procedures to avoid compulsory certification of non-risk products and multiple testing of products.

In order to simplify procedures in the field of conformity assessment was implemented supplier’s declaration of conformity through GD no. 395 from 17.04.2006. According to this document have been ensured approximation of the conformity assessment procedures to the EU standards stipulated in Council Decision 93/465/EEC concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking, which are intended to be used in the technical harmonisation Directives.

Also, through GD no. 1469 from 30.12.2004 the Nomenclatore in the field of reglementation of the products complied with compulsory conformity certification. From this Nomenclatore was excluded goods checked by other services (sanitary, veterinary and other) in oreder to avoid doubling of conformity assesment procedures. In this context, the document above mentioned with 33 % has been reduced.

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5. Develop market surveillance capacities based on best practice of EU Member States.

Within te purpose to develop administrative capacities in the field of market surveillance through the adoption of the Government Decison no.586 of 16th of June 2005 on the adoption of the Regulation, structure and personnel of the SMS, the functions were clearly separated between those of state supervisory control and of the conformity evaluation.

The national strategy concerning the consumers’ rights for the period 2008-2012 was approved through the government decision Nr. 5 from 14 January 2008 (Monitorul Oficial Nr 14- 15/76 from 22.01.2008). This strategy stipulates the politics in field of consumers protection and is supposed for a period for 5 years(2008- 2012), with a perspective for the next 10- 15 years. At the elaboration of the strategy has been taken into consideration the european politics for consumers’s protection for the period of 2007-2013, and the experience taken from other national strategies of some European member states, taking into consideration the specific conditions of our country.

For an efficient implementation of te Strategy, the Plan of Actions is elaborated, prezented in the add up at the Strategy, which includes the actions for implementation, the responsible authorities, financial resources and the time limit for execution. In this period, the assurance of the control under technical reglementations in accordance with the established ones was realized by state control concirning the conformity of the prescribed or declared products, because the technical reglementations are being elaborated; The law concirning the technical reglementation adopted in 2006 previses the market

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supervising on the requirements stated in the technical reglementations and other normative acts.

At the same time, to study the best experience of market supervising in the EU, during the 2005- 2007 years, the experts in domain took place in trainings with the subjects: „Practice of market supervising in EU”, with the presence of the experts from the memeber states of EU. Also, the experts SSM elaborated study visits in the member states of EU to study the best practises concerning the market supervising. The studies of the programs were based on te practice of using the EU directives of new and older approach including the way of notification of the dangerous products through the alert system RAPEX. Also has been studied the practice of protection the consumers through the consulting centres with direct phone lines. The consolidation of investing laboratory capacities in the field of market supervising through assigning and equipping the certain laboratory.

Taking into consideration the fact that for activities for market supervising the accredited existing laboratories can be used, and at their level of credibility and fair-mindness could de assured through the right selection of them. Thus, a reference lab has not been created, at the same time has been developed activities conscirning the consolidation of laboratories’ capacities for existing attempts. In order to consolidate the Laboratory’s capacities for attempts Agricultural and Food products within INSM, including the TACIS’ support Program have been taken the following measures:

- redesign and total repair of the laboratory’s rooms following the requirements of the flow sheet and european normatives for experimental laboratories.

- The re-equipping the Lab and endow it with spectrometem for atomic absorbtion, liquid and gas cromatographs, instalations for determining the proteins, fats, etc.

- Improvement of the Lab’s personnel during 8 seminars held by european experts and 2 instructive visits at the european Labs.

- Elaboration and implementation of quality system base don european standard SM SR EN ISO/ CEI 17025: 2006;

- Accomplishment of the accrediting procedure in the european system by the accrediting organism DAP in Germany(this prpcedure i sat the last step for accomplishment)

At the same time in order to develop the experimental Lab’s capacities a future assistance (financial support) is needed. Within the TACIS project „The harmonization of the standardisation system for

Moldova”, the endowment with modern equippmnet of 2 laboratories (food and petrol products) within INSM and Technikal Center for Industrial Security and Certification has been accomplished, as well as practical training of the experts from these experimental laboratories.The experts from these Labs followed practical trainings in european laboratoires.

Elimination of restrictions and streamlined administration (EU non-harmonised areas)

(29) Facilitate the movement of goods and improve administrative co-operation.

1. Prevent discriminatory measures and ensure interested parties have theopportunity to identify problems and comment on draft legislation.

Once or twice a week, depending on the number of documents presented for examinations, meetings of the working group of the state commission for entrapreneurship activity regulation take place. Durign these meetings all the legal acts prepared for examinations are expertized. The working group is formed of representatives of the private sector, who have the possibility to expose their opinion over the new issued regulations.

The draft normative and legislative acts that are related to the facilitation of trade are placed on the institutions’ web sites, in this way the transparency and the participation of the interested parties in providing comments on the respective drafts is ensured. Round tables on a regular basis are organised with the participation of the interested private stakeholders, during which comments for the suggested legislative or normative acts, strategies or concepts are being discussed.

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2. Ensure there is a contact point dealing with implementation of the movement of goods, which could also be used to improve information flows between the EU and Moldova and to exchange information with operators.

With the objective of development of the customs informational system the ASYCUDA World was implemented. This is a substantial instrument for the optimisation of the foreign trade facilitation of the Republic of Moldova and allows:- to maintain, update and administrate the database of the undertakings and main obligations resulting from the applications that are addressed to the Customs Service;- information processing from the customs declarations and from other operations of import/export made by the physical persons;-information distribution regarding the foreign trade transactions to the established authorities;-providing statistical reports and presenting these to the requesting authorities; -monthly and every three months providing relevant information to the partner countries regarding the foreign trade etc.

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3. Analyse legislation In the period July-September 2007 the analityc study on the regulation of imports has been performed. MET

and procedures to identify and progressively remove anydiscrimination against imported products. Analysis could initially focus on national measures covering the weight, composition, labelling, manufacture and description of products.

The study was elaborated with the assistance of TACIS Assistance in the implementation of PCA and WTO and Action Plan RM-EU and will be made public in the first trimester of 2008.

Sanitary and phytosanitary issues

(30) Increase food safety for Moldovan consumers and facilitate trade through reforms and modernisation of the sanitary and phytosanitary sectors.

1. Fully implement the requirements of the WTO Agreement on the Application ofSanitary and Phytosanitary Measures (SPS) and the Agreement on TechnicalBarriers to Trade (TBT).

The WTO Secretariat was notificated on contact points in the field of SPS and TBT. In order to ensure transparency in the field of SPS measures, sanitary veterinary norms and regulations are published in the Official Journal of Republic of Moldova.

In the same time, sanitary and phytosanitary regulations are placed on the website of the Ministry of Agriculture and Food Industry.

Republic of Moldova actively participates at the activities of relevant international organisations, in particular at Codex Alimentarius Commisssion.

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2. Accede to the European and Mediterranean Plant Protection Organisation and increase its active participation in the World Organisation for

Republic of Moldova has adhered to the European and Mediterranean Organisation for Plant Protection (EMOPP) on 24th of February 2006 (law no.16-XVI of 10 th of February 2006 on the adherence of the Republic of Moldova to the Convention for creation of EMOPP).

In the context of being a member of the International Office for Epizootics since 1994, the experts from the Directorate Veterinary Medicine participated in the framework of the General Meetings of the IOE

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Animal Health (OIE), International Plant Protection Convention and Codex Alimentarius.

Committee, where were examined issues on the field of veterinary certification, diagnosis and expertise animal welfare and other.

With the purpose to ensure the active participation of the representatives of our country within the reunions in the frame of International Convention for Plant Protection, the main representative of the Ministry took part in the second session of the Commission for the Phitosanitary of FAO (25-31 March 2007, Rome,Italy).

3. Assess the sanitary and phytosanitary control systems, in particular, at the state border, to compare with EU and international requirements.

At the end of 2005 and first semester 2006 a mission of the World Bank and FAO carried out a visit in order to evaluate phytosanitary control service. As result of performed evaluation were formulated some recommendations that must be taking into account.

In order to improve situation, Phytosanitary Service purchased express tests for tracking down of quarantine objects at the state border check points, as well as developed Quarantine, Identification and Expertise Centre, being fitted out with performed microscope and other laboratory equipments, that will permit to carry out immunofluorescent analysis for tracking down bacteria disease. Also, computer network was improved, being connected to the informational network of Custom Service (border check points: Leuşeni, Sculeni şi Costeşti).

With the purpose to align sanitary and phytosanitary control systems at the state border, to the EU and international requirements, in the Law sanitary veterinary activity MAFI purposed essential measures which stipulates reorganization of veterinary supervise at the border veterinary inspection points. In this context, normative acts concerning measures and organisation at the border inspection points were elaborated and submitted to the Government for approval (Commission Decision 91/496/CEE, 97/794/EC, 94/360/EC, Regulation 282/2004, 136/2004, Directive 2005/94/EC).

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4. On the basis of the reply by the Commission on Trade in Animal Products, draw up a comprehensive list of measures for gradual convergence towards

In conformity with the Action Plan for overcoming the deficiencies identified by the DG SANCO experts of EU, as a result of their mission on 23-27 of may 2005, the following activities were performed:

- The legislation for regulating the process of identification and registration of animals in Moldova was

developed and approved;- of the Waste plan for the residues for the honey, starting 24 th of February 2007, Moldova was included

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EU principles of hygiene in food processing, accompanied by timetables for the transposition of EU legislation and a financing plan. Start approximation to EU legislation on the hygiene in food processing.

in the list of third countries that can export honey on the Community market;- In march 2007 was sent to the experts of the EC Commission the plan of monitoring the

residues of living animals and products of animal origin for the year 2007, that includes a separate section for eggs;

- The detailed plan of trainings in the field of residue was developed; - On 8th of February 2007, the training of the veterinarians was performed for the implementation of the sanitary – veterinary norms in the field of residues in the products of animal origin and living animals;

- The plan for avian flu contingency was developed and approved;- Operational manuals for New Castle disease, classic swine fever and aphtha fever were

developed and approved; - During the process of training of the veterinarians and of the undertakings from

Moldova, with the support of FAO, the training course on “application of HACCP in the alimentation processing enterprises from Moldova” was preformed in the period of 24th – 3 of may 2007. - On 16th of April 2007, with the support of TAIEX instrument, and in collaboration with the EC experts, was organised the seminar on “the dialog and the joint activities between the countries of IOE from EU and other member states of the Regional Commission of IOE for Europe”. At the seminar the veterinary authorities and other line ministries were acknowledged with the role and obligations of the veterinary service in the member states of EU and other states in the process of adherence.

- Meetings of the responsible authorities from MAFI and the representatives of processing units interested in exports to EU were organised, urmare cărora by the veterinary services with the support of the FSP experts this units have been evaluated, being esatblished concrete terms in order conform with the EU requirements in this field;

- The strategy and the procedure of evaluation of the regional and rayon veterinary laboratories was developed;

- The structure of CRDV was evaluated and the critical points of reorganisation were identified, in order to ensure a system of quality insurance, based on the modern mechanisms, adequate to the EU standards.

- The new law on veterinary activity was adopted by the Parliament, law by which the state and private veterinary services will be restructured and reorganise.The critical items from the organization have been identified through the implementation of a system that is aimed to assure the quality based on tools and modern mechanisms proper to European standards.

5. Increase convergence of food law with EU

In order to approximate the existing legislative framework to the EU standards in the agro-alimentary sector, the following actions were undertaken:

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food safety principles (Regulation 178/2002/EC) and EU general foodstuff labelling requirements (Directive 2000/13/EC); and progressive abolition of pre-market approval systems for foodproducts.

The Law no.221-XVI from 19.10.2007 regarding the sanitary veterinary activity has been approved and follows to be promulgated by the President of Republic of Moldova, which will be as a basis for restructuring the state and private veterinary services.

With the EC experts support 4 regulations concerning hygiene and food safety and official controls of veterinary authorities were elaborated and are in the process of adoption (Regulation(EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption, Regulation (EC) 852/2004 on the hygiene of foodstuffs, Regulation (EC) 853/2004 laying down specific hygiene rules for food of animal origin, Regulation (EC) 882/2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules).

In accordance with the National Programme on elaboration of technical regulations: 22 regulations was adopted, 8 technical regulations have been submitted to the Government for approval and 9 have been submitted to the relevant institutions for review.

6. Prepare first steps for setting up of an animal identification and traceability system(in particular for cattle)

In order to setting up of an animal identification and traceability system, With this purpose next steps have been undertaken:- Law no. 231-XVI from 20 July 2006 on animal identification was adopted;

-By the Government Decision no.119 of 7th of February 2007 was created the State Enterprise “Animal Registry” subordinated to the Ministry of Agriculture and Food Industry;- in the period of 15.03.07 – 19.03.07 the public auction no. 255/07 for the acquisition of integral instruments and services for identification, registration and animal traceability was performed; - According to the minutes of the working group sessions no.7, for acquisitions, of the Ministry of Agriculture and Food Industry as the winner was awarded the LLC “DAAC System”, with the conclusion of the purchase contract, according to the procedures;- According to the order 51- of 19.03.2007 the head of the SE “Animal Registry” was selected -According to the order no.57 of 22.03.2007, the statute of the SE “Animal Registry” was adopted;

- At the present, the working space of the SE “Animal registry” is being established as well as the local for the database server. - according to the order no.43 from 16.05.2007, Veterinary Authority have been appointed responsible persons for the implementation of the System for animal identification and traceability at the rayon and territory level, as well as their obligations;

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- LLC“DAAC System” has delivered to the MAFI calculation equipment and identification tools.- animal movement forms and exploitation cart have been approved in line with the methodology - the soft was elaborated in accordance with the existing national registers;- the Central Data Base server was installed, as well as networks between territorial work points with Data Base server; - training plans for four courses were elaborated, and during the period 19.07.07 – 20.09.07 have been already organised In present, the System for Animal Identification and Traceability is being integrated in the intergovernmental network, as well as the security channel is being organised between SE ”Animal Register” and SE “Register”.

- According to the Law no. 231-XVI of 20.07.2006 (art. 5 p.2.), was developed the regulation “procedures and documents for the identification and traceability of animals”, that was positively reviewed by the entrepreneurs, after the operation of amendments for certain provisions of the draft as result of collaboration with the experts.

7. Fulfilment of EU requirements on animal health and for the processing of animalproducts (c.f.: “General Guidance for third country authorities on the procedures to be followed when importing live animals and animal products into the European Union”, DG SANCO/FVO October 2003)

In conformity with the provsions of the “General Guidance for third country authorities on the procedures to be followed when importing live animals and animal products into the European Union” – 28 normative acts was elaborated by the Veterinary Authority and 15 are in the process of elaboration.

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8. Identify national reference laboratories in the sanitary and phytosanitary sectors,with a special attention

The phytosanitary laboratories : Based on the Government decision nr.275 from 16th of March 2006 “On approving the modifications operated in some Government decisions and repealing of some Normative Acts” there has been identified and named the laboratories under the phytosanitary quarantine, the first one being established in Ungheni. More than that, within the reform APC, it is forecasted to merge the State Service for

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given to the necessary equipment and appropriate methods of analysis (residues of pesticides/contaminants) and their accreditation.

Phytosanitary quarantine and the State Inspectorate for Protection the Vegetation. Due to the fact that this inspectorate contains territorial subordinated laboratories, in case of merging these two institutions, building of new laboratories was not convenient.Thus, it is realized only the of the Center for Quarantine, Identification and Examination to the EU requiermnets.

The sanitary laboratories:There has been prepared the evaluation of the veterinary laboratories from the country to establish the level of their endowment with necessary equipment, as well as their correspondence with the established requirements due to performing the laboratory tests, in order to follow the European Commission requirements and the system optimization and the veterinary laboratory’s services. At the end of the laboratories’ assesment there has been established: a) laboratory in the field of veterinary diagnosis and food security :Republican Centre of Veterinary Diagnosis- Chisinau b) regional laboratories in the field of veterinary diagnosis: north regional laboratory – Drochia and south regional laboratory- Cahulc) laboratories in the field of food security: Test Laboratory of Animal Origin Products within RCVD, satellite north laboratory- Donduseni and south laboratory –Cahul.

The regional laboratories need to be renovated and re-equipped according to the European requirements. Thus, as a result of evaluation of the mentioned laboratories in August 2007, programs for modernization and re-equipment of the laboratories concerning the EU requirements are being elaborated.

The laboratories from Donduseni and Cahul have been changed to the CRDV standards, and the project drafts for them are being revised. The reconstruction of the buildings will start in 2008 year.Nevertheless, with financial support of EU commission, there has been built and equipped the laboratory for testing food products within the Republican Centre for Veterinary Diagnostic (RCVD), which is being finished. The department regarding viruses has been equipped with the most recent equipment.In August 2006 the construction of the laboratory for testing the Food Products within I.P. RCVD, designed after the EU standards. The works are being finished.

The actions for identifying and interaction of all processes from the organization on a future

implementing of the standard EN ISO 9001- 2000- Management Systems of Quality.There has been performed the training of the personnel on assuring the food products quality and

analyzing the risks in accordance with the EU requirements and international standards.

2.4.2 Right of establishment and Company Law

(31) Full implementation of PCA commitments in title IV, Chapter II (Conditions affecting establishment and operation of companies)

1. Complete screening to be made by Moldova of national legislation so as toidentify barriers to establishment with the aim of progressively abolishing them.

Law on „Guillotine II” establishes the quality standards for development of new draft legislation such as: a) predictability of regulation and expenditures; b) transparency when regulating by providing free access to the public to draft legislation, publication of the adopted acts in the Monitorul Oficial and including these into the single Registry; c) impact assessment of the regulations, that becomes and mandatory phase in the process of elaboration of normative acts.

For additional information see objective 20

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2. Abolish discriminatory measures affecting foreign investment

According to the Law on investments in the entrepreneurship activity, no 81-XV from 18.03.2004 the establishment procedure, the carrying on of the activity and dissolving procedures for foreign capital enterprises is similar to the national ones.

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3. Ensure full application of the best endeavour standstill clause so that theconditions for establishment of companies are not more restrictive than when thePCA was concluded.

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4. Ensure effective functioning of adequate administrative

State Chamber of Registration (SCR) provides consultative and juridical assistance and services in the field of establishment.

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structures, inter alia, a central co-ordinating body facilitating establishment

According to the regulation of SCR the following functions were established: - the state registration of enterprises and organizations which work on the territory of the Republic of Moldova; - the keeping of the State Register of Enterprises and Organizations; - the assigning, in a centralized way, of fiscal and statistical codes; - the issuing of official extracts from the Register; - the lending of juridical assistance and additional services in the sphere of registration; - the elaboration of politics in the sphere of registration; - the control over the activity of the enterprises, organizations within the limits of its competence established by the legislation in force.

Company law:1. Converge with and ensure effective implementation of key principles on companylaw, accounting and auditing in relevant international and EU rules and standards.

The following activities were undertaken:-Approval and implementation of the Limited Liability Companies (Law nr 135 as of 14.06.2007, Official Journal 127-130/548 as of 17.08.2007)-Approval and implementation of the Law on accounting nr. 113-XVI as of 27.04.2007 (Official Journal nr 90-93 as of 29.06.2007)- Approval and Implementation of the Law on Audit nr 61-XVI as of 16.03.2007 (Official Journal 117-126 as of 10.08.2007)- Implementation of the one stop shop office, in the framework of regulatory reform of entrepreneurial activity

According with the provisions of Law on Accounting and Audit: a) Was aproved the Government Decision „Regarding Consulative Council under the auspicies of Ministry of Finance”;b) Were submited to the government proposals regarding the execution of previsions of article 46 of law on Accounting no. 113-XVI as of 27.04.2007;c) Was aproved the Government Decision no. 1450 as of 24.12.2007 „Regarding certain measures of implementation of Law on Audit no. 61-XVI as of 16.03.2007” d) The Order of Ministry of Finance no.97 as of 26.11.07 on the amendment of the Order for the approval the nominal composition of attestation Commission to offer the status of independent auditor by Ministry of Finance no.74 as of 31.12.2006 was publiced in Oficial Gazett no.184- 187 as of 30.11.07. Were elaborated, amended and completed a series of National Accounting Standards (NAS), National Auditing Standards (NAS), Regulations on Auditing Practice (RAP), regulations, instructions, methodical guidelines and other normative and guideline acts in accounting and auditing to ensure aligning of national accounting and auditing legislation to the European standards: 2005 - Were elaborated, amended and completed: Plan of accounts of economic-financial activities of enterprises; National Accounting Standard: NAS 4 „Accounting peculiarities of small business entities”;

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NAS 5 „Financial reporting”; NAS 26 „ Retirement Plans Accounting and Reporting”; NAS 22 „Enterprise Mergers”; SNC 19 „ Employee Income”; NAS 63 “Information disclosure in financial statements of savings and credit associations and other similar entities”, The Regulations on Auditing Practice RRAP 1002 entitled „Auditing of Information and Computerized Systems that Operate in Real Time Mechanism”; RRAP 1008 „ Risk Assessment and Internal Control”; RRAP 1003 „ Computer Information Systems Environments – Database Systems”2006 – were elaborated and approved National Accounting Standard 22„Combination of enterprises”, and National Audit Standard 330 „The Auditor’s Procedures in Response to Assessed Risks”. Were elaborated, approved and published National Accounting Standards 19 „Employee’s benefits”, Regulation Relatively Auditing Practice 1004 „The Relations between bank Supervisors and External Auditors”, Regulation Relatively Auditing Practice 1009 „Computer – Assisted Audit Techniques”, Regulation Relatively Auditing Procedure 1014 „Reporting by Auditors on Compliance with International Finance Reporting Standards”, Regulation Relatively Auditing Procedure 1000 „The Relations between bank Supervisors and External Auditors” „The methodological instruction regarding accounting costs bound up with drawback awards to household consumer made by S.A. Moldovagaz and other entities distributive of natural gas” Ministry of Finance Decision nr.74 from September 31,2006 „Regarding approving nominally structure of Attestation Committee for independence auditor award qualification in addition to the Ministry of Finance” the changes and supplement to The Plan of Accounts of business accounting in financial-economic activity of the enterprise National Accounting Standards 4 „Accounting by small business entities” National Accounting Standards 5 „Presentation of financial statements”, National Accounting Standards 63 „ Presentation of Information in Financial Statement of economy and loan association and other similar entities”, National Accounting Standards 17 „Lease”, 2007 – Were aproved National Standard on Auditing (NSA) 330 „The Auditing Procedures related to Assessed Risks”, National Accounting Standard 22„Combination of enterprises”, National Standard on Auditing 545 „Assesments and disclosures audit in financial reports of elements reflected in real value” The Regulation on Auditing Practice 1013 „The electronic trade - the effect on the audit of financial reports” and the methodical indications on the reflection in the accounts of the legalization of the capital and tax amnesty; and adjusted NSA 120 „Framework of National Standards on Auditing”, The structure of the National Coordination Council for elaboration of the Strategy and the Action Plan on the development of accounting and audit reforms in the Republic of Moldova was approved by Ministry of Finance Order no. 61 as of June 08, 2007.

2. Improve consistency and predictability in the

In the Republic of Moldova the authority responsible for the oversight of company law is the State Chamber of Registration

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administrative and judicialauthorities responsible for oversight of company law and related investmentconditions

3. Ensure effective functioning of the public register of undertakings and the publication of certain information such as the company’s organisation and financial details in the ‘national official gazette’.

The State Registration Chamber (SRC) is keeping a centralized State Register of Enterprises and Organizations, where information is stored about all the companies that function on the territory of the Republic of Moldova. The Parliament approved the Law on State Registration of Legal Entities and Individual Entrepreneurs 220-XVI as of 19.10.2007. This law will enter into force after 6 months after the date of publication (This law will replace the Law on State registration of enterprises and organizations nr 1265-XIV as of 5.10.2000).New Law foresees that State Register of Enterprises and Organizations will contain the data from the annual financial reports of the companies. At the same, it foresees that this Register could be accessed on-line (internet version), where will be available information about every enterprise functioning on the territory of the Republic of Moldova. One of the major attributionsd of the SRC is editing monthly the Official Gazzette of the Stae Registration Chamber.

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4. Consolidate and ensure effective functioning of an administrative or judicial authority which ensures the control of the incorporation of a company or the legality of certain acts.

The State Registration Chamber (SRC) within the Ministry of Information Development is the administrative authority which ensures the control of incorporation of a company.According to the regulation of SCR the following functions were established: - the state registration of enterprises and organizations which work on the territory of the Republic of Moldova; - the keeping of the State Register of Enterprises and Organizations; - the assigning, in a centralized way, of fiscal and statistical codes; - the issuing of official extracts from the Register; - the lending of juridical assistance and additional services in the sphere of registration; - the elaboration of politics in the sphere of registration; - the control over the activity of the enterprises, organizations within the limits of its competence established by the legislation in force.

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5. Adopt and ensure effective implementation In 2007, with the active participation of the civil society, was drafted the Corporate Governance Code,

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of a code on corporate governance (can be done by the private sector).

which was approved on July, 1 2007. The implementation by the joint stock companies of the provision of the mentioned Code will contribute to the application of the best corporate governance practices, reducing the number of conflicts within the company, and contributing significantly to the protection of shareholder’s rights. As well, because according to international practices, the coordination of the activity of the joint stock company with the provisions of the Corporate Governance Code is voluntary, in the present NCFM is popularizing the document’s provisions, being used mass media, radio, TV, press.

Services

(32) Gradual abolition of restrictions to progressively allow the supply of services between the EU and Moldova in certain sectors, in line with WTO and PCA commitments in Title IV, Chapter III (Cross-border supply of services).

Complete a review of national legislation by Moldova so as to identify barriers to the provision of services with the aim of abolishing them.

During the period October-December 2007 the study concerning review of national legislation to identify barrieris to the provision of services was elaborated. This study was elaborated with the assistanve of TACIS Assistance in the implementation of PCA and WTO and Action Plan RM-EU and will be made public in the first trimester of 2008.

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Establish and ensure effective implementation of appropriate administrative structures including a central co-ordinating body with the aim of facilitating the supply of services.

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Consolidate and ensure effective implementation of adequate legislation setting out basic principles such as non-

The Republic of Moldova ensured the fulfilment of the obligations in the field of services in its major part when adhered to the WTO, hereby adopting the necessary legal framework.

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discrimination and where necessary, introduce more detailed secondary legislation, or sector specific legislation.

Financial services:

1. Ensure implementation of recommendations of the IMF FSAP (Financial Sector Assessment Program)

Maintenance of banking system liquidity at an optimal level using, depending on the macroeconomic developments, and the money market conditions, of both excess liquidity absorption and temporary liquidity provision instruments: open market operations, issuance of the NBM Certificates, overnight deposits, overnight credits*.

Standing facilities. During February 2005-January 2008 commercial banks used both deposit and credit facilities provided by the NBM. The implementation of the interbank automated payment system in 2006 created favorable conditions for banks to use the overnight deposits mechanism, providing the NBM’s monetary policy more flexibility.

Under high excess liquidity, during the above mentioned period, banks used more frequently the overnight deposit facility, while the credit overnight facility was used only by some banks. Starting with April 2007, the overnight deposit and credit facilities for banks are available on a permanent basis.

*The information regarding the instruments of excess liquidity sterilization is provided in p.19.1.

Organization of the secondary market for Government Securities with maturities over one year through the Moldovan Stock Exchange.

Meetings of the representatives of the National Bank of Moldova, the National Commission of Financial Market, the Moldovan Stock Exchange and the National Depository of Securities were held, during which the necessary organizational measures and the respective terms were identified with a view to organize the trading of state securities with maturities of over 1 year also through the Stock Exchange.

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At the moment BNM an NCFM are working on a draft agreement of cooperation between them.

Examination of the possibility to extend the requirement on formation of provisions for off-balance sheet items, setting up the procedure of making these provisions similar to those for credit risks. The information on balance-sheet assets, other than credits and off-balance sheet assets, exposed to credit risks has been examined, and the size of provisions to cover those risks, as well as used to make the relevant calculations in order to determine the budget costs, was estimated. As a result the relevant mechanism to assess the risks related to the assets, other than credits, and the contingent liabilities, as well as the procedures of provisions' formation to cover the losses related to these assets have been determined.

Improvement by the commercial banks of the internal control systems that will ensure country risks mitigation. Recommendations regarding the internal control systems related to the management of country risk and banks’ transfer have been elaborated. During the on-site inspections the NBM inspectors assessed whether banks’ internal policies related to the country risk are adequate and are being implemented. Simultaneously, the banks’ procedures related to the placement of funds in other countries, used to assess the banks’ country risk exposure, have been monitored.

Carrying out of the policy to know the owners, who have a significant impact on the management and the bank’s activity, in order to determine the structure of the owners and the origin of the funds invested in the bank’s capital.

After the amendments to the Law on financial institutions became effective (November 2005) the National Bank of Moldova brought its normative acts in line with the new legal provisions. Also, in order to adequately apply the new legal provisions, the information that should be binding upon the banks to be maintained in order to ensure the transparency structure of shareholders and borrowers, has been determined.

Based on the reports presented by banks the structure of bank owners who own 5% or more of the banks’ equity as well as non-resident shareholders from the off-shore countries and/or zones, who own 1% or more of the banks’ equity has been monitored. Simultaneously, during the on-site inspections the NBM inspectors assessed whether the internal control systems, related to knowing its direct and indirect shareholders, are adequate and are being implemented.

With the view to further monitor the risks related to banks activity within banking supervision the information on banks activity obtained by other supervisory bodies while carrying out their duties shall be used.The National Bank of Moldova established the collaboration with the supervisory authority of the securities market and the supervisory body of the insurance companies and periodically obtains the information on the activity of commercial banks on the securities market, as well as the information related to the activity performed by insurance companies. Thus, the obtained information is used as the basis to assess the commercial banks’ activity as professional participants on the securities market, as well as to analyse the level of development of the insurance market and the activity performed by the commercial banks on the above mentioned market. There was also analysed the impact, that the activity of the insurance companies, in which commercial banks have equity participation, has on the banks’ financial situation.

The above information is incorporated both in the individual reports on bank’s financial situation as well as in the reports on the banking system’s financial position.

Concerning securities market. In order to implement the reccomendation regarding investment funds governance, was adopted th amendments to the Law on investment funds, which preview their reorganization or liquidation and which shall exclude the gaps in their activity. At the present there is in the proces of drafting th Law on collective investments undertakings. The requirement that the ultimate beneficial owners of securities disclose the information regarding the real beneficial owners of securities it was reflected within the amendments operated to Law on securities market. The requirement that all traded companies and all large joint stock companies obtain an annual independent audit it is reflected within the amendments operated to Law on joint stock companies. The requirement that all capital increases be approved by the shareholders’ meeting it is reflected within the amendments operated to Law on joint stock companies.

Increase the authority (but also the transparency and accountability) of the NSCM. In this sense it was operated amendments to Law on National Securities Commission, on the purpose of creation of a unique authority, responsible for regulation and supervision of non banking financial market - National Commission of Financial Market. The members of the Council of Administration of National Commission are independent in exertion of their attributions. The transparency was ensured through issuing of informative bulletin, specialised newspaper, annual report of NSCM- the access to this information is publicly. Also, it is created the web site of the new institution which will offer the transparency in the institution activity as well the transparency of entities supervised by NCFM. On the NCFM web site it is published a large spectrum of information, periodically updated, regarding the primary securities market, secondary market, stock exchange market and off-exchange market, investment funds and fiduciary companies activity. It is envisaged the creation of a database of all entities supervised by NCFM (already exists the accept of donors to assist NCFP in this process) By the NSCM was elaborated and mediatised the Corporate Governance Code. It was organised seminars, in the rayons and in the Chisinau, for the joint stock companies Board. Within the seminars, the participants were informed about last legislation’ amendments regarding the procedure for holding the of general shareholders meeting, activity of company board, increase of social capital, ways of investment attracting etc. Regarding insurance market, the IMF FSAP Recommendations were referred to:

- Necessity of existence of only one body responsible for the insurance activity, its role and responsibilities have to be clear defined in the Law.After adoption by the Parliament of the Republic of Moldova of Law nr. 407 – XVI from 21.12.2006 on insurance, effective on 06.04.2007, the competences of supervision authorities in the insurance field are express provided in the respective legislative act.As consequence of amendments operated in Law nr. 192 – XVI from 12.11.1998 on Securities National Commission through Law nr. 129 – VI from 07.06.2007, National Securities Commission has been reorganized in the National Commission of Financial Market as a result of the merge of the National Securities Commission with the State Inspection for Insurance and Non-state Pension Funds supervision and State Supervisory Service of Loans and Savings Associations.

According to the provisions of article II of paragraph (6) of the Law nr. 129 – VI from 07.06.2007 for modifications and amendments of Law nr. 192 – XVI from 12.11.1998 concerning National Securities Commission, starting with 1 October 2008, granting and retirement of licences for the activity in insurance field, administration activity of assets of non-state pension funds and activity of loans and savings associations will be effectuated by the National Commission of Financial Market. Till this date, the Licensing Chamber, in compliance with provisions of Law nr. 451 – XV from 30.07.2001 will be responsible for the granting and retirement of licences for activity in above mentioned fields.

- Authority of insurance supervision has to present annual reports to the Parliament, for ensuring transparency.

According to the provisions of paragraph (2) Article 2 of Law nr. 192 – XVI from 12.11.1998, annually National Commission of Financial Market presents to the Parliament, to President of Republic of Moldova and to the Government report about its activity and about running of non-banking financial market, with its further publication.

- Necessity of adequate technical reserves it is basically and it is clear described in IAIS base standards and EU respective standards.According to the provisions of article 34 of Law on insurances nr. 407 – XVI from 21.12.2006 (hereinafter – Law 407/2006), the insurer forms and maintains, according to its activity, sufficient technical reserves, needed for the accomplishment of obligations which result from insuring and reinsuring contracts. The insurer is obligated to collect and to keep necessary information for reserves creation at an adequate level.Basic principals for formation and calculation of insuring reserves exposed in above indicated norm are those principals stipulated in EU directives and IAIS standards and principals. Furthemore, the formation mode of technical and mathematics reserves of insurer are established by the normative acts of National Commission of Financial Market.Categories of assets which are admitted to represent technical and mathematics reserves of insurer, dispersing rules of investment, as well as liquidity coefficient are established by normative acts of National Commission of Financial Market, at the elaboration of these acts will account the categories and classes of practiced insurances.

- Rules for determination of investment, capital, solvability and obligations are an important problem, for this reason their base needs to be clear described in the Law.

The norms regarding activities limits of insurer (reinsurer), qualified participations, solvability and

financial stability of insurer (reinsurer), prudence norms, and restrictions concerning transactions execution by the insurer (reinsurer) are provided in the articles 28-32 of Law on insurance nr. 407 – XVI from 21.12.2006.According to the provisions of articles 28-32 from the same legislative act, National Commission of Financial Market has elaborated and are in the process of primary reference and state registration:

Regulation regarding the requirements over the significant shareholders and detention of qualified participations in the share capital of insurer/ reinsurer.

Regulation regarding calculation methodology of the minimum solvency margin and of the solvency margin available for the general insurances.

Regulation regarding calculation methodology of the minimum solvency margin and of the solvency margin available for the live insurances.

Regulation regarding investment and fructification of proper and attracted funds and reserves of insurer/ reinsurer.

- Existing supervision of the direct insurance companies needs to be most clear. In this regard, has to be clear defined in the Law the following requirements: accounting, reporting, general conditions of policies and on-site inspections. In compliance with the provisions of paragraph (1) article 39 of Law nr. 407 – XVI from 21.12.2006 on insurance, the insurer (reinsurer) keeps in electronic regime and on paper support the accounting of operations effectuated in accordance with required standards of accounting for the insurance activity.In the paragraph concerning financial reporting in the insurance field, the attributions of National Commission of Financial Market stipulated in the article 8 of Law nr. 192 – XIV from 12.11.1998 are the following:

establishment of regime, form, content and keeping mode of internal registers of professional participants, as well as the requirements regarding the register of securities holders and its keeping mode;

elaboration and, jointly with Ministry of Finance, approval of embodiment rules and presentation of specialized reports of professional participants, issuers and self regulatory organizations.

In compliance with the provisions of article 5 of Law on insurance nr. 407-XVI from 21.12.2006, according to effectuation method, it exists two insurance forms: obligatory and optionally (facultative).In the obligatory insurance, reports between insured person and insurer, rights and obligations of each side, conditions and their implementation mode are established by the Law.According to paragraph (5) of article 8 of Law on Motor-vehicle Third Party Liability Insurance for the damaged caused by vehicles nr. 414 – XVI from 22.12.2006, the form and the content of insurance

enquiry, insurance contract, as well as the form and the content of TPL insurance policy and “Green Card” insurance policy are unique for all insurers and are established by the National Commission of Financial Market.In the optionally insurance, reports between insured person and insurer, rights and obligations of each side are established by the insurance contract. The conditions of optionally insurance are established by insurer, in compliance with legislation and with Regulation concerning the requirements over the insurance conditions of insurer for the facultative insurance classes, which will be elaborated by the National Commission of Financial Market.

- The auditors have to be competent to demonstrate knowledge and good experience in insurance sector. According to the provisions of paragraph (2) article 39 of Law on insurances nr. 407-XVI from 21.12.2006, the insurer (reinsurer) is obliged to establish an efficient system of internal control and to engage an adequate number of inspectors for verification of corresponding of their activity with principals and legislation which regulate insurance activity.The article 40 from respective Law stipulates that, the activity on insurer (reinsurer) submits to an annual external audit effectuated by an audit organization or by a self-employed auditor which detains license for audit activity in insurance field.The audit organization or self-employed auditor will verify annual financial situations of insurer (reinsurer) in compliance with effective legislation and with audit standards, harmonised to international audit standards, and will present to insurer (reinsurer) the control act regarding annual financial situation together with the report of accounting expertise. The report of accounting expertise of audit organization or of self-employed auditor will be attached to annual report of insurer (reinsurer) and will be published in compliance with the Law 407/2006.Mentionable is the fact that, audit activity is licensed, but for practice of audit activity in insurance field it is necessary to obtain a separate license, which is issued by the Licensing Chamber according to Law nr.451-XV from 30.07.2001 regarding licensing of some genres of activity.

- New Law has to contain provisions which indicate that the roles and responsibilities of actuaries will be determinate by regulations. According to article 41 of Law on insurance nr. 407-XVI from 21.12.2006, the insurer (reinsurer) is entitled to appeal to services of actuary. The actuary is obliged to certify annually the sufficiency of technical reserve, the calculation of conformation of solvability requirements and appropriateness of assets which cover reserves and solvability margin.

The requirements over the inquirer, list of documents attached to issued enquiry of qualifying certification and responsibilities of inquirer act as certified actuary are established through normative acts of National Commission of Financial Market.The actuary is responsible for correctness and accuracy of actuary calculations, for assessments and conclusions effectuated and is responsible for disclosure of confidential information, in compliance with Law and with contract on professional third party liability insurance.The actuary conclusions regarding technical and mathematics reserves have to correspond to requirements established through normative acts of National Commission of Financial Market. These conclusions are obligatory and constitute the integral part of annual financial report of insurer (reinsurer).

- New Law needs to contain a provision which indicate that the opinions of affected parties shall be taken in consideration at regulation issuing.According to article 17 of Law nr. 192-XIV from 12.11.1998, the National Commission of Financial Market can involve savants and specialists for consultation and for controls and expertises executions, remunerating them according to legislation.As, the respective legislative act stipulates the creation of experts council beside National Commission of Financial Market, but the Law nr.317-XV from 18.07.2003 on normative acts of Government and of other central public and local administration authorities stipulate the remittance to refer of all normative acts to interested authorities and institutions which are subordinated to Law and over which is extended the action of the draft of normative act.

- All tariffs shall be determined in the free way, but respective regulations shall be in compliance with EU directives in this field.According to the provisions of effective Law, in the obligatory insurance, the reports between insured person and insurer, rights and obligations of each side, their conditions and mode of implementation are established by Law.According to paragraph (4) of article 7 of Law on insurance nr. 407-XVI from 21.12.2006, the insurers and intermediates in insurance are obliged to operate with premiums and tariffs of obligatory insurance established in accordance with special Laws.Thereby, according to the provisions of paragraph (1) article 11 of Law on Motor-vehicle Third Party Liability Insurance for damaged caused by vehicles nr. 414 – XVI from 22.12.2006 (effective from 09.09.2007), the basic insurance premium afferent to internal and external motor third party liability insurance is established and is updated no less then once per year by the National Commission of

Financial Market after a methodology approved by the Government. At this chapter it needs to mention that the paragraph (5) of article 40 of Law 414/2006 stipulates that, after 5 years of effectiveness of Law, the insurers together with insured persons will establish the premiums of motor third party liability insurance according to the methodology approved by the Parliament and the bonus-malus system elaborated by the National Commission of Financial Market.- Due of fact, in optionally insurance, the reports between insured person and insurer, the rights and

obligations of each side are established through insurance contract. In the paragraph (5) of article 7 of Law 407/2006 is foregone that, in cases of optionally insurances, the premiums and tariffs of insurances are calculated by the insurer. The concrete measure of insurance tariff is established in insurance contract through common agreement of sides.

2. Enhancement of a prudential regulatory framework for financial markets and supervision equivalent to that existing in the EU.

Further development of prudential regulations and banking supervisory methods in line with generally accepted standards in the respective area. In order to improve prudential regulation and supervisory methods new normative acts related to country/transfer risk management systems were approved, and namely, classification of assets other than credits and contingent liabilities and procedures of formation of provisions to cover the losses related to the above assets. There have also been amended and completed some of the NBM’s normative acts referring to credits’ classification and formation of provisions to cover losses related to credits; banks’ investments in legal entities equity; banks’ authorization; prudential requirements to bank’s management; significant share in banks’ capital; banks’ internal control systems; preventing and combating money laundering; disclosure by banks’ of the information on banks’ activity and transactions with affiliated persons; „large” exposures; issuing certificates to banks’ auditor; banks’ merger and acquisition as well as other activities related to banks’ financial reporting to the NBM. While working out the above acts the provisions of the European Union Directives, Basel Committee documents for efficient banking supervision as well as generally accepted expertise in this field were taken into account.In addition, while performing on site inspections, new supervision methods to assess banks’ exposure to the risks related to their activity were applied.

Elaboration and application of measures directed towards the gradual alignment of banks capital to the provisions of the European Parliament and the Council Directive no. 2000/12/CE of March 20, 2000 regarding the establishment and the performance of the credit institutions activity.In order to consolidate the banking system as well as to align the size of banks’ capital to the provisions

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of the Directive No. 2000/12/CE of March 20, 2000 new requirements on the size of the capital were set up. Thus, banks increased gradualy tire I capital to 50 million lei until 31.12.2005, depending on their licence. In order to supervise the compliance of the commercial banks’ capital with the minimum regulatory capital requirements, the reports provided by the commercial banks were reviewed.

Was elaborated the draft of the new Norms of Financial Prudence, according to the provisions of the Law on savings and loan associations Nr. 139-XVI din 21.06.2007, which shall come into force on 01.01.2008.

In order to adjust the national legal framework with the EU standards in insurance sector was elaborated and aproved a new Law on insurance and also on boundary insurance against the cases of prejudices caused by the vehicles. In December 2006 these legislative acts were approved by the Parliament.

3. Set up and train supervisory authorities in the financial sector.

In order to consolidate and insure the sustainable development of the savings and credit associations, according to the bilateral Agreement of Cooperation signed between the State supervisory service on the activity of savings and credit associations of citizens and the Central Organization for Credit Unions from Poland, were undertaken seminars in the Wladislawowo city, Poland and study visits in credit unions from different cities of Poland.In the frame of securities market, the supervision body was participated to the sessions and seminars of two international organizations, the member of which is: Francophone Institute of Financial Regulation, the purpose of which is the change of experience between its members regarding regulation and supervision of securities market, as well as the Consultative Group of Regulation and Supervision of the Capital Market, the purpose of which is change of experience with the profile authorities of the countries which intend to become EU member.In the frame of cooperation with supervision body of capital market from Italia, according to Memorandum of Understanding and Technical Assistance between both authorities, it was organized trainings for the specialists from Republic of Moldova regarding regulation and supervision of capital market from EU.In order to improve professional qualities, the employers of the insurance supervisory authority participated at the Regional Seminary concerning the application of the IAIS core principles, organized by the Financial Stability Institute and Joint Vienna Institute, in Vienna, Austria, at the Program „Insurance Supervision”, organised under the aegis of the International Center for Collective Management of the Financial Sector Supervision from Toronto, Canada, the seminary regarding private pension system, organized by Baltic Insurance Consultation Network (BICON), Stockholm, Sweden, at

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the Global Conference for the Insurance and re-Insurance of the Natural Catastrophic Risks, organized in Istanbul, Turkey, the Seminary „Development of the financial sector for the countries of South-Eastern Europe” organized by the International Cooperation Agency (JICA), Tokyo, Japan, the seminary „Insurance supervision. Financial frauds using insurance industry and its products. The experience from EU, Central and South-Eastern Europe and USA, organized by the Partnership program for Financial Stability (USAID and East – West Management Institute) and Finance Excellence Center, from Slovenia, Ljubljana.

Setting up the process of studying by the staff of the advanced experience in the relevant field. In order to improve the knowledge in the banking regulation and supervision field, the staff of the supervisory body has participated in the banking supervision seminars in the respective fields, organized by the international financial institutions, central banks and the supervision authorities of some countries. Simultaneously, selective training related to new provisions of the banking normative acts, basic principles of the banks’ control processes as well as other issues related to the field of banking regulation and supervision has been organized.

4. Development of the insurance market.

On the purpose of execution of the action regarding elaboration of normative acts which derive from Law on insurance nr. 407 – XVI from 21.12.2006 and Law on Motor-vehicle Third Party Liability Insurance for the damaged caused by vehicles nr. 414 – XVI from 22.12.2006 was undertaken the following:- draft Law on national guarantee insurance fund was approved by the Government of the Republic of Moldova through the Decision nr. 1392 from 11.12. 2007, being ulterior presented to the Parliament for examination and adoption; - draft Decision of the Government nr. 1022 from 14.09.2007 have been approved the draft Law on modifications and amendments of some legislative acts, which, on 22.11.2007, have been adopted by the Parliament on the nr. 251 and through this Law the provisions of these legislative acts, which have tangencies with insurance field, were conformed to the new legislative acts;- through Government Decision nr. 998 from 04.09.2007 „On modification, amendments and abrogation of some Government decisions, the normative acts of the Government were conformed to the new adopted Laws; - draft Decision of the Government on the approval of the calculation Methodology of the insurance based premiums for the Motor-vehicle Third Party Liability Insurance for the damaged caused by vehicles has been presented to the Government for examination and adoption on 01.10.2007; - through Decision of National Commission of Financial Market nr. 55/6 from

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08.11.2007 has been approved the Regulation on requirements regarding insurance conditions of the insurer for the classes of voluntary insurances; - has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on refer of insurer/ reinsurer registration , Regulation on requirements beside the significant shareholders of insurers/ reinsurers/ and holding of qualified participations in social capital of insurer/ reinsurer and Regulation on requirements beside the persons with responsible functions of the insurer/ reinsurer and mediates in insurance, it follows that these Regulations to be remitted to the Working Group of State Commission for regulation of entrepreneur activity after the finalization of impact analysis of regulation; - has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on applying of bonus-malus system for the Motor-vehicle Third Party Liability Insurance for the damaged caused by vehicles;- has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on criteria and determination mode of wear degree of vehicles; - has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market. for the approval of Regulation on transfer of insurance portfolio;- has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on refer of insurers reorganization and insurance and/ or reinsurance brokers, as well refer of insurers/ reinsurers resulted in this way;- has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on establishment, administration and using of Fund of protection of street victims; - has been elaborated and is sent for the primary references the draft Decision of National Commission of Financial Market for the approval of Regulation on compensation Fund.-

5. Put into place and ensure effective implementation of independent supervisoryauthorities in accordance with internationally recognised standards (e.g. G10, IAIS, IOSCO,

During the reporting period the publications related to banking supervision were taken from the official web sites of the Bank for International Settlements www.bis.org and European Council www.europa.eu. The above documents were translated into the state language in order to be reviewed by the staff of the supervisory authority. Simultaneously, some of these publications have been sent to the commercial banks in order to improve their internal control systems.

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IASB). As a result of the study of the international experience in the respective area, was created the unified body, in charge of the supervision and regulation of the non-banking financial market: National Commission of Financial Market. The new body is responsible for the regulation, authorisation, of the participants to the non-banking financial market, as well as the supervision of the observance of legislation by them. With this scope, it is invested with the power to make decisions, grant benefits, interfere, monitor, put under a ban, and impose administrative and disciplinary penalties pursuant to the legislation.The necessity of the creation of the mentioned body was provided by the Memorandum of Economic and Financial Policies, concluded between the Government of the Republic of Moldova and IMF. At the present, NCFM intent to become a member of IOSCO. The necessary documents are elaborated and submitted to IOSCO. The IOSCO structures shall examine it and after the payment of the membership fee, the examination of the question regarding the adherence of the NCFM, in the frame of the meeting of the Committee of Presidents of IOSCO.

2.4.3 Movement of capital and current payments

(33) Ensure full application of PCA commitments under Title V (Current Payments and capital)

1. Ensure the free movement of capital relating to direct investment made in companies and other investments made in accordance with the provisions on Establishment (Chapter II of Title IV).

It is to be mentioned the adoption of the Law on industrial parks, as well as the adoption by the Government of the Megaregulator - National Commission of the Financial Market. With regard to current account, the Republic of Moldova has accepted the obligations of Article VIII, sections 2, 3, and 4 of the IMF Articles of Agreement starting with June 30, 1995. By accepting the obligations of Article VIII, the Republic of Moldova has undertaken the obligation to refrain from imposing restrictions on making of payments and transfers under current international transactions or from engaging in discriminatory currency arrangements or multiple currency practices without the IMF approval.Art.47 of PCA envisages the ensuring of the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II of Title IV, and the liquidation or repatriation of these investments and of any profit stemming therefrom. In this context, currently, the NBM normative legal acts that regulate the foreign exchange operations do not envisage any restrictions regarding direct investments which have to be made in the Republic of Moldova by non-residents (including establishing of subsidiaries /branches) in monetary form (foreign currency / Moldovan lei).

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2. Ensure the protection of such foreign investments and the liquidation and repatriation of profits and capital.

The existing legislation foresees the application of the principles of non discrimination of the foreign investments.

According to the Constitution of the Republic of Moldova and of the Civil Code of Republic of Moldova, the State guarantees the right to private property, as well as the application of this right. Nobody can be expropriated with exception situations of public interest, established by law, with faire and in advance compensation. Satrting 2004 a new law in the area of investments is applied – Law on investmnts in the entrepreneur activity no.81 – XV of 18th of March 2004, based on the principle of equal rights of local and foreign investors, that :

Ensures the transparency of the State bodies;Foresees real compensations for the illegal actions of public authorities that caused damages; quarantees in case of expropriation, confiscations or other actions of this kind; Guarantees total reimbursement to the foreign investors of their incomes;Established a clear mechanism for solving the investitional differences (litigations).

The investments can not be discriminated on the basis of citizenship, residence, place of establishment of activity, origin of the investor or of the investion or any other motiv.

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2.4.4. Movement of persons, including movement of workers and co-ordination of social security

(34) Full implementation of commitments under Article 23 of PCA (Labour conditions)1. Ensure full application of the best endeavour clause by abolishing alldiscriminatory measures based on nationality which affect migrant workers, asregards working conditions, remuneration or dismissal.

Was developed and presented to the Government the draft lw on migration ofr work in order to regulate the processes of emigration and immigration of work.

For the coordination of the activities of the private agents for placing people on jobs in foreign countries, was organised two seminars that discussed the relevant problems in the area and information was presented regarding the ratification and implementation of the relevant international Conventions in the field.

The fisrt report on implementation of the Convention 97 of the ILO on the migration with work purposes, which after the consultation with social partners will be presented to the Norm Committee of the ILO.

In the reporting period were organised visits to Portugal, Spain and France with the objective of exchange of experience and intensification of inter – states relations in the field of migration. During the

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visit to the republic of Portugal the problems of the Moldovan diasopora in Portugal were disscused. The recommendations, of the Veneto Lavoro, Corporative Association Friuli Venezia (Inalia) and Unions de Pagesos (Spain) representatives of instituing of a number of projects in the field of circular migration for work and the return of the migrated workers were examined.

The draft Agreement between the Republic of Moldova and France on the regulation of the migrational flows of labor power between both states was developed and negotiations upon it were launched.

(35) Full implementation of commitments under Article 24 of PCA (Coordination of SocialSecurity)Continue process of concluding Agreements with Member States on the full application of provisions on coordination of social security as contained in Article 24 of PCA

In order to accomplish this objective, were initiated the procedures of negotiation of an Agreement on social protection of the citizens between Moldova and some of the EU member states: Portugal, Romania, Italy, Bulgaria, Greece, Spain, and France.

During the reported period, a series of rounds negotiation on this matter took place with Bulgaria, Romania, and Portugal. At the moment the, the negotiated versions of the Agreements are in the process of finalization.

In view to facilitate the process of negotiation and signing of agreements on this isses with the other EU member states, during 2007, by MSPFC was elaborated the draft Agreement on social protection between Republic of Moldova and “X” state ( X representing a EU member state) that by diplomatic channels, was sent for coordination to interested parties. At the moment, Moldovan side is expecting a feedback a form EU states on the draft document sent.

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2.4.5. Other key areasTaxation(36) Development and implementation of a tax system and its institutions based on international and European standards.

Ensure that national tax 2006 –There has been adopted the Law no.268-XVI as of 28 July 2006 for Amendment and Completion MIN FIN

legislation is fully compatible with WTO norms, including provisions for the determination of the place of supply of services in order to prevent double taxation, for fully non-discriminatory VAT and excise taxes, and for refund of VAT to non-established foreign taxable persons.

of some Legislative Acts (Titles I, II, III, IV, V and VII of Tax Code, laws enforcing these titles, laws regulating taxes and fees that are not covered by the Tax Code), which took into consideration the requirements of WTO regarding national treatmeant and the treatment of the most favorized nation. 2007 –

At 20 July 2007, the Parliament adopted Law on Amendments and Completions of some legislative acts including the Titles III and IV of the Tax Code, which contains the tax policy measures on VAT and the excise duties, formulated in view of the national tax legislation compatibility to the WTO norms, based on Tax Policy and Tax Administration Policy Objectives for the 2008 – 2010.

At 12 October 2007, the Parliament ratified the Protocol on Amendments made to the Agreement between the Government of the Republic of Moldova and the Government of Russian Federation regarding the principles of reception of indirect taxes in mutual commerce from 29.05.2001. The protocol aims to applicate VAT by the principle of destination to the natural gas and petrol, including on compact gas, imported in Republic of Moldova from Russian Federation.

The study of community tax legislation on compatibility of rules of determination of the place of services supply with WTO norms was initiated and defined and examined the study results. The study results show that in case of VAT application the rules of determination of the services supply place are partially compatible with WTO norms.

The study of international tax legislation in the part regarding the norms on VAT refund to nonresidents was continued and examined study results .

In the period of 23-26 Ooctober 2007, the experts of Ministry of Finance of Moldova made a study visit to the Ministry of Finance of Czech Republic regarding the VAT reimbursement to nonresidents.

Were formulated tax policy measures on VAT reimbursement to nonresidents, which will be reflected in the project Objectives of tax policy on medium term for 2009-2011. These measures regard VAT refundment only to nonresident persons, establishment of VAT refunding ceiling of 500 euro, list of goods for which there will be a VAT refund, the place of VAT reimbursement – at the airport, fixation of VAT term of refunding for 3 months.

In January 2008 was initiated the elaboration of the project Objectives of tax policy and policies of tax administration as a component part of the Medium Term Expenditure Framework for 2009-2011, which will include tax policy measures ensuring the integral compatibility of the national tax legislation with WTO norms and VAT reimbursement to nonresidents.

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Develop and begin The Strategy of State Tax Inspection Development for 2006-2010 was approved by the Government MF

implementing a comprehensive Strategy for the Tax Administration, with particular attention to strengthening the tax collection and control systems.

Decision no. 1208 as of 20 October 2006 and published in the Official Gazette no. 170-173. Implementation of the Strategy started according to the terms foreseen by Strategy.

As Moldova comes closer to the internal market, adoption of and compliance with the principles of the EU Code of Conduct for Business Taxation.

Aiming the implementation of the Code, on 12.12.2006 has been a meeting in the Ministry of Foreign Affairs and European Integration with responsible from both institutions regarding the identification of measures and convenient methods of elaboration of the mentioned Code.

– At 25.01.2007 the Ministry of Finance of the Republic of Moldova has benefited from the consulation support of the expert from the Ministry of Finance of Lithuania, regarding the elaboration and implementation of the Code of Conduct on Business Taxation.

– Was identified the Action plan regarding tghe realization of measure „Implementation of Code of Conduct on Business Taxation”, along with the Ministry of Economy and Commerce, Ministry of Foreign Affairs and European Integration, in its realization.

– In the period of 16-20 July 2007, at the Ministry of Finance of the Republic of Moldova was with a visit the expert from Federal Ministry of Finance of the Federal German Republic on offering assistance in implementation of the Code of Conduct on Buseness Taxation.

– In the period of 25-26 september 2007 was held the seminar „Code of Conduct on Business Taxation”, organized by TAIEX of European Comission and in cooperation with the General Directorate for Taxation.

– The commentaries of the European Commision on the Report regarding the implementation of the Action Plan Republic of Moldova – European Union in the part that holds for implementation of Code of Conduct on Business Taxation, regarding the execution of the comparative analysis of fiscal measures on legal entities income taxes contented in the fiscal legislation of the Republic of Moldova were received.

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Complete, where appropriate, the network of bilateral agreements between Moldova and EU Member States on

Tax evasion prevention regarding the taxes on incomes and property. Were signed the Convention for avoiding double taxation and fiscal evasion prevention regarding the taxes on incomes and capital between the Government of the Republicm of Moldova and the Government of Slovenia and the Government of French Republic. Has entered into force the Convention between the Republic of Moldova and Republic of Slovakia for avoiding double taxation and prevention of tax evasion regarding

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avoidance of double taxation.

the taxes on incomes and property. Were negotiated and sealed the Convention for avoiding double taxation and prevention of tax evasion regarding the taxes on incomes and capital between the Government of the Republic of Moldova and Kingdom of Spain, Government of Cyprus Republic, Government of Great Duchy of Luxembourg. Were initiated negociations over the project of Convention for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and capital between the Republic of Moldova and Republic of Malta.Year 2007

– From 01.012007 was put in application the Convention between the Republic of Moldova and the Republic of Slovenia for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and property.

– At 16.02.2007 was negotiated and sealed the Convention between the Republic of Moldova and the Government of Ireland for avoiding double taxation and prevention of fiscal evasion regarding income taxation.

– At 22.02.2007 was ratified the Convention between the Government of the Reopublic of Moldova and the Government of French Republic for avoiding double taxation and prevention of tax evasion regarding income taxation.

– At 11.07.2007 at Chişinău was signed and the Convention between the Government of the Republic of moldova and the government of the Great Duchy of Luxembourg for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and capital and was ratified at 04.10.2007.

– At 08.10.2007 at Chişinău was signed the Convention between the Republic of Moldova and the Kingdom of Spain for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and capital and was ratified on 20.12.2007.

– At 08.11.2007 in London was signed the Convention between the Government of the Republic of Moldova and the Government of the United Kingdom of Great Britain and Northern Ireland for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and capital, and at 27.12.2007 the Government by its Decission nr.1493 aproved the draft law on ratification of Convention between the Government of the Republic of Moldova and the Government of the United Kingdom of Great Britain and Northern Ireland for avoiding double taxation and prevention of tax evasion regarding taxes on incomes and capital.

At 29.01.2008 was signed the Convention between the Government of the Republic of Moldova and the Government of the Republic of Cyprus on avoiding double taxation and prevention of tax evasion on income taxes

Competition policy

(37) Implement commitments on State aid under Article 48/2.2 of the Partnership and Cooperation Agreement, by developing full transparency in the field of state aid.Establish a binding, uniform definition of State aid which is compatible with that of the EU (either by legalisation or autonomous government act);

The NAPC drafted the law on state aid, with the intention to regulate the methods of authorisation, granting, control, monitoring and reporting of state aid. Article 3 of this draft law proposes a new, uniform and compulsory definition of state aid, which is compatible with the definition of the state aid provided for in article 87 of the Treaty Establishing the European Communities. To ensure full conformity of the respective draft law with the EU legislation, it was transmitted for comments to an EU expert through the means of the TACIS project. At the beginning of January draft law was sent to the line ministries for comments. After the receipt and examination of all the comments it will be send to the Government.

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Establish full transparency as regards State aid granted in Moldova, in particular by (i) drawing up a complete list of aid grantors, (ii) creating a national mechanism for centralising all information on state aid granted in Moldova, with a view to drawing annual reports on the amounts, types and recipients of aid;

In order to ensure complete transparency on state aid issues in Moldova, the NAPC, through the means of a TAIEX project of the European Commission, has organised, in the period of 27-28 of September, a national level seminar with the participation of experts from the EU specialised on issues of state aid. The seminar attended representatives of decision-making bodies in the state aid sphere of Moldova. The main aimed results of the seminar are:

a) Formulation of al list of institutions/bodies that offer state aid;b) Creation of a national mechanism on centralised gathering of the information on state aid granted

in Moldova.General Director and Deputy Director of the NAPC participated in the International Seminar on State Aid, organised in Bruxelles in the period of 29-30 March 2007, as a result of which an evaluation of the current situation in Republic of Moldova on state aid was possible to undertake and planning of actions that should be undertaken by the NAPC in order to fulfil the obligations under the EU-Moldova Action Plan have been pursued.

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(38) Implement, and build upon, commitments on anti-trust under Article 48.2.1 of the Partnership and Cooperation Agreements by ensuring adequacy and compatibility with the EU of the domestic anti-trust legislation and control regime. 1. Assess the effectiveness of the current legislative framework (competition law 0f 2000) including

NAPC conducted a research on the current legal framework on the protection of competition (Law on Competition 1103-XIV as of 30.06.2000) and for the purpose of its improvement, drafted amendments and add-ons to a list of laws, the provisions of which have been harmonised with the Community legislation. On 20th of December the Parliament approved this draft law in the first reading.

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respect of the principles of non-discrimination, transparency and procedural fairness;2. Ensure enforcement of the competition law, in particular by:

a. Establishing the National Agency for the Protection of Competition provided for in the law of 2000, as a politically independent institution.

b. Ensuring adequate legal powers for the competition agency, including decision-making powers; the right of own initiative investigations, enforcement orders and effective sanctions (e.g. fines).

c. Ensuring adequate human and financial resources, as well as training of staff in the competition administration.

For the purpose of enforcing the legislation on competition, the following actions have been taken: a). The National Agency for Competition Protection (NAPC) was established through the Decision of the Parliament no. 21.-XVI as of 16.02.2007, as a politically independent, permanent public administration body with legal personality, being independent of the activity of other public administration bodies and whose responsibilities is to promote the state policy in the field of protection of competition. b). In accordance with the Regulation of NAPC, adopted by Law no. 1103-XIV as of 30.06.2000, the NAPC is invested with adequate powers, including the right to own initiative investigations, access to information, application of sanctions, issuance of enforcement orders and other powers, necessary for the enforcement of the legislation in force. At the same time, the draft amendments and add-ons to a list of legislative acts, prepared by the NAPC, include such features as the mechanism of application of sanctions, including fines, if there is a breach of the legislation on protection of competition. At the beginning of January 2008 the draft law was sent to the corresponding institutions for coordination. Art 12, 13 of this draft law stipulate corresponding responsibilities for NAPC.

c). 1. For the purpose of ensuring the NAPC with human resources, the Administrative Council of the NAPC approved the personnel structure, which contains 41 posts for the functioning of the agency.

2. For the purpose of ensuring adequate financial resources, the NAPC received an allocation from the Government an additional amount the planned budget, for the procurement of furniture and technical equipment. The tender took place and before the end of August NAPC received all the necessary equipment.

3. For the purpose of training of staff, the following activities have been organised: 3.1 Two study visits - one to the Office for the Protection of Competition of the Czech

Republic and another one to Council of Competition of the Republic of Estonia, the result of which was:

- - acquaintance with the peculiarities of the activity and the experience of the above-mentioned institutions;

- analysis of actual cases registered with the activity of the respective institutions; - establishment of a basis for future cooperation with the purpose of exchange of experience

and information between NAPC and the mentioned institutions..

3.2 Through the TAIEX instrument, NAPC hosted an expert from the Hungarian Competition

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Authority between 14.05.2007 and 16.05.2007. During the meetings the experience of Hungary in the field of competition and the best practices of examination and elimination of breaches in this field has been analysed.

3.3 During 29.05.2007 – 01.06.2007 the General Director of NAPC participated at the international conference organised by the International Network for Competition, which took place in Moscow, where all heads of competition authorities in the world participated.

3.4 During 20-21.06.2007 an expert from the Federal Commission for Trade (similar authority

to NAPC) from the United States of America visited NAPC with the purpose to organise a training for the NAPC employees on issues related to competition, as well as sharing of the United State of America experience in their resolution.

3.5 The internal process of conclusion of cooperation agreements has been initiated to allow for exchange of information and experience with the competition authorities of Hungary, Romania, Czech Republic, Russian Federation, and Armenia.

Intellectual and industrial property rights

(39) Ensure a level of protection similar to that in the EU, including effective means of enforcement, in line with provisions in Articles 49 & 50 of the PCA- Apply international standards in this area, including in particular the TRIPS agreement

During the period of accession of the Republic of Moldova to the WTO, the legislation in the field of IPR has been essentially modified for complying the IP national regulatory framework with the requirements imposed by the TRIPs Agreement. This process included the amending of both the laws which ensure the protection of the IP objects (trademarks and appellations of origin, patent inventions, new plant varieties, industrial designs, topographies of integrated circuits, copyright and related rights) and civil and administrative legislation.

Once the amendments to the Penal Code have been adopted by the Parliament of the RM (by the Law no. 446-XV as of 30.12.2004 and the Law no. 1143-IV as of 29.05.2007), according to which penal sanctions for infringing the copyright, related rights and respectively industrial property rights were introduced, the compatibility of the national penal legislation with the TRIPS Agreement provisions on IPR enforcement has been ensured.

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As with respect to the application at the national level of international standards, provided by other international acts, state-member of which is the RM (Moldova is a state member to 24 conventions and treaties in the IP field), it should be mentioned that, on the one hand, the international acts are part of the national regulatory framework and they prevail over national legislation, in case of inconsistencies. On the other hand, each time there was ratification or adhesion to an international act, the Moldavian legislation in the concerned field has been assessed and modified, if needed, in order to comply with the provisions of the relevant treaty or agreement.

During the implementation of the Moldova-EU Action Plan, the Republic of Moldova’s efforts were focused on the approximation of the national legislation to the Acquis Communautaire requirements, and this reason for, new laws have been drafted that will ensure the compliance of the Moldavan IP legislation with the EU regulations and directives

The Law on the protection of industrial designs was approved by the Parliament under the No. 161 of 12.07.2007 and has been published in the Official Monitor of the Republic of Moldova of 31.08.2007. The Law entered into force on December 1st 2007. The Regulations on application of the Law 161/2007 is at the stage of coordination with interested ministries.

2. The draft law on the protection of inventions was approved by the Government on 24.10.2007 and passed the first reading in the Parliament on February 7th 2008.

3. The Draft Law on the protection of trademarks was approved by the Government on 14.10.2007 and passed the first reading in Parliament on February 8th 2008.

4. The Draft Law on the protection of the geographical indications, appellations of origin and traditional specialties guaranteed was approved by the Government on 14.10.2007 and have been submitted to the Parlament and is under examinations within the relevant Parlamentarian Commission.

5. The Draft Law on the protection of Plant Varieties was approved by the Government on 14.10.2007 and passed the first reading in Parliament on December 28, 2007.

6. The Draft Law on copyright and related rights has been finalized. The Draft Law has been submitted for coordination to the interested authorities on 02.10.2007. The comments received from the

respective ministries are under consideration.

All the drafts mentioned above were elaborated with the EU experts’ assistance via TACIS project and have been placed on the AGEPI web page for public debates.

The Draft Law on the protection of trademarks and the draft law on the protection of inventions were presented to the civil society organizations and IP representatives, other interested persons during the round tables organized by the AGEPI, monthly (in the period from August to December 2007).

The Draft Law on the protection of geographical indications, appellations of origin and traditional specialties guaranteed was submitted to the European Commission (on September 19 th) for assessment as to its compliance with the EU regulations and on October 11 th, it was presented to the civil society organizations and IP representatives, other interested persons during a round table organized by the AGEPI. At the same meeting, the draft law on the protection of plant variety has been presented for public debates.

Amendments to the Government Decision No. 774 of August 13th 1997 on application of fees for legal services in the field of industrial property objects protection have been introduced (according to which the enforcement of the national treatment with regards to the fees for obtaining the titles of protection on the industrial property objects was ensured);

To ensure an efficient application of the new legislation once approved, in parallel with the drafting law process, subordinated acts, namely the regulations on application of the special laws, are worked out.

Ensure proper functioning of the judicial system to guarantee access to justice for right-holders and availability and effective implementation of sanctions.

The current Legislation of the Republic of Moldova ensures a non discriminatory access to justice for all right holders, including intellectual property rightholders. A constructive dialogue between the AGEPI, the Court of Appeals and the Supreme Court of Justice, has been initiated for identifying the best way to create an information system related to the legal decisions on IP cases.

As a result of this dialogue, in order to offer public access to the legal information and case law in the field of intellectual property rights enforcement, the following actions have been undertaken:- a data base on the legal decisions in the IP field has been elaborated. The data base is available on

the AGEPI web page: www.agepi.md/md/decizii_judecata/index.php;

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- publication of the legal decisions summaries in the Official Bulletin of Industrial Property;- dissemination of the information via e-mail and the AGEPI web site, regarding the evolution of the

legislative system (drafts of amendments and the ones applied to the national legislation in the field of protection and enforcement of the intellectual property rights);

- seminars and round tables are regularly organized, within which the legislative news and case law in the field are presented;

- two Data bases have been elaborated permitting the e-administration of the data related to the litigations examined within the AGEPI Board of Appeals (data base “Board of Appeals”) and the litigations in court trials in which the AGEPI participate as a party to the process or as a third party (data base “Contencios”).

The Board of Appeals of AGEPI has been reorganized as an administrative body responsible for extrajudicial solutions of the litigations in the field of intellectual property, which entered into force on January 1st 2006.

Over the year 2006, during the AGEPI Board of Appeals proceedings, 97 appeals have been filled by third parties, 183 cases were examined and 146 decisions were adopted. In 2007 114 new appeals were filled and 175 decisions were adopted.

A quality indicator of AGEPI experts activity is considered a small number of appeals against the decisions released by the AGEPI Board of Appeals to the Chisinau Court of Appeals, so out of the 146 decisions of the AGEPI Board of Appeals released during the year 2006, only 17 were appealed in court.

In the year under review, no discrimination complaints from the right holders have been attested as to the access to the justice.

As a result of recent discussions held between the representatives of the AGEPI, the Supreme Court of Justice and the Tacis Project “Assistance to the implementation of the WTO, PCA commitments and the EU- Moldova Action Plan within the European Neighborhood Policy”, some common actions are to be organiyed shortly, such as:

- a training seminar for judges,- elaboration of a IP case law booklet.

Over the years 2005-2007, seven judges were trained in national or international training seminars in the

field of intellectual property.

To optimize the actual IP justice system, the competences of examining the civil cases which imply an IP right violation have been modified. Thus, the new Law no. 161/2007 on protection of industrial designs provides for competences of the Chisinau Court of Appeals as a court of first instance to examine litigations implying an infringement of a right to an industrial design. Such provisions contain as well the other draft laws which are currently under consideration or approval.

Consolidation of the relevant institutional structures, as well as of the offices for industrial rights, copyrights protection and collective societies. Extend cooperation with third country authorities and industry associations.

The consolidation of the institutional capacities of the relevant bodies constitute a part of wide process of developing and up-grading the national intellectual property system according to the Strategy on development the national system of protection and use of IP assets until the year 2010 and implementation of the reform provided by the Code on science and innovation of the Republic of Moldova, approved by the Law no. 259-XV of 15.07.2004.

Institutional consolidation of the IP system started with merging, at the end of the year 2004, of the State Agency on Industrial Property Protection and the State Agency on Copyright in a single specialized body - State Agency on Intellectual Property (AGEPI) and the strenghtening of its legal and institutional capcities.

In June 2005, the customs system of the Republic of Moldova has been up-graded, the structure and the responsibilities of the Customs Service being enhanced.

In order to ensure an univocal approach and to realize some strengthening measures for protecting and enforcing the IP rights, a closer collaboration between the relevant institutions involved in the protection and enforcement of the IP rights, has been established. Collaboration agreements between the AGEPI and the Ministry of Internal Affairs, the Customs Service, the Ministry of Information Development, were signed providing for common actions, rendering consultations, exchange of information and training of the personnel involved in IP rights enforcement.

The bilateral Agreements of collaboration in the field of IP between the AGEPI and the third countries authorities and IP regional organisations are supervised and implimented on a regular bases.

a) Exchange of information, legislation and experience with similar institutions from over 30 countries, with which the Republic of Moldova established bilateral relations of collaboration. There were strengthened relations of collaboration with the European Patent Office (EPO). The Agreement on

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exchange of information between the AGEPI and the European Patent Office (EPO notification letter of 19.03.2007) has been renewed; the AGEPI staff is participating in the EPO training and upgrading programs.

b) Negotiations on establishing cooperation relations with the Community Offices in the field of intellectual property have been initiated, namely with the Community Plant Variety Office (CPVO) with the headquarter in Angers, France, and the Office of Harmonization for the Internal Market (OHIM) with its headquarter in Alicante, Spain. The Community Offices have been informed on achievements of the Republic of Moldova obtained in the process of compliance of the national property system with the Community ones; the offices were asked for assistance in legislative consulting and professional upgrading of the personnel, two study visits were undertaken at these offices in 2007. c) Mutual advantageous relations with CIS state members and Eurasian regional organizations are maintained. At the regional level, the AGEPI collaborates with the Eurasian Patent Organization (EAPO), the Interstate Council on the Industrial Property Protection (ICIPP) and the Joint Working Commission on enforcement of the Agreement of Cooperation for the Prevention and Repression of the IP rights infringements.

d) AGEPI keeps relations of collaboration with the Embassies accredited in the Republic of Moldova, representatives of foreign companies and associations of foreign right holders operating on Moldavian market. Relations of cooperation with the representatives of the BSA (Business Software Alliance), the International Federation of Phonographic Industries (IFPI), the Coalition for Intellectual Property Rights (CIPR) and the Microsoft in Moldova, have been established in order to identify the most effective methods of involvement of the right holders in the process of strengthening the system of IP rights enforcement on the territory of Moldova, including the assessment of means to improve the protection of the software. In the year 2007 some trainings on licensing and protection of softwares and working meetings with the representatives of the BSA and Microsoft were organized.

Increase resources dedicated to enforcement, in particular for the customs authorities and the judicial system and

1. Consolidation of the legal framework in the field of IP rights protection

1.1 A factor of strengthening the mandates of the authorities responsible for the enforcement of the legislative provisions aimed to fight against the counterfeited and piracy products, constituted the amendments to the Penal Code of the Republic of Moldova. Pursuant to the Law no. 110 – XVI of 27.04.2007 on amending and completing the Penal Code, liability for industrial property rights

APIPMICS

increase seizures and actions against counterfeit/pirated goods in specifically targeted sectors

infringement was introduced and the provisions related to the penal liability for copyright and related rights were modified.

1.2. In order to ensure an efficient application of the new provisions of the Penal Code, a draft law on amending the Penal Procedural Code has been elaborated, which was approved by the Government on November 7th, 2007, and passed the second readings in the Parliament, on December 27th, 2007.

1.3. For enhancing the system of intellectual property rights protection at the border, a draft law on amending and completing the Customs Code was elaborated, including the chapter regarding the protection of intellectual property rights, which transpose the provisions of the Acquis Communautaire. The draft was elaborated within the TACIS project “Border Management – harmonization and simplification of the customs procedures in Moldova” and has been submitted to the Government for approval.

2. Increase the institutional capacities of the bodies responsible for fighting against piracy and counterfeiting. Insure a permanent dialogue between AGEPI, the Ministry of Internal Affairs, Customs Service and the National Agency for the Protection of Competition, organization of common activities.

2.1 AGEPI has signed Collaboration Agreements with the Ministry of Internal Affairs, the Customs Service and the National Agency for the Protection of Competition and common activities programs are elaborated on an annual bases, including activities for repressing counterfeiting and piracy.

2.2 Pursuant to the Law on Protection of Copyright and Related Rights No.293-XIII of 23.11.1994, the AGEPI in cooperation with the Ministry of Internal Affairs’ representatives and other competent authorities, undertake, ex-officio and at the request of the right holders, inspections on observance of the copyright and related rights, and participate in seizures and destructions of the counterfeited or pirated audio-visual goods.

In the context mentioned above, over the year 2007, the AGEPI inspectors performed 180 control actions, out of them 162 were ex-officio and 18 - upon request. As a result of these inspections 72 reports on IP rights infringements were drawn up and 2779 counterfeited and piracy products were seized.

Upon the request of the concerned authorities, over the year 2007, 134 expertise reports on IP rights infringements were carried out, including 52 - on administrative cases and 82-on penal cases.

Pursuant to the Law no.1459/2002 on the distribution of copies of works and phonograms, during the year 2007 - 1.388.148 control marks have been issued.

2.3 In the year 2006 the initiative to create a National Commission on intellectual property, designed to act as an advisory body representing both the public and private sector was launched. The draft Government Decision thereon has been approved by the Government during its meeting on November 21st 2007, with its subsequent entering into force after publication.

2.4. In October 2007, the AGEPI made available to the Customs Service, the Ministry of Internal Affairs and the National Agency for the Protection of Competition on-line access to the Registers of industrial property objects (trademarks, inventions, industrial designs and utility models) protected on the territory of the Republic of Moldova. The access to the information related to the industrial property right-holders, provided to the concerned authorities will raise the efficiency of identification and investigation procedures in the IPR infringements cases.

3. For the year 2008, various activities directed to fight against the counterfeit and piracy and increase of the level of IP rights enforcement in some targeted sectors have been carried, including development of some studies in the field, organization of the thematic seminars for economic agents and right holders, organization of training and up-grading of the staff of the institutions involved in the system related to observance of legislation in the area of Intellectual Property (Customs, Police, Prosecutor’s Office, justice etc.)

Improve enforcement of the relevant conventions provided for by PCA Article 49(2). Conduct a study on piracy and counterfeiting in Moldova and ensure effective dialogue with rights holders..

1. The treaties and agreements to which the Republic of Moldova is party are constantly monitored. For an efficient implementation of the international treaties at the national level and in order to ensure the participation of the Republic of Moldova in the process of development and enhancement of the international system of intellectual property, the AGEPI actively collaborates with the international specialized organizations:

a) World Organization on Intellectual Property, which administrates 22 international treaties and agreements in the field of intellectual property, to which the Republic of Moldova is party;

b) United Nations: AGEPI participate at the UNECE activities in the field of intellectual property and innovations;

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c) World Trade Organization: AGEPI presents the country’s position on IP protection issues approached within the TRIPS Council and notifies the WTO Secretariate on the amendments intervened in the national IP legislation, monitors the implementation of the TRIPS Agreement at the national level.

The main activities in this field are as follows:

The Law no. 456/1995 on Patents for Invention was amended and completed by the Law no.205-XVI of July 28, 2005, in order to ensure the implementation of the Patent Law Treaty at the national level, ratified by the Republic of Moldova on July 27, 2001 and entered into force on April 28, 2005.

By the Law no. 90-XVI of April 20, 2006, the Republic of Moldova accepted the amendments to the following international treaties:

- Convention Establishing the World Intellectual Property Organization (by the Law of the Republic of Moldova no.89-XVI of April 20, 2006),

- Paris Convention for the Protection of Industrial Property; Berne Convention for the Protection of Literary and Artistic Works; Madrid Agreement Concerning the International Registration of Marks;

- Hague Agreement Concerning the International Deposit of Industrial Designs; Lisbon Agreement for the Protection of Appellations of Origin and their International Registration; Patent Cooperation Treaty.

The 8th edition of the International Patent Classification entered into force on January 1st, 2006. The Repulic of Moldova applies the classification on the ground of its membership to the Strasbourg Agreement Concerning the International Patent Classification. AGEPI apply the Classification in patent examination process according the WIPO standards and instructions.

The Republic of Moldova representatives participated in the works of the Diplomatic Conference on the Singapore Treaty on the Law of Trademarks and signed the revised Singapore Treaty. The internal procedure for ratifying the Singapore Treaty by the Republic of Moldova according to the national law requirements, has been started.

The Regulations on application of fees has been amended (by the Government Decree No. 275 of 16.03.2006), according to which the principle of national treatment provided for by the Paris Convention

for the Protection of Industrial Property and WTO treaties, is respected;

AGEPI informs biannually the Ministry of Foreign Affairs and European Integration of the Republic of Moldova on the state of implementation of the international treaties and conventions in the area of intellectual property to which the Republic of Moldova is party.

2. The AGEPI organizes national seminars, round tables, etc. for different categories of interested persons so as to disseminate the information on national and international system of IP rights protection and the economic benefits to be achieved as a result of IP assets capitalization. An important goal is the increase of the level of awareness on the risks of counterfeiting and piracy for both producers and consumers.

In the year 2006, 17 seminars on different IP issues were organized for different categories of interested persons (economic agents, right holders, academia and university circles), 14 of them were held in Chisinau and 3 in the territory. AGEPI representatives participated with exposition stand and rendered consultations and marketing services during 22 exhibitions, including 16 national and 6 international exhibitions. Within the national exhibitions, AGEPI organized 6 thematic round tables for participants and visitors of the exhibitions.

In November 2006, AGEPI organized an International seminar on Copyright and Broadcasting, in cooperation with the WIPO, where 80 persons from the Republic of Moldova and neghbouring countries (Romania, Hungary) have participated. The Seminar was welcomed by the persons involved in the national system of protection, administration and use of the IP rights.

Over the year 2007, from 21 seminars organized by the AGEPI, 18 were held in Chisinau and 3 in the territory. In the period from February 28 to March 1, 2007, the Republic of Moldova hosted two sessions of the working groups of the Eurasian Patent Organization and a Regional Seminar on intellectual property. Over 70 participants, from the Republic of Moldova, Community of Independent States and Romania participated along with the representatives of the Eurasian Patent Organization, European Patent Office and WIPO, at the exchange of experience and information on the most recent technologies in the field.

In the period from October 18-19, 2007, AGEPI organized in collaboration with WIPO, a National Seminar on “Intellectual Property Management: Innovation, Promotion and Technology Transfer”,, to which 60 representatives form research & development and entrepreneurship area have participated.

In the year 2007, AGEPI participated in 24 exhibitions, including 18 national and 6 – international once, and has organized 5 thematic round tables within the national exhibitions.

A special attention has been paid to the collaboration with the representatives in the field of intellectual property, members of the local Unions of Creations and Publishing Houses, broadcasting and TV companies, information technologies firms. This collaboration was focused, in particular, to the involvement of the interested persons (right holders and users) in the process of elaboration of the new legislation in the field of copyright and related rights in the context of harmonization of the national legislation with European Directives and Regulations.

Starting with June 2007, a mechanism of collaboration with civil society has been established. In this respect, meetings with civil society organizations and representatives in the field of intellectual property are monthly organized, where AGEPI activities and the IP news are presented. The legislative initiatives are being debated along with the amendments intervened in the legislation and registration procedures of IP protection titles. Meetings are organized every Thursday of the month, starting at 14.00 PM, in the premises of the Conference hall of the AGEPI and are opened to the public.

3. In the year 2006, a survey on IP rights enforcement and extent of counterfeit and piracy, has been developed. The survey results were submitted to the European Commission and placed on the AGEPI web site: www.agepi.md. On January 15, 2008, the European Commission submitted to the AGEPI, the commentaries on the survey. The concerned document (ER/E2-VN D(2007) 500546) provide for the EC appreciation towards the survey , and the EC opinion on the actions to be carried out for improving the IR rights enforcement on the territory of the Republic of Moldova.

Public procurement

(40) Develop conditions for open and competitive award of contracts between the parties, in particular through calls for tenders, in line with Article 54 of the PCA

1. Improve the functioning of the current system through increased transparency,

Following the purpose to intensify the transparency and publicity of the public procurement process realizing, since the 1st of January 2007, Agency issues twice a week The Public Procurement Bulletin, where are included the advertisements on public competitions carrying on, these competitions results, legal acts of public procurements area, reports and other useful information. For the same purpose, a new

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information provision, training and the strictly limited use of exceptions.

version of the existent web-page for public procurement was elaborated and launched ( www.tender.gov.md ). On the one hand the interest of economic operators for the public procurement procedures and the way of their holding raised, but on the other hand state beneficiaries manifested the realizing of role and efficiency of correct applying of public procurements rules.

As a result of this, the number of public auctions was considerably grown. Thus, whether in 2004, 871 public auctions were initiated and carried on, in 2005 – 1691 public auctions, then in 2006-2353 public auctions and within the year 2007 – the 70% of all public procurements in the country. Making a comparison, the amount of public procurements realized as public auctions in 2004 amounted 46%, but in 2005-57 % from the total amount of public procurements in the country.

At the same time, a considerable reduction of the volume of single source (without competition) public procurements realized by state beneficiaries has been gained. Thereby, whether in 2004 they represented 16 % from the total amount of public procurements, in 2005-10%, then in 2006 and 2007 their number was reduced to 7-9%.

Also, last years, for the improvement of professional capacities of the specialists responsible for the realizing of public procurements, was intensified the process of training by organizing of seminars in all districts of the country, the TAU Gagauzia, the Chisinau municipality, the Balti municipality, and in all central public administration authorities. In this way, in 2007 69 seminars were organized.

2. Convergence with and effective implementation of key principles in the EU legislation on public procurement (e.g. transparency, non-discrimination, competition and access to legal recourse).

For the intensifying of transparency and improvement, harmonization of the reglementation mechanism of public procurements according to the requirements of European Union Directives in this area and to the Government Procurement Agreement of the World Trade Organization and also for the exception of discrepancies in practice use of this mechanism, The Law on Public Procurements nr. 96-XVI of 13th of April, 2007 (Official Monitor nr. 107-111/470 of 27.07.2007) was elaborated and adopted with the success and entered into force on the 27th of October, 2007. Coming into force, the new Law on public procurements determined new priorities and new efficient modes for realizing of public procurements in the Republic of Moldova, as well as: growth of transparency and publicity in the public procurement process, increase of responsibility of the persons engaged in this process, establishment of an automatic public procurement Registry, launching of modern transparent procurement procedures, implementation of electronic public procurements etc.

Following the instant implementation and execution of the Law on public procurements nr. 96-XVI of 13.04.2007, it has been drawn up, coordinated and approved, by the Government Plan of actions-The Government Decision No. 1394 of December 12, 2007 (Official Monitor No. 198-202/1450 of December, 21, 2007), which have a deadline, for the conforming the existing normative acts to the stipulations of new law and for the ensuring the drawing up and approval of new normative acts, provided by the same law.

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On the other hand, the Plan establishes concrete actions directed to intensifying of publicity and transparency in the process of public procurements realising, improvement of the capacities of persons engaged in this process, informing actively the economic operators in public procurements procedures, strict supervising and evidence of public procurements realizing, making the process of public procurements work automatically, propelling the process of adherence of the Republic of Moldova to the Government Procurement Agreement of the World Trade Organisation etc.

Statistics(41) Adoption of statistical methods fully compatible with European standards in relevant statistical areas and advance the institution building of the

Department for Statistics and Sociology of the Republic of Moldova (DSSMR)

Ensure that the forthcoming population census is carried out according to schedule following recommendations of Eurostat/UN-ECE 2000 census;

The population census was carried out in 2004 according to schedule following recommendations Eurostat/ UNECE 2000. For the purpose of retrieving the results of the Population Census, a list of processing and data publication activities were planned, in particular in February 2006 the validity of dates in all districts and for whole country was finalised; data base on results of population census in 2004 at the country, municipal and rayon level, which represent a source for policies elaboration in the field of population, publication and dissemination of statistical data, required by the users was finalised. All the stages of preparation and carrying out of the population census in Republic of Moldova, including that of processing and delivery of data, have been monitored by a high level group of experts from the Council of Europe.

In order to initiate the preparation of the forthcoming population census according with recommendations of Eurostat/UN-ECE 2010 census, NBS launched at the beggining of the 2008 the work on the elaboration of the draft Law on the General Population Census and the Plan of measures for organization and conduction of population census.

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Elaborate a short and medium term development strategy for harmonisation with European standards in the relevant statistical areas, including foreign trade statistics and statistical classifications;

Beginning with 2005 within the TACIS project Statistica 9 have been pending a series of activities aiming to improve some of the statistic sectors (global assessment of national statistic system; statistics of enterprises; statistics of trade of goods and services; informational technologies), ensuring approximation of national statistic to the EU and international standards. Thus, as a result of study the EU member states’ experience in the field of statistics, there has been identified the necessities and priorities for harmonization of national statistic according to the EU requirements, taking into consideration the Republic of Moldova’s particularities, as follow:

- There have been executed works on the process of international standard application based on republic’s situationn and reviewing the sources of information necessary for elaboration

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of financial account;- The expertise of actual economical statistics in the country has been carried out and is to

be ued for the statistical reform of the enterprises in accordance with EUrequirements.As a result, has been drawn up the concept of organizing the statistics of enterprises of RM, also recommandations regarding obtaining and fulfilling of the statistical record.The Classification of Educational Programs in RM was elaborated to serve as an adequate tool for completing, presentation of statistical data and a general conclusion regarding the natianal and international education system;

- There has been effectuated the estimation of the Labor Force Inquiry in accordance with the recommendations of the International Bureau of Labor, and the revision of the level of harmonization of labor Force Inquiry in accordance with the EU normative – estimation accomplished by an expert of the Statistic Office of Letonia.

Within this project with the support of Eurostat experts the Global Evaluation Report of the national statistics was developed and presented at the International Conference “Harmonisation of the Official Statistics of the Republic of Moldova to the European Union standards”, 3-4 May 2007, Chisinau. On the basis of this report the strategy of developing of national statistical sector has been elaborated.The finishing off the project, 2008-2011, they took into consideration the remarks and proposals of the members.After the examining of the above mentioned strategy during the meeting of Board of National Statistical Bureau, 27 December 2007, is to be presented for examination to the Council for statistics in the first trimester 2008.

Improvement of publications, statistical data dissemination1. The system of publications developed by National Bureau of Statistics oriented towards user information needs unifies statistical data time series from different areas that show uniformly and coherently the demographic, social and economic evolution of the country.

In order to facilitate access to statistical data, better information of both internal and external users the Advance Release Calendar is placed on the NBS’ Web page (www.statistica.md) every quarter. In particularly, during year 2007 there were developed and disseminated 33 analytical notes, over 120 flash information and press-releases regarding the state and evolution of social, demographic, economic and cultural life of the country.

- 2. Organisation of seminars and round tables with users regarding the system of indicators and statistical methodologies used in different areas positively contribute on the development of user relations and facilitates a better understanding of notions used in statistics, calculation methodologies of main indicators, for an adequate use of statistical data. In this context, the

seminar on “Labour market statistics in Romania and harmonization to EU requirements. Employment and unemployment” took place in May 2007. In this context, in 2007 there has been organized: Seminar on “Statistics of Labor Market with EU requirements. Occupation and unemployment”, International Conference “The harmonization of the Moldova’s official statistics with the EU standards”, International Seminar “Provocations and possibilities for the statistics and demographic analysis development”, 2 round tables(regarding the results of the Labor Force Inquiry for the year 2007 based on the modifications and the results about the research on Investigation of Home Husbandry Budgets obtained in 2006 and first quarters of 2007 ).

3. As a result of subscription to the Special Data Dissemination Standard (SDDS) of IMF, Republic of Moldova is engaged in assuring data dissemination according international norms. Thus, NBS jointly with partner institutions to SDDS: National Bank of Moldova, Ministry of Finance, and National Commission of Financial Market makes metadata revision of SDDS and continuously updates the national Web page (NSDP) for statistical data presentation according to the Advanced Release Calendar (ARC). This event fosters better access of decision factors, other internal and external users of complete and opportune statistical data contributing to the functioning of financial market, promotion of positive image of Republic of Moldova, increasing the trust of potential investors for the assurance of sustainable economic and social development of the country.

Yearly the statistical compilation „Moldova in figures” covering information about the social economic and demographic situation in comparison with previous years is placed on the NBS’ Web page and the Quarterly Statistical Bulletin -on a quarterly basis.

Improvement of statistical infrastructureIt is extremely important and primordial to adapt national statistics to existing information needs, thus ensuring the modern information technology implementation, comparability of statistical data at international level and reducing information burden on respondents.

For the improvement of information base regarding the population’s living standards and labour force market, starting with the 1st of January 2006 the Labour Force Survey (LFS) commenced as well as the Household Budget Survey (HBS) that was conducted in new primary sampling units in accordance with the multifunctional sample (EMDOS) for social surveys integrated with a unified network of interviewers. With the support of the international expert within the frameworks of TACIS project „Statistics 9”, on IT component the concept of statistical information system is being developed.In accordance to the Governmental Decision no.606 from June 1, 2007 regarding some implementation actions of National Strategy on building of information society – „E-Moldova” there were allocated

financial resources to the National Bureau of Statistics for the development of above mention Concept and corresponding technical documents.

The works on the improvement of the Register of Statistical Units continued during the year. The works related to the development of the software on automated processing of data from the Ministry of Information Development regarding new and liquidated legal units and changes in registration documents necessary for competition and updating of the Register were finalised. Also, the work on filling in the Register of statistical units with local units for the production of qualitative and complete information in territorial profile started.

Within the frameworks of developing the draft programme of statistical works for year 2008 the system of statistical reports-forms (questionnaires) was revised for the purpose of: deleting the doubling ones and those of low information value, decreasing the burden on statistical respondents, increasing usage of administrative data sources owned by public administration bodies.

The works on re-organization of the local network continues with the perspective of re-designing and re-organization of integral NBS computer network (WAN).

IT training of personnel is a crucial element that facilitates and makes the work of branch specialists more efficient. During the reporting period NBS specialists attended diverse courses in the field.

Ensure that legislation on official statistics is based on the fundamental UN principles;

The National Bureau of Statistics, together with its partners from the national system of statistics dynamically activates in order to follow the statistic legislation normative, which according to international survey, achieved within the Report on global examination of national statistics, corresponds to the requirements of the Fundamental Principles of Official Statistics of ONU. An important notion in this field constitutes the adjustment of the juridical- normative plan to the Law nr.412-XV from 09.12.2004”regarding the official statistics”

Through the Law no. 314-XVI from 02.11.2006 were introduced amendments to the Law on official statistics no. 412-XV, from December 9, 2004

Thus, according to the Government Decision no. 532 from 15th of May 2007 “on the Council for Statistics” the Council for Statistics was created and its composition approved. The draft of the „Strategy of national statistical development for 2008 – 2011” was elaborated and coordinated with line institutions and will be presented for examination within the first meeting of the Council of Statistics in February

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2008.

Financial Control and related matters

(42) Sound management and control of public finances

Promote the development of appropriate administrative capacity to prevent and fight affectively against fraud and other irregularities affecting national and international funds, including the establishment of well-functioning cooperation structure involving all relevant national entities;

In order to prevent causing damages to the country and take specific and efficient measures to recover this prejudice, the Court of Accounts cooperates based on Cooperation AGreements with the Centre for Combatting Economic Crimes and Corruption, General Prosecutor’s Office, Ministry of the Interior and Information and Security Service and remits to the Centre for Economic Crimes and Corruption the corresponding materials. Following the consolidation of the methodological base, staff training, improvement of quality of the controls carried out, as well as following th establishment of more efficient forms of cooperation with other bodies during 2006, the CoA remitted to the Center for Combating Economic Crimes and Corruption 7 materials based on which 9 criminal investigation dossiers were initiated. During 2007 the CoA remitted to the same body the materials of nine controls. Based on six of them they initiated 9 criminal cases, the rest being in process of examination.

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Ensure effective cooperation with the relevant EU Institutions and bodies in the case of on-the-spot checks and inspections related to the management and control of EU funds.

In 2006 in the context of training the staff and organizing training courses on Internal Audit and Control field have been taken the following steps: were organized training courses on „Internal Control Management” and „General Management”

through the medium of Public Administration Academy by the President Office of Republic of Moldova, where participated 6 employees of Revision and Financial Control Service;

six employees of Revision and Financial Control Service participated at a training course, organized by Public Finance Institute from London, and in the end of the year one person participated within PEM-PAL seminar on „ Internal Audit” organized at Ljubljana, Slovenia by the World Bank, DFID and INWENT;

Within Revision and Financial Control Service was elaborated a training program for all the employees and were organized seminars for 15 persons.

In 2007:

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In January seminars were organized on internal control and internal audit system in public sector, where employees of headquarter and territorial structures of Service of Financial Control and Revision participated.

In February, within the seminars organized by Public Administration Academy, the Service of Financial Control and Revision presented an introductory course on financial management, internal control and internal audit in public sector, where employees of central public administration bodies participated.In March seminars were organized for professional training within the Financial-Banking College „A. Diordiţa”. The employees have been studying the topic on internal control and internal audit in public sector. Beside that, aspects on implementation of the National Strategy on Prevention and Fighting against Corruption were discussed.The Public Administration Academy under the auspices of the President of the Republic of Moldova, in common with the Financial Control and Revision Service have organized the training seminar on topic „ Making the mechanisms of internal control and internal audit more efficient within public authorities”, where employees of Service of Financial Control and Revision as well as experts, employees of Court of Accounts, Ministry of Finance, Ministry of Internal Affairs, General Prosecution, Finance General Directorate of the Municipality Council Chisinau, National House for Social Insurance, National Company for Compulsory Health Insurance, National Center for Preventive Medicine, Center for Economic Crimes and Corruption Fighting, Information and Security participated.

In June Public Administration Academy under the auspices of the President of the Republic of Moldova, in common with the Financial Control and Revision Service have organized the training seminar on topic „ Internal control and internal audit within public authorities”, where representatives of President Executive, Parliament Executive and Government Executive participated.

In July seminars were organized on internal control and internal audit system in public sector, where employees of headquarter and territorial structures of Service of Financial Control and Revision participated. The heads of Directorates of Ministry of Finance participated to the seminar on Strategy of Public Internal Financial Control development.

In September in common with Court of Accounts specialists and experts of Sweden Supreme Court of Audit seminars were organized on accumulated experience in audit mission accomplishment, where employees of headquarter and territorial structures of Service of Financial Control and Revision participated. Within the project “Development of human resources and internal audit capacity building within local public administration of small cities situated to moldo-ucrainean border – Floreşti, Soroca and Yampil” the Service of Financial Control and Revision elaborated training materials on real situation and development strategy.In October within the Public Administration Academy seminars were organized on

topic „Internal control and internal audit” where employees of Service of Financial Control and Revision, employees of Harmonization Unit for internal control and internal audit participated. A study visit on experience exchange in area of Public Internal Financial Control was organized in Bucharest, Romania, Ministry of Economy and Finance, Central Harmonization Unit for Internal Public Audit. The module “Internal control and internal audit” was elaborated within the Public Administration Academy, trainers were trained and a pilot seminar for training was developed.

In November courses for trainers were organized with the support of Public Administration Academy, where one employee of Harmonization Directorate of internal audit and internal control participated.

In December, representatives of Service of Financial Control and Revision participated to organization of the international conference moldo-ucrainean-polish, where leaders of central and local public administration participated. In common with external experts a seminar on managerial accountability was organized for leaders of public institutions from Chişinău.In 2008:In January external experts organized workshops for training employees of Service of Financial Control and Revision, Customs Service, National Social Insurance House on spot activities within pilot mission of internal audit. Meantime within Ministry of Finance was organized a seminar on “ Internal control implementation”, where head of directorates participated.

Improve public finance management and transparency, through upgrading of the existing Treasury Accounts System, appropriate audit of budget revenue and expenditures, in line with the suggestions of the World Bank’s Public economic management review. Extension of the Treasury system by including in the state budget the social

2005- During the year the preparation phase of „ Public Finance Management Project” took place. Several activities took place as elaboration of Concept Document, describing the future Financial Management Information System (FMIS), as well as technical specifications of the software, technical equipment and network, designed for the new Financial Management Information System. 2006- on January 3, 2006 the Public Finance Management Project was declared as effective by the World Bank and the official launching of the project “Public Finance Management” took place on 20 January, which goal is the development of an effective and transparent public finance management frame in order to contribute at the programs development on poverty reduction and economic growth. Ministry of Finance together with National Social Insurance House implemented strating with January 1, 2006 the mechanism of revenue collection of state social insurance budget and compulsory health insurance funds to the account of Ministry of Finance, opened at National Bank of Moldova. Introducing this mechanism allowed to exclude a intermediate stage in revenues collection to mentioned budgets. 2007-Beginning with 1 January 2007, was modified the management mechanism, of the special means, special funds and resources entered temporarily in the public institutions possession financed from state budget through the STA of Ministry of Finance – Central Treasury, opened in the National Bank of

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insurance budget, compulsory medial insurance funds, special resources, extra-budgetary funds. Creation and implementation of an integrated informational system for public finance management.

Moldova, which nowadays allows an efficient and transparent management of public finance. As of 01.03.2007 the Central Treasury performs, in the name of Ministry of Finance, the activity of direct participant at the automated system of inter banking payments (SAPI). According to point 4 of the Government Decision no. 1021 as of September 13, 2007 regarding „Social-economic evolution and accomplishment of the Action Plan on implementation of Government Activity Program for 2005-2009 "State modernization– people welfare" during the I semester of the 2007”, Ministry of Finance (Central Treasury) together with National Social Insurance House, National Health Insurance Company and other bodies as of December 29, 2007 ensured the transfer of the balance of state social insurance budget, compulsory health insurance funds and territorial-administrative budgets from accounts of commercial banks to banking accounts of the Ministry of Finance (Central Treasury). In order to ensure the transparence public finance management during 2007, the State Treasury had assured monthly the placing in the mass-media and on the official page of the Government (www.moldova.md) the information on the national public budget execution, state budget (including all the components), territorial-administrative units budget (including all the components), state social insurances budget, compulsory health insurance funds.

The procedure on the procurement of the Financial Management Information System was launched in March 2007, and is organized, in accordance with the World Bank procedures, in two stages, with a demonstration phase between these two stages. Currently the Evaluation Committee is assessing the bids of the companies that can be admitted to the second stage of the bidding process. During the second stage the bidders will be requested to adjust their bids according to the requirements of the Evaluation Committee as well as present their financial proposal. The selection of the winning bidder and the signing of the contract on the procurement and implementation of the FMIS are envisaged for April 2008. The Ministry of Finance has developed the new budget classification in accordance with the requirements of the GFS2001 IMF standard. The draft Chart of Accounts for the public sector has been also developed. The functional, economic and program classification (I and II level) have been developed as well as work is underway on the classification of sources. The economic classification and the functional classification are tested in the current information system of the Ministry of Finance. The draft functional and economic classification have been finished and submitted to the IMF to be examined by the experts. At the same time the Ministry has developed the Concept on reforming the accounting and reporting in the budget sector and the initial draft of the Guidelines on the accounting in the public institutions. The draft Chart of Accounts is tested on the reports and accounting operations of the Ministry of Finance, as well as activities are carried out on the integration of the new budget classification and chart of accounts .

Public Internal Financial Control

Development of a strategy and policy paper for the public internal financial control system (managerial accountability and internal audit).

2006-The Concept on internal control and internal audit system in the public sector in Republic of Moldova has been adopted by the Goverment Decision no.1143 as of October 4, 2006. This Concept represents the basis for the creation and implementation in the Republic of Moldova of the internal control and audit in accordance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA).2007-The Central Division for the Harmonization of Internal Control and Internal Audit System was established by the Government Decision no. 489 of 03.05.2007 within the Financial Control and Revision Service. The establishment of such a unit was one of the main requirements of the European Union regarding the existence of the so-called Central Harmonization Unit that will ensure the coordination of the activities related to the implementation of the internal control and internal audit system in the public sector. To implement and oversight the Public Internal financial Control (PIfC), by the Minister’s of Finance Ordinance nr.90 from 13.11.2007, beside the Ministry of Finance was established the Council of internal audit, that have the responsibility to annual reports notification before its presentation in Govern, the drafts of normative acts notification in the PIfC area. In June 2007 the draft of Strategy on Public Internal Financial Control Development was developed. The draft Strategy was coordinated with Ministry of Finance and also with interested bodies as well as with international experts. In January 2008 the Strategy on Public Internal Financial Control Development was adopted by the Government Decision no. 74 as of January 29, 2008.

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Establish legislative framework for public internal financial control.

• According to recommendations of World Bank mission as of October 01 – 05, 2007, were elaborated proposals to amend the Law on Budgetary Process and System no. 847-XIII as of 24.05.1996, which will present the basic principles of internal control and internal audit system. The proposals were submitted for notification to relevant authorities. Taking into consideration the received comments, the proposals are now worked over. • During 2007 the National Internal Audit Standards for the public sector, Code of Ethics for internal auditors in public sector and Charter of Internal Audit (the Regulation – model of internal audit performing) have been developed. The National Internal Audit Standards for the public sector were approved by the Order of the Ministry of Finance no. 98 of 27.11.2007 and the decision of the Court of Accounts no.82 of 29.11.2007 and they have been published in the Official Gazette no. 198-202/61 as of December 21, 2007. The Code of Ethics for internal auditors in public sector and Charter of Internal Audit were approved by the Order of the Ministry of Finance no. 111 as of December 26, 2007 and presented to Official Gazette for publication.

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Gradual harmonization with the internationally agreed standards (International Federation of Accountants (IFAC), Institute for Internal Audit (IIA), International Organisation of Supreme Audit Institutions (INTOSAI)) and methodologies, as well as with EU best practices for the control and audit of public income, expenditure, assets and liabilities.

In 2006 in the context of training the staff and organizing training courses on Internal Audit and Control field have been taken the following steps: were organized training courses on „Internal Control Management” and „General Management”

through the medium of Public Administration Academy by the President Office of Republic of Moldova, where participated 6 employees of Revision and Financial Control Service;

six employees of Revision and Financial Control Service participated at a training course, organized by Public Finance Institute from London, and in the end of the year one person participated within PEM-PAL seminar on „ Internal Audit” organized at Ljubljana, Slovenia by the World Bank, DFID and INWENT;

Within Revision and Financial Control Service was elaborated a training program for all the employees and were organized seminars for 15 persons.

In 2007:In January seminars were organized on internal control and internal audit system in public sector,

where employees of headquarter and territorial structures of Service of Financial Control and Revision participated.

In February, within the seminars organized by Public Administration Academy, the Service of Financial Control and Revision presented an introductory course on financial management, internal control and internal audit in public sector, where employees of central public administration bodies participated.In March seminars were organized for professional training within the Financial-Banking College „A. Diordiţa”. The employees have been studying the topic on internal control and internal audit in public sector. Beside that, aspects on implementation of the National Strategy on Prevention and Fighting against Corruption were discussed.The Public Administration Academy under the auspices of the President of the Republic of Moldova, in common with the Financial Control and Revision Service have organized the training seminar on topic „ Making the mechanisms of internal control and internal audit more efficient within public authorities”, where employees of Service of Financial Control and Revision as well as experts, employees of Court of Accounts, Ministry of Finance, Ministry of Internal Affairs, General Prosecution, Finance General Directorate of the Municipality Council Chisinau, National House for Social Insurance, National Company for Compulsory Health Insurance, National Center for Preventive Medicine, Center for Economic Crimes and Corruption Fighting, Information and Security participated.

In June Public Administration Academy under the auspices of the President of the Republic of Moldova, in common with the Financial Control and Revision Service have organized the training seminar on topic „ Internal control and internal audit within public authorities”, where representatives of President

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Executive, Parliament Executive and Government Executive participated. In July seminars were organized on internal control and internal audit system in public sector,

where employees of headquarter and territorial structures of Service of Financial Control and Revision participated. The heads of Directorates of Ministry of Finance participated to the seminar on Strategy of Public Internal Financial Control development.

In September in common with Court of Accounts specialists and experts of Sweden Supreme Court of Audit seminars were organized on accumulated experience in audit mission accomplishment, where employees of headquarter and territorial structures of Service of Financial Control and Revision participated. Within the project “Development of human resources and internal audit capacity building within local public administration of small cities situated to moldo-ucrainean border – Floreşti, Soroca and Yampil” the Service of Financial Control and Revision elaborated training materials on real situation and development strategy.In October within the Public Administration Academy seminars were organized on topic „Internal control and internal audit” where employees of Service of Financial Control and Revision, employees of Harmonization Unit for internal control and internal audit participated. A study visit on experience exchange in area of Public Internal Financial Control was organized in Bucharest, Romania, Ministry of Economy and Finance, Central Harmonization Unit for Internal Public Audit. The module “Internal control and internal audit” was elaborated within the Public Administration Academy, trainers were trained and a pilot seminar for training was developed.

In November courses for trainers were organized with the support of Public Administration Academy, where one employee of Harmonization Directorate of internal audit and internal control participated.

In December, representatives of Service of Financial Control and Revision participated to organization of the international conference moldo-ucrainean-polish, where leaders of central and local public administration participated. In common with external experts a seminar on managerial accountability was organized for leaders of public institutions from Chişinău.In 2008:In January external experts organized workshops for training employees of Service of Financial Control and Revision, Customs Service, National Social Insurance House on spot activities within pilot mission of internal audit. Meantime within Ministry of Finance was organized a seminar on “ Internal control implementation”, where head of directorates participated.

External Audit1. Ensure the establishment and

Moldovan Supreme Audit Institution (the Court of Accounts, CoA) was created in 1994 based on a traditional Eastern European control approach. During the last couple of years the institution has made

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adequate functioning of an independent Supreme Audit Institution in line with the internationally accepted and EU best practice external audit standards (INTOSAI standards – International Organisation of Supreme Audit Institutions).

considerable progress in creating a base for a transition into a modern Supreme Audit Institution with a role and business in accordance with generally accepted international auditing standards and best European practices. The point of departure for the development path is the Strategic Development Plan approved in April 2006.

In the process of transformation the CoA is assisted by (i) the Swedish National Audit Office under a three year bilateral agreement of cooperation (2007-2009), and (ii) the World Bank which manages a Multi Donor Trust Fund (MDTF) (DFID and the Dutch Government).

The CoA has carried out the following activities regarding the transformation of the Court of Accounts in accordance with the objectives set out in its Strategic Development Plan.Institutional strengthening:

1. The new draft Law on the Court of Accounts was worked out aiming at adjusting the legal framework in external public audit sphere in the context of the best international practice, guaranteeing actual financial independence, ensuring non-interference in the process of planning audits and better independence for the Court members. The draft law has been produced with the assistance from the Swedish National Audit Office and it has recently been sent to the European court of Auditors for their comments. The current draft law is on the Parliament’s agenda for an adoption before the summer break 2008. In most respects, the CoA’s audit authority in the draft law is fully adequate to meet the baseline standard.

2. In the IT field, we developed and approved the IT Development Strategy of the Court of Accounts. Now the process of selecting bidders to assist the CoA in the implementation of the above strategy through the World Bank project is on the go.

3. With a view to improve access to new information resources, we finalized the interconnection works via the Governmental Intranet to the nets of the Ministry of Finance and Ministry of Information Development. This will allow the CoA to access the necessary databases and will contribute to enhanced efficiency and improved audit quality.

4. With a view to ensure financial independence, with the support of the Swedish National Audit Office experts we conducted an assessment of the current process of budgeting at the Court of Accounts and established a number of stages and methods for a zero-based budget. Profession building

5. The CoA has developed and approved 5 types of standards that include 15 auditing standards. These standards have been produced based on the international standards of auditing and cover: (i) general standards of auditing, (ii) standards of auditing applicable to the planning stage, (iii) standards of auditing applicable to the audit procedure stage, (iv) standard of auditing applicable to the reporting stage, and (v)

special standards of auditing. Approval and implementation of won standards is the first step in the shift from external control to external audit in line with the European guidelines for the implementation of the INTOSAI and IFAC audit standards.

6. During 2007, in order to carry out the recommendation no.11 of the “Resolution of the Presidents of supreme Audit Institutions of Central and Eastern European Countries and the European Court of Auditors” (Prague, 1999), the CoA has implemented in its audit work the assessment procedures for the efficiency of the internal control system in 17 public authorities. In the process of assessment we used the questionnaire method and analysis of results from the perspective of the INTOSAI Guidelines for Internal Control Standards for the public sector and COSO Integrated Framework. Following the controls, the CoA has provided a number of conclusions and recommendations to improve the internal control system, thus adding value to the controls and contributing to the promotion of the internal control system in public authorities. At the same time, the CoA in common with the Ministry of Finance have developed the minimal standards for internal audit.

7. With a view to provide support to auditors when carrying out regularity audits, in June 2007 the CoA started to work on a Regularity Audit Manual.

8. Also, in order to acquire the skill to provide an opinion on financial statements of the public authorities, we initiated three pilot attestation audits carried out with the methodological assistance from the Swedish National Audit Office.

9. We carried out two controls with performance audit elements. As a result, a department of the CoA has acquired certain practical skills for carrying out performance audits, and the audited entities were provided with recommendations to improve fiscal administration at the State Tax Service and Customs Service. The Principle State Tax Inspectorate and the Customs Department developed and tabled completions and amendments to the legal framework intended to contribute to the improvement of fiscal administration.Developing people

10. In common with the UK NAO experts we developed and approved the Human Resource Management and Development Strategy. At present, we are selecting the company to support the CoA in implementing the above mentioned Strategy. In parallel, the amendments made to the internal normative acts regulating the human resources work contribute to enhanced accountability of employees for the quality and quantity of the work carried out.

11. The implementation of the Staff Training Plan with the involvement of specialists from the CoA as well as from the outside (National Bank, Ministry of Finance, Tax Inspectorate, Financial Control and Revision Service, Ministry of Information Development, etc.), and the development of internal communication via the information system, the quarterly publication of an informative bulletin, all

together contribute the updating the knowledge and get staff involved in the process of transformation of the CoA.Securing greater impact from Court work

12. We adopted a new vision on the format and content of the Court’s Annual Report that is presented in a special plenary session of the Parliament by July 15 of the year. The last Annual Report presented to the Parliament is a document that provides a more profound and deeper analysis of financial management trends and comes with recommendations to eliminate the irregularities at this level. The report also has a chapter that informs the Parliament and public opinion on the challenges the Court faces as well as its strategic development objectives. The publication of the Annual Report and of the results of each audit in the Official Gazette of Moldova, on the Court’s website and in other mass information resources makes the budget process and use of public assets more transparent by informing taxpayers about the violations and irregularities revealed.

Taking note of the Court reports, the Parliament adopts decisions forcing the Government to ensure the execution of the Court decisions in ministries and other public authorities regarding the management and use of public financial resources, to take measures for improving public financial management as well as inform the Parliament about the elimination of the gaps revealed by the CoA. The Government, in turn, adopts its own decisions oriented towards ensuring the execution of the recommendations contained in the Annual Reports of the CoA. Most of the measures contain a certain level of assurance of the situation improvement at the entity and they contributed to the enhancement of the state budget financial management, the conform formation and use of budget state social insurance budget, the improvement of the local budget management, and improvement of public assets management.

13. With a view to ensure and control the quality of the control/audit work, with an emphasis on their final product (the control act/audit report) we developed: - legal assistance, that contributes to ensuring the control/audit activity with an adequate, coherent, an reliable legal framework, a correct applicaton of the legal and normative acts by all Court auditors;- methodological assistance, that contributes to the improvement of the control/audit planning process; to the development of auditors’ analytical skills; to ensuring the execution of the Court decision and monitoring the proper implementation of its recommendations. The Court’s normative acts that regulate and determine the organization, coordination, control, assurance, and quality monitoring of the work are: the Standards of Auditing of the Court of Accounts with an emphasis on “Audit Quality” Standard, developed based on international standards and best practice; Methodological norms on the organization and performance of controls; Auditor’s Code of Ethics; and the Activity Regulations for the subdivisions of the Court of Accounts and other corresponding internal regulations. 14. The contacts with INTOSAI and EUROSAI are expanded. We prepared three country papers for

the VII EUROSAI Congress to take place in June 2008, on the following topics: a) establishment of an audit quality management system within a SAI; b) auditing social programmes: audit of programes in the field of education; c) audit of social programes: audit of programms for professional integration of the disabled. The Court of Accounts answered to the questionnaires and requests of INTOSAI on the International Financial Auditing Standard, INTOSAI Guidelines for Compliance Audit, as well asn the questionnaire on encouraging joint audits and coordinated or parallel audits and internship and visit programs. 15. The bilateral cooperation relationships are market by the intensification of strengthening and developing cooperation relations with the SAIs of the EU Member States (Estonia, France, Latvia, Lithuania, UK, Romania, Spain, Sweden and Hungary). We signed bilateral cooperation agreements with the SAIs of the following EU Member States: Latvia, Lithuania, Romania, Spain, Sweden and Hungary, and a Memorandum of Understanding with the UK NAO. The implementation of the provisions set out in the agreements provides us with the opportunity to study and apply modern audit practices.

Enterprise policy

(43) Develop a dialogue on enterprise policy aiming at the improvement of the administrative and regulatory environment for companies, at promoting industrial co-operation and tackling the impact of industrial restructuring, and develop the Moldovan legislative and administrative framework for SME promotion - in line with articles 52, 69 and 70 of the PCA

Develop a legislative framework and appropriate infrastructure for SMEs, as provided for in Article 70(2) of the PCA

The Strategy of support of the development of small and medium-sized enterprises for the years 2006-2008 was developed and approved by the GD no. 521 from 15.05.2006. It estabilishes the supporting mechanisms, promotion and extension opportunities for SME enterprises.In conformity with the provisions of this strategy there was addopted Law no. 206-XVI din 7.07.2006 for supporting SME, which defines institutional framework for development of SME and eliminates lacunas vis-à-vis the access of foreign investments to the local enterprises.

Organization for the development of SME sector was established, being responsible for the implementation of policy promotion of SME.

Also, the support of the World Bank project “Competitiveness enhancement” in the facilitation of the access of MSTC services by enterprises needs to be mentioned. This component will help the promotion of MSTC services by entrepreneurs, especially by SMEs, through the usage of Co-financing Grants Mechanism (FGM). The aim of the FGM is to consolidate the competitiveness of the companies in Moldova, increase of exports and consolidation of their position on the local market through means of

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improvement of the quality of products and services. The mechanism will offer financial support on co-financing basis to companies that whish to use external technical assistance as means to modernise the quality of their products and services through international certification, such as ISO or HACCP.

Endorse and implement the European Charter for Small Enterprises and participate in the monitoring cycles from 2004 (includes participation in co-ordination meetings, writing an annual national report and organising an annual bilateral meeting with the European Commission and Moldovan enterprise policy stakeholders).

Republic of Moldova is no longer a member of the European Charter for Small Enterprises. MET

Preparation of companies for progressive opening of internal market elements to Moldovan participation, focusing on information and training. The opening of one Euro-Info-Correspondence Centre (EICC) is envisaged.

One of the components of the World Bank project “Competitiveness enhancement” has as aim to increase the export potential of the economy of the Republic of Moldova through delivery of co-financing grants (GFM) for enterprises which intend to implement the management system based on internal quality standards such as ISO, which is relatively new element for the internal market of the Republic of Moldova. The aim of GFM is the competitiveness enhancement of the companies from Moldova, export increase and consolidation of the position on the local market through means of improvement of the quality of products and services.

Presently, 4 companies have already obtained the management certificate based on ISO standards and will benefit from a 50% coverage of the fees from the funds of the project Competitiveness Enhancement for the consulting implementation services and certification.

Taking into account the main priorities of the external policy of the Republic of Moldova the its objectives of fulfilment of the Action Plan EU-Republic of Moldova, the Commerce and Industry Chamber of the

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Republic of Moldova has initiated the procedure for the creation of a Correspondent Euro Info Centre. Starting with February 2006, as a result of signing the technical contract with the European Commission – Directorate General “Enterprises and Industry”, the Commerce and Industry Chamber of the Republic of Moldova officially obtained the right to manage the Correspondent Euro Info Centre from the Republic of Moldova.

In accordance with articles 52 and 69 of the PCA, promote dialogue on industrial policy and associate Moldova to EU initiatives to stimulate competitiveness, including in the tourism sector (e.g. exchange of information, participation in networks and studies, training).

With the purpose of establishment of a continuous dialogue on the industrial policy, negotiations have been initiated on cooperation agreements on industry issues with 12 countries from the European Union and members of the Stability Pact for South-Eastern Europe (Slovenia, Greece, Slovakia, Germany, Croatia, Macedonia, France, Estonia, Lithuania, Latvia, Austria and Belgium). Another 16 similar agreements are scheduled to be concluded during this year with countries from the respective region.

These agreements create a motivating normative framework for cooperation in the following fields: light industries, machine manufacturing, electronics, chemical, furniture, exhibition cooperation, enhances specialised exchange of information.

The experience Member States of the EU in the field of functioning of industrial/innovative parks have been studied and are currently applied, in the process currently being the development of respective draft legislative acts. Based on legislative documents the Scientific Academy created the first scientific technology park

With the purpose of creation of a favourable environment for the development of a competitive industry, in harmony with industrial structures of the EU, the Ministry is preoccupied with the development of technical Regulations for certain products, as part of the requirements set in the European Directives.

Presently, in the development process there are 6 technical regulations:„Electrical equipment of low voltage. Mandatory requirements” (approximation with the requirements of the EU Directive 73/23/CEE);„Electrical and radio-electronic equipment. Electromagnetic compatibility. Mandatory requirements” (approximation with the requirements of EU Directive 89/336/CEE);„Packaging and waste from packaging. Mandatory requirements” (approximation with the requirements of the EU Directive 94/62/CE);„On titles, markings of fibre composites and labelling of textile products” (based on the requirements of the EU Directive 96/73/CEE);“On the setting of methods of analysis used to determine the fibre composition of textile products” (based on the requirements of the EU Directive 96/73/CEE);

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„On safety of toys users” (based on the requirements of the EU Directive 88/378/CEE).With the purpose of implementation of international and European standards in industrial procedures, a

list of these harmonised standards has been developed, on the following sectors: electrical equipment of low voltage, electromagnetic compatibility, compatibility of packaging material, toys and textile products with the purpose of their subsequent transposition as national standards.

The Sector Programme “Calitate” planned for 2004-2008 is monitored with special emphasis on the development, implementation and certification of quality management systems schedules, according to international standards ISO 9000.

Presently there are implemented and certified quality management systems according to international standards ISO 9000 at 25 enterprises. Eventually, the management system of qualities was certified at S.A ,,Midgard Terra’’. With the purpose of international recognition of realised tests in the country a special attention is paid to laboratories’ accreditation (reaccreditation) and to the new-created centers based on the standards criteria EN 45000 and EN ISO\CEI 17025. In collaboration with accreditation Center in the according evaluation area it was realized the accreditation (reaccreditation) works of center beginners’ laboratories from industrial and energetic area, at 3 laboratories. The Strategy on Development of Industry until 2015 was approved by GD no. 1149 din 05.10.2006, which defines the priority sectors of the industry: machine manufacturing industry, processing industry, light industry, furniture production, electronic industry, chemical industry etc.

Presently, there is work going on with the development and implementation of the quality management systems at other industrialised enterprises, the Progressive Reforms Programme “20 Keys” is under implementation, a fact that contributes to the improvement of performance indicators of enterprises and application of modern management techniques.

With the purpose of international recognition of tests performed in the country, a special attention is paid to the accreditation of laboratories and testing centres on the basis of European standards EN 45000 and EN ISO/CEI 17025.

In cooperation with the Centre for accreditation in the field of conformity evaluation, works have been performed on examination of dossiers and accreditation of testing centres and laboratories specialised in sectors of industry and energy.

With the purpose of investment attraction as means of implementation of project in priority area, there is cooperation with international structures - - ONUDI, PSESE, World Bank, UNDP, IMF, OECBS, EBRD etc. Some projects have been presented by the Ministry to the neighbouring countries

representatives during their bilateral meetings.It is worthwhile mentioning that the described projects have been presented to MIEPO for

dissemination and information of the interested legal entities and physical persons.The local industrial potential has been promoted during the international promotional events:

exhibitions such as “Moldova presents”, including specialised ones for textiles, furniture, machinery and equipment; investment forums, visits of businessmen organised in the country and abroad. During the local promotion of production, as part of promotional manifestations, the experts of Ministry prepared the needed material for arrangement of economic agencies to participate at the VII-th edition of National Exhibition,, Made in Moldova’’ (Chisinau city) as well as to the conference with the subject,, the present situation and the development of industry’s prospects of Republic of Moldova until 2015”. Also in this purpose, the presentation with the topic ,,The priorities of industrial branches in the Republic of Moldova and their development prospects’’ for the Moldo-Russian Affairs Forum(06.02.2008), was prepared.There were prepared 4 presentations for promotion of industrial branches and local products. The presentationswere exposed in the specialized international exibition’’ Black Sea Letex’’ the VII-th edition at ,, Romexpo’’S.A ( Bucuresti city, Romania) as part of ”Textillegprom” (Moscova City, Russian Federation) exibition, at Trade Chamber and Industry of Republic of Bulgaria ( Sofia City), and to the event “Economy Days of Republic of Moldova in Polonia” ( Zeliona Gora City, Polonia).

In the same context the Ministry’s collaborators participated at the organization of the next exhibitions and forums ,, HANNOVER MESSE’’. (Hannover City, Germany), ,, ElcomUkraine’’( Kiev City, Ukraine) ’’ Textillegprom” ( Moscow City, Russia Federation), “Economic week of Republic of Moldova in Romania”( Bucharest City, Romania) as well as the economic Forum from Swede.

Nevertheless, there were created 34 technical passports of industrial enterprises, in order to supply the investors with the right information about the possibilities of industrial enterprises and the creation of a data base concerning the technical potential of economic agencies.

Moldova’s Participation at the main international fairs and exhibitions on tourism:- In the period 5-8 of November 2006 and 12-15 of November 2007, the Republic of Moldova

participated with a personal stand at the International Tourism Exhibition “World Travel Market” from London.

- During the period 16- 19 of November 2006 at Thessaloniki, Greece, took place the international exhibition on tourism “Philoxenia”

- In the period 7-11 of March 2007 a delegation of the Republic of Moldova participated with a

personal stand at one of the most important tourist forums from Europe, The International Tourism Exhibition “ITB- 2007” in Berlin, Germany.

- During the period 8- 13 of January 2008, four economic agents from the tourism branch took place at the International Tourism and Travel Exhibition ”Vacatiebeurgs- 2008”, in Ultreht, Holland.

The Participation of the Republic of Moldova at these imposing exhibitions is part of international promotion of the Republic of Moldova as a tourist destination, increase of the number of foreign tourists in the Republic of Moldova.

Regarding the promotion of the Republic of Moldova’s image as tourism destination there has been edited and distributed promotional materials to the international partners.

There have already been implemented activities on creation of a Tourism and Culture Information Center inside the International Airport Chisinau.