Legislation*of the*Republic of Moldova

Overview of Political Situation

Political Structure

Legal Authorities

Overview of Political Situation

Moldova declared its independence from the USSR on 27 August 1991. In December, Mircea Snegur was elected the first president of the new nation. Moldova's new constitution was adopted on 28 July 1994, replacing the old Soviet constitution of 1979. The Agrarian Democratic Party, composed largely of former Communist officials, won a majority of seats in the new parliament elected the same year.

In 1996, Petru Lucinschi was elected independent Moldova 's second president and in 1998 the second parliamentary elections resulted in a four-party coalition formed against the opposition Communist party which obtained the most votes and 40% of the seats.

Presidential elections in 2001 resulted in the replacement of Lucinschi by the leader of the Communist Party, Vladimir Voronin, and the subsequent election of a Communist government.

The Moldovans are the only people who have repeatedly brought a communist political party to power in a broadly free and fair election in the post communist region. The communist party was re-elected on 6 of March 2005.

At the end of Voronin's second, four-year term, parliamentary elections were held on April 5, 2009. After mass street protests and widespread claims of fraud followed the results of the parliamentary elections, the opposition members elected to parliament boycotted the presidential vote, resulting in the failure of the parliament to choose a new president. After several futile attempts to hold a vote, Voronin was forced to dissolve the parliament in June and announced repeat parliamentary elections to be held on July 29, 2009.

On 28 August, the newly elected Parliament held its first session and elected Mr. Mihai Ghimpu (PL) as its new Speaker. The election by Parliament of the country's President, set for 23 October, was postponed since there was only one candidate, Mr. Marian Lupu, whose candidacy was endorsed by the coalition government. On 30 October, Parliament passed amendments to allow presidential elections to take place even if there is only one candidate. The article stipulating the dissolution of Parliament after two unsuccessful presidential elections was also modified, so that Parliament can not be dissolved within 365 days of the previous dissolution.

On 10 November, Parliament failed to elect a new President. The only candidate, Mr. Lupu, received 53 votes, eight short of the required 61. The PCRM boycotted the session. On 1 December, Acting President and Speaker Mihai Ghimpu signed a decree establishing a commission to draft a bill amending the Constitution, which would stipulate that the President would be elected with 52 votes (50% plus one) instead of the current 61 (three-fifths). However, members of the Alliance for European Integration opposed the bill and proposed a constitutional referendum that would provide for direct presidential elections. Consequently, the Constitution was not amended. In the second round of presidential elections on 7 December, Parliament once again failed to elect Mr. Lupu. Parliament is now due to be dissolved after 16 June 2010 for early parliamentary elections.

Foreign Investment

Moldova is a small but increasingly attractive market foreign companies.Moldova's investment climate benefits from stable and generally favorable macroeconomic conditions.

The Republic of Moldova is the land of the cheap cigarettes, beer, wine and property ...

Moldova's major industries are food processing, wine-making, tobacco manufacturing, engineering and metal processing, light manufacturing, building materials, and wood products. Moldova is a significant producer of agricultural products, such as fruits, vegetables, tobacco, and sugar beets.

Moldova has been a member of the WTO since 2001 and has signed free trade agreements with countries of the former Soviet Union (CIS) and Southeast Europe. In December 2006, Moldova joined the Central European Free Trade agreement (CEFTA). Moldova benefits from an extended generalized system of preferences (GSP-plus) with the EU. Starting in March 2008 the EU unilaterally granted Moldova autonomous trade preferences, which expanded the duty-free access of Moldovan goods to EU markets. Moldova also seeks to further deepen its preferential trade arrangements with European markets in the negotiation of a new EU agreement.

The GOM has created an adequate legal base, including favorable tax treatment for investors. Under Moldovan law, foreign companies enjoy the same treatment as local companies (national treatment principle). The GOM views investments as vital for sustainable economic growth and poverty reduction. However, the amount of foreign direct investment (FDI) is far below the country's needs. In attracting FDI, the GOM continues to add incentives. In 2008 the GOM introduced zero tax on business profit reinvested in a business.

Current investment legislation is based on nondiscrimination between foreign and local investors. Moldovan law ensures full and permanent security and protection of all investments, regardless of their form, although application of the law remains spotty. There are no economic or industrial strategies that have a discriminatory effect on foreign-owned investors in Moldova, and no limits on foreign ownership or control, except in the right to purchase and sell agricultural and forest land, which is restricted to Moldovan citizens.

Moldova continues to take small steps toward developing a stronger economy, reforming a cumbersome regulatory framework, combating corruption and adopting reforms aimed at improving the business climate.

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