Status and Perspectives of the Negotiations Process in Framework of Activities of Expert (Working) Groups on Economy of Pridnestrovie and Moldova – Report Made by Deputy Chairperson of the Government on Economic Development and Finances, Minister of Economic Development of the PMR Maiya Parnas


Economy is a base for formation of open and trust-based relations between the parties. Resolution of existing economic problems can assist elimination of artificial barriers, to activate mutual trade and, as a result, to strengthen atmosphere of confidence and lead to improvement of population's welfare.

As it is known, in order to resolve the above mentioned problems the expert groups on issues of legal and organization support of foreign economic activities from Pridnestrovie and Moldova are conducting their activities.

By now eight meetings of expert groups have taken place, in framework of which Pridnestrovian side time after time raised questions, dealing with problems, resolution of which is essential in order to activate work of economic agents of Pridnestrovie. These problems include:


-          Mutual trading costs.



-          Double customs formalities and double pay for customs formalities.



-          Phytosanitary and veterinary fees.



-          Transportation costs of economic agents.



-          Inability to export ferrous and nonferrous wastes.



-          New artificial trade barriers (refusal for access of Pridnestrovian goods on territory of Moldova under contrived pretext, law actions against Pridnestrovian economic agents).



-          Demands by Moldova's fiscal authorities to conduct paperwork under Moldova's standards.



-          Problems in cooperation in banking sphere.


In order to resolve the last issue Pridnestrovian side proposed to sign Memorandum On Mutual Understanding between Central Bank of Pridnestrovie and National Bank of the Republic of Moldova, basic provisions of which included such principles as cooperation, forbearance of pressure, data exchange, confidentiality and international recommendations. However, this document was not accepted by Moldovan side and in order to solve problems in banking sector special separate subgroup on bank cooperation was created.

It should be noted that Pridnestrovie has liberal conditions for Moldovan export, meaning that Pridnestrovian market is open for goods produced in the Republic of Moldova:


-          In 2012 100% protective fee on a number of Moldovan goods was abolished.



-          Pridnestrovie doesn't charge Moldovan economic agents with ecologic tax, it recognizes phytosanitary and veterinary certificates issued by Moldova, and it doesn't demand certificates of audit of production on each lot of goods from Moldova.



-          Pridnestrovie doesn't use indicative prices towards goods imported from Moldova.



-          Pridnestrovie provides free transit of Moldovan goods by all means of transport in third countries.



-          Pridnestrovie doesn't introduce any quantitative restrictions (quotas) against goods imported to the republic from Moldova.



-          Pridnestrovian side doesn't demand from Moldovan economic agents which export to Pridnestrovie to register in the Registration Chamber of the PMR.



In practice acting trade regime between the sides is asymmetric because favored conditions exist only for one side – the Republic of Moldova. At the same time, her customs regime impedes mutual trade and restrains economic growth.


We didn't manage to reach agreements to resolve those problems due to lack of clear rules, regulating mutual trade between Pridnestrovie and the Republic of Moldova, based upon principle of mutuality, equality, general benefits and which allow not only to abolish the existing barriers, but to prevent creation of new barriers in future.

Establishment of such rules could be based upon a document with provisions, allowing to remove misconception in those spheres which Pridnestrovian side tries to resolve in framework of negotiations groups activities. Pridnestrovian side believes that there are certain factors which are the easiest one to remove, which are:

-          Appliance of indicative prices for certain categories of Pridnestrovian products (for example, for goods of Bendery meat-processing factory) which leads to artificial value appreciation of Pridnestrovian products and loss of the competitiveness. These measures are implemented in selective and non-transparent way by the Customs Service of the Ministry of Finances of Moldova and thus Pridnestrovian producers don't even know which categories of goods fall under indicative scoring and which – don't. Pridnestrovian side proposes to abandon on reciprocal basis appliance of indicative prices in trade between Pridnestrovie and Moldova.


-          Moldova's ecologic taxation of number of Pridnestrovian enterprises (ZAO Tirotex, ZAO Vestra, ZAO Tighina, ZAO Bendery Center of Grain Production, OOO Softshoes). Even if we abstract ourselves from status issues, ecologic taxation of enterprises which are territorially located in Pridnestrovie is unjust, discriminatory because due to international practice should always be under the jurisdiction of regional/local authorities. Moldovan side expressed readiness to abandon ecological taxation of Pridnestrovian economic agents which was fixated in Protocol of a meeting of expert groups in 2009. Nevertheless, according to information of the Republic of Moldova, appropriate bill is for more than 4 years (!) under consideration of Moldova's parliament while Pridnestrovian enterprises paid about 0.5 million dollars of ecological taxes to the budget of Moldova.



-          Abandonment of demands made by Moldovan regulatory authorities to some of Pridnestrovian enterprises to conduct their paperwork in Moldovan language on Latin script. This demand is unacceptable and can't be fulfilled because this language on this script is not used in Pridnestrovie.



-          Demonopolization of market of ferrous and non-ferrous metals in the Republic of Moldova. Because currently there is only one company in Moldova, conducting buying-up and sales of ferrous and non-ferrous wastes – the Metalferos – it has abilities to control the formation of prices in this market. As a result, number of Pridnestrovian enterprises (ZAO MMZ, NP ZAO Elektromash, ZAO Moldavkabel) amassed metal wastes in the amount of more than 1.5 million dollars and they are not able to sell them at a fair market price and put them in permanent assets. It is necessary either to control price formation on a higher level or to issue one license to conduct trade in metal wastes to Pridnestrovie.


We believe not without reason that above mentioned trade barriers between the sides can be eliminated in a swift and painless way and lead to free trade regime between Pridnestrovie and Moldova which will correspond to international practice, modern aspirations and will guarantee positive development of economic processes in the region.

At the same time we defined only several problems, resolution of which could bring significant practical effect but would not create basis for powerful increase of mutual trade. For the last it is necessary to provide clear documented framework of economic cooperation, fair rules of interaction, to create trade regime which would be acceptable and understandable for both sides.

After appropriate negotiations between the parties the following theses could provide the basis of such document:


-          Removal of all tariff and non-tariff barriers and other obstacles for free trade.



-          Mutual recognition of phytosanitary and veterinary certificates, certificates of audit of production, conformity certificates, acts of expert examination of production, issued by Chambers of Trade and Commerce of the sides.



-          Data exchange on adopted and planned internal regulatory acts, affecting or potentially involving economic interests of the sides.