No. Objective The measure from the ap

2.4.2 Right of establishment and Company Law

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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 to identify barriers to establishment with the aim of progressively abolishing them.

According to the existing legislation, inclusively the law on investments in the entrepreneurial activity, no.81-XV of 18.03.2004, the registration procedure, de performance activities and the liquidation of enterprises with foreign investments are the same with the procedures of the national enterprises.

MET

2. Abolish discriminatory measures affecting foreign investment

According to the legislation in force, such discriminatory measures don’t exist.

MET

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

Adoption and implementation of the draft law on LLC; Implementation of the law on accounting; Adoption and implementation of the law on audit; Continuing the implementation of the principles of “one shop stop”, in the realisation of the regulatory reform of the entrepreneurial activity.

MET

4. Ensure effective functioning of adequate administrative structures, inter alia, a central co-ordinating body facilitating establishment

One of the major conditions in the implementation of the Reform Strategy of the Central Public Administration (CPA) and Regulatory Reform as well as National Plan for Development of the Republic of Moldova are institutional consolidation and optimization of the central public authorities. In this respect, in conformity with the objectives of economic development of the country, there is assured modernization of the reform strategy of CPA on the basis of reorganizations of ministries, autonomous administrative institutions etc. In the economy of the Republic of Moldova were undertaken a number of measures with view of supporting of entrepreneurial and business environment as a result of facilitation of the procedures of establishment. Here could be mentioned facilitation of licencing, creation of one stop shop office at the establishment of a company. At the moment there are 15 one stop shop offices on the territory of the RM. Moldovan Investment and Export Promotino Organization and State Chamber of Registration are fullfiling the duties of facilitating establishment.

MET

Company law:

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

The draft law on LLC; Law on accounting; draft law on audit; application of the principle of „one shop stop”, in the framework of implementation of the entrepreneurial activity – are approximated to the EU standards.

MET MinFin

2. Improve consistency and predictability in the administrative and judicial authorities responsible for oversight of company law and related investment conditions

Is of the competence of the Ministry of Justice

MET MJ

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 (public authority responsible of the registration of companies) maintains a centralised registry of all the companies, where information is stored about all the companies that function on the territory of Republic of Moldova, but not the financial data of these. Recently, a new draft law was developed on the registration of physical persons and individual entrepreneurs, and that foresees that the registry will have the financial data of the enterprises for each fiscal year of activity. The mentioned draft law refers to the creation of an internet version of the programme that will be accessible to the public, requesting information about the existing and functioning companies. Copies from these documents can be requested directly on the web from the State Registration chamber. The present draft law is to be adopted by the Government.

Camera înegistrătii de Stat

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.

MJ

5. Adopt and ensure effective implementation of a code on corporate governance (can be done by the private sector).

In the first trimester of 2007, with the participation of the civil society, the Code of Good Governance was finalised, that was adopted on 1st of June 2007. At the same time, in the process of development, as well as after the adoption the provisions of the respective act are being mediatised.

CNVM

Services

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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.

The study concerning review in of national legislation to identify barrieris to the provision of services was elaborated.

MET

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

In Republic Moldova, for each type of services provided, exists a central regulating body.

MET

Consolidate and ensure effective implementation of adequate legislation setting out basic principles such as non-discrimination and where necessary, introduce more detailed secondary legislation, or sector specific legislation.

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.

MET

Financial services:

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

1. Maintains of the liquidity of the bank system at the optimal level, using depending on the macroeconomic evolution and of the situation on monetary market, instruments for sterilisation of surpluses as well as the instruments for temporary injection of liquidity: open market operations, issues of NBM certificates, overnight deposits and credits. In the first half of 2007, the acceptance operations of overnight deposits, made by the NBM with the objective of evaluating of the excess of liquidity in medium term, significantly increased. The total volume of this was estimated at 3613.5 , on daily average 28.3 million lei. Besides the fact that it offered to the banks the possibility to evaluate their own liquidity, the functioning of the overnight mechanism offered to the NBM a flexibility advantage to realise its monetary policies. The facilitation that the overnight credits offer, as a instrument of flow of liquidity, was not often used in the reporting period by the banks, because of the conditions of maintain of the liquidity on the market. For obtaining liquidity for short term, as well as for the purpose of maintaining a stable level of mandatory reserves, in the last two months the banks benefited from overnight credits in total volume of 392.0 million lei. 2. The information regarding the sterilisation instruments of the liquidity surplus is reflected in the p.3 of the Use of market instruments for the administration of the liquidity of the bank system, in the Chapter 2.3, Reform and socio-economic development. The possibility of permanent use by the banks of the overnight deposits mechanism after the implementation of the system of real time payments. Starting April 2007 the facilitation of overnight deposits made by the NBM was permanently available for the use of the commercial banks. The total volume of the overnight deposits in the first half of the year 2007 was 3613.5 million lei, reaching the highest level of value since implementation of this facilitation. The organisation of the secondary market of HVS with a term bigger then one year and through the Stock Exchange. In June 2007 at the NBM a working session was organised, at which the National Commission for Securities Market, de Stock Exchange and the National Depositor of Securities were invited. During the meeting the aspects that refer to the objectives of transfer of state securities with expiration term of 1 year through the stock Exchange were discussed. Improving the internal system control by the commercial banks in order to ensure the minimisation of the country risks. During the controls, made by the NBM inspectors, was examined if the internal policies of the banks, related to country risks are adequate and are being realised. Promoting the policy on knowing the owners, that exercise considerable influence on the management and the activity of the bank, in order to determine the structure of the owners and the sources of the financial means inserted in the capital of the bank. Based on the reports presented by the commercial banks, the structure of the owners that hold more then 5 per cent from the bank capital was analysed, as well as of the share holders, non resident, from the/or off-shore countries, that hold a share of 1 per cent in the bank’s capital. At the same time the NBM inspectors, during the controls, examined if the internal policies of the banks related to the knowledge of the structure of direct or indirect owners are adequate and realised. With the purpose of continue monitoring of the risks related to the banks activities, in the framework of bank supervision information, related to the bank activity, will be used and from other institutions that perform supervision in their functional activities. As a result of the collaborative relations between the supervisory body of banks and the supervisory body of the securities market as well as the body for supervision of loan and economic association, during the reporting period, information was collected on the activity performed by the commercial banks on the mentioned markets. Hereby, the National Commission for Securities obtained information on the banks activities on the securities market, that was used as base for the evaluation of the commercial banks activities as professional participants on the stock exchange market. At the same time the State Supervision Service of the activity of the associations for loan and economies obtained information on the activity performed by the loan and economies associations that was examined with the purpose of making a comparative analysis of the credit activities made by the non-banking organisation and commercial banks. Also the information on the level of development of the insurance market and the activity made by the commercial banks on the respective market was examined as well as the analysis of the influence of the insurance companies that have in their capital shares of commercial banks was made.

NBM MIN FIN

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

Continuing the development of the prudential regulations and methods of bank supervising according to the general standards accepted in this field. Amendments were made in the prudential regulations regarding the banks’ authorisations. At the same time, when exercising supervisor activities in the field, new methods of supervision were applied like the evaluation of the bank exposure to market risks. Development and application of the measures for the gradual increase of the banks capital according to the provision of the Directive 2000/12/CE of 20^th of March 2000 on the initiation and performance of credit institutions activities. NBM continued to supervise the banks obedience to the new requirements regarding the capital, which entered into force starting 31.12.2005. In this context, the reports of the commercial banks were examined.

NBM MIN FIN

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

Organising the training of the staff of advance experience in the field For the purpose of improving the experience and knowledge in the field of banking supervision and regulation, the staff of the supervisory body participated at a seminar with the topic “Banking Supervision: organisation and methods” organised by the Finance and banking International Institute from Marne la Vallee , France; the seminar “internal controls and on site inspections in order to fight the money laundering and the terrorism financing in the financial institutions” and “Regulation of the financial sector and selected financial transactions – Presentation to the lawyers” organised by the IMF and Joint Vienna Institute in Vienna, Austria; the 20^th Conference of the Banking Supervisory Group from the Central and Eastern Europe (BSGCEE), organised by the Financial Supervisory Authority from Budapest, Hungary; the conference “Cross border Cooperation in the Central and Eastern Europe – the Problem of Supervision”, organised by the World Bank and the Financial Market Authority of Poland in Zalesie Gorne, Poland. Later on within the department trainings were organised on the topics discussed during the above mentioned seminars. At the same time, collective trainings were organised for the staff of the department, on the new provisions of the banking normative acts, basic aspects of the control procedures of the banks, as well as the subjects related to the regulation and banking supervision.

NBM

4. Development of the insurance market.

With the propose of execution of the actions related to the development of the normative acts that derive from the Law on insurance no. 407 – XVI of 21^st of December 2006 the following actions were undertaken: Draft law on national fund of guarantees in insurance attached to the letter no. 18-2/452 of 07.06.2007 was send to the Regulatory reform Working Group for experts, that was positively reviewed by this group on 13.06.2007. On 20.06.2007, attached to the letter no. 18-2/481 the draft was sent to the Ministry of justice for review; Draft law on amending and complementing some legislative acts on 13.06.2007 was reviewed positively by the Working group on Regulatory reform. On the date of 20.06.2007, attached to the letter no.18-2/481 the draft was sent to the ministry of Justice for review; Draft Government Decision on the adoption of the Methodology of calculation of the base insurance prime for the obligatory insurance for civil liability from car accidents on 29.06.2007, attached to the letter no. 18-2/503 was sent to the Working Group for Regulatory Reform and the Centre for Fighting Economic Crimes and Corruption; Draft Government Decision on the integral informational system in the field of mandatory insurance for civil liability from car accidents, which on 07.06.2007, attached to the letter no. 18-2/453, was send for review to the Centre for Fighting Economic Crimes and Corruption that later on positively review this draft. On 27.06.2007 the draft was positively reviewed by the Working Group on regulatory reform; Draft decision of the State Inspectorate for Supervision of Insurances and Non State Pension’ Funds on the adoption of the regulation on the requirements towards the condition of insurance for the type of non mandatory insurance, that on 14.06.2007 attached to the letter no.18-2/470 was send to the review to the working group on regulatory reform and the Centre for Fighting Economic Crimes and Corruption. The draft was rejected by the Working Group on regulatory reform in order for it to be additionally examined by the National Agency „ARCA”; Draft decision of the State Inspectorate for Supervision of Insurances and Non State Pension’ Funds on the adoption, of the (i) regulation on the requirements for the significant shareholder of the insurers / re insurers / insurance brokers/ and/or of re-insurance and holding participations qualified in the social capital of the insurer, (ii) regulation on the requirements towards the persons with decision making functions of insurers / re-insurers and intermediate personnel in insurances and (iii) regulation on the review of the registrations of the insurers / re-insurers , will be sent to the Working Group on Regulatory Reform and the Centre for Fighting Economic Crimes and Corruption for review and anticorruption analysis; Draft decision of the State Inspectorate for Supervision of Insurances and Non State Pension’ Funds for adopting the Regulation on the application of bonus – malus system at mandatory insurance for civil liability for damages provoked by automobiles, was developed and on 20.06.2007 was sent for review to the relevant intuitions and stakeholders; Draft decision of the State Inspectorate for Supervision of Insurances and Non State Pension’ Funds was developed on the adoption of the regulation regarding the criteria and the methods of determination of the waste level of automobiles on the date of occurrence of the insured event and use of this at the calculation of the insurance compensations, that on 20.06.2007 was sent for review to the relevant institutions and stakeholders;

MIN FIN

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

The functioning of the Banking Supervisory body in conformity with the Methodology of basic principles of the Basel Committee. During the reporting period the translation of the publications of the Basel Committee were made into the sate language, for banking supervision obtained from the www.bis.org: „Core Principles Methodology”-October 2006 that are to be sent to all the commercial banks and the document „Sound credit risk assessment and valuation for loans”-June 2006 that was sent to the commercial banks with the purpose of improving their internal control systems.

NBM MIN FIN

2.4.3 Movement of capital and current payments

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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.

MET NBM

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 18^th 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.

MET NBM