Info Bulletin
Q4 2023
Economic Council
to the Prime Minister of the RM
What we managed to achieve
To reduce excessive rules and procedures for business:
We contributed to the adoption of the 2nd package on business deregulation
In November, the Parliament voted in second reading the Law no.325/2023 - a legislative package aimed at reducing tax and customs bureaucracy. The package is estimated to save the business community at least 500 million lei annually, which is approximately 0.2% of GDP. The MEDD developed the legislative initiative to amend the Fiscal Code and Customs Code in collaboration with the Ministry of Finance, with the support of the EC Secretariat, UNDP, and GIZ. During the process of document promotion, the Secretariat assisted in drafting amendments, facilitated stakeholder consultations, assisted in the development of accompanying project documents, and supported the promotion of legislative amendments in government and parliamentary committees.
We contributed to the approval by the Government of the 5th package on business deregulation
The package of regulatory changes was approved by the government on 1 November 2023. One of the most important provisions is the exclusion of adaptation medical examinations. Another exclusion concerns the doctor's entries in the route sheet. Eligibility will be extended to more rural tourist accommodation structures, such as rural houses, tourist hostels and craft businesses. The project is expected to generate savings of more than 50 million lei per year. These legislative changes were developed by MEDD in cooperation with the EC Secretariat and with the support of UNDP. The Secretariat supported the preparation of the regulatory impact analysis and helped to consolidate the proposed amendments.
We ensured consultation on the draft National Economic Development Strategy 2023. On 20 December the MEDD presented the draft National Economic Development Strategy to 2030. It was discussed with the members of the Economic Council. The aim of the document is the creation of a modern, productive, prosperous and competitive economy that will stimulate sustainable and balanced economic growth. This should be achieved by: addressing imbalances and ensuring macroeconomic stability; strengthening economic resilience; and gradual integration into the European Union's internal market. The document is available for consultation on particip.gov.md and will be published shortly in accordance with the established procedure.
We contributed to the drafting of amendments to the Law on normative acts, related to regulatory impact assessment. The Ministry of Justice initiated amendments to the Law on normative acts in order to streamline the procedures for drafting laws. Among other things, it was proposed to merge the Informative Note with the Regulatory Impact Assessment (RIA) report and to rename it the "Argumentation Note". The EC Secretariat participated in several meetings with the Ministry of Justice and the State Chancellery, proposing the formulation of the content of the argumentation note and later suggesting solutions to maintain the mandatory consultation with the RIA working group. Most of the proposals were accepted and the draft was approved by the Government in November and sent to the Parliament for adoption, with a first reading vote as early as December 2023.
We contributed to promoting amendments to the Law on patents. The legal provisions stipulated that patent-based activity for a range of economic activities would be prohibited from 31 December 2023. This situation affected the development of a large number of MSMEs, especially in the rural tourism sector. The EC Secretariat was alerted to this situation by business associations that are members of the Economic Council. The Secretariat contributed to promoting legislative amendments that extend these patent-based activities by two years. The project was adopted by Parliament in the second reading on December 7, 2023.
To digitalise businesses and remote interaction with authorities:
We have contributed to the improvement of IT parks related legislation. The Moldova IT Park was created in 2018 and has proven to be one of the most successful practices in the region for the development of the digital transformation ecosystem. The process of updating the legislation in this area has started, and the Economic Council has been alerted by investors to possible less expected and desired interventions in terms of guarantees and the structure of the single tax. The EC Secretariat participated in the preparation of the Regulatory Impact Analysis (RIA). The draft law in the version agreed by the business community was adopted by Parliament in final reading on 22 December 2023.
We promoted the Remote Identification and Person Verification Procedure - eKYC. The Government Decision in this regard was approved on 6 December 2023 and provides the necessary legal framework for the proliferation of remote services for businesses, including remote access to public services and the provision of digital identity. It is part of a set of measures and digital platforms necessary for the operationalization of the Remote Business Initiative in the Republic of Moldova. The EC Secretariat, supported by the EBRD and the UK Embassy, developed and promoted this Regulation.
To facilitate the transition to green economy:
We organized a meeting to coordinate actions in the green transition field. At the meeting of the Working Group on Facilitating the Green Transition and Cross-Border Trade on 30 October, convened at the request of the MEDD on the platform of the Economic Council, the need for increased transparency and coordination of actions in the green transition process was discussed. Both donor and government institutions need to help facilitate the exchange of information on donor-funded projects that support the green transition process. This will enable the state to act more accurately and efficiently in developing policies to support green business investment. The issue will continue to be discussed on the Economic Council platform in 2024.
We organized discussions on establishing sandboxes in the energy sector in Moldova. The Ministry of Energy is initiating the development of innovative technology testing centres in Moldova, known as sandboxes. These centres will allow entrepreneurs to test new energy technologies. On 22 November, the issue was presented by the Minister of Energy to representatives of the business community in Moldova during the meeting of Working Group 3 "Stimulation and Maintenance of Private Investments", organised with the support of UNDP Moldova. During the discussions, it was mentioned that these innovative technology testing centres will have specific regulations, authorisation procedures, tariffs and rules that are different from the usual ones. According to the authorities, the regulatory framework will be developed soon and will be subject to consultations, including on the platform of the Economic Council.
For women's economic empowerment and an inclusive economy:
We have contributed to the introduction of gender impact assessment in legislation
The Ministry of Justice initiated amendments to the Law on Normative Acts in order to streamline legislative procedures. As part of this process, the EC Secretariat submitted a proposal to include gender and equity impacts in the list of impacts that must be assessed when drafting legislative projects. The Secretariat's proposal was approved by the Government in November 2023 and voted in the first reading in Parliament in December 2023. EC Secretariat experts have been engaged in discussions to keep the amendment for the final vote, which may be held in February 2024.
We facilitated the debates on the concept of inclusive economy.
A meeting of the Economic Council Working Group on Women's Economic Empowerment and Gender Equality was held on 7 November. The meeting presented the concept developed by MEDD to create an inclusive economy in which under-represented groups - women, people living in rural areas, the diaspora, people with special needs - are supported and make an increasing contribution to economic activity and GDP growth. Business associations - members of the Economic Council - emphasized the importance of government action to support women's economic empowerment. Initiatives that need to be accelerated include access to affordable financial resources, support for greater female participation in the IT sector, the promotion of childcare policies, etc. The Economic Council and its Secretariat will continue to provide support to further improve the approach.
We facilitated discussions on challenges and good practices in women's economic empowerment.
The business community, donor organizations and representatives of state institutions discussed challenges and good practices in regulating childcare services in Moldova. The discussions took place during the meeting of the EC Working Group No. 6 "Labour Market Development" held in December. Participants in the discussions mentioned that more and more women want to return to work sooner after parental leave, requiring a wider range of childcare services for this purpose. Government representatives mentioned measures being taken in this regard, while international organizations emphasized their commitment to continue supporting the government's efforts in empowering women economically. Additionally, during the meeting, the health regulation for the creation of care services at the workplace was also presented. The business community was able to share the main challenges in the process of implementation of these documents, which are expected to be addressed subsequently.
To facilitate a constructive dialogue between the business community and the authorities:
We organized a plenary session of the Economic Council with the participation of the Prime Minister
On November 1, 2023, Mr. Dorin Recean, the Prime Minister of the Republic of Moldova, chaired the Plenary Session of the Economic Council. During the meeting, the Prime Minister reviewed the 20 objectives outlined in the 'European Moldova 2030' Strategy, which aim to improve the business environment in Moldova. Three objectives are directly relevant to the business community: deregulation, digitizing G2B services, and supporting SMEs. These reforms could potentially save businesses 5 billion lei annually once implemented. Mr. Recean stated that the main goal of implementing the 'European Moldova 2030 Strategy' is to improve the well-being of the population of the Republic of Moldova and position the country as the most attractive location for doing business in the region by 2030. The business community has identified several challenges that require the attention of the authorities. These include labor force shortages, excessive bureaucracy in business administration, state inspections, and the need to accelerate reforms and digitize G2B services. The Prime Minister mentioned that all of these subjects are on the Government's agenda.
We helped to launch the dialogue on the economic integration of refugees
Discussions were held at the Economic Council on how to involve forcibly displaced individuals in economic activities in our country. The Ministry of Internal Affairs and the General Inspectorate for Migration requested these discussions. During the debates, participants highlighted the importance of evaluating the existing legal framework and identifying all gaps that could hinder the economic participation of beneficiaries of temporary protection status in Moldova. After the discussions, it was agreed that the relevant ministries would propose solutions to facilitate the economic integration of beneficiaries of temporary protection in Moldova.
We organized a workshop on trade facilitation in Moldova
On 13 December 2023, the EC Secretariat, in collaboration with the United Nations Economic Commission for Europe (UNECE), organized a workshop for the business community and representatives of state institutions. The event presented the results of a study on regulatory and procedural barriers to trade - the Assessment of the Trade Facilitation Framework in Moldova, developed by UNECE. The document aims to support the implementation of trade facilitation reforms in Moldova. The event also aimed to disseminate knowledge on improving border procedures and achieving faster trade flows. UNECE experts presented practical tools to enhance access to the EU market, which can be utilized by Moldovan state institutions.
We have organized the Moldovan-Romanian workshop
On 26th October 2023, the EC Secretariat, in collaboration with the Embassy of Romania in Moldova, organized a workshop on the subject of 'Customs Cooperation to Enhance Traffic Efficiency at the Border Crossings between the Republic of Moldova and Romania.' The workshop was attended by the Ambassador of Romania to Moldova, the heads of the Romanian Customs Authority, the Customs Service of Moldova, and customs posts from Romania and Moldova. During the discussions, the participants highlighted the need for joint measures to improve infrastructure capacity, interoperability, and service efficiency at border crossings. This will ensure businesses have access to the trans-European transport network. Representatives of the business community had the opportunity to ask questions and obtain relevant clarifications from both the Moldovan and Romanian customs authorities.
We undertook a study visit to the Swedish National Trade Board
A delegation from Moldova, consisting of representatives from the Ministry of Foreign Affairs and European Integration, the Ministry of Economic Development and Digitalization, the Organization for the Development of Entrepreneurship and the Secretariat of the Economic Council visited the Swedish National Trade Board in Stockholm on 5 December. The purpose of the visit was to learn from Sweden's experience in promoting economic exchanges and to gather information about economic tools that can enhance exports to the European Union. The acquired experience will enable state institutions to develop reforms that facilitate access to the EU market for Moldovan companies. During the meeting with Her Excellency the Ambassador of Moldova to Sweden, Iceland, Norway, and Finland, Mrs. Liliana Guțan, collaboration topics with the state institutions from the Nordic countries were also discussed.
Issues we are still working on
To reduce excessive rules and procedures for business:
We are currently monitoring the progress of legislative package no. 3 on business deregulation. This package includes amendments to the horizontal legislation on state control. These amendments expand the scope of the law, clarify sectoral responsibilities for state inspections, and introduce fines for inspectors who apply measures and sanctions not expressly provided by law. The changes aim to reduce the risk of penalties for businesses and ease the compliance burden in the state control process. The package could save entrepreneurs around 71 million lei per year, according to estimations. The package is being promoted by MEDD, with support from the EC Secretariat and assistance from the USAID/MISRA. It is expected to be proposed for approval at the beginning of 2024.
We have proposed legislative package no.4 on business deregulation for approval by the Government. The package aims to amend 12 laws to eliminate constraints and reduce the regulatory burden on entrepreneurial activities. The document will also recognize commodity exchanges from EU countries and modernize the related legislation. Furthermore, the changes will optimize procedures for connecting to public utilities, remove complaint conditions etc. If approved, this legislative package is estimated to generate savings of 183 million lei per year for businesses. The package is being promoted by MEDD, with support from the EC Secretariat and UNDP. Recently, the EC Secretariat initiated the development of the upcoming deregulation packages no. 6 and 7. Suggestions have been collected from all stakeholders, especially the business community, and are currently being analyzed with a view to drafting the legislative changes in the near future.
Contributing to the implementation of the state inspection reform. The EC Secretariat is implementing the Action Plan on the Reform of State Inspections, which was approved by Government Decision no. 108-d. To achieve this, the Secretariat has established 8 thematic working groups on inspection reform. Experts are working on drafting amendments to the inspection legislation in collaboration with relevant institutions. The reform will last for the entire year 2024 and will result in several packages of normative changes to primary and secondary legislation.
For digitisation of businesses and remote interaction with authorities:
We have developed a new set of amendments for the digital economy and electronic commerce. Companies across various sectors face intense competition and limitations in recruiting qualified personnel and implementing digital innovations, especially when competing with the residents of IT Park Moldova. Proposed solutions include stimulating digital innovation in non-IT companies and implementing the practice of digital nomads in Moldova to attract economic activity, particularly in the digital industries. Furthermore, through dialogue with members of the Economic Council, constraints and remedial solutions for electronic commerce have been identified. This set of 33 legislative amendments will be launched for public consultation at the first meeting of the iCouncil in 2024.
We have initiated an analysis of the benefits and stages of alignment with the DMA and DSA. In order to harmonize with EU legislation, it is necessary to thoroughly analyze the effects of transposing EU acts on digital markets and digital services (DMA and DSA) into national legislation. The EC Secretariat initiated the project, that was supported by MISRA/USAID, and involves evaluating, drafting, and promoting legislative alignment to ensure that these actions do not contradict European practices while also not negatively impacting the business environment in RM.
We are promoting a legislative package for the implementation of eKYC. The Secretariat of the Economic Council continues to support and advocate for the approval of the deliverables within the project launched by the EBRD and the and the United Kingdom's Embassy in Chisinau to support the implementation of eKYC services in Moldova. Amendments to Law No. 124/2022 on electronic identification and trusted services were approved by the Government on January 10, 2024, as well as the draft Government Decision on the creation of the public e-KYC platform has been prepared and submitted for approval. The Government has also recently approved the Decision regarding the procedure for remote identification and verification of a person's identity. All three regulatory initiatives are designed to create a proper regulatory framework, and the EC Secretariat has agreed already with the World Bank and MEDD on further funding of the development stage of the technological solution.
We are preparing the development of the eNotary technological platform. Electronic notarization plays a crucial role in the development of Contactless Business in Moldova Initiative, as notarial authentication of various transactions is required by the internal legislation. The Ministry of Justice and the Notary Chamber have requested the EC Secretariat and the e-Gov Agency support to develop the eNotary platform. With the support of EBRD and the United Kingdom's Embassy in Chisinau, an expert team has been contracted to prepare the concept, technical requirements, and regulation for the eNotary platform. These drafts were partially delivered to the EC Secretariat in December 2023, and preparatory steps are underway for the implementation phase.
To facilitate the transition to green economy:
We are contributing to the development of amendments aimed at stimulating investments in renewable energy. The EC Secretariat facilitated the consultation on the regulatory impact analysis of the amendments to the Regulation on conducting auctions for granting the status of eligible producer, promoted by the Ministry of Energy. The proposed changes aim to boost investments in renewable energy. The Regulatory Impact Analysis was approved on November 28, 2023. The proposed amendment to this Government Decision is expected to be open for public consultation in early 2024. The EC Secretariat is involved in and overseeing this process.
We are contributing to the improvement of amendments to the Natural Gas Law. The amendments were developed with the aim of enhancing the country's natural gas supply security and establishing provisions to address issues that have arisen during the implementation of the current law, in order to align national legislation with the provisions of the Energy Community acquis. The EC Secretariat supported the Ministry of Energy in consulting the members of the Economic Council on the project following the first reading in Parliament. At the same time, improvements to the project were proposed by the EC members and Secretariat.
See the previous info bulletin (Q3/2023).
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E-mail: consecon@gov.md
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