Moldova risks Romanian-style protests over fiscal amnesty bill

By bne IntelliNews February 8, 2017

Transparency International (TI) has urged Moldova lawmakers to withdraw a bill on fiscal amnesty currently being considered by the parliament. The bill would “grant impunity to corrupt officials, businesses and civil servants” for declaring assets, even if the assets were acquired from illicit wealth, the watchdog said in a February 7 statement.

The bill has the potential to spark mass protests similar to those seen recently in Romania, prompted by a similar attempt by elected politicians to enact legislation that would encourage corruption.

“This will benefit the corrupt and severely undermine Moldova’s fight against corruption. It will send a signal that corruption pays,” said José Ugaz, chair of TI. Local TI representative Lilia Carasciuc explained that the government has the option to apply a 2013 law that would allow it to collect taxes on undeclared income and properties, instead of enacting new legislation.

TI and other NGO experts particularly expressed concerns about the legal situation concerning the $1bn siphoned off from three Moldovan banks, once the bill is enacted.

Under the bill, public servants are also allowed to declare hidden wealth by the same deadline with the only obligation being to pay a 2% tax; no further explanation about the source of the money will be required.

The bill is in fact a fiscal amnesty and encourages corruption, Moldovan NGOs Expert Grup and the Centre for Judicial Resources warned in December. 

The bill was initiated by Moldova’s pro-EU parliamentary majority, including parliament speaker Andrian Candu. It was endorsed in its first reading but Candu has said a second reading will take place only after the bill is reviewed by the International Monetary Fund (IMF) and the World Bank.

Both institutions have already criticised the bill. Moldova’s so-called “capital liberalisation bill” breaches the government’s commitments as specified in its three-year agreement with the IMF, the Fund said in a statement quoted by on December 22. An IMF mission is expected in Moldova on February 14 for the review of its three-year programme with the country.

The bill prohibits the investigation of the origin of the assets declared by Moldovan residents, head of German Advisory Group Moldova Jorg Radeke told publication IPN on February 3. Such a provision is against international money laundering practices. It also breaches the best practices recommended by the Financial Action Task Force on Money Laundering (FATF), of which Moldova is a member, Radeke claimed. The rate of 2% paid in exchange for declaring the assets is too low by international standards, he added. 

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