Category: Moldova

ACI Partners’ Competition practice is busier than ever in Moldova, according to Legal Manager Carolina Parcalab, who points to transactions, Competition Council investigations, and competition law educational initiatives as their primary work sources.

CEELM: What has kept your Competition practice busy in the past year?

Parcalab: Our workload fluctuates with the Competition Council’s activity. Recent investigations and their conclusions have impacted our work. Currently, we’re handling one case before the Council and two before the courts. We can further categorize our work into three main areas.

First, transactional work is the area that occupies the most significant portion of our time. Moldovan businesses are demonstrating an increasing interest in adhering to competition law, which is a relatively new concept in Moldova compared to other countries. This translates to a significant volume of work on transactions to ensure that business practices align with the legal standards that are in place. We are involved in mergers and acquisitions transactions, with a substantial portion of our work dedicated to competition clearance. We notify the Competition Council when legal thresholds are met, and they then conduct analyses to prevent any potential distortion of competition. Additionally, advising on transactional matters and reviewing business practices for compliance are integral parts of our services. A few notable clients in this area include Metro, Coca-Cola, Efes, and Victoria Bank.

Second, we focus on contentious relations with the Competition Council. Our firm has been actively managing investigations since the Competition Council began imposing sanctions in 2006 – work that has bolstered our reputation. To avoid litigation and sanctions, we have developed robust competence in representing parties in investigations, particularly in the pretrial stages. Active involvement in these cases includes providing observations and explanations to the Competition Council, to address any unwarranted concerns that they may have, and offering trial advisory and support if a decision is ultimately issued by the Competition Council.

Finally, we undertake educational initiatives in the area of competition law. A significant challenge exists in Moldova due to the absence of courses in competition law and a lack of experts for both businesses and authorities. This signifies a knowledge gap, especially concerning European case law. Our efforts to fill this void include training business associations and providing training services to our clients on competition and compliance. Clients for whom we have provided these trainings include the American Chamber of Commerce in Moldova and the European Business Association. These efforts highlight our commitment to developing competition law in Moldova, through practice, regulatory engagement, and various trainings and events.

CEELM: What would you say drives your work pipeline?

Parcalab: Recent amendments to competition law in 2023 significantly increased our workload. One such change is the rise in fines for anti-competitive practices, from 5% to 10% of turnover, aligning Moldova with other countries. These stricter penalties are intended as deterrents. However, a concerning gap exists – the severe liabilities imposed on businesses contrast with the Competition Council’s limited human and material resources, potentially affecting investigation quality. A well-resourced Council is crucial for accurate law application, raising concerns about the heightened penalties and the Competition Council’s resource needs.

CEELM: And how are things set to evolve in Moldova, on the Competition front?

Parcalab: Interest in competition law is expected to grow as the Moldovan government, with backing from European institutions, prioritizes strengthening the Competition Council’s institutional capacity. The government’s efforts focus on complying with EU directives and requirements, including enhancing the Council’s capabilities – this is expected to lead to more market analyses by the Council, providing us with deeper insights into market concerns.

Subsequently, these insights can then be integrated into our clients’ strategies, potentially increasing our workload. Additionally, we anticipate a surge in demand for competition law education and training, alongside an uptick in investigations as the Council becomes more active. Our involvement in these investigations is assured as dedicated lawyers ensuring the proper observance of defense rights.

This Section includes information on legal acts implementing new rules or amendments, published in the Official Journal of the Republic of Moldova, referring to corporate, employment, social, taxation, customs, environment, and other matters. This Section also includes draft legislation of any direct or indirect relevance to the Company; as well as the temporary legislative measures approved pursuant to the state of emergency in the Republic of Moldova.

I. Commercial and Corporate

Law(s):

– Quality Requirements for Edible Vegetable Oils

By Government Decision, several quality requirements for edible vegetable oils are established. The rules lay down general requirements for placing edible vegetable oils on the market, as well as minimum quality, packaging, labelling, and storage requirements for oils.

– E-Transport Authorization

The Road Transport Code is completed by a new concept “e-Transport Authorization”, which is an IT system for applying for, granting, and issuing road transport authorizations, as well as for processing data and generating reports.

– Ratification of the Grant Agreement “Fertilizer Insurance for Farmers”

The ratification of the agreement between the Republic of Moldova and Japan ensures the implementation of the project to support farmers. The project provides a grant of USD 2,000,000, which shall be used to promote economic and social development in the country.

II. Tax and Customs

Law(s):

– Reporting by Non-Bank Credit Organizations

According to the regulations, non-bank credit organizations shall prepare and submit to the National Bank of Moldova specific reports on their financial situation and activities. The normative act also provides for annexes specifying the forms to be submitted in the reporting process, with the obligation to submit reports until the legal entity is removed from the register of non-banking credit organizations.

Draft law(s):

– Recognition of Commodity Exchanges Authorized in the EU

Companies that meet the following requirements shall be considered commodity exchanges:

• are registered in accordance with the law and are wholly owned by commodity exchanges that operate and are established in the Member States of the European Union;
• the founding companies meet the conditions for establishment laid down by law in the country of origin;
• the companies are recognised as functioning commodity exchanges by the public authorities responsible for the supervision or regulation of commodity exchanges in the home state or the Chamber of Commerce and Industry in the home state.

III. Employment and Social

Draft Law(s):

– Reduced Employment Age

Individuals having reached the age of 15 may conclude individual employment agreements, with the written consent of their parents or legal representatives, to undertake light work. The Labour Code is amended with the concept of light work.

– Conclusion of Fixed-Term Employment Agreements with Refugees

Individual employment agreements may be concluded for a fixed term with refugees who are employed in the labour field on the territory of the Republic of Moldova for the period of temporary or permanent work.

– Night Work, Work on Days Off and Public Holidays for a Special Category of Women Employees

Pregnant women, women who have recently given birth and breastfeeding women may perform night work, as well as work on days off and public holidays only on their own initiative.

The request is made based on a written request, with the presentation of the medical conclusion on their state of health, issued by the medical institution on the list of which they are registered, and with the consent of the employer.

– New Type Unpaid of Leave under the Labour Code

The draft law provides the introduction of a new type of unpaid leave for caring of person living in the same household as the employee. Unpaid leave may be granted to the employee based on a written request for up to 5 working days in a calendar year. During this unpaid leave, the employment agreement may be suspended at the employee’s initiative.

– Unused Annual Leave Provisions

If the employee cannot use the annual leave to which it is entitled each calendar year, the employee may request the granting of the unused annual leave within a period not exceeding 2 years from the following year.

At the end of each calendar year, the employer shall inform the employee of the balance of unused annual leave, and the expiry date, and may request the use of the employee’s unused annual leave days, based on an agreed schedule.

– Increased Penalties for the Use of Undeclared Work

The use of undeclared work shall be sanctioned up to 1200 conventional units for individuals and up to 1500 conventional units for legal entities.

– Additional Amended Provisions to the Labor Code

Prior to employment or transfer to a new position, the employer shall inform, in writing and in due time, the person to be employed or transferred of the conditions of employment in the proposed position.

Also, the employee may express consent or refusal to perform additional work in written form on paper or electronically with the use of an advanced electronic signature, until the actual recruitment for additional work.

IV. Consumer Protection

Law(s):

– Revision of the Consumer Protection Law

The amendments to the Consumer Protection Law implement the provisions of the European Directives to ensure compliance with consumer protection legislation. The Law sets out the general requirements for consumer protection, ensuring the necessary framework for unrestricted access to products and services, full information on their main characteristics, protection and enforcement of consumers’ legitimate rights and interests in the event of unfair commercial practices, their participation in the decision-making process and in decisions affecting them as consumers.

V. Environment

Law(s):

– Substantial Amendments to the Water Law

Following the legislative amendments, the Law is supplemented with new regulations on the regime of transfer of use of lands of the Water Fund and hydrotechnical constructions, as well as on the calculation of the minimum price for these lands.

The amendments also introduce several provisions concerning the powers of public authorities in the field of water resources management and protection, and provides for new regulations on riparian water protection zones and strips.

– National Waste Management Programme 2023-2027

The document foresees the implementation of European practices in line with the EU Waste Management Directives and the promotion of the circular economy, thus contributing to the sustainable development of society.

The programme sets out the analysis of the most effective waste management options and presents a simplified conceptual framework including the prevention of waste generation, preparation for re-use, recycling, material recovery and disposal.

Draft Law(s):

– Increasing Government’s Powers in the Process of Subsidising Farmers

This draft law provides for the extension of Governmental powers as to allow the allocation of financial resources in the amount of 4% of the volume of revenues necessary for the implementation of the subsidy policy in agriculture and rural areas.

The document also provides for increasing the budget of the National Fund for Development of Agriculture and Rural Environment up to MDL 2,665,280.

VI. Digitalization

Law(s):

– Implementation of Government Applications of EVO e-Services

EVO is a mobile application allowing access to electronic services, data from state registers and the storage of digital versions of identity documents, and other key documents for individuals and legal entities.

EVO collects information of all information resources available in local and external databases, ensuring interaction between individuals and legal entities.

– Implementation of the information system Maritime Single Window (MSW)

The purpose of MSW information system is to provide a single interface for the fulfilment of reporting obligations on the arrival, presence, and departure of ships.

The system allows data collection from reporting obligations on the arrival or departure of ships, the distribution of data to public authorities and the interconnection with other information systems.

– Adjustment of Road Transport Legislation

The new provisions define the concept of the “e-Transport Authorisation” information system, which is an information system for applying for, granting, and issuing road transport authorisations, as well as for processing data and generating reports.

The Law also defines a few tasks to be performed by the National Road Transport Agency and the financial capacity requirements to be met by a company.

– Obtaining the Residence Certificate in Electronic Format

The taxpayer may submit electronically the application for the issuance of the residence certificate by accessing the “Taxpayer’s personal office”, and the section related to “Individual services” or “Legal entity services”.

The result of the examination of the application is automatically sent by the system to the taxpayer’s e-mail address.

– More Activities in IT Park

Starting 12 February 2024, the activities of call centres, including those based on any technology or channel of communication with the customer, and other labour supply services, may be carried out in the IT park, provided that these services are intended for export.

Also, the park’s operating period has been extended up to 20 years.

Draft law(s):

– Digitalization of G2B Services

Providers of public electronic communications networks that intend to perform installation, operation, management, maintenance, or liquidation of electronic communications networks at the state border shall submit to the National Regulatory Agency for Electronic Communications and Information Technology (“Agency”) an additional notification at least 15 working days prior to the start of the activity.

The Agency shall within 15 working days from the date of notification, provide the applicant with the standard information statement on the completion of the notification of activities at the state border.

OTHER AMENDMENTS THAT MAY AFFECT THE COMPANY

Law(s)

– Designation of Electricity Market Operator

According to the Law on Electronic Energy, the limited liability company Energy Market Operator M (“OPCOM”) was designated as the electricity market operator in the Republic of Moldova. OPCOM shall be responsible for the creation and operation of organised electricity markets.

Disclaimer:

This Report is provided for informational purposes only and should not be viewed as a legal advice on any matter. Though we have exercised our best endeavours to identify and present you up-to-date and relevant details on the respective matters, the information contained herein, at any time, shall not be considered or construed as comprehensive or completely updated. Do not act or refrain from acting based upon this information without seeking professional legal counsel. The content of this Report is based solely on the information from publicly available sources and does not cover tax or accounting matters. Other than presenting this information, we will not be expected to investigate or conduct appraisal and/or verify continuing validity and accuracy of the respective information.

By Domnica Bejan, Junior Associate, and Laurentiu Racu, Legal Assistant

Bucharest-based ONV Law has announced it opened a new subsidiary in Chisinau, Moldova – with Mihail Gorincioi set to coordinate the new operation – and aims to surpass a cumulative turnover of EUR 2.5 million in the year 2024.

According to ONV Law, its “expansion aligns with the favorable economic development context in the Republic of Moldova over the last two years, driven by its proximity to the European Union. The specialized team of lawyers based in Chisinau will play a key role in leveraging foreign investment opportunities, particularly in sectors such as IT, business process outsourcing, automotive, retail, banking, and the tobacco industry. Their focus will be on providing legal assistance to navigate the dynamic and thriving business environment in the Republic of Moldova […] Public procurement also offers significant opportunities in the context in which, in the coming years, Moldova will also have access to European financing, totaling over 2.5 billion euros, through the Connecting Europe Facility. These funds will be allocated for significant infrastructure and digitization projects.”

ONV Law describes Mihail Gorincioi as an experienced lawyer with a substantial portfolio of projects covering areas such as health and safety, horeca, real estate, environmental protection, and the safeguarding of human rights and freedoms. “Part of the team of experts of the Republic of Moldova within the Council of Europe […] he brings considerable expertise to international consulting endeavors.” Before joining ONV Law, Gorincioi spent the past five years at the helm of his own office.

“The legislative system in the Republic of Moldova, although unpredictable, offers facilities to the business environment such as low taxes compared to the rest of European countries, online reporting of all accounting balance sheets, the possibility of using electronic signatures, and low operational costs,” Gorincioi commented. “Among the areas of practice that we will focus on in the Republic of Moldova are public procurement, infrastructure, corporate law, real estate, telecom, energy, and litigation.”

By Decision No. 361 dated 24 November 2023, the Parliament decided to extend the emergency state on the entire territory of the Republic of Moldova for 30 days, starting on 1 December 2023.

This was the last decision to extend the state of emergency, hence, starting 1 January 2024 the provisions of the Exceptional Situations Commission decisions will no longer apply on the territory of the Republic of Moldova.

1. Commercial and Corporate

Law(s): 

• Time Limit Reduction for Complaints in Public Procurement Procedures

The time limit within which the contestant is entitled to file a complaint in public procurement procedures shall be reduced from 5 days to 3 days from the notification issued by the National Agency for Settlement of Complaints. 

• Licensing of Subsidized Pharmaceutical Activities in Rural Areas

The Regulation establishes the procedure for licensing and state subsidization of pharmacies in rural areas to provide with pharmaceutical assistance.

To receive state subsidies, a pharmacy shall be licensed to carry out such activity in rural areas, have previously agreed to the distribution of medication and compensated medical devices with the National Health Insurance Company, have a cash register and control equipment, an automated information system, an internet connection, and any other equipment necessary for carrying out the activity.

2. Tax and Customs

Law(s):

• VAT Refund Programme for Agricultural Producers

Agricultural producers shall be able to claim VAT refunds for the following tax periods:

• April 2022 to June 2023, inclusive and
• July 2023 to June 2024, inclusive.

 

• Amendments to the Tax Code

The Tax Code was supplemented with new provisions governing the tax regime for economic agents engaged in activities in the field of ferrous and non-ferrous metal waste trading, as well as submission of tax statements, and the deadline for payment of tax obligations during the suspension of the economic agent’s activity, and the procedure for challenging the decision of the State Tax Service or action of the tax representative.

The Law extends the list of deductible expenses incurred by the employer for the benefit of the employee, as well as the sources of non-taxable income.

• Revision of the Rules on the Determination of Capital Gain or Loss

In respect of capital assets, capital gain or loss is not recognized when:

• redistribution of property between spouses or between former spouses, if such redistribution results from the need to divide the joint property in the event of divorce;
• redemption and/or exchange of debt securities, debentures, by their issuers;
• redemption and/or exchange of state securities, carried out by the Ministry of Finance or primary dealers within the meaning of the Law No. 419/2006 on public sector debt, state guarantees and state re-crediting;
• the exercise of the right, provided for in the option, to buy or sell equity assets and/or to convert options.

Draft law(s):

• Establishing a Moratorium on State Control of Micro, Small and Medium-sized Enterprises (SMM)

The moratorium shall be established until 31 December 2024 on state control, including fiscal, financial, quality products/services, technological parameters, or specific requirements for the type of activity carried out, on compliance with labour protection rules, on planned or unannounced controls, carried out on the spot, at the premises, places of activity or places where the goods of registered persons carrying out entrepreneurial activity are located.

The controls shall be carried out by authorized bodies empowered to initiate controls based on legal provisions.

3. Employment and Social 

Law(s):

• Foreign Citizens Allowed to Work in the Republic of Moldova without a Work Permit

According to the amendments, citizens of authorized states may work on the territory of the Republic of Moldova for up to 90 days without obtaining a temporary stay permit for work purposes or a temporary work permit, if they have a visa, a right of stay, or a right of temporary residence, as applicable.

4. Environment 

Law(s):

• New Provisions on Waste Disposal

The Regulation establishes the legal framework for waste disposal activities, including the design, construction, operation, monitoring, closure, and post-closure monitoring of new and existing landfills. These activities are carried out under strict technical and operational requirements, which are established to ensure the highest level of environmental and public health protection.

The legislative amendments introduce measures and guidelines to prevent and reduce negative impact on environment and public health caused by landfills throughout their life cycle.

5. Digitalization 

Law(s):

• Legislative Amendments for IT Parks 

In case when amendments to legislation are adopted that modify the amount or structure of the single tax levied on IT park residents, or cancel it, park residents will be entitled, until 2035, to carry out their activities following the laws effective as of the date of entry into force of the amending legislation.

If certain taxes or fees included in the single tax levied on IT park residents are replaced by other taxes or fees under the legislation, the structure of the single tax will be adjusted accordingly, without changing its rate.

• Regulation on Licensing and Registration as Payment Service Providers and/or Electronic Money Issuers

The Regulation provides for the authorization and registration of payment institutions, electronic money institutions, and postal service providers as payment service providers and electronic money issuers. It defines the category of “non-bank payment service providers”, outlines the requirements for licensing, specifies the documents to be submitted to the NBM, and establishes the requirements for persons occupying managerial positions within the undertaking.

OTHER AMENDMENTS THAT MAY AFFECT THE COMPANY

Law(s)

• Introduction of the Stamp Duty

Stamp duty is a one-time fee charged for the lodging of a civil or administrative lawsuit, both at first instance and on appeal. This fee is not subject to any exemption, deferment, or instalment, except as provided for by law. Furthermore, the amount paid as stamp duty cannot be refunded or set off against the account of the losing party.

According to the provisions of the law, the stamp fee is MDL 200.

By Domnica Bejan, Junior Associate, and Laurentiu Racu, Legal Assistant

On January 22, 2024, Vernon David announced that Victoriabank’s acquisition of the BCR Chisinau subsidiary (reported by CEE Legal Matters on April 7, 2023) had closed.

Established in 1989, Victoriabank is a Moldovan commercial bank. Its main shareholders include Romania’s Banca Transilvania and the European Bank for Reconstruction and Development.

BCR Chisinau has over 13,000 active clients, 110 employees, and four branches – two in Chisinau, one in Cahul, and one in Balti.

Erste Group member BCR has an extensive network in Romania: 19 business centers, 17 mobile offices dedicated to companies, and 430 retail units across the country.

As previously reported, Vernon David and Filip & Company advised Moldova’s Victoriabank, while Schoenherr advised the seller.

The Vernon David team was led by Chisinau-based Partners Roman Ivanov and Sergiu Bivol and included Senior Associate Nadejda Ciubotaru and Associates Adelina Braga and Mihai Silta.

The Schoenherr team included Romania-based Partners Matei Florea and Madalina Neagu and Senior Attorney-at-Law Alexandra Pop, as well as Moldova-based Office Managing Partner Vladimir Iurkovski, Attorney-at-Law Andrian Guzun, and Associates Denis Lefter and Adriana Otean.

The Filip & Company team included Managing Partner Cristina Filip, Partner Alina Stancu Birsan, Senior Associates Rebecca Marina and Camelia Iantuc, and Associate Bianca Gheorghe.

Former Senior Associate Valeriu Cernei has been promoted to a Partner position with Gladei & Partners in Chisinau.

Cernei has been with Gladei & Partners since 2016, when he joined as a Junior Associate. He primarily focuses on corporate and commercial, M&A, insolvency, IP, personal data protection, tax, litigation, and arbitration.

“[Valeriu] has worked on the majority of our critical projects, with diverse challenges, scope, and complexity,” Commercial Bank MAIB CEO Giorgi Shagidze commented. “Throughout every project, his dedication, sharp intellect, and expertise have consistently impressed me. His ability to navigate complex challenges with ease and confidence makes him a truly invaluable contributor […] Congratulations to both [Gladei & Partners] and Valeriu on this well-deserved recognition!”

“Valeriu Cernei’s work representing the Commission was very instrumental, demonstrating impressive knowledge of Moldovan law, a thorough understanding of the Commission’s cases, and a strong and constant dedication to the highest caliber of representation of the Commission,” Moldovan Independent Commission for Assessing the Integrity of Candidates for the Positions of Members in the Self-Administration Bodies of Judges and Prosecutors Chairman Herman von Hebel stated. “All members of the Commission wish him great success in his new role and we are confident that he will further support and strengthen the effective functioning of the rule of law in Moldova.”

“No day during these seven years have I regretted my decision to take Valeriu on board,” Gladei & Partners Managing Partner Roger Gladei said. “Deep-diving while forward-looking, versatile while expert-minded, Valeriu has set a new standard of quality in everything he’s doing, leading our juniors and associates by example.”

“Gladei & Partners has been my professional home since I started my career as a Junior Associate over seven years ago,” Cernei added. “Taking up this new Partner role is an honor for me and, indeed, a new exciting step in my career. The partnership is a chance to contribute to the growth of our firm from a new perspective, so I will continue to put the same engagement and dedication into the day-to-day work for our clients. I truly thank my colleagues for their continuous support and I’d like to highlight that this individual achievement actually represents a team success.”

On 21 December 2023 the Moldovan Parliament adopted significant amendments to the Law No.77/2016 on Information Technology Parks („IT Parks Law”) positioning Moldova as an attractive destination for Business Process Outsourcing (BPO). These amendments notably extend the eligibility criteria for IT Park residents, offering particular advantages to export-oriented BPO service providers.

Effective from 12 February 2024, call centre activities (82.20), including those based on any technology/customer communication channel (contact centre), exclusively for export, and other human resources provision (78.30), exclusively for export are deemed eligible core activities for the IT Park residents. 

The above amendments are aimed to apply to businesses engaged in call centre activities (class 82.20), rendering them eligible to become IT Park residents. However, the second form of business activity (human resources provision) has raised some uncertainties.

According to the Moldovan Classifier of Economic Activities (CAEM REV-2), class 78.30 (Other human resources provision) includes the activities of providing human resources for client businesses. This class refers to the employer of record for the employees on matters relating to payroll, taxes, and other fiscal and human resource issues. On the other hand, the employment of record (EOR) activity lacks regulation under Moldovan laws, adding complexity in classifying businesses under class 78.30. This becomes particularly important when assessing the eligibility of businesses for inclusion in Moldovan IT Parks.

But what specific advantages do these amendments bring to BPO service providers? Below we will outline the key features of Moldova IT Park, the first and only IT park created in the Republic of Moldova.

Moldova IT Park operates as a virtual platform aimed at fostering investment and the development of IT businesses, research, development, and digital innovation. This virtual setup enables Moldova IT Park residents to conduct the operations from any location in Moldova.

Single Tax Rate

One of the key attractions for IT Park residents is the application of a single 7% tax on sale revenues. This single tax shall replace various taxes, including:

• the corporate income tax (CIT), at the ordinary rate of 12% of taxable income;
• the salary income tax, at the rate of 12% withheld and paid by the employers;
• the social security contributions, amounting to 24% of the employee’s salary for private sector employers;
• the mandatory health insurance premiums, amounting to 9% of the employee’s salary;
• all applicable local taxes;
• real estate tax; and
• road tax for vehicles registered in Moldova.

The IT Park streamlined tax regime not only simplifies the fiscal landscape for IT Park residents but also reduces the complexities associated with navigating and complying with diverse taxes. The minimum single tax amount per employee is set at 30% of the national average projected monthly salary (in 2024 – MDL 13,700 [ca. EUR 700]).

Long-term Stability

Under the same amendments to the IT Parks Law, all IT Parks residents shall benefit of the single 7% tax rate until the year 2035. This right guarantees all IT Parks residents a stable tax environment for an extended period, irrespective of potential subsequent legislative amendments by the Parliament seeking to amend or cancel the current single tax rate or its structure. 

Despite the highlighted uncertainties, the recent amendments to the IT Park Law offer a simple and cost-effective solution for foreign businesses seeking to legally employ Moldovan residents. This can be achieved:

• without establishing a subsidiary in Moldova, through contracting a third-party EOR or
• by setting up a subsidiary in Moldova, to structure a Shared Services arrangement.

By Irina Sugoneaco, Senior Associate, and Catalina Stavila, Associate, Gladei & Partners

Recently, in the legal framework of Moldova was proposed a project regarding the modification of Standard Contractual Clauses (“SCCs”) for cross-border transmission of personal data that is meant to give a good refresh to the current regulation and ensure a better harmonization with the GDPR.

William Douglass predicted back in the last century that we are rapidly entering the age of no privacy, where everyone is open to surveillance at all times, where there are no secrets from the government. However, regulators from all over the world make continuous efforts to limit access to personal data.

A good example for our country was provided on 10.01.2022 by the amendment of Article 32 of Law No. 133/2011 on personal data protection (“Law No. 133/2011”), that introduced the concept of Standard Contract in order to secure the data transfers to states that don’t ensure an adequate level of personal data protection.

Shortly after that, in November 2023, was proposed a Project regarding the modification of SCCs content. 

Firstly, it is intended to clarify the process of assessing an appropriate level of security by considering the current state of technology, the costs of implementation, the nature, scope, context and purpose(s) of the processing, as well as the risks to which the data subjects are exposed. The parties shall, in particular, consider the use of encryption or anonymization/pseudonymization/depersonalization, including during transmission where this does not prevent the fulfillment of the processing purpose.

Secondly, the modifications proposed follow to introduce the importer’s obligation to notify the data exporter as well as the competent supervisory authorities without undue delay about a breach of the personal data security that is likely to generate a risk to the rights and freedoms of natural persons.

Also the new regulations require a certain notification content which is, in our opinion, a must-have in order to prevent practical issues.

Another substantial modification is the possibility to conclude a subsequent transfer. Directly, it will facilitate the practical processes related to data transfer while ensuring an adequate data protection all over the way.

However, the most significant novelty is the introduction of a new type of transfer: between two persons authorised by the operators. Consequently, the exporter will inform the importer about the fact that he is acting as an authorised person and about the instruction received before data processing. We see it as a necessary adaptation in the field of professional relations that require data transfers.

Even the modifications proposed are practical and refreshing, we want to formulate some objections.

Firstly, at Clause 8, subparagraphs 8.7 (Module 1), 8.8 (Module 2), and 8.8 (Module 3) concerning “Subsequent Transfers,” is provided an exhaustive list of cases when the importer may disclose personal data to a third party. However, we reasonably believe that it should be completed with the following text: ”the subsequent transfer is allowed in the event when the third party provides adequate safeguards regarding the processing in question.” Such a provision will ensure full compliance with Commission Implementing Decision (EU) 2021/914 of 4 June 2021 on SCCs and will provide better flexibility in the contractual relationships of the data importers without violating the rights of data subjects.

Nevertheless, it is problematic that Law No. 133/2011 does not provide an express regulation of “adequate safeguards” as assured by Articles 46 and 47 of Regulation (EU) 2016/679 on the protection of individuals concerning the processing of personal data and on the free movement of such data. This omission, consequently, unjustifiably limits the rights of the data importer.

Secondly, the provisions of Clause 15, point 15.1, subpoint 1, letter c), require the obligation of the data importer to notify the data exporter in the event of “becoming aware of any accidental or unauthorized access that has led to a breach of the security of personal data”.

This provision is extremely protective for the exporter given that letters a) and b) set expressly the public authority as the entity accessing personal data which shall be notified, while letter c), in the absence of an express specification, states that the data importer is obligated to notify any accidental and unauthorized access. Moreover, only accesses that have resulted in a breach of the security of personal data are to be notified, which implies that the data importer must take additional actions to ascertain this fact.

Also, we note that there is no legal provision at European level imposing such an obligation on the data importer. Therefore, to avoid any possible disruption of the data importer activity by imposing exaggerated liabilities, we consider it appropriate to exclude letter c).

Thirdly, the exporter obligation of implementing the technical and organizational measures on the importer ability to fulfil its obligations under the SCCs are not accompanied by expressly defined measures and instructions, which creates an uncertainty in the direct application of the SCCs, point to a pressing need for greater clarity and specificity in the legal framework governing cross-border transmission of personal data.

By Natalia Siretanu, Senior Associate, and Valeria Grisciuc, Junior Associate, Gladei & Partners

Law no. 77/2016 on information technology parks will be amended. A project in this regard is currently undergoing repeated public consultations (“Project”). The main amendments included in the Project are as follows:

EXTENSION of the Operating Duration of Moldova IT Park until the year 2035. Similarly, a proposal is made to extend the term of the state guarantee granted for the unified tax structure until 2035. 

INCLUSION of New Types of Activities, namely: (1) activities of call centres (82.20), including those based on any technology/channel of communication with the customer (contact centre), and (2) labour supply services (78.30) (Article 8), which will be exclusively provided for export.

ESTABLISHMENT of the Moldova IT Park Council as a collegial body, consisting of 3 representatives designated by the Ministry of Economic Development and Digitalization and 4 representatives from the residents, with the role of coordinating the activities of Moldova IT Park, according to a Regulation approved by the Government.

Certain initially proposed amendments are not found in the current Project, namely: the modification of the composition of the unified tax, the increase of the minimum monthly unified tax per employee of Moldova IT Park resident, and the increase of the minimum guaranteed monthly income of Moldova IT Park resident employees.

By ACI Partners

Moldova’s legal and economic landscape is undergoing momentous transformations according to Efrim Rosca Asociatii Partner Oleg Efrim, from updates to the corporate sector and an ongoing digital transformation, to Moldova’s path towards EU integration and the challenges and opportunities facing various business sectors amid geopolitical tensions.

“The new amendments to the corporate laws are a pivotal step for Moldova, drawing inspiration from models in the EU (including the European Model Company Act) and Switzerland,” Efrim begins. “It streamlines various corporate matters, including the regulation of new institutions and liberalization and flexibility for shareholders’ decision-making and shareholder agreements. This act is more than a legal update – it’s a strategic alignment with Western standards, simplifying company operations and fostering a more business-friendly environment,” he explains.

To that same tune, Moldova is marching forward on its path toward the European Union, Efrim notes. “The commencement of accession talks is a monumental event for Moldova,” he says, indicating the European Commission recommendation of November 8, 2023. “It necessitates a thorough revision of our legislative frameworks to align with EU standards. This harmonization process will touch upon various sectors, ensuring that our laws not only comply with but also embrace European principles and practices,” he highlights.

As part of this transformation towards a more integrated tomorrow, Moldova is already tackling the public services sector. “The digital transformation is revolutionizing the way we interact with public services,” Efrim continues. “For the justice system, it means implementing pilot programs that enable lawyers to participate in sessions, such as hearings, completely remotely.” This digital shift extends to company registrations, obtaining permits, and interactions with public authorities. “It’s a significant step towards modernizing our judiciary and making justice more accessible.”

Furthermore, Efrim reports that the Supreme Court of Justice of Moldova has undergone a thorough reform. “The Supreme Court’s restructuring is a major step forward,” he says. “It’s designed to streamline caseload management and the admissibility of appeals, thereby rationalizing workflow and optimizing court operations. This reform aims to enhance the efficiency and effectiveness of our highest court. Thus, the Supreme Court of Justice will have more limited powers and will not act as an appeals court, as it currently does.” Additionally, the hitherto existing state fee cap for filing cases into court will be removed on January 1, 2024, in a move that Efrim describes as bold. “This may potentially improve the quality of our judicial system. This change is expected to increase public awareness and usage of legal channels, fostering a more robust legal environment.”

Turning to the state of Moldova’s business sectors, Efrim begins by mentioning that “the IT sector is paving the path forward. With local IT-specific zones that benefit from an advantageous flat 7% tax system, investors from all over the world are increasingly becoming aware of the benefits of doing business here.” Moreover, Efrim states that the IT sector has, “alongside banking, demonstrated noticeable resilience during the pandemic and is outperforming other industries.”

Finally, Efrim mentions the ramifications of the war in Ukraine. “The war has indeed put a strain on our infrastructure and transportation, with ripple effects spreading onto sectors like agriculture. Many industries are now heavily reliant on the quality of their management systems to navigate these logistical challenges,” he says. “The future trajectory of these sectors, amid these hardships, remains uncertain but is a critical area of focus for us.”