Nations in Transit 2015 - Moldova

Capital: Chișinău
Population: 3.6 million
GNI/capita, PPP: US$5,180

Source: The data above are drawn from the World Bank's World Development Indicators 2015.

Regime Classification: Transitional Government or Hybrid Regime
Democracy Score: 4.86
NIT Country Rank: 19/29

NIT Edition	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
Electoral Process	3.75	3.75	3.75	4.00	4.25	4.00	4.00	4.00	4.00	4.00
Civil Society	4.00	3.75	3.75	3.75	3.50	3.25	3.25	3.25	3.25	3.25
Independent Media	5.00	5.25	5.50	5.75	5.75	5.50	5.00	5.00	5.00	5.00
National Democratic Governance	5.75	5.75	5.75	5.75	6.00	5.75	5.75	5.50	5.50	5.50
Local Democratic Governance	5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75
Judicial Framework and Independence	4.50	4.50	4.50	4.50	4.75	4.50	4.50	4.50	4.75	4.75
Corruption	6.00	6.00	6.00	6.00	6.00	6.00	6.00	5.75	5.75	5.75
Democracy Score	4.96	4.96	5.00	5.07	5.14	4.96	4.89	4.82	4.86	4.86

NOTE: The ratings reflect the consensus of Freedom House, its academic advisers, and the author(s) of this report. The opinions expressed in this report are those of the author(s). The ratings are based on a scale of 1 to 7, with 1 representing the highest level of democratic progress and 7 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year.

Executive Summary:

The November parliamentary elections, dominated by a choice between parties calling for European integration and those favoring Russian ties, were an important test for Moldova's democracy. Despite the perceived high stakes, turnout fell to a historic low at 55.80 percent. The Russophile Party of Socialists (PSRM) emerged first in the elections, closely followed by the Liberal Democratic Party (PLDM) of former prime minister Vladimir Filat. The Party of Communists of the Republic of Moldova (PCRM), led by Vladimir Voronin, finished third. Two other parties, the Democratic Party of Moldova (PDM) and the Liberal Party (PL), also secured seats in the parliament. The deregistration of the pro-Russian Patria party a few days before election day drew criticism. Although the pro-European PLDM, PDM, and PL won a majority in the parliament, talks on the formation of a new government were still ongoing at year's end.

The country's relations with Russia deteriorated, especially after Moldova signed and ratified an Association Agreement with the European Union (EU) in July, coupled with the setup of a free-trade area between the two. In response, Russia imposed embargos and duties on various Moldovan imports. On 28 April, Moldova was the first country among the Eastern Partnership (EaP) countries to enter into a liberalized visa regime with the EU. Increasing disagreement, between the Moldovan authorities on one side and the Tiraspol administration and Russia on the other, hampered the process of conflict settlement in Transnistria, postponing the so-called 5+2 negotiations three times. Relations with the autonomous Găgăuzia region were also tense after Gagauz authorities held an illegal referendum that asked voters sensitive questions on sovereignty.

National Democratic Governance. The European Union (EU) lifted visa requirements for Moldova in April, and the country signed an Association Agreement creating closer political and economic ties with the EU in June. Relations with Transnistria remained tense, and Russia broadened the ban on Moldovan imports in July. The government resorted to the use of urgent procedures in the case of 18 laws. Avoiding deliberation in these cases received significant criticism from the opposition. Moldova's rating for democratic governance remains unchanged at 5.50.

Electoral Process. Moldova held parliamentary elections on 30 November. The record low turnout of 55.8 percent brought five parties into the parliament, but the deregistration of the pro-Russian Patria Party led by Renato Usatîi just days before election day raised concerns. Authorities took security measures before the elections, which included the arrest of several activists of the extremist splinter organization Antifa. Coalition talks were ongoing at year's end. Moldova's electoral process rating remains unchanged at 4.00.

Civil Society. Moldovan civil society continued to play an active role in monitoring the government and putting public pressure on politicians, but ultimately failed to push through reform initiatives during the year. A law was adopted in December 2013 that would have allowed citizens to redirect 2 percent of their income tax payments to an NGO of their choice. However, the Constitutional Court struck down the law two months later and the parliament failed to adopt an amended version by year's end. Moldova's civil society rating remains unchanged at 3.25.

Independent Media. The media environment in Moldova offers a wide choice for audiences; however, oligarchs and politicians have control over the majority of media outlets. The parliament failed to adopt a law on transparency of media ownership and restricted journalists' access to parliamentary sessions. Several outlets received fines for unbalanced content during the elections. In July, the Audiovisual Coordinating Council (CCA) banned Rossiya 24 for six months for allegedly broadcasting propaganda and fined two other outlets. Moldova's independent media rating remains unchanged at 5.25.

Local Democratic Governance. Four entities of the local public authorities benefited for the first time from a law on local public finances. A pilot implementation of the law allows greater revenues for local budgets and enables local authorities to independently set spending priorities. The parliament failed to adopt legislation which would allow local authorities to address the Constitutional Court or give them competences over zoning. Moldova's local democratic governance rating remains unchanged at 5.75.

Judicial Framework and Independence. Efforts to reform the judicial sector were partially successful in 2014. The parliament adopted a concept for the reform of the prosecutor's office, but did not make progress on examining the draft law. Amendments streamlining the criminal prosecution of judges were adopted in July; however, the Supreme Court of Justice asked for their repeal later in the year. The courts improved their operations by adding personnel, raising the salaries of judges, and issuing decisions with better argumentation. Moldova's judicial framework and independence rating remains unchanged at 4.75.

Corruption. Moldova has adopted the necessary laws for fighting corruption, but they have yet to bring significant results in practice. The National Anticorruption Center (CNA) started an integrity evaluation of public servants in August, and the preliminary results confirmed endemic corruption and a propensity for bribe-taking in the sector. The lack of resolution in the nontransparent and scandalous cases of Banca de Economii (BEM) and Chişinău airport continued to raise questions about the political will to fight high-level corruption. Moldova's corruption rating remains unchanged at 5.75.

Outlook for 2015. The coming year is expected to be difficult for Moldova but also full of opportunities to continue reforms. The local elections will indicate the level of trust in local authorities and will redefine the balance of power between the ruling coalition and the opposition. Challenges will include implementing the Association Agreement, reforming the judiciary, fighting corruption, stabilizing the banking sector, and reorienting exports toward new markets and away from Russia. The creation of a new governing alliance will be a challenge given the insufficient will for political compromises and personal animosities that negatively influence the process. Moscow is expected to turn up pressure on Chişinău, given Russia's intense displeasure over Moldova's European integration. As a result, dialogue involving Transnistria, Găgăuzia, and the municipality of Bălți may all suffer.

National Democratic Governance:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
5.75	5.75	5.75	5.75	6.00	5.75	5.75	5.50	5.50	5.50

After a period of political turmoil in 2013, the country experienced stabilization in 2014. The governing coalition – headed by Iurie Leancă and composed of the center-right Liberal Democratic Party of Moldova (PLDM), the center-left Democratic Party of Moldova (PDM), and the splinter Liberal Reformist Party (PLR) – tried to push through reforms before the November parliamentary elections. However, the parliament failed to agree on important laws, such as the reform of the prosecutor's office, and was unable to adopt bills aimed at fighting corruption in the judiciary, clarifying the public funding of political parties, and increasing transparency of media ownership.

The government adopted a number of laws in an urgent procedure during the year. In July and September, the cabinet assumed responsibility in the case of 18 laws – meaning that the parliament could have called for a no-confidence vote following each submission. These included a law that allows lifting the immunity of judges for charges of money laundering and illicit enrichment; a law on the disciplinary responsibility of judges; a law on improving instruments to fight money laundering; a law offering additional competences to National Bank of Moldova; and provisions providing tax exemption to companies suffering from the Russian embargo on Moldovan products. The government explained that the need to overrule the parliament was caused by a stalemate in the parliamentary Commission on Economy, Budget, and Finance.^[i] However, the opposition, as well as some representatives of the ruling coalition, severely criticized this practice of avoiding deliberation and denied that there was any resistance in the legislature to adopt the laws.

In an important development, Moldova signed the Association Agreement with the European Union (EU) on 27 June and ratified it on 2 July. The agreement, which established cooperation on many policies, was coupled with a Deep and Comprehensive Free Trade Agreement (DCFTA) that sets up a free-trade area between Moldova and the EU. Several politicians of the opposition were against the agreement in the beginning. Vladimir Voronin, the leader of the Party of Communists of the Republic of Moldova (PCRM), said that the parliament's rush to ratify the agreement was driven by a fear that after the November elections, the ruling coalition would no longer be in power and the agreement might not be ratified at all.^[ii] Following the elections, however, he affirmed that his party supports integration with Europe. Others feared that waiting longer to vote on the ratification would give covert Russian agents time to corrupt ruling coalition members of parliament (MPs) to vote against the agreement. In fact, on 13 March, a woman was detained for allegedly attempting to bribe two MPs with €500,000, giving credence to the theory of such a Russian plot.^[iii]

The EU lifted visa requirements for Moldovan citizens in 2014, allowing holders of biometric passports to travel to the Schengen Zone for short stays, visa-free. This turning point in Moldova's European integration went into effect on 28 April, following the successful implementation of reforms connected to border security, migration, and fundamental rights. Visa liberalization made Moldovan citizenship more attractive, including for people living in Transnistria, and Moldovan officials reported a 250 percent increase in the number of applications for biometric passports coming from the unrecognized breakaway territory between Moldova and Ukraine.^[iv]

Relations between Chişinău and Tiraspol tensed in 2014, with events in Ukraine putting policymakers on edge. The Tiraspol administration, supported by Russia, took the position that the signature of the Association Agreement would damage the negotiation process between Transnistria and the government in Chişinău. Tiraspol postponed the so-called 5+2 negotiations – consisting of Moldova and Transnistria, with Russia, Ukraine, and the Organization for Security and Cooperation in Europe (OSCE) as mediators, and the EU and the United States as observers – three times, as Transnistria wanted Brussels to treat them separately from Moldova in trade relations. The EU declined to agree on a separate trade regime with Tiraspol, and at the end of 2014, the previous system of Autonomous Trade Preferences (ATP) applied to the region. However, since the ATP will expire at the end of 2015, the authorities in Tiraspol are expected to make a decision by that time. Experts pointed out that the economies of Chișinău and Tiraspol are interlinked and are connected to the rest of EU, so questions of whether the DCFTA will cover the breakaway province could be moot.^[v]

Still, the signature of the agreement soured relations with Russia. Moscow retaliated in September by unilaterally suspending the Commonwealth of Independent States Free Trade Agreements (CISFTA) for 19 categories and imposed customs duties on numerous products from Moldova that had previously been duty-free. Russia had banned Moldovan wine imports in 2013, but in July, it broadened the ban to imports of most Moldovan fruit and meat products.

Relations between the Autonomous Territorial Unit of Găgăuzia and Chişinău were quite difficult throughout the year. On 2 February, Găgăuzia held a referendum which asked voters whether the region should be a member of either the EU or the Russian-led Eurasian Economic Union (EEU, formerly Customs Union). Ninety-eight percent voted for a customs union with Russia, and an equal percentage supported the independence of Găgăuzia, "should Moldova lose its sovereignty."^[vi] Gagauz residents fear Moldova's accession to the EU will lead to unification with Romania. Chişinău considered the referendum illegal since it was held in violation of Moldovan legislation.

The Moldovan economy decelerated in 2014, with the GDP growing only at 2 percent, compared to a growth of 8.9 percent in 2013.^[vii] The banking sector, the majority of which is controlled by oligarchs, continued to experience difficulties. The country is dealing with the after-effects of a 2013 banking crisis, in which a formerly state-controlled bank, Banca de Economii (BEM), gave imprudent loans to entities allegedly linked to politicians. Public debate also continued on the sweetheart deal a company associated with Russian tycoon Oleg Deripaska got in October 2013 from the government: a 49-year exclusive contract to run Chişinău airport.^[viii]

In addition, foreign investors were spooked by the rollercoaster case of Grawe Carat insurance. In September 2013, the insurer was stripped of its right to issue Green Cards (an international vehicle insurance) because of alleged collusive behavior. Although the company was reinstated in its rights in a decision by the Court of Appeals in January 2014, the National Bureau of Motor Insurers did not execute the decision.^[ix] In July, the Competition Council found the exclusion of Grawe Carat to have been illegal.

Electoral Process:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
3.75	3.75	3.75	4.00	4.25	4.00	4.00	4.00	4.00	4.00

Moldova held parliamentary elections on 30 November 2014. Five parties entered the new parliament: the Party of Socialists of the Republic of Moldova (PSRM) received 20.51 percent of the vote; PLDM 20.16 percent; PCRM 17.48 percent; PDM 15.80 percent; and the former coalition member Liberal Party (PL) 9.67 percent.^[x] In its preliminary findings, the OSCE's International Election Observation Mission found that "elections offered voters a wide choice of political alternatives."^[xi] The observers, however, noted some problems, including the late deregistration of one of the electoral contestants, pressure on privately-owned outlets, and problems with the new electronic system that processed voter information.

Although the elections were referred to as a "historic" vote to decide where Moldovan public opinion would fall on the integration debate between the European Union and the Russia-led customs union, the turnout of 55.8 percent was the lowest since Moldova's independence.^[xii] The electoral list offered a wide choice of options: it included 26 candidates, with 21 parties, 1 electoral bloc, and 4 independent candidates. The process generally ensured candidates equal freedom of expression and equal access to media and public space.

A few days before election day, the Central Electoral Commission (CEC) annulled the registration of the pro-Russian Patria party led by the businessman Renato Usatîi. Usatîi, who had made his money in Russia, returned to Moldova in April and founded Patria ahead of the parliamentary vote. His critics say that the party is a Russian- and organized crime front.^[xiii] On 26 November, the CEC proposed the deregistration of Patria on the grounds that the party had received 8.1 million MDL ($500,000) from abroad, which is forbidden by Moldovan law.^[xiv] The Chişinău Court of Appeals and the Supreme Court approved the decision in the next two days. Few questioned the grounds for deregistration, but observers and political commentators took issue with the timing and circumstances. The U.S. Embassy, the EU Delegation, and the Russian Ministry of Foreign Affairs all voiced their concerns over the democratic and electoral implications of the decision.^[xv] Promo-Lex, an NGO that advocates for democratic practices and conducts election monitoring in Moldova and Transnistria, said that the majority of parties that gained seats in the parliament failed to disclose the full amount of their spending. They added that PDM and PLDM did not report significant amounts of money and thus exceeded the spending limit.^[xvi] Had the authorities proven this during the campaign, these parties would likely have been excluded from the elections as well.

A portion of the votes for PSRM is believed to have come from Patria supporters, since both parties strongly opposed EU integration. The PCRM also lost a big part of its voters to the PSRM, partly due to the departure of some of its leaders to form their own parties or join others. Earlier, in 2009, a group of PCRM radicals, including MPs, created the extremist splinter organization called "Antifa," short for anti-fascism. The group is informally headed by the former communist MP Grigorie Petrenco, who is now a member of the Patria party. In order to avoid radicalization of the rest of PCRM, its leader kicked Antifa out of the party.

The authorities took high security measures to ensure peaceful elections and postelection period. Because fear of violent protests intensified before the elections – including the fear of protests similar to Ukraine's Euromaidan movement – the security services and police detained and arrested several activists of Antifa, which remained an unregistered organization. Police and prosecutors searched the activists' houses and found two grenade launchers, among other weapons, in November. Some of the Antifa activists were conditionally released, but two of them had their arrests prolonged for another 30 days and were charged with creating a criminal group in December.^[xvii]

As of the end of 2014, a government had not yet been formed. The ongoing negotiations between the pro-European PLDM, PDM, and PL were highly non-transparent, and the parties could not agree on the division of ministries. The position of the president, which will be elected by the parliament in 2016 and for which PL was aspiring, was also a point of contention between the parties. At the same time, PLDM and PDM kept a low profile dialogue with PCRM in the event of a collapse in coalition negotiations with PL. Experts noted at year's end that if the new government does not take serious steps to fight corruption, early elections could take place.^[xviii]

In 2014, no important changes took place in Moldova's electoral legislation. The parliament adopted a bill on public financing of political parties in the first reading in July, but the bill was yet to become law at year's end. In April, at the initiative of PCRM, the parliament adopted a law calling for a state registry of voters. The goal of the electronic system was to increase transparency, prevent repeated voting by citizens, and improve the accuracy of voter lists. Overall, the system was a success, but it witnessed technical problems on election day that affected the speed of counting and tabulating votes.

Civil Society:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
4.00	3.75	3.75	3.75	3.50	3.25	3.25	3.25	3.25	3.25

Moldovan civil society is increasingly diverse and active. During the last 10 years, the country's nongovernmental organizations (NGOs) and think tanks have developed considerably, thanks in large part to support from international donors. In 2014, the sector remained dependent on foreign support for more than 80 percent of its funding, despite an increased effort to raise funds locally.^[xix] The 2012-15 Strategy for the Development of the Civil Society, which was unanimously adopted by Parliament in 2012 and applied for its first full two years in 2013 and 2014, attempted to address this problem. Overall, the number of NGOs increased to 9,315 in 2014 compared to 8,227 in 2013, though most of them were not active during the year.^[xx]

Active Moldovan NGOs are concentrated in Chișinău, where they have more opportunities to express their opinions and can be more effective at lobbying the government. Nevertheless, in 2014, many NGOs became active in the regions and held advocacy and go-to-vote campaigns. This was in part due to foreign donors' changing requirements related to funding, but also a conscious decision by NGOs who would like to see their country join the EU in the future.

Moldova's political culture continues to operate according to the conviction that decision-making is the business of politicians. Consequently, the impact of civil society organizations on the creation of public policy remains limited. However, inclusion of NGOs in the legislative process is gradually improving. They have been particularly active in the field of anticorruption and played a significant role in the drafting of anticorruption legislation and monitoring the implementation of reforms. Another collective tool to influence government policy is the National Participation Council (NPC), which consists of 30 organizations. The head of NPC attends cabinet meetings and is able to voice the opinion of the NGOs on a given issue.^[xxi]

The NPC and the umbrella organization NGO Council, together with other NGO federations, have played an active role in advocating for reforms and putting public pressure on the ruling coalition. However, despite repeated appeals, the government did not move forward on numerous reforms in 2014, including laws on financing of political parties, transparency of media ownership, and the restructuring of the National Integrity Commission.^[xxii]

The ongoing security crisis in Ukraine and the Russian occupation of Crimea mobilized NGOs. They expressed solidarity with their Ukrainian counterparts, opposed the annexation of Crimea, and denounced actions by Russian-backed separatists in eastern Ukraine. Moldovan civil society also worked to raise awareness of possible provocations and instigations of violent protest in Moldova, especially in the postelection period.

As in previous years, the influence of trade unions remained limited. They are not perceived as effective tools to defend workers' rights in practice. Despite this, the National Trade Union Confederation in Moldova was more active in 2014, and they will play a greater role in the implementation of the Association Agreement. Unions have been more vocal in calling on the government to improve social conditions and warned that inaction may lead to massive protests.

Several attempts to improve the legal environment of NGOs took place in 2014. In December 2013, parliament adopted a law that allowed taxpayers to redirect 2 percent of their income tax payment to an NGO of their choice. A month later, the Constitutional Court struck down the law on the grounds that it lacked the required official opinion of the government.^[xxiii] Although MPs promised to readopt the law with the needed improvements, taxpayers still did not have the option of donating to NGOs through their tax returns at year's end.^[xxiv]

Independent Media:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
5.00	5.25	5.50	5.75	5.75	5.50	5.00	5.00	5.00	5.00

The media landscape grew more dynamic and diverse in 2014, but lack of media ownership transparency and highly partisan coverage continued to plague the sector. According to opinion polls, most Moldovans still get their news from television (82 percent), but the internet (45 percent) is growing more popular, and radio (43 percent) remains the third most-accessed medium.^[xxv] In terms of audience share, the leaders are Prime TV, owned by Vladimir Plahotniuc of PDM; Moldova 1, the state-owned broadcaster; Jurnal TV, owned by Victor Topa; Pro TV, a subsidiary of the Romania-based Central European Media Enterprise; and Publika TV, another Plahotniuc property.

Despite promises to adopt a law on media ownership before the expiration of its current mandate, the coalition government failed to do so in 2014. A draft bill, which would require the disclosure of de facto owners of broadcasters and print publications, was adopted in the first reading in July but was yet to become a law at year's end. The draft needed improvements according to experts, as it was not clear what its authors meant by "shadow owners," and it lacked a mechanism, most likely financial penalties, to enforce the desired transparency. In January, two opposition parties, the PCRM and PL, both submitted proposals of a new Broadcasting Code to the parliament. Neither of them was adopted.

As 2014 was an election year, the Audiovisual Coordinating Council (CCA) had its hands full enforcing media laws. In April, the CCA restricted political advertising beyond the framework of the electoral campaign, after some politicians had bought and run campaign ads long before the official campaign season. The CCA also issued warnings and imposed fines during the campaign. Prime TV, Publika TV, Canal 2, and Canal 3 were reprimanded for bias in favor of PDM; TV7, N4, and Euro TV displayed bias in favor of PDL; while Accent TV and Ren TV received fines for partiality toward Patria and PCRM. Jurnal TV was censured for heavy negative bias against Plahotniuc of PDM.^[xxvi] Independent press freedom organizations confirmed, to a large extent, the findings of the council.

Against the backdrop of the escalating conflict between Russia and Ukraine, the CCA also took aim at Russian-backed media. At the request of Ana Gutu, a parliamentarian from PL, the CCA started to monitor Russian TV rebroadcasts in Moldova in April.^[xxvii] The monitoring was done in parallel with the Independent Press Association, which concluded that NTV, Channel One, RTR, Ren TV, and Rossiya 24 used propaganda methods. These methods included presenting unconfirmed rumors as information and manipulating text and images, especially related to the events in Ukraine. In July, the CCA suspended Rossiya 24 for six months and fined RTR and Ren TV for noncompliance with the broadcasting legislation.^[xxviii]

Moldovan media are highly dependent on external funding, and businessmen and politicians often influence content by taking control over editorial policy in return for financial sustainability. According to the Center for Investigative Journalism, independent media outlets are run by small editorial staffs with small, unpredictable budgets, making it hard for them to resist the pressures and enticements of oligarch money.^[xxix] Wealthy businessman and PDM MP Plahotniuc – who owns several TV channels, including the most viewed, Prime TV – is considered Moldova's most powerful media magnate. Some accused Vlad Filat, a former prime minister, of creating his own media empire during the year. According to allegations, Filat is behind the acquisitions of Euro TV and Alt TV by Klassika Media, owned by controversial businessman Ilan Shor.^[xxx]

In January, Jurnal TV, Accent TV, and RTR were excluded from the basic service packages of cable operators on technical grounds. The three channels are known for criticizing the Moldovan government. The exclusion attracted serious criticism from the head of the EU delegation in Moldova, as well as from the OSCE, the U.S. embassy, and various NGOs, and within days, the operators reintroduced the channels into their packages.^[xxxi] A cable operator said that it moved Jurnal TV to its premium package because the channel lacked a contract for 2014, a statement that prompted speculations whether Jurnal TV knew it would be excluded.^[xxxii] The exclusion generated debate in the parliament and prompted the creation of a working group in the same month. According to Chiril Lucinschi, the head of parliamentary committee on media, the conflict was caused by unclear legislation.^[xxxiii] The working group was, however, dismantled in a few days, after the opposition proposed amendments to the Broadcasting Code without waiting for consultations.

In May, the parliament decided to restrict access of journalists to the plenary hall of the parliament building, which was renovated following its destruction in riots in April 2009. As of year's end, journalists could only watch the activity of MPs on televisions in a separate room.^[xxxiv] The parliamentary committee on the media recommended allowing journalists back into the hall, but the head of parliament denied it on the grounds that the deliberation room does not have enough space to accommodate both politicians and journalists.

Journalists occasionally face threats and physical violence in the country. In January, Usatîi, the founder of Patria, called a journalist from Jurnal TV in the middle of the night and allegedly threatened him because of Jurnal TV's coverage of the politician. The newspaper Ziarul de Gardă, known for its investigative reporting, complained about alleged threats from Usatîi as well.^[xxxv]

The media environment in Transnistria, the breakaway region between Moldova and Ukraine, continued to worsen in 2014. News agency Tiras was banned in Transnistria and its owner, Dmitry Soin, a local politician and media manager, moved to Ukraine after receiving a series of threats. The owner of dniester.ru, Roman Konoplev, also received threats during the year. Konoplev's news site is blocked within Transnistria.^[xxxvi] Overall, Presidential Decree No. 241, issued on 5 August and aimed at "preventing extremist activity," was employed to clear the Transnistrian region of potential critics of President Yevgeny Shevchuk's regime.^[xxxvii]

In April, local authorities in Găgăuzia announced that they would grant themselves the right to issue licenses for TV channels. Despite warnings from the CCA that doing so would be illegal, the Găgăuz National Assembly decided to go forward with the plan in October. In November, the CCA filed a case against the assembly.^[xxxviii] During the year, several reports noted an increase in censorship in Găgăuzia, with local authorities favoring select loyal media.^[xxxix]

Local Democratic Governance:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75	5.75

Moldova has a three-tiered administrative structure. The smallest units are towns (orașe) and villages (sate), with mayors and local councils that are directly elected by residents. The second level, which features its own elected government institutions, is made up of counties (raioane), the city of Chișinău, the Autonomous Territorial Unit of Găgăuzia, and Transnistria. Since 2012, the city of Bălți has also had the status of a municipality with greater autonomy. Moldovan authorities have not had effective control over the separatist region of Transnistria since the 1992 armed conflict.

Moldova has been undergoing a process of decentralization since 2010. However, as numerous reports indicate, decentralization without proper empowerment and accountability can lead to inefficient and corrupt local administrations. The two main problems of local government remain underfinancing and endemic corruption.

The Law on Local Public Finances went into force in January but was only applied in three counties and in Chişinău. Beginning in 2015, this law will be applied in the entire country. According to the law, the villages and towns will retain 75 percent of tax revenue from their citizens, while the counties will get 25 percent and the municipalities 50 percent. This discrepancy is due to the fact that local rural and small urban areas are confronted with the mass migration of their citizens to Western Europe, resulting in chronic budget shortfalls.^[xl] The new local finance law enables local authorities to decide their own spending priorities. The law does not change how capital investments are financed – this remains at the regional level and could prove problematic.

Other potential local governance reforms remained undone. An important law that would have increased the competences of local authorities was blocked in the parliament. The draft law would give local authorities the right to contest laws with a local effect before the Constitutional Court and would grant them jurisdiction over zoning, both of which would rebalance power between the central and local public administrations. Another potentially beneficial draft law that languished in the parliament was an amendment to decrease bureaucracy in public procurement.^[xli]

The Decentralization Strategy for 2012-2015 and its implementing action plans will likely not be fully implemented before their expiration. Most of the laws within the strategy were planned to be adopted in 2014, but the process stagnated because of the elections and lack of political will. With the nationwide application of the local public finances law and municipal elections scheduled for 2015, the year will be important for local authorities. If the incumbent governing parties lose, reforms might get more difficult to push through.

Judicial Framework and Independence:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
4.50	4.50	4.50	4.50	4.75	4.50	4.50	4.50	4.75	4.75

According to the constitution, the judiciary is independent from the legislative and executive branches. However, as a recent report by the International Commission of Jurists and the Soros Foundation-Moldova states, Moldova inherited the Soviet tradition of judicial subordination to the executive power, and further efforts are still required to guarantee judicial independence in practice.^[xlii]

The judicial reform process was ongoing in 2014. In 2011, the parliament adopted the Justice Sector Reform Strategy, which aimed at reshuffling the judicial organization, updating procedures, and restructuring the prosecution service. Its implementation de facto started in 2012 with the adoption of an action plan. In 2013, a working group put forward a draft law on reforming the prosecutor's office, left largely untouched and unchanged from Soviet times and therefore requiring the amendment of the constitution. The parliament adopted a concept paper on the reform in July 2014 but was yet to examine the draft law at year's end, demonstrating a lack of political will on this matter. Delays in the implementation of the strategy have cost Moldova about €1.8 million in lost EU budgetary support.^[xliii]

In the past, the Superior Council of Magistrates (CSM) often shielded judges from criminal prosecution. In July, the government adopted amendments that enabled the criminal prosecution of judges without the consent of CSM on all charges.^[xliv] The changes were a continuation of 2012-2013 efforts to make these prosecutions easier. However, in November, the Supreme Court of Justice (SCJ) asked the Constitutional Court to repeal the law on the grounds that it affects judicial independence. The request generated disappointment and demonstrated a strong opposition to reform within the judiciary itself. As of year's end, the Constitutional Court had not examined the law.

Alongside corruption, experts highlight that Moldovan judges are poor at argumentation and make rulings that fail to touch upon key elements of a given case.^[xlv] Poorly-argued decisions have contributed to Moldova's negative track record at the European Court of Human Rights (ECHR). Even as court decisions have gotten longer, the quality remains low, filled mainly with descriptions of the position of parties. Lately, the SCJ has improved is argumentation, but it is still a systemic problem.

Wage increases have aimed to improve judicial independence and make judges less corruptible. In 2013 and 2014, judges received 100 percent raises, with 10 percent raises scheduled for 2015 and 2016. Opposition politicians and journalists, however, complained that the government simply planned on buying the future goodwill of the judges.^[xlvi] Beginning in 2013, each judge got a legal assistant, and beginning in 2014, both an assistant and a clerk. The gradual exit of the old guard is also contributing to a change in judicial ethics: according to the Minister of Justice, about one-third of the judges have been replaced since 2010.^[xlvii]

Corruption:

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
6.00	6.00	6.00	6.00	6.00	6.00	6.00	5.75	5.75	5.75

In 2014, the government continued to implement its anticorruption strategy mainly by reinforcing existing institutions. In 2013, control over the National Anticorruption Center (CNA) was transferred to the government from the parliament following its investigations of PLDM ministers and allies during the 2013 political crisis. This did not help make the CNA significantly more independent, as the government exerted its own pressure on the center, just as the parliament had previously.^[xlviii] One way in which the government can exert pressure is by holding the CNA's budget allocation hostage until the last minute. This oversight has effectively discouraged the CNA from assertively fighting corruption among top officials.

In August 2014, the CNA started evaluating the professional integrity of public servants. About 7,000 public servants participated in a training organized by the CNA, which sent official letters to about 1,000 public institutions to inform bureaucrats about the upcoming evaluation.^[xlix] According to Cristina Tarna, CNA deputy director, the preliminary results confirm endemic corruption in Moldova's public sector.^[l] Half of the public servants tested took the offered bribes and most of them were open to being bribed in the future. In some areas, 100 percent failed the test. If this trend continues through to the conclusion of testing, half of the public servants risk being fired and almost all could be fined. Those who fail will not be jailed, since the tests are conducted without a judicial warrant. The CNA was planning to roll out an "integrity record" in 2015, making it impossible for a person fired for integrity-related issues to get another civil service job. Some criticized the initiative, arguing that the CNA fails to investigate people who actually take bribes, while it eagerly tests and sanctions people who are not yet guilty of graft.

The National Commission for Integrity (CNI) continued to compare declared assets and incomes of public officials and to look for conflicts of interest. CNI verified many officials and fined ministers, MPs, and judges, but the efficiency of the commission is questionable. According to experts who assessed its work over the last two years, the commission's results are modest due to a deficient legal framework and insufficient instruments and funding.^[li]

The scandal involving BEM continued in 2014. The state-owned bank had been left financially vulnerable by extensive mismanagement and corruption. Its former president, Grigore Gacikevich, was placed under investigation in 2013 for having illegally granted credits to several companies that were allegedly connected with influential politicians. When the government issued shares to private investors and gave up majority control of the bank, the bank became the object of bitter competition among local businessmen, top politicians, and Russian companies.^[lii] In November 2014, the state became a majority shareholder again. An International Monetary Fund (IMF) report published in December confirmed that BEM had received a bailout loan from the National Bank, worth MDL 3.3 billion ($205 million) and that BEM and two other banks had been put under special administration. At year's end, the amount of money needed to save the banks was estimated MDL 15 billion ($1.025 billion), or about an eighth of Moldova's GDP.^[liii]

Public opinion also focused on the unresolved scandal involving the Chişinău airport. In October 2013, via an opaque and noncompetitive tender, the government granted a Russian firm a 49-year concession to operate the airport.^[liv] Politicians from PLDM and PDM, as well as controversial businessman Ilan Shor, are suspected of being involved in both the bank and the airport cases, with investigations expected to drag well into 2015.^[lv]

A bright spot in recent years is the media, which has become more sensitive on issues related to corruption. Cases of corruption are being investigated and written about in specialized publications such as Ziaru de Gardă and RISE, which have managed to turn law-enforcement attention on a series of alleged crimes, particularly connected to politicians.

Author: Leonid Litra

Leonid Litra is a senior research fellow at the Institute of World Policy in Kyiv, Ukraine. Previously he worked for more than 10 years in the Moldovan NGO sector. His research focuses on the relationship between the Eastern Partnership countries and the EU, democratization, and conflict settlement.

---

Notes:

i "Guvernul şi-a asumat răspunderea în faţa Parlamentului pentru mai multe proiecte de legi," [The Government assumed responsibility before the parliament for several bills], Teleradio Moldova, 22 July 2014, http://www.trm.md/ro/politic/guvernul-si-a-asumat-raspunderea-in-fata-parlamentului-pentru-mai-multe-proiecte-de-legi/.

ii "VOTAT! Parlamentul a RATIFICAT Acordul de Asociere cu Uniunea Europeană," [Voted! The parliament ratified the Association Agreement with the European Union], Publika TV, 2 July 2014, http://www.publika.md/votat-parlamentul-a-ratificat-acordul-de-asociere-....

iii "ULTIMA ORĂ! Mită pentru deputaţi în valoare de 500 000 de euro, găsită într-o bancă din Chişinău," [Latest news! Bribe for MPs worth EUR 500.000 found in a bank in Chişinău], Publika TV, 13 March 2014, http://www.publika.md/ultima-ora-mita-pentru-deputati-in-valoare-de-500-...şinău_1841711.html.

iv "Paşapoartele biometrice, mai atractive pentru populaţia din stânga Nistrului," [Biometric passports more attractive for population from the left bank of Dniestr], Timpul, 21 November 2014, http://www.timpul.md/articol/pasapoartele-biometrice-mai-atractive-pentr....

v "Moldova: EU Commission clarifies intentions about Transnistria," Euractiv, 16 January 2014, http://www.euractiv.com/europes-east/moldova-eu-commission-clarifies-news-532785

vi "Gagauzia Voters Reject Closer EU Ties For Moldova," Radio Free Europe/Radio Liberty, 3 February 2014, http://www.rferl.org/content/moldovagagauz-referendum-counting/25251251.....

vii "The World Bank predicts by 2015 the growth of Moldova's GDP by 3%," Timpul Business Club, 14 January 2015, http://www.timpul.org/en/news/detail/stiri140115-1.html.

viii Vladimir Socor, "Moldova Hands Over Chisinau International Airport to Russian Business in Exclusive, Non-Transparent Deal (Part One)," Eurasia Daily Monitor, 8 October 2013, http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D=41459&no_cache=1#.VXVZ9OvQQaU .

ix "GRAWE Carat are din nou dreptul de a vinde 'Carte Verde,'" [GRAWE Carat once again has the right to sell 'green cards'], Journal.md, 30 January 2014, http://jurnal.md/ro/import/2014/1/30/grawe-carat-are-din-nou-dreptul-de-....

x Central Electoral Commission (CEC), "Alegerile parlamentare 30 noiembrie 2014," [Election results 30 November 2014], http://www.cec.md/r/r/.

xi Organization for Security and Cooperation in Europe, International Election Observation Mission, Republic of Moldova- Parliamentary Elections, 30 November 2014, Statement of Preliminary Findings and Conclusions (Chişinău: OSCE/ODIHR, 1 December 2014), http://www.osce.org/odihr/elections/moldova/128476?download=true.

xii Central Electoral Commission (CEC), "Alegerile parlamentare 30 noiembrie 2014a," [Election results 30 November 2014], http://www.cec.md/r/r/.

xiii Marc Champion, "Russia's Project Moldova," BloombergView, 24 November 2014, http://www.bloombergview.com/articles/2014-11-24/russias-project-moldova.

xiv "Cum a reacţionat Renato Usatîi când a auzit că Partidul "Patria" a fost exclus din cursa electorală," [How Renato Usatii reacted when the Patria party was excluded from elections], Publika.md, 27 Noiembrie 2014, http://www.publika.md/cum-a-reactionat-renato-usatii-cand-a-auzit-ca-par....

xv Viorica Marin,"Reacţii după eliminarea Partidului Patria din cursa electorală. Ambasada SUA la Chişinău, îngrijorată privind respectarea supremaţiei legii," [Reactions after eliminating 'Patria' party from the elections. US Embassy in Chişinău concerned over the respect of rule of law], Adevarul, 28 November 2014, http://adevarul.ro/international/europa/reactii-eliminarea-partidului-patria-cursa-electorala-ambasada-sua-Chişinău-ingrijorata-privind-respectarea-suprematiei-legii-1_5478502fa0eb96501e2a46b4/index.html.

xvi Alla Ceapai, "Cheltuieli nedeclarate în campania electorală – un raport Promo-Lex," [Expenses undeclared in election campaign – a Promo-Lex report], Radio Europa Libera [Radion Free Europe/Radio Liberty], 18 December 2014, http://www.europalibera.org/content/article/26751191.html.

xvii "Încă 30 de zile de arest pentru Mihail Amerberg şi Pavel Grigorciuc," [30 days more of arrest for Mihail Amerberg and Pavel Grigorciuc], Noi.md, 4 December 2014, http://www.noi.md/md/news_id/52441.

xviii Interview with Moldovan experts, December 2014.

xix Liubomir Chiriac and Eduard Tugui, Civil Society Organizations from the Republic of Moldova: Development, Sustainability and Participation in Policy Dialogue (Chişinău: Institute for Development and Social Initiatives (IDIS) "Viitorul," Spring 2014), http://www.csdialogue.eu/sites/default/files/civil_society_mapping_csdp_....

xx Ministry of Justice of the Republic of Moldova, "Registry of non-Commercial Organizations," http://rson.justice.md/organizations.

xxi National Participation Council (NPC), "General Presentation," http://www.cnp.md/en/about-npc/overview.

xxii "ONG-urile cer parlamentarilor să-şi onoreze angajamentele restante," [NGOs ask MPs to honor commitments], Info Prim Neo, 29 September 2014, http://www.ipn.md/ro/societate/64768.

xxiii "ONG-urile din Moldova ar putea fi finanţate parţial de contribuabili," [NGOs from Moldova might be partially financed by taxpayers], TV7, 14 July 2014, http://www.tv7.md/ro/economic/ong-urile-din-moldova-ar-putea-fi-finantat....

xxiv "ONG-urile din Moldova ar putea fi finanţate parţial de contribuabili," [NGOs from Moldova might be partially financed by taxpayers], TV7, 14 July 2014, http://www.tv7.md/ro/economic/ong-urile-din-moldova-ar-putea-fi-finantat... "ONG-urile cer parlamentarilor să-şi onoreze angajamentele restante" [NGOs ask MPs to honor commitments], Info Prim Neo, 29 September 2014, http://www.ipn.md/ro/societate/64768.

xxv Institute for Public Policy, Barometer of Public Opinion: Republic of Moldova October-November 2014, (Chişinău: Institute for Public Policy, November 2014), http://ipp.md/public/files/Barometru/Brosura_BOP_11.2014_prima_parte-r.pdf.

xxvi "BBC punished TV channels for biased coverage of election campaign," EaP Media Freedom Watch, 10 November 2014, http://mediafreedomwatch.org/ru-kstr-nakazal-telekanaly-osveshhayushhie-....

xxvii "State regulator begins monitoring of Russian TV, Rebroadcast in Moldova," EaP Media Freedom Watch, 22 April 2014, http://mediafreedomwatch.org/ru-regulyator-nachinaet-monitoring-rossijsk....

xxviii IREX, Europe and Eurasia Media Sustainability Index: Moldova (Washington D.C.: IREX, 2015), https://www.irex.org/sites/default/files/u105/EE_MSI_2015_Moldova.pdf.

xxix "Journalist believes media are not free due to financial problems," EaP Media Freedom Watch, 14 August 2014, http://mediafreedomwatch.org/ru-zhurnalistka-schitaet-chto-smi-nesvobodn....

xxx Europe and Eurasia Media Sustainability Index: Moldova, https://www.irex.org/sites/default/files/u105/EE_MSI_2015_Moldova.pdf.

xxxi "International reaction to removal of TV channels from cable packages of Moldovan providers,"EaP Media Freedom Watch, 15 January 2014, http://mediafreedomwatch.org/ru-реакция-общественности-на-исключени.

xxxii Soros Foundation Moldova, PLURALISMUL EXTERN AL MASS-MEDIA ÎN REPUBLICA MOLDOVA: ÎNTRE OPORTUNITATE ȘI REALITATE, [External Pluralism in mass media in the Republic of Moldova: Between possibilities and reality], (Chişinău: Soros Foundation Moldova, 2014) http://www.soros.md/files/publications/documents/Pluralismul%20extern%20al%20mass-mediei%20din%20RM.pdf.

xxxiii "Situation with channels excluded from cable networks still being discussed," EaP Media Freedom Watch, 20 January 2014, http://mediafreedomwatch.org/14116/.

xxxiv "Reacții ale jurnaliștilor la condițiile de muncă pentru presă în Parlamentul renovat," [Reactions of journalists on working conditions in the renovated parliament], Media Azi, 16 January 2014, http://media-azi.md/ro/stiri/reacții-ale-jurnaliștilor-la-condițiile-de-muncă-pentru-presă-în-parlamentul-renovat.

xxxv "Businessman threatened Journal TV journalist," EaP Media Freedom Watch, 23 April 2014, http://mediafreedomwatch.org/ru-zhurnalist-jurnal-tv-zayavil-chto-ego-kollege-ugrozhal-predprinimatel/.

xxxvi "КГБ Приднестровья угрожает владельцу портала РИА 'Днестр," [The KGB of Transnistria threatens the owner of RIA 'Dnester'], Dniestr.ru, 27 April 2014, http://dniester.ru/node/10418.

xxxvii President of the Transnistrian Moldovan Republic, "Указ Президента ПМР № 374 'О внесении изменения в Указ Президента ПМР от 5 августа 2014 года № 241 'О некоторых мерах, направленных на предупреждение экстремистской деятельности…," [The decree of PMR President No 374 'on amending the Decree of President of PMR from 5 August 2014 – No 241 'on Several measures aimed at preventing extremist activity'], 18 November 2014, http://president.gospmr.ru/ru/news/ukaz-prezidenta-pmr-no-374-o-vnesenii....

xxxviii "President of Broadcasting Coordinating Council called attempt to issue broadcasting license to Gagauzia going against the agency separatism," EaP Media Freedom Watch, 21 May 2014, http://mediafreedomwatch.org/ru-popytka-vydachi-licenzij-na-veshhanie-tv-v-gagauzii-v-obxod-regulyatora-yavlyaetsya-formoj-separatizma/.

xxxix "Journalist in Gagauzia: Authorities support loyal press, the rest have different provision," EaP Media Freedom Watch, 6 June 2014, http://mediafreedomwatch.org/ru-zelenyj-svet-dlya-svoej-pressy-a-dlya-ostalnoj-vse-po-zakonu/.

xl Alla Ceapai, "De ce legea privind finanţele publice locale trebuie aplicată pe întregul teritoriul al R.Moldova" [Why the law on local public finances must be applied across the entire territory of Moldova], Radio Europa Libera [Radio Free Europe/Radio Liberty], 14 March 2014, http://www.europalibera.org/content/article/25297417.html.

xli "Reformarea Administraţiei Publice: Principalele evoluţii în perioada 2010-2014," [Reform of Public Administration: Main Evolutions in the period of 2010-2-14], Promis.md, 27 November 2014, http://www.promis.md/analitica/reformarea-ap-2010-2014/.

xlii International Commission of Jurists (ICJ) and Soros Foundation-Moldova, Reforming the Judiciary in Moldova: Prospects and Challenges (Geneva: ICJ, 2013), http://www.icj.org/moldova-more-work-needed-to-implement-judicial-reforms/.

xliii "Pirkka Tapiola: Moldova a ratat 2 milioane de euro pentru ca n-a reformat procuratura. Reactia ministrului Justitiei" [Prikka Tapiola: Moldova lost EUR 2 million because it did not reform the Prosecutor Office. Reaction of the Minister of Justice], inprofunzime.md, 15 September 2014, http://inprofunzime.md/stiri/politic/pirkka-tapiola-moldova-a-ratat-2-mi....

xliv Legal Resource Center from Moldova, Achievements and faults in reforming the justice sector of the Republic of Moldova: July 2012-2014 (Chişinău: Legal Resource Center from Moldova, September 2014), http://crjm.org/wp-content/uploads/2014/09/LRCM-Achievements-Just-sector.-Translated-chapters.pdf.

xlv Legal Resource Center from Moldova, Achievements and faults in reforming the justice sector of the Republic of Moldova: July 2012-2014.

xlvi Legal Resource Center from Moldova, Achievements and faults in reforming the justice sector of the Republic of Moldova: July 2012-2014.

xlvii "Ministrul Justiţiei: În patru ani, o treime din corpul judecătoresc a fost înlocuit," [Minister of Justice: in four years one third of judges were replaced], Teleradio Moldova, 21 June 2014, http://www.trm.md/ro/social/efrim-in-patru-ani-o-treime-din-corpul-judecatoresc-a-fost-inlocuit/.

xlviii In fact, the conflict is between the Vlad Plahotniuc, a former deputy speaker of the parliament, and Vlad Filat, a former prime minister. Both of them want control over CNA to block the other from using the center against him.

xlix National Anticorruption Center of the Republic of Moldova,"CNA dă startul testării integrităţii profesionale a agenţilor publici," [CNA starts testing professional integrity of public servants], news release, 13 August 2014, http://www.cna.md/ro/evenimente/cna-da-startul-testarii-integritatii-pro....

l "Jumătate dintre funcţionarii testaţi de CNA sunt corupţi, iar majoritatea sunt indulgenţi faţă de mită," [Half of the verified public servants are corrupted or are indulgent to bribe], Ziarul de Garda, 20 November 2014, http://www.zdg.md/social/jumatate-dintre-functionarii-testati-de-cna-sunt-corupti-iar-majoritatea-sunt-indulgenti-fata-de-mita.

li "Litanii pentru reforma eşuată a CNI" [Litany of failed reforms for CNI], Radio Europa Libera [Radio Free Europe/Radio Liberty], 25 November 2014, http://www.europalibera.org/content/article/26710213.html.

lii "Schimbare de macaz la Banca de Economii," [Change of direction at the Banca de Econonomii], Jurnal.md, 17 September 2013, http://www.jurnal.md/ro/import/2013/9/17/schimbare-de-macaz-la-banca-de-....

liii "BNM a dat CREDIT de 3,3 MILIARDE de lei Băncii de Economii și Băncii Sociale," [BNM offered a credit of MDL 3.3 billion to BEM and Social Bank], Bani.md, 18 December 2014, http://www.bani.md/banca-nationala-a-dat-credit-de-33-miliarde-de-lei-ba....

liv Vladimir Socor, "Moldova Hands Over Chisinau International Airport to Russian Business in Exclusive, Non-Transparent Deal (Part One)."

lv "Ilan Shor a pus mâna și pe Euro TV, după BEM și Aeroport," [Ilan Shor seized Euro TV after BEM and airport], Hotnews.md, 2 September 2014, http://www.hotnews.md/articles/view.hot?id=27126.