6 August 2020

Gheorghe Russu

Vice-director, The Center for Combating Economic Crimes and Corruption

Parties-Phantoms, Parties - State Institutions, Parties - State Enterprises


20 parties have registered in the current election campaign. Many people say it is a too big number for such a small country as Moldova. At the same time, much more parties could take part in the election campaign.

Last week illustrated

Activists launch Moldova’s first ‘Space Camp’ © Susan Coughtrie

Synthesized vision on the Transnistrian problem

There is no reason to believe that until the parliamentary elections in the spring of 2009 sound steps regarding the solution of the political conflict could be made.
Institute for Public Policy, 18 December 2008, 15:43

 The Black Sea Trust for Regional Cooperation

Institute for Public Policy

The events which took place during the period of September 11 to November 26, 2008 confirmed the assessments and conclusions[1] made at the expert group meeting on September 11, 2008.

A certain intriguing situation occurred about the fact that after the meeting between Dmitrii Medvedev and Igor Smirnov on September 3, 2008, the Tiraspol administration, "taking into account the request of the President of Russia", lifted the moratorium on talks with officials from Chisinau, which meant that the opportunity for resumption of dialogue between Chisinau and Tiraspol arose again. Meanwhile, after Smirnov-Medvedev meeting, the logic of the subsequent events seen by Russia, probably looked like this:

- Setting up a meeting between Igor Smirnov and Vladimir Voronin, in which they would had to find common points in their positions.

- Setting up a Dmitrii Medvedev - Igor Smirnov - Vladimir Voronin meeting, in which a framework document for the process of Transnistria conflict settlement was to be signed.

On September 17, 2008 speaking to the "Supreme Soviet" in Tiraspol, Igor Smirnov announced that Russia's position on the Transnistrian problem is based on the following principles:

1. The Russian Federation clearly stated its commitment for exclusively peaceful settlement of the conflict, and as a guarantor country it will undertake every effort to avoid an escalation of tensions.

2. The solutions for all the problems have to be found exclusively by the parties in conflict: TMR and Moldova. Russia will accept any agreement that will be reached between Chisinau and Tiraspol. The Russian side will not take any measures of pressure and will not impose any proposals, although it will participate and assist in the negotiation process.

3. Russia stands for an equal dialogue between the conflicting parties.

4. Russia will undertake every effort to protect the rights of its compatriots, wherever they are.

5. Russia, as a mediator country, will assist the parties in finding a compromise solution.

Presenting these points, Igor Smirnov has said that Russia's approach of the Transnistrian problem concures fully with the position of the Transnistrian authorities. These principles, enunciated by Igor Smirnov, show that there is a continuity in Russian Federation's policy towards the issue of Transnistria, and that this policy still remains incompatible with the territorial integrity and sovereignty of the Republic of Moldova.

De facto, the fulfillment of the scenarios which assume successive meetings in the Voronin-Smirnov and Medvedev-Smirnov-Voronin (2+1) format mean that Moldova would have faced the common position of Kremlin and Tiraspol, while the EU, U.S. and OSCE would have been removed from decision-making process. If this kind of scenarios would have been fulfilled, two situations, both unacceptable to Chisinau, could have resulted.

The first - an acceptance of the common position of Kremlin and Tiraspol, based on key elements of the "Kozak Memorandum" (federalization, the Russian military, etc.).

The second - an open rejection by Vladimir Voronin of the common position of Russia and Tiraspol.

It is obvious that both of the options would have been unacceptable for the Moldovan leadership. The first option, implying the acceptance of the "Kozak Memorandum", is impossible, because it is contrary to the Constitution and to the The law on the basic provisions of the special legal status of the localities on the east bank of the Nistru River of July 22, 2005; also it would have provided strong arguments for opposition, in the situation when only few months are left until the next parliamentary elections; and definitely it would have been contrary to EU and the U.S. position towards the presence of Russian army in Moldova after the settlement of the conflict.

The second option, implying an open rejection by Vladimir Voronin of Kremlin's proposals, would have been perceived in Moscow as an offence, as in the case of Kozak Memorandum in November 2003. In addition, this gesture would shatter forever the myth, on internal political arena,  about the ability of Vladimir Voronin to settle the Transnistrian conflict and reunify the country through a direct dialogue with the President of Russia (Vladmir Putin (up to March 2 2008) and Dmitrii Medvedev).

Even worse is the fact that an open refusal by Vladimir Voronin to accept the proposal of the Kremlin during the possible meetings in the 2+1 negotiations format, would have sharply increased the likelihood of harsh actions by Russia, with a negative impact on the political and economic situation of the Republic Moldova.

Firstly, this is the case of the situation in the Security Zone, where, if Moscow decides, it has all the necessary levers to start some provocations.

Probably realizing these risks and not being able to develop some alternative solutions, Chisinau has finally dropped the idea to reach a "package solution" of the Transnistrian problem through a direct dialogue with the Kremlin, followed by the parliamentary elections in the spring of 2009 on the whole territrory of the country. This assumption is indirectly confirmed by the fact that the Transnistrian problem almost disappeared from the informational space of the Republic of Moldova, controlled largely by CPRM.

Against this background, on September 12, 2008, Andrei Staratan, Minister for Foreign Affairs and European Integration, at the meeting in Brussels with Benita Ferrero-Waldner, Member of the EC in charge of External Relations and European Neighbourhood Policy, said that "the Transnistria settlement negotiations based on a "agreement package" will be resumed only in the 5+2 format". This statement of the Moldovan minister was a clear message that Chisinau waived the scenario of a settlement of Transnistria problem through a direct dialogue with the Kremlin, excluding other parties, and withdrew under the 5+2 protection shield.

The meeting between Igor Smirnov and Vladimir Voronin, on the background of mutual accuses between Chisinau and Tiraspol, has not taken yet place, not mentioning the fact that such meetings, under the Kremlin pressure, in any case, can  not have positive results for Moldova.

Transnistrian problem at the CIS Summit of Heads of Government in Chisinau and during the official visit of Vladimir Putin.

The prospect of the CIS Summit of Heads of Government, in Chisinau on November 13-14, 2008, with the participation of Vladimir Putin, reanimated some expectations regarding the possibility of reaching a quick solution for the Transnistrian problem. But, the issue of  the conflict has not figured on the agenda of official talks, and the issues discussed at Voronin-Putin meeting remained unknown to the public.

Meanwhile, it was stated that as a result of the meeting between Putin and Greceanii four documents were signed, one of which is the "Agreement[2] on the project to separate Moldavian State Raional Power Plant blocks for the purpose of radial functioning with the Romanian energy system". The expressed goal of signing this agreement was to enhance the volume of electricity exports from the Cuciurgan Power Plant to Romania.

According to the provisions of the Agreement, Inter RAO EES Company will invest in developing the distribution network, adjusting it to the European standards. Commenting on the signing of this document, on the "Maxima" talk-show on "NIT" TV station, Prime Minister Zinaida Greceanii said: "It's important for us because it leads toward the energy security of the country"

The delivery of electricity from Cuciurgan Power Station to Romania started in 2007. However, these transactions continue to be questionable[3].

 1. Ownership of the property located in the TMR.

The leadership of Moldova has repeatedly stated that the Moldovan state would recognize the ownership of the property in Transnistria, privatized outside the legal framework of the Republic of Moldova, only after reaching a political settlement of the conflict. This position is a basis of the "package agreement", through which the leadership of Moldova intended to settle the  Transnitrian conflict in a dialogue with Russia.

Legal aspects of this issue are reflected in the study of the New York City Bar Association "Thawing a Frozen Conflict: Legal Aspects of The Separatist Crisis in Moldova", presented in the summer of 2006 in Chisinau. Some of the authors of this study, Christopher J. Borgen, a professor of law at the University of St. John's, USA, and Mark A. Meyer, the Chair of the Committee on European Affairs of the New York City Bar Association , were decorated with the "Meritul Civic" medal, through a decree of President Vladimir Voronin. There should be emphasized the fact that the study was taken over by the Government as a guideline in the process of reintegration of the country (GD. 891 of 03.08.2006).

In this study, the authors prove that, under the rules of international law, the TMR is not entitled to change the form of ownership and to conduct privatization in Transnistria. This is also the case of the Cuciurgan Power Plant privatized (illegally) by the Russian Inter RAO EES Company.

The ambiguity of the situation regarding the privatization in TMR is seen in the Law Nr. 274 of 16.07.2004, which complements the Law Nr.627 of 4 July 1991 on privatization. Article 23 of the 1991 Law is completed with paragraph (4) stating the following: "The state does not guarantee the right of ownership of targets situated on the left bank of Nistru river and in the city of Bender, privatized without proper coordination with the Government, as established."

Article 2 of the Law Nr.274 of 16.07.2004 obliges the government to develop, within a month, the procedure for the coordination of privatization targets situated on the left bank of Nistru River and in the city of Bender.

In connection with what was said above, the following questions occur:

- Has the Government developed or not "the procedure for the coordination of privatization targets situated on the left bank of Nistru River and in the city of Bender", and in case it was developed, how is it complying with the legislation of the Republic of Moldova?

- Was the Cuciurgan Power Plant privatized in accordance with this procedure or not?

- How and to what extent the signing of the Agreement of November 14 2008 contributes to the strengthening of the energy security of the Republic of Moldova?

- Were the licensing of the Cuciurgan Power Plant by the Government and the signing of the Agreement of November 14 2008 made under the laws of the Republic of Moldova?

- Does the licensing by the Government means explicit recognition of ownership by Inter RAO EES Company of the Cuciurgan Power Plant?

2. The gas debt

It is well known that the Transnistria debt to "Gazprom", including penalties, exceeded the amount of 1.7 billion U.S. dollars. In 2008, enterprises from Transnistria, including the Cuciurgan Power Plant, were paying per one thousand cubic meters of gas only 105 U.S. dollars, while the official price of gas delivered by "Gazprom" to Transnistria is 192.75 U.S. dollars. Therefore, increasing the amount of electricity produced by the Cuciurgan Power Plant will substantially lead to the growth of the debt of Transnistria to the "Gazprom".

On July 18, 2008, the International Commercial Arbitration Court in Moscow ruled that "MOLDOVAGAZ" shoul pay to "Gazprom" 42 million U.S. dollars, as a debt for gas consumed in Transnistria in the first quarter of 2006. The "MOLDOVAGAZ" denied that the Republic of Moldova will pay this debt. However, the signing of the Agreement of November 14 implies substantial increase of the volume of electricity generated by the Cuciurgan Power Plant.

In connection with what was said above, a question occurs again:
- Who will pay for the gas consumed in Transnistria, inclusively by the Cuciurgan Power Plant, which will deliver electricity to Romania under the Agreement of 14 November 2008?

3. Questions regarding the intermediaries

After the beginning of the delivery of electricity from the Cuciurgan Power Plant to Romania, allegations have arisen in the press, that a company was interposed between the Cuciurgan Power Plant and the consumer in Romania. This company is "Eastern Europe Energy Ltd." a British off-shore company, founded in June 2007 especially for this transaction. The calculations carried out by the publications in question show that, for intermediation, Eastern Europe Energy Ltd. received 1.5 U.S. cents per kWh, while the Moldoelectrica company charges a fee for transporting the energy of only about 0.3 cents U.S. Annual profits of this intermediary, taking into account the transaction volume in 2007, climb up to 10 million U.S. dollars.

After the Voronin-Putin meeting, in which the energy issue was also discussed, the press quoted Putin's opinion: "Lately, we succeeded together with our Moldovan colleagues to find quickly enough quality solutions in the key points of collaboration "

In connection with what was said above, the following questions occur:
- Will electricity from the Cuciurgan Power Plant, after signing the Agreement of November 14 2008, be delivered through East Europe Energy Ltd.?

- Who are the persons that founded this off-shore company?

- What is the reason for the inclusion of an intermediary in the supplying electricity to Romania scheme?

 - How energy supply from the Cuciurgan Power Plant to Romania influences the debt of Moldova to Romania for electricity, delivered during 1998-2001 (about 30 million U.S. dollars)?

From what was stated above the following conclusions occur:

- There is no reason to believe that until the parliamentary elections in the spring of 2009 sound steps regarding the solution of the political conflict could be made;

- There is no guarantee as regards stability in the Security Zone. Moldova is extremely vulnerable and unprotected in the face of possible provocations in the Security Zone;

- The Government does not have a coherent and consistent position regarding the issue of ownership of the objects in the localities from the left bank of the Nistru River and the city of Bender;

- The relations between the leadership of Moldova and the Russian Federation regarding various energy projects are not sufficiently transparent and leave questions of corruption and of impact on energy security of the Republic of Moldova.

 Dr. Arcadie Barbaroşie, Executive Director, Institute for Public Policy

Oazu Nantoi, Program Director, Institute for Public Policy

Dr. Igor Boţan, Executive Director, Association for Participatory Democracy

Dr. Anatol Gremalschi, Program Director, Institute for Public Policy

Vlad Lupan, Independent expert

Dr. Viorel Cibotaru, Executive Director, European Institute for Political Studies in Moldova

Eugen Revenco, European Integration Studies Centre  

Dumitru Mînzărari, Researcher on security issues and foreign policy, IDIS „Viitorul"

Radu Vrabie, Project Coordinator, Foreign Policy Association

 November 26, 2008







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