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Legal Monitoring Report for the period of 28 April - 24 May 2023

Legal Monitoring Report for the period of 28 April - 24 May 2023

Moldova
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The Legal Monitoring Report deals with amendments to the Law on Joint Stock Companies and the Compulsory Licensing Mechanism, ratification of the Agreement on the Transportation of Goods, and approval of Legal Framework on Cuber Security, the FISCALIS Agreement and Ecolabel Regulations.

RELEVANT LEGISLATIVE PROVISIONS IN CONNECTION WITH THE STATE OF EXCEPTIONAL SITUATION

Decision(s) issued in relation to the Exceptional Situation

By Decision No. 133 dated 26 May 2023, the Parliament extended the state of emergency on the entire territory of the Republic of Moldova for a period of 60 days, starting on 4 June 2023.

 

LEGAL AMENDMENTS CHANGING GENERAL ASPECTS OF THE BUSINESS

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, and social, tax and customs, environment, etc matters. This Section shall also include draft legal acts 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.

Commercial and Corporate

Law(s):

Amendments to the Law on Joint Stock Companies 

The purpose of the amendments is to supplement the law with a special provision regulating the work of the company's supervisory bodies, which include the audit committee and the supervisory board.  

In public interest companies, the establishment of an audit committee is mandatory, which shall act in accordance with the provisions of the law, the company's articles of association, and the rules of procedure of the company's audit committee.

Improving the Compulsory Licensing Mechanism

The law provides for additional cases in which the compulsory patent license may be granted. Thus, the court of law may grant the compulsory patent license on the ground of failure to exploit or insufficient exploitation of the patent, to serve the public interest, for the purpose of redressing an anti-competitive practice, or in case of inventions in the field of semiconductor technology and for the purpose of exploiting dependent patents and patents for plant varieties.  

Draft law(s):

Amendment of the Law on Internal Trade

The trader will purchase and ensure the presentation on the shelf of food products from the short food chain at a minimum of 50% of the linear length of the commercial shelf. 

The draft law also provides for the publication on the trader’s website of the available local products in a separate section entitled “Local Product - Made in Moldova”.

 

Fines for Infringements in the Activity of Legal Entities

Legal entities that have obtained income by incorrectly reflecting production costs, the selling price of goods, the volume of construction work carried out and the charges for services performed will be subject to a fine of up to 20% of the equivalent of such income.

Legal entities that have applied commercial surcharge for socially important products that exceed the legally established limit will also be subject to a fine.

 

Employment and Social

Draft law(s):

Amendments to the Labor Code 

The draft law provides for the right and conditions to paternity leave, ensuring the father’s active participation in the upbringing of the adopted child. The father of the newborn, as well as of the adopted child will be entitled to 15 calendar days of paternity leave.

The proposed law further regulates the leave conditions for employees who adopted children or were granted family’s guardianship or custody.

 

Tax and Customs

Law(s):

Ratification of the Agreement on the Transportation of Goods 

The Agreement aims at overcoming transport blockages faced by Moldovan road transport operators, by using alternative routes for transporting Moldovan goods, in particular agricultural products, within the territory of EU states.

Approval of FISCALIS Agreement 

Under this Agreement, the Republic of Moldova benefits from support to improve the functioning of the internal market, promote competitiveness and fair competition. The primary aim is to protect the financial and economic interests of Signatory States, including against tax fraud and tax evasion.

 

Draft law(s):

Amendments to the Tax Code

The 18% tax rate of taxable income will be established for banking and non-banking legal entities for the period 2023-2025. It is also proposed to exclude the provision which requires banks, savings and loan associations and issuers of corporate securities to withhold a 7% on interest paid to resident individuals.

VAT Reimbursement Requirements

The amount of deducted VAT that has accrued on the accounts for at least three years will be reimbursed to the settlement account of the legal entity that requested the refund.

The VAT refund will be processed within 15 days of the refund application date, and within 30 days after the application submission date for taxpayers who filed a disagreement against the control act.

 

Environment

Law(s):

Approval of the Ecolabel Regulation

 The Regulation aims at establishing a voluntary eco-labelling scheme, ensuring the promotion of products and services with a reduced environmental impact compared to other products or services in the same category. The Regulation provides for requirements for certification bodies and the procedure for verifying the conformity of products and services.

Draft law(s):

Environmental Pollution Charges

The draft law sets pollution charges for certain categories of packaging waste that were not previously charged, such as composite packaging. At the same time, the draft law provides for the exemption of up to 100% of the environmental pollution charge for those economic agents that reach the collection and recovery targets set out in Appendix No. 2 of Government Decision 561/2020.

 

Digitalization

Law(s):

Legal Framework on Cyber Security 

The law aims at establishing a uniform minimum level of security for networks and information systems used in the delivery of essential services by public and private sector legal entities.

The law also focuses on creating risk and vulnerability management practices in both sectors to ensure interoperability in crisis management. The legal provisions of the Cyber Security law will enter into force on 1 January 2025.

 

OTHER AMENDMENTS THAT MAY AFFECT THE COMPANY

Law(s):

Regulation on Requirements for the Installation of Vehicles Filling Stations 

The installation standards for all new and old motor vehicle filling stations with primary petroleum products, liquefied petroleum gases, and compressed natural gas are established by the Government Decision No. 259 dated 3 May 2023. 

Any economic agent who designs, builds, assembles, and operates refuelling stations for motor vehicles shall adhere to the Regulation, independent of ownership or organizational structure.

 

Disclaimer:

The information contained in this Report is provided for informational purposes only and should not be considered as a legal advice on any matter. Though we have exercised our best endeavours to identify and present you with 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 upon this information without seeking professional legal counsel. The content of this Report is based solely on the information sourced 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 ACI Partners Legal Team

ACI Partners at a Glance

ACI Partners is a leading law firm in Moldova with an expanding network of partners throughout Europe. ACI Partners was established in 2006 and since then has managed to build a very strong and competitive legal practice. Our business strategy strives to deliver a solid and reliable service, going beyond merely grasping the law, which the clients may turn to whenever they need. In reaching this goal, ACI Partners employs a personalized approach to each client, showing a genuine respect for their values and unqualified commitment to their interests and needs, steadily investing in knowledge and data management and ensuring a working environment consistent with our clients’ quality demands and high expectations.

ACI Partners is a one-stop shop law firm proficient in all possible legal matters a business might come across in Moldova, starting with incorporation of a business, and obtaining of all the necessary regulatory permits, continuing with various daily matters, such as contracts, labor, and migration, and finishing with dispute settlement, insolvencies, and criminal investigations. But we pride ourselves especially for our unmatched expertise in most innovative and complex areas for Moldova, as Modern Financial Products, Data Protection, Renewable Energy, Competition, Clinical Studies, Public Procurement, and Regulatory. In our work, we always involve a team of professionals with the relevant skill-mix, which enables us to provide our clients with an integrated and comprehensive advice, superior to our competitors.

ACI Partners has advised the Government of the Republic of Moldova, businesses, international organizations, and other institutions on most challenging transactions, assignments and projects.

ACI Partners is not just another law firm. Over the course of our existence and working in Moldova, and on the international stage for our non-Moldovan clients, we have developed a strong set of core values which, we believe, guide us in everything that we do and, moreover, gives us a competitive advantage – differentiating us from other firms on the market.

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