Chapter

MOLDOVA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 30, 1995.
Exchange Arrangement
CurrencyThe currency of Moldova is the Moldovan leu.
Exchange rate structureUnitary.
Classification
Independently floatingThe official exchange rate of the leu against the dollar is determined daily as the weighted average of all market transactions as announced by the National Bank of Moldova (NBM). The NBM quotes exchange rates of the leu for other currencies on the basis of the leu-dollar rate and the cross-rate relationships between the dollar and the currencies concerned in the international market.



The official exchange rate is used in accounting and statistical calculations. Institutions eligible to deal in foreign exchange are authorized banks and foreign exchange bureaus. The latter are authorized to purchase from and sell to residents and nonresidents foreign banknotes and traveler’s checks in any currency. Authorized banks and foreign exchange bureaus may set their own buying and selling rates in their foreign exchange transactions.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Bilateral payment arrangements
OperativeMoldova has concluded agreements on settlements with the CIS countries providing for settlements and payments in accordance with international banking practices.
Regional arrangementsMoldova is a member of the Payments Union within the CIS; however, the arrangement is inoperative.
Administration of controlThe NBM has the ultimate authority in the area of foreign exchange arrangements and is responsible for managing the country’s foreign exchange reserves, regulating the currency market, and granting licenses to engage in foreign currency transactions. In accordance with the Law on Controls on the Repatriation of Funds, Goods, and Services, the NBM provides the accounting. The MOF is responsible for controls on repatriation.
International security restrictionsNo.
Payment arrears
OfficialOn April 7, 2000, the government concluded an agreement with the Russian Federation on the restructuring of official debt.
PrivateThe government is holding negotiations on the restructuring of private debt.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThe MOF establishes regulations governing domestic trade.
Controls on external tradeA license from the MOF is required to conduct international trade in gold.
Controls on exports and imports of banknotesNonresident banks that have loro correspondent accounts at resident banks may export or import cash in local or foreign currency only with the approval of the NBM. Resident banks with a “B” or “C” type license may freely export or import foreign currency.
On exports
Domestic currencyThe export limit is MDL 2,500 for both residents and nonresidents; exports of domestic currency have to be declared.
Foreign currencyFor freely convertible currencies, the limit is $50,000 for both residents and nonresidents upon presentation of a customs declaration for the importation of the currency or approval of an authorized bank or the NBM. Without these documents, the limit is $5,000. For non-convertible currencies, there are no limits.
On imports
Domes tic currencyThe limit is MDL 2,500 for both residents and nonresidents; imports of domestic currency must be declared.
Foreign currencyImported currency must be declared, but there are no quantitative restrictions.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents are entitled to open an unlimited number of type “A” and “B” accounts in freely convertible currencies. All foreign currency earnings of residents must be deposited in their accounts at authorized banks. Account holders may use foreign exchange balances in their accounts to settle current international as well as domestic transactions only after conversion into the national currency, whereas, for capital transactions, NBM approval is required. Other than that, there are no restrictions on the use of funds from type “A” accounts. There are, however, restrictions on the use of funds from type “B” accounts. MOF approval is required only for organizations financed from the budget.
Held abroadThese accounts may be held abroad. However, NBM approval is required, except for banks holding a “B” or “C” license. MOF approval is required only for organizations financed from the budget.
Accounts in domestic currency convertible into foreign currencyFunds from accounts in Moldovan lei may be converted into foreign exchange and may be used for current international transactions and for capital transactions. Approval from the NBM is required for capital transactions.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents with foreign currency deposits at authorized banks in Moldova may freely transfer the balances abroad or sell them on the foreign exchange market through authorized banks.
Domestic currency accountsAccounts in Moldovan lei may be opened by nonresidents from CIS countries with approval from the central bank of the relevant country. Other nonresidents may open accounts in Moldovan lei at authorized banks in Moldova if the funds were received from selling foreign exchange in the foreign exchange market in Moldova or as a result of selling goods, providing services, or other labor.
Convertible into foreign currencyNonresidents may convert Moldovan lei into foreign exchange provided the Moldovan lei were received as a result of a current international transaction, with the exception of Moldovan lei received from selling restricted currencies (for CIS countries and Romania). For nonresident natural persons, conversion into a freely convertible currency is allowed if the foreign currency was previously imported or transferred into Moldova and sold to a bank, and documents showing that the foreign currency had been imported into Moldova are submitted to the purchasing bank.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Advance payment requirementsIf a contract is not executed, the amount of the advance payment must be repatriated into Moldova no later than 90 days after such advance payment was effected.
Documentation requirements for release of foreign exchange for importsA contract with a nonresident for importation from abroad is required. Foreign exchange purchased on the domestic currency market must be transferred for imports within seven days of the date of purchase. In the event that payment is not made, the foreign exchange must be sold.
Preshipment inspectionOn March 21, 2000, a preshipment inspection agreement was signed with a foreign company.
Import licenses and other nontariff measuresImports of medicine; medical equipment; chemicals; industrial waste; narcotics; psycho-tropic, high-potency, toxic, poisonous, radioactive, and explosive substances; and hazardous waste are subject to licensing for the purpose of protecting the consumer and ensuring compliance with domestic standards. Imports of ammunition, military hardware, and special compounds for the manufacture thereof (with the exception of hunting rifles and cartridges), as well as work and services in the sphere of military-technical cooperation, are allowed only with permission of a special government commission.
Negative listImports of unprocessed ivory into Moldovan territories are prohibited.
Import taxes and/or tariffsThere are four tariff bands for imports (zero, 5%, 10%, and 15%), with the maximum tariff applied to tobacco products, alcoholic beverages, and jewelry. A zero customs tariff is applied to cotton, fertilizers, pharmaceutical products, textbooks, and base metals and products thereof. No import customs duty is imposed on goods and objects produced in and imported from Romania and CIS countries that have ratified the Agreement on the Creation of a Free Trade Zone or with which the Republic of Moldova has conducted bilateral interstate agreements on free trade. Imported goods for which a zero customs duty is applied are subject to a special duty of 5% of the customs value, regardless of the country of origin. Imported goods and services are subject to VAT in the amount of 20%, with the exception of the following types of goods: those intended as assistance in the event of a natural disaster and other emergencies; those identified as humanitarian assistance; transit goods; and goods intended for sale through duty-free shops and shops that exclusively serve diplomatic missions of foreign states in Moldova and their personnel.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports must be repatriated no later than 180 days from the issuance of the customs declaration. Proceeds from exports of strategic goods must be repatriated within 90 days, and proceeds from goods sold on consignment within 365 days. The list of these goods is established by the government.
Financing requirementsNo.
Documentation requirementsPresentation of an export contract and a declaration on the repatriation of foreign exchange proceeds is required.
Export licensesExport licenses and normative prices are abolished, except for a limited list of goods considered important, and for health and security reasons.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersResident and nonresident natural persons may transfer abroad without restriction freely convertible currencies received from abroad or imported into Moldova, provided they have a customs declaration. Otherwise, for payments in freely convertible currencies of up to $1,000, a resident natural person must show a supporting document confirming the need to effect the transfer. For payments over $1,000, approval by the NBM is required.



There is no limit on the transfer of nonconvertible currencies by natural persons. Juridical persons may effect transfers for current international payments on the basis of documents confirming the need to effect these payments.
Investment-related paymentsRepayment of loans from nonresidents that have been registered with the NBM is permitted. Payments for depreciation of direct investments that are registered with the NBM and that exist on the basis of certificates of registration of direct investments may be made.
Payments for travel
Prior approvalFor amounts in freely convertible currencies in excess of $5,000 a trip, a resident unable to produce evidence of the currency’s importation or receipt from abroad must obtain prior approval for exports.
Quantitative limitsResidents may export up to $5,000 of freely convertible currencies.
Personal payments
Prior approvalThe transfer of pensions from abroad as well as expenditures/alimony for the support of families payable to residents of Moldova is not regulated. In the case of payment for medical services, study abroad costs, and the transfer abroad of alimony for the support of families, approval from the NBM is required for freely convertible currencies in excess of $1,000.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Foreign workers’ wagesA labor contract and documents confirming the payment of taxes are required.
Credit card use abroadIssuance of credit and debit cards against accounts of juridical persons is allowed, and for natural persons, issuance of debit cards against types “A” and “B” accounts and accounts in lei is allowed. Funds from type “B” accounts and those in Moldovan lei may be used for personal current expenses and business travel.
Prior approvalThe issuing bank must obtain NBM approval to issue cards from type “B” accounts and from those in Moldovan lei.
Quantitative limitsThe limit for the use of cards abroad is $200 a day or $5,000 a month, and not more than $20,000 for settlement of current transactions.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsResident natural persons may transfer up to $1,000 in freely convertible currencies.
Indicative limits/bona fide testAmounts in excess of $1,000 are freely approved subject to documentation.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll proceeds from invisibles, except the earnings of workers residing abroad, must be repatriated unless the NBM approves the opening of an account abroad.
Restrictions on use of fundsPayments and transfers from abroad to natural persons in nonconvertible currencies are made in Moldovan lei.
Capital Transactions
Controls on capital and money market instrumentsApproval from the NBM is required for the transfer of capital to nonresidents. Investment income earned abroad by residents must be repatriated. Proceeds from loans and other capital flows from nonresidents are to be registered with the NBM.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsApproval by the NBM is required. Effective March 23, 1999, an offer to acquire at least 25% of the total number of shares of a company, or such quantity that would allow control over the company, must be registered with the National Securities Commission.
Sale or issue locally by nonresidentsForeign securities may be sold in Moldova only in the form of Moldovan Depository Receipts (MDRs) issued by residents who are professional participants in the securities market. NBM approval for the exportation of capital from Moldova is required for registration to issue MDRs.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsNBM registration is required.
Bonds or other debt securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsNBM registration is required.
On money market instruments
Purchase locally by nonresidentsMOF approval is required for foreign investors to purchase state securities. A single investor (resident or nonresident) may account for no more than 50% of the issuance of a given government security purchased in an auction or on the secondary market.
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsNBM registration is required.
On collective investment securities
Purchase locally by nonresidentsNBM registration is required.
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsNBM registration is required.
Controls on derivatives and other instruments
Purchase locally by nonresidentsNBM registration is required.
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsNBM registration is required.
Controls on credit operations
Commercial credits
By residents to nonresidentsNBM approval is required.
To residents from nonresidentsEffective April 16, 1999, the NBM registers those credits with a deferred payment of more than one year.
Financial credits
By residents to nonresidentsNBM approval is required.
To residents from nonresidentsNBM registration is required.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsNBM approval is required.
To residents from nonresidentsNBM registration is required.
Controls on direct investment
Outward direct investmentNBM approval is required.
Inward direct investmentNBM registration is required.
Controls on liquidation of direct investmentYes.
Controls on real estate transactions
Purchase abroad by residentsNBM approval is required.
Sale locally by nonresidentsNBM approval is required to transfer proceeds.
Controls on personal capital movements
Loans
By residents to nonresidentsNBM approval is required.
To residents from nonresidentsNBM registration is required mainly for statistical purposes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsGifts and endowments are permitted with NBM approval only upon presentation of relevant documentation and only by a first-order relative. Inheritances in monetary form are transferred with NBM approval upon the presentation of relevant documentation.
Settlement of debts abroad by immigrantsLimited to income earned and past transfers by immigrants into Moldova.
Transfer of assets
Transfer abroad by emigrantsNBM approval is required upon presentation of confirming documents.
Transfer of gambling and prize earningsResidents may export up to $5,000. Nonresidents are not permitted to transfer gambling earnings abroad.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadNBM registration is required.
Maintenance of accounts abroadFor types “B” and “C” banking licenses, there are no controls on the opening and maintenance of accounts abroad.
Lending to nonresidents (financial or commercial credits)NBM approval is required.
Lending locally in foreign exchangeAuthorized banks are permitted to lend in freely convertible currencies only to importers that are resident juridical persons. Banks holding “B” and “C” licenses are permitted to lend to one another and to other economic agents using funds obtained from foreign and international financial institutions for the financing of certain programs.
Purchase of locally issued securities denominated in foreign exchangeSecurities denominated in foreign exchange are not issued in the country.
Differential treatment of deposit accounts in foreign exchangeThe charter of accounts does not provide for separate accounts in foreign exchange; banks, however, perform separate accounting for each currency.
Differential treatment of deposit accounts held by nonresidentsThe charter of accounts does not provide for separate accounts for nonresidents; banks, however, perform separate accounting for nonresidents.
Investment regulations
Abroad by banksNBM approval is required.
In banks by nonresidentsNBM approval is required when a share representing more than 10% of aggregate capital is acquired.
Open foreign exchange position limitsThe limit for both long and short exchange positions is 10% of the aggregate normative capital for each currency and 20% for long and short positions individually.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadNonresidents may not issue securities without the approval of the National Securities Council.
Limits (max.) on portfolio invested abroadNBM approval is required.
Limits (min.) on portfolio invested locallyNBM registration is required.
Other controls imposed by securities lawsNo.
Changes During 1999
Arrangements for payments and receiptsJanuary 1. A new procedure for the import and export of foreign currency was introduced. Nonresident banks that have loro correspondent accounts at resident banks may import/export foreign currency and cash Moldovan lei only with the approval of the NBM. Resident banks with types “B” and “C” licenses may freely import and export foreign currency.
Imports and import paymentsJanuary 1. Moldova switched to VAT destination principles for all imports, including imports from Russia.
Capital transactionsMarch 23. An offer to acquire at least 25% of the total number of shares of a company, or such quantity that would allow control over the company, must be registered with the National Securities Commission.
Controls on credit operationsApril 16. The NBM registers commercial credits from nonresidents with a deferred payment of more than one year.
Changes During 2000
Arrangements for payments and receiptsApril 7. The government concluded an agreement with the Russian Federation on the restructuring of official debt.
Imports and import paymentsMarch 21. A preshipment inspection agreement was signed with a foreign company.

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