Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

MOLDOVA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of February 28, 2005)

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
Managed floating with no predetermined path for the exchange rateThe official exchange rate of the leu against the dollar is determined daily as the weighted average of the exchange rates used in all market transactions. The National Bank of Moldova (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 and foreign exchange offices of authorized banks are authorized to purchase from and sell to resident and nonresident individuals foreign banknotes, coins, and traveler’s checks in any currency. These transactions may also be effected through credit cards. Authorized banks and foreign exchange bureaus may set their own buying and selling rates in their foreign exchange transactions.
Exchange taxForeign exchange purchased by individuals against cash at foreign exchange offices of authorized banks or at foreign exchange bureaus is subject to a tax of 0.1%. Receipts from this tax are used for domestic social services.
Exchange subsidyNo.
Forward exchange marketWhile this market does exist, it is small and operations are insignificant.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyThe leu is the only legal tender within the territory of Moldova.
For current transactions and paymentsThe regulations governing international current transactions in foreign currencies also apply to those effected with domestic currency.
For capital transactionsEffective April 23, 2004, according to the Law on Foreign Investment, foreign investments may be undertaken in domestic and foreign convertible currencies (previously, convertible currencies or in other foreign currencies that were purchased by authorized banks). NBM regulations on capital transactions apply to capital transactions in foreign currency and in domestic currency.
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsExcept for authorized banks, transfers are not allowed between foreign currency accounts of different residents. The use of foreign currency among residents is allowed only in cases stipulated by legislation.
Payments arrangements
Bilateral payments arrangements
OperativeMoldova has concluded agreements on settlements with some CIS countries, providing for settlements and payments in accordance with international banking practices. Several bilateral agreements exist for the promotion of investments and trade development that include provisions on payments between the signatories.
Regional arrangementsMoldova has 10 bilateral interstate agreements on free trade with CIS countries, except for Tajikistan, and 7 bilateral interstate agreements on free trade with countries that are members of the Stability Pact for Southeastern Europe. The agreements on free trade within the CIS stipulate the full application of preferential trade, except for bilateral trade with the Russian Federation, the Republic of Belarus, and Ukraine, that apply unilateral exceptions from this regime. The agreements on free trade within the Stability Pact for Southeastern Europe stipulate the gradual implementation of the preferential trade regime until 2007 and set up certain lists of products that are subject to these agreements. Moldova is a member of the Payments Union within the CIS; however, the arrangement is inoperative.
Administration of controlThe NBM has 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. Effective February 8, 2005, according to the amendments to the Law on Regulation of Repatriation of Funds, Goods and Services, the control over the repatriation of funds is transferred from commercial banks, the NBM, and the Centre for Combating Economic Crimes and Corruption to fiscal authorities, which carry out verifications on repatriation within on-site inspections of legal entities’ economic activities.
International security restrictionsThe Law on Fighting Against Terrorism stipulates that the funds and other financial assets of persons associated with terrorism are to be blocked.
In accordance with IMF Executive Board Decision No. 144-(52/51)Banks and other financial institutions have been instructed to freeze all funds, financial assets, and other economic sources of individuals, groups, and organizations associated with terrorism, pursuant to the relevant UN Security Council resolutions.
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeYes.
Controls on external tradeA license from the Chamber of Licensing is required to conduct international trade in gold.
Controls on exports and imports of banknotesForeign currency may be imported and exported by resident banks with a B or C type license and, with NBM approval, by nonresident banks that have loro correspondent accounts with resident banks.
Domestic currency may be imported and exported only by nonresident banks that have loro corresponding accounts with resident banks, and then only with NBM approval.
Imports and exports of banknotes by resident and nonresident banks must be declared to customs. Resident and nonresident individuals are not allowed to export or import either domestic or foreign currency banknotes, coins, checks, traveler’s checks through the mail or unaccompanied luggage.
On exports
Domestic currencyThe limit for exports of banknotes, coins, and leu-denominated checks is MDL 7,000 for both resident and nonresident individuals; exports of domestic currency must be declared to customs.
Foreign currencyThe limit on exports of foreign currency (banknotes, coins, and traveler’s checks) for both resident and nonresident individuals is the equivalent of $50,000 upon presentation of a customs declaration confirming previous import of foreign currency or with the approval of an authorized bank or the NBM. Without these documents, the limit for resident individuals is $5,000, while the limit for nonresident individuals is $1,000. Exports of foreign currency must be declared to customs.
On imports
Domestic currencyThe limit for imports of banknotes, coins, and leu-denominated checks is MDL 7,000 for both resident and nonresident individuals; imports of domestic currency must be declared to customs.
Foreign currencyImports of foreign currency (banknotes, coins, and traveler’s checks) must be declared to customs, but there are no quantitative limits for individuals.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResident legal entities and individuals may open an unlimited number of accounts in any foreign currency. All foreign currency earnings of resident legal entities must be deposited in their accounts at authorized banks, and account holders may use foreign exchange balances in their accounts to settle their transactions according to legislation. Domestic transactions may be settled only after the foreign currency has been converted into lei. All payments or transfers by legal entities must be effected through bank transfers. Foreign currency may be withdrawn from accounts of resident legal entities only for business trips.
Resident individuals may open type A and B accounts in any foreign currency. Type A accounts may be credited with foreign currency that was received from abroad (documentary proof is required). Type B accounts may be credited with foreign currency purchased locally; no documentary proof of origin is required. There are no restrictions on the use of funds from both type A and type B accounts for current international transactions.
Approval requiredMOF approval is required for the opening of bank accounts for public institutions. Financial services to these public institutions are provided through treasury accounts.
Held abroadYes.
Approval requiredNBM approval is required for all residents to hold these accounts abroad, with the following exceptions: (1) banks holding a B or C license; (2) resident individuals during a temporary stay abroad; and (3) consular offices, diplomatic missions, and other representative offices located abroad. Banks holding type A licenses are not allowed to open FCAs abroad. Authorized banks are not allowed to open accounts in shell banks.
Accounts in domestic currency held abroadResident legal entities, including authorized banks, may open accounts in domestic currency only after obtaining written NBM approval. Resident individuals are permitted to open accounts abroad for the duration of their temporary stay abroad without NBM approval. Authorized banks are not allowed to open accounts in shell banks.
Accounts in domestic currency convertible into foreign currencyFunds from leu-denominated accounts may be converted into foreign exchange in accordance with regulations. Resident legal entities (except for authorized banks and foreign exchange bureaus) may purchase foreign currency only for making payments and transfers. Effective May 7, 2004, the requirement that foreign currency purchased by a resident legal entity (excluding authorized banks and foreign exchange bureaus) be used within seven business days, or be sold in the domestic market thereafter, no longer applies. The previous rule allowed a holding period that could exceed seven business days for purchases made through credit cards.
Nonresident Accounts
Foreign exchange accounts permittedNonresident individuals and legal entities may open accounts in any foreign currency. These accounts may be credited with funds legally acquired, including through purchases in the domestic foreign exchange market. Nonresidents with foreign currency accounts at authorized banks in Moldova are permitted to transfer the balances from these accounts abroad or sell them on the foreign exchange market through authorized banks without restriction. Foreign currency deposited into foreign currency accounts of nonresident individuals may be withdrawn in cash or traveler’s checks up to the balances of their accounts. Nonresident legal entities may withdraw foreign currency in cash or traveler’s checks from their accounts for (1) permitted exports of foreign currency by nonresident banks; (2) current expenses of diplomatic missions, consular offices, other official representative offices of foreign states, and international organizations; and (3) business travel expenses of and remuneration of nonresidents by representative offices of nonresidents legal entities.
Domestic currency accountsAccounts in lei may be opened freely by nonresidents, except for those from countries with which the NBM has signed a bilateral agreement that requires permission by the relevant central bank to open such accounts. All payments by nonresident legal entities must be effected through bank transfers. Domestic currency (cash) may be withdrawn from the accounts of nonresidents only for (1) permitted exports of domestic currency by nonresident banks; and (2) remuneration of business travel expenses, and other current expenses related to the activities of international and foreign official representative offices and nonresident legal entities. Nonresident individuals holding accounts in lei may make payments for goods and services and other legal payments and transfers, and withdraw lei in cash.
Convertible into foreign currencyBalances on leu accounts of nonresidents may be converted freely into foreign currency.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsEffective February 8, 2005, goods must be imported and services rendered no later than one year (previously, 90 days) from the date of the advance payment. The value of all imported goods and rendered services must equal the amount paid.
If a contract is not executed, the amount of the advance payment must be repatriated to Moldova no later than one year (previously, 90 days) after such advance payment was effected. However, the length of this period may vary, depending on the type of contract.
Documentation requirements for release of foreign exchange for importsEffective February 8, 2005, purchases by resident legal entities of foreign currency for import payments are based on supporting documents such as contracts or invoices. Previously, to effect payments for imports, the following documents must be presented to an authorized bank: the contract executed with the nonresidents, the transaction passport, and other documents.
Import licenses and other nontariff measuresThe following imports are subject to licensing for the purpose of consumer protection and to ensure compliance with domestic standards: dual purpose goods and technologies, ammunition, military equipment, and special compounds for the manufacture thereof; explosive substances; nuclear products and technology; medicine, equipment for the manufacture of medicine, and medical equipment; chemicals; cultures for developing microorganisms; and stupefying or psychotropic materials and compounds for their derivation or production.
Negative listImports of unprocessed ivory are prohibited
Import taxes and/or tariffsThere are several tariff bands for imports. A zero customs tariff is applied to cotton, fertilizers, pharmaceutical products, textbooks, and base metals and products thereof, as well as to other goods. Customs duties are not imposed on goods and objects produced in and imported from Romania, CIS countries, and member countries of the Stability Pact for Southeastern Europe that have ratified the Agreement on the Creation of a Free Trade Zone or with which Moldova has bilateral interstate agreements on free trade. Imported goods and services are subject to a standard VAT of 20%; imports of gas and liquid gases are subject to a reduced VAT of 5%. Effective February 16, 2004, a temporary four-year exceptional duty was imposed as a safeguard measure on imports of sugar (whether made from cane or beets) at the rate of 55% of customs value but not less than €115 a ton. The duty is to be reduced annually by 5% (with a minimum decrease of €5 a ton) until its elimination at end-2007.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsEffective February 8, 2005, proceeds from exports of goods must be repatriated to the exporter’s accounts with authorized banks no later than one year (previously, 180 days) from the issuance of the export customs declaration. However, the length of this period may vary, depending on the type of contract.
Financing requirementsNo.
Documentation requirementsEffective February 8, 2005, the requirement that exporters submit a declaration on the repatriation of foreign exchange proceeds no longer applies.
Export licensesThe Chamber of Commerce and Industry issues export licenses. These export licenses apply to a limited list of goods controlled for health or security reasons.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersEffective June 2, 2004, payments and transfers by resident individuals using balances from type B accounts, MDL balances, or foreign currency purchased in the domestic foreign exchange market are subject to the following regulations: (1) resident individuals are free to transfer abroad any currency up to the equivalent of $500 (previously, $200) to effect a single payment without presentation of supporting documents; (2) resident individuals may, with written NBM approval, make transfers for family maintenance in amounts of up to $3,000 (previously, $1,000) a quarter; and (3) other payments and transfers in excess of $500 (previously, $200) may be made in favor of nonresidents up to the amount set forth in supporting documents.
Effective June 2, 2004, payments and transfers by resident individuals using foreign currency in type A accounts, foreign currency imported with a customs declaration, or foreign currency permitted to be exported by an authorized bank are subject to the following regulations. A resident individual may freely transfer without supporting documents a single payment or transfer to (1) a nonresident legal entity up to the equivalent of $500 (previously, $200); and (2) a nonresident individual, up to the equivalent of $1,000. Transfers exceeding these amounts require presentation of documents (such as an invoice or proof of family relationship). Resident legal entities may effect payments or transfers for current international transactions up to the amounts shown in the supporting documents.
Effective February 8, 2005, services must be rendered by nonresidents to resident legal entities no later than one year (previously, 90 days) from the date of the advance payment for the services. Rendered services must be equal in value to the amount paid for them.
Effective February 8, 2005, if services are not rendered by nonresidents to resident legal entities, any amount of advance payments must be repatriated no later than one year (previously, 90 days) after the advance payment was made.
Effective February 8, 2005, to effect payment for services, supporting documents (such as contracts or invoices) that must be presented to an authorized bank was streamlined. Nonresidents may transfer abroad from their accounts or to residents’ and nonresidents’ accounts in Moldova any amount in foreign or domestic currency, provided that the transfers or payments comply with the law.
Trade-related payments
Indicative limits/bona fide testPayments are permitted up to the amount set forth in supporting documents.
Investment-related paymentsAfter payment of all fiscal obligations, foreign investors may transfer abroad any funds obtained domestically as a result of their investment activities.
Private loans from nonresidents must be registered with the NBM. Current payments related to these loans may be effected upon presentation of the certificates of registration issued by the NBM.
Indicative limits/bona fide testPayments are permitted up to the amount set forth in supporting documents.
Payments for travelWithout supporting documents, nonresident individuals may export the equivalent of $1,000 in foreign currency, while resident individuals may export up to $5,000. The export of amounts in excess of these limits requires a customs declaration with respect to prior importation or the approval of an authorized bank or the NBM. Resident individual holders of type A accounts and nonresident individual account holders may withdraw foreign currency (cash or traveler’s checks) for travel purposes up to their account balances and, with a bank’s permission, export the currency.
Resident individual holders of type B accounts may withdraw foreign currency (cash or traveler’s checks) for travel purposes up to their account balance, but may export only up to the equivalent of $5,000. Exports of amounts exceeding this limit require NBM approval.
Effective June 2, 2004, authorized banks may provide resident legal entities and representative offices of nonresidents with foreign currency (cash and/or traveler’s checks) for business travel expenses abroad up to the equivalent of $10,000 (previously, $5,000) a person a month, along with the corresponding permission to export foreign currency. Amounts exceeding this limit require NBM authorization. Remittances of currency exceeding $50,000 must be effected through banks.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testA labor contract is required, together with documents specifying the amount to be paid.
Credit card use abroadInternational cards may be issued to individuals and legal entities against all types of resident and nonresident accounts.
International cards issued against leu or type B foreign exchange accounts of resident individuals may be used abroad up to certain limits for cash withdrawal, as allowed under NBM regulations. Effective June 2, 2004, international cards of resident individuals may be used abroad for payment at commercial entities (shops, hotels, gas stations, etc.) without any quantitative limits.
Resident legal entities may make payments through international cards issued against their accounts only for business travel expenditures. Cash withdrawals are subject to limits.
International cards issued in conjunction with type A foreign exchange accounts of resident individuals may be used abroad without quantitative limits.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds received by residents from invisible transactions must be repatriated to Moldova unless a specific exemption has been granted by law.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsApproval from the NBM is required for the transfer of capital in monetary form to nonresidents. Loans and other monetary capital flows from nonresidents must be registered with the NBM. However, NBM regulations exempt certain monetary capital flows from approval or registration requirements.
Controls on capital and money market instrumentsCommercial banks may purchase (in their portfolios) securities issued and, effective August 18, 2004, guaranteed by the governments of Group of Seven countries, without NBM approval. Issuance in Moldova of securities denominated in foreign currency is not permitted.
The procedures for purchases of state securities by foreign investors at auctions are similar to those applied to local investors. A foreign investor may not possess more than 50% of state securities within a certain ISIN market, whether obtained on the primary or secondary market through a competitive bid.
The noncompetitive bid submitted by the investor cannot exceed MDL 300,000 at face value within a certain ISIN number of state securities.
On capital market securities
Shares or other securities of a participating naturePurchases or acquisition of more than 5% of the total value of the securities of an issuer—and each subsequent purchase or acquisition of 5%—must be reported to both the issuer and the National Securities Commission (NSC). A person that intends to purchase, directly or indirectly, independently or together with affiliated persons, a significant share of an open corporation’s equity (that constitutes more than 25% of the corporation’s shares with voting rights) shall (1) submit his offer to the corporation, to the State Institution for Antimonopoly Regulations, and to the NSC at least one month prior to the acquisition of the significant share; and (2) within 10 days after the acquisition of a significant share of equity, publish the relevant information, according to the applicable legislation on securities.
It is not permitted to submit a tender offer, purchase or negotiate the acquisition of securities based on tender offer, or publish the relevant offer prior to its registration with the NSC.
Any acquisition of more than 25% of the ordinary shares of a company must be effected through tenders, which must be registered with the NSC.
Purchase locally by nonresidentsNBM registration is not required for these transactions.
Sale or issue locally by nonresidentsForeign securities may be sold in Moldova only as Moldovan Depository Receipts (MDRs) issued by residents who are professional participants in the securities market, with registered capital of at least MDL 500,000. Issuance of MDRs requires registration with the NSC subsequent to NBM approval for the exportation of capital from Moldova.
Purchase abroad by residentsNBM approval is required except, effective August 18, 2004, for the acquisition by banks of securities of a participating nature that represent less than 10% in the capital of a legal entity (engaged in other than financial activities) and whose net current value exceeds 15% of the bank’s regulatory capital.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and gives permits for securities to circulate outside the country.
Bonds or other debt securities
Purchase locally by nonresidentsNBM registration is not required for these transactions.
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Purchase abroad by residentsNBM approval for capital outflow is required.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and gives permits for securities to circulate outside the country.
On money market instruments
Purchase locally by nonresidentsThe procedures of purchasing state securities by foreign investors at auctions are similar to those applied to local investors. A foreign investor may not possess more than 50% of state securities within a certain ISIN number, whether obtained on the primary or secondary market through a competitive bid.
The noncompetitive bid submitted by the investor cannot exceed MDL 300,000 at face value within a certain ISIN number of state securities.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
On collective investment securities
Purchase locally by nonresidentsNBM registration is not required for these transactions.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsAcquisition by banks from nonresidents of financial derivatives (forward, swap, options, futures) with foreign currencies as the basic asset may be conducted without NBM approval.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsNBM approval for capital outflow is required.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and gives permits for securities to circulate outside the country.
Controls on credit operations
Commercial credits
By residents to nonresidentsEffective February 8, 2005, the NBM approval is not required for commercial borrowings or credits from residents to nonresidents for up to 1 year (previously, 180 days) or other period set in accordance with relevant legislation. Commercial borrowings or credits from residents to nonresidents exceeding the above-mentioned periods are not allowed.
To residents from nonresidentsNBM registration is required, except for credits in the form of delivery of goods or rendering of services, or in the form of advance money transfers, for a period not exceeding 180 days when interest does not accrue.
Financial credits
By residents to nonresidentsNBM approval is required, except for government and overnight credits. Credits involving resident or nonresident nonentrepreneurial individuals are not allowed.
To residents from nonresidentsNBM registration is required, except for financial credits received by the government or under government guarantees and overnight financial credits received by residents.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsNBM approval is required for these transactions, except for (1) guarantees issued by the government and (2) guarantees issued by resident banks to nonresident beneficiaries against resident current transactions. Residents may not issue guarantees against nonresidents’ transactions without providing a security or placing a deposit with a bank in Moldova.
Issues of guarantees to nonresident nonentrepreneurial individuals or by nonentrepreneurial individuals to nonresidents are not allowed.
To residents from nonresidentsNBM registration is required, except for (1) guarantees received by the government; (2) guarantees issued by nonresidents with respect to transactions with residents when the beneficiary of the guarantee is a nonresident; and (3) guarantees issued by nonresidents with respect to transactions with nonresidents when the beneficiary of the guarantee is a resident.
Controls on direct investment
Outward direct investmentEffective August 18, 2004, legal entities no longer require NBM authorization to make direct investments abroad. NBM authorization is required for direct investments by resident individuals.
Controls on liquidation of direct investmentEffective April 23, 2004, after having fulfilled all fiscal obligations, foreign investors may transfer abroad funds obtained domestically as a result of liquidation of direct investment.
Proceeds from the liquidation or sale of investments abroad must be repatriated to Moldova, except for, effective August 18, 2004, proceeds that are reinvested abroad in such investments not requiring NBM approval.
Controls on real estate transactions
Purchase abroad by residentsNBM approval is required for the purchase of real estate abroad, including rights to land or subsoil.
Purchase locally by nonresidentsNonresidents are allowed to own property in Moldova, except for agricultural lands and forests.
Sale locally by nonresidentsAgricultural land and forests inherited by nonresidents in accordance with Moldovan law, must be sold only to resident individuals or legal entities.
Controls on personal capital transactions
Loans
By residents to nonresidentsThese transactions are not permitted.
To residents from nonresidentsRegistration with the NBM is required.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsResident individuals may transfer abroad as gifts, donations, or gratuitous assistance without submitting supporting documents (1) up to the equivalent of $1,000 from type A accounts, or upon presentation of a customs declaration attesting to the previous import of the funds or with permission from an authorized bank to export foreign currency; and (2) effective June 2, 2004, up to $500 (previously, $200) from type B accounts, leu balances, or foreign currency purchased in the local foreign exchange market. Funds in the form of legacies from residents to nonresidents may be transferred abroad without NBM approval if they have been registered in the nonresident individuals’ account in an authorized bank.
Settlement of debts abroad by immigrantsThese transactions require NBM authorization.
Transfer of assetsEmigrant holders of type A accounts or of foreign currency previously imported and declared or permitted by an authorized bank to be exported may transfer abroad such balances or amounts without NBM approval.
Emigrants may export the equivalent of $5,000 (banknotes, coins, and traveler’s checks) without submitting to customs authorities supporting documents, customs declarations (confirming foreign currency import into Moldova), or the approval of an authorized bank or the NBM.
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsNBM approval is required for transfers from residents to nonresidents.
Provisions specific to commercial banks and other credit institutionsCommercial banks are permitted to purchase (for their portfolios) without NBM approval securities issued and, effective August 18, 2004, guaranteed by the governments of Group of Seven countries.
Effective August 18, 2004, banks were allowed to effect without NBM approval payments related to the acquisition of securities of a participating nature that represent less than 10% of the capital of a legal entity (engaged in other than financial activities), that exceed as to its net current value 15% of the bank’s regulatory capital.
Borrowing abroadNBM registration is required, with the exception of loans guaranteed by the government and overnight credits.
Maintenance of accounts abroadThere are no controls on the opening and maintaining of foreign currency accounts abroad by banks holding type B and C banking licenses. Authorized banks may open accounts in lei with nonresident banks only with NBM approval.
Authorized banks are prohibited from opening accounts in shell banks.
Lending to nonresidents (financial or commercial credits)NBM approval is required, except for overnight credits to nonresidents. Lending to nonresident nonentrepreneurial individuals is not allowed.
Lending locally in foreign exchangeBanks holding type B or C licenses are allowed to extend foreign currency credits to: (1) other banks; (2) resident legal entities and individuals engaged in entrepreneurial activities for settlements with nonresidents; (3) residents mentioned in item (2) from the funds received, in accordance with credit agreements between the government and nonresidents or between resident banks and international financial institutions; (4) residents mentioned in item (2) from the funds under cofinancing programs, in accordance with credit agreements between the government and nonresidents or between resident banks and international financial institutions; and (5) resident individuals for settlements with nonresidents for personal expenses such as education, medical treatment, and items for personal use.
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 exchangeBanking regulations do not provide for separate accounts in foreign exchange; banks, however, perform separate accounting for nonresidents.
Differential treatment of deposit accounts held by nonresidentsBanking regulations do 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 nonresidentsWritten NBM approval is required in order to transfer any equity interest in a bank that represents in a 10%, 25%, 33%, or 50% share of the aggregate capital of the bank.
Open foreign exchange position limitsEffective February 27, 2004, foreign currency assets may not exceed 125% or be less than 75% of foreign currency liabilities in balance sheets. The open long/short exchange position limit for each currency may not exceed or be less than 10% of aggregate capital, respectively. The open long/short foreign exchange position limit for all currencies may not exceed or be less than 20% of aggregate capital, respectively.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsAccording to procedures for the admission of foreign securities to Moldova securities market, the issuer of MDR has the right to issue MDRs only in the amount that represents the equivalent of foreign securities of which he is the nominal holder, and for the admission of which he has obtained the permission of the NSC and of the National Bank of Moldova. Simultaneously, the amount of MDR issue (taking into consideration the MDR issues previously registered by this issuer) should not exceed the amount of net assets according to the latest balance sheet multiplied by 4.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Other controls imposed by securities lawsNo.
Changes During 2004
Exchange arrangementApril 23. Foreign investors were permitted to conduct investments in Moldova in domestic currency.
Resident accountsMay 7. The requirement that foreign currency purchased by resident legal entities be used within seven days, or sold to authorized banks, was lifted.
Imports and import paymentsFebruary 8. The documentation required for purchases of foreign currency for import payments by resident legal entities was simplified.
February 16. A temporary exceptional tax was imposed as a safeguard measure on imports of sugar (whether made from cane or beets), which is to be reduced gradually and eliminated by the end of 2007.
Payments for invisible transactions and current transfersJune 2. The ceiling on payments and transfers by resident individuals to nonresident legal entities without presentation of supporting documents using balances from type A accounts and certain other sources was raised to $500 from $200.
June 2. The ceilings on payments and transfers by resident individuals using balances from type B accounts and certain other sources were raised as follows: (1) single payments without presentation of supporting documents, to $500 from $200; (2) for family maintenance with NBM approval, to $3,000 from $1,000 a quarter; and (3) with supporting documents, amounts in excess of $500 (previously $200) up to the amounts set forth in the documents.
June 2. The limit of foreign currency (cash and/or traveler’s checks) for business travel expenses abroad that could be provided from the account of the resident legal entity/representative office of the nonresident legal entity was increased to $10,000 from $5,000 a month per individual.
June 2. The limit for payments at commercial entities (shops, hotels, gas stations, etc.) through international cards used abroad, issued against leu or type B foreign exchange accounts of resident individual, was abolished.
Capital transactions
Controls on capital and money market instrumentsAugust 18. Commercial banks were permitted to purchase without NBM approval securities guaranteed by Group of Seven countries.
August 18. Banks were allowed to perform payments, without NBM approval, related to the acquisition of securities of a participating nature that represented less than 10% in the capital of a legal entity (engaged in other than financial activities), and whose net current value exceeded 15% of the bank’s regulatory capital.
Controls on direct investmentAugust 18. Legal entities were no longer required to obtain NBM authorization to make direct investments abroad.
Controls on liquidation of direct investmentApril 23. After discharging all fiscal obligations, foreign investors could transfer abroad funds obtained domestically as a result of the liquidation of direct investment.
August 18. Proceeds from the liquidation or sale of investments abroad were allowed not to be repatriated to Moldova, if these proceeds were reinvested abroad in the form of investments, not requiring NBM approval.
Controls on personal capital transactionsJune 2. The limit or amounts that may be transferred abroad as gifts, donations, or gratuitous assistance from type B foreign exchange accounts of resident individuals, or from leu accounts, or foreign exchange purchased in domestic market, was increased to $500 from $200.
Provisions specific to commercial banks and other credit institutionsFebruary 27. The foreign currency assets of commercial banks were not permitted to exceed 125% or be less than 75% of foreign currency liabilities in balance sheets.
August 18. Banks were allowed to perform payments, without NBM approval, related to the acquisition of securities of participating nature that represent less than 10% in the capital of a legal entity (engaged in other than financial activities), that exceed as to its net current value 15% of the bank’s regulatory capital.
August 18. Banks were allowed to purchase for their portfolios, without NBM approval, securities guaranteed by the governments of Group of Seven countries.
Changes During 2005
Exchange arrangementFebruary 8. Control over the repatriation of funds was transferred from commercial banks, the NBM, and the Center for Combating Economic Crimes and Corruption to fiscal authorities.
Imports and import paymentsFebruary 8. The period within which goods were required to be imported, or services rendered, was extended to one year from 90 days.
February 8. In making import payments, importers were exempted from the obligation to present to banks transaction passports and relevant documents that confirm the import of goods and services. The payments for imports shall be performed by resident legal entities upon presentation to the banks of the supporting documents such as contracts or invoices.
Exports and export proceedsFebruary 8. The period for the repatriation of exports of goods and services was extended to one year from 180 days.
February 8. The requirement that exporters submit a declaration on the repatriation of export proceeds was lifted.
Payments for invisible transactions and current transfersFebruary 8. Advance payments for services not rendered were required to be repatriated within one year instead of 90 days previously.
February 8. The documentation necessary to effect payments for services was streamlined.
Capital transactions
Controls on credit operationsFebruary 8. NBM approval was not required for commercial borrowings/credits from residents to nonresidents for up to one year or other period set in accordance with legislation in force. Commercial borrowings or credits from residents to nonresidents exceeding the mentioned periods were not allowed.

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