Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

MOLDOVA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of May 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 30, 1995.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
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.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
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 market transactions. 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 can be effected through bank cards. Authorized banks and foreign exchange bureaus are allowed to 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 marketThis market does exist, but it is small and operations are insignificant.
References to legal instruments and hyperlinksInstruction on the Procedure of Setting, Distribution, and Archiving of the Official Exchange Rate of Moldovan Leu (NBM Decision No. 399, dated December 23, 1999); Regulation on Foreign Exchange Regulation on the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Regulation No. 10018-20, on Organization and Operation on the Territory of the Republic of Moldova of Foreign Exchange Offices and Foreign Exchange Bureaus by Hotels (NBM Decision No. 22, dated May 6, 1994); Law on Republican and Local Funds for Social Support of the Population (No. 827-XIV, dated February 18, 2000); Law on the National Bank of Moldova (No. 548-XII, dated July 21, 1995); www.bnm.org.
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 transactionsForeign investments may be undertaken in domestic and foreign convertible currencies. The National Bank of Moldova (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 residentsThe 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. There are several bilateral agreements 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. 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, which apply unilateral exceptions to this regime. Moldova has eight bilateral interstate agreements on free trade with countries that are members of the Stability Pact for Southeastern Europe. On December 19, 2006, the Stability Pact members, including Moldova, signed the CEFTA, which is in effect as of May 1, 2007. CEFTA replaces the existing agreements on free trade within the Stability Pact and provides for canceling all import and export customs duties, quantitative restrictions, and other taxes with an equivalent effect on the trading of industrial products and most agro-industrial products. Moldova is a member of the Payments Union within the CIS; however, the arrangement is inoperative.
Administration of controlThe NBM has ultimate authority for 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. According to the amendments to the Law on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions, control over the repatriation of funds, goods, and services is transferred from commercial banks, the NBM, and the Centre for Combating Economic Crimes and Corruption to fiscal authorities, which carry out verification on repatriation through on-site inspections of legal entities’ economic activities.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeActivity with precious metals is licensed by the state. The state depository of valuables has the exclusive right to purchase precious metals for filling the state fund. Buying-up centers and pawnshops are not allowed to purchase or accept for storage or as collateral precious metals in bullion or precious metal coins.
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 and coins by resident and nonresident banks must be declared to customs.
On exportsEffective July 7, 2006, resident and nonresident individuals have the right to export when departing from Moldova (1) domestic currency cash and checks, as well as cash and traveler’s checks in foreign currency, up to the equivalent of €10,000 an individual without the submission to customs authorities of justifying document; and (2) domestic currency cash and checks, as well as cash and traveler’s checks in foreign currency, up to the equivalent of €50,000 an individual by submitting to customs authorities the following justifying documents: (a) customs documents confirming the import of currency into Moldova; and/or (b) export permissions, issued, according to the NBM normative acts, by authorized banks or by the NBM. Previously, up to MDL 7,000 could be imported or exported without declaration.
Resident and nonresident individuals are obliged to declare in written form to customs authorities banknotes, coins, and checks in national currency, and banknotes, coins, and traveler’s checks in foreign currency, if the export of their total amount exceeds the equivalent of €10,000 an individual.
Domestic currencyYes.
Foreign currencyYes.
On importsEffective July 7, 2006, resident and nonresident natural persons have the right to import unlimited banknotes, coins, and checks in national currency, as well as banknotes, coins, and traveler’s checks in foreign currency.
Resident and nonresident natural persons are obliged to declare in written form to the customs authorities the import of banknotes, coins, and checks in national currency, as well as banknotes, coins, and traveler’s checks in foreign currency, if their total amount exceeds the equivalent of €10,000 an individual.
References to legal instruments and hyperlinksCivil Code No. 1107-XV, dated June 6, 2002; Law No. 81-XV, dated March 18, 2004, on Investments in Entrepreneurial Activity; Law No. 548-XIII, dated July 21, 1995, on the National Bank of Moldova; Law No. 1466-XIII, dated January 29, 1998, on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Instruction on Bringing into/Taking out of the Republic of Moldova of Cash by Banks (NBM Decision No. 340, dated November 18, 1998); Law No. 282-XV, dated July 22, 2004, on Precious Metals and Stones Regime; Law No. 451-XV, dated July 30, 2001, on Licensing of Some Activities; Law No. 1569-XV, dated December 20, 2002, on the Procedure of Import and Export of Goods to/from Moldova by Individuals; www.bnm.org.
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, unless otherwise expressly provided for in the legislative acts of the Republic of Moldova or in the NBM regulations.
Effective September 1, 2006, in accordance with the amendments to the regulation on foreign exchange, resident individuals’ foreign exchange accounts have been changed to a single type of account in foreign currency that may be credited with foreign exchange received from abroad or with foreign currency purchased locally (no documentary proof of origin is required). Previously, resident individuals could open types A and B accounts in any foreign currency. Type A accounts were credited with foreign currency that was received from abroad (documentary proof was required), and type B accounts were credited with foreign currency purchased locally (no documentary proof of origin was required). Effective September 1, 2006, cash can be deposited into and withdrawn from resident individuals’ foreign exchange accounts without restrictions. There are no restrictions on the use of funds for current international transactions. Effective September 1, 2006, the requirement to submit a customs declaration confirming the import of currency into the Republic of Moldova or funds export permissions, issued by authorized banks or the NBM, when depositing cash and traveler’s checks in residents’ foreign exchange accounts was lifted.
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; (3) consular offices, diplomatic missions, and other official representative offices of the Republic of Moldova located abroad; (4) effective September 1, 2006, residents making direct investments and real estate investments abroad, if the opening of such accounts by investors (in their own name) is compulsory under the laws of the foreign state where the investments are made; and (5) resident public institutions conducting transactions abroad of the national public budget funds, with the approval of the MOF. Banks holding type A licenses are not allowed to open foreign currency accounts (FCAs) abroad. Authorized banks are not allowed to open accounts in shell banks.
Accounts in domestic currency held abroadAuthorized banks are not allowed to open accounts in shell banks. NBM approval is required for all residents to hold these accounts abroad, with the following exceptions: (1) resident individuals during their temporary stay abroad; (2) effective September 1, 2006, residents making direct investments and real estate investments abroad, if the opening of such accounts by investors (in their own name) is compulsory under the laws of the foreign state where the investments are made; and (3) resident public institutions conducting transactions abroad of the national public budget funds, after the approval of the MOF.
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.
References to legal instruments and hyperlinksRegulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Regulation on Opening, Modification, and Closing of Accounts with Authorized Banks of the Republic of Moldova (NBM Decision No. 297, dated November 25, 2004); Instruction on Opening Accounts Abroad (NBM Decision No. 279, dated November 13, 2003); NBM Decision No. 185, dated July 23, 2003, on the Procedure for Buying Foreign Currency by Resident Legal Entities; www.bnm.org.
Nonresident Accounts
Foreign exchange accounts permittedNonresident individuals and legal entities may open accounts in any foreign currency. These accounts may be credited with funds from abroad obtained through purchases in the domestic foreign exchange market and from other legal sources. Nonresidents with FCAs 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. Effective September 1, 2006, cash may be deposited into and withdrawn from nonresident individuals’ foreign exchange accounts without restrictions. All payments and transfers by nonresident legal entities must be effected through bank transfers, unless otherwise expressly provided for in the legislative acts or in NBM regulations.
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. These accounts may be credited with funds from the sale of foreign exchange in the domestic foreign exchange market and from other legal sources. Nonresidents with lei accounts at authorized banks may transfer the balances from these accounts abroad or convert them into foreign exchange on the foreign exchange market through authorized banks without restriction. All payments by nonresident legal entities must be effected through bank transfers, unless otherwise expressly provided for in the legislative acts of Moldova or in NBM regulations. Cash may be deposited into and withdrawn from nonresident individuals’ foreign exchange accounts without restrictions.
Convertible into foreign currencyBalances on leu accounts of nonresidents may be converted freely into foreign currency.
Blocked accountsNo.
References to legal instruments and hyperlinksRegulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); NBM Decision No. 202, dated August 13, 2003, on Opening of Banking Accounts within the Framework of Foreign Technical Assistance Projects in the Republic of Moldova; Regulation on Opening, Modification, and Closing of Accounts with Authorized Banks of the Republic of Moldova (NBM Decision No. 297, dated November 25, 2004); www.nbm.org.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsGoods must be imported and services rendered no later than one year 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 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 importsPurchases by resident legal entities of foreign currency against domestic currency for import payments are based on supporting documents such as contracts or invoices.
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.
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 CIS countries 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%. In 2004, a temporary four-year exceptional tax was imposed as a safeguard measure on imports of sugar (whether made from cane or beets). Currently, according to Law No. 8, dated May 2, 2004, on safeguard measures, starting January 2007 until February 15, 2008, the import of sugar is subject to a customs duty of 40% of the customs price, but not less than €100 a ton.
The Southeastern Stability Pact countries signed on December 19, 2006, the CEFTA, which went into effect May 1, 2007. This Agreement supersedes all existing free trade agreements in the framework of the Stability Pact, and foresees the abolishment of all import and export customs duties, quantitative restrictions, and other taxes of equivalent effect in regard to the trade in industrial goods and the majority of agroindustrial goods.
State import monopolyNo.
References to legal instruments and hyperlinksLaw No.1466-XIII, dated January 29, 1998, on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); NBM Decision No. 185, dated July 23, 2003, on the Procedure for Buying Foreign Currency by Resident Legal Entities; Decision No. 484, dated May 30, 2005, of the government of the Republic of Moldova, on Regulating the Import of Goods Originating from Member Countries of the Stability Pact for Southeastern Europe.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports of goods must be repatriated to the exporter’s accounts with authorized banks no later than one year from the issuance of the export customs declaration.
Financing requirementsNo.
Documentation requirements
OtherYes.
Export licensesExport licenses apply to a limited list of activities considered important for health and security reasons.
Export taxesNo.
References to legal instruments and hyperlinksLaw No.1466-XIII, dated January 29, 1998, on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994; Law No. 451-XV, dated July 30, 2001, on Licensing of Some Activities.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersResident individuals may freely purchase foreign currency through authorized banks or foreign exchange bureaus.
Effective September 1, 2006, after unifying the types of foreign exchange accounts of resident natural persons, the following rules apply for the making of current payments and transfers abroad (in foreign and domestic currencies) by resident natural persons: (1) transfer abroad for the purpose of family expenses, as follows: (a) up to €1,000 (previously, $500 without documentation, and with NBM approval, $3,000), without the submission of documents confirming kinship; (b) from €1,000 to the equivalent of €10,000 on submission of documents confirming kinship; and (c) more than €10,000 on submission of documents confirming kinship and of documents confirming the necessity of making the payment or transfer by the individual in whose favor the transfer is made; (2) transfer abroad in the resident’s name for the purpose of current expenses for the period of his or her temporary stay abroad: (a) up to €10,000, on submission of documents confirming the fact of temporary stay abroad; and (b) more than €10,000, on submission of documents confirming the fact of temporary stay abroad and documents confirming the necessity of making the payment or transfer by the individual in whose favor the transfer is made; (3) transfer abroad in the resident’s name for the purpose of obtaining a study visa, on submission of a document confirming the admission of the respective individual at the education institution and the document or information confirming the necessity of depositing funds in his or her account abroad for the purpose of obtaining the study visa; and (4) payment or transfer in favor of a nonresident in the amount of up to €1,000, without the submission of supporting documents, unless otherwise provided for in the normative acts of the NBM. Transfers exceeding €1,000 require the submission of supporting documents.
Resident legal entities may purchase foreign currency and effect payments or transfers through authorized banks in favor of nonresidents for current international transactions up to the amounts shown in the supporting documents.
Services must be rendered by nonresidents to resident legal entities no later than one year from the date of the advance payment for the services. Rendered services must be equal in value to the amount paid for them. If services are not rendered by nonresidents to resident legal entities, any amount of advance payment must be repatriated no later than one year after the advance payment was made.
Nonresident natural persons may purchase foreign currency through authorized banks or foreign exchange bureaus freely. Nonresident legal entities may purchase foreign currency through authorized banks freely.
Effective September 1, 2006, nonresidents may make payments and transfers abroad in foreign or domestic currency on submission to the authorized bank of supporting documents (such as contracts, invoices, documents confirming kinship, etc.). Submission to the authorized bank of the above documents is not required in the following cases: (1) for legal entities, in case of (a) transfers in the name of the same account holder; (b) payments or transfers by diplomatic missions, consular offices, other official representation of foreign states, and the representation of international organizations located and accredited in the Republic of Moldova; and (c) payments or transfers by nonresident banks; and (2) for individuals, in the case of (a) transfer in their own name; and (b) payment or transfer in favor of an individual or legal entity in an amount not exceeding the equivalent of €1,000.
Trade-related payments
Indicative limits/bona fide testPayments are permitted up to the amount set forth in the 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.
Effective September 1, 2006, the NBM must be notified of private loans from nonresidents (previously, these loans were registered by the NBM). Current payments related to these loans may be effected by residents on presentation of the certificates of notification.
Indicative limits/bona fide testPayments are permitted up to the amount set forth in the supporting documents.
Payments for travelAuthorized banks may provide resident legal entities and representative offices of nonresident legal entities with foreign currency (cash and/or traveler’s checks) for business travel expenses abroad up to €10,000 a month a representative office, along with the corresponding permission to export foreign currency, if requested. Transactions with amounts of currency exceeding this level must be effected through banks, in accordance with the regulations for making payments or transfers abroad.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroadInternational cards may be issued to individuals and legal entities against resident and nonresident accounts.
Effective September 1, 2006, international cards issued against leu or foreign exchange accounts of resident individuals may be used abroad up to €10,000 a month for cash withdrawal, as allowed under NBM regulations. International cards of resident individuals may be used abroad for payment at commercial entities (shops, hotels, gas stations, etc.) without quantitative limits.
Resident legal entities may make payments through international cards issued against their accounts (1) for business travel expenditures whereby, effective September 1, 2006, cash withdrawals are subject to a €10,000 limit a month; and (2) for some types of duties, taxes, and penalties related to payments for import of goods and services in favor of nonresidents. Cash withdrawals for such payments are not allowed.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksLaw No. 1466-XIII, dated January 29, 1998, on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Law No. 81-XV, dated March 18, 2004, on Investments in Entrepreneurial Activity.
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.
References to legal instruments and hyperlinksLaw No. 1466-XIII, dated January 29, 1998, on Regulation of Repatriation of Funds, Goods, and Services Obtained from External Economic Transactions; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994).
Capital Transactions
Controls on capital transactionsApproval from the NBM is required for the transfer of capital in monetary form to nonresidents. However, NBM regulations exempt certain monetary capital flows from approval or registration requirements. Effective September 1, 2006, notification of the NBM is required for capital flows from nonresidents in the form of commercial and financial credits and guarantees. Effective September 1, 2006, NBM approval is not required for the transfer of capital by residents if the transfer is performed on the account of the national public budget funds.
Effective September 1, 2006, resident legal entities are allowed to make transfers abroad without NBM approval, as a gift, donation, or gratuitous assistance in favor of nonresidents, up to €10,000.
Repatriation requirementsProceeds received by residents from capital transactions must be repatriated to Moldova unless a specific exemption has been granted by law.
Controls on capital and money market instrumentsEffective September 1, 2006, resident banks may purchase (in their portfolios) securities issued and guaranteed by the governments of OECD countries (previously, G-7 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 in the case of local investors. A foreign investor may not possess more than 50% of state securities within a single international securities identification number (ISIN), whether obtained on the primary or the secondary market.
A noncompetitive bid submitted by an investor for state securities may not exceed MDL 300,000 at face value within a single ISIN number.
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) within 10 days from purchase. A person who purchases 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) must publish the relevant information in the mass media indicated in the corporation’s statute, within 10 calendar days after acquisition. A compulsory tender offer is required (1) if a person, independently or together with affiliated persons, purchases more than 50% of an open corporation’s total volume of shares with voting rights; (2) on purchase or sale of an issuer’s securities by an insider, except in cases of inheritance and donation; and (3) on purchase by the issuer of the issuer’s securities.
It is not permitted to submit a tender offer, purchase, sell, or negotiate the acquisition or selling of securities based on the tender offer, or advertise the relevant offer prior to its registration with the NSC.
A compulsory norm applies to the nominal holder to disclose information to the securities’ issuer or registry holder, regarding the securities reflected in the holder’s accounting, with the data indicating the owners of the securities and the number of securities held by them, as well as other data required by law. The purchase and sale of securities by insiders other than under the tender offer conditions are prohibited.
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 for the acquisition by banks of securities of a participating nature that represent less than 10% of the capital of a legal entity.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and issues permits for securities to circulate outside the country.
Bonds or other debt securities
Sale or issue locally by nonresidentsRegulations governing shares or other securities of a participating nature apply.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and issues permits for securities to circulate outside the country.
On money market instruments
Purchase locally by nonresidentsThe procedures for 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 single ISIN number, whether obtained on the primary or secondary market.
A noncompetitive bid submitted by the investor may not exceed MDL 300,000 at face value within a single ISIN number of state securities.
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsn.r.
On collective investment securities
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsn.r.
Controls on derivatives and other instrumentsAcquisition by resident banks from nonresidents of financial derivatives (forwards, swaps, options, futures) with foreign currencies as the basic asset may be conducted without NBM approval.
Sale or issue locally by nonresidentsNBM approval is required.
Purchase abroad by residentsNBM approval is required.
Sale or issue abroad by residentsThe NSC registers the securities issued by residents in Moldova and issues permits for securities to circulate outside the country.
Controls on credit operationsCredit operations contracted or guaranteed by the government of Moldova are not subject to NBM approval or notification to the NBM.
Commercial credits
By residents to nonresidentsNBM approval is not required for commercial borrowings or credits from residents to nonresidents.
To residents from nonresidentsEffective September 1, 2006, NBM notification is required for interest-bearing commercial loans or credits, except for factoring operations, if the nonresident factor assumes the risk of the debtor’s insolvency. Previously, NBM registration was 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 nonresidentsEffective September 1, 2006, NBM approval is required, except for (1) interbank credits (for the purpose of a bank’s liquidity management) with an initial repayment period of less than one year; and (2) financial leasing. Previously, NBM approval was required, except for government and overnight credits. Credits involving resident or nonresident nonentrepreneurial individuals were not allowed.
To residents from nonresidentsEffective September 1, 2006, NBM notification is required for financial loans or credits, except for (1) interbank credits (for the purpose of a bank’s liquidity management) with an initial repayment period of less than one year; and (2) loans or credits received from nonresidents by using credit cards issued by nonresidents at a residents’ request. Previously, NBM registration was 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 nonresidentsEffective September 1, 2006, NBM approval is required for guarantees issued by a resident guarantor (other than an authorized bank) based on a transaction between two nonresidents. Previously, NBM approval was 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.
To residents from nonresidentsEffective September 1, 2006, NBM notification is required for guarantees issued by a nonresident guarantor based on a transaction between two residents. Previously, NBM registration was 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 was a nonresident, and (3) guarantees issued by nonresidents with respect to transactions with nonresidents when the beneficiary of the guarantee was a resident.
Controls on direct investment
Outward direct investmentEffective September 1, 2006, NBM approval is no longer required for direct investment by resident individuals.
Controls on liquidation of direct investmentForeign investors may transfer abroad funds obtained domestically as a result of liquidation of direct investment after having fulfilled all fiscal obligations.
Proceeds from the liquidation or sale of investments abroad must be repatriated to Moldova, except for proceeds that are reinvested abroad in investments not requiring NBM approval.
Controls on real estate transactions
Purchase abroad by residentsEffective September 1, 2006, the control on the purchase of real estate abroad by residents has been lifted. Previously, NBM approval was 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 land 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 nonresidentsEffective September 1, 2006, these transactions are governed by the rules on commercial and financial loans. Previously, loans from residents to nonresidents were not allowed and loans to residents from nonresidents had to be registered.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsEffective September 1, 2006, resident individuals may transfer abroad as gifts, donations, or gratuitous assistance without NBM approval up to €1,000 (previously, $1,000 from type A foreign currency accounts and $500 from type B accounts). Funds in the form of inheritances or legacies from residents to nonresidents may be transferred abroad without NBM approval.
Settlements of debts abroad by immigrantsEffective September 1, 2006, these transactions do not require NBM authorization.
Transfer of assets
Transfer abroad by emigrantsEffective September 1, 2006, emigrants may transfer money abroad without NBM approval.
Transfer of gambling and prize earningsNBM approval is required for transfers from residents to nonresidents.
References to legal instruments and hyperlinksLaw No. 81-XV, dated March 18, 2004, on Investments in Entrepreneurial Activity; Regulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Instruction on Performing Transfers of Capital in the Form of Investments (NBM Decision No. 186, dated July 29, 2004); Instruction on External Commitments (NBM Decision No. 185, dated July 13, 2006); Law No. 192-XIV, dated November 12, 1998, on the National Securities Commission; Law No. 459-XII, dated January 22, 1991, on Property; Law No. 1308-XIII, dated July 25, 1997, on Regulatory Price and Procedure for Selling-Purchasing of Land; Law No. 199-XVI, dated November 18, 1998, on the Securities Market.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsEffective September 1, 2006, resident banks are permitted to purchase (for their portfolios) without NBM approval securities issued and guaranteed by the governments of OECD countries (previously, G-7 countries).
Acquisition by banks from nonresidents of financial derivatives (forwards, swaps, options, futures) with foreign currencies as the basic asset may be conducted without NBM approval. Effective September 1, 2006, resident banks are allowed to make real estate investments abroad without NBM approval. Effective January 12, 2006, amendments were passed to the regulation on equity investments of banks in legal entities to ensure the consolidated supervision of risks assumed by banks as a result of banks’ investments in legal entities, by obliging banks to present financial reports of the legal entities in which banks hold 25% or more of the capital, as well as informing the NBM on the investments held in the capital of legal entities. Effective April 20, 2006, amendments were accepted to the recommendations on the internal control systems of banks in Moldova to ensure transparency in the banks’ ownership structure and knowing the person who considerably influences banks’ management and activity through determining the minimum list that has to be maintained by the banks of its direct and indirect owners. Effective July 13, 2006, recommendations on the country/transfer risk management system by the banks in Moldova were approved, which determine the fundamental principles related to internal policies and procedures of banks’ risk management. Effective November 30, 2006, amendments were accepted to the regulation on holding significant interest in a bank, by extending the requirements for the presentation of information regarding the persons affiliated with the applicant wishing to hold a significant interest in banks’ equity, as well as by determining the procedures of the presentation of the documents related to holding by the foreign bank of a significant interest in a bank in Moldova. Effective December 17, 2006, amendments were accepted to the regulation on publishing information on financial activity by authorized banks of Moldova to oblige banks to inform the public of the total exposure of a bank to affiliated persons; accounting policy; principal strategic directions of banks’ activities; the conditions of credit extension to individuals; and information on the bank’s management. Effective February 15, 2007, amendments were accepted to the regulation on the licensing of banks, to increase the information presented for obtaining a license.
Borrowing abroadEffective September 1, 2006, the procedure of registration of commercial and financial credits and guarantees received by resident banks from nonresidents was changed to a procedure of notification to the NBM.
Notification to the NBM is required for (1) financial loans or credits, except for interbank loans (for the purpose of managing bank liquidity) with an initial repayment period of less than one year; and (2) commercial loans or credits bearing interest, except for factoring operations in cases in which the nonresident factor assumes the risk for the debtor’s insolvency.
Maintenance of accounts abroadThere are no controls on the opening and maintaining of FCAs abroad by banks holding types 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)Effective September 1, 2006, NBM approval is required for financial loans or credits, except for (1) interbank credits (for the purpose of managing of bank liquidity) with an initial repayment period of less than one year; and (2) financial leasing. Granting loans to nonresident nonentrepreneurial individuals is allowed with NBM approval (previously, it was not allowed) according to the rules established for commercial and financial loans or credits.
Lending locally in foreign exchangeBanks holding types B or C licenses are allowed to extend foreign currency credits to (1) other resident banks; (2) resident legal entities and individuals engaged in entrepreneurial activities for settlements with nonresidents; (3) residents mentioned in item (2) from 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 funds under cofinancing programs, in accordance with credit agreements between the government and nonresidents or between resident banks and international financial institutions; (5) resident individuals for settlements with nonresidents for personal expenses such as education, medical treatment, and items for personal use; and (6) legal entities and individuals for reimbursing credits in foreign exchange from another resident bank received for the purpose of settlement with nonresidents.
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 each currency.
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 regulationsThe significant interest of a bank in a legal entity for which NBM approval is required is 5% of the equity or of the voting rights.
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 a 5%, 25%, 33%, or 50% share of the aggregate capital of the bank. Previously, the lowest limit was 10%.
The sum of all interests in a bank’s equity whose direct or indirect owners are residents of offshore countries and/or zones and/or any group of persons acting together that includes a person from the offshore countries and/or zones, may not exceed 5%.
Open foreign exchange position limitsForeign currency assets may not exceed 125% or be less than 75% of foreign currency liabilities in balance sheets. The open long or short exchange position limit for each currency may not exceed or be less than 10% of aggregate capital, respectively. The open long or 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
Insurance companies
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadThe use of insurance reserves for stock exchange and financial activities is prohibited.
Limits (min.) on investment portfolio held locallySecurities issued by residents of Moldova registered with the NSC and allowed for circulation on the stock market may represent up to 40% of the total technical reserves of an insurer.
Pension fundsn.a.
Investment firms and collective investment fundsAccording to procedures for the admission of foreign securities to the Moldova securities market, the issuer of MDRs has the right to issue MDRs only in the amount that represents the equivalent of foreign securities of which the issuer is the nominal holder, and for the admission of which the issuer has obtained the permission of the NSC and of the NBM. The amount of MDRs issued (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 four.
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksRegulation on Foreign Exchange in the Territory of the Republic of Moldova (NBM Decision No. 2, dated January 13, 1994); Instruction on Performing Transfers of Capital in the Form of Investments (NBM Decision No. 186, dated July 29, 2004); Instruction on External Commitments (NBM Decision No. 185, dated July 13, 2006); Instruction on Opening Accounts Abroad (NBM Decision No. 279, dated November 13, 2003); Instruction No. 8/1001 on Extension of Credits in Foreign Currency (NBM Decision No. 8, dated February 2, 1996); Law No. 407-XVI, dated December 21, 2006, on Insurance; Order No. 34, dated March 9, 2006, of the State Inspectorate for Insurance and Non-State Pension Funds Supervision on Approval of the Rules of Placement of Insurance Reserves and Funds; Law No. 550-XIII, dated July 21, 1995, on Financial Institutions; Regulation on Banks’ Open Foreign Exchange Position (NBM Decision No. 126, dated November 28, 1997); Regulation No. 42/09-01, on Holding Significant Interest in a Bank (Minutes No. 53 of the NBM Administrative Council, dated November 29, 1996); Regulation on Equity Investments of Banks in Legal Entities (NBM Decision No. 81, dated April 9, 1998).
Changes during 2006
Arrangements for payments and receiptsJuly 7. The limit on imports of domestic currency by natural persons was lifted.
July 7. Resident and nonresident individuals have the right to export when departing from Moldova (1) domestic currency cash and checks, as well as cash and traveler’s checks in foreign currency, up to the equivalent of €10,000 an individual without the submission to customs authorities of justifying documents; and (2) domestic currency cash and checks, as well as cash and traveler’s checks in foreign currency, up to the equivalent of €50,000 an individual by submitting to customs authorities the following justifying documents: (a) customs documents confirming the import of currency into Moldova; and/or (b) export permissions, issued, according to the NBM normative acts, by authorized banks or by the NBM. Previously, up to MDL 7,000 could be imported or exported without declaration.
If the total amount exported exceeds the equivalent of €10,000, residents and nonresidents must declare it to the customs authorities.
December 19. Moldova signed the CEFTA agreement.
Resident accountsSeptember 1. The requirement to submit a customs declaration confirming the import of currency into the Republic of Moldova or funds export permissions, issued by authorized banks or the NBM on depositing of cash and traveler’s checks in residents’ foreign exchange accounts was lifted.
September 1. Resident foreign exchange accounts were changed to a single foreign currency account from two types (A and B) of foreign currency accounts.
September 1. Cash may be deposited into and withdrawn from resident individuals’ foreign exchange accounts without restrictions.
September 1. Residents may open foreign exchange accounts and domestic currency accounts abroad without NBM permission (1) for making direct investments and real estate investments, if the opening of such accounts is compulsory under the legislation of the concerned foreign state; and (2) resident public institutions for making operations abroad on the account of the national public budget fund.
Nonresident accountsSeptember 1. Cash may be deposited into and withdrawn from nonresident individuals’ foreign exchange accounts without restrictions.
Imports and import paymentsDecember 19. Moldova signed the CEFTA, which took effect May 1, 2007, and replaced existing agreements on free trade within the Stability Pact.
Payments for invisible transactions and current transfersSeptember 1. Nonresidents may make payments and transfers abroad of domestic and foreign currency on submission of supporting documents. These documents are not required in the following cases: (1) for legal entities, in the case of (a) transfers in the name of the same account holder; (b) payments or transfers by diplomatic missions, consular offices, other official representation of foreign states, and the representation of international organizations located and accredited in the Republic of Moldova; and (c) payments or transfers by nonresident banks; and (2) for individuals, in the case of (a) transfer in their own name; and (b) payment or transfer in favor of an individual or legal entity in an amount not exceeding the equivalent of €1,000.
September 1. The NBM must be notified of private loans from nonresidents (previously, these loans were registered by the NBM). Current payments related to these loans may be effected by residents on presentation of the certificates of notification.
September 1. International cards issued against leu or foreign exchange accounts of resident individuals may be used abroad up to €10,000 a month for cash withdrawal, as allowed under NBM regulations.
September 1. Cash withdrawals abroad for business travel by resident legal entities are limited to €10,000 a month.
September 1. Residents may make the following payments and transfers abroad: (1) for the purpose of family expenses, as follows: (a) up to €1,000 (previously, $500 without documentation and with NBM approval, $3,000) without the submission of documents confirming kinship; (b) from €1,000 to the equivalent of €10,000 on submission of documents confirming kinship; (c) more than €10,000 on submission of documents confirming kinship, and of documents confirming the necessity of making the payment or transfer by the individual in whose favor the transfer is made; (2) in the resident’s name for the purpose of current expenses for the period of his or her temporary stay abroad: (a) up to €10,000, on submission of documents confirming the fact of temporary stay abroad; (b) more than €10,000, on submission of documents confirming the fact of temporary stay abroad and documents confirming the necessity of making the payment or transfer by the individual in whose favor the transfer is made; (3) in a resident’s name for the purpose of obtaining a study visa, on submission of a document confirming the admission of the respective individual at the education institution and the document or information confirming the necessity of depositing funds in his or her account abroad for the purpose of obtaining the study visa; and (4) in favor of a nonresident, in the amount of up to €1,000, without the submission of supporting documents, unless otherwise provided for in the normative acts of the NBM. Transfers exceeding €1,000 require the submission of supporting documents.
Capital transactionsSeptember 1. NBM approval is not required for the transfer of capital by residents if the transfer is performed on the account of the national public budget funds.
September 1. Notification of the NBM is required for capital flows from nonresidents in the form of commercial and financial credits and guarantees.
Resident legal entities are allowed to make transfers abroad without NBM approval, as a gift, donation, or gratuitous assistance in favor of nonresidents, up to €10,000.
Controls on capital and money market instrumentsSeptember 1. Amendments to the Instruction on Performing Transfers of Capital in the Form of Investments extended the right of commercial banks to purchase securities issued and guaranteed by the governments of OECD countries (previously, G-7 countries).
September 1. Resident banks may purchase (in their portfolios) securities issued and guaranteed by the governments of OECD countries (previously, G-7 countries) without NBM approval.
Controls on credit operationsSeptember 1. NBM approval is not required for financial credits granted by residents to nonresidents for (1) interbank credits (for the purpose of a bank’s liquidity management) with an initial repayment period of less than one year; and (2) financial leasing.
September 1. NBM notification is not required for financial credits granted by nonresidents to residents for (1) interbank credits (for the purpose of a bank’s liquidity management) with an initial repayment period of less than one year; and (2) loans or credits received from nonresidents by using credit cards issued by nonresidents at a residents’ request.
September 1. NBM approval is required for guarantees issued by a resident guarantor (other than an authorized bank) based on a transaction between two nonresidents.
September 1. NBM notification is required in the case of guarantees issued by a nonresident guarantor based on a transaction between two residents.
September 1. NBM notification is required for interest-bearing commercial loans or credits to be accepted by residents from nonresidents, except for factoring operations, if the nonresident factor assumes the risk of the debtor’s insolvency.
September 1. Granting loans to nonresident nonentrepreneurial individuals is allowed with NBM approval (previously, it was not allowed) according to the rules established for commercial and financial loans or credits.
Controls on direct investmentSeptember 1. All residents may make direct investments abroad without NBM approval.
Controls on real estate transactionsSeptember 1. The requirement of NBM approval for purchase of real estate abroad by residents was lifted.
Controls on personal capital transactionsSeptember 1. Loans by residents to nonresidents and from nonresidents to residents are subject to the same rules as commercial and financial loans.
September 1. Residents may transfer abroad as gifts, donations, or gratuitous assistance up to €1,000 without NBM approval (previously, $1,000 from type A foreign currency accounts and $500 from type B accounts).
September 1. Settlement of debt abroad by immigrants is not subject to NBM approval.
September 1. Emigrants are allowed to transfer money abroad without NBM approval.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 12. Amendments were passed to the regulation on equity investments of banks in legal entities to ensure the consolidated supervision of risks assumed by banks as a result of banks’ investments in legal entities, by obliging banks to present financial reports of the legal entities in which banks hold 25% or more of the capital, as well as informing the NBM of the investments held in the capital of legal entities.
April 20. Amendments were accepted to the recommendations on the internal control systems of banks in Moldova to ensure transparency in the banks’ ownership structure and knowing the person who considerably influences banks’ management and activity through determining the minimum list that has to be maintained by the banks of its direct and indirect owners.
July 13. Recommendations on the country/transfer risk management system by the banks in Moldova were approved, which determine the fundamental principles related to internal policies and procedures of banks’ risk management.
September 1. Resident banks were allowed to make real estate investments abroad without NBM approval.
September 1. Amendments to the Instruction on Performing Transfers of Capital in the Form of Investments extended the right of the commercial banks to purchase securities issued and guaranteed by the governments of OECD countries (previously, G-7 countries).
September 1. The procedure of registration of commercial and financial credits received by resident banks from nonresidents was changed to a procedure of notification of such transactions to the NBM.
September 1. Granting loans to nonresident nonentrepreneurial individuals is allowed with NBM approval (previously, it was not allowed) according to the rules established for commercial and financial loans or credits.
November 30. Amendments were accepted to the regulation on holding significant interest in a bank, by extending the requirements for presentation of information regarding the persons affiliated with the applicant wishing to hold a significant interest in banks’ equity, as well as by determining the procedures of the presentation of the documents related to holding by the foreign bank of a significant interest in a bank in Moldova.
December 17. Amendments were accepted to the regulation on publishing information on financial activity by authorized banks of Moldova to oblige banks to inform the public of the total exposure of a bank to affiliated persons; accounting policy; principal strategic directions of banks’ activities; the conditions for credit extension to individuals; and information on the bank’s management.
Changes during 2007
Arrangements for payments and receiptsMay 1. Moldova became a member of the CEFTA.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsFebruary 15. Amendments were accepted to the regulation on the licensing of banks, to increase the information presented for obtaining a license.

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