The Legal Monitoring Report deals with amendments to the Law on Joint Stock Companies and the Compulsory Licensing Mechanism, ratification of the Agreement on the Transportation of Goods, and approval of Legal Framework on Cuber Security, the FISCALIS Agreement and Ecolabel Regulations.
RELEVANT LEGISLATIVE PROVISIONS IN CONNECTION WITH THE STATE OF EXCEPTIONAL SITUATION
Decision(s) issued in relation to the Exceptional Situation
By Decision No. 133 dated 26 May 2023, the Parliament extended the state of emergency on the entire territory of the Republic of Moldova for a period of 60 days, starting on 4 June 2023.
LEGAL AMENDMENTS CHANGING GENERAL ASPECTS OF THE BUSINESS
This Section includes information on legal acts implementing new rules or amendments, published in the Official Journal of the Republic of Moldova, referring to corporate, employment, and social, tax and customs, environment, etc matters. This Section shall also include draft legal acts of any direct or indirect relevance to the Company; as well as the temporary legislative measures approved pursuant to the state of emergency in the Republic of Moldova.
Commercial and Corporate
Law(s):
Amendments to the Law on Joint Stock Companies
The purpose of the amendments is to supplement the law with a special provision regulating the work of the company's supervisory bodies, which include the audit committee and the supervisory board.
In public interest companies, the establishment of an audit committee is mandatory, which shall act in accordance with the provisions of the law, the company's articles of association, and the rules of procedure of the company's audit committee.
Improving the Compulsory Licensing Mechanism
The law provides for additional cases in which the compulsory patent license may be granted. Thus, the court of law may grant the compulsory patent license on the ground of failure to exploit or insufficient exploitation of the patent, to serve the public interest, for the purpose of redressing an anti-competitive practice, or in case of inventions in the field of semiconductor technology and for the purpose of exploiting dependent patents and patents for plant varieties.
Draft law(s):
Amendment of the Law on Internal Trade
The trader will purchase and ensure the presentation on the shelf of food products from the short food chain at a minimum of 50% of the linear length of the commercial shelf.
The draft law also provides for the publication on the trader’s website of the available local products in a separate section entitled “Local Product - Made in Moldova”.
Fines for Infringements in the Activity of Legal Entities
Legal entities that have obtained income by incorrectly reflecting production costs, the selling price of goods, the volume of construction work carried out and the charges for services performed will be subject to a fine of up to 20% of the equivalent of such income.
Legal entities that have applied commercial surcharge for socially important products that exceed the legally established limit will also be subject to a fine.
Employment and Social
Draft law(s):
Amendments to the Labor Code
The draft law provides for the right and conditions to paternity leave, ensuring the father’s active participation in the upbringing of the adopted child. The father of the newborn, as well as of the adopted child will be entitled to 15 calendar days of paternity leave.
The proposed law further regulates the leave conditions for employees who adopted children or were granted family’s guardianship or custody.
Tax and Customs
Law(s):
Ratification of the Agreement on the Transportation of Goods
The Agreement aims at overcoming transport blockages faced by Moldovan road transport operators, by using alternative routes for transporting Moldovan goods, in particular agricultural products, within the territory of EU states.
Approval of FISCALIS Agreement
Under this Agreement, the Republic of Moldova benefits from support to improve the functioning of the internal market, promote competitiveness and fair competition. The primary aim is to protect the financial and economic interests of Signatory States, including against tax fraud and tax evasion.
Draft law(s):
Amendments to the Tax Code
The 18% tax rate of taxable income will be established for banking and non-banking legal entities for the period 2023-2025. It is also proposed to exclude the provision which requires banks, savings and loan associations and issuers of corporate securities to withhold a 7% on interest paid to resident individuals.
VAT Reimbursement Requirements
The amount of deducted VAT that has accrued on the accounts for at least three years will be reimbursed to the settlement account of the legal entity that requested the refund.
The VAT refund will be processed within 15 days of the refund application date, and within 30 days after the application submission date for taxpayers who filed a disagreement against the control act.
Environment
Law(s):
Approval of the Ecolabel Regulation
The Regulation aims at establishing a voluntary eco-labelling scheme, ensuring the promotion of products and services with a reduced environmental impact compared to other products or services in the same category. The Regulation provides for requirements for certification bodies and the procedure for verifying the conformity of products and services.
Draft law(s):
Environmental Pollution Charges
The draft law sets pollution charges for certain categories of packaging waste that were not previously charged, such as composite packaging. At the same time, the draft law provides for the exemption of up to 100% of the environmental pollution charge for those economic agents that reach the collection and recovery targets set out in Appendix No. 2 of Government Decision 561/2020.
Digitalization
Law(s):
Legal Framework on Cyber Security
The law aims at establishing a uniform minimum level of security for networks and information systems used in the delivery of essential services by public and private sector legal entities.
The law also focuses on creating risk and vulnerability management practices in both sectors to ensure interoperability in crisis management. The legal provisions of the Cyber Security law will enter into force on 1 January 2025.
OTHER AMENDMENTS THAT MAY AFFECT THE COMPANY
Law(s):
Regulation on Requirements for the Installation of Vehicles Filling Stations
The installation standards for all new and old motor vehicle filling stations with primary petroleum products, liquefied petroleum gases, and compressed natural gas are established by the Government Decision No. 259 dated 3 May 2023.
Any economic agent who designs, builds, assembles, and operates refuelling stations for motor vehicles shall adhere to the Regulation, independent of ownership or organizational structure.
Disclaimer:
The information contained in this Report is provided for informational purposes only and should not be considered as a legal advice on any matter. Though we have exercised our best endeavours to identify and present you with up-to-date and relevant details on the respective matters, the information contained herein, at any time, shall not be considered or construed as comprehensive or completely updated. Do not act or refrain from acting upon this information without seeking professional legal counsel. The content of this Report is based solely on the information sourced from publicly available sources and does not cover tax or accounting matters. Other than presenting this information, we will not be expected to investigate or conduct appraisal and/or verify continuing validity and accuracy of the respective information.
By ACI Partners Legal Team