Input Paper “Overview of the current situation and chal­lenges of the fight against corrup­tion in the Republic of Moldova”

As part of our project “Eastern Part­ner­ship Plus”, we are publishing a first series of input papers on the topic of anti-corrup­tion reforms in Ukraine, Georgia and Moldova. The authors from the region (Kateryna Ryzhenko, Ion Guzun, Sandro Kevkhishvili) analyse the role of the European Union in supporting the fight against corrup­tion and formulate their political recom­men­da­tions for decision-makers in Berlin and Brussels.

By Ion Guzun, Attorney at Law

Overview of the current situation and chal­lenges of the fight against corruption 

On 8 June 2019, Moldova’s Parlia­ment adopted a decla­ra­tion recog­nizing that the state had been captured by the oligarch Vladimir Plahot­niuc and the Demo­c­ratic Party of Moldova (PDM) under his lead­er­ship. That same day, the two parties of the ACUM Bloc and the Party of the Social­ists entered into an unlikely agreement to form a new coalition govern­ment with ACUM’s Maia Sandhu as prime minister. The newly estab­lished govern­ment undertook to inves­ti­gate corrup­tion schemes and illicit financial flows, fight corrup­tion and reform the judiciary. Feeling threat­ened by the revo­lu­tionary measures taken by the Sandu Govern­ment to remove political influence from the judiciary and Pros­e­cutor General’s Office, the PSRM toppled the govern­ment five months after its appoint­ment. The succeeding PSRM-led coalition govern­ment under Ion Chicu stalled the judicial reforms and the anti-corrup­tion measures, while the Social­ists focused on re-building the Plahot­niuc style power vertical.

The appoint­ment of a new Pros­e­cutor General in November 2019 did not bring the expected break­through in the inves­ti­ga­tion of high-profile corrup­tion cases, such as the banking fraud and Laun­dromat money-laun­dering scheme. On the contrary, the Pros­e­cutor General’s Office released from prison or freed from criminal inves­ti­ga­tion multiple indi­vid­uals involved in money laun­dering and the billion-dollar banking fraud, among them the contro­ver­sial busi­nessman Veaceslav Platon, two Shor Party MPs who figure in the Kroll reports[1] and Vlad Filat,[2] the former prime minister. The Pros­e­cutor General’s Office refused to launch an official inves­ti­ga­tion into the alleged bribery of then President Igor Dodon, even after a video leaked in the summer of 2020 showing Igor Dodon taking a plastic bag from the oligarch Vladimir Plahot­niuc in 2019 had gone viral.[3] Another inves­ti­ga­tion into bribery among MPs launched in 2020 has been also stalled.

Although Moldova has made some progress, such as amend­ments to the legis­la­tion on sanctions of criminal offenses and improving policy documents and proce­dures on money laun­dering, these achieve­ments were made possible largely thanks to the external pressure exerted via the condi­tion­ality mechanism attached to the EU macro-financial assis­tance, and far less due the existence of any genuine political will on the part of the incumbent govern­ment. No progress has yet been made towards strength­ening the anti-corrup­tion insti­tu­tions by narrowing the compe­tences (and thus sharp­ening the focus) of the special­ized Anti-corrup­tion Prosecutor’s Office (APO).

Anti-corrup­tion reforms: main achieve­ment and failures 

Moldova has adopted a string of various anti-corrup­tion strate­gies and action plans since gaining its inde­pen­dence. The latest National Integrity and Anti­cor­rup­tion Strategy expired in 2020, but only 50 (39%) of its 127 measures had been imple­mented by mid-2020, though another 20% had been partially imple­mented.^[4]

The latest Strategy and the Action Plan for ensuring the inde­pen­dence and the integrity of the justice sector for 2021–2024, adopted by the PSRM-Sor Party coalition in late 2020, was due to go into effect as of 1 January 2021. On 17 February 2021, President Maia Sandu returned the justice sector strategy to the Parlia­ment for further review, requesting the imple­men­ta­tion of the mechanism of the external eval­u­a­tion of judges, that the assets and interest disclo­sures submitted by judges and pros­e­cu­tors be subject to effective review and that the Consti­tu­tion be amended to allow for the confis­ca­tion of assets/​ wealth owned by public servants in the absence of justi­fi­ca­tion. Parlia­ment did not re-examine the justice sector strategy before 28 April 2021 (when the pres­i­den­tial decree dissolving parlia­ment was signed).

The veri­fi­ca­tion of asset reporting is proceeding very slowly, and priority seems to be given to conflicts of interest, which are of less complexity. Unfor­tu­nately, the integrity inspec­tors perform only super­fi­cial checks on the asset and interest state­ments submitted, limiting these only to form and content and do not compile all the infor­ma­tion from previous years or inves­ti­gate discrep­an­cies revealed in this way. As of the time of writing, of 11 inves­ti­ga­tions initiated to check assets, four cases citing the unjus­ti­fied property have been sent to court. The National Integrity Authority (NIA) needs to amend the rules governing the veri­fi­ca­tion of asset and interest state­ments, ensure their effective imple­men­ta­tion with respect to the disclo­sures of all high-level actors and ensure the timely publi­ca­tion of results of these investigations.

Since 2016, the e‑integrity system has been available for online filing and veri­fi­ca­tion of asset and interest state­ments. Automated cross-checking is extremely important for the effective veri­fi­ca­tion of such state­ments. NIA failed to implement this mechanism, although the donor community has expressed its readiness to support the improve­ment thereof, subject to a prior audit of its functioning.

Amend­ments to the Criminal Code tough­ening the sanctions for corrup­tion offenses entered into force in October 2020. The new legal framework, aimed at combat­ting corrup­tion by improving effec­tive­ness in the criminal inves­ti­ga­tion phase, will provide for the possi­bility of criminal pros­e­cu­tion bodies with addi­tional proce­dural tools. Also, the term of impris­on­ment for corrup­tion has been increased to 8 years.

The Anti-corrup­tion Prosecutor’s Office (APO) of the Republic of Moldova was created to fight high-level corrup­tion. However, it devotes signif­i­cant efforts to cases involving small-scale corrup­tion. Thus, restricting the mandate of the APO to cases of high-level corrup­tion would help its pros­e­cu­tors to focus on the cases of high-level corrup­tion; such inves­ti­ga­tions require increased guar­an­tees of inde­pen­dence as well as special methods and means of inves­ti­ga­tion due to the complexity of the cases and interests involved. Such a mandate justifies the main­te­nance of a special­ized body with a special status.^[5]

In 2020, no high-ranking Moldovan officials were sentenced for corrup­tion. On the contrary, judges postponed signif­i­cant cases or released suspects under inves­ti­ga­tion, and pros­e­cu­tors have been stalling with respect to the proper inves­ti­ga­tion of substan­ti­ated alle­ga­tions of corrup­tion. For instance, Oleg Stern­ioală, a Supreme Court Judge, was detained in November 2019 in a criminal inves­ti­ga­tion on suspicion of large-scale money laun­dering and illicit enrich­ment to the tune of about EUR 320,000, the discrep­ancy between the suspect’s income and his expen­di­tures. More than a year later, the case has still not been sent to court. Mr. Stern­ioală resigned from the court, but is a prac­ticing attorney. In June 2020, the Chișinău Appellate Court issued an order to cease criminal proceed­ings against two indi­vid­uals caught in flagrante delicto trying to send, through third-parties, USD 250,000 to members of parlia­ment in March 2014. This was the first case involving high-level corrup­tion of MPs.

In September 2019, the APO withdrew the charges against 14 former and current judges accused of money laun­dering in the “Laun­dromat” case, on the grounds that the elements of the offense could not be estab­lished. In late October 2020, the Superior Council of Magis­tracy accepted the requests of five magis­trates to be rein­stated in the positions they had held until 2016, when they became subjects of criminal pros­e­cu­tion, and ordered that they receive back pay for the period in which they were suspended from acting as judge.

The draft amend­ments which would provide for an extension the anti­cor­rup­tion strategy until 2022 are still awaiting a decision by Parlia­ment. Based on judicial statis­tics, the National Anti­cor­rup­tion Centre, NAC claims that the courts issue sentences involving “real” impris­on­ment in no more than 16% of all corrup­tion cases, and issue fines in 71% of them.^[6]

The EU’s role in supporting the fight against corruption

The fight against corrup­tion has been a constant priority in the EU-Moldova dialogue and consti­tutes an important part of the EU-Moldova Asso­ci­a­tion Agreement (AA), signed in 2014. The two Asso­ci­a­tion Agendas produced by the Asso­ci­a­tion Agreement set out a clear area of actions in the field of rule of law, among them the compre­hen­sive reform of the pros­e­cu­tion and the justice sector, actions to advance the fight against corrup­tion, espe­cially high-level corrup­tion, and to strengthen the inde­pen­dence and func­tion­ality of the existing anti-corrup­tion insti­tu­tions (the National Anti­cor­rup­tion Centre and the NIA). The second Asso­ci­a­tion Agenda for 2017–2019,[7] which was approved after the one-billion banking theft came to light, defined a more extensive and detailed list of anti-corrup­tion and anti-money laun­dering measures.

Before 2018, the European Union had not allocated funding to support rule-of-law measures within the framework of the European Neigh­bour­hood Instru­ment (ENI). The first ENI-funded programme aimed at strength­ening the rule of law and anti-corrup­tion mech­a­nisms was launched in 2018,[8] with a budget of EUR 8.5 million.

In December 2020, The European Commis­sion approved the disburse­ment of EUR 5 million in budget support assis­tance to help the delivery of reforms in the police sector in the Republic of Moldova. This new payment comes in the wake of the second instal­ment of the now expired Macro-Financial Assis­tance programme in July (EUR 30 million), and the first instal­ment (EUR 50 million) of the emergency Macro-Financial Assis­tance programme, disbursed in November.[9] It encom­passes important anti-corrup­tion and anti-money laun­dering compo­nents vis-à-vis the Ministry of Interior and the police.[10]

The Joint EU/​CoE Project Control­ling Corrup­tion through Law Enforce­ment and Preven­tion (CLEP) started on 1 June 2017, with a duration of 36 months and a budge of EUR 2.2 million.[11] In addition, the EU initiated a million-euro Twinning project with the NAC in September 2017, aimed at strength­ening the insti­tu­tional capac­i­ties of the NAC, APO, Ministry of Internal Affairs (MIA), General Police Inspec­torate (GPI) and Customs Service, and thus increasing their effec­tive­ness in the fight against corrup­tion.[12]

The current High Level Advisor’s Mission provides expertise on combat­ting corrup­tion and money laun­dering. This is not the only support that the European Union, the Council of Europe, and the other donors provide to assist Moldova in the fight against corrup­tion and money laundering.

Main conclu­sion and recom­men­da­tions as to how the EU could effec­tively support anti-corrup­tion reforms 

 Conclu­sions

• The EU condi­tion­ality mechanism has been a key impetus for all of the anti-corrup­tion and judicial reforms imple­mented by the Moldovan govern­ment in recent years.
• The assets veri­fi­ca­tion mechanism and fight against high-level corrup­tion remains inef­fec­tive, targeting mostly the low-level public servants and conflicts of interests. The existing legal short­com­ings make the inves­ti­ga­tion of illegal enrich­ment a chal­lenging task.

Recom­men­da­tions

(1) with respect to the Eastern Part­ner­ship framework (Asso­ci­a­tion countries)

• Enhance coop­er­a­tion between the law enforce­ment and anti-corrup­tion agencies of the EU , including the European Public Prosecutor’s Office, and the EaPs in the areas of combat­ting high-level corrup­tion, controls of foreign assets of high-ranking public officials, the recovery of crim­i­nally acquired assets and combat­ting financial crime.
• Extend the scope of the Global Human Rights Sanctions Regime (EU ‘Magnitsky Act’) to include indi­vid­uals involved in high-level corrup­tion cases in the EaP countries.
• Continue to define the rule of law and the fight against corrup­tion as key criteria and condi­tions for closer political part­ner­ship and financial assis­tance to the EaP countries.
• Continue to provide civil society with capacity support and funding to support moni­toring the trans­parency, integrity, and effec­tive­ness of state insti­tu­tions in imple­menting anti-corrup­tion and judicial reforms.

(2) with respect to the Republic of Moldova specifically

• Strengthen the capacity of the APO and NIA to handle high-level corrup­tion cases and the compe­ten­cies of the NIA to carry out effective controls of assets and interest statements.

[1] Ziarul de Gardă, 2 October 2020, “Tauber and Apos­tolova freed from criminal pros­e­cu­tion in the banking fraud case”, https://bit.ly/2SlS0OZ.

[2] Radio Free Europe, 4 December 2019, “Former Moldovan PM convicted of bribery released from prison”, https://www.rferl.org/a/former-moldovan-pm-convicted-of-bribery-released-from-prison/30306678.html.

[3] Ziarul de Gardă, 23 June 2020, “The Anti­cor­rup­tion Prosecutor’s Office concluded the inves­ti­ga­tion regarding the b[l]ack plastic bag”, https://www.zdg.md/en/?p=3722.

^[4] National Anti­cor­rup­tion Center, Moni­toring Report on imple­men­ta­tion NIA Strategy for the semester I, 2020, https://cna.gov.md/public/files/Raport_SNIA__sem_I_2020_.pdf.

^[5] The Legal Resources Centre from Moldova, The Anti-Corrup­tion Pros­e­cu­tion office should inves­ti­gate only high-level corrup­tion, available at https://crjm.org/wp-content/uploads/2019/01/2018–11-Nota-Competentele-PA-fin_eng.pdf.

^[6] National Anti­cor­rup­tion Centre, The study on court sentences for corrup­tion offenses. Special­ized courts /​ panels. Inter­na­tional practices and recom­men­da­tions for the Republic of Moldova, available in Romanian at https://bit.ly/3csMjFR.

^[7] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22017D1489.

[8] https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/annex_3_clean_anti_corruption_final.pdf.

[9] Moldova: EU approves €5 million in support of police sector reform — https://bit.ly/2Tasblf.

[10] https://www.eu4moldova.md/en/content/support-police-reform-republic-moldova.

[11] Council of Europe, Project on Control­ling Corrup­tion through Law Enforce­ment and Preven­tion, available at https://www.coe.int/en/web/corruption/completed-projects/clep.

[12] Twinning Project “Support to the strength­ening of the oper­a­tional capac­i­ties of the Law Enforce­ment Agencies of the Republic of Moldova in the field of preven­tion and inves­ti­ga­tion of criminal acts of corrup­tion”, available at https://bit.ly/3cpT3EG.

Ion Guzun, Attorney at Law

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