The fight against corrup­tion in Moldova – current situation and challenges

Im Rahmen unseres Pro­jek­tes „Öst­li­che Part­ner­schaft Plus“ ver­öf­fent­li­chen wir eine erste Reihe von Input Papers zum Thema Korrup­ti­ons­be­kämp­fung in der Ukraine, Georgien und Moldau. Die Autoren aus der Region (Kateryna Ryzhenko, Ion Guzun, Sandro Kevkhish­vili) analy­sieren die Rolle der Euro­päi­schen Union bei der Unter­stüt­zung der Korrup­ti­ons­be­kämp­fung und formu­lieren Ihre Hand­lungs­emp­feh­lungen an die Entschei­dungs­träger in Berlin und Brüssel. 

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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