Financial Crime World

Moldova’s Business Environment: Corruption and Ethical Challenges Persist

Overview

Europe and Central Asia, November 5, 2020

The business environment in Moldova continues to face significant challenges, primarily due to pervasive government corruption and a complex regulatory framework. These issues have weakened the economy and eroded investor confidence, according to numerous reports and experts.

Judiciary and Corruption

  • Moldova’s judiciary considered one of the weakest in the world
  • Businesses and international organizations report judges and prosecutors accept bribes
  • Corruption also rampant in the police and public services sector
  • Former PM Vlad Filat serving 9-year jail sentence for abuse of office and bribery
  • Was part of large-scale banking fraud case worth over $1 billion

Anti-Corruption Legislation

  • Moldova’s Criminal Code outlaws several forms of corruption
  • Insufficient financing, monitoring, and resources hinder effectiveness
  • Facilitation payments (quid pro quo) not directly addressed in law
  • Accusations against officials, such as former Deputy Minister Valeriu Triboi
  • He is currently facing charges of abuse of power, large-scale financial damages, and corrupt schemes

Foreign Companies Involved in Corruption Scandals

  • Rabobank, a Dutch banking group, involved in ’land grabbing’ through forgery and fraud
  • Several other foreign companies reportedly involved in similar corruption scandals

Efforts to Curb Corruption

  • Moldova introduced incentives for businesses to attempt mediation
  • Contract enforcement takes longer than in neighboring countries
  • Foreign arbitral awards generally enforceable based on reciprocity

Conclusion

Despite some progress in addressing corruption, it remains deeply ingrained in Moldova’s public institutions. Collaboration between the government and civil society is crucial to strengthen the rule of law, increase transparency, and promote ethical business practices.

Sources

  1. Doing Business 2017, World Bank
  2. Investment Climate Statement 2017, US Department of State
  3. Nations in Transit 2017, Freedom House
  4. Global Corruption Barometer 2013, Transparency International
  5. Business Environment and Enterprise Performance Survey 2013, World Bank
  6. Crime Moldova, various articles
  7. European Human Rights Court filings, various cases
  8. Transparency International: Corruption and Quality of Governance: The Case of Moldova 2017.