Position statement: Possible disposal by the NBM of state securities to a dubious investor represents a risk of legalizing means of fraudulent origin


In December 2016, a group of MPs headed by Andrian Candu, Speaker of the Parliament of the Republic of Moldova, came up with a legislative initiative on capital liberalization and tax stimulation, known as the “amnesty of illegally obtained capital”. Civil society representatives condemned the initiative to adopt this law, considering that it would legalize the money obtained fraudulently and would compromise the anti-corruption fight in the Republic of Moldova.

Through a joint effort of civil society, the environment of experts and development partners, this project was blocked, and in February 2017 – withdrawn from the parliamentary agenda, even if it was voted in first reading. At the same time, the anti-corruption expertise carried out by the National Anticorruption Center found “… the concept of capital liberalization becomes equivalent to the legalization of capital outside the legal circuit, approaching a concept of money laundering.” Thus, this intention of legalizing suspicious funds has failed.

Recently, in an interview with a media portal, Finance Minister Octavian Armasu admitted the situation where the National Bank of Moldova (NBM), the securities holder issued by the Ministry of Finance (MF) to convert state guarantees into government bonds issued by Government in November 2014 and March 2015 (ROL 13.2 billion) could give up some of the securities (up to 40%) to an investor.

It should be noted that Law no. 235/2016 of the domestic state debt conversion of the guarantees assumed by the Government of Philip was one with deviations. This law attempted to legalize unlawful decisions of previous governments to allocate emergency credits from the NBM to three banks involved in bank fraud, knowing from the very beginning about the inability to repay these funds and their further use for purposes other than declared – clearing of deposits to individuals.

At present, Moldova has the risk of legalizing, by various methods, some dubious capital. Therefore, the statements of the Minister of Finance regarding the possible disposal of a part of the domestic debt by the NBM as a result of the conversion of the guarantees in favor of a potential investor should be examined with great care and caution as it could be a way of legalizing funds previously defrauded in the Republic of Moldova.

Even if the State Debt Consolidation Act allows for a transfer of up to 40% of state securities to a possible investor, its motivation could be determined by the desire to legalize some dubious means of origin. The  economic and financial interest is missing. And, unless it has been previously achieved through a special law on legalization of capital, other economically-packaged methods can now be used, making reference to the independence of the NBM that can take such a decision.

It is worth mentioning that the transactions with the investors in state securities are considered secret, the information about the investors being neither accessible to the public nor to several state institutions. The value of the transaction (40% of ROL 13.2 billion) would amount to ROL 5.2 billion – a stunning amount representing almost one quarter of the domestic debt of the Republic of Moldova. Thus, the vulnerability of the state and the Ministry of Finance to such an investor is obvious.

A possible transfer of the securities to a dubious investor against exorbitant and unclear funds from the NBM portfolio could have a negative impact on several basic elements of the security of the Republic of Moldova: would compromise the fight against money laundering; Would reduce the effectiveness of the newly created Criminal Recovery Agency, responsible for recovering fraudulent means; Would limit and constrain the activity of companies involved in investigating bank fraud.

At the same time, since in the interview of the Minister of Finance it is mentioned that state values ​​will be served and redeemed from non-fiscal means, it could be assumed that the state values ​​in the possession of the “investor” could be used in the privatization of state property.

Starting from the above mentioned, TI-Moldova expresses its concern that the transfer of state securities could be a new attempt to legalize the means of doubtful origin, and the secrecy of the information about the transactions with the investors in state securities generates the risk possible abuses.

In this context, TI-Moldova draws the attention of the National Bank of Moldova and the Ministry of Finance to the inadmissibility of allowing the legalization of illegally acquired capital, under the cover of laws adopted with deviations from the constitutional provisions of the Leanca, Gaburici and Filip governments.

Also, TI-Moldova asks the development partners to take into consideration the governments’ intentions to place the state securities at the disposal of potential investors with means of fraudulent origin, which could later be in the possession of public property.

This document has been prepared within the project “A Case based Approach to Fighting grand Corruption” funded by Open Society Institute and implemented by Transparency International – Moldova. The expressed opinions belong to the author and not necessarily reflect the position of the donor.

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