Business in Moldova and Protection of Competition

Facilitated by IABP-Moldova,
Supported by World Bank in Moldova
under the auspices of National Agency for the Protection of Competition

Recent establishment of National Agency for the Protection of Competition (ANPC) introduced new relationships between business community and the state, customers and between competing enterprises. ANPC aims to encourage loyal competition in the market through the application of more stringent but also more transparent rules. Therefore it is important that ANPC’s actions are understood univocally at different levels: business, Government, Parliament and consumers. The Parliament as a legislative body shall understand in every moment in time if the regulation performed by ANPC is impartial and contributes to the achievement of the above mentioned objectives.

Under the auspices of ANPC, with the support of the WB, IABP-Moldova initiated a series of enquiries aimed at informing the business community and the members of the parliament about recent developments at ANPC, including, its views and approaches on protecting and encouraging loyal competition, its applied methodologies, and latest solved controversial cases. The other aim of this series of enquiry is to have the business community actively engaged in the process of drafting the new Law on competition protection. It is expected to organize up to 5 enquires over next three months, inviting MPs, SMEs and large companies, including companies with foreign capital, and international donor community (please refer to the action plan attached).

The first enquiry took place on December 17, 2007. ANPC was represented by Dr. Carare, Director, Mr. Vladii, ANPC lawyer, and Mrs. Chiriac, ANPC advisor. Mr. Burunsus, on behalf of the WB, opened the discussion. After a short introduction by Dr. Romeo V. Turcan, IABP-Moldova Executive Director, Dr. Carare presented ANPC, its aims and objectives, its functions, and key provisions form the Law on protection of competition (that was adopted back in 2000). At the event were also present (i) entrepreneurs representing advertising, construction, agribusiness, asset management, pharmaceutical, and service and distribution sectors, (ii) representatives from the ministry of economy, (iii) representatives from the project implementation unit; (iv) WB; and (v) mass media.

Several generic discussion topics could be singled out during the first enquiry. One referred to the scope of ANPC. Entrepreneurs suggested ANPC widens its scope by looking not only at the protection side of the competition, but also at the possibility of creating opportunities for loyal competition. In this respect, some entrepreneurs equaled the responsibilities and functions of ANPC to those of the National Bank in that ANPC like the National Bank, ANPC deals with fundamentals of the economy.

The other issue discussed looked at the intervention of the State into the operation of the free market economy. Entrepreneurs were worried that the State favours state owned enterprises in the process of public purchases. To what ANPC made it clear that according to the current legislation the State may do so only in force major circumstances. The other concern in this regard was recently adopted fiscal amnesty. Entrepreneurs asked ANPC to officially express their opinion from the point of view of encouraging loyal competition, i.e. whether this amnesty contributes to or inhibits loyal competition, and if the latter, what needs to be done to alter the situation.

Next issue discussed concerned some definitions that ANPC operates with, e.g. dominant player in the market, how big is big, advertising, hyperbole and vaporware. ANPC referred to its methodologies, and urged entrepreneurs to come visit ANPC if in doubt before taking an action. At the same time, entrepreneurs were concerned with the asymmetry of information that currently exists at all levels that does not allow the market to operate perfectly.

The next enquiry is scheduled for January 2008. The draft Action Plan is detailed below:

Draft Action Plan:

Enquiry 1: December 17, 2007
• Participants – Local SMEs
• Concrete Objectives
• Discussions topics 

Enquiry 2: January 2008 (second half)
• Participants – MPs (based on a cross-party selection)
• Concrete Objectives 
• Discussions topics 

Enquiry 3/4: February 2008
• Participants – SMEs with foreign capital
• Concrete Objectives 
• Discussions topics 
• Participants – Large companies with foreign capital
• Concrete Objectives 
• Discussions topics 

Enquiry 5: March 2008 – Debates on draft law
• Participants
• MPs (based on a cross-party selection)
• SME, large companies including companies with foreign capitals
• Concrete Objectives 
• Discussions topics 
• International experts from the GoM

Continuous dialogue: December-March 2008
• during these 2-3 months the entrepreneurs, participants to these events, as well as their colleagues will be involved in providing constructive feedback, comments to the amendments of the law.

Output:
• Informed stakeholders (MPs, SMEs, large companies, with foreign capital, including donors)
• harmonized law;

Subject to availability of funds:
• series of publications, case studies;
• promotion matter.