IMF READY TO HEAR MOLDOVA'S PROPOSALS ON PRE-SHIPMENT INSPECTION ISSUE

Infotag: Interview with Edgardo Ruggiero, IMF Resident Representative in Moldova (8 October 2002)


I: Mr. Ruggiero, how do you appraise the Constitutional Court's decision on
pre-shipment inspection in Moldova?

E.R.: I am not a lawyer, though I studied law. Working in transition-economy
countries, one has to know about legal issues. Nonetheless, I am not in a
position to comment the decision of the Constitutional Court, which is the
supreme judicial power in your country. In other words, I am not eligible to
speak out about whether the Court has taken a correct or wrong decision. By its
essence, the decision was correct.

Now it's up to the Government to decide how to act further. If I understand the
court decision properly, the Government had no right to conclude the contract
with the SGS company (Switzerland) rendering PSI services.

But this problem can be settled. If the Government presumes that the inspection
is necessary, it should send to parliament a draft of a corresponding law in
order to create a legal frame for SGS activities.

So far, we do not know how the Government is going to act. It disposes of data
on the SGS activities in the first half of the year. The data suggest that the
amount of taxes and duties received from importers is approximately twice greater
than was in the same period last year.

I: Does the IMF continue to believe that the pre-shipment inspection is
necessary for Moldova?

E.R.: If we held a different opinion, we would not recommend PSI. In many
countries which had decided to introduce the inspection, it took 2-3 years to
achieve results - not solely in terms of budget revenue growth, but also for the
sake of revealing economy sectors with the heaviest deceit and tax evasion
statistics.

I: How may the IMF/Moldova relationship be developing if the Government refuses
to make the steps you mentioned? You know there exists a certain pressure by
economic operators, and the Cabinet cannot disregard it...

E.R.: Yes, many economic agents hate pre-shipment inspection - firstly, because
they have to pay for it, and, secondly, because the inspection reveals various
violations. As for the IMF/Moldova relationship, any relations are known to have
happy and less happy moments. The chief thing is in trying to find a way out of
the situation.

I: Which other solutions could you offer?

E.R.: I have offered one solution. Perhaps, the Government has other. Let's
wait, and then discuss them, including together with the IMF mission which is
coming to Chisinau in late October.