Friday, May 14, 2010

On the "Economic Blockade" of Transnistria

A day or two a story appeared in the Russian daily "Independent Newspaper" postulating that Russia and  Ukraine are about to sign an agreement to "lift Moldova's economic blockade on Transnistria".

Here are the facts of the matter:
  1. Until 2006 there was effectively no border control between Ukraine and Transnistria in respect of exports and imports to/from the region.  Whatever Ukrainian import restrictions did exist were easily overcome through the payment of small bribes to customs officials.
  2. Under the 1992 cease-fire agreement there are in theory no customs controls between Transnistria and right-bank Moldova.  Taken together with the inexistent controls between Transnistria and Ukraine, this meant that the Moldovan market was wide open to smuggling.
  3. In 2006, Moldova and Ukraine agreed to bring in an EU "Border Assistance Mission" (EUBAM).  EU monitors were placed at Ukrainian customs posts along the border with Transnistria.  From this point on goods could only be imported or exported by enterprises registered with the Moldovan authorities and carrying Moldovan customs stamps.
  4. Since 2006, most legitimate businesses in Transnistria have taken the steps of registering with Chisinau and obtaining Moldovan customs stamps.  They trade freely with the rest of the world in accordance with Moldovan customs law and WTO rules.
  5. It should be noted that the registration process for Transnistrian businesses in Chisinau is free of charge and that all import / export duties are paid to the Transnistrian administration.
The arrangement has many benefits:
  1.  Moldova, Transnistria and Ukraine are no longer being denied customs revenue due to corruption
  2. Transnistrian businesses are able to benefit from Moldova's membership of the WTO and the trade agreements signed between Moldova and the EU.
  3. Moldova's market is now controlled and smuggling has been reduced markedly
  4. Moldova has been able to achieve the partial economic reintegration of Transnistria.
The only disadvantages of EUBAM accrue to those who wish to keep their businesses in the shade and to those who do not wish to see Transnistria reintegrated with Russia.  In this sense it is instructive to see who, in fact, is (mischievously)describing the EUBAM arrangement as an 'economic blockade' - Igor Smirnov, self-styled 'President of the Transnistrian Republic'.

Disappointingly, some sections of the media in Chisinau have picked up on the Russian newspaper article and are using the term "economic blockade" uncritically, thereby giving Smirnov's propaganda implicit support.  The journos need to do their homework and present their readers with a more accurate picture.

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