Business Regulatory, Investment, and Trade Environment Program First Quarterly Report July – September 2012

This report covers the period of June 16 to September 30, 2012. The program's first quarter of activities was marked by significant progress in establishing the project's presence in Chisinau, recruiting highly qualified and experienced personnel, securing office space, establishing the local accounting system, and launching the project's first major technical activity, the Business Climate, Legal, and Institutional Reform (BizCLIR) assessment. The BizCLIR assessment is the BRITE program's first major technical activity. BRITE fielded a team of four international experts in the subject areas and selected a team of local experts from Business Research Company (BRC) to prepare and conduct the BizCLIR assessment. The BRITE team of experts included Charles Schwartz, Edward Koos, Olin McGill, and Alan Morley. BRC provided a team of five experts, one in each subject area, who were paired with an international expert and responsible for preparing preliminary information packages, identifying and scheduling meetings with key stakeholders, and working with the BRITE team to evaluate the information received and help develop recommended actions. The assessment took place from September 4-21 and involved more than 125 meetings with stakeholders in all subject areas in the public and private sectors, including key ministries, agencies, business groups and associations, law firms, and donor organizations. The key findings were presented at a roundtable discussion on September 24 at the Leogrand Conference Center. Nearly 100 participants took part in the roundtable and discussion groups in each of the five focus areas of the assessment. Based on the discussion groups, the project presented a summary of findings and recommendations in the final session. BRITE was assisted in the assessment process and roundtable by Senior Commercial Law Advisor Nicholas Klissas from USAID/Washington. Mr. Klissas assisted in planning and conducting the roundtable and delivered brief remarks during the opening session. Deputy Minister of Economy Octavian Calmic and USAID Deputy Country Director Jeff Bryan opened the roundtable, and U.S. Ambassador William Moser opened and attended the summary session. The findings and recommendations are now being compiled into a final BizCLIR report to be distributed to USAID for review and then to all stakeholders and participants in final form. It will also form the basis for the BRITE work plan for the coming year. BRITE also spent much of the quarter meeting with its potential counterparts in tax administration and trade facilitation at the Ministries of Economy and Finance. During the quarter, a new director was appointed to lead the State Tax Service under the Ministry of Finance: Mr. Nicolae Vicol. The BizCLIR team met with Mr. Vicol and his staff and learned that his immediate priorities are raising tax revenue by reducing non-compliance, strengthening enforcement, and expanding the use of cash registers in retail businesses. BRITE will meet again with each of these partners to validate the BizCLIR findings and develop concrete action plans to support their reform efforts and address private sector needs. BRITE is now working with Danube Logistics to better understand the impact of Customs formalities on the port and its customers and to develop legislative amendments and arguments in favor of streamlining these requirements. The port is facing a number of difficulties with Customs formalities, including multiple and unnecessary documentary and clearance requirements that are raising costs to the port and its customers and reducing the port's attractiveness as an international gateway.