State Aid Register of the Republic of Moldova

As the world economy is constantly changing, the integration of banking and financial markets has reached the point where one country’s economy may  affect the economies of other countries as well. Particularly in times of financial crisis it is essential to use state resources in a rational and efficient way to ensure that a state economy will be less influenced by external factors. In order to monitor the correct implementation of all the state aid in Republic of Moldova, the Competition Council, with the support of the World Bank, has implemented the Electronic Informational Register of Recording and Monitoring State Aid – SIRASM. SIRASM contributes to a more efficient way of use of state resources by:

  • Improving efficient of allocation of public funds
  • Ensuring transparency in the use of public money;
  • Improving the implementation of competition law;
  • Promotion of competition culture;
  • Improving the competitive environment.

SIRASM will help to establish a system of state aid monitoring and – the main task  – to implement a monitoring mechanism to assess the impact of state aid on the competition environment.  It provides information resources on state aidfor public authorities – state aid providers and beneficiaries – and online notification and reporting of state aid. EFFICIENT USE OF PUBLIC MONEY This objective will be achieved on three levels: 1. country level; 2. district level; 3. level of state aid providers, because it enables all involved to:

  1. Save time and financial resources when including information in the state aid inventory.
  2. Save financial resources for postal dispatches and telephone conversations.

TRANSPARENCY OF STATE RESOURCES By adopting the National Development Strategy „Moldova 2020” approved by the Law no.166 from 11.07.2012, the Moldovan Parliament acknowledges competition as a vital factor to boost the national economy, to improve the business environment, to launch new businesses and to assure their development. The Republic of  Moldova has the aim to  develop and implement a national programme on competition and state aid by adopting the best European practices to prevent, suppress and limit anticompetitive activities of undertakings and public authorities . SIRASM will also generate statistical data about state aid, which will be placed on the Competition Council’s web page. This information will describe all state aid granted in Moldova according to following criteria: total amount; objectives of the aid; forms of aid; regions of the country where aid is distributed.

EFFICIENT IMPLEMENTATION OF COMPETITION LAW In addition, SIRASM will provide the option to identify dependent undertakings with common ownership so that groups of companies can be detected. This tool will allow the competition experts to properly enforce the Competition Law in different areas:

  • Abuse of dominant position – to determine the exact market share held by the company and cumulative shares of the group of companies it belongs to and to conclude if the market shares exceed the threshold of 50%, presuming a dominant position.
  • Merger – information regarding state aid received from the group of enterprises will better allow the assessment of its real power on the market, which is an important factor in evaluating a merger, in order to determine if the examined operation raises significant impediments to effective competition on a market.
  • Anticompetitive agreements – similar behavior of the undertakings on a market may be caused by links between competitors, and the detection of these linksmay be evidence of the existence of an anticompetitive agreement on the market.

ENFORCEMENT OF ELECTRONIC NOTIFICATION AND REPORTING PROCEDURE REQUIREMENTS OF THE EUROPEAN COMMUNITY   Moldova is looking forward to EU integration, which involves adapting the country’s economy to EU requirements. SIRASM provides an automatic procedure of notification and reporting of state aid according to European Community requirements.

PROMOTING COMPETITION CULTURE The introduction of SIRASM has also helped to more widely promote state aid and competition law to state aid providers  on central and local level via advocacy activities that included: – Organizing SIRASM training session for State aid providers – central public authorities.

[1] – International Conference „New opportunities through the implementation of competition policy, state aid”;

[2] – Promotion via mass media. With three meetings at the beginning of 2014 with aid providers in the Central, North and South regions of the country, the rate of promotion of competition  culture regarding the aspect of state aid law has increased to 100% of all state aid providers on central public level and to about 62% for local public authorities. The Competition Council has also provided support to the Competition Authority from Ukraine with the aim to promote SIRASM and to share the results. SIRASM was presented during several official and working meetings to representatives of the Ukrainian government with the aim to elaborate a legal framework for state aid in the Ukraine. Our colleagues expressed their desire to implement the same project in their country and the Competition Council of the Republic of Moldova has guaranteed the support in implementation and elaboration of the project.

CONCLUSIONS The appropriate use of public funds is crucial in ensuring economic stability and growth for the future, and the implementation of SIRASM in the Republic of Moldova will contribute to a well-targeted and transparent use of state resources without distorting competition, and will generate economic growth for the entire country. In this context, the Competition Council has been selected among the winners of the 2014 Competition Advocacy Contest, under the thematic category of “Promoting co-operation with relevant public bodies to balance competition goals with other public interests”.

The contest was organized by the World Bank Group with the aim to raise awareness of the key role of competition agencies in promoting competition and showcase their successful advocacy stories