Pan Euro Med Convention Supporting the Implementation Convention

Pan. Euro. Med Convention Supporting the Implementation Convention in the Republic of Moldova Allen Lanceley Natalia Vitiuc Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Chapter 5 - Deep and Comprehensive Free Trade Area Officially Launched 21 October 2015 Customs and Trade Facilitation • Simplify Customs Requirements and Formalities • Closer Alignment of Legislation • Mutual Administrative Assistance Protocol II Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention EU Grants Autonomous Trade Preference January 2008 until December 2015 Trade Facilitation Moldova Applies to Join Pan. Euro. Med Convention July 2013 Republic of Moldova Becomes 23 rd Contracting Party to the Convention 1 st September 2015 Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Member States European Union, Switzerland, Lichtenstein, Norway, Iceleand, Faroe Islands, Algeria, Egypt, Israel, Jordan, Lebanon, Marocco, West Bank and Gaza* Strip, Syria, Tunisia, Turkey, Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia, Serbia, Kosovo*, Moldova Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What are the benefits to The Republic of Moldova in Joining the PEM Convention? To create economic benefits for Moldova, especially, in terms of opportunities of attracting additional investments in industrial sector and processing raw materials. Applying a set of common rules for all member states create a friendly and transparent environment for trade exchanges. At the same time, to serve as a perfect platform for identifying suppliers of raw material and new sales markets in the entire Euro-Mediterranean region. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What is the Convention intended to do? • The Regional PEM Convention consolidates and integrates all the protocols on the origin of goods in force among all the members of paneuro-Mediterranean origin cumulation system into one single document. The Convention allows importing materials from the member countries, manufacturing goods and obtaining the certificate of origin, regardless of the rate of imported materials used. Its implementation in the Republic of Moldova will develop and enhance the preferential trade regime with the EU. • Moldova will be able to cumulate the origin of goods with EU, CEFTA countries, Turkey once the Free Trade Agreement becomes effective and with the PEM countries with which Moldova may sign bilateral free trade agreements. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What is the Convention intended to do? Cont’d • It will enhance the competitiveness of the goods of Moldovan origin on the EU market as there will be no taxes on imports to EU on the goods wholly obtained or processed sufficiently in the country. • The Convention will offer and extend the possibilities for importing a broader range of raw materials. • Moldova will become more attractive foreign investments and will offer the possibility to open foreign businesses, including in the industrial sector and processing of raw materials. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What is the Convention intended to do? Cont’d • The set of common rules will enhance transparency in foreign trade. • The extension of the implementation of PEM Convention on the whole territory of the country will create new possibilities for the economic integration of the country into a single economic area, . Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Ministry of Economy • Overall Responsibility for Implementation of DCFTA • Coordination and monitoring of Effective Implementation of The Convention Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What do we Understand by Effective Implementation? • Effective = successful in producing a desired or intended result. • Implementation = specified set of activities designed to put into practice an activity or program of known dimensions. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What are the benefits to The Republic of Moldova in Joining the PEM Convention? To create economic benefits for Moldova, especially, in terms of opportunities of attracting additional investments in industrial sector and processing raw materials. Applying a set of common rules for all member states create a friendly and transparent environment for trade exchanges. At the same time, to serve as a perfect platform for identifying suppliers of raw material and new sales markets in the entire Euro-Mediterranean region. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention EU-Republic of Moldova Deep and Comprehensive Free-Trade Area Chapter 5 Customs and trade facilitation This chapter seeks to enhance cooperation in customs and customs-related matters and simplify customs requirements and formalities while at the same time preventing customs fraud, e. g. through incorrect declarations of product origin. Building on current customs cooperation, it fosters closer alignment of legislation and procedures through the use of modern, internationally endorsed customs and trade facilitation practices and procedures, and developing a stronger legal framework. The protocol on mutual administrative assistance in customs matters is aimed at ensuring the correct application of customs legislation and the fight against infringements. The EU and the Republic of Moldova have agreed to supply each other with all relevant information needed to conduct investigations and to allow for each other’s officials to participate in administrative enquiries in the other party’s territory. EC Export Helpdesk Trade Guide Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Customs Perspective Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Economic Operator’s Perspective Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Best Answer Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What were Natalia and myself brought in to do? Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention • Analyse the Current Situation • Identify Gaps in ability to effectively implement • Actions Required o Including any capacity building • Workshop(s) • Action Plan/ Implementation Plan Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Analysis of Current Situation Who Is involved? What Is Their Role? Customs Service Guardians of the Legal Requirements Economic Operators Carrying on business and improving the economy of Moldova Business Associations Looking after the interests of their members Support Agencies Providing experience and technical assistance Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Who did we speak to? • Customs Service of the Republic of Moldova o Origin of Goods Section o Risk Analysis o Post Clearance Audit o Training Centre • Trade Associations o Amcham o EBA o Chamber of Commerce • Support Agencies o USAID BRITE o EUBAM o EU High Level Adviser to MDCS • Other Government Agencies o ANSA 15 Meetings in total Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention What was our analysis of the current situation? • However, we will present some of our findings and hopefully have some debate and agreement on a way forward to the benefit of the economy of the Republic of Moldova. • Whilst observing the EC requirements of the Pan. Euro. Med Convention Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Legal • Convention in force – 1 September 2015 • Protocol II to be adopted by EU_MD Customs sub-committee Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Customs Service Structure • From my experience I had in mind a structure that should be there • We found that the structure was in place Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Origin of Goods Section – Chisinau Headquarters What is a ‘Centre of Excellence’? Centre of Excellence The actual role and form of a Co. E is largely dependent on the organisational and business context but the essential features we suggest should be as follows. • A Co. E should have a normal operational function and also be responsible for improving its own expertise and knowledge resources so that in turn workers can help other activity centres throughout the organisation to solve problems and improve in the future. • The defining feature of a Co. E is knowledge management, especially the tacit (verbal) knowledge that cannot be readily captured by technical manuals and which is constantly changing and adapting to operational requirements. • The Co. E may comprise a functional or cross-functional team looking both inside and outside the organisation to capture new knowledge and practices. It may be set up as a physical or virtual team, but it will have a permanent rather than just a project status. Ian Herbert MBA, FCMA, CGMA, Kerrine Bryan MEng (Hons), MBA, CEng, MIET, Management Services Summer 2012 Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Better targeting of fraudulent applications Risk analysis "An integral part of the modernization of the Moldovan Customs Service (MCS) over the last few years has been the enhancement of their risk management capacity. Work has included the development of a strategic approach to managing risk; the gradual refocusing of Custom control activities away from the point of clearance; and the introduction of improved procedures for the setting and monitoring of risk profiles. This has helped the MCS achieve a closer alignment of their working practices with the principles set out in the European Union (EU) risk management framework and provided a solid foundation for the further development of the organizations risk management capacity going forward. The 2016 MCS annual plan builds upon the risk management work undertaken so far. It includes key performance indicators (KPIs) for better-targeted Customs control interventions at the point of clearance of 10% Red Lane and 20% Yellow Lane. Such KPIs reflect a determination to gradually align the levels of Customs controls applied on imports and exports with the EU average. “ USAID BRITE March 2016 Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Post Clearance Audit GUIDELINES FOR POST-CLEARANCE AUDIT (PCA) WORLD CUSTOMS ORGANIZATION JUNE 2012 Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Training Dedicated training centre which appears well equipped Annual training plan PEM Training planned Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Mutual Administrative Assistance Already doing this under: • EU - Autonomous Trade Preferences • CEFTA Agreement • CIS Agreement • OLAF Audit – November 2015 Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Gaps in Ability to Implement PEM Areas for this forum MDCS has : • Structure • Resources • Knowledge • Support • simplify customs requirements and formalities while at the same time preventing customs fraud, e. g. through incorrect declarations of product origin. • The protocol on mutual administrative assistance in customs matters is aimed at ensuring the correct application of customs legislation and the fight against infringements. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Looking at the other element of: Effective Implementation To create economic benefits for Moldova, especially, in terms of opportunities of attracting additional investments in industrial sector and processing raw materials. Applying a set of common rules for all member states create a friendly and transparent environment for trade exchanges. At the same time, to serve as a perfect platform for identifying suppliers of raw material and new sales markets in the entire Euro-Mediterranean region. Problems from the Economic Operator Perspective Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Specific Issues Communication Competency Consistency Transparency Authorised Exporter Binding Origin Information Charge for EUR 1 Small Producers Formal Errors Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Communication the imparting or exchanging of information by speaking, writing, or using some other medium. Two way process Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Who is the Enemy? MDCS vs Economic Operators (Trade Associations) Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Let’s Play this Game Together! Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Customs Can Offer Information rationale behind certain requirements Simplified information on legal requirements Economic Operators (Trade Associations) Can offer Support to customs in translating legal requirements into understandable language Support in explaining the necessity for certain requirements Information on proposed new legislation More open and helpful assistance to economic operators Listening to economic operators concerns Adapting customs requirements in line with economic reality in Moldova Technical expertise in manufacturing processes Organisation of seminars with input from MDCS Providing information on the impact of customs requirements on various trade sectors Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Transparency Essential condition for a free and open exchange whereby the rules and reasons behind regulatory measures are fair and clear to all participants. Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention How do MDCS and Economic Operators Create More Transparency? • Better understanding of each other’s needs • More user friendly information on MDCS Website • More support from EOs via the Trade Associations • Positive action from the quarterly meetings and publicise Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Chapter 12 of the DCFTA • Moldova shall ensure that measures of general application are promptly and readily available via an officially designated medium in such a manner as to enable any person to become acquainted with them. • Where feasible, by electronic means. [Article 357 (1)(a)] • Moldova shall ensure that measures of general application provide an explanation of the objective of, and the rationale for, such measures. [Article 357 (1)(b)] • Moldova shall endeavour to publish at an appropriate early stage any proposal to adopt or to amend any measure of general application, including an explanation of the objective of, and rationale for, the proposal. [Article 357 (2)(a)] Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Chapter 12 of the DCFTA (cont’d) • Moldova shall endeavour to provide reasonable opportunities for interested persons to comment on such proposal, allowing, in particular, for sufficient time for such opportunities. [Article 357 (2)(b)] • Moldova shall endeavour to take into account the comments received from interested persons with respect to such proposal. [Article 357 (2)(c)] • Moldova shall maintain or establish appropriate mechanisms for responding to enquiries from any person regarding any measure of general application which is proposed or in force, and its application. • The Parties recognise that any response provided for in Article 358 (2) [see point 8 a above] may not be definitive or legally binding but for information purposes only, unless otherwise provided in their respective laws and regulations. [Article 358 (3)] Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Chapter 12 of the DCFTA (cont’d) • Upon the request of one Party, the other Party shall promptly provide information and respond to questions pertaining to any measure of general application or any proposal to adopt or to amend any measure of general application that the requesting Party considers might affect the operation of Title V (DCFTA), regardless of whether the requesting Party has been previously notified of that measure. [Article 358 (4)] • Moldova shall administer all measures of general application in an objective, impartial and reasonable manner. [Article 358] Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention The DCFTA requirements: Chapter 12 Transparency Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Competency the ability to do something successfully or efficiently. OLAF visit in 2015 Past Administrative Cooperation Record Observations and interviews Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Consistency Being in conformity with a set of rules, guidelines or policies Dealing with human beings Rules = Law in relation to Co. O Guidelines = Internal orders/ ISO 9000/9001 External Communication Policies = Achieving the objectives of the Law in a fair and equitable way to all involved Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Authorised Exporter Conditions How decided? Restrictive? Relaxation of requirements? Risk Assessment? Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Binding Origin Information Conditions How decided? Restrictive? Relaxation of requirements? Risk Assessment? Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention EUR 1 Charge? Time taken to authenticate? Documents required to support application? Other issues from MDCS/ EOs Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Small Producers Proof of Origin Walnut farmers Other small producers Discussion MDCS/ EOs Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Formal Errors Definition How to minimise Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Rationale Recommendations Action Plan Implementation Plan Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Discussion Support to the DCFTA process in the Republic of Moldova

Pan. Euro. Med Convention Thank you for your presence and your input today and the input from those whom we met during our mission Support to the DCFTA process in the Republic of Moldova