Public Association "Partnerships for the New Economy" completed a preliminary study on the regulatory framework and issues related to insolvency procedures in the Republic of Moldova. The research analyzed both the national institutional and legislative framework, as well as the jurisprudence of the Constitutional Court and the regulations of the European Union, to which the Republic of Moldova is to align.
The results were discussed at a round table with the participation of representatives of the Parliament of the Republic of Moldova, the Ministry of Economic Development and Digitalization, the Ministry of Justice, the Union of Authorized Administrators, the Agency for the Administration of Courts.
One of the conclusions of the study is the lack of a comprehensive analysis of how the provisions of the Insolvency Law, adopted in 2012, are implemented. Previous assessments have only addressed certain aspects, without including a complete verification of how this legislation is implemented, including by the courts.
The authors of the study – Sergiu Litvinenko and Gheorghe Iudin, recommends conducting a detailed review of the effectiveness of insolvency procedures, through consultations with relevant private and public stakeholders, interviews and questionnaires. This analysis would allow for improving legislation so as to better support the economy, maintain jobs, and minimize cases where insolvency procedures are used for improper purposes (including business takeovers through "raider attacks").
According to the analysis, the competences in the field of insolvency are divided between the Ministry of Economy and Digitalization and the Ministry of Justice. However, the administrative resources allocated are insufficient. In this context, the study proposes to strengthen administrative capacities and establish mechanisms for permanent monitoring of the implementation of the legislation.
At the same time, to optimize insolvency procedures, the authors proposed several measures, including the introduction of an automated and random system for appointing provisional administrators, the organization of electronic auctions for the sale of insolvent debtors' assets by adapting the platform mtender.gov.md.
The study also highlights the need to introduce insolvency prevention measures and a "second chance" mechanism for honest entrepreneurs who have gone through insolvency proceedings, in line with EU standards.
Likewise, the authors highlighted the lack of a regulatory framework related to the insolvency of individuals, which affects both debtors - individuals, and creditors - companies.
Another problematic aspect highlighted by the study is the lack of an efficient mechanism that would ensure the uniform application of insolvency legislation. Although this role falls to the Supreme Court of Justice, it does not examine insolvency cases, and the instruments at its disposal (proceedings in the interest of the law or advisory opinions), for various reasons, are not used.
See the study "Insolvency in the Republic of Moldova. Current situation and future prospects" (PDF file, 0.6 MB, will open in new tab).