FIRST QUARTER TRANSNISTRIAN TRADE GROWS

UNCLAS CHISINAU 000418

SIPDIS

SENSITIVE

SIPDIS

STATE FOR EUR/UMB

E.O. 12958: N/A
TAGS: ECON PGOV PBTS ETRD MD
SUBJECT: FIRST QUARTER TRANSNISTRIAN TRADE GROWS

REF: CHISINAU 130

SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY


1. (SBU) SUMMARY: The Government of Moldova's (GOM) Transnistrian
(TN) trade data show significant increases in certified exports
(+30%) and imports (+22%) documented by the Moldovan Customs Service
(MCS) in the first quarter. Since January, 26 more TN companies
have registered with Chisinau, increasing the total number of
registered TN entities to 409. Steel products, light manufacturing,
cement and electricity account for 93.2% of all TN exports.
Chisinau continues to facilitate legal TN trade, providing
registered TN enterprises equal access to Moldovan trade preferences
(reftel). END SUMMARY.

TN COMPANIES CONTINUE TO REGISTER WITH CHISINAU
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2. (SBU) According to the Ministry of Reintegration, 26 TN
enterprises registered with Chisinau in the first quarter of 2008
(20 temporarily and 6 permanently). This increased the total number
of registered TN enterprises to 409 (258 temporarily and 151
permanently). More than 7,300 customs declarations (on exports)
were filed by 60 TN enterprises with the MCS during this quarter.
About 30% of the declarations were for exports to the EU. The vast
majority (89%) of exports were from Moldova Steel Works (MMZ) and
Ribnitsa Cement. MCS processed 1,076 customs declarations filed by
37 TN enterprises, of which 32 declared imports of raw materials for
production.

(LEGAL) TN TRADE EXPANDS
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3. (SBU) Total first quarter TN trade documented by the MCS was
valued at Moldovan Lei (MDL) 2.65 billion (about USD 238 million),a
30% increase compared with 2007. (NOTE: The average official
exchange rate January-March was MDL 11.11 per USD. END NOTE.)
Exports totaled MDL 2.34 billion (about USD 210 million) and imports
equaled MDL 315 million (about USD 31.5 million). Transnistria's
main exports continue to be steel products from MMZ, which account
for 62%, and light manufacturing (apparel, footwear and textiles
mainly from Tirotex),which accounts for 15.5% of the total
certified exports. Other exports include cement from the Ribnitsa
Cement Factory (11.4%),industrial machinery (5.2%),and electricity
from the Moldavskaya GRES power plant (4.7%).


4. (SBU) According to the GOM, the Moldovan Chamber of Commerce and
MCS issued 597 certificates of origin to 39 TN enterprises,
including 442 preferential and 155 non-preferential certificates.
Preferential trade certificates included 230 Type "A" for access to
the EU and Turkey, 97 Type "EUR-ATP" for access to the EU via the
new autonomous trade preference (ATP),68 Type "CT-1" certificates
for access to the CIS, and 47 Type "EUR-CEFTA" certificates for
access according to the Central European Free Trade Agreement. The
GOM also processed requests for refunds on VAT and customs duties
from four TN enterprises for the period January-February, refunding
MDL 7.4 million (about USD 666,000). (NOTE: The GOM refunds VAT and
customs duties on imports of production inputs bound for export
products. END NOTE.)

COMMENT
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5. (SBU) The GOM continues to deliver on its promise to facilitate
trade for registered TN companies. Although the number of
registered TN economic entities continues to grow, four large
companies (MMZ Steel Works, Tirotex, Ribnitsa Cement, and
Moldavskaya GRES power plant) account for 85% of total exports.
We've previously noted the difficulties these companies face, most
notably increased transportation costs because of railroad
re-routing and customs procedures. However, it seems these
companies realize that the road to preferential trade passes through
Chisinau. END COMMENT.

KIRBY