14 December 2021 – The Ministry of Economy intends to propose to the Government new legislative changes related to business insolvency processes. This is after Moldova’s business community affected by the aftermath of the pandemic alerted to a number of problems related to default and insolvency proceedings.

This topic was discussed in the Economic Council Working Group “Removing constraints on entrepreneurial activity”. Representatives of the business community noted that the COVID pandemic has changed the business model of many companies, with entrepreneurs rethinking how they build their business to retain assets, employees and customers. This process, it turns out, has been very cumbersome, and in many cases causes long-term default. And default is the path to insolvency.

In times of crisis this phenomenon – default – is extremely dangerous, say business people, leading primarily to company closures and staff layoffs. Business representatives say they face several problems related to the lack of a minimum threshold for creditors to request the initiation of the insolvency process, delays in the process, valuation of pledged assets by the bank, failure to comply with the restructuring procedure plan, etc.

Attending the debates, the Minister of Economy, Sergiu Gaibu, urged the business community to come up with concrete proposals for amending the Insolvency Law, which will be examined and integrated into a new draft amendment of the law, in order to make it simpler and clearer how to initiate and conduct the insolvency process.

According to data from the State Tax Service, about 3 thousand cases are registered with the tax authority in insolvency proceedings.

The business community will submit proposals for amendments to the regulatory framework of the Insolvency Law to the Secretariat of the Economic Council by 21 December.

After compiling the proposals, the Economic Council will hold technical meetings to discuss in detail each of the possibilities for initiating and conducting insolvency proceedings provided for by national legislation. The shortcomings of the regulatory framework will then be examined and proposals will be made to remove them from national legislation.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.