Moldova: Background and U.S. Policy
Steven Woehrel
Specialist in European Affairs
August 27, 2012
Congressional Research Service
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Moldova: Background and U.S. Policy
Summary
Although a small country, Moldova has been of interest to U.S. policymakers due to its position
between NATO and EU member Romania and strategic Ukraine. In addition, some experts have
expressed concern about alleged Russian efforts to extend its hegemony over Moldova through
various methods, including a troop presence, manipulation of Moldova’s relationship with its
breakaway Transnistria region, and energy supplies and other economic links. Moldova’s political
and economic weakness has made it a source of organized criminal activity of concern to U.S.
policymakers, including trafficking in persons.
From 2009 until March 2012, Moldova suffered a protracted political and constitutional crisis,
over the inability of the parliament to secure a needed supermajority to elect a president. The
dispute triggered three parliamentary elections in two years. Finally, in March 2012, the
Moldovan parliament elected as president Nicolae Timofti, a judge with a low political profile.
Prime Minister Vlad Filat has said he is focused on dismantling the country’s Communist legacy
and building a state ruled by law.
Moldova is Europe’s poorest country, according to the World Bank. Living standards are low for
many Moldovans, particularly in rural areas. Remittances from Moldovans working abroad
amounted to 22% of the country’s Gross Domestic Product in 2010. The global financial crisis
has had a negative impact on Moldova. Moldova’s currency weakened and remittances dropped,
as Moldovan emigrants lost jobs in other hard-hit countries. Moldova’s GDP dropped by 7.3% in
2009. GDP growth rebounded to 6.9% in 2010 and 6.5% in 2011, only to stall in early 2012.
As a self-declared neutral country, Moldova does not seek NATO membership, but participates in
NATO’s Partnership for Peace (PFP) program. Moldova is currently negotiating an Association
Agreement with the European Union (EU), which provides for cooperation in a wide variety of
spheres and holds out the possibility of an eventual free trade agreement and visa-free travel.
Moldova hopes to become a candidate for EU membership, although the EU is unlikely to accept
Moldova in the foreseeable future, due to Moldova’s poverty, the EU’s own internal challenges,
and possibly also due to concerns that it would set a precedent for the candidacy of other former
Soviet states, such as Ukraine.
The United States and Moldova have enjoyed good relations since the country’s independence in
1991. In a sign of support for the pro-Western government, Vice President Joseph Biden visited
Moldova in March 2011. At a speech in Chisinau, the country’s capital, Biden praised Moldova
for its commitment to reform and democratic values, including the holding of free and fair
elections. He called on Moldova to continue its efforts to create a transparent legal system, to
fight corruption, and to end human trafficking. He said that the United States would continue to
support a settlement for Transnistria that preserves Moldova's sovereignty and territorial integrity
within its internationally recognized borders. He said U.S. aid will help the Moldovan
government create policies to spur economic growth and attract foreign investment, train civil
society to become more effective advocates, and help improve Moldova's schools.
Moldova is seeking permanent Normal Trade Relations (PNTR) from the United States by
terminating the application of the Jackson-Vanik amendment to Moldova. House and Senate
committees have passed bills that would extend PNTR to Moldova (H.R. 6156 and S. 3406,
respectively), but both still await floor consideration.
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Contents
Political Situation............................................................................................................................. 1
Transnistria ................................................................................................................................ 3
Economy .......................................................................................................................................... 4
Foreign Policy.................................................................................................................................. 5
NATO and the European Union................................................................................................. 6
U.S. Policy....................................................................................................................................... 8
Congressional Action................................................................................................................. 9
Figures
Figure 1. Transnistria and Gagauz Regions ..................................................................................... 3
Contacts
Author Contact Information........................................................................................................... 10
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Moldova: Background and U.S. Policy
Political Situation
Although a small country with a population of just over 3.6 million people, Moldova has been of
interest to U.S. policymakers due to its position between NATO and EU member Romania and
strategic Ukraine. Some experts have expressed concern about alleged Russian efforts to extend
its hegemony over Moldova through various methods, including a troop presence, manipulation
of Moldova’s relationship with its breakaway Transnistria region, and energy supplies and other
trading links. Moldova’s political and economic weakness has made it a source of organized
criminal activity of concern to U.S. policymakers, including trafficking in persons.
The Communist Party of the Republic of Moldova (PCRM) held power in Moldova for most of
the 2000s after winning parliamentary elections in 2001 and 2005. The PCRM’s leader is
Vladimir Voronin, who was elected by the parliament as president of Moldova after each of the
Communists’ election victories.
From 2009 until March 2012, Moldova suffered a protracted political and constitutional
stalemate. On April 5, 2009, Moldova held parliamentary elections. The PCRM won 60 seats in
the 101-seat parliament. Three parties from the center-right opposition won the remaining seats.
International observers said the vote met many international standards, but noted shortcomings in
some areas. The Communist victory sparked demonstrations on April 6 and 7. As many as 10,000
persons demonstrated in Chisinau, Moldova’s capital, on April 7. Many demonstrators were
peaceful, but some sacked and looted the parliament building and the offices of the president.
More than 200 people were injured in clashes between the police and the rioters, and one person
died. The authorities later arrested more than 300 people, allegedly for engaging in violence.
Observers noted that young people predominated among the protestors, many of whom reportedly
found out about the demonstrations through messaging tools such as Twitter and SMS.
Some observers asserted that the demonstrators acted out of frustration with Moldova’s limited
economic opportunities and stagnation, which they associate with the Communists, as well as
suspicions of electoral fraud. According to press accounts, in addition to anti-Communist slogans,
some demonstrators chanted “we want to join Europe,” and “we are Romanians,” pointing to at
least some support among the demonstrators for union with neighboring EU member-state
Romania. President Voronin denounced the protests as an attempted coup d’etat and vowed to put
down any further riots with force, if necessary. Opposition leaders charged that journalists and
students were arrested and in some cases beaten by authorities in the days after the violence.
According to Moldova’s constitution, a three-fifths supermajority (61 votes) of the Moldovan
parliament is required to elect a president. The PCRM was unable to secure the presidency for its
candidate, as it was one vote short. This stalemate triggered new parliamentary elections, which
were held on July 29, 2009. The campaign featured sharp rhetoric, much of it dealing with
responsibility for the April 2009 violence. The PCRM again was the largest party, but fell short of
a majority. Four opposition parties—Liberal Democratic Party, the Liberal Party, Our Moldova,
and the Democratic Party—formed a governing coalition, the Alliance for European Integration.
As its name suggests, the AEI has focused on carrying out reforms with the goal of closer
integration into Europe. One particular area of focus is reform of law enforcement bodies and the
judiciary.
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The coalition elected Mihai Ghimpu of the Liberal Party as parliament chairman. After Voronin’s
term expired in September, Ghimpu became acting president, according to Moldova’s
constitution. Ghimpu then chose Vlad Filat, head of the Liberal Democratic Party, to form a new
government.
On October 30, 2009, the parliament approved changes to the law on electing the president.
Among other provisions, they clarified that parliament could not be dissolved before a full year
had elapsed. This allowed the government to postpone a new election. In an effort to definitively
solve the issue, the government called a referendum in September 2010 to make the presidency a
popularly elected office. However, the referendum was invalidated by a voter turnout lower than
the 33.34% minimum required by law, and yet another round of parliamentary elections was held
in November 2010, the third in less than two years.
The result of the vote was similar to that of 2009. The Communist Party won the largest single
number of seats, while a group of center-right parties was able to reconstitute the Alliance for
European Integration, with Filat again as prime minister. (However, one former AEI party, Our
Moldova, did not win enough votes to secure any seats in the parliament, and was therefore
dropped from the coalition.) Filat’s Liberal Democratic Party holds 32 seats in the parliament, the
Democratic Party has 14 seats, and the Liberal Party has 12. Marian Lupu from the Democratic
Party was elected as parliament chairman and acting president of Moldova. The Communists had
42 seats, and were at first able to prevent the AEI from garnering the 61 seats needed to elect a
new, permanent president.
However, the defection of several deputies from the Communist faction eventually allowed the
parliament to elect a new president. In March 2012, the Moldovan parliament elected Nicolae
Timofti as president. Timofti was a judge with long experience in the Moldovan judicial system
dating back to the Soviet era. He has a very low political profile, which may have been a major
consideration in his selection. Critics note that very little reform occurred during his tenure as
chairman of the Supreme Council of Magistrates. The PCRM boycotted the parliament, starting
in February 2012, claiming that the parliament lost its legitimacy after procedural violations by
AEI deputies during a previous attempt to elect a president in December 2011. The Communists
returned to the parliament in June 2012, after the party was weakened by further defections.
The Moldovan government has taken steps that Communist leaders have decried as
undemocratic. These include rescinding the broadcasting license in April of a pro-Communist
television station for alleged lack of pluralism and parliament’s approval of a law in July which
banned the use of Communist symbols (such as the hammer and sickle) for political purposes.
Communist leaders have struck back by threatening to hold referendums on local autonomy in
areas in which they are in control.
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Transnistria
Figure 1. Transnistria and Gagauz Regions
Conflict between Moldovan forces and
those of the breakaway “Dniestr Republic”
(a separatist entity proclaimed in 1990 by
ethnic Russian local officials in the
Transnistria region of Moldova) erupted in
March 1992. More than 300 people died in
the violence. A cease-fire was declared in
July 1992 that provided for Russian,
“Dniestr Republic,” and Moldovan
peacekeepers to patrol a “security zone”
between the two regions. Each of the
peacekeeping contingents has roughly 400
personnel. They are overseen by a Joint
Control Commission, which includes the
three sides, as well as the OSCE as an
observer.
The causes of the conflict are complex,
involving issues of national identity and
maneuvering for power and wealth among
elite groups. Ethnic Russians and
Ukrainians together make up a majority of
Transnistria’s population of under 500,000,
while Moldovans are the single largest
ethnic group, at 40%.
Many analysts believe a significant factor
obstructing a settlement is the personal interests of the leaders of the “Dniestr Republic” and
associates in Moldova, Russia, and Ukraine, who control the region’s economy. They also
allegedly profit from illegal activities that take place in Transnistria, such as smuggling and
human trafficking. The 2011 State Department human rights report sharply criticized the poor
human rights record of the “Dniestr Republic,” noting its record of rigged elections and
harassment of political opponents, independent media, many religious groups, and Romanian
speakers.
Negotiations over the degree of autonomy to be accorded the Transnistria region within Moldova
have been stalled for many years.1 The two sides have negotiated over Transnistria’s status with
the mediation of Russia, Ukraine, and OSCE. In 2005, at the urging of Ukraine and Moldova, the
United States and the European Union joined the talks as observers, resulting in what is called the
“5+2” format. From 2006 until late 2011, formal 5+2 talks were not held, due to Transnistrian
leaders’ anger at Moldova’s cooperation with the EU and Ukraine to monitor Moldova’s
Transnistria border with Ukraine, in an effort to deter smuggling. Informal 5+2 consultations
were held regularly, however. Expert groups have discussed confidence-building measures
1 Another potential secession issue was defused in 1994, when the Moldovan parliament adopted a law establishing a
“national-territorial autonomous unit” for the Gagauz minority. The region has its own elected legislative and executive
authorities and would be entitled to secession from Moldova in the case of Moldova’s reunification with Romania.
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between the two sides, but no progress has been reported on larger political questions. Formal
5+2 talks were resumed in late 2011 and continued in 2012.
The current Moldovan leadership favors a substantial degree of autonomy for Transnistria, but
only as part of a united Moldova. It is seeking the withdrawal of all foreign (i.e., Russian) troops
from Transnistria and the replacement of the current peacekeeping force by civilian observers,
preferably led by the EU. In an effort to secure Russian support for a resolution, Moldova is
willing to reaffirm its military neutrality. Moldovan leaders are also reportedly willing to
guarantee Russian property rights in Transnistria. They have also said that they hope to improve
the climate for Transnistria’s reintegration into Moldova by improving non-governmental, person-
to-person links between the people in Transnistria and the rest of Moldova. They also hope that
Moldova’s growing integration with the EU will increase Moldova’s attractiveness to people
living in Transnistria.
For their part, Transnistrian leaders reject autonomy. In September 2006, Transnistria held a
referendum on independence and union with Russia, which passed with 97% of the vote. The
Transnistrian leadership demanded that Russia recognize the independence of their republic, as
Moscow did with Abkhazia and South Ossetia, two secessionist regions in Georgia, in 2008.
Russia rejected these entreaties, however.
In December 2011, Yevgheni Shevchuk was elected “president” of Transnistria, beating longtime
hard-line leader Igor Smirnov in a runoff vote. Moscow’s favored candidate, parliament speaker
Anatoli Kaminsky, was defeated in the first round. Observers have characterized the election as a
vote by people in Transnistria for a normal life, as opposed to the image of a besieged fortress
projected by the Smirnov leadership. Shevchuk made a clean sweep of the government, replacing
supporters of the former regime, often with young people who have grown up in a de facto
independent Transnistria, never having felt themselves as part of Moldova or the Soviet Union.
Experts say that it is too early to be certain about the impact the change in leadership will have on
Transnistria’s relations with Moldova. Shevchuk has established good personal ties with Prime
Minister Filat. Shevchuk has called for focusing on practical issues such as lifting trade
restrictions between Transnistria and Moldova, and restoring communications links such as trains
and telephone service. Moldova has offered to have Transnistrian experts join its delegation in
trade talks with the EU. Moldovan leaders hope these small steps will eventually lead to progress
on the issue of Transnistria’s status, but that is unclear. Shevchuk has stressed his continued
support for Transnistria’s independence. He has also rejected Moldova’s call to replace the
multinational peacekeeping force stationed between Transnistria and right-bank Moldova with a
civilian mission, saying that the Russian troops there as part of the force protect Transnistria’s
security.
Economy
According to the World Bank, Moldova’s per capita Gross National Income of $1,980 in 2011
makes it the poorest country in Europe. More than one-fifth of the country’s population lives in
poverty. More than one-quarter of Moldova’s economically active population works abroad.
Remittances from those working abroad amounted to 20% of the country’s Gross Domestic
Product in 2011, according to the Economist Intelligence Unit. Moldova’s main natural resource
is its rich soil. Agriculture, especially fruit, wine, and tobacco, plays an important role in
Moldova’s economy. In 2011, agriculture accounted for 12% of GDP, 41% of exports, and 28% of
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employment in Moldova. Most of Moldova’s industry is located in the breakaway Transnistria
region. Transnistria’s economy has also suffered as a result of the global economic crisis,
resulting in large-scale emigration. Transnistria’s economy is dependent on remittances and on
aid from Russia, including direct aid and indirect subsidies in the form of unpaid debts for energy
supplies.
The global financial crisis had a negative impact on Moldova. The leu, Moldova’s currency,
weakened and remains under pressure. Remittances dropped, as Moldovan emigrants lost jobs in
other hard-hit countries. Moldova’s GDP dropped by 6% in 2009, but rebounded to grow by 6.9%
in 2010 and 6.5% in 2011. However, growth decreased sharply to 1% in the first quarter of 2012,
on a year-on-year basis, due to the slowdown in the Eurozone, which has hit Moldova’s exports
and remittances. In addition, the country’s agriculture sector has been affected by drought.
In 2010, the Moldovan government unveiled a medium-term economic reform plan, dubbed
“Rethink Moldova.” The plan is aimed at improving the business climate in the country;
increasing exports, including agricultural exports; and upgrading the country’s infrastructure.
International donors, including the International Monetary Fund, the World Bank, the European
Union, and the United States, pledged $2.6 billion for the period 2010-2013 to implement the
plan.
In January 2010, the International Monetary Fund approved a $574 million loan for Moldova.
Under its terms, Moldova will have to cut its budget deficit. It has reduced the deficit from about
9% of GDP in 2009 to 2.5% in 2010, to 2.4% in 2011, and has set a goal of 1.3% of GDP in 2012.
The government has cut government administration costs and increased VAT, excise, and
corporate taxes. Nevertheless, it is having difficulty in meeting its deficit targets due to slowing
economic growth.2
Foreign Policy
Perhaps Moldova’s most important foreign policy relationship is with Russia. More than 90% of
its energy imports come from Russia, and Russia has been an important market for Moldova’s
exports. Moldova has accumulated large debts to Russian energy firms, which has provided
Russia with leverage over Moldova. Russia has used negotiations over Transnistria to try to block
real and potential Moldovan moves toward Euro-Atlantic integration.
The Transnistria issue is complicated by the continued presence of about 1,500 Russian troops in
the breakaway region (including the approximately 400-person peacekeeping contingent in the
security zone), as well as huge stockpiles of weapons and ammunition. Russia has refused to
honor commitments it made at the 1999 OSCE summit in Istanbul to withdraw its forces from
Moldova. Russian leaders have conditioned the withdrawal of Russian troops and weapons stocks
on the resolution of Transnistria’s status. Russia has provided financial support to Transnistria,
including grants and loans as well as subsidized energy. In return, Russian firms have assumed
control over most of Transnistria’s key industrial firms.
Some analysts charge that Russia has also used energy supplies and other trade as weapons to
pressure Moldova to drop its pro-Western orientation and to turn its energy infrastructure over to
2 Economist Intelligence Unit Country Report: Moldova, July 2012.
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Moscow. On January 1, 2006, Gazprom cut off natural gas supplies to Moldova, after Moldova
rejected Gazprom’s demand for a doubling of the price Moldova pays for natural gas. Gazprom
restored supplies on January 17, in exchange for a slightly smaller price increase. Moldova also
agreed to give Gazprom, already the majority shareholder, a higher equity stake in Moldovagaz,
which controls Moldova’s natural gas pipelines and other infrastructure. Gazprom also sought to
complete the purchase of Transnistria’s stake in Moldovagaz. In 2005, Russia restricted wine and
other agricultural imports from Moldova, allegedly over health concerns, dealing a heavy blow to
the country’s economy. Russia finally permitted Moldovan wine imports again in November
2007, but Moldova’s wine exports to Russia were reduced from former levels.
Moldova currently faces renewed pressure from Gazprom. As a signatory to the Energy
Community Treaty, Moldova is obliged to implement the EU’s Third Energy Package, which
prohibits an energy supplier from monopolizing the pipelines used to transport that energy.
Gazprom strongly objects to this policy and has tried to secure an exemption from it. Other
difficult issues between Moldova and Gazprom include Moldova’s gas debts and those of
Transnistria, for which Moldovagaz is currently responsible. Moldova is also trying to secure a
lower gas price, so far without success. Gazprom has offered a lower price if it is exempted from
the Third Energy Package.
Transnistrian authorities have called for Russia to grant Transnistria diplomatic recognition as an
independent state, as Moscow did for Georgia’s South Ossetia and Abkhazia regions in 2008.
Over 170,000 people in Transnistria have Russian citizenship. This could serve as a pretext for
Russian action, as Russian leaders have asserted the right to intervene militarily in other countries
to protect Russian citizens. On the other hand, observers note that the case of Transnistria is
different from that in Georgia in that Moldova is very unlikely to try to retake Transnistria by
military force. Moreover, they point out that Russia does not have a common border with
Transnistria, as it does with Georgia.
Instead, Russian officials have proposed that Transnistria could have a “special status” within
Moldova. As part of the settlement, Moldova would have to reconfirm its permanent neutrality,
ruling out any future possibility of a NATO membership candidacy. Based on its past actions,
observers believe that Moscow may favor an agreement that would give the pro-Russian enclave
effective veto power over the country’s foreign and domestic policies. This could stymie
Moldovan efforts toward closer ties with NATO and the European Union and increase pressure
for Moldova to join the Customs Union and other Russia-led integration structures. However,
such an agreement appears unlikely, given the pro-EU orientation of the current Moldovan
government and the Transnistrian regime’s continuing support for independence. Moreover,
Russian President Vladimir Putin has said that Transnistria’s future could only be decided with
the consent of the people of Transnistria, which would also appear to make unlikely the region’s
reintegration into Moldova. Therefore, Russian leaders may see little need to change the status
quo, which could itself serve to inhibit Moldova’s EU membership aspirations.
NATO and the European Union
As a self-declared neutral country, Moldova does not seek NATO membership, but participates in
NATO’s Partnership for Peace (PFP) program. The key foreign policy goal of the government is
to accelerate integration with the European Union (EU). Moldova currently has a Partnership and
Cooperation Agreement (PCA) with the EU, which provides a framework for the EU’s efforts to
assist reforms in Moldova and for strengthening ties between the EU and Moldova.
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In 2010, Moldova and the EU began talks on an Association Agreement to replace the current
PCA. While the agreement would not recognize Moldova as a membership candidate, it would
enhance EU-Moldova cooperation in many areas. In March 2012, Moldova began talks on a free
trade zone with the EU as part of the Association Agreement, and hopes to sign the completed
agreement in 2013. Moldova has made progress in its efforts to secure a visa-free travel
agreement from the EU, but much work still needs to be done.
From 2011 to 2013, Moldova is slated to receive 273.14 million Euro ($372.9 million) in aid from
the EU.3 The aid is targeted at bolstering Moldova’s reform efforts, including fostering good
government, the rule of law, and the protection of fundamental freedoms. Other programs help
Moldova improve its social protections, and its health care and education systems. EU aid also is
allocated to help Moldova diversify its energy mix and improve energy efficiency.
The EU has granted Moldova trade preferences that permit it to sell more of its wine and
agricultural goods to the EU, enabling it to reduce its dependence on the Russian market. In 2010,
the EU was Moldova’s largest trading partner, accounting for 45.3% of its trade. Russia
accounted for 18.4%.4 Since 2005, an EU mission has helped to monitor Moldova’s Transnistria
border with Ukraine, in an effort to deter smuggling. Many Transnistrian companies have
registered in Moldova in order to benefit from EU trade preferences, a move that it is hoped will
reinforce Moldova’s sovereignty.
Moldova hopes to become a candidate for EU membership, although the EU is unlikely to accept
Moldova as a candidate in the foreseeable future, due to Moldova’s poverty and the EU’s own
internal challenges. Some EU countries may also be concerned that a Moldovan candidacy could
set an unwelcome precedent for the possible candidacy of other former Soviet states, particularly
Ukraine. Moldova is part of the EU’s Eastern Partnership initiative, part of the EU’s European
Neighborhood program. The partnership is aimed at developing a regional approach to the EU’s
relations with the countries lying between the EU and Russia, to supplement the bilateral ties that
the EU has with these states.
Moldova’s ties with Romania are a sensitive issue in both countries. Many Romanians consider
Moldovans in fact to be Romanians, and support the eventual unification of the two countries.
Although most independent experts consider the “Moldovan language” to be Romanian, the issue
is a matter of political controversy in Moldova. After the incorporation of Moldova into the
Soviet Union during World War II, Soviet authorities promoted the idea of a separate Moldovan
language (using the Cyrillic rather than the Latin script), as a means of countering possible
secessionist ideas. Those favoring the term “Moldovan” tend to favor Moldova’s independence or
close ties with Russia. Many persons favoring the term “Romanian” support eventual union with
Romania.
In a 1994 referendum, more than 90% of Moldovans rejected unification with Romania. Recent
opinion polls in Moldova show that Moldovan support for union with Romania remains at less
than 10%. The most pro-Romanian party in the government, the Liberal Party, won about 10% of
the vote in the last parliamentary election, and has had to downplay pro-union views to avoid
harming its electoral chances. However, it should be noted that Romania’s 2007 entry into the EU
3 European Commission, European Neighbourhood and Partnership Instrument: Republic of Moldova National
Indicative Program 2011-2013, at http://ec.europa.eu/world/enp/pdf/country/2011_enp_nip_moldova_en.pdf
4 European Commission document, at http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113419.pdf
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led to hundreds of thousands of Moldovan applications to Romania for dual Romanian-Moldovan
citizenship.
The current Moldovan government has moved to improve relations with Romania, which
deteriorated sharply under the Communists. It signed an agreement with Romania to liberalize
small-scale border traffic, and removed barbed wire obstructions from the border dating from the
Soviet period. In February 2010, Romania agreed to provide 100 million Euro in aid to Moldova
over the following three years. In July 2012, Moldova and Romania agreed to build a gas pipeline
between the two countries It is hoped that the pipeline will help Moldova to reduce its energy
dependence on Russia, although critics have noted that Romania itself receives much of its gas
from Russia.
U.S. Policy
The United States and Moldova have enjoyed good relations since the country’s independence in
1991. In a significant sign of U.S. support for the current pro-Western government, Vice President
Joseph Biden visited Moldova in March 2011. At a speech in Chisinau, the country’s capital,
Biden praised Moldova for its commitment to reform and democratic values, including the
holding of free and fair elections. He called on Moldova to continue its efforts to create a
transparent legal system, to fight corruption, and to end human trafficking. He said that the
United States would continue to support a settlement for Transnistria that preserves Moldova's
sovereignty and territorial integrity within its internationally recognized borders.
The Vice President said that the United States would continue to assist Moldova’s reform efforts.
He highlighted the five-year, $262 million Millennium Challenge Corporation aid program,
signed in 2010, to bolster Moldova’s agricultural sector and road network. He said U.S. aid will
help the Moldovan government create policies to spur economic growth and attract foreign
investment, train civil society to become more effective advocates, and help improve Moldova's
schools.
Since 1999, Moldova and the state of North Carolina have worked together in such areas as civil
emergency, expansion of markets, and cultural, scientific, and academic exchanges.
The United States has called on Russia to withdraw troops from Transnistria deployed there
without the consent of the Moldovan government. The United States refused to ratify the adapted
Conventional Forces in Europe (CFE) treaty until several conditions were met, including the
withdrawal of Russian troops from Moldova. In November 2007, Russia suspended its
observance of the CFE Treaty, attributing the move to the failure of the United States and other
countries to ratify the adapted treaty.
The United States has called for continued cooperation on weapons proliferation and trafficking
in persons. In May 2003, the United States imposed missile proliferation sanctions on two
Moldovan firms for transferring equipment and technology to Iran. The 2012 State Department
Trafficking in Persons report is critical of Moldova’s record in this area. It notes that Moldova is a
source of women and girls trafficked for commercial sexual exploitation, as well as men and
women for forced labor. Moldova is a “Tier 2” country. Tier 2 denotes a country that “does not
fully comply with the minimum standards for the elimination of trafficking,” but is “making
significant efforts to do so.”
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The United States has provided aid to Moldova to help meet political and economic reform
objectives. From the country’s independence in 1991 through FY2011, the United States
obligated over $1 billion in aid to Moldova, according to the USAID publication U.S. Overseas
Loans and Grants and the FY2013 Congressional Budget Presentation for Foreign Operations. In
FY2012 Moldova is slated to receive $23.4 million in U.S. aid. For FY2013, the Administration
has requested $19.68 million in aid for Moldova, a significant cut that is in line with a general
reduction in U.S. assistance to Europe and Eurasia. Of this amount, $14.05 million comes from
the Economic Support Fund to promote political and economic reform in Moldova; $3.23 million
is from the International Narcotics Control and Law Enforcement account; $1.25 million is from
the Foreign Military Financing account; $0.75 million is from the IMET military training and
education account; and $0.4 million is from the Nonproliferation, Antiterrorism, Demining and
Related Programs account. This assistance does not include aid from the Millennium Challenge
Corporation.
U.S. aid is aimed at helping Moldova fight corruption and transnational crime, including
trafficking in persons. U.S. assistance also supports independent media and non-governmental
organizations in Moldova, as well as rule of law programs. U.S. economic aid is aimed at
improving the business climate in Moldova, and helping the country diversify its exports. The
United States donates humanitarian aid in the form of food and medicine to particularly
vulnerable parts of Moldova’s impoverished population. U.S. security assistance is used to help
Moldova participate in Partnership for Peace exercises, and to develop its peacekeeping capacity
and interoperability with NATO.
U.S. aid has helped Moldova interdict attempted sales of highly-enriched uranium (HEU). In an
incident in June 2011, Moldovan police, including some officers who had received U.S. counter-
proliferation training, conducted a “sting” operation against persons offering HEU for sale. The
material, which probably came from Russia, transited Transnistria.
Congressional Action
Moldova is seeking permanent Normal Trade Relations (PNTR) from the United States by
terminating the application of the Jackson-Vanik amendment to Moldova.5 In the 112th Congress,
Senator Lugar introduced a bill (S. 309) which terminates the application of Title IV of the Trade
Act of 1974 (also known as the Jackson-Vanik amendment) for products of Moldova. If the bill
were adopted, Moldova would receive permanent Normal Trade Relations with the United States.
Representative David Reichert introduced H.R. 1463, which would also end Jackson-Vanik’s
application to Moldova.
On July 19, 2012, the Senate Finance Committee approved S. 3406, which would extend PNTR
to Russia and Moldova. On July 26, the House Ways and Means Committee approved an identical
companion bill, H.R. 6156. Neither bill has yet received floor consideration.
In June 2012, the Congressional Moldova Caucus was formed, in order to promote U.S.-Moldova
cooperation on a wide range of issues, including Euro-Atlantic integration and the termination of
Jackson-Vanik’s application to Moldova.
5 For more on the Jackson-Vanik amendment, see CRS Report RS 22398, The Jackson-Vanik Amendment and
Candidate Countries for WTO Accession: Issues for Congress, by William Cooper.
Congressional Research Service
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Moldova: Background and U.S. Policy
Author Contact Information
Steven Woehrel
Specialist in European Affairs
swoehrel@crs.loc.gov, 7-2291
Congressional Research Service
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