Moldova: Background and U.S. Policy
Steven Woehrel
Specialist in European Affairs
June 5, 2013
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 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 2013, Moldova was governed by the Alliance for European Integration, a
coalition of center-right parties. The government claimed to be focused on dismantling the
country’s Communist legacy and building a state ruled by law. However, conflicts with the
Communist opposition and tensions within the coalition have slowed reform efforts. The
accidental killing of a businessman in December 2012 and an attempted cover-up by the
Prosecutor General touched off open conflict among the AEI parties, and the government
collapsed in March. A new government comprising most of the members of the old AEI was
approved by parliament at the end of May.
Moldova is Europe’s poorest country, according to the World Bank. 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, rebounded by 6.9% in 2010 and 6.5% in 2011, only to drop by
0.8% in 2012, due to the Eurozone crisis.
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, including a free trade agreement. 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 visit to Moldova in 2011, Vice President Joseph Biden outlined U.S. policy toward the
country. 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
would 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. The 112th Congress addressed a longstanding Moldovan concern by adopting legislation
to grant the country permanent normal trade relations (PNTR) with the United States (P.L. 112-
208).
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Contents
Political Situation ............................................................................................................................. 1
Transnistria ................................................................................................................................ 3
Economy .......................................................................................................................................... 5
Foreign Policy .................................................................................................................................. 6
NATO and the European Union ................................................................................................. 7
U.S. Policy ....................................................................................................................................... 8
Congressional Action ............................................................................................................... 10
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 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.
Since then, Moldova suffered bouts of political instability that have hindered reform efforts. In
April 2009, Moldova held parliamentary elections. The PCRM won 60 seats in the 101-seat
parliament. The Communist victory sparked large demonstrations. 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, some of whom reportedly
found out about the demonstrations through messaging tools such as Twitter. Some observers
asserted that the demonstrators acted out of frustration with Moldova’s limited economic
opportunities and stagnation, which they associated 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.
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 in July 2009. The campaign featured sharp rhetoric, much of it dealing with
responsibility for the April 2009 violence and the police crackdown following it. The PCRM
again was the largest party, but fell short of a majority. A group of opposition parties formed a
governing coalition, the Alliance for European Integration. As its name suggests, the AEI was
pledged to carry out reforms with the goal of closer integration into Europe. Vlad Filat, head of
the Liberal Democratic Party, was chosen as Prime Minister of the new government.
However, the continuing inability to elect a president eventually led to yet another round of
parliamentary elections in November 2010, the third in less than two years. The Communist Party
again 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, Filat’s
Liberal Democratic Party won 32 seats in the parliament, the Democratic Party won 14 seats, and
the Liberal Party received 12. Marian Lupu from the Democratic Party was elected as parliament
chairman. The Communists had 42 seats, and were at first able to prevent the AEI from garnering
the 61 seats needed to elect a new president. However, the defection of several deputies from the
Communist faction eventually allowed the parliament to elect Nicolae Timofti as president in
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March 2012. Timofti was a judge with long experience in the Moldovan judicial system dating
back to the Soviet era. He had a very low political profile, which may have been a major
consideration in his selection.
An incident in December 2012 led to the breakup of the AEI coalition and underlined the
country’s continuing shortcomings in the rule-of-law. It also demonstrated the often petty and
self-centered attitudes of the country’s political elite and the politically-connected businessmen
(often dubbed “oligarchs”) who stand behind them. Moldova’s Prosecutor General and other
high-ranking officials were hunting in a nature preserve (an act which itself was apparently
illegal) when one of them accidently killed one of their party. The officials apparently tried to
cover up the incident, but were exposed by an anti-organized crime activist in January. The
Prosecutor General resigned under pressure from Prime Minister Filat. Because the Prosecutor
General had been chosen by the Democratic Party, his forced resignation angered that party’s
most powerful figure, deputy parliament chairman Vlad Plahotniuc, who is reportedly Moldova’s
wealthiest man. In February 2013, the National Anti-Corruption Center, which was controlled by
the Democratic Party, launched corruption investigations against several government ministers
who are members of Filat’s Liberal Democratic Party. The Liberal Democrats then teamed with
the Communists in parliament to remove Plahotniuc from his position. In March 2013,
Plahotniuc’s Democrats themselves voted with the Communists to bring down the Filat
government.
In April, Filat tried to restore the AEI coalition by meeting some of Plahotniuc’s demands,
including by voting with the Democrats to make sweeping changes to Moldova’s election laws
without prior public debate or consultations with European institutions. This plan failed when
Moldova’s Constitutional Court ruled that Filat could not head a new government, as he was
suspected of corruption. Some analysts charged that the ruling was made at Plahotniuc’s bidding.
Perhaps feeling betrayed, the Liberal Democrats then once again joined with the Communists to
oust Marian Lupu of the Democrats as parliament chairman. The Liberal Democrats and
Communists also changed the election laws again, in order to disadvantage small parties such as
the Democrats and Liberals. They also voted to assert greater government control over the
National Anti-Corruption Center and to permit the parliament to depose Constitutional Court
judges. EU officials criticized these laws and the haste in which they were adopted. President
Timofti vetoed the law on the removal of constitutional court judges.
On May 30, the Moldovan parliament approved a new government led by Iurie Leanca, a close
associate of Filat, with 58 votes in favor. The government is composed of the Liberal Democrats,
the Democratic Party, and a breakaway faction of the Liberals. Democratic Party deputy leader
Igor Corman was elected as chairman of the parliament. The main tasks set by the new
government are to secure an Association Agreement with the European Union in November, fight
corruption and reform law enforcement bodies. The decision of most of the members of the
former AEI coalition (now called the Coalition of Pro-European Rule) to reconstitute the group
after months of unseemly bickering may have been due to the fear of many of them that they
could be turned out of power if new elections were held. In addition, the EU urged Moldovan
leaders to reassemble the coalition in order to enhance Moldova’s chances of initialing an
Association Agreement with the EU in November.
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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, also
referred to as Transnistria) 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 fewer than
500,000 persons, 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 2012 State Department human rights
report sharply criticized the poor human rights record of the “Dniestr Republic,” noting its record
of 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
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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Transnistria border with Ukraine, in an effort to deter smuggling. Informal 5+2 consultations
were held regularly, however. Expert groups discussed confidence-building measures between the
two sides, but no progress occurred on larger political questions. Formal 5+2 talks have since
resumed, starting in late 2011.
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, Yevgeni Shevchuk was elected “president” of Transnistria, beating longtime
hardline leader Igor Smirnov in a runoff vote. 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.
Shevchuk 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.
Moldovan leaders have hoped progress on these small steps will eventually lead to progress on
the issue of Transnistria’s status. However, that appears unlikely. In September 2012, Transnistria
imposed customs duties on goods imported from Moldova. Shevchuk has rejected discussing the
status issue at the 5+2 talks and stressed his support for Transnistria’s independence. He has
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. He has called for closer economic integration
between Russian and Transnistria, including Transnistria’s eventual membership in the Russian-
led Customs Union and Eurasian Union. During Moldova’s recent political crisis, there were
several incidents in the security zone between the two sides, seemingly motivated by the
Transnistrian side’s desire to test the will of the Moldovan leadership.
Some analysts believe that Shevchuk’s seemingly less conciliatory policy toward the Moldovan
government more recently may be due to a similar shift to a more hardline stand by Russia, on
which Transnistria is highly dependent for political and economic support.
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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 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 from Transnistrians working abroad 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. Foreign direct investment also dropped sharply. Moldova’s GDP dropped
by 6% in 2009, but rebounded to grow by 6.9% in 2010 and 6.5% in 2011. However, GDP
contracted by 0.8% in 2012, due to the slowdown in the Eurozone. The International Monetary
Fund (IMF) projects a return to growth for the Moldovan economy of 4% in 2013.
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. The country’s prospects for increased foreign investment remain hindered by serious
problems with corruption and shortcomings in the rule of law. However, Moldova ranked 81st out
of 183 countries in a 2012 World Bank’s ranking on ease of doing business, a significant
improvement over its past rankings.
In January 2010, the IMF approved a $574 million loan for Moldova. Under its terms, Moldova
was required to cut its budget deficit. It has reduced the deficit from about 9% of GDP in 2009 to
2.1% in 2012, and has set a goal of 1.1% of GDP in 2013. The government cut government
administration costs and increased VAT, excise, and corporate taxes. Nevertheless, slow economic
growth has made it difficult to meet deficit targets.2 International financial institutions have
expressed concern about the health of the key, majority state-owned Banca de Economii, which
has engaged in dubious lending practices.
2 Economist Intelligence Unit Country Report: Moldova, May 2013.
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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 a significant market for Moldova’s
exports. Moldova has accumulated large debts to Russian energy firms, which has provided
Russia with leverage. 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 energy supplies for which Transnistria does not pay. In
return, Russian firms have assumed control over most of Transnistria’s key industrial firms.
Russian intelligence operatives hold senior posts in Transnistria’s security structures.
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
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 2007.
Moldova continues to face 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, which are mainly 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. Russia has sought to open a
consulate in Transnistria, a proposal rejected by Moldova. This large population of Russian
citizen 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. However, 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.
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Russia has so far rejected recognizing Transnistria as an independent country. However, Russian
officials have warned that Moscow could change its mind if Moldova loses its status as a neutral
country. Russian and Transnistrian officials sharply criticized Moldovan plans to accept U.S.
assistance at a Moldovan military base to bolster its peacekeeping capabilities and participate in
EU crisis management efforts. Based on its past actions, observers believe that Russia favors
maintaining the status quo in Transnistria, in order to deter Moldova from pursuing closer ties
with NATO and inhibit Moldova’s EU membership aspirations. It could even cause serious
problems with Moldova’s projected free trade agreement currently under negotiation with the EU,
given that Moldova is incapable of enforcing its provisions in Transnistria.
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.
Moldova’s main foreign policy objective currently is to sign an Association Agreement with the
EU to replace the PCA. While the agreement would not recognize Moldova as a membership
candidate, it would enhance EU-Moldova cooperation in many areas, including the establishment
of a free trade zone. Moldova and the EU hope to initial the agreement by the EU’s Eastern
Partnership summit in Vilnius, Lithuania in November 2013. Moldova is also seeking a visa-free
travel agreement with the EU. Moldova has developed detailed plans on what it needs to do to
qualify for such an agreement, but much work still needs to be done in implementation.
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. EU aid totals
for the 2014-2020 period are expected to be set later this year.
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. EU Enlargement Commission Stefan
Fuele has backed a potential membership candidacy for Moldova. However, EU member states
are 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
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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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
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. Moldova and Romania are planning 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
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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 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 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.”
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. According to the FY2014 Congressional Presentation for Foreign Operations
Moldova received $23.51 million in U.S. aid in FY2012. For FY2013, the Administration
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. The Administration has not yet released an
estimate of how much will actually be obligated for Moldova by the end of FY2013, taking into
account the possible effects of sequestration.
For FY2014, the Administration requested $19.66 million in aid for Moldova. 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 $0.38 million is from the
Nonproliferation, Antiterrorism, Demining and Related Programs account. This assistance does
not include aid from the Millennium Challenge Corporation, or from Department of Defense
sources such as the Defense Threat Reduction Agency and the European Command (EUCOM).
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.
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Moldova: Background and U.S. Policy
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 has long sought permanent normal trade relations (PNTR) from the United States by
terminating the application of the Jackson-Vanik amendment to Moldova.5 On November 16,
2012, the House approved H.R. 6156, which extends PNTR to Russia and Moldova. The Senate
passed the bill on December 6. It was signed by the President on December 14 (P.L. 112-208).
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.
Author Contact Information
Steven Woehrel
Specialist in European Affairs
swoehrel@crs.loc.gov, 7-2291
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.
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