Russian MFA Information and Press Department Commentary Regarding the Situation Around Transnistria Brought on by the Imposition by Moldova and Ukraine of the New Customs Regime for the External Economic Activity of the Area

Unofficial translation from Russian

Question: Moldova and Ukraine imposed a new customs regime for the external economic activity of Transnistria on March 3. What does the situation in the area looks like at this stage?

Answer: The alarming fears voiced recently by our interagency group visiting Trasnistria, made up of officials from the Apparatus of the Government, the Security Council, the Ministry of Foreign Affairs and other Russian agencies, have proven completely founded

Transit commercial and transport links through Transnistria have been interrupted; Ukraine, Moldova and Southeastern Europe are losing out. Russian business is incurring losses; cooperation ties are crumbling. The losses of the area's economy itself, according to data coming in from Tiraspol, have reached 30 million dollars; ten major budget-forming enterprises have ground to a halt (apart from many others, of smaller size). A shortage of certain types of vitally important medicines has arisen.

Attempts are being made to create yet another myth that there are no obstacles to Transnistria's external economic activity, and that the only thing that's needed to do is to comply with certain customs regulations and not create conditions for self-isolation.

Behind this phrase, however, a stern reality is hidden, which boils down to the fact that Chisinau has placed the enterprises of the left bank of the Nistra in conditions that deprive them of the possibility to legally export their goods. Products go to the warehouses, and circulating funds are dwindling along with wage funds. The enterprises and the people working there have found themselves in difficult conditions as a result.

It is not the first time that with the help of levers of economic pressure attempts are being made to impose on the Transnistrians a model of settlement which they regard with considerable apprehension.

The "clean" use of customs legislation by Moldova is doubtful, for the Law concerning Regulation of the Flows of Goods Which are the Subject of the Foreign Trade Activity of Transnistria, on the basis of which everything is being done, is being supplement as the situation evolves like a patchwork quilt. It offers no stable, clear-cut rules. But in any case Chisinau is not going to discuss it with Tiraspol, as it does not recognize Transnistria as an equal part to the negotiating process.

Russia has its own experience on that score. It has received a principled refusal from Chisinau to all its appeals to talk about the terms of economic activity with the invitation of the representatives of Transnistria ever since November 2004.

As a mediator in the negotiation process on Transnistrian settlement the Russian state cannot but state that at issue is not so much the imposition of better-arranged customs regulations on the Ukrainian-Moldovan border and its Transnistrian section as a political action. One can easily discern the aim of placing under Chisinau's control the whole external economic activity of Transnistria, undermining the bases of the formation of the area's budget and bringing the situation there to a social explosion.

We convey this vision of the situation to the other mediators, Ukraine and the OSCE, as well as to the partners that have recently joined the negotiating process, the representatives of the United States and the European Union. Now much in our common work depends on a well-balanced position and on getting back to a reliable mainstream of respect of the principles of equality of the parties of the negotiating process, which is the basis for elaborating compromises on any complicated problems.

March 17, 2006