On inadmissibility of arranging the Moldovan-Ukrainian customs and border control at the Kuchurgan-Pervomaisk checkpoint 10 March 2017

General context On 4 November 2015 the Republic of Moldova and Ukraine signed a Protocol between the border and customs authorities on the organization of joint control at the Kuchurgan international border crossing point on the territory of Ukraine. On 13 February 2017 the Prime Ministers of the Republic of Moldova and Ukraine signed a Roadmap of Ukrainian-Moldovan cooperation in 2017, where one of the objectives is to organize joint customs and border control. On February 14, 2017 the Head of the MIA Border Police of the Republic of Moldova confirmed the launch of joint control in three checkpoints – Kuchurgan-Pervomaisk, Reni-Giurgiulesti, Mayaki- Palanca-Udobnoye – until the end of 2017. On 24 February 2017 in the context of implementation of the Roadmap signed by the Prime Ministers of Ukraine and Moldova the Moldovan delegation headed by the political representative in the Pridnestrovian settlement from the Republic of Moldova made a working trip at the Kuchurgan checkpoint in order to develop a strategy to implement the project of joint border and customs control on the Ukrainian-Moldovan border. The Moldovan and Ukrainian sides carried out these actions without considering the views of Pridnestrovie.

Potential risks Restricting foreign economic activity Restricting free movement of citizens Restricting vehicles movement Security risks

Restricting imports Inability to import phytosanitary and veterinary goods; Triple customs control; Limitations for individuals; Restricted import of socially important goods; Possible arrest of cargo.

What Kuchurgan-Pervomaisk BCP means for the Pridnestrovian imports

Restricting foreign economic activity Due to triple customs control additional transport costs would be between US $ 1.5 mln and US $ 3 mln; Losses from the payment for brokerage services to companies of Moldova would be between US $ 750,000 to US $ 1,700,000 per year. The cost of obtaining Moldovan licenses for certain categories of imports will be at least US $ 350,000 per year.

Restricting import of goods subject to veterinary and phytosanitary control Currently, import of such goods through the Kuchurgan-Pervomaisk BCP is prohibited by the Moldovan authorities; Pridnestrovie risks losing US $ 2.5 mln from inadequate customs duties for a year; A threat to food security will be created. If an opportunity to conduct imports remains, transport costs to obtain Moldovan certificates will comprise over US $ 1 mln.

Restricting FEA for private individuals In Pridnestrovie Individual entrepreneurs are involved in foreign economic activity; It is allowed to import goods worth US $ 1,000 without a declaration. In the Republic of Moldova It is allowed to import goods worth no more than € 300 without the declaration; Individuals should be registered as business entities to carry out foreign economic activity (citizenship of RM + medical insurance).

Restricting FEA for private individuals About 20,000 individual entrepreneurs are involved in foreign economic activity in Pridnestrovie; Given the average composition of a Pridnestrovian family, about 55,000 persons (11.5% of the population of Pridnestrovie) will be left without means of living if abovementioned individuals are banned from FEA; The budget losses of Pridnestrovie from shortfalls in payment for a patent will amount to US $ 7 mln, more US $ 9 mln will be required to pay unemployment benefits.

Ratio of annual losses to GDP of Pridnestrovie The total loss of the Pridnestrovian economy could reach more than US $ 38.5 mln a year. DCFTA, as suggested by the EU, will lead to 5.4% increase in GDP of the Republic of Moldova; Introduction of joint control at the Kuchurgan-Pervomaisk BCP will lead to 6% decrease of Pridnestrovie’s GDP; Should Pridnestrovie pay for the Moldovan economic growth?

Restricting free movement of citizens Triple migration control will obviously negatively affect the time of passage of all procedures, even without additional restrictions; Detention of citizens of Pridnestrovie persecuted in the Republic of Moldova for political reasons (more than 180 persons involved); Extension to the Ukrainian-Pridnestrovian border of administrative and psychological effects on citizens and officials of Pridnestrovie, applied by the border structures of Moldova at the Kishinev airport.

Kuchurgan-Pervomaisk BCP in 2016 Number of crossings of Kuchurgan-Pervomaisk BCP in 2016 146 670 573 285 621 976 913 971 In total 2,255,902 crossings, about 20% more than in the Kishinev airport.

Restricting vehicles movement Inability for vehicles registered in Pridnestrovie to travel to Ukraine by analogy with the ban for Pridnestrovian vehicles on the crossing of the Ukrainian-Moldovan and Romanian-Moldovan borders Difficulties with border crossing for cars registered in the “temporary importation” mode; The ban on import or temporary import of vehicles in Pridnestrovie (in view of differing regulations on the permissible age of vehicles to be imported), as well as possible attempts to coerce citizens of the PMR to clear their imported vehicle in the customs bodies of Moldova.

Road traffic comparison (number of cars for 2016)

Security risks At present in accordance with the documents of the negotiation process the security agencies of the conflicting parties – Pridnestrovie and the Republic of Moldova – contact only within the Security Zone, where activities, including in the event of incidents, are strictly and effectively regulated; If representatives of the Moldovan security agencies are placed on the border of Pridnestrovie and Ukraine, there are no practical mechanisms to prevent possible aggravation of the situation with participation of security agencies of the parties to the conflict.

Joint control is a political measure There is no economic, transport-logistical, migration justification; Expediency in terms of transparency is absent; Plans for joint control violate agreements in the negotiation process; In fact this measure is purely political in the framework of Moldova’s commitments to the EU to control its so-called customs territory in accordance with the Association Agreement with the EU; Economic rhetoric is used to conceal these intentions, but the EU financing of the joint control project only confirms the political nature of this destructive decision.

Joint control violates agreements in the negotiation process The Agreement on the Maintenance of Peace and Security Guarantees of 5 July 1995: “The Republic of Moldova and Pridnestrovie undertake not to use military force in mutual relations and not to put political, economic or other forms of pressure on each other”; Berlin Protocol of 2-3 June 2016: “The sides reconfirm their earlier commitments to resolve all issues exclusively at the negotiation table, with the assistance of and mediation by the OSCE, the Russian Federation and Ukraine”.