## Corruption and Economic Growth in Moldova: A Reexamination

## Source details

**Canonical URL:** [Corruption and Economic Growth in Moldova: A Reexamination](https://www.imf.org/-/media/files/publications/selected-issues-papers/2024/english/sipea2024003-print-pdf.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024003-print-pdf.pdf.md)
- [Structured JSON version](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024003-print-pdf.pdf.json)

---

### Introduction and context
- Corruption in Moldova is widely perceived as entrenched and widespread.
- A Selected Issues Paper for the 2020 Article IV Consultations found Moldova ranked unfavorably among peers on perception indicators for grand and petty corruption.
- In 2021, at the request of the Moldovan authorities, the IMF conducted a comprehensive Governance Diagnostic (GD) analyzing corruption and governance vulnerabilities in six key state functions; the GD found sound legal and institutional frameworks largely in place but significant corruption and governance vulnerabilities persisted.
- More recent data suggest some improvement in indicators of corruption in Moldova, but they remain higher relative to other Central, Eastern and Southeastern Europe (CESEE) countries and to the EU.
- Moldova achieved EU candidate status in June 2022.
- The combined impact of the pandemic and Russia's war in Ukraine has exacerbated the gap in living standards between Moldova and the EU.

### Corruption as an impediment to growth and business
- Main points:
  - High levels of corruption reduce quality of governance, undermine competition, weaken property rights protection, and inhibit private investment.
  - Corruption and political instability are frequently cited as the most problematic factors for doing business in Moldova (IMF 2020, Figure 1).
  - Reducing corruption could help accelerate economic convergence to the EU.
  - The fight against corruption and strengthening rule of law are part of nine steps identified by the European Commission as critical to advance Moldova’s path to EU accession.
  - Reform efforts face resistance from vested interests who leverage economic and political influence to evade prosecution and undermine the criminal justice system.

### Corruption and economic growth — theory and evidence
- Theoretical perspectives:
  - “Grease the wheels” hypothesis: corruption may help growth by circumventing inefficient rules.
  - “Sand in the wheels” hypothesis (Tanzi 2000): corruption slows growth by hindering efficient production and innovation.
  - Causality is challenging to establish because of potential reverse causality (higher-income countries may have greater resources to tackle corruption).
- Empirical evidence:
  - Countries with lower perceptions of corruption tend to have higher GDP per capita (Figure 2, average for 2018–2022).
  - Literature that controls for endogeneity generally finds corruption tends to negatively affect growth, particularly in countries with low investment rates and poor governance (IMF 2017, Gründler and Potrafke 2019, Uberti 2022).

### Quantitative estimates and convergence scenarios
- Methodology:
  - Regression analysis builds on IMF 2017 methodology, updated using panel data estimates covering the last 20 years.
  - Variables include: (i) real GDP growth per capita (dependent variable); (ii) ICRG as measure of corruption perceptions (lower ICRG values indicate higher corruption); (iii) conventional growth determinants including lagged dependent variable, lagged level of GDP per capita, and lagged value of secondary school enrollment.
  - Cross-sectional estimates assume stability in relative prevalence of perceptions of corruption; panel data with country fixed effects used to account for over-time variation.
- Key quantitative finding:
  - An increase of the Corruption Index from the International Country Risk Guide (ICRG) by one unit may raise per capita GDP growth by about 0.6 percent.
- Scenario projections for Moldova’s GDP per capita relative to the EU average by 2040:
  - If Moldova is unable to lower corruption, per capita GDP will remain at about 30 percent of the EU average in 2040.
  - If corruption is lowered to the average of EU countries (equivalent to an increase of the ICRG index by 1.3 points), per capita GDP will reach 35 percent of the EU average in 2040.
  - If Moldova reduces corruption to the level of the best performing, highest ICRG level in the EU (equivalent to an increase of the ICRG index by 3 points), per capita GDP will reach 45 percent of the EU average by 2040, with accelerated convergence thereafter.

### Regional best practices in criminal justice reforms
- Relevant CESEE examples and establishment years:
  - Romania’s National Anti-corruption Directorate (DNA) in 2002.
  - Poland’s Central Anti-Corruption Bureau (CBA) in 2006.
  - Ukraine’s National Anti-Corruption Bureau (NABU) in 2015.
- Common successful features:
  - Broad operational independence, including autonomy over staffing and budget.
  - Clear mandates to investigate high-level corruption.
  - Broad investigative powers and capacity, including special techniques such as surveillance and wiretapping.
  - Success depends on convictions and asset recovery; robust prosecution and adjudication are required.
  - Leadership perceived as rule-of-law oriented and prosecuting without regard to political affiliation is key to institutional credibility.
  - Civil society engagement and involvement of experts with international experience aided credibility and sustainability of reforms.
  - Investigative journalists and media supported anti-corruption efforts by identifying officials not declaring assets or exhibiting signs of illicit enrichment.

### Taking stock of Moldova’s progress on anti-corruption and AML
- Overall implementation status since the GD:
  - Two measures from the GD anti-corruption recommendations were incorporated into the Fund-supported program as conditionality.
  - The majority of GD priority recommendations in the two areas analyzed (anti-corruption and AML) were implemented.
  - Good progress and steps to implement structural, long-term recommendations were observed on the remainder.
  - A number of additional, non-priority GD recommendations were also implemented.
- GD findings on anti-corruption framework:
  - Legal and institutional infrastructure is largely in place but lacked effectiveness and needed insulation from undue influence.
  - Sanctioning in corruption cases appeared lenient: almost half of all convictions in corruption cases resulted only in a fine; a minor share resulted in imprisonment, and those sentences were mostly suspended.
  - Criminal enforcement efforts were focused on petty corruption and not targeted at high-level corruption.
  - Corruption in law enforcement and the judiciary is particularly concerning, allowing for non-prosecution of criminals and facilitating other economic crimes.
  - The GD identified five priority recommendations to strengthen the anti-corruption framework, ranging from short-term measures to strengthen anti-corruption law enforcement and promote integrity in the prosecution service, to longer-term adjustments to improve investigative effectiveness.

### Strengthening prosecution and prosecution-related institutional reforms (selected implemented measures)
- APO selection and independence:
  - GD recommended participation of experts with international experience and civil society and allowing non-prosecutors to apply; recommendation incorporated into conditionality under the ECF/EFF program (March 2020 Structural Benchmark).
  - Authorities amended the legal framework to include a selection commission comprised of members with impeccable reputation and high professional and moral qualities using objective criteria stipulated by law.
  - A commission including members with international anti-corruption prosecution experience and civil society representatives was promptly established and a prosecutor with the necessary professional skills and irreproachable reputation was appointed as APO head (December 2022 Structural Benchmark).
- Independence of disciplinary function:
  - At the time of the GD, the Inspection of Prosecutors was insufficiently independent and subordinated to the Prosecutor General.
  - Authorities revised the legal framework in June 2023 to transfer the Inspection of Prosecutors to the Supreme Council of Prosecutors; the mandate and structure are now determined by the Supreme Council, which organizes the selection process for inspectors who cannot be selected from among prosecutors in office.
- Enhancing dissuasiveness of sanctions:
  - GD recommended conducting and publishing a study of court practice to identify factors leading to lenient sanctions.
  - As part of the Fund-supported program, authorities enhanced simplified proceedings provisions by adding clear criteria and procedures and prohibited reduction of terms of imprisonment in corruption cases below statutory minima (prior action, third ECF/EFF review).
- Prioritization and results in investigating high-level corruption:
  - Since January 2023, NAC and APO submitted to court over 140 corruption cases involving: one former President, one former Prime Minister, one former minister, four former and current members of Parliament, three prosecutors, one judge, one former governor of the NBM, and other high-level officials.
  - APO obtained 130 sentences in the first instance court, including confiscation orders for over MDL 1.7 million.
  - APO prosecutors obtained an appellate adjudication in a high-profile bank-fraud case, sentencing in absentia a former high-level official to 15 years imprisonment and ordering over MDL 5.2 billion confiscation.

### Illicit enrichment, unresolved cases, and judicial delays
- Illicit enrichment legal clarification:
  - November 2022 Constitutional Court decision clarified that application of Article 330-2 does not require proof that assets resulted from another crime; evidence that assets substantially exceed legally acquired means and could not have been obtained legally is sufficient.
- Court performance and timelines:
  - In 2020, courts in Moldova took, on average, 324 days to reach a final decision on a case (39 percent faster than the Council of Europe median of 529 days).
  - Reaching a final decision in corruption cases took, on average, 3.5 years (four times slower than the national average for all criminal cases and 2.4 times slower than the Council of Europe median).
  - Completion rate for corruption cases in 2022 was 30 percent of cases examined adjudicated, versus 50 percent completion rate for all criminal cases.
- Judicial infrastructure response:
  - The President initiated establishment of an anti-corruption court, citing stalled adjudication of high-profile corruption cases and judicial unwillingness to act against unwritten rules; a draft law was submitted to Parliament in July 2023 and authorities are adjusting the draft taking into account a Venice Commission opinion with adoption of the law expected in early 2024.

### Anti-Money Laundering (AML) framework and supervisory actions
- GD findings:
  - Moldova’s AML regime was not sufficiently used to support anti-corruption efforts; banks exhibited recurring deficiencies in preventive measures, especially in identifying beneficial owners and politically exposed persons (PEPs).
  - For PEPs, banks often relied on self-reported customer information without cross-checking.
- Actions implemented:
  - The NBM introduced thematic inspections focused on identification of beneficial owners and customer due diligence measures for PEPs, triggered by external audit findings; during on-site inspections NBM also reviewed implementation of action plans based on external audits.
  - NBM assessed effectiveness of suspicious transaction reporting systems and applied sanctions on banks (including written warnings and fines) for failures to identify and report suspicious transactions.
  - Office for Prevention and Combating of Money Laundering approved new Guidelines on identification and monitoring of PEP activity and risk indicators for PEPs, including a list of types of officials that hold prominent public positions for PEP identification.
- Outstanding issue:
  - Public Services Agency (PSA) maintains a public register of beneficial owners but lacks sanctioning powers for submission of false/incorrect information or failure to report changes; those sanctioning powers are currently with the Ministry of Internal Affairs. GD recommended granting the PSA sanctioning powers or establishing an effective mechanism of cooperation between the PSA and the Ministry of Internal Affairs.

### Conclusion and recommended next steps (priorities)
- Progress assessment:
  - Strengthening of the anti-corruption and anti-money laundering framework since the GD in 2021 is evident, but further progress is needed to realize growth and convergence benefits.
- Key recommendations and priorities:
  - Further strengthen the AML regime to mitigate substantial money laundering risks from corruption-related illicit financial flows.
  - Strengthen law enforcement capacity to use financial intelligence and conduct financial investigations to identify and trace proceeds of corruption more effectively.
  - Intensify efforts to prosecute corruption-related money laundering in line with Moldova’s substantial risks.
  - NBM should develop a risk-based supervision toolkit and leverage risk-based targeted and thematic on-site inspections focused on vulnerabilities to laundering proceeds of corruption.
  - NBM should impose effective, proportionate, and dissuasive sanctions for non-compliance with AML/CFT obligations and streamline internal processes for sanction approval.
  - Grant the PSA sanctioning powers for non-compliance with beneficial ownership requirements or establish effective cooperation mechanisms with the Ministry of Internal Affairs.
  - Build up APO’s investigative capacity by granting required equipment, premises, and staffing (prosecutors, investigative officers, counsels, and experts); ensure APO has authority over its human resources (leading role in identifying prosecutorial candidates, forming panels for selection interviews, decisive say in selection and transfer of prosecutors to APO).
  - Ensure APO is safeguarded from pressures of vested interests (prevent transfer or limits that curb APO’s investigative capacity).
  - Establish a specialized adjudication infrastructure (anti-corruption court) with reinforced selection process for judges (involving experts with international experience), objective and uniform selection criteria specific to anti-corruption judges, jurisdiction limited to cases investigated and/or prosecuted by APO to avoid overburdening, and comprehensive safeguards for staffing, budgetary and operational autonomy.

*International Monetary Fund — Selected Issues Papers: Corruption and Economic Growth in Moldova: A Reexamination*

### 1. Corruption Indicators ...............................................................................................

### 1. Corruption Indicators

### Introduction
- Corruption in Moldova is widely perceived as entrenched and widespread.
- A Selected Issues Paper for the 2020 Article IV Consultations (IMF 2020) found Moldova ranked unfavorably among peer countries across a range of perception indicators on both grand and petty corruption.
- In 2021, at the request of the Moldovan authorities, the IMF conducted a comprehensive Governance Diagnostic (GD, see IMF 2021) analyzing corruption and governance vulnerabilities in six key state functions.
- The GD concluded that despite having sound legal and institutional frameworks largely in place, Moldova continued to suffer from significant corruption and governance vulnerabilities.
- More recent data suggest some improvement in indicators of corruption in Moldova, but they still remain higher relative to other Central, Eastern and Southeastern Europe (CESEE) countries and to the EU.
- The paper provides an update on implementation of GD recommendations on anti-corruption and Anti-Money Laundering (AML), assesses empirically the impact of reducing corruption on growth and convergence towards EU living standards, and suggests a way forward based on progress achieved.

### Corruption as an impediment to growth and business
- High levels of corruption can reduce the quality of governance, undermine competition, weaken property rights protection, and inhibit private investment.
- Corruption and political instability are frequently cited as the most problematic factors for doing business in Moldova (IMF 2020, Figure 1).
- Moldova achieved EU candidate status in June 2022.
- The combined impact of the pandemic and Russia's war in Ukraine has exacerbated the gap in living standards between Moldova and the EU (see Staff Report ¶1).
- Reducing corruption could help accelerate economic convergence to the EU.
- The fight against corruption and strengthening of the rule of law are part of nine steps identified by the European Commission as critical to advance Moldova’s path to EU accession.
- Reform efforts face resistance from vested interests who leverage economic and political influence to evade prosecution and undermine the criminal justice system.

### Corruption and Economic Growth — theory and evidence
- The theoretical relationship between corruption and economic growth is complex; two main theories discussed:
  - An earlier view that corruption may "grease the wheels" and help growth by circumventing inefficient rules.
  - The "sand in the wheels" approach arguing corruption slows growth by hindering efficient production and innovation (Tanzi 2000).
- Challenges in establishing direct causality include potential reverse causality (higher-income countries may have greater resources to tackle corruption).
- Empirical evidence summarized:
  - Countries with lower perceptions of corruption tend to have higher GDP per capita (Figure 2, average for 2018–2022).
  - An extensive literature controls for endogeneity and generally finds corruption tends to negatively affect growth, particularly in countries with low investment rates and poor governance (IMF 2017, Gründler and Potrafke 2019, Uberti 2022).

### Quantitative estimates and projections
- Methodology:
  - Regression analysis builds on IMF 2017 methodology, updated using panel data estimates covering the last 20 years.
  - Variables include: (i) real GDP growth per capita (dependent variable); (ii) ICRG as measure of corruption perceptions (lower ICRG values indicate higher corruption); (iii) conventional growth determinants including lagged dependent variable, lagged level of GDP per capita, and lagged value of secondary school enrollment.
  - Cross-sectional estimates assume stability in relative prevalence of perceptions of corruption; panel data with country fixed effects used to account for over-time variation.
- Key quantitative findings:
  - Regression estimates suggest an increase of the Corruption Index from the International Country Risk Guide (ICRG) by one unit may raise per capita GDP growth by about 0.6 percent.
- Scenario projections for Moldova’s GDP per capita relative to the EU average by 2040:
  - If Moldova is unable to lower corruption, per capita GDP will remain at about 30 percent of the EU average in 2040.
  - If corruption is lowered to the average of EU countries (equivalent to an increase of the ICRG index by 1.3 points), per capita GDP will reach 35 percent of the EU average in 2040.
  - If Moldova reduces corruption to the level of the best performing, highest ICRG level in the EU (equivalent to an increase of the ICRG index by 3 points), per capita GDP will reach 45 percent of the EU average by 2040, with accelerated convergence thereafter.

### Regional best practices in criminal justice reforms
- CESEE countries with similar backgrounds provide relevant examples; there is a strong association between control of corruption and economic growth in the region.
- Examples of specialized anti-corruption enforcement bodies and their establishment years:
  - Romania’s National Anti-corruption Directorate (DNA) in 2002.
  - Poland’s Central Anti-Corruption Bureau (CBA) in 2006.
  - Ukraine’s National Anti-Corruption Bureau (NABU) in 2015.
- Common features of successful institutions:
  - Broad operational independence, including autonomy over staffing and budget.
  - Clear mandates to investigate high-level corruption.
  - Broad investigative powers and capacity, including special investigative techniques such as surveillance and wiretapping.
- Importance of prosecution and adjudication:
  - Success depends on convictions and asset recovery; robust prosecution and adjudication of corruption cases are required.
  - Leadership perceived as rule-of-law oriented and prosecuting without regard to political affiliation is key to institutional credibility.
  - Judicial response (adjudication) has been a key feature of success in Romania and Latvia (IMF 2017).
  - Ukraine’s weaknesses in rule of law prompted the establishment of a specialized anti-corruption court.
- Role of civil society and international experts:
  - Civil society engagement and involvement of experts with international experience aided credibility and sustainability of reforms.
  - Investigative journalists and media have supported anti-corruption efforts by identifying officials not declaring assets or exhibiting signs of illicit enrichment.

### Taking stock of Moldova’s progress on anti-corruption and AML
- The GD found corruption and governance vulnerabilities pronounced in rule of law, anti-corruption, AML, and governance of state-owned enterprises (SOEs); other areas (public financial management, tax administration, central bank governance and financial sector oversight) showed some progress.
- This section focuses on anti-corruption and AML as two critical control functions to support broader governance reform.
- Implementation status:
  - Two measures from the GD anti-corruption recommendations were incorporated into the Fund-supported program as conditionality.
  - The majority of GD priority recommendations in the two areas analyzed were implemented.
  - Good progress and steps to implement structural, long-term recommendations were observed on the remainder.
  - A number of additional, non-priority GD recommendations were also implemented.
- Findings on the anti-corruption framework from the GD:
  - Legal and institutional infrastructure is largely in place but lacked effectiveness and needed insulation from undue influence.
  - Sanctioning in corruption cases appeared lenient, with recourse to fines and reduced and suspended sentencing.
  - Criminal enforcement efforts were focused on petty corruption and not targeted at high-level corruption.
  - Corruption in law enforcement and the judiciary is particularly concerning, allowing for non-prosecution of criminals and facilitating other economic crimes.
  - The GD identified five priority recommendations to strengthen the anti-corruption framework, ranging from short-term measures to strengthen anti-corruption law enforcement and promote integrity in the prosecution service, to longer-term adjustments to improve anti-corruption investigative effectiveness.

*Source: IMF Selected Issues Papers, "Corruption and Economic Growth in Moldova: A Reexamination."*

### 12.      One of the first implemented anti-corruption recommendations was to strengthen the selection

### Corruption and Economic Growth in Moldova: A Reexamination

### Strengthening selection for the head of the Anti-corruption Prosecution Office (APO)
- Finding: APO’s mandate includes investigation and prosecution of high-level corruption; the Governance Diagnostic (GD) concluded the selection process for the APO head needed additional safeguards to reflect the office’s importance and need for independence.
- Action implemented:
  - GD recommended participation of experts with international experience and civil society and allowing non-prosecutors to apply; this recommendation was incorporated into conditionality under the ECF/EFF program (March 2020 Structural Benchmark).
  - Authorities amended the legal framework to include a selection commission comprised of members with impeccable reputation and high professional and moral qualities using objective criteria stipulated by law.
  - A commission including members with international anti-corruption prosecution experience and civil society representatives was promptly established and a prosecutor with the necessary professional skills and irreproachable reputation was appointed as APO head (December 2022 Structural Benchmark).

### Independence of disciplinary function in prosecution
- Finding: At the time of the GD, the Inspection of Prosecutors was insufficiently independent and subordinated to the Prosecutor General; disciplinary cases required Prosecutor General approval and the Prosecutor General appointed and dismissed inspectors and chief inspectors.
- Action implemented:
  - Authorities revised the legal framework in June 2023 to transfer the Inspection of Prosecutors to the Supreme Council of Prosecutors (a self-governing body of prosecutors).
  - The mandate and structure of the Inspection of Prosecutors are now determined by the Supreme Council of Prosecutors, which organizes the selection process for inspectors who cannot be selected from among prosecutors in office.

### Enhancing dissuasiveness of sanctions in corruption cases
- Finding: Sanctioning in corruption cases appeared lenient: almost half of all convictions in corruption cases resulted only in a fine; a minor share resulted in imprisonment, and those sentences were mostly suspended—contributing to perceptions of impunity.
- Actions taken:
  - GD recommended conducting and publishing a study of court practice to identify factors leading to lenient sanctions.
  - As part of the Fund-supported program, authorities enhanced simplified proceedings provisions by adding clear criteria and procedures and prohibited reduction of terms of imprisonment in corruption cases below statutory minima (prior action, third ECF/EFF review).

### Prioritization and results in investigating high-level corruption
- Finding: GD concluded enforcement efforts previously focused on petty bribery and needed reorientation toward high-level corruption.
- Outcomes since January 2023:
  - NAC and APO submitted to court over 140 corruption cases involving: one former President, one former Prime Minister, one former minister, four former and current members of Parliament, three prosecutors, one judge, one former governor of the NBM, and other high-level officials.
  - APO obtained 130 sentences in the first instance court, including confiscation orders for over MDL 1.7 million.
  - APO prosecutors obtained an appellate adjudication in a high-profile bank-fraud case, sentencing in absentia a former high-level official to 15 years imprisonment and ordering over MDL 5.2 billion confiscation.

### Illicit enrichment, unresolved cases, and judicial delays
- Finding: GD identified embezzlement and illicit enrichment as under-prosecuted at the time; proving illicit enrichment was seen as difficult due to perceived requirements for direct proof of illegality.
- Legal development:
  - November 2022 Constitutional Court decision clarified that application of Article 330-2 does not require proof that assets resulted from another crime; evidence that assets substantially exceed legally acquired means and could not have been obtained legally is sufficient.
- Court performance and timelines:
  - In 2020, courts in Moldova took, on average, 324 days to reach a final decision on a case (39 percent faster than the Council of Europe median of 529 days).
  - Reaching a final decision in corruption cases took, on average, 3.5 years (four times slower than the national average for all criminal cases and 2.4 times slower than the Council of Europe median).
  - Completion rate for corruption cases in 2022 was 30 percent of cases examined adjudicated, versus 50 percent completion rate for all criminal cases.
- Institutional response:
  - The President initiated establishment of an anti-corruption court, citing stalled adjudication of high-profile corruption cases and judicial unwillingness to act against unwritten rules; a draft law was submitted to Parliament in July 2023 and authorities are adjusting the draft taking into account a Venice Commission opinion with adoption of the law expected in early 2024.

### Anti-Money Laundering (AML) framework and supervisory actions
- Finding (GD): Moldova’s AML regime was not sufficiently used to support anti-corruption efforts; banks exhibited recurring deficiencies in preventive measures, especially in identifying beneficial owners and politically exposed persons (PEPs). For PEPs, banks often relied on self-reported customer information without cross-checking.
- GD recommendation: Conduct cross-sectoral thematic inspections of banks based on external audits.
- Actions implemented:
  - The NBM introduced thematic inspections focused on identification of beneficial owners and customer due diligence measures for PEPs, triggered by external audit findings; during on-site inspections NBM also reviewed implementation of action plans based on external audits.
  - NBM assessed effectiveness of suspicious transaction reporting systems and applied sanctions on banks (including written warnings and fines) for failures to identify and report suspicious transactions.
  - Office for Prevention and Combating of Money Laundering approved new Guidelines on identification and monitoring of PEP activity and risk indicators for PEPs, including a list of types of officials that hold prominent public positions for PEP identification.
- Outstanding issue:
  - Public Services Agency (PSA) maintains a public register of beneficial owners but lacks sanctioning powers for submission of false/incorrect information or failure to report changes; those sanctioning powers are currently with the Ministry of Internal Affairs. GD recommended granting the PSA sanctioning powers or establishing an effective mechanism of cooperation between the PSA and the Ministry of Internal Affairs.

### Conclusion and recommended next steps
- Progress assessment:
  - Analysis shows strengthening of the anti-corruption and anti-money laundering framework since the GD in 2021, but further progress is needed.
  - Continued reforms could boost growth, foster competition and investment, and accelerate income convergence towards the EU.
- Key recommendations and priorities:
  - Further strengthen the AML regime to mitigate substantial money laundering risks from corruption-related illicit financial flows.
  - Strengthen law enforcement capacity to use financial intelligence and conduct financial investigations to identify and trace proceeds of corruption more effectively.
  - Intensify efforts to prosecute corruption-related money laundering in line with Moldova’s substantial risks.
  - NBM should develop a risk-based supervision toolkit and leverage risk-based targeted and thematic on-site inspections focused on vulnerabilities to laundering proceeds of corruption.
  - NBM should impose effective, proportionate, and dissuasive sanctions for non-compliance with AML/CFT obligations and streamline internal processes for sanction approval.
  - Grant the PSA sanctioning powers for non-compliance with beneficial ownership requirements or establish effective cooperation mechanisms with the Ministry of Internal Affairs.
  - Build up APO’s investigative capacity by granting required equipment, premises, and staffing (prosecutors, investigative officers, counsels, and experts); ensure APO has authority over its human resources (leading role in identifying prosecutorial candidates, forming panels for selection interviews, decisive say in selection and transfer of prosecutors to APO).
  - Ensure APO is safeguarded from pressures of vested interests (prevent transfer or limits that curb APO’s investigative capacity).
  - Establish a specialized adjudication infrastructure (anti-corruption court) with reinforced selection process for judges (involving experts with international experience), objective and uniform selection criteria specific to anti-corruption judges, jurisdiction limited to cases investigated and/or prosecuted by APO to avoid overburdening, and comprehensive safeguards for staffing, budgetary and operational autonomy.

*International Monetary Fund — Selected Issues Papers: Corruption and Economic Growth in Moldova: A Reexamination*

---


_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2024/english/sipea2024003-print-pdf.pdf_