The Cabinet of Ministers has rejected a proposal by MPs to abolish limits on cash payments. The conclusion will be considered at its meeting on February 25.
As Logos Press previously reported, the MPs propose to adjust the Law on cash payments in order to remove barriers to buying real estate, as housing sales have decreased in Moldova since this provision came into force. And also to reduce the problems faced by entrepreneurs in their activity in the context of the current restrictions.
Europe imposes fewer restrictions
The initiative also provides for the amendment of a number of legislative acts to reduce the risks of illegal use of cash in transactions. The authors of the initiative note that the law goes beyond the European framework, which sets fewer restrictions.
The project provides for the revision of the previous regulatory framework, including rules on sanctions for violation of the regime of cash payments – from 3% to 10% of the amount of the violation.
“The initiative cannot be supported”.
As noted in the government’s response, “the initiative cannot be supported” because “a return to previous legislation may affect the current legal situation or disrupt administrative procedures already initiated…. This phenomenon can be considered as an indirect retroactivity of the law and it may generate consequences similar to it, which are contrary to Article 22 of the Moldovan Constitution”.
At the same time, according to §108 of the judgment of the Constitutional Court No. 13/2015, “any normative act must comply with constitutional principles and norms. The frequency of amendments becomes problematic when it affects these standards, resulting in specific shortcomings recognized by the CC: ambiguity, inconsistency or violation of fundamental rights”.
The government explains that the law “created a regulatory framework governing the rules for cash transactions” and that setting limits “reduces the possibility of creating fictitious expenses and artificially increasing deductions and under-reporting of income.” Its abolition will lead to an increase in the shadow economy and money laundering. And the National Program of EU accession for 2025-2029 prescribes Moldova’s obligation to implement new European acts in the field of money laundering prevention by December 2026.
At the same time, it is noted that the Ministry of Finance has already started to analyze the application of the law and is developing a relevant draft of clarifications to improve its effectiveness.
