Publication: Monitor Volume: 7 Issue: 218

Through their recent actions, Ukrainian President Leonid Kuchma and Prime Minister Anatoly Kinakh are shouldering personal responsibility for violating Moldova’s sovereignty, international law and the norms of international bodies such as the World Trade Organization that Ukraine aspires to join. On Kuchma’s and Kinakh’s authority, Ukraine is allowing the unrecognized Transdniester to conduct illegal trade operations via Ukraine. By the same token, Kuchma and Kinakh are rejecting the Moldovan government’s attempts to stop those unlawful trade flows and the illicit banking operations that undoubtedly accompany Transdniester’s trade with and via Ukraine. This situation has now led to a crisis in Ukrainian-Moldovan relations.

Transdniester’s massive contraband trade alone sustains that breakaway region. Its authorities control militarily a 400-kilometer long sector of Moldova’s border with Ukraine. The result is perhaps Europe’s largest “black hole,” through which massive flows of contraband in oil products, cigarettes and a wide range of industrial and agricultural goods, as well as light weapons, are moving from Russia and Ukraine to Europe and vice versa.

That trade has enriched both the political authorities and organized crime groups, which are hardly distinguishable in Transdniester. Symbolizing these two groups’ merger, the contraband is mainly run by Transdniester’s self-styled customs service, headed by “president” Igor Smirnov’s son, and working in tandem with the “Sheriff” clan of transit traders. The system has been operating successfully for years, thanks in part to corrupt Moldovan and Ukrainian officials.

For its part, the Russian government has been content to see Transdniester “self-sustaining,” rather than directly dependent on Russian subventions. Moscow therefore pressed Chisinau in 1996 and 1997 to grant Tiraspol the authority to trade directly with foreign partners. Moldova’s presidents of that time, Mircea Snegur and Petru Lucinschi, gave their political consent. Since then, Ukraine has provided the main routes for both the registered and the larger unregistered trade that goes through Transdniester.

Moldova’s new president, Vladimir Voronin–a Communist and a Transdniester native–has finally tackled this problem. Unlike his two noncommunist predecessors, Voronin is not resigned to the partition of Moldova, and recognizes that no progress is possible as long as Smirnov’s group remains in power in Tiraspol. Consequently, Voronin has moved to penalize Tiraspol economically by curbing its illegal trade. Irrespective of these political considerations, however, Moldova must in any case introduce order in its foreign trade under the norms of the WTO, of which Moldova became a member earlier this year.

On September 1, Moldova launched a set of measures to stop Transdniester’s unlawful trade. The Moldovan government discontinued the validity of its customs stamps, seals and export-import authorization forms, and introduced new ones. It required Transdniester-based exporting and importing firms to register legally with Moldova’s foreign trade authorities, to use the new stamps, seals and forms, and to pay taxes and dues–in token amounts for the time being–to Moldova’s treasury.

Chisinau had officially notified Tiraspol, as well as Ukraine and Russia, several months in advance of these measures. A few Transdniester firms complied. The Tiraspol authorities refused compliance, however, and encouraged most firms there to also refuse. Since September 1 they continue using the old, invalid stamps, seals and forms, and are routing their trade–registered as well as unregistered–via Ukraine. These actions are possible thanks to the support of the government in Kyiv.

In late August, Voronin met with Kuchma in Ukraine and requested the creation of twelve joint Ukrainian-Moldovan customs stations on the Ukrainian side of the border with Moldova in the Transdniester sector. Voronin interpreted Kuchma’s response as positive. On September 1, Moldovan customs employees moved to the designated locations. The same day, however, Kyiv expelled the Moldovan employees from Ukrainian territory.

Since then, Moldova’s Deputy Prime Minister Dumitru Todoroglo and Prime Minister Vasile Tarlev have headed two delegations to Kyiv pleading for the creation of the joint customs posts. Both delegations returned home empty-handed. On November 9, Kuchma and Voronin met in the Ukrainian city of Vynnitsya to discuss the problem. Kuchma refused categorically to cooperate. On November 17, Kinakh and Tarlev held further talks in Odessa on bilateral relations in general. It was Kinakh’s turn to reject Chisinau’s pleas.

The Ukrainian leaders’ arguments are especially worrisome. They maintain that Transdniester has a “right” to conduct foreign trade independently, under the 1996 and 1997 Chisinau-Tiraspol joint documents, mediated by Russia and Ukraine. The 1996 document authorizes Transdniester to use Moldova’s stamps, seals and forms, provided that the Transdniester firms register with the government in Chisinau and pay dues. Transdniester, however, has all along taken advantage of the first point while refusing to abide by the second and third. Ukraine now seems to support the continuation of this system.

The 1997 understanding is part of the notorious Primakov “Memorandum,” which, if implemented, would create a “common state” of two states under mainly Russian arbitration. Voronin has from the beginning of his presidency abandoned that document, which in any case was an informal document with no legal or binding value, and was never ratified by any authority. Such is also the case with the 1996 document. Yet, Kyiv is now siding with Tiraspol and implicitly with Moscow in arguing that those documents must be adhered to.

On November 26, Voronin retaliated in his own way, which can only aggravate the situation. In his dual capacity as head of state and leader of Moldova’s Party of Communists, Voronin received the Ukrainian Communist leader Petro Symonenko in Chisinau. Voronin announced that Moldova’s Communists–his party–would support Symonenko’s party in the upcoming Ukrainian parliamentary elections. Voronin expressed the hope that the Ukrainian Communists, if successful in the elections, would treat Moldova more fairly than the current Ukrainian leaders are doing. Through all this, any sense of common interest and purpose among the two states seems to have vanished from the official discourse (Flux, Basapress, UNIAN, November 14-17, 19-20, 26).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions