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COUNTRY PROFILES


PROFILE

Country Profile

Area: 33,843 sq km
Population: 4.32m
Capital City: Chisinau (population: 656,000)
People: Moldovan/Romanian (65%), Ukrainian (13.8%), Russian (13%), Gagauz (Christian Turks) (3.5%), Jewish (1.5%), Bulgarian (2%), other (1.2%)
Main Languages: Romanian and Russian
Religion(s): Eastern Orthodox (95%), Jewish, Baptist, Catholic
Currency: Moldovan Lei (MDL)
Political system: Parliamentary democracy. Unicameral Parliament. President of the Republic elected by Parliament.
Major political parties: Communist Party, Liberal Democratic Party, Democratic Party, Liberal Party, Our Moldova Alliance.
Government: Alliance for European Integration (Liberal Democratic Party, Democratic Party, Liberal Party).
Head of State: Acting President and Speaker of Parliament Marian Lupu.
Prime Minister: Vlad Filat
Foreign Minister: Iurie Leanca
Membership of international groupings/organisations: United Nations, World Trade Organisation (WTO), Council of Europe, Commonwealth of Independent States (CIS), a CIS sub-group entitled GUAM (for Georgia, Ukraine, Azerbaijan and Moldova), European Bank for Reconstruction and Development (EBRD), International Monetary Fund (IMF), Interpol, Organisation for Security and Cooperation in Europe (OSCE), NATO's Partnership for Peace, Stability Pact for South East Europe, Central European Free Trade Area (CEFTA)

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ECONOMY

Basic Economic Facts

GDP: US$ 5.8bn (2010) (IMF est.), US$ 6.2840bn (2008); US$ 4.770bn (2007); US$ 3.356bn (2006)
GDP per head: US$1,630 (2010) (IMF est.), $2,500 (2008 est.), US$2,300 (2007), US$ 936 (2006), US$ 831 (2005).
Annual Growth: 6.9% (2010) (IMF.) - 6.5% (2009),7.3% (2008),5% (2007), 4% (2006).
Inflation (CPI end of period): 7.4 (2010) (IMF est.)
Major Industries: agro-foods, wines and beverages, textiles, metals, tobacco, vegetable oil, electrical appliances, shoes and leather products
Major trading partners: Russia, Romania, Ukraine, Germany, and Italy. Russia, the US, France and Spain are significant investors in Moldova

Proximity to the Black Sea provides Moldova with a mild and sunny climate though winters can be cold. Agriculture accounts for around sixteen percent of total GDP. The fertile soil of the river valleys supports wheat, corn, barley, fruits, tobacco and sugar beet, as well as beef and dairy cattle. Moldova is also well known for its vineyards, wine and brandy. The country does not have significant mineral deposits, so has to import all of its supplies of oil, coal, and natural gas from Russia and Ukraine.

Moldova has been badly affected by the world economic crisis, with foreign investment and exports down. The crisis is causing large numbers of migrant workers to return (particularly from Russia and other CIS countries) and this is dramatically affecting the Moldovan economy, which is one of the most remittance-dependent in the world.

The coalition government is trying to address the economic situation and has embarked on a series of strict economic reforms following a $574m agreement with the IMF in January 2010. This is designed to help reduce the budget deficit. This is also supported by €1.9bn in grants and loans over the next four years proposed at an international donor co-ordination meeting in March 2010.

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HISTORY

Recent History

Most of the territory of Moldova was before World War II the Romanian province of Bessarabia. It was annexed by the Soviet Union in 1940 and combined with existing Soviet territory - an area on the left bank of the Nistru (Dniester) river, to which Stalin had given the status of autonomous region in 1924. The newly formed State was named the Moldavian Soviet Socialist Republic (MSSR), one of fifteen Soviet republics.

Moscow decreed that the local language, originally Romanian (a Latin language), was written in Cyrillic script and renamed Moldavian. Russian was obligatory in schools, in administration and of course in dealings with Moscow.

As the political climate began to ease in the late 1980s under Gorbachev, nationalist stirrings began in Moldova as well as in other soviet republics. It became a strong trend by 1989, leading to a declaration of independence in August 1991. In 1990 politicians toyed with the notion of unification with Romania (following the fall of Ceausescu). A law making Moldovan the sole state language was adopted. These moves alarmed the republic's non-Moldovan population, mainly ethnic Russians, Ukrainians and Gagauz (Christian,Turkish speaking population), which resulted in a unilateral proclamation of separatist republics in Transnistria (12% of Moldovan territory, 14% of the population) and the Gagauz region (the latter remained, however, within the Moldovan state). The problem, though often characterised as an ethnic one, owes more to ideological, historical, social and economic factors.

Transnistria

The population of the Transnistrian region is 40% Moldovan, 28% Ukrainian and 23% Russian. Much of the Russian population moved there from Russia in Soviet times as a workforce for the Soviet Republic's industries, many of which are located in this region. In the wake of moves to rejoin Romania (see above) and following independence, a separatist movement in the Transnistrian region on the left bank of the Nistru River declared a 'Dniester Republic'. Tension rose and in 1992 armed clashes occurred between government forces and Transnistrian separatists, resulting in several hundred deaths and the flight of tens of thousands of refugees to Ukraine. Following peace efforts by the Foreign Ministers of Moldova, Russia, Ukraine and Romania in April 1992, Presidents Yeltsin and Snegur signed an agreement in July 1992 confirming Moldovan territorial integrity and providing for the deployment of a tripartite Russian, Moldovan and Transnistrian peace-keeping force in Transnistria. They also agreed that a special status should be negotiated for Transnistria. However, no agreement on the status of Russian forces was ever formally concluded.

Since the brief conflict, Transnistria has been governed by a de facto administration based in the main city of Tiraspol. Igor Smirnov held the position of “president” from 1992, until Evgenhy Shevchuk won power in a “presidential” election in December 2011.

Moldovan leaders, with the mediation efforts of the OSCE, Russia and Ukraine, have sought to reach a political settlement with Transnistria and Gagauzia. In July 1994 the Moldovan parliament approved a constitution according to which Transnistria and Gagauzia would be granted a special status. In December 1994, after several months of negotiations, legislation was adopted and duly implemented on Gagauzia.

Negotiations with the Transnistrians have proved far more difficult. Eventually in 1997, Moldova and Transnistria signed a Memorandum on the bases for Normalisation of Relations with international backing. This memorandum established the framework for negotiations to reach a political settlement, involving the Moldovan and Transnistrian authorities with Ukraine, Russia and the OSCE as mediators. This agreement foresaw a broad degree of autonomy for Transnistria within a unitary Moldovan state; foreign and security policy would remain the preserve of central (i.e. Moldovan) government. But no agreement was reached and the negotiations remained sluggish.

In July 2002, the mediators approved a document by the OSCE and the mediation states (Ukraine and Russia) setting out a draft federalisation plan, and in February 2003 the Moldovans and Transnistrians agreed to establish a Joint Constitutional Committee (JCC) to draft a new Moldovan constitution for a re-integrated state. The JCC met regularly but progress was slow. Deep differences remained on the fundamental questions of the structure of the federation and the relative powers of the entities. Chisinau wants a unitary state with some autonomy for Transnistria, whilst Tiraspol favours a confederal arrangement.

In late November 2003, Russia produced a document setting out the parameters for a settlement. This was at the initiative of Presidents Voronin and Putin and drafted by Dmitri Kozak, then Deputy Head of the Russian Presidential Administration, following months of negotiations with President Voronin's administration and the Transnistrian authorities. The Kozak document was drawn up in parallel to the OSCE-led negotiation and drafting of a text by the three mediators. The OSCE refused to endorse the document and the opposition parties within Moldova held widespread anti-government protests. Voronin initially welcomed the Russian paper but cancelled the planned signature on 25 November 2003, along with a visit by President Putin.

The negotiating format was expanded in October 2005 to include the EU and US as observers, but formal ‘5+2’ (Moldova, Transnistria, Russia, Ukraine, OSCE + the EU and US) talks were suspended in March 2006. Informal ‘5+2’ meetings did, however, continue and on 22 September 2011 it was agreed that formal talks would resume. The first of the resumed formal meetings took place in Vilnius in November 2011. Ireland holds the Chair of the OSCE for 2012 and will host the ongoing settlement talks – the first such meeting took place in Dublin in February 2012. Ukraine will take over the Chair in 2013.

On 24 February 2003, the EU's General Affairs and External Relations Council declared an EU visa ban against those members of the Transnistrian leadership considered to be primarily responsible for the lack of co-operation to find a political settlement to the conflict. In August 2004 the measures were broadened to include a number of people responsible for the intimidation and closure of Latin script schools in Transnistria. The schools teach Moldovan in the Latin script and use the curriculum of the Moldovan Ministry of Education. Other schools in Transnistria teach Moldovan using the Cyrillic script under the curriculum of the Transnistrian "Ministry of Education”.

The EU has renewed the ban annually since then, amending the list of individuals subject to the ban in February 2008 to reflect changes within Transnistria. EU sanctions were renewed in February 2010, but with an initial seven month suspension in order to encourage positive developments. Three names were also removed from the sanctions lists, as it was deemed that there were no longer reasons for their remaining on the list. The sanctions were renewed in September 2010, and again in March and September 2011. On each occasion, the EU also extended the suspension of the sanctions.

Although unlikely to break out into violence again, the conflict is a concern for Europe, especially given Moldova's position as neighbouring country of the EU. Not only is Moldovan territorial integrity undermined, but there are serious security concerns too (e.g. alleged arms smuggling to other regional conflicts and cigarette, people and drugs trafficking to the West).

The issue of border security was addressed when the Ukrainians and Moldovans requested EU assistance in improving transparency in security matters of trade across the Ukraine/Moldova border. The EU responded positively to this request by launching in November 2005 a Border Assistance Mission to Moldova and Ukraine (EUBAM). This has encouraged a gradual reduction in criminal activity across – and either side of – the border.

Ammunition Withdrawal

The presence of Russian troops from the former Soviet 14th Army and approximately 43,000 tonnes of arms and ammunition remain of concern. The Russians and Moldovans signed an agreement on a 3-year timescale for the withdrawal of the Russian 14th Army forces in October 1994, but this was not ratified by the Duma, so never entered into force. The Istanbul OSCE Summit (November 1999) agreed a decision calling for full withdrawal of arms and ammunition from Transnistria or their destruction in situ by end 2002 and withdrawal of Russian forces. A few trains loaded with ammunition did leave the territory in 2002 but the Transnistrian authorities put obstacles in the way of complete withdrawal or destruction. As a result, at the OSCE Ministerial in Porto in December 2002, Russia successfully negotiated a new deadline for full withdrawal of Russian arms, ammunition and forces from Transnistria – 31 December 2003. From mid-March to mid-June 2003 approximately 16,000 tonnes was removed. However, in mid-June 2003, the Transnistrian authorities halted further loading or removal of ammunition. They claimed that they were blocking operations until Russia paid USD100m in assistance promised to reduce Transnistria’s debt to the Russian gas monopoly Gazprom. A further trainload left Moldova in March 2004, but a substantial amount of the ammunition remains in Transnistria. At the successive OSCE Ministerials, the EU expressed regret at Russia’s failure to comply with its Istanbul Commitments. The issue of munitions dumps and the Russian military presence still wrangles on.

Longer Historical Perspective

BBC News Country Timeline: Moldova (http://news.bbc.co.uk/hi/english/world/europe/country_profiles/newsid_1108000/1108492.stm)

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INTERNATIONAL RELATIONS

Moldova and the former Soviet bloc

Moldova is a member of the Commonwealth of Independent States (CIS), but has not joined its Collective Security Treaty, the Eurasian Economic Community, or the Single Economic Space established in September 2003. Moldova hosted the CIS Summit in Chisinau on 8-9 October 2009.

Relations with Russia strengthened during former President Vladimir Voronin’s first years in power, but deteriorated after the Moldovan rejection of the Kozak memorandum in November 2003. Russia retains strong interests in Transnistria, supporting the leadership there economically and through the presence of “peacekeeping” troops. In the January 2009 gas dispute between Russia and Ukraine, Moldova became a victim of its neighbours’ poor relations, and its supplies of gas were also disrupted.

In June 2010, then acting-President Mihai Ghuimpu declared the 28 June as a national day of remembrance to mark the Soviet occupation in 1940 and to highlight the expectation that Russia should remove its troops from Transnistria. This has further soured relations with Moscow.

Russia subsequently started rejecting wine imports from Moldova (one of Moldova’s most important industries) on the grounds of failing quality tests. The Russian market is the single largest for Moldovan wine. Russia once before, in 2006, suspended imports ostensibly on similar grounds, though widely reckoned to have been politically motivated. Ghimpu’s declaration was issued without consulting his coalition partners and has since been ruled unlawful by the Moldovan Constitutional Court.

Moldova has been a member of GUAM (Georgia, Ukraine, Azerbaijan and Moldova - formerly GUUAM, until Uzbekistan’s withdrawal in May 2005) since the core group of states first met in 1996. GUAM is a sub-group of the CIS without Russia, and member states seek to co-operate on political and economic issues. The grouping was formalised at the June 2001 GUUAM Summit in Yalta. It has not been very active since then, but developments in Georgia and Ukraine gave the grouping some impetus. A GUAM Summit in Chisinau in April 2005 was used to launch the new guise of the grouping, which has now become a standing regional organisation, with a permanent Secretariat in Kiev.


Moldova and the EU

Relations with Romania are generally cordial but became strained under the Communist government. The accession of Romania to the EU in 2007 created issues for Moldovans. Those wishing to travel to or transit through Romania were now obliged to obtain visas. Accession also brought about the end of its Free Trade Agreement with Moldova. Since July 2009 the Alliance for European Integration, has forged a much closer relationship with Bucharest.

EU countries, including the UK recognised Moldova on 31 December 1991. Moldova joined the Council of Europe in July 1995, the first CIS member state to do so. The EU/Moldova Partnership and Cooperation Agreement entered into force on 1 July 1998. The first Cooperation Council met in July 1998.

During 2001 Moldova acceded to the WTO and the Stability Pact for South East Europe. Moldova assumed the Chair of the Committee of Ministers of the Council of Europe during May-November 2003.

The Communist Government publicly avowed a policy of working towards closer relations with, and eventual membership of, the EU. In October 2003 Since September 2009 the ‘Alliance for European Integration’ Government, has further pursued interaction with the EU. In January 2010 Moldova started negotiating an EU-Moldova Association Agreement which will succeed the 1998 PCA.

Following further parliamentary elections in November 2010, the ‘Alliance for European Integration’ reformed without the ‘Our Moldova Alliance’, which failed to gain a high enough share of the vote to enter parliament. European integration continues to be a top priority.

Moldova is a priority country for the European Neighbourhood Policy, launched by the then Foreign Secretary, Jack Straw, in spring 2002. The Policy offers Moldova a much closer relationship with the EU contingent on it carrying out specified economic and political reforms. A jointly agreed Action Plan setting out key reform priorities was launched in February 2005. Moldova also participates in the EU’s Eastern Partnership initiative launched in May 2009.

Following further parliamentary elections in November 2010, the ‘Alliance for European Integration’ reformed without the ‘Our Moldova Alliance’, which failed to gain a high enough share of the vote to enter parliament. European integration continues to be a top priority.

Moldova is a priority country for the European Neighbourhood Policy, launched by the then Foreign Secretary, Jack Straw, in spring 2002. The Policy offers Moldova a much closer relationship with the EU contingent on it carrying out specified economic and political reforms. A jointly agreed Action Plan setting out key reform priorities was launched in February 2005. Moldova also participates in the EU’s Eastern Partnership initiative launched in May 2009.

Moldova's relations with the UK

In January 2012 the UK and Moldova celebrated the 20th anniversary of the establishment of diplomatic relations. A resident Embassy opened in Chisinau in July 2002 and moved to a permanent town-centre building in April 2004. There are currently 3 UK-based members of staff. The current Ambassador, Mr Keith Shannon, took up his post on 1 April 2009.

Moldovan representation to the United Kingdom

Moldova opened an Embassy in London in late 2004. The current Ambassador is Dr. Iulian Fruntaşu, who took up his post in December 2011.

Cultural Relations

The British Council does not have a permanent presence in Moldova but it does administer Chevening Scholarships on behalf of the British Embassy in Chisinau.

Recent Visits

Inward

-- Deputy Prime Minister and Minister of Foreign Affairs and European Integration Iurie Leanca, September 2011;

-- Deputy Minister of Foreign Affairs and European Integration Andrei Popov, July 2010;

-- Deputy Prime Minister and Minister of Foreign Affairs and European Integration Iurie Leanca, February 2010;

-- Deputy Minister of Foreign Affairs and European Integration Natalia Gherman, November 2009;

-- Minister of Defence Vitalie Vrabie, November 2008;

-- Bashkan of the Gagauz Autonomous Territorial Unit Mihail Formuzal; Deputy Minister in Ministry of Foreign Affairs and European Integration Valeriu Ostalap; Minister of Reintegration Vasilii Sova; ‘Speaker of the Transnistrian Supreme Soviet’ Yevgeny Shevchuk; and Chief Transnistrian Negotiator to the 5+2 Process Vladimir Yastrebchak, October 2008, for a conference at Wilton Park;

-- First Deputy Prime Minister Zinaida Grecianîi, November 2006;

-- Minister of Defence Valeriu Plesca, September 2006;

-- Deputy Minister for Foreign Affairs and European Integration Valeriu Ostalep, July 2006;

-- Speaker of the Moldovan Parliament Marian Lupu, February 2006;

Outward

-- Minister For Europe, David Lidington MP (joint visit with German Minister of State, Werner Hoyer), September 2010;

-- Chairman of the All-Party Parliamentary Group Lord Dubs, October 2009;

-- UK Members of the UK All-Party Parliamentary Group, October 2008;

-- Former Minister for Europe Geoff Hoon, February 2007;

-- Members of the UK All-Party Parliamentary Group, October 2006.

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GEOGRAPHY

Moldova is a landlocked country in Eastern Europe and borders Romania and Ukraine. Agreements with Ukraine allow Moldova to enjoy access to the Black Sea via a small portion of the Danube in Giurgiulesti. The terrain consists of rolling steppe with a gradual slope towards the Black Sea. Moldova has cold to moderate winters and generally warm summers. It has natural resources of lignite, phosphorites and gypsum. Rich black soils make it very suitable for agriculture.

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TRADE AND INVESTMENT

UK Development Assistance

The UK has funded bilateral projects in a number of areas. This includes: training for Moldovan diplomats, police reform training, strengthening of NGOs and independent media, journalism training, part-funding the destruction of stock-piled anti-personnel landmines and small arms, re-training of military personnel, and environmental protection. The joint FCO/MOD/DfID Global Conflict Prevention Pool has funded various programmes, including a three year Peace Building Framework project (focussing on poverty alleviation through conflict resolution), mass media training and people-to-people projects. The UK has assumed the role of lead nation in the development of a NATO Partnership for Peace Trust Fund Project involving the safe destruction of chemicals stored on military sites. Projects have also been run to help Moldova in the fields of human rights, good governance, and combating people trafficking, and to encourage democratic and fair elections processes.

Trade and Investment

In 2010 UK exports (mainly vehicles and pharmaceuticals) to Moldova were worth US $ 67m and UK imports (mainly textiles and agricultural products from Moldova amounted to US $ 56m.

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POLITICS

Recent Political Developments

In July 2000 the Moldovan parliament voted by a large majority to change the constitution, ending direct presidential elections and creating a Parliamentary Republic. However, in December 2000 the first attempt by parliament to elect the president ended in disarray, resulting in the dissolution of parliament. In the subsequent February 2001 parliamentary elections, the Communist Party of Moldova won more than two-thirds of the seats in the parliament (50.2% of the vote) and elected party chairman Vladimir Voronin as the new President.

In parliamentary elections held on 6 March 2005 the Communist Party won 46.1% of the vote, equivalent to 56 of the 101 seats in parliament. This was down from its previous majority of 71 and meant that it could not elect the President on its own (which requires 61 seats). The leaders of the two opposition parties which also won seats, the Democratic Moldova Bloc (BMD) and the Christian Democrats, both declared they would not co-operate with the Communists. However, the BMD coalition fragmented after the election, with eight BMD deputies leaving to form the Democratic Party and a further three creating an informal parliamentary group. All 11 voted on 4 April 2005 for the incumbent President, Vladimir Voronin. The Christian Democrats also voted for Voronin, who ultimately won a total of 75 votes, securing his re-election as President.

The next parliamentary elections were held on 5 April 2009. The Communist Party won a parliamentary majority, gaining 60 seats out of 101, with the rest of the seats distributed among three opposition parties (Liberal Party, Liberal Democratic Party, and Our Moldova Alliance). The opposition expressed their concerns regarding the transparency and correctness of the elections. The results of the elections generated a lot of discontent especially among the younger population who protested against the alleged falsification of the results on 6 and 7 of April. During the protest on April 7, a group of violent protesters broke into the parliament and the presidential palace, prompting the government to make unsubstantiated accusations that Romania, its western neighbour, was plotting a coup d’état in Moldova.

The Communist Government also launched a crackdown on opposition parties, peaceful protesters and independent journalists, which raised concern in the international community. As the opposition parties blocked the election of the president (61 votes are needed), parliament was dissolved and repeat parliamentary elections were held on 29 July 2009. These elections were held under intense international scrutiny because of the allegations about the conduct of the April elections. The results this time favoured four non-Communist parties (Liberal Party, Liberal Democrats, Our Moldova Alliance, and Democratic Party) with 53 seats to the 48 seats won by the Communist Party. A non-Communist ’Alliance for European Integration’ Government took office on 25 September 2009.

Attempts by the Parliament to elect a new President of the Republic were made by Parliament in November and December 2009. These votes were boycotted by the Communist Party, leaving the Alliance with insufficient votes to elect their candidate Marian Lupu. Following a period of constitutional uncertainty during which the Speaker of Parliament Mihai Ghimpu carried out the responsibilities of Acting President of the Republic, the Alliance moved to hold a referendum on 5 September 2010. This was to decide if the constitution could be amended so a President could be elected by popular vote. However, the turnout was just below the 33% required for the result to be validated. Parliament was dissolved and further parliamentary elections were held on 28 November 2010.

These latest elections resulted in four parties returning to Parliament: Communist Party 39.3 %, 42 seats; Liberal Democratic Party 29.4%, 32 seats; Democratic Party 12.7%, 15 seats; Liberal Party 10%, 12 seats. The Our Moldova Alliance party failed to reach the 4% threshold required and so the ‘Alliance for European Integration’ Government was re-constituted without them. On 30 December 2010 Marian Lupu of the Democratic Party was elected Speaker of Parliament and Vlad Filat of the Liberal Democratic Party re-appointed Prime Minister. Parliament has since been unable to elect a President of the Republic, so as Speaker of Parliament, Marian Lupu is acting President. The uncertainty has continued, with the Alliance for European Integration still searching for a solution.

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HUMAN RIGHTS

UN Committees on Human Rights, Racial Discrimination, Elimination of Discrimination against Women, and the Rights of the Child, as well as the Council of Europe, have all expressed concern at Moldova's human rights record in their respective areas of responsibility. There have been allegations of ill treatment and torture of suspects and prisoners by Moldovan police officers, particularly following the violent protests after the April 2009 parliamentary elections. There is also concern at the levels of corruption within the Moldovan police force and other areas of public life.

Lesbian, gay, bisexual and transgender persons continue to face severe challenges in Moldova. A peaceful demonstration supporting the adoption of anti-discrimination laws was prevented from taking place in Chisinau city centre by a court ruling in April 2011.

The Alliance for European Integration intends to improve Moldova's record on human rights, including forming a new Parliamentary Commission on the April 2009 events, reforming key institutions and restarting the process of developing a new action plan on human rights. In 2010 Moldova ratified the Rome Statute on the International Criminal Court and the UN Convention on the Rights of Persons with Disabilities.

The FCO has funded projects in a number of key human rights areas for Moldova, including on child abuse, trafficking in women, and prevention of torture in prisons.

The human rights situation in the separatist Transnistria region remains worrying. Political and linguistic rights and freedom of expression are curtailed. The EU and OSCE have regularly called on the authorities to improve the human rights situation there and will continue work with the new de facto administration in Transnistria.

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Last Updated: February 2012

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