Page 46 - BNE_magazine_10_2019 kolomoisky

46 I Southeast Europe bne October 2019
opening ceremony for his company’s newest business venture in Moldova. When Decision 172 passed into law on February 18, 2008, the authorities were asked to organise and conduct a tender for the creation of a network of duty free stores at key transit points on the Romanian border, for which Arif bid. On May 20 that year, the businessman learned that his bid to operate via his subsidiary, Le Bridge Travel Retail,
had been successful. By July 1 Arif had signed the agreement with the then minister of the economy and commerce, Dodon, to commence work.
Under the contract’s specific terms, LeBridge acquired the right to open
five retail points at Leuseni, Sculeni, Cahul, Costesti and Giurgiulesti. A further prerequisite of the concession, outlined in Clause 7.2, recognised that the government regarded Arif’s request to operate an additional duty free outlet at Chisinau International Airport as
a reasonable idea that would be duly considered. By the time Arif came to celebrate his company’s new venture in Moldova in November 2009, his retail outlet at the airport had been approved to operate, and was ready to open a few days later.
“I believe Moldova will one day become a major market for luxury goods. It lies at a crossroads of 100 million people
in Europe,” Arif told The Moody Report. Reasserting his belief in Moldova’s potential – just days before the new venture began its rapid decline – Arif assured journalists that his company had long-term objectives in the country. LeBridge had been present in the country since 1988, which led Arif to see the duty-free concession as a route to become “a major force in luxury goods” within Moldova.
Arif’s dreams were slow to materialise. After almost three years of intimidation, extra-judicial harassment, endless fire-inspections, numerous court decisions, and several death threats, Arif temporarily left Moldova. Robbed of its assets in the country, LeBridge’s only recourse was international arbitrage. In a ruling delivered on April 8, 2013 by the International Centre for Settlement
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of Investment Disputes in the District
of Columbia, Arif alleged under oath that Moldova’s duty-free market had almost cost him his life. When politicians intensified their efforts to prevent his working in Moldova, he fled for the Romanian border at high speed, fearing his life. The government of Moldova – or, specifically, the Moldovan taxpayer
– was ordered to pay Arif approximately $600,000 if he accepted restitution. This allowed LeBridge to resume its right to operate the duty free outlets in Moldova and required the government to return assets seized in the country. The alternative offered was approximately $3mn if Arif conceded the concession completely.
After a commercial dispute which dragged through courts for four years – at enormous cost to the Moldovan taxpayer – the government buckled. Arif was reluctantly allowed to operate his shops in more or less the manner
currently seems insurmountable. Beside the president’s ties to long- serving lawmakers mired in corruption allegations, foreign investors do not believe Dodon’s pledge to ensure Moldova remain a “neutral” country with allegiance to neither Europe,
nor Russia. This is principally because personal interests generally take precedence over national policy in Moldova.
Dodon was recently pictured with his brother’s business partner Chaika in southern Moldova at a traditional dance display. Chaika, who has also been granted the title of ambassador for Russian business in Moldova, is reportedly investigating the enticing opportunity to open cryptocurrency “mining farms” in the breakaway territory of Transnistria, a de-facto Russian protectorate. Transnistria is a grey economy, which operates in total secrecy.
“I believe Moldova will one day become a major market for luxury goods. It lies at a crossroads of 100 million people in Europe”
provided for under the 2008 agreement, over which Dodon presumably held ultimate responsibility. This did not stop Dodon from complaining bitterly in the media about Arif’s mistreatment, despite his oversight over the entire concession agreement. Tobacco is a depressing industry by any barometer, but it seems more depressing still that fifteen years later, LeBridge must now return its controlling stake in the concession to the government, at a cost of $9.4mn.
Numerous agreements are under review with other international companies – which may simply choose to pay up and quit the Moldova
game, before the penalties become too heavy. While Sandu’s remarkable record in opposition is still cause for hope, the Dodon presidency, with
its rotating apparatchiks, present a challenge to foreign investment which
The notion of mining crypto-currency with cheap electricity in a disputed region of Moldova which seceded during a bitter war in 1990, doesn’t exactly sound legal and directly contradicts
the EU’s stated objectives. The former chairman of the European Parliament’s ad-hoc delegation to Moldova, Jan Marinus Wiersma described the Russian backed enclave as a “‘black hole’ in Europe in which illegal trade in arms, the trafficking in human beings and the laundering of criminal finance (takes place)” and successive EU parliaments have sought to reunite the region with Moldova. Dodon has repeatedly stated the desire to federalise the province.
Dodon has never answered for the disastrous dispute which arose with LeBridge. Instead, he has deftly ascended the greasy pole of Moldovan politics. While Dodon’s career prospects