MOLDOVA LAND TENURE SYSTEM Carlton A Brown. May 2002

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1 MOLDOVA LAND TENURE SYSTEM Carlton A Brown May Introduction 1.1. The Moldova land tenure system permits an interesting comparison between two competing cadastral systems. Starting in the early 1990s, the United States Agency for International Development (USAID) instituted a cadastral system with a classical American influence, while the World Bank instituted a cadastral system with a classical Northern European influence. While the World Bank approach is for long range, very detailed, rigid planning, the USAID approach is for flexible planning, able to change quickly when conditions change or problems are encountered. A compromise between both agencies and the government of Moldova has created a cadastral system in which both types of cadastre coexist This paper will give a brief history of the Republic of Moldova as well as a discussion of the USAID cadastral system and the World Bank cadastral system. Next will be a discussion of the conflict that developed by having two cadastral systems in one country and the resulting compromise that has created the unique cadastral system that exists today. Finally, the possible future of the Moldovan land tenure system will be discussed. 2. Location and History 2.1. The Republic of Moldova is situated in central Europe bordered by Ukraine to the south, north and east and by Romania to the west. The area of Moldova is about 33,700 square km and runs about 350 km north and south and 150 km east and west. According to the 1991 census, Moldova has a population of 4,362,000 with 850,000 living in Chisinau, the largest town and Capital of Moldova. (Fedor 1995) 2.2. This region was influenced by a mixing of the nomadic East (such as Tatar- Mongol tribes) with Western tribes in the millennium before the Roman conquest of the second and third centuries A.D. The first document referring to a Moldovian people dates back to 1360 A.D. The peak of this medieval Moldovan state was during the rule of Stefan the Great ( A.D.). In the 16 th century the Moldovan state was conquered by the Ottoman Empire, which ruled for the next three hundred years. After the Russo-Turkish wars, most of present day Moldova became part of the Russian Empire. After the 1917 collapse of the Russian Empire, the region declared its independence and formed the Democratic Moldovan Republic. In 1918 they voted to unite with Romania. In 1940 Soviet forces occupied the region as a result of a secret protocol attached to the 1939 Nazi-Soviet Nonaggression Pact and the Moldovan Soviet Socialist Republic was formed and made a part of the Soviet Union. With the collapse and break-up of the Soviet Union, the Republic of Moldova gained its independence. (Fedor 1995)

2 2.3. The Republic of Moldova declared its independence on August 27, 1991 and approved its constitution on September 29, According to the constitution, Moldova is a democratic state in which the legislative, executive and judicial bodies are separate. The chief of state is the President who is elected for four years by vote of the public. The legislative body is Parliament, made up of 101 deputies who are also elected by popular vote for four years. The main principles of the economy are market relations, free initiative and loyal competitiveness. (Department of Privatization of the Republic of Moldova) 2.4. In January 1990, the second largest city of Moldova, Tiraspol, voted to become a self-governing, independent territory (including all lands in Moldova located to the east of the Dniestr River) and in October 1991 became the Pridnestrovyan- Moldavian Republic (commonly referred to in the Western press as Transnistria ). In 1992 a war was fought between Moldova and Transnistria in which some forces of the Russian Army aided Transnistria. In July 1992 the Russian President and the Moldovan President approved a communiqué respecting the territorial integrity of Moldova but giving a special status for Transnistria within the Republic of Moldova and giving the right of the Transnistria population to decide upon its future in case Moldova ever reunifies with Romania. However, even though there is official recognition of Moldova s right to include Transnistria within its governmental jurisdiction, Transnistria continues to run its own economic and political affairs. (British Helsinki Human Rights Group 2001) 3. USAID Cadastral System 3.1. Moldovan National Land Program to Privatize Agricultural Land The United States Agency for International Development (USAID) supported the land privatization and land market development work in Moldova through its Task Order in Support of the National Land Titling and Registration Program and Nationwide Dissemination of the Enterprise Land Sales Methodology in the Republic of Moldova ( National Land Program ). Booz.Allen and Hamilton (BA&H) of McLean, Virginia was contracted to perform the work The goal of the Moldovan National Land Program was to subdivide and privatize all collective farms in Moldova and transfer ownership of the land to the member farmers of the collective. USAID approached this task with a two-phase pilot program. The first phase, started in December 1996, was to break up and privatize one collective farm (the Maiac collective farm). The farm was subdivided, land titles were prepared, and 1400 individual members of the farm had titles to various parcels legally registered in their names. The second phase of the pilot project (the Roll-Out phase) began in April 1997, where the initial land privatization and titling methodology successfully performed in phase one was expanded to 72 other collective farms. This Roll-Out phase tested the concept and methodology through all parts of Moldova and established a decentralized mechanism for creating parcels and conveying them to collective farm members. This method

3 worked quickly and efficiently at a cost of about 2.25 US dollars per parcel. (Booz-Allen & Hamilton 2000a) In October 1998 after the completion of the pilot program, USAID contracted with BA&H to work on the third phase with the Moldovan Ministry of Economy and Reforms and the Moldovan Department of Privatization to privatize the land of a total of 901 collective farms that entered the National Land Program. BA&H surveyed over 1.5 million hectares of land; created 2,412,296 land parcels; and legally registered these parcels in the local village land registry to the 783,051 former members of the collective farms, (of which 189,645 were independent farmers who had previously withdrawn from the collective farms). BA&H also aided the various village mayors in distributing the land ownership titles to each new landowner In October 1999, during this third phase of work, the World Bank through a contract with Swedish Aid (SIDA) also started giving aid to Moldova with its First Cadastre Project in which a national cadastre was implemented. BA&H helped this First Cadastre Project by beginning a mass registration program that systematically transferred information on rights to 1,172,000 (as of December 2000) agricultural land parcels from the local village land registries to the new regional Real Estate Registries maintained by the Territorial Cadastre Office. (Booz-Allen & Hamilton 2000a) The land survey fieldwork was prepared in 27 months by fifty private, local land survey firms that were established with help of BA&H. This help consisted of financial support, technical assistance, free training and maintenance on computer hardware and software, discounts on computer workstations and electronic surveying equipment, and assistance in avoiding political and bureaucratic obstructions during the privatization process. The following specialized teams assisted the private survey firms and enabled BA&H to accurately review and approve the work product created by the survey firms: A team of cadastral engineers (specialists in land surveying and land subdivision) reviewed the surveys, cartographic plans and land subdivision materials created by the private firms A team of lawyers reviewed all legal decisions adopted by the village mayor, and provided additional aid in resolving other political problems A team of information technology specialists helped the local survey firms coordinate the large quantities of data they produced to insure the data was compatible with the software used in the privatization process A team of computer hardware specialists helped keep all hardware in good working order to reduce delays created by malfunctioning equipment The procedure for completing the land privatization and titling process for agricultural land was as follows (Booz-Allen & Hamilton 2000a): Contracting and equipping.

4 BA&H and the private survey firm signed the standard contract for land privatization work on a collective farm. BA&H negotiated the supply of equipment necessary to begin the land survey. The surveyor collected historical maps of the farm and other preliminary information Field Surveys The private firm surveyed the perimeter of each field to be privatized; setting a minimum of three monuments for each field or group of contiguous fields and assigning monument coordinates that were referenced to nearby permanent man-made objects Cartographic base map The surveyor collated the field notes and prepared a cartographic base map of the farm that included information on terrain slope and soil quality taken from historical farm maps Preliminary Land Arrangement Project map On the cartographic base map, the surveyor projected an antierosion plan, existing and proposed access roads, and the orientation of parcels that would be created. After the local environmental authorities and the regional cadastral engineer approved this preliminary Land Arrangement Project map, the surveyor recalculated the surface area of each field and deducted the surface area of the projected roads and anti-erosion strips to determine the exact number of parcels that could fit into each field Grouping and arranging Based on the preliminary Land Arrangement Project map, the farm conducted a land tender in which eligible members formed themselves into groups and negotiated with one another to select the fields in which they would receive land. The members of each group then decided within which field each member of the group would receive land. Group members who would be receiving land within a particular field then decided the relative location of each person s parcel in that field, preferably taking into account family relationships, types of cultivation, and farm member agreements for the use and deposition of land. The Land Commission and the village mayor s office approved the grouping and arranging lists describing the relative location of each person s land within each field The subdivision and conveyance of collective farm land was complicated by having to work with 300 farm members to decide where, in each field, each individual s parcel would be located. The procedure was for a group of farm members (friends, relatives, etc.) to pick a leader. The leaders would then negotiate among themselves about which fields, orchards and vineyards would go to which group. Next each leader negotiated with his

5 group to decide in which field and next to whose parcel, each member s parcel would be located. Many problems and disputes arose during this process that were resolved by BA&H working with the leaders and mayors of the area Final Land Arrangement Project map, Land Titles and Cadastre Registry of Landholders After the grouping and arranging lists were completed, the surveyor used computer software to create parcels within each field and prepared the final Land Arrangement Project map (the final parcel map) (Example of Land Arrangement Project map). This map showed parcel boundaries and dimensions, access roads, existing servitudes, and the anti-erosion scheme. The map also assigned a unique parcel number to each parcel. The final map was approved by the village mayor and made available for public viewing. On the basis of this map, the surveyor prepared the Cadastre Registry of Landholders (village land registry), printed the land titles, and presented these documents to the mayor to approve and sign Demarcation of parcels in field For parcels that would be cultivated independently by new landowners, the surveyor marked the parcel corners with simple monuments. Parcels that would be farmed in common or would all be leased to one farmer were not demarcated in the field. Likewise, vineyard and orchard parcels were not demarcated, since the location of the parcel is generally evident upon the location of the vines or trees Final file The surveyor prepared an archive file containing three copies of the Land Arrangement Project map, all field notes, base maps, and other documents. The mayor s office would keep a copy of the file for public viewing, and the National Cadastre Agency and the surveyor would each keep a copy. (Booz-Allen & Hamilton 2000a) Three steps were involved in getting the title of land of collective farms transferred from the State to the individual owner: allocation of equivalent land shares in private ownership; issuance of the Title Certificate of Land and entry of the land and ownership right in the Cadastre Registry of Landholders kept at the mayor s office; and registration of ownership rights in the Real Estate Registry at the Territorial Cadastral Office The Land Code established the process of allocation of equivalent land shares in private ownership. The first process was to determine which citizens were entitled to land shares of the various collective farms. Next the mayor would issue the land share certificate (before August 9, 1993 called the Certificate Confirming the Ownership Right to an Equivalent Land Share, and thereafter called the Act Confirming the

6 Ownership Right to an Equivalent Land Share ) to the individual. (Booz-Allen & Hamilton 2000c page 29) After allocating equivalent land shares and approving the land arrangement project (which consists of maps showing boundaries, cadastre number and size of each land parcel), the mayor would issue a Title Certificate of Landholder s Right ( Title Certificate ) (Example of Title Certificate of Landholder's Right) to each landowner. Next the mayor would enter the landowner s name in the Cadastral Registry of Landholders book kept at the Mayor s office (Example of Cadastral Registry of Landowners). The ownership right registered in this book appeared as of the date the entry was made in the book. (Booz-Allen & Hamilton 2000c) Although the entry of the ownership right made in the Cadastre Registry of Landholders confirmed the landowner s ownership of a land parcel, the ownership rights or a lease for more than three years could not be sold until the landowner s ownership was registered in the Real Estate Registry (Example of excerpt from Real Estate Registry) maintained by the Territorial Cadastral Office (the First Cadastre Project of the World Bank). (Booz-Allen & Hamilton 2000c) Problems and solutions encountered during the procedure Serious problems were encountered during the Roll-Out phase when inaccurate historical maps were used to create and convey land parcels in the expectation of speeding up the process while the Land Arrangement Project maps were being created in the field. This problem was solved when it was realized that conveying parcels by using the inaccurate historical maps was meaningless and would result in longer delays than just waiting for the Land Arrangement Project maps to be finalized. (Booz-Allen & Hamilton 2000a) To ensure that land privatization could be performed quickly (or even at all) it was necessary that three critical conditions be met and maintained: local officials and farm leaders had to cooperate; the legal and regulatory framework that covered land privatization had to remain stable; and the active support of the highest levels of government of Moldova was necessary to resolve disputes and enforce policies among the various governmental agencies. (Booz-Allen & Hamilton 2000a) Village officials and farm leaders had substantial authority due to the decentralization of the land titling process. To minimize the risk of abuse of this authority, each farm leader and mayor was required to sign a contract listing the responsibilities of each as well as deadlines by which each step was to be completed. An effective deterrent for abuse was to use the local media to chastise uncooperative local officials. Often only political pressure would force officials and farm leaders to follow the vote of the farm member group. Collective farms were completely privatized and conveyed in three months for small farms and six months for big farms when officials were cooperative. When they were not

7 cooperative, it could add nine months to the process. The following were typical problems with local officials and farm leaders: Failure to include eligible farm members for allocation of equivalent land shares or misrepresenting the parcel locations to the members Addition or removal of names long after the land privatization and titling process had started. Sometimes eligible fields for distribution were changed so that the mayor s friends would get more valuable land. These changes caused disputes among farm members, as well as additional surveys and redrafting of plans Failure to inform eligible members about their rights under the National Land Program for purposes of delaying privatization or attempting to gain benefits for themselves or friends Failure of the mayor to sign and distribute land titles prepared under the National Land Program. Without titles, the individual landowners did not know where their land was located and could not convey their property. They could not sell or lease to anyone except the former farm manager, thus effectively keeping the old collective farm in operation Failure to execute written lease agreements, allowing leaders to alter rent terms or to fail to make payments altogether Opponents to privatization with positions in the various government agencies were constantly applying pressure trying to change policies and regulations to the detriment of the individual landowner. The following were typical problems with these agencies: Constant attempts by the National Cadastre Agency to recentralize control of the land titling to their agency. They attempted to force surveyors to submit their work for review at each step of the process, and to pay the National Cadastre Agency for such reviews Attempts to change laws to the detriment of landowners. One proposed law gave the State the right to take land that was not being cultivated, but would not have provided the landowner any compensation. The worst provisions of this law were not enacted Corruption was a nagging problem. Local officials, environmental authorities and employees of the National Cadastre Agency often demanded payoffs from private survey firms in order to give final approval to Land Arrangement Project maps or to accept the final files when the surveys were complete. Moldgiprozem (the State survey institute) often demanded payoffs, threatening to suspend the

8 surveyor s license if the demand was not met. Moldgiprozem even requested a Government mandate that they be the only entity allowed to perform work under the National Land Program, which threatened the existence of private surveyors Lack of communication and understanding of the land tenure process at the highest levels of government were a problem. USAID was involved with privatizing land that was under State ownership, but the World Bank was involved in developing a unified land and building registry. Conflicts between these two agencies and the laws that were promulgated for each program were a problem. (This conflict is described in detail later in the paper) Enterprise Land Sales A second task of this third phase performed by BA&H was helping privatize non-agricultural enterprise land (for instance, business or industrial land). During the mass privatization in 1994 and 1995 the State transferred the assets of enterprises to citizens but kept the land on which the enterprise was located. To privatize land, an enterprise must purchase it from the State in accordance with Government Decision No. 562 Regulation on Sale and Purchase of Land Associated with Privatized Objects and Objects Subject to Privatization which created a quick and simple procedure for transferring associated land from the State to the enterprise in which a legal land title could theoretically be issued within a few days after the purchase. (Booz- Allen & Hamilton 2000c) The enterprise land sale procedure is as follows: The enterprise submits to the primaria an application to purchase its associated land, and requests consent to the land sale from the Department of Privatization Territorial Agency. The application for land acquisition must include a cadastre plan of the land parcel, the state registration certificate of the enterprise, a document confirming the surface area of the land parcel and the enterprise s right to use the land parcel, and a document that certifies that the enterprise actually owns the immovable object located on the land parcel Within thirty days the primera must adopt a decision on the sale of the land parcel and prepare a contract on sale and purchase of the land The buyer transfers the down payment or full purchase price to the primera and State The contract on sale and purchase is signed in the presence of a notary and is notarized in three copies, one of which is given to the primera, the purchaser, and the notary The primera issues the land title certificate (the Title Certificate) to the purchaser within ten days of the notarization of the contract on sale and purchase The purchaser must register a notarized copy of the contract along with the Title Certificate at the Territorial Cadastre Office within three months of the notarization of the contract on sale and purchase.

9 The Territorial Cadastre Office registers the land parcel and the ownership rights thereto based on the contract on sale and purchase. (Booz-Allen & Hamilton 2000a) The following are some problems encountered during the privatization of enterprise land (Booz-Allen & Hamilton 2000a page 43): The National Cadastre Agency attempted to force surveyors to tie land plans used during the privatization of enterprise land to the national coordinate system, which would have seriously raised the cost and needlessly complicated the existing procedure Privatization of notaries in September 1998 led to abuses about practices and fees. The Law on Notaries in 1999 established a fixed fee schedule for notary services The price that the State was charging was prohibitive such that as of October 1998 only 409 enterprises had purchased their associative land. In April 1999 the purchase price for enterprise land dropped between 50 to 98 percent, which will hopefully speed up the privatization process Private Land and Real Estate Sales The development of the private real estate market was important to promote investment in the economy, unlock a source of capital for individuals and enterprises, and give landowners the ability to exercise fully their ownership rights. BA&H helped establish four private real estate brokerage firms in October 1999 to help match buyers and sellers in the private real estate market The procedure to convey private land starts with the preparation of a contract on sale and purchase (Example of Contract on Sale and Purchase of Land), which must specify the buyer and seller, the location of the land parcel and the sales price. Next the buyer and seller must present to the notary the contract on sale and purchase, an excerpt from the Real Estate Registry issued by the Territorial Cadastre Office confirming the seller s ownership rights to the land parcel, and personal identification documents of the seller and buyer. The buyer and seller sign three copies of the contract in the presence of the notary who then notarizes the three copies. The notary, buyer and seller each get a copy. Within three months of notarization of the contract, the buyer must register land and ownership right in the Real Estate Registry at the Territorial Cadastre Office by preparing an application for registration of ownership right with a notarized copy of the contract as the document confirming ownership right and paying the fee. The Territorial Cadastre Office then registers the land and buyer s ownership right. (Booz- Allen & Hamilton 2000c) Similar laws and procedures deal with exchanging land, leasing land and inheriting land. 4. World Bank Cadastral System (The First Cadastre Project) 4.1. By presidential decree on 27 July 1994 the National Agency for Geodesy, Cartography and Cadastre (NAGCC) was created. In autumn 1995 the

10 Government of Moldova requested the World Bank for help in creating a national cadastre. The World Bank granted money to the NAGCC in the spring of 1996 for this purpose. Because of conflicts between the mission of the World Bank s projects and the mission of the above-described USAID projects, a Memorandum of Understanding was drawn up between the Government, the World Bank and USAID in mid 1996 (see separate discussion). (Booz-Allen & Hamilton 2000a page 34) (World Bank 1998 page 8) The World Bank s project is known as the First Cadastre Project The First Cadastre Project s objectives are to develop and implement a national unified real estate registration program for urban and rural land, promoting the privatization of land and the development of real estate markets by establishing a system of clear and enforceable ownership rights. This land registration system should provide landowners with security of ownership rights so they may sell, lease or pass on holdings through inheritances of all lands owned by them. Commercial banks would be able to confidently loan money using land as collateral. The real estate market would function effectively with this needed information on ownership and location of property. Government agencies would have information for urban planning and land management. (World Bank 1998 page i) 4.3. Even though the World Bank felt that the existing system of private ownership of land and buildings was not an problem, they felt that order and stability were needed to create the security that land owners, and national and international investors would demand, which could only be provided by a land administration system like their First Cadastre Project. Private ownership of land or buildings is, as a principle, not in question. However, order and stability needed for the various actual and potential uses of land are lacking; these can only be provided by a land administration system that creates security for property owners and their partners, as well as for national and international investors and lenders, traders and dealers, and Governments. Currently, such a system does not exist in Moldova. (World Bank 1998 page 2) 4.4. The World Bank carried out a needs assessment, first by public participation of various governmental groups, and second by the World Bank s knowledge of Moldova s requirements through extrapolation of on-going cadastral work in other areas of the world The World Bank sponsored seminars and workshops to solicit feedback on the cadastral project. Various government agencies were consulted, such as the NAGCC, the Ministry of Agriculture and Food, the Ministry of Privatization, the Ministry of Finance, the Ministry of Justice. Commercial banks, notaries and several municipalities were consulted. (World Bank 1998 page iii) The World Bank had extensive knowledge of land registration and cadastre projects in other parts of the world through its 13 land titling and land registration projects with a total loan value of 550million US dollars,

11 including work in Russia, Estonia, Georgia, Kazakhstan and Romania. (World Bank 1998 page 6) 4.5. The total projected cost of the First Cadastre Project is 24million US Dollars to fund the Mapping Program, the Urban Cadastral Services Program, the Rural Cadastral Services Program, and the Institution and Capacity Building Program The Mapping program will cost 6.9million US dollars, and will consist of the production of new maps and updating of existing maps over a five year period to cover about half the urban land and about one-fifth the privatized rural land. The State agency Institute for Surveying, Geodetic Engineering and Research (IRCIM) will produce the maps. In rural areas, maps at a scale of 1:5000 will be used for land parcel demarcation. In urban areas cadastral registration will require maps at a scale of 1:2000. (World Bank 1998 page 9) The Urban Cadastral Services Program will cost 8.6million US dollars. Territorial Cadastre Offices would be established in the twelve largest municipalities and villages. The bureaucracy for handling ownership registration, title conversion and day-to-day maintenance of the legal cadastre would be created The Rural Cadastral Services Program will cost 3.7million US dollars. The initial plan was to allow titles to be issued by the 3000 Land Arrangement Services offices around the country without full registration and without identifying the exact parcel boundaries. Full registration of property ownership was planned to take place in 24 Branch Cadastral Offices (as well as the 12 Territorial Cadastre Offices) on a systematic basis with only one-fifth of the rural land parcels being planned for registration during the first five years. (World Bank 1998 page 10) However, this was revised when the USAID program performed a mass registration of 1.2 million parcels (about 65% of all parcels created during the privatization of the collective farms) in less than one year. USAID negotiated a fee for registration with the Cadastre Agency that was about one-half of what the World Bank was paying. The result was that USAID funded the mass registration of 844,800 agricultural parcels at no cost to the landowners. Also, USAID was able to negotiate the use of the project maps and land titles as prepared by the private land surveyors and approved by the mayors of the primerias without any alterations or re-surveys (The private land surveyor s maps were used as the cadastral map without alteration). (Booz- Allen & Hamilton 2000a page 34) The Institution and Capacity Building Program would cost 5.4million US dollars. This would include 1.5million US dollars for training staff at the Territorial Cadastre Offices, the Branch Cadastre Offices and the National Agency of Geodesy, Cartography and Cadastre. 2million US dollars would be used for technical assistance such as paying for consultants for computer systems installation, legal development support, procurement support, digital mapping support, GPS support and cadastral survey support. 1.9million US dollars would be used for the Project Implementation Office with 30 staff and six support staff that would supervise the project implementation.

12 5. Two Cadastres for One Country 5.1. One fascinating aspect of Moldova s transformation towards a market economy has been the fact that two separate cadastres were created at the same time, aided by two different world agencies. This allows a unique insight into how different the philosophy, structure and methods are between USAID, whose outlook has a United States influence, and the World Bank, whose outlook has a Northern European influence. Some of the differences are as follows: The World Bank used a top-down approach while the USAID used a bottom-up approach. The World Bank performed a needs-assessment mostly with contact with large Moldovan bureaucratic governmental agencies and extrapolated the need of Moldova through other cadastral projects with which it was involved. USAID s needs-assessment was a continual process as they constantly monitored all aspects of the day-to-day operations of privatizing agricultural land, getting title of land into the individual farmers, and setting up the system for private land sales The World Bank created a five-year plan where all aspects of the emerging cadastre were carefully written in great detail. USAID had less of a long-range plan, but more of a process where there was constant assessing of what was working and what problems were developing. Rather than the cadastre project having very rigid rules, the USAID process was very malleable, able to change quickly when problems developed The World Bank proposed to register about 200,000 properties (one-fifth of the privatized agricultural land) in 60 months (World Bank 1998 page 10) (Thus it appears that to register all agricultural parcels may take 25 years). USAID prepared 2,412,296 land titles (nearly 100% of the privatized agricultural land) in 27 months (Booz-Allen & Hamilton 2000a page 10) The World Bank wanted accurate cadastral maps tied to a national geodetic reference frame (Moldova National Agency of Cadastre Land Resources and Geodesy ). The geodetic reference network and land surveying work was to be carried out by two large Governmental owned institutes; the rural planning institute MOLDGHIPROZEM, and the survey institute INGEOTECH. (World Bank 1998 page 5) The mapping program is a five-year plan to cover about one-half the urban land and one-fifth of privatized rural land (World Bank 1998 page 9) (again, at this rate it might take 25 years to map all the privatized rural land). USAID created cadastral maps not tied to a national geodetic reference frame that instead were tied to the ground through monuments set on the outside boundary of the various agricultural fields. Each parcel had a unique parcel identification number, and all parcels were shown on the one of the cadastral maps on file at the mayor s office, the National Cadastre Agency and the office of the original surveyor. Private surveyors created these final cadastral maps (the Land Arrangement Project maps) for all privatized agricultural land in 27 months Inevitably the two cadastres conflicted. In January 1999 the National Cadastre Agency unexpectedly declared all of its new Territorial Cadastre Offices open and ready to register land. The Law on Real Estate Cadastre stated that when

13 this happened all rights to real estate transferred as part of a transaction (sale, exchange, inheritance) must be registered in the new Real Estate Registries. This caused the following problems Because of this unexpected development all owners would be forced to reregister their land ownership rights in the new registry before they could sell their property, resulting in extra effort and cost as well as delays in the development of the land market. Thus a rural landowner wanting to sell his land might be required to travel 30 kilometers to the nearest Territorial Cadastre Office and pay the registration fee to register the parcel. Since this rarely was completed in one day, the owner would be required to return on a second day to obtain the official document proving that the parcel was registered. For the many landowners who had little money and no access to transportation, this process was unmanageable. This also would have created confusion in the land tenure system because both the 3000 local Land Arrangement Services offices and the regional Territorial Cadastre Offices would each have continued to maintain land parcel records. USAID proposed to perform an initial mass registration of all parcels by a quick and systematic transfer from the local registry to the regional registry at no cost to the landowner. Once data was moved from the local registry, the local registry would close and then all transactions would be registered exclusively in the regional Real Estate Registry. However, the Cadastre Offices were planning on sporadic registration (World Bank 1998 page 10) rather than mass registration, preferring to slowly register land over a five or ten year period. To do otherwise would have meant that they would lose the revenue generated by sporadic registration. Finally, the Cadastre Agency had not budgeted nor staffed for immediate mass registration The National Cadastre Agency also was proposing to re-map all agricultural parcels. The individual farmers owned land through the Title Certificate of Land issued by the mayor for land shown on the Land Arrangement Project maps. Any re-mapping of these parcels might have seriously affected the rights of these new landowners as their parcel boundaries might have been altered without their consent The final outcome was a compromise called the Memorandum of Understanding signed by the Government, the World Bank and USAID in October The main points were: The mass registration of up to three million agricultural land parcels privatized as part of the National Land Program. USAID paid for the work involved in the mass registration as well as paying the National Cadastre Agency a negotiated fee for each registration The preparation of cadastre maps (paid for by USAID) based on the Land Arrangement Project maps and land titles as prepared by the private surveyors and approved by the mayors, with no alterations or re-surveying. Thus the Land Arrangement Project maps effectively became the definitive cadastral maps.

14 The result was that most agricultural landowners had their land registered with the National Cadastre Agency free of charge. For others there is still a two-step process as described above. 6. The Future of Moldova 6.1. One hope of privatizing land was to bring Moldova into a market-economy. This has not happened. According to an article in the Moldovan newspaper Azi, the land market is not working yet. Even though the land market is worth over $1.5 billion, it has not been a driving force in the economy. Only 2000 hectares of land out of a total of 1.5 million hectares have been the subject of private sales and purchases. (Moldova Azi 23 March 2000) 6.2. A strong stable government is also necessary for a market economy. A strong government is needed to protect landownership rights. A stable government is necessary to ensure that the laws regulating land ownership do not change drastically with new government administrations Moldova is not strong. There are 16,597 hectares of land that are located in the Transnistrian territory on the east side of the Dnister River but which are governed by Moldova. Moldovan peasants owning land in this area must pay all existing Transnistrian taxes as well as pay customs duties to transport their goods over to the west side of the Dnister River. Now the Transnistrian government is planning on levying an annual land tax of $5 per hectare, otherwise the peasants will not be allowed to cultivate their fields. The peasant s are demanding that the Moldovan government protect their land rights. (Moldova Azi 24 March 2000) It does not appear that Moldova is able to protect the land rights of these Moldovan citizens Moldova is not stable. In 2001 the Communist party gained control of the parliament. It appears that Moldova may be headed back towards the type of government that existed under the Soviet Union. For instance, on March 28, 2002 the Land Consolidation Bill, supported by the Communist deputies, passed through parliament. Opponents voting against the bill call it a camouflaged attempt to pass agricultural collectivization. They stated that the document contradicts the Constitution allowing private ownership. (Moldova Azi 29 March 2002) 6.3. The Moldovan land tenure system appears to be in danger of failing to protect land rights of property owners, and of failing to help the country become a market economy.

15 REFERENCES Booz-Allen & Hamilton (2000a). End of Contract Report USAID/Booz-Allen & Hamilton Project to Develop Land and Real Estate Markets in Moldova: Booz-Allen & Hamilton (2000b). Appendix 1-End of Contract Report USAID.. Booz-Allen & Hamilton (2000c). Appendix 2-End of Contract Report USAID. British Helsinki Human Rights Group (2001). Transnistria 2000, British Helsinki Human Rights Group Department of Privatization of the Republic of Moldova East-West Management Institute (2000). USAID. Final Report. Moldova. National Land Privatization Program. Contract OUT-EPE-I New York, East-West Management Institute. Fedor, H. (1995). Moldova History, Federal Research Division, Library of Congress. Moldova Azi (23 March 2000). Moldova's $1.5 Billion Worth Land Market Not Working Yet. Moldova Azi. Moldova Azi (24 March 2000). Moldovan Legislature Concerned with Tiraspol's Land Claims. Moldova Azi. Moldova Azi (29 March 2002). Land Consolidation Bill Passes through Parliament. Moldova Azi. Moldova National Agency of Cadastre Land Resources and Geodesy Establishment of a National Geodetic Frame Swedesurvey The Link Between Moldova and Swedesurvey USAID (2000). USAID Projects in Moldova-Agricultural Land Privatization, USAID USAID (2001). Moldova-Results Review and Resource Request-FY Arlington, Virginia, USAID Development Experience Clearinghouse.

16 World Bank (1997). Moldova-First Cadastre Project-Project Information Document, World Bank /Rendered/INDEX/multi_page.txt. World Bank (1998). Moldova-First Cadastre Project-Staff Appraisal Report, World Bank /Rendered/INDEX/multi_page.txt. World Bank (1998). Press Release: World Bank to Support Land Reform in Moldova, World Bank World Bank (1998). Loan & Credit Summary-Moldova First Cadastre Project Credit Amount, World Bank World Bank (2002). Moldova-First Cadastre Project-Project Details, World Bank.