Speech by Andrew Tesoriere, Head of Mission, at the OSCE Economic and Environmental Committee on 24 February 2016 in Vienna

        Transport as a confidence building measure: The practical experience of the EU Border Assistance Mission to Moldova and Ukraine

        1. Introduction
        As some in the room will know, I am no stranger to the field of designing, mediating and catalysing confidence-building measures (CBMs). I have been a practitioner and conflict-resolution mediator over many years, working with multilateral bodies such as the UN, the OSCE, NATO and now the EU as well as national government service, in diverse geographical settings, ranging from Afghanistan, Central and South Asia to the Middle East, Africa, Balkans and Northern Ireland. I have worked on wide-ranging thematic aspects of CBMs. Transport, in the context of what has come to be termed “economic connectivity”, is one such CBM.

        Transport as a CBM is what we are here to consider today. Self-evidently, transport connects people and nations, travellers, business, artists, specialists. We take it increasingly for granted. Conversely, if transport connectivity is disrupted or ceased, there is a loss which heightens the sense of divide, separation, but also potentially the senses of fear, suspicion and discrimination.

        This in essence is why transport is a such tremendous asset as a CBM in generating or regenerating trust and dialogue not only between protagonists in dispute but also mobilising business and the ordinary travelling public to lobby and lever their representative Authorities to build or rebuild broken or non-existent transport links and to make travel easier, more cost and time efficient.

        I have been invited to sketch how addressing problems and gaps in transport issues can improve the settlement prospects, the peace dividend, specifically between the Republic of Moldova and the Transnistrian region. My presentation today will therefore cover the following ground:

        • Why transport underpins peace and stability;
        • What is impeding transport optimisation between the two banks of the Dniester;
        • How EUBAM (and the International Community) are seeking solutions;
        • How much has been achieved thus far; and
        • How far is yet to go.

        2. Background context

        A well-developed and managed transport system is essential for the security and economic development of a State. Disruption of the road and railway traffic in the Republic of Moldova because of the Transnistrian conflict has caused significant losses not only to the economies of the left and right bank of the Dniester River, but also the entire region. This has notably affected neighbouring Odesa oblast, by interrupting long established road and railroad networks.

        In Ukraine, a major centre for the transportation of goods are the ports of Odesa, Chernomorsk[1] and Yuzniy, which play a significant role in Ukraine’s external trade[2]. Goods in transit to and from the Republic of Moldova are also transported via the ports. These ports have been the subject of considerable scrutiny owing to their slow clearance times, congestion and corruption. The World Bank ‘Logistics Performance Index’ indicates that there is substantial potential for an increase in the volume of processed cargo and improvement in procedures.

        Against this background, the full resumption of the rail freight traffic via Transnistria has been an important step in regulating the long lasting conflict in the Republic of Moldova and has had both economic and political implications. In October 2010, rail passenger traffic was resumed, followed in April 2012 by the rail cargo traffic. The first freight train came via the northern Rybnitsa (MD) – Slobidka (UA) railway section and one month later via the southern Bender 2 (MD) – Kuchurhan (UA) railway section.

        However, international road transport of goods between the Republic of Moldova and Ukraine through Transnistria still remains blocked. Neither vehicles in international transit nor bilateral trade between Ukraine and Moldova can cross Transnistria. Thus, two important transport routes, the southern M14/M16 route leading to Odesa and the northern M21/M13 route, are blocked for international and interstate transit. Cargo vehicles have to make long and costly detours to circumvent Transnistria. The higher transport costs act as an impediment for regional trade and economic development, whilst the circumvention of the territory means that associated services, such as fuel stations, hotel and retail have not flourished.

        The existence of two separate systems of motor vehicle registration has been an additional obstacle, with Chisinau and Tiraspol issuing their own motor vehicle registration certificates and license number plates. The Transnistrian registration plate has been a recurrent subject of dispute. Chisinau raises the non-compliance of the Transnistrian registration plates with the national norms adjusted to the international standards, and the fact that these vehicles cannot be checked by Interpol in cases of thefts. At present, Transnistrian motor vehicle registration plates are only tolerated in Abkhazia, Belarus, Russia, South Ossetia and Ukraine.

        [1] Previously named “Illichivs’k”

        [2] Odesa and Chernomosk ports handle approximately 60% of Ukraine’s sea cargo and the majority of sea born container imports.

        3. Approaches of the international community, including EUBAM, towards problem solving

        Turning to EUBAM’s problem solving approach, in tandem with the wider International Community, I will now show you a slide that portray our various visiting cards.

        First, technical working groups. In April 2008, Chisinau and Tiraspol agreed to create a number of sectoral joint working groups to discuss confidence-building measures in the areas that affect the daily life of people on both banks of the Dniester River. As of November 2011, eleven working groups have been established, including those on railway and transport and infrastructure. As you know, the OSCE Mission to Moldova works with Chisinau and Tiraspol to build confidence between the people on both sides of the Dniester River, facilitates informal meetings between the Chief Negotiators of the two sides and organises the activities of the expert working groups.

        Second, CBMs and the 5+2 settlement negotiations. Every year, the OSCE Mission to Moldova with the support from the German Government organizes a Conference on Confidence Building Measures in the Transnistrian Settlement Process.

        EUBAM contributes through its technical and advisory work towards the peaceful settlement of the Transnistrian conflict through the official international negotiation mechanism, the so-called 5+2 process, under the overall aegis of the OSCE and direct supervision of the EU Delegation to Moldova (the “5+2” process).EUBAM focuses its advice on the free movement of people and goods across the administrative boundary line and the Transnistrian segment of the border with Ukraine  – which are key principles and elements of the 5+2 negotiations.

        EUBAM experts monitor that control measures are carried out in compliance with human rights and European border control standards and help resolve cross-border problems. The Mission aims at strengthening Chisinau-Tiraspol cooperation in the field of transport, customs and trade, and law enforcement. It also makes longer-term technical proposals, such as the reopening of international transport corridors. Observing the implementation of the technical proposals and evaluating their development is a task that EUBAM undertakes, with the aim to build sustainable economies and increase trust and confidence between the right and left banks of Dniester River.

        Third, facilitating regional trade. Pressure for the development of trade facilitation measures is driven by the needs of business to reduce their costs on the one hand, and on the other hand by the need of border control services to minimise their costs within state budgets. In 2015, EUBAM completed a study on Odesa and Illichivs’k Ports. The study highlighted 29 recommendations for customs and the border agencies to implement, which would have a significant impact on the efficient clearance of goods and benefit transport and trade. The importance of these recommendations is heightened by the EU – Ukraine AA/DCFTA. These agreements require the implementation of improvements to make the “doing of business” easier. Such improvements would result in further increases in goods’ transportation through Odesa province’s southern ports and engender greater confidence between the border authorities and the business community.

        4. Results


        In this slide, you will see a sample of the technical initiatives and the results, which EUBAM has accomplished to facilitate the resumption of vehicle and railway traffic. In developing these initiatives, EUBAM has drawn on wider confidence-building guidance and best practice in seeking tangible results.

        Key steps or good technique have included, first, establishing EUBAM’s credibility with both parties, Chisinau and Tiraspol, as a technically competent, innovative and impartial body. Our ability to help the two sides formulate technical proposals and provide strong supporting argumentation, properly referenced to international norms, obligations as well as business efficiency and civil enhancement models, has helped us deliver a strong level of bonding in coping with the rough rides involved in negotiation.

        Second, developing a well-informed understanding of each side’s perspective and empathizing with it, has also been important for sustaining interest when talks appear to founder or stall.

        Third, perseverance, determination matters. Walking away from reaching solutions when the chips are down should not be seen as an option. Taking judicious time-bound, time out for reflection can ensure negotiation remains on-track. A recent example of this was, during the OSCE Bavaria-hosted retreat on Transnistria last October, when both Chisinau and Tiraspol drew a blank on a cluster of individual transport problems, the conference facilitators simply invited the two sides to go away and draft their vision for a comprehensive overall solution to how the two road-transport systems could interact positively. This thereby invited the two parties to broaden their vision, consider more “the art of the possible”, and raise the level of potential outcomes. Ultimately, personal chemistry and the heart matter as much as the head. After all, one man’s logic can be another man’s anathema.

         4.1 Railway transport

        Under the framework of confidence building initiatives, EUBAM succeeded in the renewal of customs cooperation between Chisinau and Tiraspol, and in resuming the railway passenger and cargo traffic across Transnistria, by providing technical analysis, advice and proposals to both sides. EUBAM developed technical proposals for using a mechanism of joint customs clearance and control in Bender-2 and Rybnitsa, which helped solve one of the prerequisites for the resumption of railway freight traffic. As a result, in 2012, transport corridors and railway freight across Transnistria reopened after six years’ suspension.

        The resumption of the railway freight traffic has speeded up the time of delivery of goods, and has reduced transportation cost, thus making products of economic operators from both banks of Dniester River more competitive on the market. This should help boost the export and encourage investments in these economies. Political implications of the resumption of the rail traffic are linked to creation of the joint customs control by the left and right banks that could be further used as a foundation for deepening the cooperation and building a trust and confidence based on mutual interest.

        In a further demonstration of efforts to support the confidence building process on both sides of the Dniester River, the Mission also brought customs experts from Chisinau and Tiraspol together for training and a study visit to gain hands-on experience on mechanisms of international cooperation, customs modernisation and processes including EU best practice.

        4.2 Road transport

        In autumn 2014, when the movement of goods was affected by tightened controls initiated by the State Fiscal Service of Ukraine, first on the transit of excisable products and then on non-excisable goods destined for Transnistria, the Mission used its good offices to get these moving again and its assistance in this regard was acknowledged by Tiraspol. Goods were also subject to extensive checks and analysis. The transit of excisable goods to Transnistria was disrupted and declined to zero.

        EUBAM provided recommendations to the State Fiscal Service of Ukraine with a view to ensuring compliance with the relevant domestic legislation and international conventions on the free transit of goods. Later, a four-way interaction with Odesa, Chisinau, Tiraspol Customs and the Ministry Foreign Affairs of Ukraine enabled the Mission to defuse some of the difficulties at the border. However, the issue of the transit of excisable goods to Transnistria remained unsolved.

        In November 2015, the Republic of Moldova and Ukraine signed two new cross-border cooperation agreements that will make it faster and easier to move across their joint border, freeing up trade and saving businesses and travellers’ time and money. The first one aims at establishing joint control at Pervomaisk-Kuchurhan Border Crossing Point, a key transit hub on the Transnistrian segment of the Moldova-Ukraine border. The agreement will help re-establish international transport corridors across Transnistria. The second provides for the automated exchange of border crossing data across the Moldova-Ukraine border and will enhance security through increasing transparency about the movement of vehicles and goods over the border. EUBAM has long advocated these agreements and played an active role in encouraging and facilitating their conclusion.

        4.3. Transnistrian number plates

        As regards the Transnistrian number plate issue, at the end of August 2015, the Moldovan authorities restricted the movement of Transnistria-registered vehicles across the state border, citing the need to comply with the Vienna Convention on Road Traffic and Moldova’s national legislation. EUBAM sent a Technical Opinion Paper to Chisinau and Tiraspol, the OSCE, and the EU Delegation to Moldova outlining a temporary solution that could be used as the springboard for a permanent settlement. In October 2015, Chisinau lifted the ban and established a system along the lines of EUBAM’s proposal, allowing vehicles with Transnistrian number plates driven by owners or authorised persons residing in Transnistria to cross the Moldova-Ukraine border. However, this is a temporary measure.

        As a follow up, at the Working Group on Road Transportation held in December 2015, Tiraspol offered to develop a draft Protocol aimed at resolving the issue of full participation of Transnistrian transport means in international traffic, including cargo-passenger transportation and movement of private cars, taking into consideration the previously reached agreements. In January 2016, indeed, the draft Protocol was distributed among the relevant parties. The Protocol includes solutions presented in the EUBAM Technical Opinion Paper along with the 2013 draft Protocol Decision on “Some Primary Measures to Provide Freedom of Movement for Population of Transnistria and the Republic of Moldova”.

        EUBAM has also used its participation in the ‘5+2’ expert working groups on transport to advance technical solutions for resolving some of the issues which arose in relation to the freedom of movement, for example the introduction of a compulsory civil liability vehicle insurance scheme by Transnistria.

        5. Forward-look

        No doubt, the Mission has achieved some notable successes in encouraging several transport initiatives in the region thus contributing to free movement of goods and people. But major challenges remain.

        Recently, the successful resumption of railway cargo traffic through Transnistria has been jeopardised. From 1 January 2016, the Moldovan and Ukrainian Railways, agreed to comply fully with the Protocol on quote “the principles of full-fledged rail freight traffic” unquote, signed on 30 March 2012. Previously, some Transnistrian shipments circumvented the initially established conditions. The implementation of the new agreement between Moldovan and Ukrainian Railways affects the transportation costs of Transnistrian economic operators and diminishes the role of the de facto Transnistrian Railways as a carrier. A consensual solution is being sought, supported by EUBAM.

        The reopening of road transit through Transnistria would require an international agreement of Moldova, Ukraine and Transnistria. As a minimum, such an agreement would have to enable transit-traffic to pass through the three international border crossing points at Kuchurhan, Bolhan and Platonove (all located at the Transnistrian segment of the Moldova-Ukraine border). In addition, the road bridge in Gura Bicului would have to be opened for traffic. Damaged by shelling during the 1992 conflict, the Gura Bicului Bridge, which spans the Dniester River, was reconstructed in 2001 with money from the EU. The bridge—along the main highway between the Black Sea and the Baltic coast—should facilitate trade and contacts between both banks. However, it has never been reopened. Only pedestrians and bicyclists are allowed to cross[1].

        The fact that rail transit through Transnistria has been in place for some time suggests a similar agreement for road transit is feasible. In this regard, the draft Protocol on resolving the issue of full participation of Transnistrian transport means in international traffic, including cargo-passenger transportation and movement of private cars, offers such a possibility. Moreover, the implementation of the joint control at Pervomaisk-Kuchurhan Border Crossing Point would support the resumption of transit through Transnistria if handled with care. Paired with increased capacity of Odesa ports, this would boost the transport opportunities.

        Thus, while implementing joint control at Transnistrian segment of the border with Ukraine, it is very important to desynchronise the deployment of Moldovan customs officials and border police. During the first phase only customs officials should be deployed. Simultaneous deployment of customs and border police will only leave room for fearmongering about Moldova “impeding” the free movement of Transnistrian holders of Russian and Ukrainian passports across the border with Ukraine. The transit of goods through/to/from Transnistria could also be disrupted by Chisinau or by Tiraspol as a retaliatory measure to the “sandwiching” effect created by Moldova and Ukraine.

        The transport-related initiatives promoted by EUBAM, such as the settlement of the Transnistrian license plates and the establishment of joint customs control at the Transnistrian segment would contribute to facilitating trade and re-opening of international transport corridors across Moldova and Ukraine via Transnistria.

        Nevertheless, it is important for Chisinau to preserve its reintegration policy and strengthen cooperation with Tiraspol through engagement and compromise. Enhancing cooperation in transport issues could also trigger progress in other areas, such as trade and investment, or social issues.

        EUBAM will continue to engage in facilitating the implementation of these technical solutions, under the framework of Confidence Building Measures, as well as through other informal ways that might provide ‘hands-on’ solutions to practical problems. Additionally, with a view to fostering cooperation between Chisinau and Tiraspol, the Mission will promote joint initiatives that place emphasis on transparency and cooperation, rather than unilateral approaches.

        [1] ‘Issue Brief Bridge over the Dniestr: Confidence-Building Measures in Moldova’, March 2011, International Peace Institute