Glass Container Prim Forced to Seek Justice in International Courts

Glass Container Prim Forced to Seek Justice in International Courts

• 31.03.2014

 Chisinau, March 31, 2014 – Glass Container Prim (GCPrim), a leading glass producer and exporter from Moldova, announces with regret that it would have to defend its cause and seek justice in international courts after being unable to find a solution to its conflict with the Customs authority in Moldova. 

GCPrim is a large investment project, of over $45 million, realized since 2007 by the U.S. Agency for International Development (USAID) -funded Western NIS Enterprise Fund and Moldova Agroindbank, with the attraction of international creditors International Finance Corporation (IFC) and Black Sea Trade and Development Bank (BSTDB). GCPrim produces and sells annually over 120 million bottles worth nearly MDL 300 million ($23.4 million), two thirds of which are exported mostly to European Union markets. 
GCPrim tried to defend its right to the VAT exemption granted by Moldovan law on its principal imported equipment – a glass melting furnace - production equipment contributed to the capital of the company. Four years after the import of the furnace, the Customs authorities treated it differently, as “bricks and construction materials” – despite previously granted authorization, confirmation of import declarations and expertize documents – and demanded payment of an additional value added tax (VAT) of 21 million MDL (~$1.6 million) and 12 million MDL (~$0.9 million) in penalties. 
Unfortunately, Moldovan courts did not consider the company’s arguments and the reports of industry experts, ignored the mere fact of the continuous functioning of this furnace, did not invite representatives of the Moldovan authorities who could have shed light on the case, and made decisions contradicting its earlier precedential rulings. 
The Government of Moldova has made numerous statements regarding its significant efforts to attract and protect foreign investments, and regarding its support of local manufacturers and exporters. Regretfully, our numerous efforts to bring this conflict to the attention of the highest state authorities and to find clarification and a fair solution to this dispute within Moldova failed. 
Payment of this additional, absolutely unfair and incorrect payment of 33 million MDL (~$2.5 million) would significantly affect the company’s operations, its ability to honor existing contractual obligations, imposing a great risk to the company’s normal operations. In this extreme case, significant losses would be suffered not only by the local and foreign investors of the company, but first of all by its employees, as well as by the multiple suppliers and clients of the company who represent important industries of the domestic economy. 
The company insists that it acted correctly, legally and in good faith at all stages of this case and sees itself forced to use all existing means to seek justice, including application to international courts, like the European Court for Human Rights (ECHR) and International Center for Settlement of Investment Disputes (ICSID).

Vetropack Chisinau

Vetropack Chisinau S.A. joined the Vetropack Group in December 2020. We produce, sell, and distribute glass packaging in the Republic of Moldova, with sales and distribution in selected export markets. Our glassworks is located in Chişinău. With 516 employees, two furnaces, and six production lines, the glassworks produces over 130,000 tonnes of glass each year. Its product range includes everything from wine and beer bottles in green, brown, and white to jars for food and more. Here at Vetropack, we enable people to enjoy food and beverages safely by providing solutions that combine elegance with responsibility. We develop and maintain close and long-lasting relationships with our customers. Guided by our understanding of environmental responsibility and cost-effective operation, we endeavor to minimize our carbon footprint throughout the supply chain, and we are committed to recycling as the key to optimizing product life cycles.