First a little background:

The country now known as Moldova was formerly part of (Greater) Romania, known as the region of Bessarabia. It was annexed during World War II by the Soviet Union and later became the Moldovan SSR. After the disintegration of the Soviet Union, Moldova became an independent nation and shortly afterwards there was a brief but vicious war between Moldovan forces and Transdniestr.

Transdniestr (sometimes spelled Trans-Dniester in English) is a self-proclaimed independent country, although it is not recognized as such by any other nation. It has its own government, police, customs, border patrol and military, not to mention its own official "state" run media. Due to a number of factors, it is also home to most of the industrial capabilities of Moldova, and therefore despite its small size and awkward geographical layout, it is financially better off than Moldova proper.

The population of Transdniestr is about half Romanian, with the other half mostly ethnic Russians and Ukrainians. The political power structure however is completely run by Russians, including the "President" of Transdniestr, Igor Smirnov. Transdniestr fended off Moldovan attacks to become independent/autonomous largely thanks to Russian military help and the country has survived entirely thanks to Russian patronage. Indeed, most Russian citizens of Transdniestr carry Russian passports and the Russian ruble is the currency used in Transdniestr.

Unfortunately for Transdniestr's leadership, the autonomy does not have any borders with Russia itself. Instead it is wedged between Moldova proper and Ukraine. In former, perhaps happier times for Transdniestr, Ukraine was considered an ally and critical rail links with the Ukrainian port city of Sevastopol were a lifeline for Transdniestr's economy.

With the election of Viktor Yushchenko in early 2005, Ukraine has steadily allied itself with the west, including the United States. And the west believes that Russia is illegally maintaining military bases in three autonomies in Europe, including Transdniestr, which is the primary stumbling block towards the signing and ratification of the Conventional Forces in Europe treaty. To put it bluntly, the west wants Transdniestr to do what Adjara did in 2004 (in Georgia), which is acquiesce to Moldovan central government, perhaps in the form of some lind of limited autonomy in a federation.

This issue shifted last week when Moldova and Ukraine implemented new customs regulations, requiring all Transdniestr goods (that are being exported) to carry a Moldovan tax stamp. In other words, Transdniestr must pay taxes to Moldova to export its goods, which of course angered the Transdniestrians. At first Igor Smirnov believed that Ukrainian president Yushchenko must be "poorly informed" on the new regulations, implying Yushchenko would never implement them if "only he knew" about them.

Well Yushchenko knows about them darn well and as a result of the new rules, all exports from Transdniestr to Ukraine have stopped. Just to reinforce his awareness on the issue, Ukraine beefed up its troop presence on the border with Transdniestr just to keep Smirnov from getting any ideas.

Russia responded angrily, saying that the new customs rules could lead to a humanitarian disaster, saying that the enforcement of customs rules is actually an imposition of economic sanctions. Transdniestr's econonomic "minister", Yelena Chernenko, said the autonomy had already lost 20 million dollars after one week of the new rules. Meanwhile Ukraine says that Transdniestr has only itself to blame after Transdniestr banned all automobile imports from Ukraine.

Perhaps most ominously, a Russian MP named Sergey Shishkarev stated that Russia could formally recognize Transdniestr as an independent country. I sincerely doubt that will happen at this juncture but it's adding fuel to the fire.

As far as Russia is concerned, Transdniestr is an independent country even if it doesn't say so on paper. And it isn't going to let Transdniestr get put into an economic stranglehold. There are five self-declared autonomies slash de facto nations in Europe and the CIS - Transdniestr, South Ossetia (Georgia), Abkhazia (Georgia), Nagorno-Karabakh (Azerbaijan) and Kosovo (Serbia). Russia backs the independence of the first four while opposing the last one.

Yet Russia and others in the region cannot help but notice how close Kosovo is to becoming an independent country, backed by all the western nations. This seems patently unfair compared to the other four, where there are equally as many valid reasons to justify international recognition as independent states. Therefore the loss of Transdniestr touches on bigger issues, such as Russia's influence in the world versus that of NATO/the west.

Russia will try twisting Ukraine's arm on this issue to get some kind of compromise worked out. But if that doesn't work out, I don't know what the next step will be. Transdniestr cannot survive if they cannot export goods via Ukraine or Moldova and it seems extremely unlikely that they will acquiesce to Moldovan customs oversight as that would be political suicide for the Smirnov clan.

We'll have to keep a sharp eye on this situation, that's for sure.

Peace