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ROMANIAN LEGISLATIVE SUMMARY FOR 2010 |
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Introduction
During 2010 this publication’s articles have covered the major
legislative changes which have a significant impact on potential
investors in Romania. For details on the articles published during 2010,
please visit our Digest Archive at
/digest_archive.htm. This article summarizes other
important legislation of which investors ought to be aware. Because 2010
was characterized by severe economic difficulties, many laws were
adopted in the attempt to reduce the impact of the crisis on the
Romanian people. This article presents just a few of the laws adopted in
2010 that have an impact on business activities in Romania. |
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Law 202/2010 regarding certain measures for
the acceleration of judicial proceedings |
Faced with a dysfunctional judicial system with huge delays in bringing
cases to trial and the continuous and increasing frustrations of all
claimants seeking justice in Romania, the Parliament adopted Law
202/2010. This law, in force since November 26, 2010, substantially
amends both the civil procedure code, as well as the criminal procedure
code, in order to diminish the administrative burden of the courts and
their currently overloaded docket of files. The measures seek to reduce
the costs which the courts are facing in relation to the summons system
and the communication of all other procedural documents required at
trial. Moreover, the law imposes on the courts of law to set hearings at
shorter intervals, so that solutions can be rendered much faster than
they are now. Another significant aspect of the law is the emphasis put
on the role of mediation in disputes. Mediation is still not perceived
as a common tool to solve disputed claims, but Law 202/2010 attempts to
introduce it in an effort to avoid litigation and reduce costs, as well
as save time by using the mediation as an amicable alternative method of
resolving disputes.
It remains to be seen how the new law will be implemented in the reality
on Romania’s judicial system. Reducing the administrative burden of the
courts of law, or for the courts to actually be able to issue decisions
faster than they are now can not be achieved only by creating the
adequate legal framework; further management measures must be undertaken
in relation to the personnel in the courts and to the costs incurred
during trial. In fact, the achievement of the main purposes set as such
within Law 202/2010 will have to be sustained by more specific measures
which shall be established by the new civil, as well as criminal
procedure codes. Their entry into force is envisaged for July next year. |
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Government Emergency Ordinance no. 64/2010
amending and supplementing Law 7/1996 on cadastre and land registration |
 Government
Emergency Ordinance no. 64/2010 was adopted following the conclusion of
the loan agreement between Romania and the International Bank for
Reconstruction and Development, dated December 28, 2007. Based on this
Government Emergency Ordinance, the Romanian Government undertook to
have the general cadastre of the immovable properties in the country
performed. Consequently, real estate properties that were not subject to
a cadastral study as of yet will, eventually, be able to get registered
with their corresponding land books. There are various practical
implications of this GEO. For instance, in order to fluidize the
performance of the cadastre of all real estate properties in the
country, as soon as possible, in case the owner or possessor of the real
estate property in question is unknown, the cadastre shall be
accomplished ex oficio, and the respective owner or possessor of
the immovable shall be further registered as such in the corresponding
land book of the immovable, once he is determined. Furthermore, another
significant provision put in place by GEO 64/2010 is the fact that not
only the owner of the immovable shall be registered with the land book
of that immovable, but also the person holding only a possession right
over the respective immovable (de facto possession). This is
particularly important for potential investors interested in acquiring
certain real estate properties, since they would be able to find out
this particular information on the property in question from the
corresponding office for cadastre and land registration. Another
significant aspect of this GEO is the fact that it allows for the
registration of the buildings erected until 2001 without a building
permit with their corresponding land books. Also, a very significant
novelty put in place by this GEO, having a huge impact on developers of
real estate projects or for investors interested in becoming part of
such projects, is the fact that this GEO allows for the registration of
the buildings in the construction phase with their land books, and for
parts of the buildings to be registered as such, on each particular
execution stage. Practically, this allows the owner of the building to
either sell or mortgage the building during any construction stage.
All the amendments put in place by this GEO should actually increase the
confidence of the potential interested entities in entering into real
estate transactions. The practical impact of this GEO is significant
since all real estate sale-purchase agreements can only be concluded if
the registration thereof in the cadastre of the respective property has
been performed. In practice, investors interested in purchasing real
estate first need to solve the cadastre issue and only afterwards can
they initiate the development of their envisaged project. Potential
investors’ time and costs will be saved after the finalization of the
general cadastre of all real estate in Romania. |
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Government Emergency Ordinance no. 30/2010
amending Government Emergency Ordinance no. 60/2009 regarding the “First
Home” Program, approved by Law 187/2010 |
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The “First House” program was put in place by the Romanian Parliament in
order to provide for opportunities for the public to have access to
credits and loans from financial institutions, which otherwise could not
be accessible in these difficult financial times. This Government
Emergency Ordinance actually initiated a major amendment, namely the
extension of the category of potential beneficiaries of the program from
the persons who have not held an ownership title over any dwelling until
the date that they sought the credit, extending it to persons who have
not owned any dwelling since 2000. |
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Government Emergency Ordinance no. 76/2010
amending Government Emergency Ordinance no. 34/2006 on the awarding of
public procurement contracts, contracts for the concession of public
works and contracts for the concession of services |
 Since
public procurement remains one of the most significant tools for private
businesses to obtain funding in difficult times, amendments were enacted
by through this Government Emergency Ordinance for the purpose of
turning the public procurement procedure into a more transparent and
smooth one. There are many amendments put in place by this piece of
legislation. Some of them refer to the amendment of the estimated value
of the public procurement agreement to which the request for offers
procedure, the simplest and most expedited procedure, may be applied by
the contracting authority. Another key amendment brought by this GEO
refers to the enforceability of the decisions adopted by the National
Council for Solving Contestations. Consequently, after the entry into
force of this new GEO, the contracting authority will be able to
conclude the public procurement agreement as soon as the Council has
issued its decision rejecting a possible contestation, regardless of
whether the claimant decides to appeal the respective decision of the
Council before the Court of Appeal or not. Moreover, in case the Council
rejects the contestation, the contracting authority will be able to
retain part of the participation warranty submitted by the contester, in
a percentage corresponding to the estimated value of the agreement. Both
the enforceability character of the decisions adopted by the National
Council for Solving Contestations, as well as the possibility of the
contracting authority to actually sanction a challenge without grounds
are both meant to reduce the huge number of contestations and to make
potential contesters think twice before using the challenging procedure. |
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Government Ordinance no. 29/2010 amending
Law 220/2008 on creating the system for the promotion of energy
production from renewable sources |
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Law 220/2008 is an essential piece of legislation in the field of energy
production from renewable energy sources. The secondary legislation to
be adopted based on this law has been awaited for some time. This
Government Ordinance defines certain concepts significant in this area,
such as the “gross final energy consumer” or the “renewable energy
related obligation”. Furthermore, the Government Ordinance introduced
two distinct new chapters to Law 220/2008, i.e., one referring to the
administrative procedures with regard to the issuance of licensing
documents, and one referring to the certification systems for plumbers. |
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Law 169/2010 amending and supplementing Law
85/2006 on insolvency procedures |
The amendments put in place by Law 169/2010 were deemed to have two main
objectives: to ensure the unitary implementation of insolvency-related
legislation, and ensure the celerity of the insolvency procedure.
In order to diminish the number of companies that are subject to
insolvency procedures, as well as to avoid the cases where insolvency
claims are submitted against large companies for small amounts, the
following amendments were adopted by Law 169/2010: the term calculated
from the due date up to the date when the debtor’s insolvency is
presumed to be overt was increased from 30 to 90 days; also, the
threshold of the claim which may represent the ground for submitting the
request to commence the insolvency procedure against a debtor has been
increased from RON 30,000 to RON 45,000 and, in case of employees, the
threshold must equal 6 medium gross wages per economy per employee, such
medium gross wage per economy being established in the annual budget of
social insurance.
Hopefully, following these new amendments to the insolvency law,
potential claimants will cease to use this procedure as a tool to
frighten their debtors and the public will finally come to realize that
the initiation of insolvency procedures for the wrong reasons may
eventually turn against the ones who initiated it. |
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Government Ordinance no. 75/2010 amending
Law 21/1996, i.e. the Competition Law |
The amendments introduced by Government Ordinance no. 75/2010 actually
aim at the alignment of Romanian national legislation in the competition
field with the legislation adopted at the European Union level. In line
with the new legal provisions, the Competition Council adopted the
secondary legislation necessary for the implementation of the amendments
put in place by Government Ordinance no. 75/2010.
The new amendments bring some clarification to concepts used in the
competition field such as “undertaking” or “relevant market”, defining
such concepts in line with European Union standards. Another key
amendment refers to the removal of the individual exemption procedure,
and the introduction of the self-assessment system, as already put in
place by European legislation. Further amendments were adopted in
relation to the procedures concerning economic concentrations. |
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Government Emergency Ordinance no. 50/2010
on consumer credit contracts |
This Government Emergency Ordinance has transposed into the national
legislation the provisions of Directive 2008/48/CE of the European
Parliament and Council. Since the Romanian lending market has been
hugely affected by the economic crisis, this legislation is meant to
turn financial institutions into more trustworthy partners for
consumers. The new Government Emergency Ordinance seeks to establish
principles of transparency and free competition.
Some of the most significant provisions of the new Government Emergency
Ordinance, highly appreciated by consumers, are the ones referring to
their possibility of early repayment of their loans, to the
reimbursement of credits with no costs attached, and to the possibility
to withdraw from credit agreements with no cause, or to change the
creditor depending on the credit conditions offered.
The Government Emergency Ordinance established a 90-day term following
its entry into force, in which the banks and non-financial institutions
must undertake the requisite measures in order to ensure their
compliance in their credit contracts with the provisions of this GEO.
Furthermore, the GEO obliges lenders to inform potential borrowers both
in the pre-contractual stage of the transaction, as well as at the
moment of actually concluding the credit agreement, of their rights
under law. Consumers are finally recognized as contractual partners of
the banks or of the non-financial institutions and, consequently, they
are to be treated as such. |
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Government Emergency Ordinance no. 43/2010
amending a series of acts, aiming at the administrative simplification
of certain authorizations/licenses/procedures, following measures
undertaken by the Romanian Government as part of the Simplification Plan
corresponding to the Memorandum of Understanding concluded between the
European Union and Romania, signed in Bucharest and Brussels on June 23,
2009 |
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By way of this Government Emergency Ordinance, procedures were
simplified by amending a series of acts, such as: Law 31/1990, i.e. the
Company Law; Law 13/2007, i.e. the Electricity Law; Law 422/2001 for the
protection of historical monuments; the Government Ordinance no. 25/2006
for strengthening the administrative capacity of the Romanian Copyright
Office. We are not detailing herein the provisions of this piece of law,
especially since it actually refers to various other distinct laws.
However, the amendments put in place by this GEO attempt to simplify
certain procedures for obtaining various authorizations and other such
documents put in place by the respective laws. |
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The Fiscal Code |
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Year 2010 brought multiple amendments to the Fiscal Code. The increase
in the VAT from 19% to 24% has undoubtedly brought a huge burden on
companies. Since the Fiscal Code has been substantially amended in the
course of 2010, it is compulsory for any interested investor to check
closely the fiscal provisions applicable to any transaction, before
entering such transaction. Among the amendments to the Fiscal Code put
in place during 2010, there was a special one hugely affecting the micro
enterprises. According to an amendment adopted in 2010, the provision
regarding the state tax of 3% applicable to the turnover of the micro
enterprises was taken put, and replaced with the regular percentage of
16% to the profit. However, since this provision raised huge debates in
the economical environment, another amendment was put in place in 2010,
in force since the January the 1st, 2011, according to which the former
provision of the Fiscal Code was reintroduced, and the state taxe
percentage applicable now to micro enterprises is of 3% to the turn over
of the company. |
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The First Pilot Judgment against Romania |
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Another difficult moment during the current year has been represented by
the issuance by the European Court of Human Rights of the first pilot
judgment against Romania, i.e. Maria Atanasiu & Others v. Romania.
We have exhaustively treated this subject in our November 2010 Digest
article and consequently, we are not going to detail this matter herein.
However, attention should be given to this pilot judgment, since the
Romanian state is now obliged to find the adequate solutions in order to
put in place a coherent and effective restitution system in the 18-month
term granted by the Court, or, otherwise, the negative consequences can
be highly damaging for Romania. |
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Conclusion |
 Needless
to say, the increase in the VAT has burdened a lot the businesses in
Romania and it has prevented many potential investors from entering the
Romanian market. The adoption of laws relevant in various business
sectors may have resulted in the improvement of certain procedures
already put in place. However, no major improvements could be seen in
the absence of specific laws designated to help the activity of the
small and medium enterprises which are the central part of Romania’s
economy, and consequently the Romanian legislative power should further
adopt the proper solutions in order to support the SMEs redress from the
current difficulties which they are currently facing.
Close attention should be paid in the course of 2011 on the proper
implementation of all these laws. The substantial amendments to the
Fiscal Code alone definitely raise a lot of implementation issues, and
hopefully these amendments will help clarify and smoothen fiscal
aspects, instead of bringing more confusion. Furthermore, the envisaged
entry into force of the new Civil and Civil Procedure Codes, as well as
of the Criminal and Criminal Procedure Codes, the debates currently held
over the proposed amendment of the Labor Code, all this represents
significant steps to be taken within the Romanian legislative framework
in the course of 2011. But the most important aspect of all remains the
Romanian institutions’ real capacity to properly implement all the laws
already adopted. |
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Editors Note: It is our policy not to mention our clients by name in
The Romanian Digest™ or discuss their business unless it is a matter of
public record and our clients approve. The information herein is correct
to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2011 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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RUBIN MEYER DORU & TRANDAFIR
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