Better Business in Romania Tuca Zbarcea Asociatii

Introduction 6
Romania-A Country Profle 8

with contribution from the Romanian Ministry
of Foreign Affairs
Together For Your Business 16
with contribution from the Bucharest Chamber
of Commerce and Industry
Corporate 22
Environment 31
Real Estate 38
Creditor & Debtor Disputes 49
Employment 62
Public Procurement & Concessions 68
Competition 78
Intellectual Property 93
Product Liability 102
Pharmaceuticals 108
Financial Institutions & Security Interests 115
Capital Market 126
Energy 135
EU Community Law 156
Contents
2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.
Published by uca Zbrcea & Asociaii with contributions from the Romanian
Ministry of Foreign Affairs and the Bucharest Chamber of Commerce and Industry.
2012 SCA uca Zbrcea & Asociaii. All Rights Reserved. Printed in Romania.
The information contained herein is valid as of 1
st
of December 2011. No
part of this publication may be used or reproduced in any manner without
permission from the publisher, except in the context of reviews.
Better Business in Romania
7 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.
Introduction
In previous editions of this booklet, we were welcoming you with enthusiastic
presentations of the transformations Romanias economy went through after
the fall of Communism, with legitimate hopes fowing from Romanias accession
to the EU, with the optimism of the fgures measuring foreign investments on the
local market and, generally, with the trust that the entire business environment
in Romania has all chances of becoming better: as any other emerging market,
ours cannot (could not) other than grow
We all know that todays premises are not the same or, if not yet completely
different, are undergoing inevitable changes. Romanias economy remains emergent,
but the crisis which affects the world today forces a different perspective upon us.

After the unprecedented warming of the global economy, we suddenly fnd
ourselves faced with an icy cold wind, causing contraction. Globalthis contraction,
too, and expressing itself by a natural tendency of repositioning, reorganization,
exorcism.
The chaos on the fnancial markets, the fall of the speculations on the stock
exchange and on the real estate market, the chain of bankruptcies, the infections
spreading from toxic banking assets, the growing unemployment, the dramatic
reduction of trade are only a few of the symptoms the virus attacking the world
economy now spreads. Symptoms that we can only expect to inevitably hit our
economy too, cause trouble in what we saw as the El Dorado of foreign investment.
This dramatic change of perspective forces us to introspection, before anything else,
to an effort of realistic repositioning. To adapting to new realities as we go. To
redefning better business. It seems like only yesterday that, on the background of
the economy growing en fanfare, better meant more (and more and more),
but now, better means more effcient and more effective.
This booklet is offered as a support for you and your companys investments in an
economy affected, along the others, by global cooling; in an economy which, even
though confronted by bankruptcies and reorganizations, by the decline of the
real estate market and the soaring unemployment, still looks forward trustfully to
investments in infrastructure, environment protection, health and green energy.
This year again, Better Business in Romania features valuable contributions from
the Ministry of Foreign Affairs, as well as the Bucharest Chamber of Commerce
and Industry.
This booklet is made to offer you support in managing the inevitable complications
created by the economic crisis but to also give you solid arguments for a better
business development in Romania.
The sun may shine in wintertime, too. We would be happy if this booklet would help
you fnd and enjoy its warmth.
Florentin uca
Managing Partner

9 8 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved. 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.

Romania
A Country Profle
An Active European Member
Romania pursues a foreign policy of active involvement in the major political
and economic processes at regional, European and global level.
Romania is a member state of the NorthAtlantic Treaty Organization (NATO) since
2004 and of the European Union since 2007. It has diplomatic relations with 182
states and an extensive network of diplomatic missions all over the world (more than
100 bilateral and multilateral, plus a signifcant number of consulates general and
honorary consulates), which is an asset for its foreign objectives. In recent years,
Romania has focused on effciently substantiating its role within these two
fundamental structures, promoting the consolidation of the Transatlantic link,
building a prominent regional profle in the Balkans and at the Black Sea,
expanding and intensifying its bilateral relations, while also taking part actively
in the UN and other multilateral organizations or fora.
The participation in the EUs decisionmaking processes has proven Romanias
capacity to contribute to the common European objectives, but also to promote
its own national interests in the EU framework.
Romania was among the frst EU members to ratify the Lisbon Treaty and is actively
engaged in its implementation by ensuring a solid national contribution for the
European External Action Service. The Commissioner designated by Romania in the
new European Commission (20102014) covers an area of outstanding importance at
the EU level, with signifcant fnancial implicationsAgriculture and Rural
Development.
Romania brings a noted contribution to the EUs Common Foreign and Security
Policy, and is among top 10 contributors among the member states to EU missions,
mainly through its participation in the EU military and police operations in the
Western Balkans and Georgia. Romania has also been involved in the EU debates and
processes aimed at taking the best policy steps in response to the global fnancial
and economic crisis, and has benefted from strong EU support in addressing its own
domestic challenges. Romania has taken an active part in the common European
effort to combat fnancial instability and boost economic competitiveness, being
associated to enhanced cooperation mechanisms such as the Euro Plus Pact. It is
worth mentioning, in the context, that right after becoming a fullyfedged EU
member, Romanias profle as a reliable recipient of FDI increased drastically.
A common EU energy security policy, based on diversifcation and solidarity, is one
of the key EU related priorities for Romania. The signing of the Intergovernmental
Agreement on the Nabucco gas pipeline (July 2009) and the endorsement of the
project by the EU as a strategic component of this diversifcation approach is a
notable success for Romania and its partners. A series of important initiatives have
been launched in the EU with Romanias support, such as the Black Sea Synergy
and, most recently, the proposal of an EU Strategy for the Danube Region.
Romania frmly believes in regional cooperation, especially in Danube Strategy. The
EU Danube Strategy is structured into four pillars, which address the major issues.
These are connectivity (improving mobility and multimodality, inland waterways,
road, rail and air links, encouraging more sustainable energy, promoting culture
and tourism, people to people contacts), protecting the environment (restore
and maintain the quality of waters, managing environmental risks, preserving
biodiversity, landscapes and the quality of air and soils) building prosperity in the
Danube Region (supporting the competitiveness of enterprises, including cluster
development, developing the knowledge society through research, education
and information technologies), strengthening the Danube Region (stepping up
institutional capacity and cooperation, promoting security and tackle organized and
serious crime). There are 12 priority areas of action, each area coordinated by two
countries. Romania is coordinating, together with our partners in Austria, Hungary
and Bulgaria, three of the priority areas: inland navigation, risk management,
culture and tourism. Romanias efforts are now focused on the implementation
of the Strategy. At national level, the management mechanism of the Strategy is
functional. It was launched a special framework for the implementation of the EU
Danube Strategy: an annual Forum, a steering ministerial Committee (formed by
the ministers who have the responsibilities for the priority areas coordinated by
Romania), an Advisory Council (representatives of the local and central authorities,
academic and private environment), an interministerial Group, a coordination
Offce in the Ministry of Foreign Affairs and action groups for the main priority
areas. We have created a special action group for the fnancial aspects.

10
11 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved. 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.
Romanians priorities in Danube Strategy are related to investments for
improving and upgrading navigation, intermodal transport, and environment
protection, developing tourism and cultural projects, transfer of knowledge. A
strategic priority for Romania is to return to its traditional signifcant place in
the Danube navigation system. Another priority regards providing a modern
transport system through upgrading the port infrastructure and by creation
of an intermodal logistics centers. The adoption of the EU Strategy for
the Danube region and its implementation help deepen the transboundary,
transregional and transnational cooperation and coordination, hence, also
further integration and stabilization within the Central and South East Europe.
This particularly holds true for countries which are not yet EU Member States.
A Reliable NATO Ally
Romania has brought a substantial input to NATOs transformation process.
Romania has been engaged in the internal debates of the organization on issues
of highest relevance: providing the Alliance with fexible capabilities, renewing
NATOs Strategic Concept, promoting the cooperation with the EU, shaping the
Allied military missions, developing a NATO antimissile system, defning NATOs
role in energy security, combating new threats (such as the cyberdefence).
In particular, Romania has had a very solid contribution to the Allied operations
in Afghanistan, as Romanian forces not only have been constantly signifcant
in number, but they also have been involved in diffcult missions.
At the beginning of 2010, Romania decided to supplement its troops in Afghanistan
by 600 military to reach a maximum level of almost 1800 armed forces. The full
recognition of Romanias outstanding status within NATO, but also on the
international stage came with the Allied Summit organized in April 2008 in
Bucharest, which was the largest NATO Summit ever and the most important foreign
policy event hosted by Romania.
Developing Partnerships and Participation
on the International Stage
Romania has frmly supported the integration of Western Balkans states into the EU
and NATO and constantly encouraged the European and EuroAtlantic aspirations
of the countries from its Eastern neighbourhood. Romania is committed to an active
contribution to the EU policy and actions towards the Eastern proximity aimed
at anchoring the Eastern neighbours to the EU identity and values. The special
relationship with the Republic of Moldova, based on common historical and cultural
ties, is expressed both in supporting the countrys aspirations for European
integration and in extending substantial and concrete support bilaterally, in order
for Republic of Moldova to be able to reform and to modernize. Romania is
tirelessly promoting the strategic and economic importance of the Black Sea
region for the EU and NATO. Romania has also been assertive in supporting the
consolidation of EU and NATOs relations with Russia based on principles and
pragmatic approaches. Romania has developed very close bilateral relations with a
signifcant number of countries from all over the world. It has concluded Strategic
Partnerships with the United States, the United Kingdom, France, Italy, Hungary,
the Republic of Korea, and very recently, in 2009, with Poland and Azerbaijan,
concluded an economic partnership with Germany, and also established special
cooperation frameworks with countries such as China, Japan, Turkey or Israel.
Cooperation with the United States has been placed at the core of Romanias
partnership policy. The adoption of the RomaniaUS Joint Declaration on Strategic
Partnership for the 21
st
century, alongside the signing of the Agreement between
Romania and the United States of America on the deployment of the US ballistic
missile defense system in Romania on the 13
th
of September, on the occasion of the
visit by the President of Romania to the United States, marked the entry of our
bilateral relations into a new stage, broader and deeper. The Joint Declaration
reasserts the strategic character of the relations between Romania and the US and
sets the pillars of future RomaniaUS cooperation: political dialogue, security,
economy, peopletopeople contacts, science and technology, research, education,
culture. At the same time, cooperation in the military feld and on security issues has
long represented the cornerstone of the RomaniaUS Strategic Partnership, and in
this context the MD Agreement reconfrms the importance given by both countries
to the bilateral collaboration in this area and highly contributes to enhancing
the security not only of Romania and the US, but of all NATO members. Beside
the adoption of the RomaniaUS Joint Declaration and the signing of the MD
Agreement, our countrys military engagement alongside American forces
in theatres of operations such as Afghanistan and Iraq, as part of the global fght
against terrorism, as well as the 2005 Agreement regarding the activities of US forces
located on the Romanian territory, prove the special nature of the bilateral
partnership. Moreover, the approval given by Romanias Supreme Council of
National Defence in February 2010 to the US request regarding Romanian
participation to the future American Missile Defence System in Europe is of highest
relevance not only for RomaniaUS strategic cooperation, but also for Romanias
national security.

12
Especially after the EU accession, Romania has used part of its diplomatic energies to
revitalize and/or expand its relations with partners from other regions and
continents. Romania is acutely aware of the global signifcance of developments
in Central Asia and the Middle East, and its bilateral relations with countries from
these regions have known signifcant successes for the past years, with positive
economic implications.
Another foreign policy aspect with particular relevance from a business perspective
is that, after 1990, Romania has steadily intensifed its relations with international
fnancial organizations, including the International Monetary Fund, the World
Bank Group, the European Bank for Reconstruction and Development (EBRD), the
European Investment Bank (EIB), the Council of Europe Development Bank. Although
still diffcult, Romanias objective to strengthen relations with the Organization for
Economic Cooperation and Development (OECD), with a view to promoting its
candidacy for full membership, remains high on the agenda of the Government.
A Brief Look into Romanias Economic
Evolution after 1990
The economic evolution, after 1990, registered two distinct stages. During
the frst stage (19901999), Romania passed through an economic recession,
deeper in 19901992, when the economy registered a 27% decrease and
during 19971999 years, with a 12% downturn. This process, accompanied
by an almost permanent infation and an increase of unemployment, took
place in the context of decentralization and privatization measures and,
after 1997, of an accelerated economic restructuring. The second period
(20002008) witnessed a strong economic recovery, with an average annual
growth rate of over 6%, with peaks in 20032008 when Romania scored a
strong increase in consumption and productionoriented investments.
An enhanced and friendly business environment, the consequences of introducing
a fat tax rate and the positive attitude of foreign partners towards Romaniain
the context of its NATO and EU accessionsled to record foreign investments fows.
During 20052008, direct investments in Romania amounted to approximately 28
billion Euros, more than half of the total foreign investments of the last 20 years.
As a consequence of the global economic crisis, the fgure registered a downturn in
2009 when it reached EUR 4.89 billion (approx. of the 2008 level). The Romanian
economy offers quite a number of competitive advantages which recommends it
as one of the favourite destinations for foreign investments in the region. These
advantages were enhanced by policy measures and an adequate legal framework
promoted by the authorities in this important feld of economic development. The
Romanian foreign trade registered a signifcant increase both from a quantitative
and a qualitative perspective, especially during the last years when it displayed
annual growth rates above 10%. 2008 marked a peak in foreign trade, the total
volume reaching EUR 90 billion (of which EUR 34 billion exports). During the last
decade, the main trading partners were Germany, Italy, France, Turkey, Hungary,
the Netherlands, Great Britain and Austria. Structurally, the evolution of foreign
trade registered signifcant developments, whereas Romania exported more
services and manufactured products with an enhanced valueadded content.
These trends refected the positive effects of economic restructuring, the national
economys offering potential and an improved use of access facilities on foreign
markets. Currently, EUs weight in Romanias foreign trade stands at over 70%,
proving Romanias degree of integration into the European internal market.
As a consequence of the global economic crisis that emerged in fall 2008 (leading
inter alia to low levels of commercial and credit fows), 2009 was in Romania a year
of economic recession. Although the Romanian banking system was solid and the
economy registered almost a decade of sustained growth, Romania was affected
by the crisis, mainly because of its links with the European and global markets. Last
year the economy registered a 7.1% decrease of the GDP (lower than estimated),
accompanied by an increase of the budget defcit and of unemployment fgures.
Governments efforts to mitigate the crisis impact were oriented towards
macroeconomic stability, stimulating the economic relaunch and maintaining
investors interest. In order to prevent further diffcultiesand support the structural
reform process, Romania has concluded with European partners and international
fnancial institutions a fnancial assistance package of up to EUR 20 billion for
a period of two years (2009-2011), which was successfully concluded at the beginning
of 2011. The main objectives concerning the above-mentioned package focused on
balance of payments support, ensuring the credit and investment fows and
consolidation of the National Banks reserves.
Within this context, Romanias economic perspectives gradually improved. The year
2010 led to a stabilization of the GDP and the economy returned to growth in 2011,
with an estimated 1.5% advance for the entire year and an estimated 2% next year.
In spite of global fnancial market tensions and deterioration in domestic asset
quality, the banking sector has remained resilient. Continued fscal consolidation
has improved Romanias credibility. The ambitious fscal consolidation process and
structural reforms implemented in 2010 brought encouraging results and
it is aimed at ensuring the basis for a sustainable economic recovery on the back of
enhanced competitiveness. In this context, the partnership with the European
Commission, IMF and the World Bank continued within the framework of a new,
precautionarytype, fnancial agreement (20112013).

14
The Romanian Government maintains its target date for joining the Eurozone
(in 2015), within the framework of its continuing efforts towards the fulflment
of Stability and Growth Pact, convergence criteria (we are a member of the Euro
Plus Pact), as well as ensuring long term exchange rate stability of the national
currency (Leu). The sustained pace of reforms will be maintained with an emphasis
on public administrations capacity to manage public funds and to generate EU
fnanced projects; fnancing priority projects in agriculture, education, healthcare,
energy, environment and creating new investment opportunities for investors.
Romanias strategic priorities for the forthcoming period aim at developing
the infrastructure, ensuring energy security and alternative routes of transport,
modernizing the agriculture, improving the education and healthcare quality.
A Cultural and Generational Revival
A new generation of highly skilled and competitive people has largely taken over
the leadership both in private and public sectors, boosting Romanias development
from all points of view. This can be seen not only in the foreign policy or in business,
but also in Romanians vivid cultural life.
Here are some fascinating examples of the Romanian creativity after 1990:
Cinema: Romanian movies have impressed international juries and audiences
in the past years. The Romanian director Cristian Mungiu won the European Film
Award of the European Film Academy and the Palme dor prize at the
International Film Festival in Cannes in 2007 for his movie 4 weeks, 3 months,
2 days. Police, Adjective, directed by Corneliu Porumboiu was awarded in 2009
with the prize of the International Federation of Film Critics. The Grand Prix
of the Jury at the 60th Berlin Film Festival, the Silver Bear, was won by Florin
Serbans movie If I Want to Whistle, I Whistle. Two major flm festivals
with broad international participation take place annually in Transylvania,
in Cluj and Sibiu. Movies like Cold Mountain, Amen, Callas Forever were
shot in Romania. Francis Ford Coppolas flm Youth Without Youth is based
on a short story of Romanian reputed philosopher and author Mircea Eliade.
Literature: Mircea Crtrescu is the Romanian writer whose works have been
translated in over twelve languages after 1989. The 2009 Nobel prize for
literature went to the German writer of Romanian origin, Herta Muller, whose
books stem from her experience in totalitarian Romania. The Romanianborn
writer Marius Daniel Popescu was the winner of Switzerlands prestigious Robert
Walser Award for literature for his novel Symphony of the Wolf, based on life
experience in Ceausescus Romania. The book of the year in the Czech Republic in
2006 was the novel Simion Liftite authored by the Romanian Petru Cimpoiesu.
Music and theatre: The biggest classical music festival in SouthEastern
Europe, The Enescu Festival, takes place every two years in Bucharest. Every
year, in November, Romania hosts an International Chamber Music Festival
SoNoRo, in Bucharest and other major cities. An international jazz festival
is organized every year in the picturesque mountain village of Grna.
The International Theatre Festival in Sibiu brings together participants from
70 countries, presents 350 events in 55 venues, with 60,000 spectators.
Cultural promotion: There are Romanian Cultural Institutes in 17 countries and the
network is growing. The second biggest building in the world, located in
Bucharestthe Palace of Parliamenthosts a museum for contemporary art.
Doina, a traditional Romanian folk song is part of the UNESCO Representative
List of the Intangible Cultural Heritage of Humanity.
Romania`s Ministry of Foreign Affairs
1

31 Aleea Alexandru, Sector 1, Bucharest, 011822
Phone: (40) 21 319 21 08 or 319 21 25
Fax: (40) 21 319 68 62
www.mae.ro
1
The Ministry of Foreign Affairs (MFA) takes responsibility only for the content of the above
presentation. The MFA encourages private companies to promote their views on the Romanian business
environment. Better Business in Romania is a booklet authored by uca Zbrcea & Asociaii.

17 16 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.

Together For
Your Business
No Stage in a Companys Life without the Bucharest
Chamber of Commerce and Industry!
The frst Chamber of Commerce and Industry in the world, forefather and model of
all the chambers established ever since, is that of Marseilles, which dates from 1599.
In Romania, merchants and manufacturers are organised in guilds and
corporations until the Union of the Principalities, in 1859, when business
people express their interest in setting up a chamber structure.
On the 10
th
of November 1861, before the frst law on chambers of commerce
exists in Romania, C.A. Rosetti, senior of the traders in Bucharest, explains the
need for chambers of commerce to be independent from the government:
The Ministry of Finance, which the trade and industry of the country depend
on, cannot, no matter how hard it tries, give special heed to these reforms
and improvements, because it lacks the time to do so and, most of all,
because the interests of commerce and industry are not always compatible
with those of the internal revenue services, but are often conficting.
On the 30
th
of September 1864, after having been supported by all the enlightened
minds of the time, such as Nicolae Kretzulescu and Mihail Kogalniceanu, the
law on chambers of commerce is promulgated by its signing by Alexandru
Ioan Cuza. On the 28
th
of January 1868, the Bucharest Chamber of Commerce
(Bucharest CCI) starts operatingthe frst suchlike institution on the territory
of Romania, as it was at that timewith Miron Vlasto as President.
During the inauguration ceremony of the Bucharest CCIs Building on the
23
rd
of May 1911, HM King Carol I underlines, in few words, the mission
of chambers of commerce and their standing in a democratic society:
Chambers of commerce and industry have given the government valued
support through enlightened counsel and outstanding undertakings. I
am most pleased to say that these undertakings and counsel have always
had at heart not individual interests, but those of the community.
A century later, on the 13
th
of November 2011, the Bucharest CCI celebrates the
centennial of its historical head offce by organising an extraordinary concert
hosted by the Romanian Athenaeum and performed by the George Enescu
Philharmonic Orchestra conducted by Horia Andreescu. The event is honoured
with the presence of members of the Royal House of Romania and over 700
participants, close partners of the Bucharest CCIrepresentatives of the diplomatic
corps accredited in Bucharest, academics, economic actors. During this special
event, Prof. Sorin Dimitriu, Ph. D., President of the Bucharest CCI, announces
the decision of the Managing Board that the 2011 Hermes Trophy shall be
awarded to HM King Mihai, as a tribute to the Royal House of Romania for its
contribution to the modernisation and strengthening of the Bucharest CCI.
The Bucharest CCIs activity has always been most rewarding and has
given, since the very beginning, effective support to Romanias economic
development. As early as June 1868, with the assistance of the Bucharest CCI,
the registration of commercial companiesthe ancestor of presentday
Trade Registryis introduced for the frst time in Romania. The Bucharest
CCI is subsequently authorised to publish the average exchange rate of
the main foreign currencies, it is coauthor of the text of the frst law on
trademarks, and initiator of the law on encouraging domestic industry.
In 1884, upon proposal of the Bucharest CCI, the law on encouraging domestic
industry is promulgated. In 1895, the Bucharest CCI opens the frst commercial
information offce, and in 1899 it announces its position on cartels. In 1926, following
a Bucharest CCI initiative, the postal cheque is frst introduced as noncash
means of payment. The Chamber supports and fnances commercial and vocational
education and contributes a generous sum to the construction of the Academy of
Economic Studies Building.
Currently, the Bucharest CCI (www.ccib.ro) has diversifed the range of services
supplied; thus, throughout the life of a company, the Bucharest CCI can supply
traders with counselling and expertise, assisting them in developing their business
most rapidly and effciently.

18
As stipulated by the initiators of the frst law on chambers of commerce in Romania,
the Bucharest CCI continues to be a selfsuffcient, nongovernmental, non
political, nonproft, public purpose organisation without a patrimonial purpose,
a legal person in its own right, whose aim is to represent, defend and promote
the interests of its members and other economic players of Bucharest before the
public authorities and domestic and international bodies, for the development
of trade, industry, agriculture, services, tourism, etc., in line with market economy
requirements.
The Bucharest CCI is organised and operates under Law No. 335 of 3
rd
of December
2007 and its duties still include support to its members in their economic
relations with offcial representatives of both other states, and local public
administration authorities, for the economic and social development of Bucharest,
including by public-private partnership.
Likewise in the past, when the Bucharest CCI used to have its say in the elaboration
of laws essential to the development of market economy in Romania, the Chamber
continues to send bills to authorised institutions, on its own initiative or after
consultation of its members.
The Bucharest CCI, represented by Prof. Sorin Dimitriu, Ph. D., President elected
in 2008, concludes protocols with local and central public administration
authorities and regional structures, for the economic development of Bucharest.
Furthermore, under its Articles and in conformity with the objectives set out
by the new managing team, the Bucharest CCI initiates, supports and develops
promotion, research and development, and innovation programmes and
projects, organises training programmes, and promotes EU and international
bodies regulations and practices by organising symposia, conferences, seminars
and other similar events for both members and other economic operators.
The Bucharest CCI organises and manages trade fairs, exhibitions, shows, business
forums, economic partnership actions at home and abroad, in own, leased
or rented locations; it organises the annual Chart of Top Companies of Bucharest,
granting moral rewards to economic actors for their business efforts and
stimulating competition.
This brief overview of the activities of the Chamber shows beyond any doubt
that, as stated herein before, the Bucharest CCI can supply services that make it
easier for businesses at any stage in a companys life.
Here are below, with no pretence of exhaustiveness, the main categories of services
supplied by the Bucharest CCI for the beneft of the business community. The range
of services justifes the Chambers motto, Together for your business.
Registration and authorisation of companies and activities
Information and consultancy on the Romanian business legal environment;
Counselling and assistance for registration and authorisation of companies
and activities;
Counselling and assistance for registration of associations and foundations;
Counselling and assistance for the registration of amendments to company
formation documents.
Consultancy services to foreign companies and entrepreneurs
Consultancy and assistance on the formalities for setting up representation
offces, subsidiaries, branches and companies in Romania;
Consultancy and information on the Bucharest business;
Organisation of business meetings, partnerships, forums, conferences,
company profles;
Evaluation of Romanian companies.
Business information
Supply of information on companies and marketing databases;
Business opportunities (demand, supply, tenders, auctions, cooperation
and outsourcing);
Market surveys and information on areas of expertise;
InfoFinfnancial analysis report developed by Bucharest CCI experts
based on the analysis of the up to sevenyear evolution of balance sheet
data and major indicators such as solvency, liquidity, return on assets
and activity; potential commercial or credit risks can be thus identifed
and clientor supplierrelated risks can be better controlled.
Consultancy and assistance for business development
Information, assistance and consultancy regarding the participation in EU tenders
and communityfnanced programmes;
Tailormade assistance for companies participation in national and European
projects;
Assistance in intellectual property rights exploitation;
Technology transfer activities;
Information on international and foreign trade legislation.

20
Events and debates organisation
The Chart of Top Companies in Bucharest, highlighting the best performing
economic actors that have their headquarters in the Capital;
Hermes Trophy annual awards, for honouring outstanding personalities from
outside the chamber system for their contribution to the consolidation of
the Bucharest CCI;
Counselling and assistance for events organisation;
Organisation of meetings on business environment issues (seminars, conferences,
forums, workshops, etc.);
Organisation of inhouse seminars and workshops on request;
Organisation of debates on legislative issues;
Organisation of fairs and exhibitions;
Assistance to companies for participating in fairs and exhibitions organised by
ROMEXPO S.A., by granting discounts;
Organisation of scientifc events and exhibitions.
Promotion of company products/services
Organisation of events on company products/services supply;
Promotion on the Bucharest CCI website (www.ccib.ro) and its online
periodical Afacerea (www.ccib.ro/afacerea);
Representing member companies in fairs, exhibitions or economic missions
in Romania or abroad;
Dissemination of R&D projects results.
Entrepreneurial training and vocational programmes
Organisation of training, courses, including inhouse programmes for
entrepreneurs or company employees, with Romanian and foreign expert trainers.
Issue of certifcates
Certifcates of origin;
Force majeure certifcates (force majeure cases occurred during operation,
on the territory of Bucharest Municipality, based on evidence);
Certifying deeds.
Mediation Centre
Settlement of civil and commercial litigations by certifed mediators
by agreement of both parties, with lower expenses than those incurred by
going to court, and in shorter time.
The place where culture and business meet
Under the auspices of the Carol I Trust Foundation chaired by HRH Prince
Jean of Luxembourg and set up in order to bring the historical Chamber Building
at 4, Ion Ghica St. back into the economic and cultural life of
the Capital, the Bucharest CCI organises, periodically:
Chamber music recitals;
Coup recitals;
Classical concerts;
Book launches.
The Bucharest Chamber of Commerce and Industry
2 Octavian Goga Blvd., Sector 3, Bucharest, 030982
Phone: (40) 21 319 01 73 or 319 01 21
Fax: (40) 21 319 01 33
www.ccib.ro

22

Corporate
Overview
Business activities in Romania may be carried out as a rule by companies (which
may be owned without any restrictions by Romanian or foreign shareholders) or
by other forms of business organizations such as authorized individuals, individual
undertakings or family undertakings within the framework set out in the Companies
Law No. 31/1990 (the Companies Law) and the Government Emergency Ordinance
No. 44/2008 on the performance of business activities by authorized individuals,
individual undertakings and family undertakings (GEO 44/2008). Listed companies
have to observe also the capital market regulations, which are discussed in a
dedicated chapter herein. As a matter of principle, business organizations may
conduct any type of activity
1
. Limitations, such as special approvals or permits, or
restrictions as to the form of company allowed to perform certain activities, may be
imposed by law in various business sectors placed under the supervision of a public
regulatory authority, such as certain fnancial services (insurance and banking).
The Companies Law provides the limited list of legal forms under which a
company may be established in Romania: the general partnership (societate n
nume colectiv), the limited partnership with shares (societate n comandit
simpl), the limited stock partnership (societate n comandit pe aciuni),
the joint stock company (societate pe aciuni) and the limited liability
company (societate cu rspundere limitat). Founders are free under
the law to choose the type of company they establish, but certain business
activities may be conducted only by companies having a certain legal form
(e.g. only joint stock companies may operate in insurance or banking).
1
The available economic activities are listed in an offcial codeClasifcarea Activitilor
din Economia Naionalcommonly known as the CAEN Code which represents a transposition
of the NACE Code, valid at the European level.
Changing the legal form of the company during its operations is possible, with the
required corporate approvals, and provided the legal requirements for the new form
are met.
The types of companies most frequently incorporated in Romania are joint stock
companies and limited liability companies, especially due to the limitation of the
shareholders liability to the value of their subscribed shareholding. Nevertheless,
piercing the corporate veil is expressly regulated, so that shareholders abusing
2

the limitation of their liability and the distinct personality of the company, thus
deceiving the companys creditors, shall be held liable without limitation for the
companys outstanding debts. Registration formalities required to set up a Romanian
company usually last three days from submitting the complete documentation with
the Trade Registry.
Among the most important refections of the EU norms in Romanias corporate
law, we note the following:
Romanian companies meeting at least two of the following criteria: (i) aggregate
assets amounting to at least EUR 3,650,000, (ii) net turnover amounting to at least
EUR 7,300,000 or (iii) number of employees exceeding 50 individuals must prepare
their fnancial statements in accordance with the EC IV
th
Directive and have them
audited, while the companies which do not meet the criteria are permitted to
provide only simplifed fnancial statements (even though they may choose to
apply the EC IV
th
Directive, in addition to the Romanian Accounting Standards);
Further to Romanias accession to the EU on the 1
st
of January 2007, business
activities may be carried out under the two fundamental freedoms central to
the effective functioning of the EU Internal Market: the freedom of establishment
and the freedom to provide services. The freedom of establishment enables
an economic operator (whether a person or a company) to carry out business
activities in a stable and continuous manner in one or more Member States.
The freedom to provide services enables an economic operator providing
services in one Member State to offer services on a temporary basis in another
Member State, without having to establish itself in the second state, too;
Romania created the legal environment for the incorporation/authorization of the
European companies, free from obstacles arising from disparities and limited
territorial application of the national company law, as per EC No. 2157/2001;
Also, Romania implemented the European regulations on crossborder mergers.
Romanian limited stock partnerships, joint stock companies or limited
liability companies, as well as the European companies headquartered
in Romania may take part in crossborder mergers.
2
The law deems abusive the acts of the shareholder to use the companys assets as if they were
its own, or to diminish the companys assets for its own beneft, while aware that in doing so
the company is hindered in performing its obligations.

24
25
capital, or decreased, the minimum share capital requirements observed, with
a value equal to that of the losses that cannot be covered from the companys
reserves). Failure to observe such provisions could trigger the dissolution of
the company although such sanction has been rarely put into practice.
Shares may be registered shares or bearer shares. As a matter of practice, bearer
shares are rarely used in Romania. Shares may be ordinary (i.e. one share gives right
to one vote in the shareholders meeting and to the dividends proportionally to the
quota of the share capital) or preferential (i.e. giving priority to dividends but not
entitling to voting rights). Preferential shares may account for only up to of the
share capital nominal value. The articles of association of a joint stock company
may provide for a different number of votes attached to a certain block of shares.
One share may be jointly owned by several persons, however, the coowners have
to appoint a joint representative to exercise the rights derived from the share.
Unless otherwise provided in the companys articles of association, the shareholders
may freely transfer their shares to any person. If the company is listed, the transfer
has to observe the rules governing the relevant regulated market. Depending on
the stock a person wishes to purchase in a listed company, certain procedures shall
be observed (i.e. public offers).
As a general rule, the joint stock company may acquire up to 10% of its own shares
provided they are fully paid. There are few exceptions to this limit, such as where
the company acquires its own shares with a view to decreasing the share capital
or within enforcement proceedings against a shareholder for debts due to the
company. Such shares do not give the right to vote or to receive dividends
while held by the company itself.
The shares may be subject to security interests, which become opposable towards
third parties as of registration with the Electronic Archive for Security Interests.
The Joint Stock Companys management
The main management body of a stock corporation is the General Assembly
of Shareholders (the GAS). Depending on the matters to be submitted
to shareholders approval, the GAS may be ordinary (e.g. appointing and
dismissing the directors and auditors, approving the yearly fnancial statements
and the management report) or extraordinary (e.g. increase/decrease of the
share capital, change in the companys legal form, mergers, spinoffs).
Shareholders having an interest contrary to the companys interest in the matter
submitted for the GAS approval have to refrain from voting.
Joint Stock Companies
Shares and share capital
Joint stock companies must have at least 2 shareholders
3
and a share capital of
at least RON 90,000. The minimum legal share capital value may be changed
from time to time so that it refects the RON equivalent of EUR 25,000.
The companys share capital may be formed by contributions inkind, in cash and/
or in receivables. Cash contributions are always mandatory upon the companys
establishment. Inkind contributions must be evaluated and effectively delivered
to the company (the company being given a real right over the property, such
as ownership, or usufruct etc.). Only 30% of the entire subscribed share capital
is required upon establishment while the remaining 70% must be paid either
within 12 months from establishment, if formed of contributions in cash, or
within 2 years, for contributions inkind. Contributions in receivables are
deemed paid when the debtor effectively makes the payment to the company.
The share capital of a joint stock company may be increased, by issue of additional
shares or by increasing the face value of the existing shares, through contributions
in cash or inkind, or through the incorporation of the companys reserves (save
for the legal reserves), undistributed dividends and share premiums or by setting
off outstanding receivables against the company with newly issued shares (debt to
equity swaps). Positive balance registered upon the revaluation of the companys
assets may not be used to increasing the share capital of a joint stock company.
The existing shareholders have a preemption right to subscribing the newly
issued shares, as well as for the bonds convertible into shares, pro rata with
their participation in the company. Exceptionally, the preemption right may
be limited or withdrawn for well grounded reasons by the general assembly
of the shareholders, with special majorities: the decision must be passed in
the presence of of the subscribed share capital and with the majority of
votes of the shareholders present or represented in the respective meeting.
In certain cases, the share capital increase or decrease becomes mandatory
(e.g. in the event of a reduction of the net assets below half of the subscribed
share capital, the share capital must be either increased to a certain level
which ensures that the net assets value exceeds half of the subscribed share
3
5 was the minimum number of shareholders according to the form of the Companies Law as
in force before the 1
st
of December 2006. The modifcation of the minimum number of shareholders
in a stock corporation has determined several companies to reduce their number of shareholders to
2 since this brings more fexibility in the operation of the corporate bodies of a stock corporation.
2012 SCA uca Zbrcea & Asociaii. All Rights Reserved. 2012 SCA uca Zbrcea & Asociaii. All Rights Reserved.

26
27
Under the law, voting rights may not be assigned to any person and any agreements
on exercising the vote in a certain manner are null and void.
This latter interdiction raises issues in practice, as it places doubts on the validity
of shareholders agreements, especially as regards clauses containing arrangements
to exercise the vote in a certain way on specifc matters (e.g. when voting to appoint
the directors nominated by each of the shareholders).
The ordinary and the extraordinary GAS differ as regards the quorum and voting
rules. On the frst call, the ordinary GAS may duly pass resolutions only (i) in the
presence of the shareholders holding at least of the total number of voting
rights and (ii) with the majority of the voting rights exercised in the meeting.
On the second call
4
, there is no minimum share capital required to attend or be
represented and the decision will be taken with the majority of the voting rights
exercised in the meeting. The constitutive act may not under the law provide for a
lower quorum or a higher majority for the second call of the ordinary GAS,
a limitation which raised controversy in practice concerning the enforceability of
shareholders agreements providing for a certain veto right in relation to important
decisions in a joint stock company.
In the case of the extraordinary GAS, the presence of the shareholders (or their
representatives) holding at least of the total number of voting rights is required
at the frst call, and
1
/5 of the total number of voting rights for the second call.
Decisions may be duly passed with the vote of the shareholders representing at
least of the voting rights of the shareholders present or represented at the
meeting. However, a special majority of
2
/3 of the voting rights of the present
shareholders is required for decisions on major issues, such as the increase
or decrease in the share capital, merger or the company`s winding up.
The articles of association may provide for increased thresholds of quorum
and voting majorities. The shareholders holding at least 5% of the share capital may
request that a GAS be called, or that the agenda of an already convened GAS be
supplemented. As well, they may request the auditors to review any act or operation
of the company or initiate claim, on the companys account, against the founders,
directors or managers of the company for damages they caused the company.
The Companies Law provides for two types of management systems available for
joint stock companies: the onetier management system, where the management
is entrusted to a board of directors (consiliu de administraie) which can or in
4
The second call takes place when the necessary quorum is not met upon frst call.
certain cases is obliged to delegate management powers to several managers
(directori), and the twotier management system, where the effective
administration of the company is ensured by an executive committee (directorat)
under the control of a supervisory council (consiliu de supraveghere).
The managers may also be appointed from among the members of the board of
directors, provided that the majority of the board members remain nonexecutive
in order to ensure the objectivity of the board and its independence from the
management. Certain prerogatives of the board may not however be delegated
to the executive offcers (e.g., establishment of the main activity and development
trends of the company; establishment of the accounting and fnancial control
system and approval of the fnancial planning; appointment and revocation
of the executive offcer and the supervision of the executive offcers activity;
flling the request for the opening of the insolvency procedure, as well as the
prerogatives delegated to the board by the general assembly). On the other
hand, in the twotier management system, a person cannot hold functions
in the executive committee and in the supervisory council simultaneously.
The members of the board of directors and the managers, in the onetier
management system, and the members of the executive and supervisory committee,
in the twotier system, may not be concomitantly employees of the company,
their relationship with the company being regulated by a management contract.
However, the managers and the members of the executive committee are
assimilated with the employees, from the perspective of the taxes due to the social
security budgets, which means that, with few exceptions, the same contributions
have to be paid in relation to their remuneration as in the case of the employees.
There are no residency or citizenship restrictions on the directors, managers,
members of the executive or supervisory committees of a joint stock company.
The managers of a company opting for the onetier management system and
the members of the executive committee in a joint stock company that adopted
the twotier management system can only be individuals (natural persons).
In practice, the onetier management system is elected by the vast majority of the
Romanian joint stock companies
In the case of listed companies, the directors may be appointed, at the request
of a shareholder holding at least 10% equity participation, by way of cumulative
voting, as discussed in the chapter dedicated to Capital Market.
There are legal provisions requiring GAS approval on certain operations (e.g.
acquisition, transfer or lease of assets amounting to over half of the book value of
the companys assets) before the companys directors are allowed to conclude them.
In addition, the articles of association may provide for several other operations

28
29
which require the GAS prior approval before allowing the management to conclude
a transaction. As well, there is a general requirement that directors must refrain
from voting on issues wherein they have a direct or indirect interest. As a rule,
management members could be held liable only by the GAS for their management
operations. However, the shareholders holding more than 5% of the share capital
may engage the liability of the management members in case the GAS did not
exercise such right. The offcial receiver appointed in case insolvency proceedings
are initiated against companies may also engage the liability of the management
members and, failing to do so, the creditors of the concerned company may exercise
such right under specifc circumstances regulated in the insolvency legislation.
Limited Liability Companies
Shares and share capital
A limited liability company may have 1 to 50 shareholders and must hold a share
capital of at least RON 200 (approx. EUR 50). An individual or a legal entity may be
the sole shareholder in one limited liability company only. The sole shareholder of
a limited liability company may not be itself a limited liability company owned
by a sole shareholder.
During the companys life, provided that the abovementioned minimum threshold
is observed, the share capital may be either increased or decreased. The rules
governing the case of reduction of the net assets below half of the subscribed
share capital in joint stock companies apply also to limited liability companies.
The shares of a limited liability company cannot be traded on a regulated
market. The limited liability company cannot issue bonds. The shares are freely
transferable between the shareholders, while transfers towards third parties are
subject to the approval of the shareholders holding at least of the companys
share capital. The effectiveness of the transfer of shares towards third parties is
conditioned by the lapse of 30day opposition term or by the rejection of such
opposition through an irrevocable court decision. The opposition term is not
applicable to share capital increases through contributions made by third parties.
The limited liability companys management
Decision making in a limited liability company belongs to the GAS. The directors
are obliged to convene the GAS whenever necessary, but in any case at least once
a year. The shareholders of at least 25% of the share capital have the right to
request the convening of the GAS. Unless otherwise provided in the companys
articles of associations, the decisions may be passed within the GAS based on
the votes of, cumulatively: over 50% of the shareholders and over 50% of the share
capital.
The shareholders having an interest in the matter submitted to the GAS
for approval have to refrain from voting. In the event that the GAS cannot validly
take a decision due to the absence of the majority required by the law, the GAS
may decide at the second call irrespective of the number of the shareholders
attending the meeting and of their quota to the companys share capital.
The limited liability company is managed by one or several directors, who may be
shareholders or third parties. Unless otherwise approved by the GAS, the directors
are subject to certain noncompeting restrictions (i.e. they may not hold
directorship position in another company conducting the same business or a
competing business activity and may not perform, on their own account or on behalf
of a third party, the same business activity or a competing business activity). The
one and twotier management systems described for joint stock companies,
and the limitations attached thereto, are expressly excluded from application in
the case of limited liability companies, to the effect, inter alia, that the directors
in a limited liability company may be concomitantly employees of that company.
The GAS but not the shareholders themselves may engage the management liability.
Similar with joint stock companies, the management liability may be engaged during
insolvency proceedings by the offcial receiver or by the creditors.
Authorized Individuals
Authorized individuals may carry on business activities as selfemployed
authorized individuals, as owners of individual enterprises, or as members of
family enterprises. The owners of individual enterprises are the only authorized
individuals able to act as employers and to conclude individual employment
agreements with third parties. The activity of the authorized individuals is mainly
regulated by the Government Emergency Ordinance No. 44/2008 (GEO 44/2008).
Authorized individuals are personally liable for all the obligations undertaken
during the business operations. Under GEO 44/2008, Romanian citizens and
citizens of EU Member States and EEA are allowed to carry out in Romania, as
authorized individuals, all the business activities provided by the CAEN Code.
The activities performed by individuals require prior registration with the Trade
Registry Offce having jurisdiction in the area where the applicants have residence
or where the activities are to be carried out. The Trade Registry should issue the
registration certifcate within a period of maximum 5 business days as of the
submission of the application and complete documentation. The registration
certifcate best expresses the simplifed procedure of authorization individuals enjoy,
as it incorporates the actual registration of the individual, the required functioning

30
31
authorisations (e.g. sanitary authorization, fre extinction authorization etc.),
as well as the registration of the authorized individual with the fscal authorities.
However, under special enactments, certain activities require additional specifc
authorisation before beginning the actual operations (e.g. the insurance agent must
be authorized by an insurance/reinsurance company). GEO 44/2008 is also not
applicable when the permission to practice certain activities is granted through
a decision of a specifc professional body, as it is the case of lawyers, certifed
accountants or fnancial auditors.
Restructuring Businesses
In the context of the economic and fnancial crisis, several business restructuring
options gathered ground, including mergers, spinoffs transfer of lines of
businesses, and acquisition and disposal of assets. The Companies Law regulates
in a dedicated chapter the merger and spinoff of companies. The merger may
take place either by merging one or more companies into another, existing
company (fuziune prin absorbie) or by two or more companies deciding to
form a new company (fuziune prin contopire). In the frst case, the absorbed
companies are dissolved without undergoing liquidation, while in the second
case all participating companies (except for newly created one) follow the same
process of dissolution without liquidation. Spinoffs are made by transfer of
one companys assets and liabilities, either entirely or partially, to two or more
existing or newly created companies. The spunoff company is dissolved without
undergoing liquidation. Transferring part of one companys assets and liabilities
to one or more existing or newly created companies is assimilated to spinoff.
Mergers and spinoffs have to be approved by the GAS of each participating
company and must follow a specifc implementation process. The legal framework
applicable to mergers and spin-offs has been amended in the second half
of 2010 in view of shortening the deadline for completing such operations,
especially through the elimination of the suspensive effect of the opposition
fled by the creditors of the companies participating in the operations.
Companies in fnancial trouble may undergo reorganization based on a plan
approved within insolvency proceedings before their shares are sold or their assets
transferred to third parties. The successful fnalization of such reorganization plan
offers an important level of comfort to both the creditors of the concerned
companies, and to the purchasers of its shares or assets. All such processes
involve a multidisciplinary legal analysis. Besides the corporate aspects, the
permitting matters (including approvals from the competent authorities and
transfer of authorizations) and the employment issues (such as the protection
of employees in case of transfer of undertakings) must be carefully assessed.

Environment
General. Main Regulations. Regulatory Authorities
Romanian legislation on environment is currently undergoing changes, as
implementing new regulations for environmental protection has become one
of Romanias legislative priorities after joining the EU in January 2007.
During the last years, Romanian authorities have made serious efforts in order to
transpose the principles of the relevant EU Directives in this feld and, at the time
of this analysis, the most important EU Directives already implemented in Romania
are the following:
Directive No. 96/61/EC concerning integrated pollution prevention and control
(the IPPC Directive);
Directive No. 2004/35/EC on environmental liability with regard to the prevention
and remedying of environmental damage;
Directive No. 85/337/EEC on assessment of the effects of certain public and private
projects on the environment;
Directive No. 2003/35/EC providing for public participation in respect of the
drawing up of certain plans and programs relating to the environment and
amending Council Directives 85/337/EEC and 96/61/EC with regard to public
participation and access to justice;
Directive No. 2000/60/EC establishing a framework for Community action in the
feld of water policy;
Directive No. 79/409/EEC on the conservation of wild birds;
Directive No. 92/43/EEC on the conservation of natural habitats and of wild fauna
and fora.

32
33
The main authorities entrusted with the application of the environmental rules are:
The local environmental protection agencies established in each county;
The regional environmental protection agencies (i.e. one regional
environmental protection agency coordinates the activity of several local
environmental protection agencies);
The National Environmental Guard.
The Ministry of Environment and the National Environmental Protection Agency
also have competencies in applying the environmental regulations; however, their
implication is limited to projects that may have signifcant impact at national level,
or which may impact on the environment of other states.
Implementing Projects Which May Generate
an Environmental Impact
Implementing projects that may generate impact on the environment requires a
twotier authorization. On the one hand, such projects may only be developed
subject to obtaining an environmental agreement (acord de mediu), which
sets out the conditions to be fulflled so as to ensure that the implementation
(construction) of the project complies with the statutory environmental
requirements. The environmental agreement is one of the documents substantiating
the application for a building permit. On the other hand, works may not be
commissioned until the operator obtains an environmental authorization
(autorizaie de mediu), which is separate from the environmental agreement.
The environmental agreement
The environmental agreement is issued further to conducting a complex procedure
coordinated by the environmental protection agencies at different levels or, in
certain cases, by the Ministry of Environment itself. The statutory framework in
the feld of environmental impact assessment was amended in April 2010 so as to
ensure a better implementation of the EIA Directive 2001/42/CE as well as a better
synchronization with the legal enactments in the feld of building permitting. As
a frst step of this legal procedure, the environmental authorities conduct a frst
assessment aimed at establishing the magnitude of the environmental impact
possibly generated by the project. For projects deemed to generate minor impact,
the law prescribes a simplifed permitting procedure, the project developers being
allowed to begin construction works without an environmental impact assessment.
For projects generating an important impact on the environment, developers are
invited to prepare an environmental impact assessment. To this end, after having
consulted the interested members of the public, the competent authority prepares
a checklist with the items to be covered in the report.
The report is submitted by the environmental authority to a public debate.
Based on the fndings in the environmental impact assessment report and, if the
case, on the comments received from the public, the environmental authority
takes its decision on issuing the environmental agreement. The decision is
published in the media, so as to allow any interested person to challenge it. The
environmental agreements are valid for the whole period of project development.
The public potentially affected by the project and the NGOs specializing in
environmental protection play an important role in the procedure, as they have
the right to participate in the process by submitting their points of view in relation
to the project and by participating to the public debates organized by
the environmental authorities.
For projects that may generate impact on the environment of neighboring countries,
the Ministry of Environment conducts consultations with the relevant authorities
in the possibly affected state. Decisions on issuing the environmental agreement for
such cases must take into account the comments and suggestions possibly received
from the potentially affected state. The environmental agreement is a prerequisite
for obtaining the building permit for projects with signifcant impact on the
environment. In 2009, the framework procedure for issuing the environmental
agreement was amended to ensure better synchronization with the legal framework
governing the issuance of the building permit.
The environmental authorization
While the environmental agreement is the document regulating the implementation
of environment impacting projects, activities with possible impact on the
environment may only be carried out subject to an environmental authorization.
The authorization sets forth the specifc technical conditions to be complied with
when carrying on a specifc activity possibly generating an impact on the
environment.
The environmental authorization may provide for a set of measures to be
implemented in order to reduce the impact on the environment, establishing also
the time schedule for implementing the respective measures. Failure to abide by its
terms may trigger the suspension or annulment of the environmental authorization.
Projects subject to the IPPC Directive
For installations subject to the IPPC Directive, integrated environmental agreements
and integrated environmental authorizations are required.
The integrated environmental agreement is the document setting out the conditions
to be fulflled so as to ensure that development (construction) of the project
complies with the statutory environmental requirements.

34
35
Unless the relevant water installations exceed a certain capacity, the use of
underground and surface waters is free for small activities specifc to households,
such as human and animal consumption.
The right to use waters for other activities is only granted through administrative
acts regulating the terms and conditions of use, namely:
The water management permit (aviz de gospodrire a apelor); and / or
The water management authorization (autorizaie de gospodrire a apelor).
The water management permit is a prerequisite document to beginning
construction works for new investment projects built on / near water sources,
or related to the use of waters. Applying for the building permit is possible only
after having obtained the water management permit.
The water management authorization is required before the commissioning
and exploitation of new projects erected on / near water sources, or which are
related to the use of water. The water management authorization regulates
in detail the terms and conditions under which the use of water is allowed.
Exceptionally, for certain projects or activities, the law exempts the project
developers / operators from their obligations to obtain the water management
permit or the water management authorization. In this situation, a mere notifcation
to the relevant branch of Romanian Waters National Company is suffcient.
Emission of Greenhouse Gases
In 2001, Romania was among the frst states to ratify the Kyoto Protocol regarding
the framework Convention of the United Nations with respect to the climate
changes. In 2006, Romania transposed the Directive 2003/87/EC establishing a scheme
for greenhouse gas emission allowance trading within the Community. As of 1
st
of
January 2007, any operator of equipments listed in Annex I to the Directive
2003/87/EC must hold a greenhouse gas emission authorization and an adequate
number of greenhouse gas emission certifcates allowing a certain level of
greenhouse gas emissions.
At the same time, starting with the 1
st
of January 2007, Romania has implemented
a greenhouse gas emission trading scheme. The total number of greenhouse gas
emission certifcates granted to Romania is approved by the European Commission
separately for 2007 and then for each 5year subsequent period. For the frst two
periods (i.e. for 2007 and for 20082012), operators of installations listed in Annex I
to the Directive 2003/87/EC were granted a certain number of free greenhouse gas
emission certifcates to be used in respect of their polluting activity.
Applying for a building permit is only possible after having obtained the integrated
environmental agreement.
The integrated environmental authorization sets forth the specifc technical
conditions to be complied with when operating an installation subject to the IPPC
regulations. While establishing measures to reduce the impact is allowed in
environmental authorizations, the integrated environmental authorization is issued
only if the installation in question complies with the best available techniques. In
certain exceptional cases, the integrated environmental authorization may provide
for a set of measures ensuring that the operator reaches the statutory
requirements within 6 months.
In the context of the accession to the EU, Romania faced the challenge of bringing
the old installations to meet the best available techniques. Since implementing such
techniques could not be achieved in a short period of time, Romania has negotiated
transition periods for ensuring progressive compliance of certain installations.
Change of Operators of Impacting Activities
Whenever the operator of an activity generating signifcant impact on the
environment is subject to change of control, sale of assets, merger, spinoff,
concession or other operations entailing a change of the operator, such operations
must be notifed to the environmental protection agency, in order for the latter
to inform the parties involved on the specifc environmental obligations they must
undertake.
Having received the list of environmental obligations, the parties involved in any
of the operations above will negotiate the allocation of such obligations among
them.
The exact manner the parties involved understood to split the responsibility for
fulfllment of the relevant environmental obligations must be notifed to the
environmental protection agency.
Water Management
While most waters are included in the states public domain and administered by
the Romanian Waters National Company (Compania Naional Apele Romne),
the Government has the exclusive right to establish the rules governing the use of
waters, irrespective of whether water sources are included in the public domain
or not.

36
37
wild birds and Council Directive 2006/105/EC of 20
th
of November 2006 adapting
Directives 73/239/EEC, 74/557/EEC and 2002/83/EC in the feld of environment,
by reason of the accession of Bulgaria and Romania to the EU.
In Romania, there are several types of protected areas, depending on their importance:
Protected areas of national interest;
Protected areas of international interest;
Protected areas of Community interest (Natura 2000);
Protected areas of local interest.
Depending on the importance of various protection areas, their management may
be entrusted to special structures organized for this purpose companies or to
custodians, which may be individuals or legal entities.
The management of the Danube Delta Wildlife Reservation is entrusted to a
speciallycreated entity, the Danube Delta Wildlife Reservation Administration.
This entity is under the direct control of the Ministry of Environment and Forests.
For each protected area, the administrators or custodians prepare the management
plans and the regulations setting forth the rules applicable within the area. Such
management plans and regulations are approved by the Romanian Government
or, as the case may be, by the Ministry of Environment. The possible infuence
of any environmental impacting projects on the protected areas is subject to
assessment within the environmental impact assessment procedure conducted
for the purpose of obtaining the relevant environmental agreement.
Liability for Damages Caused to the Environment
The liability for damages caused to the environment is governed by the principle
polluter pays. Operators must promptly inform the local environmental protection
agency on any damage caused to the environment, as well as on any imminent
threat of such damage. In any such situation, the operator must take all necessary
reparatory and/or precautionary measures.
If the operator does not comply with these obligations, or if the operator is not
identifed, the relevant environmental protection agency is entitled to take all
reparatory or precautionary measures itself, on the account of the operator who
has to bear the related costs. In order to recover the costs, the environmental
protection agency may proceed to seizing the goods of the operator. If damage to
the environment or a threat of such damage is caused by two or more operators,
their liability will be joint.
For 2007 and 20082012, the greenhouse gas emission trading scheme provides for
a certain limited number of certifcates forming the national reserve available
for new entrants (i.e. installations carrying out one or more of the activities
indicated in Annex I to the Directive 2003/87/EC, which has obtained a greenhouse
gas emissions permit subsequent to the notifcation to the Commission of the
national allocation plan). Allocation of certifcates to new entrants is free and
is made on a frst came, frst served basis. Should the demand from new entrants
exceed the number of certifcates available in the national reserve, the new entrants
who could not obtain free certifcates would have to acquire such from the market.
For installations which are defnitely closed, the relevant greenhouse gas emission
certifcates are valid only for the closing year; the remaining certifcates are to be
transferred to the national reserve.
Noise Requirements
The Romanian standards in the feld of noise pollution stipulate that any
constructions which may generate environmental noise must be located in such a
way so as the impact over inhabited areas does not exceed certain thresholds. As per
the legal provisions in force, the continuous noise level measured in certain
technical conditions must not exceed 50 db and level 45 for the noise curve during
the day. During the night, the noise level values must be lower with 10 db. Also,
the continuous noise level measured inside apartments, schools or libraries (with
windows closed) must not exceed 35 db and level 30 for the noise curve during
the day. During the night, the noise level values must be lower with 10 db. These
thresholds have to be taken into account when developing new projects; at the
same time, for projects generating environmental impact, they must be considered
when preparing the environmental impact assessment report required for
obtaining the environmental agreement. In the feld of noise impact.
Romania has implemented Directive 2002/49/EC relating to the assessment
and management of environmental noise, thus implementing a system aimed
at preventing the negative effects caused by environmental noise. Public
authorities must prepare noise maps for the noisy areas identifed in the law
(i.e. big cities, airports, roads, railways and harbors) and propose action plans
that would help prevent and reduce the impact of environmental noise.
Protected Areas
Romanian legal framework was aligned to the EU requirements primarily through
the implementation of Directive No. 92/43/EEC on the conservation of natural
habitats and of wild fauna and fora, Directive No. 79/409/EEC on the conservation of

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Private Property
Save for public property, any real estate can be subject to private property rights.
As a general rule, any legal or natural entity may be the holder of private
property rights. However, the Constitution and the specifc applicable law (Law
No. 312/2005 on the right of foreign citizens and stateless individuals, as well as
of foreign legal entities to acquire the private property right over lands, which
came into effect on the 1
st
of January 2007) set forth limitations on the right
of foreign citizens and stateless individuals to acquire ownership over lands
in Romania. Citizens of an EU Member State or stateless individuals domiciled
in an EU Member State, who are not Romanian residents, as well as legal
persons established under the laws of an EU Member State, will be allowed
to acquire ownership over lands in Romania for the purpose of establishing
a secondary residence or a business unit starting with 2012. Ownership over
agricultural lands, forests or forest lands will be made available to citizens of an
EU Member State or to stateless individuals domiciled in an EU Member State,
who are not Romanian residents, only starting with 2014, and only provided
such persons work as independent farmers and become Romanian residents.
NonEU citizens and stateless individuals not domiciled in an EU Member State
may only acquire ownership over lands in Romania in accordance with international
treaties and to the reciprocity principle, under conditions not more favorable than
those set for EU citizens, EU legal persons and, respectively, Romanian citizens.
The most practical way for foreign investors to acquire land in Romania is to setup
a special purpose vehicle with its headquarters in Romania. This will be a Romanian
legal entity and, therefore, will be entitled to acquire land without the legal
limitations imposed to foreign citizens.
Formal Requirements for the Valid Transfer of Lands
Under Romanian law, deeds having as object the transfer of ownership over real
estate must be concluded in authenticated form (i.e. signed in front of a Romanian
public notary), under the sanction of absolute nullity.
According to the Romanian Fiscal Code, individuals (natural persons) obtaining
income from transferring the right of ownership (or dismemberments of ownership)
over real estate (constructions of any kind and the affected land and/or land of
any kind without constructions) are compelled by law to pay income tax
to the state budget.

Real Estate
Public Property
Both State and territorialadministrative units (communes, cities, municipalities and
counties) own properties consisting of real estate that, according to certain legal
principles, belongs either to the public or the private domain.
Public property includes all real estate that under the law or by its nature is of
public use or interest. As an example, the public property of the Romanian State
includes estates such as roads, beaches, parks, railway infrastructure, etc.
According to the principles of the Romanian Constitution, real estate in the public
domain (i) may not be subject to transfers of ownership right; (ii) may not be subject
to enforcement procedures and (iii) may not be encumbered by security interests.
Any transaction referring to an asset that is part of the public domain, and which
does not observe the abovementioned rules, is deemed to be null and void.
Some of the private real estate projects, especially projects developed in partnership
with local authorities, involve transfers of lands and buildings from public property
into private property or transfers between the public domains of the State and
respectively of the cities. The law imposes certain limitations to such transfers.
According to the Constitution, assets in the public domain may be exploited by third
parties by means of concession. The sale, concession or lease of such real estates
should be achieved by means of a public tender.
Exceptionally, the right to use real estate belonging to public property may be
granted, free of charge and for a limited period of time, to the public
utility institutions.

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41
Certain limitations to the free legal circulation of real estate are regulated by
specifc restitution laws (i.e. Law No. 10/2001 regarding the legal regime of certain
abusively taken over real estates and Law No. 247/2005 regarding the reform
in the felds of ownership and justice, as well as certain adjacent measures): if the
ownership title over a real estate which falls within the regulatory scope of
the restitution laws is subject to an administrative procedure and/or litigation, the
said real estate may not, among others, be validly transferred before such
procedures and/or litigation are settled.
Claims Regarding Real Estate Abusively Taken by
the Romanian State during the Communist Regime
Within the process of acquiring land for the purpose of developing real estate
projects in Romania, real estate investors should always consider the critical issue
of claims fled by former owners of real estate abusively taken by the Romanian
State during the Communist regime (by way of abusive expropriation, abusive
confscation, abusive nationalization etc.). Starting with 1991, the Romanian
Parliament issued a series of enactments regulating the restitution of such
real estate, such as:
Land Law No. 18/1991 (Legea fondului funciar);
Law No. 1/2000 on the reinstatement of the ownership right over agricultural
and forest land claimed in keeping with the provisions of the Land Law
No. 18/1991 and Law No. 169/1997;
Law No. 10/2001 regarding the legal regime of certain abusively taken over
real estates between 6
th
of March 1945 and 22
nd
of December 1989;
Law No. 247/2005 regarding the reform in the felds of ownership and justice,
as well as certain adjacent measures, which completes and unifes the general
legal framework on restitution of real estate.
The rule set forth in the above-mentioned enactments is that restitution of
the abusively taken real estate should be made in kind. Specifcally, the rights
of ownership must be reconstituted for the original real estate, on their
original locations/sites. Only should restitution in kind not be possible, the
former owners shall be granted compensation. This rule may have signifcant
consequences if, for instance, at the date of the claim, the real estate is public
property of a city and subject to a concession agreement awarded to a private
investor. As a rule departing from the ordinary legal provisions related to
registration within the Land Book, the ownership titles issued based on the
The value of such income tax depends on the transfer price, as well as on the time
period elapsed between the date when the real estate was acquired by the seller
and the date the seller transfers the ownership and/or dismemberments of
ownership over said real estate, as follows:
If the ownership (or the dismemberment of ownership) over the real estate has
been acquired by the seller within a 3year period prior to its being transferred,
the income tax amounts to: (i) 3% of the price, if the price does not exceed
RON 200,000, respectively to (ii) RON 6,000 plus 2% of the value exceeding
RON 200,000, if the price exceeds RON 200,000;
If the ownership (or the dismemberment of ownership) over the real estate
has been acquired within a period exceeding a 3-year term prior to the transfer,
the income tax amounts to (i) 2% of the price, if the price does not exceed
RON 200,000 and (ii) RON 4,000 plus 1% of the value exceeding RON 200,000,
if the price exceeds RON 200,000.
Limitations to the Free Legal Circulation of
Real Estate
As a general rule, privately owned real estate may be freely transferred. Exceptions
to the free legal circulation rule are included in special laws.
For instance, in the case of property rights established
5
over certain types of
agricultural land regulated by the Land Law No. 18/1991, ownership could not be
transferred by its initial owner for a 10year period beginning with the year
following the one in which the property was registered. In accordance with the
provisions of Law No. 71/2011 for the implementation of Law No. 287/2009 on
the Civil Code, this limitation was removed as of the entry into force of the
New Civil Code on the 1
st
of October 2011.
Another limitation to the free legal circulation of real estate is included in the
Romanian Forestry Code with respect to the transfer of the right of ownership
over forest lands, which may only be permitted subject to observing the Romanian
States preemption right. Under Law No. 422/2001 on the protection of historical
monuments, the Romanian State, respectively the territorialadministrative units,
also beneft of a preemption right in cases of transfer of the right of ownership over
real estate classifed as historical monuments under the applicable legal provisions.
5
This limitation only applied to the establishment (constituire) of property rights, and not also
to the cases of reinstatement (reconstituire) of such rights, two different hypotheses under the law.

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43
(opozabilitate fa de teri). Therefore, until this change in their legal
regime, registrations with the Land Book shall be carried out according to the
provisions of Law No. 7/1996 on cadastre and real estate publicity (the Cadastre
Law), to the effect of opposability, rather than constitution of rights.
In view of the above, recording in the Land Book rights acquired by investors over
real estates involved in a project (for instance, rights deriving from concession,
lease, a prohibition to sell) is essential in order to ensure the opposability and
stability of the right so acquired (while after the fnalization of the national general
cadastre of Romania such registration will be made for constitutive purposes). The
review of the records in the Land Book with respect to a real estate contemplated
by the project may reveal issues which signifcantly infuence the development of
the project, making it a required step prior to acquiring rights (for instance, the
Land Book may reveal that the estate is subject to an interdiction to alienate and
to set up mortgages, or that the estate is under concession to a third party, etc.).
Besides the new rule on the constitutive effects of Land Book registrations,
which has not yet become effective, the New Civil Code also establishes a
set of principles concerning the effects of the registration of legal rights,
deeds and acts, registration methods, cases where there is a confict between
several forms of registration and the right of any person to have access
to public registries, even if such person does not justify an interest.
The right to demand fulfllment of registration formalities is protected under the
New Civil Code, while contractual clauses seeking to limit the right to perform
certain registration formalities are deemed null and void. Where registration
procedures related to a deed or right have been performed, third parties may
not prove that they were not aware of such deed or right. The provisions of the
New Civil Code establish two legal relative presumptions, i.e.: the presumption
related to the existence of the registered act or right if it was not amended or de-
registered and the presumption of the inexistence of a de-registered deed or act.
The Cadastre Law sets forth the manner in which legal operations regarding real
estate properties are to be published. The records are kept by the National Agency
for Cadastre and Real Estate Publicity, through its territorial units. The general
cadastre record system is designed to provide a public record of all transactions
and relevant legal issues related to real estate located in the same territorial unit.
The Land Book provides for a description of estates (cadastral number of the
estate, dimensions of the estate, its categories of use and, as the case may be, the
buildings and the location of the estate by indicating neighboring areas), for various
aspects related to the ownership right (name of the owner, the legal deed or fact
which gives rise to the owners right, any rightsofway, legal facts, personal
laws on restitution of land properties shall be registered with the Land Book
ex offcio. Further, Law No. 247/2005 sets forth the legal framework governing
compensations, by way of establishing Fondul Proprietatea SA, a securities
collective placement body, in the form of a fnancial investment company.
Considering the large number of properties abusively taken by the State
between 1946 and 1989, and the multitude of legal issues raised in connection with
such properties over the years, also due to changing legislation, a detailed legal due
diligence investigation on the background of the ownership title over the relevant
real estate (land and/or building) is a requirement before initiating any real estate
project in Romania, irrespective of whether the real estate is currently in the States
public domain, in the private domain of a city, or owned by legal entity or
an individual.
Real Estate Publicity
As a major legislative novelty in Romanian real estate regulations, the New Civil
Code, in force starting from 1
st
of October 2011, sets forth the rule according
to which the fnal registration (intabularea) of a certain right with the Land
Book will have a constitutive effect, leading to the creation of the respective
right, rather than a mere opposability effect, as under the previous rule.
Conversely, private ownership over an immovable asset shall cease upon the
registration with the Land Book of the (previous) owners waiver thereof, under
certain regulated forms, and its de-registration from the Land Book. By way of
exception, ownership may also be obtained without registration with the Land
Book (which will retain an opposability effect only) when acquired by one of the
following means: natural accession, inheritance, forced sale, expropriation for
public utility reason or other cases expressly regulated under the law. Real rights
acquired by forced sale are not enforceable against good-faith third party acquirers
if the enforcement proceedings have not been previously noted in the Land Book.
Nevertheless, in order to legally dispose (e.g. sell a property) of a right obtained
by one of the abovementioned legal means, the owner will have to previously
register its ownership right with the Land Book for opposability purposes.
However, this set of new rules shall only become applicable after the complete
implementation of the unitary and mandatory cadastral system providing
a technical, economical and legal record of real estate, a system already
initiated in Romania starting with 1996. Until the national general cadastre
system is fully in place, and fnal registrations will become constitutive of
rights as envisaged by the New Civil Code, the public record system will only
have the purpose of making such rights opposable against third parties

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45
As for leased assets, the New Civil Code sets forth that, if ownership over the leased
asset is transferred, the lease contract shall be enforceable against the acquirer
pursuant to the following rules:
In the case of immovable assets registered with the Land Book, only if the lease
agreement was noted therein;
In the case of immovable assets not registered with the Land Book, only if the
certifed date (data cert) of the lease agreement is previous to the date
of the ownership transfer;
In the case of immovable assets subject to publicity formalities, if the lessee
fulflled such formalities;
In the case of other movable assets, if upon the ownership transfer date,
the asset was used by the lessee.
Construction
Construction works can only be performed on the basis of a building permit
(autorizaie de construcie) that is issued by the local public authorities
with a view to ensuring compliance of future construction with the legal provisions
regarding location, design, and scope thereof.
Town planning documentations
The main town planning documentations are the General Urbanism Plan (Plan
Urbanistic GeneralPUG), the Local Urbanism Plan (Plan Urbanistic Zonal
PUZ) and the Detailed Urbanism Plan (Plan Urbanistic de DetaliuPUD).
The PUG has a general applicability to a certain locality, and establishes, inter
alia, the limits of the intramuros territory (the city limits), the use to which the
intramuros lands (located within the city limits) may be put, the protected areas
(as the case may be), the development of the technical infrastructure, requirements
pertaining to the location and characteristics of the constructions. The PUG
represents the guideline for the development of a certain locality and may be
updated from time to time, every 10 years at most. In this respect, based on the head
architects specialized report, the mayor shall initiate the procedure for procurement
of PUG updating services and extension of the inforce PUGs validity term,
with at least 18 months prior its expiry. At the same time, the Local Committees/
General Council of Bucharest Municipality are entitled to extend by means of a
decision the validity term of the PUG until the entry into force of the new PUG,
however without exceeding two years from the expiry of the initial validity term.
The PUZ mainly ensures coordination between the development plans and the PUG
of a specifc locality. The PUZ is prepared for each specifc area of the respective
locality and refers to: (i) street network organization; (ii) urbanarchitectural
organization, depending on the urban structure; (iii) land usage; (iv) infrastructure
rights or other legal relations or actions taken in connection with the property)
as well as for aspects regarding the background of various dismemberments of
ownership (the right to use the land located under the construction, the right to
use, the right to dwell on, the rightsofway related to the land, mortgages
and real estate privileges, leases and assignments of income exceeding 3 years,
actions regarding garnishee proceedings, pursuit of the estate or of its proceeds).
If a certain right over real estate is recorded in the Land Book, it is presumed
to exist, if acquired or set up in good faith and lacking any proof to the
contrary. Registrations in the Land Book do not represent an absolute
evidence of the right of ownership over the real estate property.
The New Civil Code expressly includes and generalizes rules previously applicable
only in certain matters, such as rules concerning the effect of enforceability against
third parties (opposability), the rank of registration and, where expressly provided
by the law, the constitutive effect of registration. Therefore, as a general rule,
rights, deeds or acts are enforceable between the parties even lacking registration
formalities. It is also provided that a performed registration formality does not
substitute the conditions which are required for the valid existence of the deed. In
addition to the above, the registration does not interrupt the statute of limitation.
Besides the above, as of the entry into force of the New Civil Code,
provisional Land Book registrations and Land Book notations have a legal
character and may be done only in the cases expressly provided by the law.
Real rights (drepturi reale) which are subject to a condition precedent
or to a condition subsequent may not be registered with the Land Book,
and maybe recorded as provisional Land Book registrations only.
Lacking evidence that the condition precedent affecting a right provisionally
recorded with the Land Book was met, the right shall be deregistered ex offcio
within 5 years as of the date of its registration. Conditions subsequent shall also
be deregistered ex offcio if deregistration for having met the condition
was not requested within 10 years as of the registration of the affected right.
Under the New Civil Code, registrations with the Land Book become effective as of
the date on which the registration application is registered with the Land Book.
The New Civil Code also sets forth in detail provisions regarding the order of
priority between concurrent titles or multiple registrations in the Land Book.
Where there are concurrent titles emanating from the same predecessor in title,
the holder of a Land Book registered right is deemed to be the frst person who
made such registration, irrespective of the date of the title on which the Land
Book registration relies upon.

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The construction requirements established under the town planning documentation
are described, for individualized parcels of land, through urbanism certifcates. The
purpose of such certifcates, which may be issued at the request of any interested
person (individual or legal entity), is mainly to: (i) provide information on the legal,
economical and technical regime of a certain plot, including in relation to the
buildings erected thereon, (ii) detail the town planning requirements that apply
to it and (iii) indicate the approvals and permits required in order to begin
construction on the plot.
The urbanism certifcate is issued by the same authorities issuing the building permit,
respectively the Mayor of the locality where the land is located or the President
of the County Council, if the land on which construction works are going to be
performed exceeds the boundaries of a single territorialadministrative unit. The
urbanism certifcate does not grant its holder the right to perform construction
works. The sole document allowing construction works is the building permit.
Urbanism certifcates are also issued for granting concession rights on lands, for
adjudication of projects referring to public works, and for certain legal transactions.
The building permit
Depending on the type of land (intramuros or extramuros), as well as on the use
to which the land is put (agricultural or industrial), certain steps have to be taken
before applying for a building permit.
If the relevant plot is classifed as farming (agricultural) land, one of the
prerequisites to obtaining a building permit is to change the category of
use of the land, a process that requires a certain administrative procedure
(including drawingup of cadastral documentation and obtaining approvals
from various governmental agencies) be followed and fees be paid.
The building permit may only be issued after the fulfllment of the following
steps: (i) obtaining the urbanism certifcate, which describes, inter alia, the
town planning requirements for the relevant area, (ii) obtaining the relevant
endorsements and approvals by the authorities indicated in the urbanism certifcate
and (iii) submitting the technical documentation of the future construction.
Building permits may be issued to the holder of a real right on the estate
(land and/or construction), such as: ownership, usage right, usufruct right, or
superfcies. However, a building permit may be issued on the basis of a free
lease or lease agreement only in the case of temporary buildings, and provided
that the owner of the real estate expressly consents to such constructions
being built on its land. Building permits are issued by the same authorities
empowered to issue urbanism certifcates. If the benefciary is changed before
development; (v) technical regime applicable to the respective area, and (vi)
protection of historical monuments located in the relevant area. The PUZ is approved
by the Local Council of the City Hall where the land is located. Once approved, it
becomes compulsory for the respective area in relation to the technical parameters
contained, and it may not be amended for a period of 12 months after its approval.
The PUZ establishes regulations with respect to the construction regime, function of
the area, maximum permitted height, land use coeffcient (Coefcient de Utilizare
al TerenuluiCUT), land occupancy ratio (Procent de Ocupare al Terenului
POT), buildings alignment receding planes and distances to lateral and backside
limits of the plot, architectural features of the buildings, permitted materials.
The PUD is a specifc regulation that setsforth detailed requirements regarding the
location and area of a construction on a specifc plot, as well as its harmonization
to surrounding areas. The PUD includes, inter alia, regulations regarding: (i)
accessibility and connection to the urban networks; (ii) general constraints regarding
the built volumes and the fttings; (iii) functional and esthetical harmonization
of the construction with the surrounding areas. The PUD shall have the exclusive
nature of a specifc regulation of a plot in relation to the neighboring plots. This
cannot change the plans with a higher rank, but only detail the specifc construction
fashion considering the function of the area and the architectural identity thereof.
According to the legal provisions currently in force (Government Emergency
Ordinance No. 7/2011 for the amendment and completion of Law No. 350/2001 on
territory management and urbanism), the initiative of preparing the land
development and town planning documentations exclusively belongs to the
public administration authorities
Should the application for the issuance of an urbanism certifcate (certifcat de
urbanism) seek an amendment to the town planning documentations (e.g. PUZ)
approved for such area, or should the specifc conditions of the location or nature of
the investment objectives require it, the local public authority shall be entitled, for
specifc cases, to condition the authorization of the investment on the preparation
by care of the private investor who fled the application, of a PUZ and on the
approval thereof by the local public authority or, for some other cases, to condition
the authorization of the investment on the preparation and approval of a PUD.
Starting from the 1
st
of January 2012, no town planning documentations (such as
PUZ or PUD) having the purpose to bring into legality certain constructions built
without a building permit or failing to comply with the provisions of the building
permit may be initiated and approved. Decisions approving town planning
documentations issued in breach of the law may be annulled at the prefects
request, or upon a notifcation from the general inspector of the State Inspectorate
in Constructions, county head architect, or central specialized authorities.

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Creditor & Debtor Disputes
Overview
Economic instability in the last year has continued to exert signifcant pressure
on the budgets of companies in debt, with amiable payment of outstanding
receivables still usually challenged and subject to delay. This, in turn, has
increased the number and complexity of disputes issued in courts and in
arbitration, calling forth new developments in the dispute resolution system.
With a new Civil Procedure Code underway, tentatively set to enter into force by July
2012alongside an already enacted New Civil Code, and future New Criminal and
Criminal Procedure CodesRomania looks at a major reform of its judiciary system
in the immediate future. For the time being, the Civil Procedure Code (the CPC) still
in force, and amended at the end of 2010 by Law No. 202/2010 which implemented
in advance certain measures envisaged by the New Civil Procedure Code, provides
the procedural rules for civil disputes arisen under the New Civil Code; from this
point of view, civil procedure law undergoes a legislative transition period.
An expansion of alternative dispute resolution mechanisms has already begun, with
courts being held to recommend mediation to litigating parties since the entry into
force of substantial amendments to the Mediation Law on the 3
rd
of March 2010.
Against this background, urgent and costeffective court applications have
been made available to creditors in recent years for the recovery of their
certain, liquid and exigible debts. These special urgent procedures are currently
regulated by laws external to the CPC but the New Civil Procedure Code
includes them in the main body of civil procedure rules. In answer to urgent
debt recovery procedures made available in courts, the Court of International
Commercial Arbitration attached to the Romanian Chamber of Commerce
and Industry, which hosts most of the arbitrations in Romania, has approved
a set of rules for expedited arbitrations, including an online procedure,
with awards to be passed in approximately one month as of request.
completion of the works, the building permit remains valid and is automatically
transferred to the new benefciary, which is bound to observe its provisions.
The building permit is issued subject to the payment of a tax of (i) 0.5% of the
estimated value of the construction works referring to dwellings, (ii) 3% of the
estimated value of the works referring to site organization, provided that such
works are authorized individually, and not together with the main construction
works to which they refer, (iii) 2% of the estimated value of the construction works
for the camping, cottages, camps or caravans or (iv) 1% of the estimated value of
the construction works (such tax is further adjusted at the end of the project based
on the fnal construction price). Should the extension of the building permit be
required, an additional tax amounting to 30% of the initial authorization tax has
to be paid. The completion of the construction works and their compliance with
the requirements laid down in the building permit are ascertained by means of
reception minutesa deed prepared by the representatives of the local authorities,
of the constructor and of the benefciary of the respective construction works.
Such reception minute represents also the deed ascertaining the completion
of the construction works, being one of the documents based on which the new
building may be registered with the Land Book.
Consequently, based on the legal provisions in force, (Government Emergency
Ordinance No. 64/2010 regarding the amendment and completion of Law No.
7/1996 on cadastre and real estate publicity) the registration of constructions with
the Land Book is grounded cumulatively on the building permit, the reception
minutes upon the completion of works, as well as on a cadastral documentation.
As an exception, the ownership right over constructions may also be registered
within the Land Book by execution phases (pe stadii de execuie), on the grounds
of: (i) the building permit, (ii) the minutes on the physical stage of the construction
works, endorsed by the representative of the public administrative authority
which issued the building permit, as well as of (iii) the cadastral documentation.
As already detailed above, the constitutive effect of the registration of the
ownership right with the Land Book shall be applicable only after the fnalization
of the national general cadastre of Romania, the registration having only an
opposability effect until such time.

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51
Proof of having carried out the pre-action procedure (minutes of the meeting where
the attempt to reconcile failed or proof that the debtor refused or failed to attend
even though formally invited or, as the case may be, minutes of mediation result)
is required in court.
For debts deriving from matters other than between professionals, even though the
CPC does not require a preliminary procedure, the creditor is expected to notify the
debtor of delay before issuing claim, if not otherwise provided by way of exception
in the law or agreed by the parties. The notice of delay will have to include a
reasonable deadline for the payment of debt. If such prior notice is omitted, the
debtor will beneft from a reasonable time-frame inside which payment of debt
will lead to the dismissal of the claim, with legal fees to be borne by the creditor.
Claim formalities
Unlike other jurisdictions, no claim forms are made available or required by
the courts in Romania, even though the law requires minimal contents for the
application. The CPC provides a minimal content of the claim but certain
formalities may be fulflled after the registration of the claim, within the term set
by the judge. Any claim issued in court must have attached evidence that legal
stamp in the required amount has been paid. The amount of the legal stamp
depends generally on the value of the litigation.
Evidence
Romania is a jurisdiction where the types of evidence admissible in courts are
limitedly provided by law. They include documents (privately made, authenticated
and, since 2001, electronic documents provided with electronic signature), witnesses,
interrogatory, expert reports and on site assessments. All evidence must be
approved and is taken by the court. The court may permit requests for production
of documents in the possession of the adversary or a third party to the trial provided
the evidence proposed is legal (including legally obtained), credible, relevant and
conclusive and the requested documents do not contain privileged information.
Interim and urgent measures
The CPC makes available interim applications for creditordebtor disputes
such as injunctions to seize tangible assets or place liens on bank accounts in order
to preserve the rights of the creditor. The applications are adjudicated in urgent
procedure. In assistance of creditors seeking to preserve rights that may be
jeopardized by delay, or prevent, mitigate or remedy damages, or remove
impediments that may forestall enforcement, the CPC provides the urgent
application for an injunction, an urgent procedure available prior to
or after issuing claims.
Resolution of Debt Recovery Disputes by the Courts
Structure of the courts and competency rules
The Romanian judiciary system consists of four levels of courts: local courts, tribunals,
courts of appeal and the High Court of Cassation and Justice, Romania`s supreme
court.
As a general rule, a debt recovery claim will be issued in the court holding
jurisdiction over the respondents business headquarters or domicile
6
. In terms of
the material jurisdiction, claims may be issued in frst instance in the local courts
or tribunals, depending on the value of the claim. The current threshold is set at
approx. EUR 115,000, with no distinction being made between civil and commercial
matters
7
.
Preaction protocols
In matters between professionals
8
only, should the dispute arise from
contract, the CPC requires the creditor to carry out (i) a direct conciliation
procedure, or (ii) a mediation procedure as a preaction protocol,
lacking which the claim may be denied in court as inadmissible.
The mandatory prior conciliation consists in an invitation sent by the creditor to the
debtor for a meeting during which the parties attempt private amicable settlement
of the dispute. The timeframe set by law permits this mandatory preaction phase
to be completed in approximately 30 days. Provided alternatively to conciliation,
mediation procedures are regulated by Law No. 192/2006 on mediation, and involve
the assistance of a third party mediator in the negotiation of a settlement.
Agreements reached by the parties by conciliation or mediation are
private instruments, but the parties may opt to have them authenticated
by the notary public, with the advantage that authenticated instruments
ascertaining payment obligations are deemed writs of enforcement.
6
Alternative criteria to determine the court having territorial competence as frst instance are
provided for certain cases, such as the place where the agreement is performed. Other exceptions
are provided for claims bearing on immoveable assets, where the competency is determined
by locus rei sitae.
7
The distinction between civil and commercial claims, a pinnacle of former civil proceedings
legislation, has been repealed with the entry intro force of the New Civil Code, on the 1
st
of October
2011. All matters covered in the New Civil Code, which also contains regulations in matters
formely included in the Commercial Code, are henceforth deemed civil. New rules of procedure
included in the New Civil Procedure Code are meant to implement this reunifcation; the law
implementing the New Civil Code already put in place certain reorganizational measures at the courts
level to refect this change.
8
Professionals, as defned under the New Civil Code, are persons operating an enterprise.

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The injunction to pay represents an available means of action only in the case of
debts fowing from agreements concluded between professionals, or between
professionals and authorities. Debts already registered within an insolvency
procedure, as well as debt deriving from providerconsumer relations are not
recoverable by injunction. On the other hand, the motion to pay has a larger scope
of regulation: it includes all debts fowing from contracts that have been concluded
in written form, or from statutes, regulations or other manuscripts that are signed
by the parties, and attest to rights and obligation deriving from the execution of
works, services or other undertakings. In case of both procedures, should legal
conditions be met, the court will pass a court order directing the debtor to pay,
with a grace period between 10 and 30 days, if the parties do not otherwise agree.
The court order is only challengeable by way of action in annulment, to be fled in
10 days time from the serving of the award. Where legal conditions are not met,
the application is denied as inadmissible by irrevocable order and the creditor
may resort to the general procedure to fle claim for the recovery of his debt.
Both the motion to pay and the injunction to pay provide signifcant advantages
to the creditors: expedited and simplifed procedures, reduced legal fees (a fxed
legal stamp fee is requiredcurrently set at the equivalent of approximately EUR
10, rather than a pro rata fee from the value of the claim). However, in practice,
debtors generally contest the debts claimed by urgent application in order to obtain
denial of the application as inadmissible, and provoke a settlement on the merits
under the general rules, which require prior dispute resolution procedures, a pro
rata legal stamp fee, ample evidence and a broader range of available appeals.
Alternative Dispute Resolution Procedures
Available for Debt Recovery
Arbitration, conciliation and mediation are available in Romania as alternative
methods of adjudicating claims to the courts. Among them, arbitration is the most
common, and we will outline the framework of arbitrations in Romania below.
Conciliation
Conciliation is made available at the Chamber of Commerce and Industry but is
rarely resorted to, especially with the CPC providing a mandatory direct conciliation
as preaction protocol in all commercial cases bearing on patrimonial claims.
Creditors prefer to carry out the conciliation under the CPC and thus complete
a required step before issuing claim, if settlement fails, rather than resort to
private conciliation.
Rights of appeal
Judgments passed in frst instance are usually challengeable by frst appeal, in 15
days as of service. The frst appeal is an ordinary application seeking to obtain
revision of the judgment on its merits and the court may take new evidence.
Decisions passed in frst appeal are challengeable by fnal appeal, which is
an extraordinary appeal that may only be grounded on limitedly provided
reasons. In fnal appeal, no new evidence is accepted except for documents.
The current rules, however, render enforceability to frst court judgments
in matters between professionals, if the dispute derived from contract.
Such judgments are, nevertheless, challengeable by frst appeal.
The distinction between commercial and civil matters having been removed, the
New Civil Procedure Code includes rules set to accommodate the change, among
which, it unifes provisions with regard to available challenges, instituting a
single means of ordinary challenge (the appeal) and three exceptional means of
challenge (the fnal appeal, the contestation for annulment, and the revision).
In all cases, the appeal will constitute the only means of challenge of devolutive
character, seeking to verify the judgment on the merits. Final appeals are to
be largely retained within the jurisdiction of the High Court of Cassation and
Justice, their scope being limited to examining the legality of judgments.
Other extraordinary challenges, available only for limitedly provided reasons,
are the revision (mainly for discovery of new evidence or contradictory
decisions or minus or plus petita) and the motion to annul (for breach
of competency rules or failure to fulfll the summoning procedure).
Special urgent applications
Two urgent procedures of debt recovery have been made available to creditors owed
certain, liquid and exigible debts: the motion to pay (somaia de plat) introduced
by Government Ordinance No. 5/2001, and the injunction to pay (ordonana de
plat), made available by Government Emergency Ordinance No. 119/2007.
In order to be capable of seeking recovery by way of either urgent procedures, the
creditor must be owed a debt that is certain (there is no dispute on its existence),
liquid (accurately determined or determinable), exigible (matured and enforceable)
and payable in money. In both procedures, to satisfy the urgency, the creditor
must be capable of evidencing the debt by documents (agreements, invoices) as
other evidentiary means, such as witnesses or expert reports, are not admissible.
Differences between the two procedures mainly relate to feld of application.

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Domestic arbitration awards (passed in Romania and which do not present
prevailing ties with another jurisdiction) are fnal and binding for the
parties. Such awards are enforceable in Romania under the same procedures
as a court judgment and challengeable only by motion to annul, for
limitedly provided reasons, to the court ranking superior to the one that
would have had jurisdiction on the claim lacking the arbitral clause.
Decisions passed on motions to annul an award may challenged by fnal appeal
on limitedly provided grounds. In practice, the occurrence of award nullifcations
is very scarce, signifcantly due to the professional excellence of the arbitrators
made available at the Court of International Commercial Arbitration.
Further incentive for adjudication of claims in arbitration, enforcement abroad of
arbitration awards is facilitated by Romanias recognition of the 1958 New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The costs of arbitration, however, are generally perceived as higher than the costs
of court proceedings.
Enforcement of Domestic Judgments
and Arbitral Awards
Writs of execution
Enforceability is, in Romanias jurisdiction, specifc in principle to domestic
judgments (issued upon frst or second appeal, depending on the matter)
and domestic arbitral awards, which are recognized enforceability ipso
jure on the territory of Romania. There are other instruments to which law
recognizes enforceability, such as certain agreements (such as loan contracts
concluded with banks, the legal assistance contract concluded with a lawyer),
or documents authenticated by the notary public in certain conditions.
Creditors wanting to enforce the writs of execution have to submit them to the
local court to be vested with executory power. This is a formal procedure, by
which the court verifes the existence of the enforceable judgment or award and
applies a stamp and signature (commonly referred to as vesting formula). There
are exemptions from the vesting requirement, such as in the case of judgments
issued in frst court in matters between professionals, stemming from contract.
Subsequently, writs of execution are handed over to a court bailiff, who will
have to obtain approval of the request for enforcement from the competent
court. Once such approval is obtained, the bailiff can proceed to enforcement.
Mediation
The Chamber of Commerce and Industry has been offering the service of
mediation since 2003, but this alternative dispute resolution method caught the
attention of the general public only after 2006, when a law to regulate it was
passed. Mediation is expected to develop a signifcant practice after the March
2010 legal amendment requiring all judges and arbitrators, as well as any other
jurisdictional authorities, to explain and recommend mediation to disputing
parties. With the law permitting the parties to request their agreement reached by
mediation be embodied in a court judgment, confdentiality of proceedings and
privilege to the parties submissions during mediation (which may not be used in
court), the constant efforts of the business and legal community to promote and
popularize mediation are expected to bring forth developments in the next few
years. The New Civil Procedure Code also includes a specifc provision requesting
judging panels to explain and recommend mediation to litigating parties.
Arbitration
Any commercial or civil matter which bears on rights on which the parties
are by law permitted to compromise (pecuniary) is capable of settlement
by arbitration under Romanian law. The CPC provides the main body of
rules regarding arbitration, which may be adhoc or institutionalized.
Institutionalized arbitrations are preferred by the parties and most claims are issued
at the Court of International Commercial Arbitration attached to the Chamber
of Commerce and Industry, established in 1953 in Bucharest, which handles civil
and commercial, domestic and international arbitrations under its own rules,
compliant with the CPC. New courts of arbitration have been established more
recently at county chambers of commerce and in Bucharest. The parties are
permitted to establish the rules to govern the arbitration in terms of constituting
the tribunal, appointment and revocation of arbitrators, procedural rules, the
place of the arbitration etc., either directly or by reference to an existing set of
norms, provided they do not depart from public policy rules in the CPC. In the
case of institutionalized arbitrations, the applicable rules are usually the rules of
the permanent court under the auspices of which the tribunal is constituted.
Disputes may be settled by one arbitrator or by a tribunal formed of two or more
arbitrators, if the parties so decide. Failing to do so, the tribunal is formed of
three arbitrators, which is also the rule under the Arbitration Rules of the Court
of International Commercial Arbitration. Adjudicating claims by arbitration
rather than in courts provides a series of incentives to the parties. Arbitrations
are governed by the rule of confdentiality, contrary to court proceedings, which
are public as a rule. Arbitral awards must be passed, as rule, in 5 months from
the constitution of the tribunal, with permitted extensions of up to 2 months.

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Recognition and enforcement of judgments issued in EU Member States
The procedure for the recognition and enforcement in Romania of judgments
issued in Member States is governed by Council Regulation No. 44/2001 of 22nd
of December 2000 on jurisdiction, recognition and enforcement of judgments in
civil and commercial matters. The Regulation establishes a simplifed procedure.
Essentially, a judgment passed in a Member State is deemed recognized
enforceability in Romania pursuant to an application fled by the interested party,
attaching a formal certifcate issued by the court that passed the decision.
Recognition of enforceability of a foreign judgment issued in a EU Member State
may only be denied in the following cases:
If the respondent was not summoned by the court in compliance with the
applicable law, except for the case when the respondent was however
given the possibility to challenge such judgment but failed to do so;
If the judgment is irreconcilable with a judgment issued in Romania in a dispute
between the same parties;
If the judgment is irreconcilable with an earlier judgment passed in another
Member State or in a third State involving the same object, cause of action and
parties, provided that the earlier judgment fulfls the conditions necessary
for its recognition in Romania;
If the judgment breaches jurisdiction rules provided in the Regulation (with
regard to exclusive jurisdiction of certain courts on certain matters, jurisdiction
on consumer protection or insurance) or if the recognition of enforceability
would interfere with obligations Member States undertook previously to the
entry in force of the regulation under Article 59 of the Brussels Convention.
As to the enforcement, the admission of such an application is conditional upon
the applicants proving that the foreign judgment is authentic (based on a formal
certifcate issued by the court that passed the decision) and enforceable (recognition
has been obtained, the right to enforce was not extinguished by prescription,
the judgment is susceptible of being enforced). Decisions on the enforcement may
be appealed against.
Recognition and enforcement of judgments issued in NonMember States
The procedure for the recognition and enforcement in Romania of judgments
issued in NonMember States is regulated by Law No. 105/1992 on private
international law relations. In order to obtain recognition, the creditor
must prove that the foreign judgment is fnal, that the foreign court had
jurisdiction to rule on the case and that reciprocity exists with respect to the
acknowledgement of the effects of foreign judgments between Romania and
the State of the issuing court. The enforcement of nonEU foreign judgments
in Romania is conditional upon the petitioner proving the enforceability of
the judgment (recognition has been obtained, the right to enforce was
Writs of execution may be enforced within 3 years as of the moment the
debtor is allowed to request enforcement, with the exception of writs bearing
on immoveable property, for which the prescription term is of 10 years.
Subsequently, writs of execution are handed over to a court bailiff, who will have
to obtain approval of the request for enforcement from the competent court. Once
such approval is obtained, the bailiff can proceed to enforcement. Writs of
execution may be enforced within 3 years as of the moment the debtor is allowed
to request enforcement, with the exception of writs bearing on immoveable
property, for which the prescription term is of 10 years.
Enforcement procedures
Enforcement, governed by the CPC, may be indirect, when the debt is
satisfed from amounts the creditor obtains from enforcement (either from
selling the debtors assets, or directly from the debtors accounts or from
third parties owing money to the debtor) or direct, whenever the creditor
seeks to satisfy his right by a performance in kind (for instance, when the
debtor owes the creditor an asset and the creditor pursues the debtor
for that asset). Enforcement is carried out by bailiffs, a professional body
organized under the supervision and control of the Ministry of Justice.
There are available methods for the debtor to forestall, stay, or even cancel the
enforcement procedure. The procedure may be forestalled by way of a preliminary
request for a stay, which is fled by urgent application in advance to the adjudication
of a main request for a stay. The main request for a stay is fled concomitantly
with the opposition to enforcement, and requires the debtor to deposit a bail,
usually established prorata from the amount of the debt under enforcement.
Oppositions to enforcement seek to cancel the enforcement, wholly or partially,
usually for formal miscarriages, such as invalidity of the enforcement formal papers,
which are prepared by the bailiff, or the absence of a valid writ of execution.
Recognition and Enforcement of Foreign
Judgments and Arbitral Awards
Recognition and enforcement of foreign judgments
Foreign judgments may be recognized enforceability and enforced in Romania by
procedures which differ depending on the place of issue being inside or outside
the EU. In both procedures, the application for recognition and the application for
enforcement may be submitted simultaneously and be adjudicated by the court in
the same decision. Neither procedure allows the courts competent to adjudicate
applications for recognition and enforcement to review the judgment on its merits.

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former enactment (Law No. 64/1995), establishing a new, simplifed and expedited
insolvency procedure in certain cases, discharging the syndic of his administrative
duties, increasing the duties of the judicial administrator and of the liquidator
as well as the role of the representative bodies of the creditors, and aiming to
improve the service of process by establishing the Insolvency Proceedings Bulletin.
Special provisions exist under Romanian law for the insolvency of banks
(Government Ordinance No. 10/2004) and private international law matters
regarding insolvency, having to do with states outside the EU (Law No. 637/2002).
As of 1
st
of January 2007, the Council Regulation No. 1346/2000 of the 29
th

of May 2000 on insolvency proceedings regulates the private international
law relations in the feld of insolvency applicable to EU Member States.
General conditions
According to Romanian law, insolvency means the debtors manifest incapacity
to pay its matured debts out of the available liquidity. Within the meaning of
Romanian law, debtor in the matter of insolvency may be: commercial companies,
regional associations, agricultural companies, private legal entities carrying out
commercial activities, economic interest groups, as well as the individuals who
carry out commercial activities either individually or in family associations.
The insolvency procedure may be initiated at the request of the debtor itself, of
any of its creditors, or at the request of certain especially enabled institutions,
such as the National Securities Commission for debtorslisted companies.
The following conditions must be cumulatively met to ground and application:
The debtor owes amounts in excess of RON 45,000 (approximately
EUR 10,500) or in excess of 6 national average salaries for debts
arising from labour or civil relations (approximately EUR 2,800);
The debtor is unable to pay its matured debts with cash for more than 90 days;
The debtor may declare itself insolvent and place itself under the protection
of a judicial reorganization procedure should its insolvency be imminent.
Insolvency procedures and participants
All applications under the Insolvency Law are, in frst instance, within the jurisdiction
of the insolvency division of the tribunal where the debtor is headquartered. The
participants to the insolvency procedure are: the court, the syndic judge appointed
by the president of the court, the creditors collegial bodies (the assembly and the
committee), the judicial administrator (appointed by the syndic for reorganization),
the special administrator of the debtor (appointed by the debtors shareholders)
and the liquidator (appointed by the syndic for liquidation /bankruptcy).
not extinguished by prescription, the judgment is susceptible of being enforced).
The New Civil Procedure Code will bring about only minor adjustments
to the requirements for recognition, among which:
In order to obtain recognition, the creditor will also have to prove that
the foreign court jurisdiction was not exclusively based on the presence
of the defendant or assets belonging to him in the State of the said
jurisdiction, if this presence held no direct relation to the dispute;
Two new situations in which recognition may be refused are regulated:
(i) the case of a foreign judgment incompatible with any previous
foreign judgment, likely to be recognized in Romania, or (ii) the case
of a foreign judgment given in breach of the right to defense;
By the judgment approving the enforcement of the foreign award, the Romanian
court shall also establish the conversion into the local currency of the sum
of money established by the foreign award. The exchange rate shall be the
one established for the day when the judgment was rendered enforceable
in the State where it was rendered, and not the exchange rate established
for the day when the judgment granting the enforcement was given.
Recognition and enforcement of arbitral awards
Foreign arbitral awards are recognized and enforced in Romania under the 1958
New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards and under Law No. 105/1992 on private international law relations.
In case of inconsistencies, the New York Convention prevails. The above
presented conditions in relation to the recognition and enforcement of
foreign judgments issued in NonMember States will apply, in principle,
to the recognition and enforcement of foreign arbitral awards.
The New Civil Procedure Codes provisions on the subject are also principally
bound to ensure full compliance with the New York Convention.
Insolvency
Insolvency framework
Insolvency in Romania is governed by the Insolvency Law (Law No. 85/2006) passed
in the process of harmonizing domestic laws with the legal principles applied in the
European Community. The Insolvency Law develops around two basic principles
ensuring celerity to insolvency proceedings and a better protection of the creditors
interests through instruments made available to their representative bodies in the
proceedings (the creditors assembly and the creditors committee). In an effort to
transpose such principles, the Insolvency Law brought certain amendments to the

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Agreements concluded by the debtor within the 3 years prior to opening the
procedure, except for transfers made during the normal course of operations,
are subject to verifcation by the administrator/liquidator and may be annulled by
the court if concluded in bad faith to the detriment of creditors. Should liability for
causing the debtor to become insolvent be established on the part of a person
(for instance, on the part of the managers), the syndic may order such person
to bear some/all of the debtors dues.
The bankruptcy procedure may be closed by decision of the syndic at any stage if
established that the debtor has no assets, or that the existing assets cannot satisfy
the administrative expenses and no creditor offers to advance the necessary
amounts. By the same decision, the syndic orders the debtors deregistration from
the register in which it was recorded (the Trade Registry usually, for commercial
companies).
Preventive Arrangement
January 2010 has seen the entry into force of a new legal procedure designed to
protect overburdened companies from ending in insolvency: the preventive
arrangement (concordatul preventiv). The preventive arrangement is a
procedure meant to solve temporary fnancial diffculties of a company in
order to ensure continuance of its commercial activity and it consists of an
agreement between the debtor and the creditors holding at least two thirds of
the existing uncontested receivables. The preventive agreement must include
a plan of redress for the future of the debtor, which may comprise, inter alia,
measures aiming to restructuring personnel and/or management staff, the
closing down of branches and/or working points etc. The debtor is bound to
pay at least 50% of its dues during the implementation of the redress plan.
The procedure provides the debtor notable advantages. For instance, once
an offer of arrangement is made, the syndic judge can provisionally suspend
legal enforcement procedures initiated by the creditors in question. Also, if
an arrangement is reached with creditors holding at least 80% of existing
receivables against the debtor, and provided the receivables disputed by the
debtor amount to less than 20% of the debt total, the judge will suspend all
enforcement procedures against the company, for the period of the arrangement.
Due to its essentially amiable character, and to its less radical effect on the
commercial image and credibility of a company, the use of preventive arrangements
is expected to become a growing trend in creditordebt or dispute settlement
methods.
The Insolvency Law makes available two types of procedures for debtors unable
to pay their outstanding debts: the general insolvency procedure and the simplifed
procedure.
The general procedure is formed of two phases:
The judicial reorganization procedure, aimed at allowing the debtor to
pursue its activity and pay its debts under a reorganization plan. If the
debtor does not comply with the plan or the continuance of its activities
causes losses to its assets, the offcial receiver, the creditors committee or
any of the creditors, as well as the special administrator may request, at any
time, to the syndic judge to approve bankruptcy procedure be opened;
The bankruptcy procedure, wherein the debtors assets are liquidated and the
amounts obtained are distributed to satisfy the creditors. The liquidation of a
debtors assets is carried out by the liquidator under the control of the syndic
judge. In order to maximize the value of the debtors assets, the liquidator
will take all measures necessary to publicize the sale, in whatever manner
deemed adequate. The liquidation costs are borne from the debtor`s assets.

After a period of observation, insolvency under the general procedure allows for
reorganization. The legal text highlights that assistance provided to the debtor in
view of surviving fnancial distress, reorganizing its activity on an effcient basis and
satisfying its creditors claims best satisfes the goal of insolvency procedures, which
is not limited to the paying of creditors, but also includes debtors economic redress.
The simplifed procedure, applicable in certain cases (such as the debtor having
been already placed under judicial reorganization within the previous 5 years from
application), permits the bankruptcy procedure be opened without the preliminary
phase of the judicial reorganization.
Under the general procedure, the syndicjudge may order the debtor into
bankruptcy if (i) the debtor departs from the provisions of the reorganization plan
concerning opportunities to pay its debts or (ii) a reorganization plan is not
submitted, or not confrmed by the creditors assembly, or by the syndicjudge.
Should these conditions be met, the bankruptcy procedure is opened by way
of court order, to the immediate effect that all claims, judiciary or extrajudiciary,
bearing on the debtors assets are suspended.
Due to a 2009 amendment to the Insolvency Law, banks cannot discontinue
credit fnancing to the debtor on insolvency grounds. The same rationale is
applicable to all pending contracts at the moment of opening the proceduresuch
contracts cannot be terminated due to the opening of insolvency procedures
against the party in debt.

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Duration
As a general rule, individual employment agreements are deemed concluded for
an unlimited duration. This rule triggers important constraints for employers,
dismissing employees being possible only in exceptional circumstances, strictly
regulated in the Labour Code. Employers are allowed to conclude timelimited
individual employment agreements with their employees only in the cases expressly
mentioned by the Labour Code, such as temporary increases in the employers
activity, replacing employees whose employment is suspended or in the case of
seasonal activities. Using temporary work is permitted in order to perform certain
precise and temporary tasks by employees provided by temporary labour agents,
entities rendering the socalled leasing of personnel services. The maximum term
of the temporary work or the fxed-term employment agreements is of 36 months.
Minimal level of rights
Employees cannot be given rights and benefts which are below the level established
in the labour legislation and the collective bargaining agreements. Any derogations
from or waivers of such rights shall not be considered valid, even if accepted by
the employees or expressly provided in the individual employment agreements.
Working time
Regular working time is 8 hours a day and 40 hours a week. Employees` consent
is required for overtime work. The working time duration can not exceed 48
hours a week, including overtime. Additional overtime is exceptionally accepted,
provided that the average working time computed on a fourmonth basis
does not exceed however 48 hours. Overtime shall be extra paid, unless paid
time off is offered in lieu within 60 days after the date it was performed.
Leaves and days off
Employees beneft from daily and weekly rest. Saturdays and Sundays are days off
but changing the days of weekly rest is possible provided that the employees
are additionally paid.
The following days are declared public holidays under the law:
1
st
and 2
nd
of January;
First and second Easter days;
1
st
of May;
First and second Pentecost days;
15
th
of August;
1
st
of December;
First and second Christmas days.
Employment
Overview
During the past years, Romanias attractiveness for foreign investors came, among
others, from the highly skilled and relatively cheap labour force it offered in the
context of economic growth and macro stability. Authorities tried to adapt the
labour legal framework as the transition from the state planned economy was
complete and the employment environment had to respond to the demands
entailed by Romanias target to join the European Union in 2007. Now, Romania is
still facing the challenges of the economic and fnancial crisis which also impacted
employment, as crises usually do. Flexible public policies and an adequate legal
framework have more than ever a vital role in alleviating unemployment.
Recently, Romania took a signifcant step forward in freeing up the labour market
in the spirit of EU legislation and competitive labour market. The latest changes
of the main regulations in the feld of employment are very much welcomed by
the investors and are deemed to bring more fexibility in the labour relations.
Individual Employment Agreements
Conclusion
Employers have the obligation to conclude written employment agreements
with each of their employees. Concluding individual employment agreements
in writing is mandatory and is a condition for the agreement to be valid. Failure
to comply with such obligation may result in a penalty for the employer if the
number of employees for which the employer has not concluded a written
employment agreement is under 5. In case such number is bigger, the act
of the employer shall be deemed as an offence under the criminal law.

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The same sanction shall apply if the employers cannot prove that the reasons for
dismissal are real and fall within the categories recognized by the Labour Code
as entitling employers to perform dismissals. In case the number of redundancies
throughout periods of 30 calendar days exceeds certain thresholds, the
collective dismissal procedure shall be activated. Specifc steps shall have to
be observed and consultations with trade unions need to be conducted.
Employers are obliged to observe a 20day prior notice term, except when
the dismissal is done for disciplinary reasons. Special provisions regarding dismissals
of personnel (including as regards severance payments) are commonly provided
under collective bargaining agreements.
Collective Bargaining Agreements
Collective Bargaining Agreements (the CBA) may be concluded at different levels:
company, group of companies and industry sector level. CBAs concluded at lower
levels cannot provide for rights inferior to those set forth by CBAs concluded at
higher levels.
The Labour Code obliges companies with more than 21 employees to conduct
collective negotiations in view of concluding a CBA. The obligation is to
carry out negotiations only, and not to actually conclude the CBA.
The provisions of CBAs are compulsory for the parties and apply to all employees,
irrespective of whether they are members of a trade union or not. CBAs
have to be concluded for minimum 12 months and maximum 24 months.
Trade Unions
The right to establish trade union organisations and to become member of such
organisations are guaranteed. Employers cannot ban access of the employees to
trade unions. Trade union representatives have the right to be communicated
the decisions taken by the board of directors or by other management board
of the employer regarding issues of professional, economic or social interest.
For the purpose of defending the rights and promoting the interests of their
members, trade unions must be served with necessary information for the
negotiation of the CBAs and other agreements relating to employment relations.
Employers have the obligation to recognise the trade unions as social partner and
conduct collective negotiations with the trade unions that are representatives
Employees are entitled to a paid annual leave of minimum 20 working days.
Additional leave may be regulated under the collective bargaining agreements.
The minimum period of paid annual leave may not be replaced by an allowance
in lieu, except where the employment relationship is terminated. In these cases,
holiday entitlement is calculated on a pro rata basis proportionate to the time
he/she has worked in that same enterprise during the respective year.
In addition to the annual paid leave, employees can be granted paid or unpaid
leave in certain specifc circumstances.
Bonuses
In addition to the base salary, there are certain mandatory bonuses that are paid
to the employees, such as:
Overtime bonusminimum 75% of the base salary;
Nighttime working bonus25% of the base salary.
Other bonuses may be provided under the collective bargaining agreements.
Noncompete obligation
Under the Labour Code, employees have a general obligation of loyalty towards
their employer, preventing them from performing similar activities for other
employers throughout the duration of the individual employment agreement.
The parties may agree to turn this into a noncompete obligation applicable
also after the termination of the individual employment agreement, for a period
of maximum 2 years.
A monthly indemnifcation shall be granted by the employer for the entire
noncompete period following the termination of the employment, which
can not be less than 50% of the employees average gross salary in the last
6 months of employment.
Dismissal
Both dismissal for cause (restructuring) and dismissal without cause (the legal
terminology used by the Labour Code is dismissal for reasons relating to the
employee as opposed to dismissal for reasons not relating to the employee)
are recognised by Romanian employment legislation, but employers may resort
to them only in a limited number of situations. Dismissal for cause can be done
if economic or operational reasons prevent employers from maintaining the
current number of jobs. Dismissals for bad performance and for disciplinary
reasons are among the most commonly met types of dismissal for cause.
In each case, specifc procedures must be followed. Employers failure to comply
with such procedures may trigger the anullement of the dismissal decisions in court.

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This category of conficts may entitle strikes. However, strikes cannot be declared
during the existence of a collective bargaining agreement at the unit level. As a
matter of principle, strikes may be declared only in order to protect professional,
economic and social interests of employees and cannot have political goals.
During strike, hiring employees to replace those on strike, or dismissing employees
on strike, are strictly forbidden. Unlike other legal systems, Romanian labour
legislation does not recognize lockout as strike countermeasure.
The individual labour conficts are settled directly by the courts of law.
at unit level. Also, employers are bound to consult the trade unions for specifc
aspects of labour such as labour norms, reducing the working days from 5 to 4
days/week in case of temporary reduction of employers activity for periods longer
than 30 days, participating in the labour safety and health committees etc.
The trade unions may open labour conficts (strikes or law suits) in
case their claims are not satisfed or the employers fail to observe the
rights of the employees deriving from the law or from CBAs.
Transfer of Business
Romanian labour legislation provides for several protection rules in the event
a business or parts thereof are transferred from one employer to another.
Such rules shall apply, in principle, when the transfer of business is accompanied by
an asset transfer.
Both the transferor and the transferee shall be under the obligation to consult
their employees about the transfer and to inform them of:
Proposed transfer date;
Reasons for transfer;
Legal, economical and social consequences of transfer on the employees;
Measures to be taken with respect to the employees;
Working conditions after the transfer.
However, no consent from the employees is required. The employees shall have to
be given the possibility to be transferred with the transferee. In case they refuse the
transfer, the transferor may dismiss them as a result of cutting their job positions.
The transferee is liable to observe the rights which the transferred employees had
with the transferor under their individual employment agreements and the CBA.
Labour Conficts
Labour conficts may regard collective or individual rights of the employees.
Collective labour conficts may occur when:
The employer refuses to proceed with the negotiation of the CBA;
when there is no CBA signed, or the previous CBA has expired;
The company refuses to accept the employees claims;
The parties do not reach an agreement until the date set up for completing
the collective negotiations.

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There are also specifc provisions concerning procurement contracts
in the utilities sectors and framework agreements.
Public procurement contracts relate to the acquisition of works, goods or
services, in exchange for the price to be paid by the contracting authority,
while by public works/services concession contracts private entities are granted,
in consideration of their performing the works/services, the right to exploit
the public works/services with or without the payment of additional amounts
of money. This distinction is further refected in the allocation of risks, e.g.
when most part of the risks are borne by the private sector, the contract
is to be qualifed as a public works/services concession contract. Otherwise
the contract has the nature of a regular public works/services contract.
Besides the Procurement Law, a special enactment is currently in place,
regulating the concession of public assetsi.e. Government Emergency
Ordinance No. 54/2006 on the regime of public assets concession contracts,
as approved, with amendments and completions, by Law No. 22/2007.
As regards public-private partnerships, the PPP Law regulates the concept of
public-private partnership contracts and the procedures to be carried out by
the public partners to award such contracts. The publicprivate partnership
contract is concluded between the public partner and the private partner, it
covers one or several activities related to the design, fnancing, construction,
rehabilitation, modernization, operation, maintenance, development and
transfer of a public asset or public service and the specifc activities which
are the object of the contract are fnanced by the private partner.
In addition to the Procurement Law, Government Emergency Ordinance No.
54/2006 and the PPP Law, there are also other enactments which govern the
regime of certain specifc concessions. For instance, Law No. 51/2006 on public
utility community services, subsequently amended and supplemented, is the
general enactment regulating the regime of public utility community services
(i.e., services regarding the supply of water, residual water and sewage, supply
of thermo power, waste collection, public lighting, management of public
and private property, public local transport), which may be provided to the
local communities either under a direct management structure, by the local
authorities or public bodies subordinated to the local authorities, or under
delegated management, by commercial companies, further to the conclusion of a
management delegation contract, which is a specifc type of concession, between
the local municipality and the commercial company providing the service.
Public Procurement
& Concessions
Overview
Public procurement, concessions and publicprivate partnerships in Romania
are regulated by a set of enactments which set forth the legal framework within
which cooperation between the public sector and the private sector may be
established with a view to developing public projects with the involvement of
the private sector. Public procurement and concessions are governed mainly by
Government Emergency Ordinance No. 34/2006 on the award of public procurement
contracts, public works concession contracts and services concession contracts, as
approved, with amendments and completions, by Law No. 337/2006, subsequently
amended and supplemented (the Procurement Law), while publicprivate
partnerships are regulated by the recently adopted Law No. 178/2010 on public
private partnership, subsequently amended and supplemented (the PPP Law).
The Procurement Law and the PPP Law aimed at harmonizing the Romanian
legislation with EU Directives in this feld and transposed the provisions of Directive
2004/18/EC of the European Parliament and of the Council of 31
st
of March 2004
on the coordination of procedures for the award of public works contracts, public
supply contracts and public service contracts, Directive 2004/17/EC of the European
Parliament and of the Council of 31
st
of March 2004 coordinating the procurement
procedures of entities operating in the water, energy, transport and postal services
sectors and of Directive 2007/66/EC of the European Parliament and of the Council
of 11
th
of December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with
regard to improving the effectiveness of review procedures concerning the award
of public contracts. The main legal structures regulated by the Procurement Law are
the public procurement contract and the public works/services concession contract.

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Also, the Procurement Law provides a partly special legal regime for the sector
contractsi.e. the procurement contracts in the public utilities sectors (i.e. water,
energy, transport and postal services and other activities qualifed as relevant
activities) although they are included in the category of public procurement
contracts.
Award procedures
The Procurement Law regulates the following award procedures
9
: (i) open tender,
(ii) restricted tender, (iii) competitive dialogue, (iv) negotiation with or without
the publication of a procurement notice, (v) request for offers and (vi) contest of
solutions.
The open tender is in principle a onephase procedure, but the contracting
authority may organize a supplementary phase of electronic tender. Any
interested undertaking may submit tender in this award procedure.
The restricted tender is carried out in two stages: (i) the selection of the
applicants in accordance to the established selection criteria, and (ii) the
subsequent evaluation of the tenders submitted by the selected applicants.
The competitive dialogue is carried out in three stages: (i) the preselection of
applicants, (ii) the dialogue between the contracting authority and the pre
selected applicants, with a view to identifying the solutions based on which fnal
tenders are prepared and submitted, and (iii) the evaluation of fnal tenders.
The competitive dialogue procedure may be applied when the following conditions
are cumulatively met: (i) the contract is deemed to be of great complexity
and (ii) the award of the contract could not be achieved by open or restricted
tender. The competitive dialogue procedure has only been recently applied in
complex infrastructure projects where the involvement of experienced private
undertakings in establishing the structure of the projects is a real necessity.
The negotiation with publication of a procurement notice is applicable in cases such
as when, following an open tender, a restricted tender or a competitive dialogue
procedure, the submitted tenders are found unsatisfactory or unacceptable, or if
the services in question do not allow for a proper description in the tender book as
the open or restricted tender procedures expressly require. The Procurement Law
also regulates cases when the negotiation may be carried out without the prior
publication of a procurement notice, among which, when due to the technical or
artistic aspects of the project, or in order to protect exclusivity rights, the public
9
The contracting authority is entitled to directly acquire products, services or works without
carrying out one of the specifc procedures provided for by the Procurement Law, if the value of the
acquisition is below EUR 15,000.
Principles
Both the Procurement Law and the PPP Law provide for the main principles
contracting authorities should observe in awarding public procurement contracts,
public works/services concession contracts and publicprivate partnership
contracts, such as (i) nondiscrimination, (ii) equal treatment, (iii) transparency,
(iv) proportionality, (v) effcient use of funds and (vi) assuming responsibility.
Public Procurement Contracts
Types of public procurement contracts
The Procurement Law regulates (i) works contracts, (ii) supply contracts
and (iii) service contracts.
The works contract may refer to one of the following activities:
Construction or constructionrelated works as expressly listed in
the Procurement Law; or
Design and execution of a construction or of constructionrelated works
as expressly listed in the Procurement Law; or
The execution by any method of a construction according to the conditions
set forth by the contracting authority.
The object of the supply contract is the supply of one or more products,
through salepurchase, lease or leasing, with or without a purchase option.
The service contract regulates the provision of one or more services expressly
referred to in the Procurement Law (e.g. transport, telecommunications, research
and development, accounting, auditing, consultancy for business and management).
While several types of service contracts are expressly defned as public procurement
service contracts (e.g. the accommodation services, the railway and waterway
transport services, the legal services), they are nevertheless exempted from the
otherwise mandatory procedures regulated in the Procurement Law and made
subject only to the general principles governing the award of public procurement
contracts and to a few other specifc provisions of the Procurement Law.
The Procurement Law does not apply to certain cases, such as national security
related services, or whenever special exemptions derive from the nature of
the contracted services, or from the application of international treaties.
If contracts are fnanced by international funds, the award procedures may derogate
from the Procurement Law and follow the rules and regulations imposed by
the respective fnancing institutions.

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Concession Contracts
Types of concession contracts
The Procurement Law regulates two types of concession contracts: (i) public works
concession contracts and (ii) services concession contracts. The general principles
guiding the award of the public procurement contracts apply also for awarding
concession contracts.
One of the main issues raised in practice in the case of complex contracts is
determining the nature of the public contract, whether it should be qualifed
as a public procurement contract, or a concession contract. Such distinction
is not always easy to make, as analyzing whether it is the private sector or
the public sector that takes over most risks often requires highly specialized
fnancial and technical expertise.
Where concessions have public assets as their object, the special rules provided by
Government Emergency Ordinance No. 54/2006 on public assets concession contracts
become applicable. However, the distinctions between public works concession
contracts, services concession contracts and public assets concession contracts are
not always clearcut, with the practical consequence of possible uncertainty
as to the nature, and therefore applicable legislation to particular contracts.
The application of Government Emergency Ordinance No. 54/2006 is seen
as rather exceptional, the rule being that the Procurement Law applies.
Also, further to the entry into force of the PPP Law, the nature of the
contract should be established from the outset, as depending on
whether the contract is a public works/services concession contract, a public
asset concession contract or a publicprivate partnership contract the
relevant provisions and award procedures of either of the Procurement Law,
Government Emergency Ordinance no. 54/2006 or the PPP Law shall apply.
Given the various types and purposes to which public property assets are put
to use, and based on the administration practice, several general criteria for
distinguishing between the three types of concession may be used:
Where the use of public property assets involves the performance of
construction works aimed at creating a new public asset to be further
operated, the contract may qualify as a public works concession contract.
For instance, in the case of constructing and operating a motorway, or a
parking facility, although such structure may involve the use of a public
property site, the contract is to be considered as a public works concession
contract because its main object is the performance of construction works;
procurement contract can only be granted to a certain entity. However, such
instances are rather exceptional and subject to strict interpretation. The request for
offers is a simplifed procedure by which the contracting authority requests offers
from several participants. It may only be applied when the value of the contract does
not exceed certain thresholds set forth by the Procurement Law, namely EUR 125,000
for supply contracts and services contracts and EUR 4,845,000 for works contracts.
The contest of solutions may be organised when the contracting authority develops
projects in urban planning, cityscape and landscape design, architecture and
data processing.
All award procedures must observe the general rules applicable with respect
to (i) the procurement notice, (ii) informing the participants about the legal,
fnancial and technical requirements, (iii) the evaluation and award criteria, (iv)
the forms required for submitting the offer, (v) the communication procedure
between the authority and the participants, (vi) the deadlines applicable
for submitting the offer and the other documents with the contracting
authority, (vii) as well as other requirements having general applicability.
The request for offers is a simplifed procedure by which the contracting authority
requests offers from several participants. It may only be applied when the value
of the contract does not exceed certain thresholds set forth by the Procurement Law,
namely EUR 100,000 for supply contracts and services contracts and EUR 750,000
for works contracts. The contest of solutions may be organised when
the contracting authority develops projects in urban planning, cityscape
and landscape design, architecture and data processing.
All award procedures must observe the general rules applicable with respect
to (i) the procurement notice, (ii) informing the participants about the legal,
fnancial and technical requirements, (iii) the evaluation and award criteria, (iv)
the forms required for submitting the offer, (v) the communication procedure
between the authority and the participants, (vi) the deadlines applicable for
submitting the offer and the other documents with the contracting authority,
(vii) as well as other requirements that have general applicability.
Besides the award procedures mentioned above, other methods may apply
in special cases, such as the framework agreement, the dynamic acquisition
and the electronic tender. Upon completion of any award procedure,
the contracting authority establishes, based on the award criterion and
after applying the evaluation factors, the winning tender, and concludes
the public procurement contract with the respective tenderer.

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As regards public utility community services, the abovementioned awarding
procedures regulated in the Procurement Law also apply to public works/services
concession contracts regarding waste collection, public lighting and management
of public and private property. Services regarding water supply, residual water and
sewage and thermo power supply are awarded through two specifc procedures:
(i) public open tender and (ii) direct negotiation. Similarly to the public assets
concession contracts, the management of such services is as a rule delegated
further to a public open tender procedure, and in exceptional circumstances only
(i.e., if a tender procedure was twice carried out and neither time have three
valid offers been submitted), may it be awarded further to a direct negotiation
procedure. The management of the local public transport service is also delegated
further to specifc procedures provided for in the relevant enactments.
Public-Private Partnership Contracts
Distinction between Public-Private Partnership Contracts and
Public Works/Services Concession Contracts
The PPP Law regulates the publicprivate partnership as a type of contract,
rather than as a legal concept, as it describes the object and the main features
of publicprivate partnership contracts and the related award procedures.
As expressly specifed therein, the PPP Law applies to publicprivate
partnership contracts and does not apply to public works/services concession
contracts and to public assets concession contracts. Therefore, in order
to properly identify the applicable law to the type of contract which is
intended to be awarded, it should be determined from the outset whether
the contract qualifes as public works/services concession contract or as a
publicprivate partnership contract, although, as a matter of principle,
the two concepts should not be regarded as substantially different.
The differences between public works/services concession contracts and public
private partnership contracts may be derived from the provisions of the PPP
Law, which sets out certain requirements for a contract to qualify as a public
private partnership contract, such as:
A publicprivate partnership contract requires the setting up of a project
company to perform the project by the private partner and the public partner.
If no project company is set up, or the project company is set up by the private
entity only, the contract may not be qualifed as publicprivate partnership,
but, if all other conditions are met, as a public works/services concession contract;
Where the use of public property assets involves the performance of various
activities qualifed as services by the Procurement Law, and/or such activities
may be performed by a contracting authority itself given its legal status, roles
and responsibilities, the contract may qualify as services concession contract.
For instance, where a public hospital intends to grant a private operator
the right to use a specifc location in order to provide health assistance
services, this may be achieved under a services concession contract, given
that the hospital could provide the services itself, and granting the right to
use its facilities to a private entity is merely a means to provide the services.
Likewise, in the case of most of the public utility community services, which
are under the power and responsibility of local authorities, an operator
provides them under a services concession contract (management delegation
contract), the use of assets being incidental to the provision of services;
Where the use of public property assets involves the performance of construction
works and/or the provision of services but they are merely incidental to the use
of the assets, and/or the results of the works/services are used and operated for
a purely private purpose, the contract may qualify as a public assets concession
contract. For instance, where a public administration intends to allow a private
entity to use a public property plot of land in order to install a wind farm and
produce electricity, the contract may be considered as a public assets concession
contract. It should also be mentioned that, as a general rule, the very nature of
the public assets concession contract always requires the payment of a royalty by
the concessionaire to the concession grantor, as, under the applicable law, those
cases where the concession grantor allows the concessionaire to use the public
asset without receiving a royalty, or where the grantor pays a certain amount of
money to the concessionaire may not qualify as public assets concession contract.
Award procedures
According to the Procurement Law, public works/services concession contracts
are awarded further to carrying out a tender (open or restricted) or a
competitive dialogue procedure. Such contracts may be awarded further to
a negotiation procedure with publication of a prior procurement notice
only in the exceptional circumstances set forth in the Procurement Law.
Public assets concession contracts are awarded further to carrying out the specifc
procedures set out by Government Emergency Ordinance No. 54/2006, namely
(i) tender or (ii) direct negotiation. As a rule, public assets concession contracts
are awarded by way of tender, while the direct negotiation procedure may
only be employed in exceptional circumstances (i.e., if a tender procedure was
twice carried out and neither time have three valid offers been submitted).

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in a rapid manner, as a 20day (or, in exceptional circumstances, 30day) period
for settling the complaints is imposed to the National Appeal Council. However,
in practice, the need to rapidly solve the complaints may have adverse effects on
the manner the claimants are allowed to substantiate and document their case,
as the complaints in this feld usually involve technical issues, which may only be
determined based on expert reports whose preparation within this reduced timeline
seems rather unrealistic
10
. As regards the effects of submitting a complaint, fling
such a complaint in connection with the procedure does not, under the current
rules, trigger its automatic suspension, but instead prohibits the contracting
authority from concluding the public procurement contract when the procedure
is completed and until a decision of the National Appeal Council is issued.
Prospects
The Romanian legislation is generally in line with the EU Directives on public
procurement and concessions. Also, recent initiatives on publicprivate partnership
introduced another legal structure which may be used to develop public projects
with the involvement of the private sector. Although regulations on the two
general categories of contracts (concessions and publicprivate partnerships) are
rather similar (despite being included in different enactments) and do not ensure
a clear conceptual distinction between the two, the Romanian legislation seems
comprehensive with respect to the legal means and structures available to public
entities for carrying out public projects. Public authorities have various options
available so as to choose the legal structures which are best tailored to the nature
of the projects they intend to develop. In the current global economic context,
public funds are seen as an important source of investment. The rehabilitation and
the modernization of the infrastructure remain goals that still have to be achieved
as most of the local infrastructure requires urgent investments in order to reach
European standards. Major investments in infrastructure are announced, as the
Government and local authorities seem to rely on concession and publicprivate
partnership structures to continue or to initiate infrastructure projects. In doing
so, the public authorities will resort to the legal structures offered by the public
procurements, concessions and publicprivate partnership regulations, which
allow and call for private sector participation. Public procedures aimed at awarding
complex public procurement/concession/publicprivate partnership contracts will
probably be often used and, consequently, private investors will encounter many
opportunities of becoming involved in such complex projects in the future.
10
We also note that these new rules are surrounded by a legal controversy as to their alleged
unconstitutionality, as they may be construed to prevent the interested parties from addressing the
courts in the frst stage of their complaint, while, under the previous rules, this right was ensured,
as the interested party could opt between addressing the court or the National Appeal Council.
The controversy arises from alleged breaches to the constitutional principles of free access to justice
and of the optional nature of administrative jurisdictions.
The project company should be set up as a jointstock company wherein
the contribution of the public authority is an inkind contribution. Lacking
compliance with such requirements, the contract would not qualify as
a publicprivate partnership contract (but it may qualify as a public works
/services concession contract);
The PPP Law does not cover the case where the public partner grants the private
partner with the right to exploit the results of the works/services and also pays
the private partner an amount of money, as provided by the Procurement Law
in the case of public works/services concession contracts. Therefore, the public
private partnership contract appears closer to the classical concept of concession,
where the fnancing of the project is ensured by the private entity, which further
recovers the investment from the revenues received from the third parties
using the result of the works/services and pays a royalty to the public partner.
Award procedures
The PPP Law regulates two procedures for awarding publicprivate partnership
contracts: (i) open procedure and (ii) competitive dialogue. The award procedures
in the PPP Law are rather similar to those of the Procurement Law, respectively,
the open procedure set out in the PPP Law is similar to the open tender
regulated by the Procurement Law, while the regulation of the competitive
dialogue under the PPP Law follows the same lines as the regulation of the same
procedure under the Procurement Law.
Protests Against Award Procedures
One of the major debates ensuing from the application of the Procurement Law
concerned the protests interested undertakings were entitled to fle against
acts issued by the contracting authorities during an award procedure. Until
January 2011, such protests were settled by either the National Appeal Council (an
administrative jurisdictional body competent to settle complaints in connection
with acts issued in public procurement procedures) or the courts of law.
However, further to the most recent amendments brought to the Procurement Law
in January 2011, the twotier system which allowed interested parties to bring their
case before either the National Appeal Council or the courts of law was replaced by
a onetier system, wherein acts issued in public procurement procedures are to be
challenged before the National Appeal Council only, while it is only the decisions
issued by the National Appeal Council that may be contested in courts, namely
by way of appeal, fled with the competent court of appeal. The lawmakers new
approach to the mechanisms of solving complaints in this area of practice focuses on
the purposes of creating a uniform practice in this feld and solving the complaints

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Practices Prohibited under the Antitrust Rules
Cartels and vertical agreements
Agreements between competitors aimed at distorting market competition are top
targets and severely sanctioned by the competition authorities, both at domestic
and EU level. Both article 5(1) of the Competition Law and article 101(1) of the TFEU
prohibit any explicit or tacit agreements between undertakings or associations of
undertakings, any decisions of association or any concerted practices between them,
pursuing among others price fxing, customers or markets allocation or bid rigging.
Cartels are illegal secret agreements concluded between competitors as to fx prices,
restrict supply and/or divide up markets. The agreements may take a wide variety of
forms but often relate to sale prices or increases in such prices, restrictions on sales
or production capacities, sharing out of product or geographic markets or customers,
and collusion on the other commercial conditions for the sale of products or services.
Although generally considered less restrictive than cartels, the agreements between
noncompetitors, be they customers or suppliers (e.g. distribution agreements,
supply agreements, outsourcing or specialization agreements) also require
particular awareness. Several types of agreements are qualifed as hardcore
restrictions and consequently banned irrespective of the parties market share.
Such agreements mainly consist in resale price fxing, market allocation and
bid rigging. Some examples in this respect are provided herein below:
Resale price maintenancethe restriction of the buyers ability to determine
its sale price;
Passive sales ban in an exclusive distribution network limiting the distributor to
respond to unsolicited orders coming from customers located in territories
exclusively reserved by the supplier or allocated to another distributor;
Active and passive sales ban to territories which are not exclusively reserved by
the supplier or allocated to another distributor, in a nonexclusive or mixed
distribution network;
Restriction of sales to endusers in a selective distribution by members of a
selective distribution system operating at the retail level of trade, without
prejudice to the possibility of prohibiting a member of the system
from operating out of an unauthorized place of establishment;
Restriction of crosssupplies between distributors within a selective
distribution system operating at different levels of trade;
Spare parts restrictions consisting in the restriction agreed between a supplier
of components and a buyer who incorporates those components, which limits
the supplier to selling the components as spare parts to endusers or
to repairers or other service providers not entrusted by the buyer with the repair
or servicing of its goods.
Competition
Overview
The market behavior or strategies adopted by businesses present in Romania
may fall under the domestic and/or European Community competition rules
to the extent they restrict competition on the market.
While the national Competition Law is concerned with the domestic market,
the EC legislation sets forth the policy imperative of market integration and also
aims at ensuring endusers and resellers are able to source products anywhere
in the European single market.
Some of the highest fnes have been imposed by the European Commission on
companies seeking to frustrate this aim, even if their actions had little effect
on competition.
Between August 2010 and July 2011, the Romanian Competition Law
11
has been
subject to a second substantial review in its 15year enforcement record
following its adoption in 1996.
The main changes followed the general trends in antitrust feld at the
European level, the Competition Council being provided with reinforced rights
of investigation. Highlights include (i) a rebuttable positive presumption of
dominance set in the case of undertakings holding a share above 40% on the
relevant market; (ii) the enforcement of the Competition Councils sanctioning
decisions may only be stayed in court should the concerned undertaking
pay a surety in accordance to the principles set under Fiscal Procedural
Code in force; (iii) procedures related to enforcement of unfair competition
practices were transferred in the competence of the Competition Council.
11
Competition Law No. 21/1996, republished in the Offcial Gazette of Romania No. 742 of
16
th
of August 2005 and further modifed by Law No. 149/2011 approving GEO No. 75/2010,
published in the Offcial Gazette of Romania No. 490 of 11
th
of July 2011.

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2008 market allocation on the insulin market case (total amount of fnes
applied EUR 22,600,000)
12
: Eli Lilly (producer) and three distributors were
sanctioned for an alleged allocation of the portfolio of diabetes products
produced by Eli Lilly in the context of the national tenders organized
for the centralized acquisition by the Ministry of Public Health of such
products
13
. In court, some parties to the alleged infrigement succeeded
in reducing the fne initially uphold by the Competition Council;
2008 bid rigging between distributors on the dialysis market (total fne EUR
1,600,000): three distributors participated in a bid rigging in the context
of the national tender organized by the Ministry of Health in 2003
14
;
2006 market sharing on the TV cable services market in Timioara city (total
fne EUR 2,350,000): the case was overturned in court on procedural grounds,
since the Competition Councils right to apply fnes had been time bared;
2005 price fxing between Wrigley26 distributors (total fne of EUR 5,480,000);
2005 price fxing on oral and personal care products (total fne EUR 4,200,000):
the Council charged Colgate Palmolive and four of its distributors and
imposed aggregate fnes of EUR 4,200,000, for indirectly fxing the minimum
resale prices, both as vertical price fxing involving Colgate and as horizontal
agreement between the distributors
15
. The decision has been overturned on
procedural grounds by the High Court of Cassation and Justice
16
, which found
that the Competition Council`s right to review the case had been time bared;
2005 grey cement cartel: the highest fne (amounting in aggregate to EUR
26,000,000) concerned the three Romanian cement producers, Lafarge,
Holcim and Carpatcement (part of the HeidelbergerCement group), which
were found liable for a price fxing cartel
17
. Carpatcement succeeded to win
the appeal against the Councils decision before the Romanian High Court of
Justice, which ordered the annulment of fnes imposed to this company
18
.
At EC level, the European Commissions recent enforcement record is notable by the
level of the fnes imposed to cartel members. In some cases, the sanctions were
signifcantly raised by the EC watchdog as a result of repeated anticompetitive
behaviour of the defendants, as shown in the following recent examples:
Consumer Detergents: the Commission applied fnes amounting to EUR
315,200,000 in a price fxing cartel case against household laundry powder
detergents producers Procter & Gamble, Unilever and Henkel (the latter being
12
The EUR equivalents are approximated.
13
Competition Councils Decision No. 15 of 12
th
of March 2008.
14
rd
of March 2008.
15
th
of July 2005.
16
High Court of Cassation and Justice, Decision No. 2720 of 25
th
of May 2007.
17
th
of May 2005.
18
High Court of Cassation and Justice, Decision No. 1358 of 5
th
of March 2007.
As the Competition Council increased its focus on false bidding and market sharing
in public procurement procedures, it established a special division entrusted with
complaints from authorities or bidders affected by the anticompetitive bidding
practices.
Other restrictions included in vertical agreements may be exempted, either by
the application of specifc block exemptions, or following an individual
examination undertaken on a case by case basis.
The individual exemption requires a balance between the negative effects
of the vertical agreements (e.g. raising the artifcial market entry barriers,
restriction on interbrand and intrabrand competition etc.) and the
expected positive effects (e.g. products quality improvement, investments
for entering new markets, better distribution services etc).
The enforcement record of the Competition Council on cartel cases covers
various industries such as pharmaceutical distribution, cable TV services,
fast moving consumers goods, grey cement markets etc. As shown below, some
of the cartel cases built by the Competition Council were overturned in court:
2010 market allocation between the 14 administrators of mandatory private
pensions funds (total fne of EUR 1,220,000): the alleged infringement
related to the sharing among pension funds administrators, based on a
5050% principle, of participants having subscribed for two different funds
(doubles) within the initial sales window. Although the agreement has
dealt only a marginal part of consumers, i.e. the doubles, the Competition
Council qualifed this arrangement as a client sharing agreement between
competitors, infringing both article 5(1) letter c) of Competition Law and article
101(1) TFEU. The case is currently under review before the Romanian courts;
2010 minimum price fxing by the members of the Romanian Body of Expert
and Authorised Accountants (RBEAA) (total fne of EUR 950,000): the sanction
was applied for the price fxing practices employed by RBEAA members
under the organizations Internal Regulation on the criteria and procedures
in setting the fees, consideration and compensation due to RBEAA members
by their clients, and for continuing applying such practice subsequent to
receiving indications from the authority that the price fxing behaviour is
anticompetitive. This case sets a record for the Competition Council in terms
of fne percentages, namely 9.2% of RBEAAs previous years income;
2010 bid rigging cartel on the market of hydrotherapy treatment services
in Bile Olneti (total fne of EUR 980,750): in this case, the members of the
cartel set the level of tariffs and number of available places for treatment
that each undertaking was bidding for. Moreover, the cartel members created
a system whereby they monitored the offers being submitted to the tender;

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Repsol, Sasol, Shell and Total also engaged in market allocation for this
product and ExxonMobil, Sasol, Shell RWE and Total also fxed prices for
slack wax sold to endconsumers on the German market. The companies
held regular meetings to discuss prices, allocate markets and/or customers
and to exchange sensitive commercial information. The Commissions
investigation started with down raids prompted by Shells application for
immunity whereby it revealed the existence of the cartel to the Commission;
Lifts and escalators cartel: the European Commission applied a EUR 992,000,000
fne to Otis, KONE, Schindler and ThyssenKrupp groups for operating cartels for
the installation and maintenance of lifts and escalators in Belgium, Germany,
Luxembourg and the Netherlands, found to be in violation of Article 101 TFEU
that outlaws restrictive business practices. Between at least 1995 and 2004, these
companies rigged bids for procurement contracts, fxed prices and allocated
projects to each other, shared markets and exchanged commercially important
and confdential information. The Commission found that the effects of this
cartel may continue for twenty to ffty years as maintenance is often done by
the companies that installed the equipment in the frst place; by cartelising
the installation, the companies distorted the markets for years to come.
KONE subsidiaries received full immunity from fnes under the Commissions
leniency programme in respect of the cartels in Belgium and Luxembourg, as
they frst provided information about these cartels. Similarly, Otis received
full immunity in respect of the Netherlands cartel. The fnes imposed on the
ThyssenKrupp companies were increased by 50%, as it was a repeat offender.
Leniency policy
Both national and European Union legal framework provide for different
types of incentives for companies that voluntarily disclose the existence of a cartel
and bring evidence to prove the infringement or cooperate during the procedure.
The immunity or reduction of the fne varies widely depending on the timing
and signifcant added value of the information and evidence provided by
the cartel members.
At national level, although the leniency policy is available from 2004, no major
cartel case has so far been discovered and sanctioned by the Competition
Council following a leniency application. The frst leniency case fnalised before
the Competition Council (2010) was a local cartel formed by the taxi drivers in
Timis County. Since then, no other anticompetitive practices were identifed
and sanctioned further to leniency application. However, the President of the
Competition Council declared on several occasions that the authority is assessing
various disclosures under the leniency procedure. Similarly to the leniency model
applicable at European Commission level, the leniency guidelines previously
in force, only applied to cartels, i.e. collusive behaviour between competitors
targeting price fxing, market sharing, exports or imports restrictions.
granted immunity under leniency procedures). The cartel was implemented in
eight European Union countries;
LCD panels: the European Commission sanctioned six LCD panel producers
(Samsung Electronics and LG Display of Korea and Taiwanese frms AU Optronics,
Chimei InnoLux Corporation, Chunghwa Picture Tubes and HannStar Display
Corporation), a total fne of EUR 648,925,000 being applied for operating
a cartel which harmed European buyers of television sets, computers and
other products that use the key Liquid Crystal Display component;
Airfreight: the Commission fned 11 air cargo carriers (for instance, Air Canada,
Air FranceKLM, British Airways, Cathay Pacifc, Cargolux, Japan Airlines, LAN
Chile, Martinair, SAS, Singapore Airlines and Qantas), the total fne amounting to
EUR 799,445,000 for operating a worldwide cartel which affected cargo services
within the European Economic Area. The carriers coordinated their action on
surcharges for fuel and security without discounts over a six year period;
Animal feed phosphates: the Commission imposed fnes totaling EUR
175,647,000 on fve companies for operating a cartel that lasted over three
decades and covered a large part of EEA. All but one company settled the
case with the Commission and therefore received a 10% reduction on each
of their fnes. This is the frst settlement of a cartel case in a hybrid scenario,
where both the settlement and ordinary procedures were followed;
Bathroom equipment cartel: the Commission fned 17 bathroom equipment
manufacturers a total of EUR 622,250,783 for a price fxing cartel covering six
EU countries. The Commission decision shows that between 1992 and 2004, 17
companies coordinated the sales price for bathroom fxtures and fttings in
Germany, Austria, Italy, Belgium, France and the Netherlands. The coordination
took place during meetings of 13 national trade associations in Germany (over
100 meetings), Austria (over 80), Italy (65), and also Belgium, France and The
Netherlands, and in bilateral contacts. It consisted of fxing price increases,
minimum prices, and rebates, and exchanging sensitive business information;
Car glass cartel: the Commission imposed fnes totaling EUR 1,383,896,000 on
Asahi, Pilkington, SaintGobain and Soliver for illegal market sharing, and
exchange of commercially sensitive information regarding deliveries of car glass
in the EEA, in violation of TFEU. Between early 1998 and early 2003, these major
players, discussed target prices, market sharing and customer allocation in a
series of meetings and other illicit contacts. The Commission started the cartel
investigation on its own initiative following a tipoff from an anonymous source.
The Commission increased the fnes on SaintGobain by 60% because it was
a repeat offender. Asahi provided additional information to help expose the
infringement and its fne was reduced by 50% under the leniency procedure;
Wax producers cartel: the Commission imposed on the wax producers fnes
amounting to EUR 676,000,000 for price fxing and market sharing cartel.
From 1992 to 2005, the producers of paraffn waxes and slack wax operated
a cartel in which they fxed prices for paraffn waxes. ExxonMobil, MOL,

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Such form of cooperation is deemed as special mitigating circumstance which
may even trigger a reduction of the fne below its minimum threshold set at
0.5% of the turnover obtained in the year preceding the sanctioning decision.
Abuse of dominant position
Dominant players on the market could also infringe the antitrust rules, both
at national and European Union level by adopting unilateral market strategies
which could harm consumers and/ or competitors. Domination is defned
as the ability of a company, to act, to a large extent independently from its
competitors (actual and potential) and its clients in that particular market.
The recently revised Competition Law provides for a relative presumption of
dominance: frms which hold more than 40% of the relevant market in question
and presumed to be dominant, should other factors not prove the contrary. The
market share is however just one factor in assessing dominance. The structure of
the relevant market, position of the main competitors, entry barriers or specifc
advantages enjoyed by a company may also infuence the dominance assessment.
Holding a dominant position is not prohibited, it is abuse which can be caught
under the antitrust rules. The abusive behaviour may consist in: (i) exploitative
practices, i.e. abusing market power in trading relationships with customers
or suppliers (e.g. unfair purchase or selling prices, tying arrangements, price
discrimination) and (ii) exclusionary practices, i.e. abusing market power with
an aim to harm competitors (e.g. refusal to deal, predatory pricing etc).
Article 6 of the Competition Law provides only an exemplifcative list of
behaviours that are deemed as abuse of the dominant position:
Imposing, directly or indirectly, of selling and buying prices, price lists or other
inequitable contractual clauses and the refuse to negotiate with certain
suppliers or benefciaries;
Limitation of production, distribution, technological development in the
disadvantage of the consumers;
Application, regarding the commercial partners, of dissimilar conditions for
equivalent performances, causing to some of them a disadvantage in the
competitive position;
Conditioning of concluding certain contracts by the partners acceptation
of clauses stipulating supplementary performances which, neither by their
nature nor according to commercial practices, have any connection with the
object of such contracts;
Imposing excessive or ruinous undercost prices, to eliminate competitors, or
exporting under production costs and covering the difference through higher
domestic prices;
Exploitation of the economical dependence status of a client or supplier.
With the new guidelines adopted on the 7
th
of September 2009, the Competition
Council broadens the leniency scope and opens up the possibility for distributors
or suppliers to also report vertical anticompetitive agreements, such as price fxing,
market allocation, imports or exports restrictions concluded with their
downstream or upstream partners.
As such, from now on, the distributors or resellers may seek leniency by
disclosing the anticompetitive provisions or practices agreed with or imposed
upon by their suppliers. To the same extent, the suppliers may be awarded
full immunity from fnes if they are frst to provide insider information on
anticompetitive practices agreed downstream and they have not initiated the
infringement. This is a major development of the leniency policy in Romania,
proving the Competition Councils full interest in vertical restraints and
potentially putting the spotlight on the distribution / reselling markets, if the
distributors or producers will feel tempted to break the ice and disclose the
anticompetitive practices they agreed upon with their clients or suppliers.
In order to obtain total immunity under the leniency policy, a company which
participated in a cartel or a vertical anticompetitive practice must be the frst to
inform the Competition Council of the undetected illegal activity by providing
suffcient information to allow the authority to open an investigation and
launch an inspection at the premises of the companies allegedly involved in
the anticompetitive practice. If the Competition Council is already in possession
of enough information to launch an investigation, or has already opened one,
the company must provide evidence that enables the Competition Council to
prove the infringement. In all cases, the company must also fully cooperate
with the Competition Council throughout its procedure, provide it with all
evidence in its possession and put an end to the infringement immediately.
Companies which do not qualify for total immunity may beneft from a reduction
of fnes if they provide evidence that represents signifcant added value to that
already in the Competition Councils possession and if they have ceased involvement
in the anticompetitive practice. Evidence is considered to be of a signifcant
added value for the Competition Council when it reinforces its ability to prove
the infringement. The frst company to meet these conditions may receive 30% to
50% reduction, the second 20% to 30% and subsequent companies up to 20%.
Moreover, according to the Competition Law recently revised, companies may also
beneft of 10% to 30% fne reduction if they choose to cooperate with the
Competition Council and expressly recognize the infringement after the
communication of the statement of objections or during the hearings
before the Councils Plenum.

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Independently from the sanctions applied under the Competition Law, the natural
and legal persons are reserved the right to claim for the recovery in full of the
damages resulting from the anticompetitive practice prohibited by the
Competition Law.
The recently revised law provides that the status of limitation of the damages action
is 2 years and starts to elapse from the date the Competition Councils decision
remains defnitive and irrevocable.
This provision may lead to the interpretation that the applicant may necessarily
submit a complaint to the Competition Council and obtain an administrative
decision on the infringement prior to seeking damages in court. Although the
burden of proof on the claimant is defnitely more severe in the absence of
the Competition Councils prior investigation of the case, we do not exclude
however direct damages actions in court, as the national judges have extensive
powers to directly apply both national and European Union antitrust rules.
Companies having blown the whistle in cartel cases or hardcore vertical agreements
which beneft of leniency are also exonerated from the joint liability resulting
from a damages action, which bears on all participants to the infringement.
As regards the quantum of the damages, the Romanian law system acknowledges
the full compensation principle in case of tort liability. Thus, the author of
the anticompetitive practice could be compelled to reimburse both the actual
prejudice (damnum emergens) and the loss of beneft (lucrum cessans).
Mergers
The merger of two or more previously independent parties, or the direct or indirect
control brought about by share capital/ assets acquisition, by contract or by other
means qualifes as an economic concentration and may trigger a notifcation
obligation in the competent jurisdiction. In merger cases, a division of competence
between the European Commission and the national authorities applies.
The Commission has exclusive power to examine concentrations with a
Community dimension determined on the basis of certain turnover thresholds,
while the Competition Council assess concentrations with national dimension.
Community notifcation thresholds
Two alternative sets of thresholds must be taken into account in order to determine
if a concentration between undertakings has a Community dimension and thus
must be notifed to the Commission.
The Competition Council has recently applied signifcant fnes in two abuse cases,
namely (i) one case against the national postoffce operator for discriminatory
prices applying a fne of approximately EUR 24,060,000 (ii) the other, against
the two main telecom operators (i.e. Orange and Vodafone) applying fnes of
approximately EUR 34,800,000 and EUR 28,300,000, respectively for actions
related to restriction of access to essential facilities. Such cases are currently
on the top of the fne record applied by the authority in its practice.
According to the recently revised Competition Law, companies may now
offer commitments during the investigation procedure that they will
comply with a certain conduct as to end the alleged infringement.
Competence: The European Commission or the Competition Council?
A system of parallel competences of the European Commission and the national
competition authorities is instituted at the level of the Community. While the
European Commission usually intervenes to investigate anticompetitive practices
affecting more than three Member States or justifying a Community interest
(i.e. the respective practice affects the internal markets freedoms or the case
has a novelty character at Community level), the Competition Council remains
competent to examine practices affecting mainly the Romanian market.
Fines. Public and Private enforcement
The sanctions for violations of the Competition Law are serious and they
may reach between 0.5% and 10% of the involved partys turnover on the
year prior to the sanctioning decision. Other sanctions include invalidity of
contract terms, damages claims requested in court by the damaged competitors
and other restrictions imposed by the Competition Council or the courts on
the business activity. The Competition Law can also lead to criminal liability
of those individuals responsible for the violation. So far, the Competition
Council has only once remitted the case to criminal prosecution.
Throughout more than 14years, the Romanian Competition Council
applied fnes amounting in excess of EUR 110,000,000 for the infringements
of domestic antitrust rules. However, the largest part of this amount has
been applied during the last few years, when the Competition Council
accelerated the investigation process and also raised the fnes level
imposed on the players found guilty of anticompetitive practices.
Private enforcement relates to legal actions that can be brought before a
national court by one private party against an undertaking that infringed the
competition regulations. Private enforcement of competition rules can take
different forms, including actions for damages, actions for injunctive relief (to
stop the behaviour contrary to the competition rules), actions for nullity, etc.

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However, the buyer may close the transaction pending clearance provided that
it does not take any measures deemed as irreversible with regard to the targets
operations. For justifed cases, the buyer may also require for a derogation from the
above rule. Within a 5year statute of limitation period, the Competition Council
can impose a fne of up to 10% of the Romanian turnover achieved by the buyer for
completing a notifed merger before clearance.
Review periods
The Competition Council shall issue a decision to either authorize the merger, or
open an indepth investigation within 45 days after the submission is effective
(upon registration at the Competition Council or, upon submission of additional
required information). In practice, the review period (phase I) is likely to take up
to 6090 days, since the authority usually takes 1525 days before it declares
the submission complete and the statutory time starts to run. In certain cases,
a simplifed procedure is available. If an investigation is opened (phase II), the
Competition Council shall issue a decision of refusal/ authorization/ conditional
authorization within a 5month term after the notifcation is effective.
Authorization fee
If the authorization of the economic concentration is granted, an authorization
fee ranging from EUR 10,000 up to EUR 25,000 shall be paid.
State Aid Regulations
Considering that state aid may distort or threaten to distort competition by
favouring certain undertakings to the detriment of others, the European Union
rules provide for a strict control of state aid measures granted by Member States.
Measures qualifying as state aid
Measures granted by Member States should qualify as state aid if the following
criteria are met:
Transfer of state resourcesgranted by central or local authorities, public
banks, foundations, private/public intermediate bodies appointed by the State;
Economic advantagewhich would not be obtained in the ordinary course of
business;
Selectivityonly selected undertakings have access to the measure. As such,
measures applying without distinction to all undertakings in all economic
sectors in a Member State (e.g. a nationwide fscal measure) are not selective
and therefore should not fall under the state aid principles;
Effect on competition and tradethe undertaking benefting from the measure
must be engaged in economic activities.
First set of thresholds
The combined aggregate worldwide turnover of all the undertakings concerned
is more than EUR 5,000 million; and
The aggregate Communitywide turnover of each of at least two of
the undertakings concerned is more than EUR 250,000,000;
Unless each of the undertakings concerned achieves more than 2/3 of its
aggregate Communitywide turnover within one and the same Member State;
The worldwide turnover threshold is intended to measure the overall dimension
of the undertakings concerned; the Community turnover threshold seek to
determine whether the concentration involves a minimum level of activities
in the Community; and the 2/3 rule aims to exclude purely domestic
transactions from Community jurisdiction.
Second set of thresholds
The combined aggregate worldwide turnover of all the undertakings
concerned is more than EUR 2,500 million;
In each of at least three Member States, the combined aggregate turnover
of all the undertakings concerned is more than EUR 100,000,000;
In each of at least three Member States included for the purpose of the
point above, the aggregate turnover of each of at least two of the
undertakings concerned is more than EUR 25,000,000;
The aggregate Communitywide turnover of each of at least two of the
undertakings concerned is more than EUR 100,000,000;
Unless each of the undertakings concerned achieves more than 2/3 of its
aggregate Communitywide turnover within one and the same Member State;
A concentration that does not meet the frst set of thresholds, but meets the ones
mentioned above has a Community dimension and thus must be notifed to the
Commission.
National notifcation threshold
Should the merger not fall in the jurisdiction of the European Commission, it would
require clearance by the Competition Council if the following thresholds
19
are
cumulatively met in the fscal year preceding the transaction:
The parties combined worldwide turnover exceeds EUR 10,000,000; and
At least two of the parties involved in the transaction have a turnover
in Romania exceeding EUR 4,000,000.
Implementation prior to clearance
Romania is considered to be a suspensive jurisdiction, i.e. a transaction may
not be implemented prior to clearance issued by the Competition Council.
19
For the purpose of the threshold test, the group that each involved party belongs to shall also
be taken into consideration.

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State aid which is not subject to prior notifcation procedures
As an exception, certain state aid measures do not fall under the notifcation
requirement. Such measures are either falling under the (i) de minimis aid rules or
(ii) are block exempted under a specifc Commission regulation.
Transparent incentives not exceeding the minimum threshold (EUR 200,000 over
any period of 3 fscal years) are deemed to be authorized and are not subject to
notifcation requirement.
The European Commission has issued a General Block Exemption Regulation
(EC) No. 800 of 6
th
of August 2008 declaring certain categories of aid
compatible with the common market in application of Articles 107 and 108
TFEU codifying previous block exemption regulations and regarding:
Regional aid;
Small and medium size enterprises investment and employment aid;
Aid for creation of enterprises by female entrepreneurs;
Aid for environmental protection;
Aid for consultancy in favor of small and medium size enterprises and small
and medium size enterprises participation in fairs;
Aid in the form of risk capital, aid for research, development and innovation;
Training aid; and
Aid for disadvantaged or disabled workers.
In order to beneft from the notifcation exemption, a state aid measure must
observe inter alia the following criteria:
The aid measure is transparentaid in respect of which it is possible to
calculate precisely the gross grant equivalent ex ante without need to
undertake a risk assessment;
The aid measure does not exceed the aid intensity thresholds provided in the
GBER (i.e. the gross aid amount expressed as a percentage of the eligible costs);
The aid measure does not exceed the individual notifcation thresholds
provided in the GBER;
The aid measure is targeted at activities or investments that prove an
incentive effectunder the European Union principles on less and better
targeted aid any state aid measure must be targeted to an activity or
investment that would have not been performed in the absence of aid;
The aid measure complies with the specifc requirements under the GBER
for each category of aid contemplated above;
Subject to the criteria described above, measures qualifying as state aid may take
various forms, such as grants, capital injections, debt writeoff, exemptions,
reductions or deferrals of fees and/or tax payments, accelerated depreciation
allowances, preferential interest rate loans, interest rate rebates, loan guarantees,
price reductions in connection to goods supplied and services provided by public,
central and local authorities or other bodies managing central or local state
resources, including sale or rent of land owned by public central or local authorities
or other bodies managing central or local state resources below market price.
State aid measures may be granted under a specifc state aid scheme made
available to a larger number of undertakings or in the form of individual
aid. Individual aid may take the following two forms: (i) ad hoc aid and (ii)
individual awards of aid on the basis of an aid scheme (the individual award
requiring the performance of a notifcation procedure under state aid rules).
State aid control by the European Commission
The Commission is competent to keep under constant review all systems
of aid existing in the Member States. The supervision of the Commission
in connection with state aid is based on a system of ex ante authorization.
Consequently, each Member State is required to inform the Commission, based
on a notifcation procedure, of any plan to grant or modify any previously
authorized state aid measure. Member States are not allowed to put such aid
into effect before it has been authorized by the Commission (i.e. the Standstill
principle). Aid granted in absence of authorization by the Commission is
automatically deemed as unlawful aid and is subject to recovery.
Based on its examination of the notifed aid, the Commission may (i) issue a
decision attesting that the notifed measure does not constitute aid; (ii) issue
a decision not to raise objections if it fnds, after a preliminary examination,
that no doubts are raised as to the compatibility with the common market
of a notifed measure; (iii) issue a decision to initiate a formal investigation
procedure if, after a preliminary examination, it fnds that doubts are raised
as to the compatibility of the notifed measure with the common market.
Moreover, if the Commission fnds that aid granted by a Member State or
through that Member States resources is not compatible with the common
market, or such aid is being misused, the Commission is competent to decide
that the Member State concerned must abolish or alter such aid within a period
determined by the Commission. If the State concerned does not comply with
such decision within the prescribed time the Commission or any other interested
Member State may refer the matter directly to the European Court of Justice.

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Intellectual Property
Overview
Intellectual property rights are protected in Romania by various legal enactments
applying specifcally to each category of IP rights: patents, utility models,
trademarks, industrial designs, integrated circuits, copyrights. The Romanian legal
framework on IP rights has been gradually harmonised with the corresponding
European legislation and, generally, with the principles provided in international
treaties and conventions
21
. The public authorities invested with competence in the
protection of intellectual property rights are the State Offce for Inventions and
Trademarks (OSIM) (in relation to industrial property i.e. inventions, trademarks,
geographic indications, industrial designs, integrated circuits) and the Romanian
Offce for Copyright (ORDA) (relevant for copyright protected works).
Patents
The Patent Law No. 64/1991 (the Patent Law) sets forth the specifc patentability
conditions. The patent ensuring protection on the territory of Romania is valid
for 20 years from the date the regular national application is fled, and is subject
to yearly fees for maintenance.
21
Romania is a party to the main international treaties and conventions on intellectual property,
among which: the Paris Convention for the Protection of Industrial Property (1883), including its
subsequent revisions; the Convention establishing the World Intellectual Property Organization (1967);
the Marrakech Agreement establishing the World Trade Organization (1994); the Madrid Arrangement
(1967) and the Protocol related to the Madrid Arrangement (1989); the Trademarks Treaty (Geneva,
1994); the Nice Arrangement on trademarks classifcation (1957); the Treaty on Trademarks Law
(Singapore, 2006); the Patent Cooperation Treaty (Washington, 1970); European Patent Convention
(Munich, 1973); the Strasbourg Agreement concerning the International Patent Classifcation (1971);
the Locarno Agreement on the classifcation of industrial designs (1968); the Hague Arrangement
on the international deposit for industrial designs (1925); the Berne Convention on the protection
of literary and artistic works (1886).
The measure must not be targeted at (i) aid to exportrelated activities,
namely aid directly linked to the quantities exported, to the establishment and
operation of a distribution network or to other current costs linked to the
export activity; or (ii) aid contingent upon the use of domestic over imported
goods;
The measure must not be targeted to certain sectors
20
;
The measure is not targeted at (i) aid schemes which do not explicitly exclude
the payment of individual aid in favor of an undertaking which is subject
to an outstanding recovery order following a previous Commission decision
declaring an aid illegal and incompatible with the common market; (ii) ad hoc
aid in favor of an undertaking which is subject to an outstanding recovery
order following a previous Commission decision declaring an aid illegal and
incompatible with the common market; (iii) aid to undertakings in diffculty.
20
Such sectors are the following: (i) aid favoring activities in the fshery and aquaculture
sectors, except for training aid, aid in the form of risk capital, aid for research and development
and innovation and aid for disadvantaged and disabled workers; (ii) aid favoring activities in the
primary production of agricultural products, except for training aid, aid in the form of risk capital,
aid for research and development, environmental aid, and aid for disadvantaged and disabled
workers to the extent that these categories of aid are not covered by Commission Regulation (EC)
No. 1857/2006; (iii) aid favoring activities in the processing and marketing of agricultural products
when the amount of the aid is fxed on the basis of the price or quantity of such products purchased
from primary producers or put on the market by the undertakings concerned or when the aid is
conditional on being partly or entirely passed on to primary producers; (iv) aid favoring activities in
the coal sector with the exception of training aid, research and development and innovation aid and
environmental aid; (v) regional aid favoring activities in the steel sector; (vi) regional aid favoring
activities in the shipbuilding sector; (vii) regional aid favoring activities in the synthetic fbres sector.

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Failure to open the national phase renders the application ineffective in Romania.
The requests for international registration may also be fled with the OSIM, as
receiving offce.
The duration of the protection of the utility model is of 6 years, available for
extension for two 2year each successive periods, and may not, extensions included,
exceed the maximum of 10 years.
Applicants at the OSIM may requalify their request from patent to utility model
and, conversely, from utility model to patent, without thereby causing the
examination procedure be automatically closed. Requalifcations are only
admitted once and are not available for international requests where
the national phase has already commenced. The right to the utility model may
be transferred, wholly or partially, by assignment or by exclusive/nonexclusive
licensing. Utility models can be encumbered and pursued in enforcement procedures.
Trademarks
According to the Trademark Law No. 84/1998 (the Trademark Law), exclusive rights
to use a trademark in Romania are granted by registration with the OSIM, either
directly or by way of an international (WIPO) application.
In order to be registered, a trademark must not be identical or confusingly similar
to a previous trademark belonging to a different owner and registered for identical
or similar products or services. Whenever the previous trademarks are notorious
(either in Romania or in the European Union), the risk of confusion is analyzed even
if the new trademark is for products or services that are not identical or similar,
if registration risks to cause damage to the notorious trademark. The applicant
may invoke priority rights.
According to the rules applicable following Romanias accession to the European
Union, Community trademarks shall automatically enjoy protection on the
Romanian territory. This mechanism operates ipso jure, without the need for
the holder to fulfll any formalities or procedures at the OSIM. A potential
confict with a domestic trademark shall be solved based on the priority rules.
The holder of a national trademark previously registered in good faith is allowed
to oppose the use of the Community trademark only on Romanian territory.
Oppositions may be raised to the competent Romanian courts in compliance with
Regulation No. 207/2009 on the Community trademark.
However, since the automatic extension of protection is not reciprocal (i.e. national
The right to patent belongs to the inventor or to his/her rightful successor. For
employeeinventors, the right to patent belongs either to the inventor (for
inventions made in the exercise of the employees specifc duties, using the
employers technologies or data, or his knowledge about such, or with support from
the employer, if not otherwise provided in the labour agreement) or to the
employer (for inventions made by the employee under a labour agreement that
expressly provides that inventions are within the employees specifc duties).
Patentability conditions are harmonised with international regulations. An
invention
22
(for a product or a procedure in any technological feld) is patentable
in Romania if it is new worldwide, involves an inventive step (i.e. it does not
follow evidently for a trained individual from the knowledge incorporated in the
existing technical development stage) and is susceptible of industrial application.
Applications for patent are submitted to the OSIM. The invention shall be disclosed
in the description, drawings and claims in a manner which is clear and complete
as well as scientifcally and technically correct. The applicant may invoke priority
rights. The information comprised in the patent application will be kept confdential
until the application is published by OSIM. The patent applications are published
immediately after the expiry of a 18month term from the date of the regular
national fling or from the claimed date of priority. Published patent applications
beneft from provisional protection until the patent is issued. The patent is subject
to public opposition for 6 months from the publication of the decision granting it.
Utility Models
The protection of utility models is mainly regulated in Romania by Law No. 350/2007,
concerned with such technical inventions that cannot be protected by patent
according to the Patent Law as they do not involve inventive activity. Utility models
refer to any technical inventions provided that they are new (they are not already
included in the current development stage of the technique), that they exceed the
level of mere professional skill, and that they are applicable in the industrial feld.
The right to the utility model belongs to the inventor or his/her rightful successor.
The utility model acquires protection by registration with the OSIM.
The law permits international registration of utility models. International
applications may be fled with foreign receiving offces and may indicate Romania
as a designated country.
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Scientifc discoveries, theories and mathematical methods; esthetical works; plans, principles and
methods for the development of mental activities in entertainment, business, computer programs;
methods to present information are not deemed inventions.

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An industrial design is deemed to be distinctive (have an individual character)
if the overall impression it has on the experienced user differs from the impression
made by any industrial design made publicly available before the date of fling the
application for registration, or before the priority date if priority was claimed.
The industrial design the appearance of which is determined by a technical function
cannot be registered.
Several industrial designs may be submitted for registration in the same application,
in a multiple deposit comprising industrial designs intended to be incorporated in
articles of the same category of goods as per the Locarno Agreement classifcation.
Industrial designs subject to a multiple deposit should meet the condition of unity
of design, unity of production or unity of use, or should belong to the same set
or composition of items.
The application for the registration of industrial designs is required to provide a
graphic representation of the design and a maximum 100 words description of the
design to explain the novelty. The date of the application meeting the minimal legal
requirements constitutes the date of the national deposit. The applicant may invoke
priority rights.
Within 4 months from the national deposit, the application is published. Third
parties have the right to oppose the registration within 2 months. The OSIM will
decide to grant or deny registration of an industrial design within 12 months
from publication, subject to potential oppositions being rejected.
The registration certifcate grants exclusive rights to its owner for the use of
the industrial design on the Romanian territory starting retroactively from the date
of the national deposit.
The registration certifcate of an industrial design is valid for 10 years from
constituting the national deposit and may be renewed for three successive 5year
periods upon payment of the legal fees.
According to the rules applicable following accession, EU designs automatically
enjoy protection on the Romanian territory. This mechanism operates ipso jure,
without the need for the holder to fulfll any formalities or procedures with OSIM.
A potential confict with a domestic design shall be solved based on the priority
rules, the holder/applicant of an earlier local design registered/applied for in good
faith being entitled to oppose the use of a Community design on Romanian territory.
(i.e. national trademarks do not automatically beneft from protection in the
Member States) holders of national trademarks cannot substantiate, at the
European Union level, a motion to annul or to obtain withdrawal of rights for lack
of use against the owner of a subsequently registered Community trademark.
The holder of a previously registered Community trademark or of previously
acquired rights may ask the competent court to cancel the national trademark or
to withdraw the rights such a trademark has. Claims of counterfeit may not be
submitted if the owner of the previous Community trademark tolerated, for
a period of 5 years, the use of the subsequent national trademark which was
registered in good faith.
Within 7 days as of fling, the application is published by OSIM, so that any
interested person may oppose to registration of the trademark. OSIM takes a
decision on the registration of the trademark within 6 months from as of publication
of the application.
Pursuant to the OSIM issuing a fnal decision for registration, the trademark
will be registered with the National Register for Trademarks.
The trademark certifcate issued by the OSIM grants exclusive rights to the owner
to use the trademark in Romania for a period of 10 years starting retroactively
from the date of submitting the application. Upon payment of legal fees,
the protection period can be extended by subsequent 10year periods.
Further to the latest amendment to the Trademark Law, the concept of Community
exhaustion of trademarks was statutorily recognized. According to this concept,
the frst sale of a trademarkprotected product within the European Economic
Space by the owner, or with the owners consent, exhausts the trademark rights
over these given products not only domestically, but also within the whole
European Economic Space. The direct consequence is that resellers within this
region cannot be prevented from undertaking parallel imports, unless a legitimate
interest related to the alteration of the respective products could be raised.
Industrial Designs
Based on the provisions of the Industrial Design Law No. 129/1992 (the Industrial
Design Law), the new external appearance of a product in two or three dimensions
having a practical function may be registered as industrial design. Novelty and
distinctive character are the registration conditions for an industrial design. A form
is novel if it is practically unknown in the territory of Romania, and has not been
disclosed for the same category of goods in Romania or abroad.

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Protection for artists interpretations or performances is valid 50 years from the date
of such interpretation or performance. However, if such were fxed on a material
during this period of time, and were legally published or communicated to the
public, the 50year protection period starts from the date of such fxing or
publication or communication. The same applies to the rights of sound or video
recordings producers.
Copyrights are classifed in moral rights and economic or patrimonial rights. While
moral rights (e.g. the right to decide whether and how the work is going to be
published; the right to decide the name under which the work shall be published
etc) may not be transferred by the author, economic rights may be assigned to third
parties by way of copyright licensing. The author, or, as the case may be,
the holder of the economic copyright, may license the patrimonial copyrights,
in whole or in part, as well as restrict the use of the work by the licensees to certain
territories and/or to certain time limits.
The licensing agreement must identify the patrimonial rights that are transferred
thereby and must provide, for each right, the permitted methods of use, the
term and scope of the licensing, as well as the payments due to the holder of the
copyright. If any of these provisions is missing, the interested party may request the
termination of the agreement. The licensing agreement concerning all the future
works of the author, whether or not such works are named, is null and void.
If the licensor is also the author of the work, and the licensee uses the work
in a manner that may be found insuffcient and conficting with the licensors
legitimate interests, the author has the possibility to claim invalidity of the
copyright license agreement after 2 years from the entry into force of the
license. The term is of 3 months in case the work was to be published in a daily
publication and of 1 year if the work was supposed to be published in periodicals.
The author may not waive in advance such right to seek termination.
In the case of agreements for creation of future works, in the absence of a clause
to the contrary, the economic rights belong to the author. The person contracting
the creation of a future work is entitled to terminate the agreement if the work
fails to comply with the agreed conditions. In case of termination, the author keeps
the amount which he/she has already received. In the absence of a contractual
clause to the contrary, for the works created by employees while fulflling their
professional duties under an individual labour agreement, the patrimonial rights
belong to the author. In this case, the author may authorize third parties to use
the work only with the employers consent and subject to compensation for the
employers contribution to covering the costs of creation. The employer may utilize
the work in its business without authorization from the authoremployee.
Copyright
The Copyright Law No. 8/1996 (the Copyright Law) provides protection to all literary,
artistic or scientifc works, as well as to other intellectual creation works, provided
that they are original, take a concrete form of expression, and are susceptible of
being made known to the public.
The protection granted under the Copyright Law applies to the following works:
Authored by Romanian citizens, even if they have not yet been made known
to the public;
Authored by natural or legal persons domiciled or headquartered in Romania,
even if they have not yet been made known to the public;
Architectural works located on the Romanian territory;
Artists interpretations or performances taking place on the Romanian territory;
Artists interpretations or performances which are fxed in sound recordings
protected by the Copyright Law;
Artists interpretations or performances which are not fxed in sound
recordings, but are transmitted by television or radio broadcastings protected
under the Copyright Law;
Sound or video recordings produced by natural or legal persons residing in
Romania;
Sound or video recordings fxed on any material for the frst time in Romania;
Radio/television programs broadcast by entities headquartered in Romania;
Radio/television programs transmitted by entities headquartered in Romania.
Such works beneft from protection under the Copyright Law without registration
or any other formality being required. Nonresidents, individuals or legal entities,
beneft form copyright protection as per the terms of the international treaties
Romania is a party to or, absent such treaties, under the same terms as Romanian
residents, on a reciprocity basis. Authors of such work have the moral right to retract
it, indemnifying, if the case, the holders of the right to use the work should they
incur damage by retraction.
The Romanian copyrights last for the lifetime of the author plus other subsequent
70 years after their death, being transmitted to lawful successors, irrespective of the
date when the work was brought to public knowledge. The same applies to software
works.
The person who, after the death of the author, lawfully brings to public knowledge,
for the frst time, a previously unknown work, benefts from protection similar to
that offered to authors for a period of 25 years from the date the work was frst
made public.

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Conversely, contractual clauses may provide that, for works created for the
fulfllment of professional duties stipulated in the individual labour agreement,
the patrimonial rights do not belong to the author of the work. If such clauses
do not set forth the duration of the assignment of patrimonial rights, the term
shall be of three years as of the work delivery date.
Upon expiry, the patrimonial rights are transferred to the author and, absent a
clause to the contrary, the employer is entitled to request the author to pay
a reasonable quota from the income obtained from utilization, in order to
compensate costs borne by the employer for the creation.
The economic rights on photographic work performed under an individual labour
agreement, or further to an order, are presumed to belong, for a period of 3 years,
to the employer or the person that placed the order, if not otherwise provided in
the agreement.
The photograph of a person, when it is made further to an order, may be
published, reproduced by the photographed person or its successors, without
the consent of the author, if not otherwise agreed.
The holders of copyrights and related rights may exercise their legal rights
individually or, based on a mandate, through collective management bodies.
Collective management is mandatory for certain rights (i.e. the right to
compensatory remuneration for the private copy; the right to a fair remuneration
for public loan in certain cases; the right of resaledroit de suite; the right
of broadcasting for musical works; the right of public release of musical
works, except for the public screening of cinematographic works; the right
to fair remuneration acknowledged to performing artists and producers of
phonograms for public communication and broadcasting of trade phonograms
or the reproduction thereof; the right to cable retransmission), for which the
collective management bodies also represent holders of rights that did not grant
them a mandate, and is optional for other rights (i.e. the right to reproduce
musical works on phonograms or videograms; the right to publicly communicate
works, except for musical works and artistic performances in the audiovideo
sector; the right of loan, except for certain cases provided by law; the right
to radio broadcast the works and artistic performances in the audiovisual
sector; the right to fair remuneration resulting from the assignment of lease
rights; the right to fair remuneration acknowledged to performing artists and
producers of phonograms for public communication and radio broadcasting of
phonograms published for commercial purposes or the reproduction thereof).
Customs Action against Goods Suspected
of Infriging Intellectual Property Rights
The fght against the import of goods suspected of infringing intellectual property
rights is carried by the customs authorities, enabled to retain the goods and to verify
their authenticity. The customs authorities collaborate closely with holders of
intellectual property rights in order to facilitate a quick authenticity check on
suspect products imported in Romania.
Goods that are found to breach intellectual property rights are in most cases
destroyed, orif the holder of the breached intellectual property right so accepts
offered free of charge for humanitarian purposes.
In practice, the customs authorities are active in retaining goods that are suspect
of infringing intellectual property rights, being especially focused on excisable
goods (e.g. cigarettes). However, destroying the goods proven to be counterfeited
is a lengthy and cumbersome process.


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Product Liability
Overview
Over the last years, product liability legislation consolidated and developed,
generating an increasing level of public awareness regarding consumer
rights following the expansion of the retail activities and the activity of the
consumer watchdog authorities and nongovernmental organizations.
Currently, the Consumer Code represents the framework enactment in
the feld of product liability and consumer rights, regulating inter alia
the consumers access to goods and services, their rights, the producers
obligations, as well as the general rules applicable to nongovernmental
organizations and the general framework on product security.
Consumer Watchdog Authorities and
NonGovernmental Organizations
The Governments policy in the feld of consumer protection is coordinated by
the National Authority for Consumer Protection (ANPC). The ANPC is responsible
for the constant harmonization of the Romanian legislation with the EC laws,
as well as for supervising compliance with specifc legislation applicable to the
sale of consumer goods. Under the ANPC direction, the effective supervision
of the compliance with the law is performed by twelve territorial offces for
consumers protection, by the InterMinisterial Committee for the Supervision
of the Products and Services Market and for Consumer Protection and by
the National Center for Products Testing and AppraisementLAREX.
Nongovernmental organizations in the feld of consumers protection have
fourished over the past years and they have several prerogatives, subject to
compliance with the criteria provided by law, such as the right to participate
to consultative councils (organized based on territorial criteria and in charge of
enforcing the consumer protection policy and coordinating the activity of public
institutions and nongovernmental organizations in the feld of consumer policy)
and to run consumer information and consulting centers subsidized with
public funds.
Content of Contracts Concluded between
Consumers and Sellers
Contractual formalism in Romania has not yet reached the status currently
existing in most of the EU member states. Romanian consumers protection
legislation does not provide for framework contracts with a predefned
content, but only for specifc rules regarding the drafting and the application
of certain clauses to the contractual relationship between the parties
23
.
Such being the situation, a distinction should be made between:
Statutory provisions which establish general rules applicable to all the contracts
in this feld; and
Statutory provisions which set out special rules applicable only to specifc
contracts.
Consumers protection legislation focuses on establishing rules designed to
ensure that contractual clauses are drafted in an accurate and clear manner
allowing the consumer to understand their content. In case of ambiguous
clauses, these will be interpreted in favor of the consumer. Abusive clauses are
considered an important threat to consumer protection, as they are frequently
inserted in the contracts concluded between sellers and consumers, where
many agreements are standard and not subject to negotiation. Contractual
clauses which are not subject to negotiation may be considered abusive if they
lead to a signifcant misbalance between the parties rights and obligations.
23
Unlike the previous Civil Code, the New Civil Code, in force as of 1
st
of October 2011, includes
a general legal framework for standard clauses (which are to be superseded by negotiated clauses)
and unusual clauses (defned as standard clauses whereby the party who proposes them retains,
among others, only a limited liability, or a right to unilaterally denunciate the contract; in order
to be valid, such unusual clauses must be accepted expressly, in writing, by the other party).
These provisions constitute the general rules on standard clauses, while the rules provided in the
legislation specifcally governing consumer protection are deemed special rules, which will apply
with priority and will only be complemented, wherever necessary, with the general rules.

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Romanian legislation provides for a nonexhaustive list of clauses de jure deemed
abusive, among which:
Clauses providing for the unilateral right of the seller to amend the contract;
Clauses whereby the consumer is not entitled to obtain remedies in case
the seller does not fulfll its contractual obligations;
Clauses whereby the indemnifcations the consumer has to pay in case of
of noncompliance with the contractual clauses are disproportionately
bigger than the effective damage incurred by the seller; or
Clauses providing for the right of the seller to unilaterally terminate
the contract without a similar right being granted to the consumer.
Abusive clauses, although included in agreements already concluded with
consumers, are deemed as null and void under the law. Besides the general
consumers protection legislation applicable to all the contracts concluded
between sellers and consumers, there are special legal enactments setting rules
applicable to specifc types of contracts. Four types of such contracts should
be mentioned:
Distance contracts;
Contracts concluded away from business premises;
Credit contracts;
Real estate intermediation contracts.
Distance contracts special rules shall not apply to contracts relating to fnancial
services, to contracts concluded by means of automatic vending machines or
automated commercial premises, to contracts concluded with telecommunications
operators for the use of public payphones, to contracts concluded within tender
procedures, to contracts concluded for the construction and sale of immovable
property or relating to other immovable property rights, except for rental, to
contracts concluded upon auction sale. In case of distance contracts, consumers
shall have a period of 10 working days to withdraw from the contract without
penalty and without providing any justifcation. The only charge that may be
imposed on the consumer for the exercise of such right of withdrawal is the
direct cost of returning the goods. Similarly to the case of distance contracts,
the regulations on contracts concluded away from the business premises do not
apply to contracts relating to certain fnancial services or to the construction
and sale of immovable property. Regulations on contracts concluded away from
the business premises shall apply to the contracts under which a seller supplies
goods or services to consumers under any of the following circumstances:
During trips organized by the trader away from the business premises;
During a visit by a trader (i) to the consumers home or to that of
another consumer; or (ii) to the consumers place of work, where the
visit does not take place at the express request of the consumer; or
In other public places where the trader offers the products or the services
to consumers.
In addition, the consumer shall have the right to unilaterally terminate the contract
within 7 working days from either (i) the date of concluding the agreement if
this is the date when the product has been delivered or (ii) the products delivery
date or (iii) the date of concluding the services agreement. The boom in crediting
activity on the Romanian market triggered the need for establishing of a set of
legal requirements designed to ensure a minimum standard of protection for
consumers. Thus, the rules applicable to the credit contracts lay down a number
of express obligations to be fulflled by the providers of fnancial services.
The specifc norms regard the information which needs to be provided to customers
in the precontractual phase, upon marketing and advertising credit products,
as well as the rules to be observed upon conclusion of credit contracts. Financial
services providers must inform the consumers, in an accurate and exhaustive
manner, on all the costs and risks that are related to the credit contract. Also,
the interest, commissions, fees or other banking expenses need to be directly
inserted in the credit agreement rather than merely indicated by reference to
other documents such as general terms of the provider, list of tariffs, etc.
Furthermore, amendments brought to the legal framework during
year 2010, implementing the provisions of the Directive 2008/48/EC on
consumer credit contracts, provided a broad array of protective measures
for consumers (such as prohibition to impose new or the increase of the
existing commissions, fees, taxes or banking costs, other than those provided
by the law, during the execution of the credit agreement; the prohibition
to impose a series of contractual clauses detrimental to the consumers,
etc). Such new rules apply, as a matter of principle, only to credit contracts
concluded after the enactment of aforesaid new (except if the consumers
and the banks expressly agreed to amend the ongoing credit contracts).
Notably, consumers have two procedural means for challenging clauses included
in credit contracts which infringe aforesaid statutory standards. Thus, the
consumers may either (i) fle a complaint in front of ANPC for the public authority
to investigate the complaint and, in case of abusive clauses, they may fle a court
claim for assessing administrative sanction and amending/annulling abusive clauses;
or (ii) directly fle a court claim challenging the default contractual clauses.
The legislation on consumers protection has also set particular focus on real
estate intermediation contracts (legally defned as the intermediation activity
regarding salepurchase or rental of immoveable assets). Such contracts need
to include, besides the regular clauses (i.e. object of the contract, validity period,

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107
termination cases), a minimum set of compulsory clauses such as the maximum
commission owed to the real estate agency, the exclusivity clause (if the case),
as well as the clear determination of cases when the customer owes the agency
a commission. Statutory obligations have been imposed on real estate agents
in the precontractual phase, such as the obligation to inform the interested
customer on any defciencies or inconveniences of the asset (if the agent is aware
of such defects), e.g. sources of noise, humidity, pollution, legal issues etc.
Liability for Lack of Conformity
Starting with 1
st
of January 2007, Romania has implemented the provisions
of Directive No. 1999/44/EC on certain aspects of the sale of consumer goods
and associate guarantees. Under this legislation, the seller shall be liable to
the consumer for any lack of conformity which exists at the time when the
goods were delivered. In the case of a lack of conformity, the consumer will be
entitled to have the goods brought into conformity free of charge by repair
or replacement, or to have an appropriate discount in the price or to have
the contract rescinded with regard to those goods. The price discount or the
rescission of the contract may be applied only (i) if the defect good has not
been repaired or replaced; (ii) if the seller has not provided complete remedy
within a reasonable time; (iii) if the seller has not provided complete remedy
without signifcant inconvenience to the consumer. The consumer is not
entitled to have the contract rescinded in case of minor lack of conformity.
The seller will be held liable if the lack of conformity becomes apparent within
2 years from delivery of the goods. The consumer shall inform the seller on the
occurrence within 2 months from the date the lack of conformity was detected.
Unless proved otherwise, any lack of conformity which becomes apparent within
6 months as of the delivery of the goods shall be presumed to have existed at
the time of delivery unless this presumption is incompatible with the nature of
the goods or the nature of the lack of conformity. Where the fnal seller is held
liable to the consumer because of a lack of conformity resulting from an act or
omission by the producer, by a previous seller in the same chain of contracts
or by any other intermediary, the fnal seller disposes of the right of redress
against the producer or the previous seller for the damages it incurred.
Contractual Relations between Prejudiced
Consumers and Sellers
Sellers shall be held liable for the prejudices caused by defciencies in the quality of
the products or services occurring during the guarantee term, provided that such
defciencies were not caused by the consumers themselves and for any prejudice
caused by hidden defects during the average utilization period, provided that the
products or services become improper for the use envisaged by the consumers or
potentially harmful to consumers life, health or security. In such cases, consumers
are entitled, free of charge, to product repair or replacement and to compensations.
The consumers should fle a claim against the responsible seller within three years
from the date when the consumer has acknowledged or should have acknowledged
the existence of the damage, the defciency or the identity of the seller, but not
later than 10 years from the date when the product has been introduced on the
market provided that the damage has occurred during the 10year period.
In addition, consumers may claim compensation based on contractual civil liability
rules. In the event the consumers are compensated by an insurer, such insurer shall
have the right of redress against the responsible seller.

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The National Medicines and Medical Devices Agency (the Agency) is the specialized
public institution subordinated to the Ministry of Health which issues relevant
regulations concerning authorization, marketing, manufacturing, import and
distribution of the medicinal products, oversees the activities of the wholesale
distributors and monitors compliance with the pharmacovigilance related
requirements.
The Agency authorizes and regulates the performance of the clinical trials and
endorses the advertising materials used for promotion of medicinal products.
Authorization
In order to be marketed in Romania, medicinal products must have in place a valid
marketing authorization. The Agency may not grant marketing authorization
to applicants not headquartered in Romania or in another EU member state.
Companies headquartered outside of the EU interested in obtaining marketing
authorization should use a Romanian or European vehicle for applying.
The marketing authorization is issued by the Agency for medicines to be authorized
for marketing in Romania only (the national procedure) or in several EU Member
States, including Romania simultaneously (the decentralized procedure).
A valid authorization for marketing medicines in one or more EU Member
States, may be acknowledged by the Agency for marketing in Romania (the
mutual recognition procedure). Finally, a valid marketing authorization may
also be issued directly by the European Medicines Agency in accordance
with Regulation (EC) No. 726/2004 (the centralized procedure).
The marketing authorization procedure in Romania is generally in line with
the one set forth under the European regulations. Thus, the marketing
authorization application form to be fled with the Agency is similar to
the application form required by the European Medicines Agency in the
centralized procedure, while the procedures carried out before the Agency
entirely transpose the requirements laid down under Directive 2001/83/EC.
The initial validity period of the marketing authorization issued by the Agency
is of fve years. The authorization may not be denied, suspended or withdrawn
for reasons other than the ones set forth under the Health Law. As regards the
exclusivity data period set forth under Directive 2001/83/EC, Romania decided to
grant a tenyear period of protection to the reference medicinal product.
Pharmaceuticals
Overview
In line with European regulations and practice, the regime of medicinal
products in Romania is highly regulated. Law No. 95/2006 on the healthcare
system reformTitle XVII (the Health Law) is the main regulation in this feld
while detailed material provisions are included in secondary legislation issued
by the Government or competent public authorities. Essentially, the Romanian
legislation in the pharmaceutical area observes the European regulations, to
which it has been properly harmonized during the last fve years. There are
however specifc requirements set forth by the Romanian regulatory authorities
in certain domains, such as reimbursement and pricing of prescription medicinal
products or, recently, the special taxation of the marketing authorization holders;
n0tably, these special regulations may be subject to unpredictable changes,
depending on the relevant economic policies and the budgetary constraints.
Competent Public Authorities
The Ministry of Health is the public authority which establishes and monitors
the implementation of the general policies, strategies and regulations in
the healthcare system, including the pharmaceutical area. Among other
important attributions, the Ministry of Health endorses the prices of the
prescription medicinal products and coordinates the national health programs
whereby the treatment of certain diseases with relevant products.
The National Health Insurance House (the NHIH) is the public institution
that regulates the secondary legislation within the social health insurance
system, monitors allocations made from the National Sole Fund of the
Social Health Insurances, and oversees the release and payment of the
reimbursed medicinal products. The NHIH also has important responsibilities
in respect of establishing the amount of the recently introduced clawback
contribution to be paid by the marketing authorization holders.

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The wholesale distribution authorization is issued by the Agency within
maximum 90 days as of the date when the applicant fles a complete
and valid documentation, subject to a favorable result of the inspection
carried out by the Agencys representatives to the warehouses and
headquarter of the applicant. The authorization is valid for an undetermined
period and may be revoked by the Agency should the holder fail to
comply with authorization or functioning related requirements.
The applicant should not necessarily be the owner of the warehouse but may not
use such an authorized warehouse other than based on a contract concluded with
the authorized owner of the warehouse. The secondary legislation permits certain
activities such as handling, transportation or delivery to also be contracted.
In line with European regulations and practice, the Romanian legislation
imposes on wholesale distributors a public service obligation to promptly
and continuously supply the Romanian market with adequate quantities
of medicines in order for the needs of patients to be covered.
Reimbursement
The Government approves by decision the reimbursed DCIs List, which
provides for the international nonproprietary name (DCI) of the
medicines which are subject to reimbursement by the State in the social
health insurance system or within national health programs. The DCIs List
should be yearly updated, but this rule and the transparency required
for the actual update is not strictly observed by the Government.
In order to be included in the DCIs List, new medicinal products must be previously
assessed and accepted by specifc commissions of experts within the Ministry of
Health in accordance with criteria required for granting the reimbursement right.
The DCI List includes three main sublists (A, B and C), and sublist C includes
three sections (C1, C2 and C3). The percentage of reimbursement of medicines
related to the DCIs is 90% for the Sublist A, 50% for Sublist B and 100% for
Sublist C (sections C1 and C3), and applies to the reference price. Medicines
on Sublist C, section C2, are covered at the value of the reimbursement price.
The NHIH and the county health insurance houses reimburse the value of the
medicines on the DCI List (save for medicines within Sublist C, section C2)
in accordance with the rules set forth in the Biannual framework contract
regarding the conditions for granting medical assistance in the social health
insurance system (approved by Government decision) and the secondary
legislation further issued by the NHIH President and the Minister of Health.
Pricing
The Ministry of Health establishes and approves, by order of the Minister, the
maximum prices for prescription medicines to be marketed in Romania.
Nonprescription medicines (OTCs) pricing is not subject to specifc endorsement
and needs to be notifed only to the Ministry of Health within 30 days as of
placing the medicines on the market.
The legal regime of prescription medicines pricing is set forth in Minister of
Health Order No. 75/2009, as further amended and completed (the Pricing Order).
According to it, the decision to endorse the manufacturer price proposed by the
marketing authorization holder or its local representative is to be issued by the
Ministry of Health within 90 days as of the date of fling the complete application.
In order to obtain endorsement, the proposed manufacturer price must be
lower or at most equal with the lowest price of the same product available
in twelve countries provided for comparison in the Pricing Order. Another
special rule aimed at reducing the allowed manufacturer price threshold
states that the maximum manufacturer reference price for generic medicines
cannot exceed 65% of the manufacturer price of the correspondent innovative
product. Likewise, should generic reference price be lower than the 65%
aforementioned threshold, the manufacturer price of the correspondent innovative
product may not exceed such generic reference price by more than 35%.
The maximum wholesale and retail distribution prices of medicines are computed
in accordance with a specifc formula that takes into account the endorsed
manufacturer price and the maximum wholesale and pharmacy margins also
regulated through the Pricing Order.
Once determined, the manufacturer prices as well as the wholesale and pharmacy
prices are included in the National Catalogue of Medicine Prices (CANAMED), which
is quarterly approved by order of the Minister of Health, and may not be exceeded.
Distribution
The provisions of the Health Law and secondary legislation issued by the
Ministry of Health in this area also comply with European requirements.
A wholesale distributor involved in sale, purchase, warehousing, handling,
transportation, delivery or export of medicines activities must hold a wholesale
distribution authorization. Authorized manufacturers of medicines are deemed
authorized as wholesale distributors of the manufactured products.

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113
With regard to the determination of the reference price used in the social health
insurance system for medicines included on Sublists A and B, the secondary
legislation issued by the NHIH provides for a formula based on the split of DCIs
in therapeutic clusters as per relevant ATC codes and the defned daily dosage.
By applying this system, the reimbursement reference price will be determined at
the value of the medicinal product with the lowest price in the relevant cluster.
Determining the reference price of medicines included on Sublist C, sections
C1 and C3 takes into account the ATC classifcation per each DCI, assimilated
pharmaceutical form, and strength. The reference price will be computed as per said
elements, by applying a specifc percentage to the lowest price per therapeutic unit.
The regulations issued by the NHIH also require costvolumeresult contracts to
be concluded in relation to the reimbursement of certain expensive medicines that
may be approved for administration in accordance with therapeutic protocols.
As regards medicines on Sublist C, section C2, which are used in the
national health programs, the secondary legislation issued by the Ministry
of Health states that the reimbursement price is determined by a applying
a specifc percentage (120%) to the lowest retail price per therapeutic
unit, per each DCI, assimilated pharmaceutical form and strength.
Advertising
Advertising of medicines must be performed with strict observance of the
rules laid down by the Health Law and the Guidance on the assessment of
advertising to medicines for human use issued by the Agency in 2011. According
to these regulations, advertising includes any form of information through
direct contact (doortodoor system) and any form of promotion aimed at
stimulating prescription, distribution, sale or consumption of medicines.
The Health Law expressly indicates the following forms of advertising:
Advertising of medicines addressed to the wide public;
Advertising of medicines addressed to persons qualifed to prescribe
or distribute them;
Visits of medical sales representatives to persons qualifed to prescribe medicines;
Supply of medicine samples;
Stimulation of prescription or distribution of medicines, by offering, promising
or granting pecuniary advantages, unless such have a symbolic value;
Sponsorship of promotional meetings attended by persons
qualifed to prescribe or distribute medicines;
Sponsorship of scientifc congresses attended by persons qualifed to prescribe
or distribute medicines, especially by way of paying for travelling and
accommodation costs.
Advertising addressed to the wide public is allowed only for medicines that may be
used without a prescription from the physician, a pharmacists advice being
suffcient, as the case may be. Advertising to the wide pubic is forbidden as
regards prescriptiononly medicines, medicines reimbursed in the health
insurance system, and medicines containing psychotropic or narcotic substances.
Advertising addressed to persons qualifed to prescribe or distribute medicines has to
provide at least the essential information compatible with the summary of product
characteristics and its classifcation for release. The law expressly states
that, when carrying out advertising activities to persons qualifed to prescribe or
release medicines, no gifts and pecuniary or in kind advantages may be offered,
promised or granted, except where such advantages are inexpensive and relevant
for medical or pharmaceutical practice.
Hospitality within promotion events is allowed should it be strictly limited to its main
scope and be not extended to persons other than healthcare professionals. The
competent authority to oversee the advertising of medicines is the Agency,
which issues regulations detailing the Health Law provisions, endorses the
advertising materials and applies sanctions for failure to observe the relevant
legal requirements.
The Agencys Guidance on the assessment of advertising applies not only to
pharmaceutical companies, their subsidiaries and representation offces, but
also to any other partners (agents, agencies, representatives of marketing
authorization holders) contracted in connection with the performance of any
form of advertising for medicines. Pharmaceutical companies are held liable
to observe the obligations set forth under the Guidance even if they assigned
certain promotion or advertising activities to specialized third parties.
Taxation
In order to control medicine consumption and to ensure fnancing for increased
consumption, the Romanian Government imposed a special tax to be paid by
marketing authorization holders or their local representatives in connection with
medicines subject to reimbursement from public funds.
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115

This new tax, which applies starting with October 2011, is computed by applying a
specifc percentage, quarterly determined by the NHIH depending on the increase
of consumption of reimbursed medicines, to the value of the quarterly consumption
of reimbursed medicines that belong to each marketing authorization holder.
Payers must determine the amount of tax owed, declare it to the competent
fscal bodies and pay it by the 25
th
of the second month following the end of
the relevant quarter. The tax is collected by the fscal bodies under the rules
set forth in the Fiscal Procedure Code.
The Government emergency ordinance which sets forth this tax repealed and
replaced previous legislation regulating a similar tax, according to which a variable
percentage set forth by the law has applied to the quarterly encashments registered
by the subject payers. Notably, the NHIH remained responsible for determining
the value of the said tax pursuant to the legislation in force as of the date of
the medicines sale. The collection of the old tax has been however entrusted to
the fscal bodies starting with the 1
st
of October 2011.
Financial Institutions &
Security Interests
Financial Market
The fnancial market was among the frst subjected to new regulation immediately
after 1989 within the process of replacing the centralized state economy with
free market institutions. Between 2002 and 2010, both primary and secondary
legislation regulating the fnancial sector have undergone major changes in order to
implement the relevant European Union (EU) Directives and secondary enactments
and to adjust the Romanian fnancial system to the EU requirements, post
accession (Romanias accession to the EU took place on the 1
st
of January 2007).
Regulatory authority
National Bank of Romania
The National Bank of Romania (the NBR) acts as central state bank, having mainly
supervisory and control powers over fnancial entities within its jurisdiction,
irrespective of whether they are credit institutions or nonbanking fnancial
institutions. The NBRs powers do not extend to the capital market and its
institutions (e.g. the fnancial investment services companies), which are placed
under the supervision and control of the National Securities Commission (the NSC).
The NBR has exclusive powers in authorizing and supervising the credit institutions,
the nonbanking fnancial institutions, the payment institutions and the institutions
issuers of electronic currency, Romanian entities, which are set up and operate in
Romania. In this respect, the NBR issues mandatory regulations, applies sanctions
and is entitled to controlling and reviewing the books of accounts and any other
documents of the mentioned entities.
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To the extent that they are authorized and operating under the supervision of
fnancial regulatory authorities in an EU or European Economic Area (EEA) country,
foreign entities may directly operate on Romanias fnancial market, without
being required to follow a local authorization procedure and observe the capital
requirements applicable to Romanian entities.
Payment Incident Bureau
The Payment Incident Bureau is created and operating within the National Bank of
Romania as a centre for intermediation and management of information specifc to
payment incidents, in connection with paper and electronic payment instruments
(e.g. cheques, bills of exchange and promissory notes). Information to the Bureau is
conveyed by computerized system through the Interbank Communication Network,
which links the head offce of the NBR to the head offces of all credit institutions.
Credit Information Bureau
The Credit Information Bureau is established as a private structure, operating
as an intermediation centre that manages credit risk information and card
fraud information. The system collects from, and provides to fnancial and
credit institutions as well as other participants to the system (such as the utilities
companies) positive and negative information on the individuals, debtors of the
participants which register payment arrears exceeding 30 days, on the frauds
related to the participants (ascertained by defnitive or irrevocable court decisions
or uncontested administrative acts) and on the statements of individuals
containing inconsistencies.
Banking Risks Central
The Banking Risks Central is a structure created and operating within the NBR
specialized in collecting, storing and centralizing information on crediting
operations performed by the declaring entities (in principle, institutions supervised
by the NBR) towards their debtors. The system collects, stores and centralizes
information (i) on the exposure of every credit institution in the Romanian banking
system to debtors that were granted loans and/or have commitments totaling
more than the reporting threshold, (ii) on payments overdue in excess of 30 days,
regardless of the amount, owed by individuals against whom credit institutions
exposure is less than RON 20,000, as well as (iii) information on card frauds
committed by cardholders.
Procedure and prerequisites for authorization of credit institutions
General
Under the Government Emergency Ordinance No. 99/2006 (the Banking Law),
both credit institutions and branches of foreign credit institutions headquartered
in nonEU member states may be set up and operate in Romania only upon their
authorization by the NBR.
Authorization of credit institutions by the NBR involves a twostep procedure:
(i) preliminary authorization, whereby the NBR approves the setting up of credit
institutions, and (ii) the banking license, whereby the NBR authorizes operation
of credit institutions. As regards the credit institutions headquartered in EU member
states, they may operate in Romania either directly, by passporting their services
based on the freedom to provide services within the EU, or through branches, in
both cases upon a notifcation to the NBR. No authorization is necessary in this case.
Corporate form
Under the Banking Law, credit institutions, as well as housing banks and mortgage
banks may be incorporated only as joint stock companies.
Capital requirements
Specifc capital requirements are applicable to each category of credit institutions.
The initial share capital has to be of at least RON 25,000,000 (approx. EUR
5,500,000) in the case of housing banks and of mortgage banks and RON
37,000,000 (approx. EUR 8,400,000), in the case of regular credit institutions.
Preliminary authorization
The application for a preliminary authorization should be joined by a series of
documents providing details on the share capital, the shareholders and managing
bodies of the credit institution etc., and also a business plan including inter alia
a description of the targets, policies and strategies of the future credit institution,
including information regarding the clients and the segment of market that the
credit institution envisages, the products and services, price policies, capitalization
policies, the fnancing sources and asset structure, personnel policies, a description
of the internal control system to be employed, as well as references to adjustment
of the IT system. The NBR is bound to decide on the application for a preliminary
authorization within 4 months as of submission. The issue of the preliminary
authorization by the NBR is not a guarantee that the subsequent banking
license shall be also granted.
Banking license
After the NBR grants the preliminary authorization, the shareholders proceed with
incorporating the credit institution or registering the branch of a credit institution
from a nonEU member state with the Trade Registry, as the case may be. After the
credit institution/branch was duly incorporated and registered, a number of
additional documents should be fled with the NBR, within 2 months from
the issuance of the preliminary authorization. The NBR shall issue the banking
license within 4 months as of receipt of the application and complete joining
documentation. The relevant credit institution is subsequently registered with the
banking register hold by the NBR.
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119

Banking license
After the NBR grants the preliminary authorization, the shareholders proceed
with incorporating the credit institution or registering the branch of a
credit institution from a nonEU member state with the Trade Registry, as
the case may be. After the credit institution/branch was duly incorporated
and registered, a number of additional documents should be fled with the
NBR, within 2 months from the issuance of the preliminary authorization.
The NBR shall issue the banking license within 4 months as of receipt of the
application and complete joining documentation. The relevant credit institution
is subsequently registered with the banking register held by the NBR.
Business purpose and forbidden transactions
Under the Banking Law, credit institutions may perform various fnancial activities,
such as: taking deposits and performing lending operations (including consumer
loans, mortgage loans etc.), fnancial leasing, payment operations, issue and
management of payment instruments, issue of guarantees and undertaking of
commitments, transactions with money market instruments, intermediation on
the interbank market, fnancial investment services and fnancial consulting, etc.
Credit institutions may also perform, within the limits of their authorization and
subject to compatibility with the requirement of banking business, the following
operations:
Nonfnancial mandate or commission operations, especially on behalf of other
entities within their group;
Asset management operations in respect of the movable and/or immovable
assets owned by the credit institution, but not for the purpose of performing
fnancial operations;
Services for their own clients which, although not connected with the
performed business, are an extension of the banking operations;
Except for those referred above, transactions by credit institutions with movable
assets and real estate property are only allowedunder the following circumstances:
(i) when such transactions are necessary for the authorized operations of the
credit institution, for the employees training, or for organizing resorts or
housing for employees and their families; (ii) when the transactions involve
movable assets and real estate property acquired following foreclosure
proceedings.
The following transactions are entirely forbidden to credit institutions:
Pledging of own shares against the credit institutions debts;
Granting loans secured with shares, other equity securities or bonds issued by
the credit institution itself or by other credit institution within the same group;
Receipt of deposits or other reimbursable funds, equity securities or other
valuables when the credit institution is in insolvency.
Capital adequacy
The provisions of the Banking Law are essentially compliant with the principles of
the Basel II Accord.
Thus, as per the NBR/NSC Regulation No. 22/27/2006, credit institutions must
comply with capital requirements inter alia for risk covering, on individual and
consolidated bases, and for monitoring and control of large exposures.
Minimum mandatory reserves
As per the NBR Regulation No. 6/2002, all categories of Romanian credit institutions
are compelled to create and maintain with the NBR minimum mandatory reserves,
in national and in foreign currencies, receiving interest at such rates as periodically
determined by the NBR norms.
Currently, in the case of credit institutions, the minimum mandatory reserves rate
for RON liabilities is of 15%, while for foreign currency liabilities the respective rate
is of 20%, in both cases for liabilities having a residual maturity limited to 2 years
as of the expiry of the observation period or, if it exceeds 2 years, the liabilities
have attached a reimbursement, transfer or an anticipated withdrawal clause.
In any other cases, the minimum mandatory reserves rate is zero. The minimum
mandatory reserves applicable to mortgage banks are zero.
Prudential obligations
As per the Banking Law, the NBR is empowered to set forth prudential requirements
applicable to Romanian credit institutions, inter alia referring to related parties
agreements, liquidity, provisioning, corporate changes etc, by way of NBR norms
(regulations, instructions and circulars).
Reporting obligations
Pursuant to the Banking Law and the NBR subsequent enactments, Romanian credit
institutions are compelled to periodically fle specifc reports with the NBR,
containing inter alia information in respect of:
Tier I and Tier II capital levels and other capital adequacy compliance indices;
Net assets;
Individual and aggregate levels of the large exposures;
Solvency indices, on individual and consolidated basis;
Yearly fnancial statements and certain biannual fnancial data;
Classifcation of the loan portfolio and related credit risk provisions;
Banking fees for cashing in and payment operations etc.

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121
Mortgage banks
Mortgage banks, deemed credit institutions under the Banking Law, are established
as joint stock companies operating under the authorization issued by the NBR. The
main business object of mortgage banks consists of (i) providing mortgage loans
for real estate investments (dwellings, industrial/commercial constructions) and
(ii) issuing mortgage bonds. Mortgage banks are not allowed to take deposits.
Nonbanking fnancial institutions
Nonbanking fnancial institutions are mainly regulated by Law No. 93/2009
on nonbanking fnancial institutions (the Law 93/2009) and the subsequent
NBR norms.
Business purpose
As per Law 93/2009, nonbanking fnancial institutions are allowed to carry out
various lending activities, among which fnancial leasing activities and consumer
credits are most commonly met in practice. Nonbanking fnancial institutions are
entitled to grant mortgage loans as well.
In addition, they can also undertake fnancing and guarantee commitments, issue
and manage credit cards, perform payment services and perform any connected
or ancillary activities to the credit operations as well as mandate and consultancy
activities. Nevertheless, they cannot receive money under deposit and cannot,
as a rule, issue bonds, nor perform other activities unless in relation to
their lending activities.
Nonbanking fnancial institutions are required to have a share capital amounting
to the RON equivalent of EUR 200,000, except for those acting as mortgage loan
companies, to which a minimum EUR 3,000,000 threshold applies.
Procedure and prerequisites for authorization
As per Law 93/2009, nonbanking fnancial institutions have to apply for license
with the NBR within 30 days as of their incorporation. They are allowed to start
lending activities only after being registered in the registry held by the NBR for
nonbanking fnancial institutions. The NBR should issue the license within 60 days
as of receipt of the application and joining documentation.
Prudential and reporting obligations
As per Law 93/2009 and the subsequent NBR norms, nonbanking fnancial
institutions must comply with specifc prudential and reporting requirements,
inter alia concerning the Tier I and Tier II capital, exposures, credit portfolio structure
and corporate changes.
Payment institutions
Payment institutions are in particular regulated by Government Emergency
Ordinance No. 113/2009 on payment services (GEO 113/2009) and the subsequent
Regulation No. 21/2009 passed by the NBR.
General
Payment institutions can be incorporated only as Romanian legal entities and are
subject to an authorization procedure before starting their operations. The
payment institutions from EUmember states may operate in Romania based on a
notifcation sent to the NBR by the competent authority in their home member state.
Business purpose
As per GEO 113/2009, payment institutions are allowed to carry out various
payment operations, to take deposits, to perform specifc transfers, withdrawals
of funds, issuing and accepting to payment instruments, cash remittance or
electronic payments. Payment institutions are also able to grant credits, but only
in connection with certain of their operations and subject to specifc conditions.
They can also perform operational and other connected services, management of
payment systems and other commercial activities, subject to the applicable laws.
Payment institutions are required to have a share capital which may vary in
consideration of their business object, i.e. amounting to the RON equivalent of
EUR 20,000 (for cash remittance operations only), EUR 50,000 (for electronic
payment operations only) or respectively EUR 125,000 (for all the payment services
provided by GEO 113/2009).
Authorization
As per GEO 113/2009, payment institutions are allowed to start payment operations
only after obtaining the approval from the NBR, which should be issued within 3
months as of the submission of the complete documentation. The authorization
documentation includes inter alia information on the initial capital, business object,
signifcant shareholders, managers of the payment operations, business and
activity plans, etc. Within 5 days as of the initiation of the authorized operations, the
payment institutions must submit to the NBR a notifcation in this respect,
together with the internal regulations and a statement of the management in
respect of the IT system.
Prudential and reporting obligations
As per GEO 113/2009 and the subsequent NBR Regulation No. 21/2009, payment
institutions must comply with specifc prudential and reporting requirements,
inter alia concerning their agents, the Tier I and Tier II capital requirements,
measures to protect the received funds.

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123
The changes in the status of the payment institutions are subject to either
authorization or notifcation to the NBR, depending on the degree of risk entailed
by such changes. The payment institutions are subject to specifc regulatory
requirements, aimed to protecting consumers and their funds deposited with
the payment institutions.
Security Interests
Under the New Civil Code, the legal regime of personal and real security interests
has received a uniform regulation and certain new categories of security interests.
Moveable hypothecs
The moveable hypothecs, formerly known as security interests on moveable
property, are regulated by the New Civil Code as of its entry into force on the
1
st
of October 2011 (Title VI of Law No. 99/1999 on the legal regime of security
interests has been abrogated). The New Civil Code provides a fexible and
uniform framework, more effcient and adequate to the current economic
reality, as well as additional security enforcement procedures, as an alternative
to the classical procedures provided by the Civil Procedure Code, such as
allowing the creditor to undertake privateenforcement measures.
Creating and perfecting the moveable hypothecs
Moveable hypothecs are created by way of written agreement between the secured
creditor and the security provider (either the debtor or a third party providing
security to the beneft of the debtor). There is no special form requirement for
such moveable hypothec agreements and, unlike immoveable hypothec agreements,
notarization is not necessary. The perfection of the moveable hypothecs,
which is relevant for establishing the priority ranking of the hypothec, is
obtained as of the moment when the secured obligation is born, the security
provider gains rights on the secured asset, the moveable hypothec agreement
is signed and the registration formalities of the moveable hypothec have been
duly performed. The New Civil Code provides the categories of moveable
assets which can be charged by moveable hypothec, such as intangible assets,
universalities of moveable assets (including goodwill)but only to the extent
they are assigned to the operations of a company, moveable assets attached
to real estate, products of the secured asset (e.g. proceeds of the sale or any
moveable asset replacing the secured asset), future moveable assets.
Publicity
The New Civil Code requires the registration of moveable hypothecs with
the Electronic Archive for Security Interests (the Electronic Archive) for
ensuring a priority order among creditors holding moveable hypothecs on the
same assets, as well as publicity towards third parties. The Electronic Archive can be
easily accessed through a taxfree Internet database, ensuring rapid verifcation
of the records. The general rule is that the priority rank is given by the date of the
registration of the moveable hypothec with the Electronic Archive. The creditor
is bound to request the moveable hypothec be removed from the Electronic
Archive within 10 days following the fulfllment of the secured obligation.
Moveable hypothec agreements
The moveable hypothec agreement must provide for a determinable value of the
secured obligation, as threshold limiting the amounts that may be recovered by the
secured creditor in case of enforcement. The agreement must describe the secured
assets in suffcient detail as to reasonably allow identifcation of the secured assets,
general descriptions for category of assets being no longer permitted (e.g. all
the debtors present and future moveable assets does not represent a suffcient
description anymore). Generally, although the security provider continues to use the
secured assets during the security period; it is possible that the secured creditor takes
possession of the secured asset (although the security provider remains owner); in
such case particular rules apply. Still, the security provider is allowed to sell or
otherwise dispose of the asset throughout the entire duration of the moveable
hypothec agreement. As a general rule, a moveable hypothec agreement cannot
prevent the security provider from disposing of the hypothecated asset. Also, the
New Civil Code pohibits negative pledges clauses in moveable hypothec agreements.
Enforcement of moveable hypothec
The moveable hypothec agreements are deemed enforceable titles, which provide a
procedural advantage in case of enforcement, as the secured creditor would not be
required to fle claim on the merits of the case. Throughout the enforcement
procedure, before the sale of the secured assets, the debtor or any other interested
person is entitled by law to pay the outstanding debt and to thus put an end to the
enforcement procedure. The parties to a moveable hypothec agreement may agree
on methods of sale to be used in case of enforcement. If the moveable hypothec
agreement is silent in this regard, the creditor may capitalize on the hypothecated
assets through reasonable commercial conditions. Under a certain procedure, the
secured creditor may appropriate the hypothecated assets for settling its claim.
Pledge
The pledge is now regulated by the New Civil Code as a security where the secured
creditor takes over the pledged assets. Only tangible moveable assets or materialized
commercial titles may be subject to pledge. The publicity of pledges is ensured by
the mere fact of possession over the pledged assets. If no specifc rules are provided
under the New Civil Code on pledges, those applicable to moveable hypothecs
shall apply.

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125
Immoveable hypothecs (mortgages)
Immoveable hypothecs continue to be preferred among the security instruments
and are frequently used in various types of commercial and retail transactions.
Under the New Civil Code, mortgages can be created on existing property such
as land and buildings, but also (differently from the previous regulation) on
future immoveable assets. Following the creation of an immoveable hypothec,
the security provider will continue to own and use the hypothecated asset.
The immoveable hypothec will be preserved despite any ownership transfer,
following the hypothecated asset into the hands of any subsequent acquirer,
so that the secured creditor is able to enforce the immoveable hypothec
irrespective of who owns the property at the date of the enforcement.
If the debtor failed to discharge the debt on the due date, the secured creditor is
entitled to enforce the immoveable hypothec and satisfy its receivable against
the debtor by selling the hypothecated real estate following the procedure
under the Civil Procedure Code (which procedure in many cases proves to be
lengthy and bureaucratic).
Immovable hypothec agreements
An immoveable hypothec is created by agreement of the parties and by
registration thereof with the relevant land book (under the New Civil Code,
the registration has become a validity condition). The immoveable hypothec
agreement must be notarized as a condition for its validity. Under the sanction
of nullity, the immoveable hypothec agreement must provide a proper
description of the mortgaged property and details of the secured obligations.
The security provider is allowed to sell or otherwise dispose of the hypothecated
asset throughout the entire duration of the immoveable hypothec agreement and as
a general principle, an immoveable hypothec agreement cannot prevent the security
provider from disposing of the hypothecated asset. The New Civil Code explicitly
prohibits the negative pledges clauses in immoveable hypothec agreements.
Publicity
The Cadastre Law No. 7/1996 sets out the legal framework for the registration of
immovable hypothecs with the land books kept by the offces for cadastre and real
estate publicity. The immoveable hypothec registration system is aimed at ensuring
the validity thereof and also the priority rank among secured creditors and the
publicity against third parties. Thus, by reviewing the registrations in a land book,
a third party would be informed about the existence of any immoveable hypothecs
encumbering the property. The land books can be relatively easy accessed. An
internet database is not available yet for the verifcation of the real estate records.
Enforcement of the immovable hypothec
A properly notarized immoveable hypothec agreement is an enforceable title
on the basis of which the secured creditor can submit a formal request to the court,
within a noncontentious procedure, in order to obtain approval to start
the enforcement procedure.
Suretyship (Fidejussio)
The suretyship (fdejussio) is a personal guarantee, on the basis of which the secured
creditor is granted the right to pursue the assets of the guarantor in case the
debtor fails to perform the secured obligation. The suretyship is not subject to any
registration procedure and does not give a priority ranking to the secured creditor.
When pursued by the creditor, the guarantor may use the following defenses:
The beneft of discussion (benefciul de discuiune), whereby the guarantor
asks the secured creditor to frst exhaust its remedies against the debtor before
pursuing the guarantor; and
The beneft of division (benefciul de diviziune), available where there are
multiple guarantors for the same debt; should one guarantor uphold the
beneft of division, the creditor would be obligated to pursue each of the
guarantors prorata with their undertakings.
Either of these types of defense may be contractually waived by the guarantors.
Independent guarantees
For the frst time under Romanian law, the New Civil Code regulates the letter
of guarantee and the comfort letter as categories of independent guarantees.
Letters of guarantee
The letter of guarantee is a category of personal guarantee whereby the
issuer irrevocably undertakes to pay an amount of money to a benefciary
on its frst demand and such obligation to pay is independent from the
underlying obligation in relation to which the letter of guarantee was
issued. As a rule, the letters of guarantee are payable on frst demand.
Comfort letters
The comfort letter is regulated by the New Civil Code as an irrevocable
undertaking of the issuer to perform or abstain from performing an action,
for the purpose of supporting the debtor in the performance of its obligations
towards its creditor (such creditor being the benefciary of the letter of
comfort). The issuer of a comfort letter may only be held liable for damages
caused to the creditor, upon the latter providing evidence of the issuers breach
of the obligations undertaken by the comfort letter and only to the extent
the principal debtor defaults towards the creditor. The issuer has a right of
recourse against the principal debtor if it has paid damages to the creditor.

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127
However, REM is a completely different tier than BSE and, although it is a
system for securities spot trading, it is neither an authorised regulated market
nor a multilateral trading facility
26
;
Sibiu MonetaryFinancial and Commodities Exchange (Sibex)
27
operated by
Bursa Monetar Financiar i de Mrfuri SA, operational since January 2010.
The main institutions on the Romanian capital market are:
The regulatory authority (NSC);
The market operators (BSE and Sibex);
The central depository, ensuring depository activities for securities, clearing
and settlement of securities transactions (Depozitarul Central SA
28
for the
transactions on BSE and Depozitarul Sibex SA
29
for the transactions on Sibex);
Clearing houses, ensuring the clearing and settlement of transactions with
derivatives (Casa de Compensare Bucureti SA
30
for derivatives traded on BSE
and Casa Romn de Compensaie SA Sibiu for derivatives traded on Sibex);
Investors Indemnifcation Fund
31
, ensuring investors indemnifcation, up to a
certain threshold in case of a default of an investment frm/asset management
company to reimburse investors money and/or fnancial instruments.
The main entities activating on the local capital market are:
Issuers of fnancial instruments consisting mainly of local commercial companies
and undertakings for collective investments, local authorities (municipalities,
city halls, county councils) and the State (Tbills);
Intermediaries/investment frms which may be either specialized fnancial
investment services companies or credit institutions duly authorised
in this respect;
Investment management companies.
Investment frms/investment management companies authorised in an EU Member
State may provide fnancial services in Romania, directly or through local branches.
Transactions with Listed Securities
As a general rule, admission of securities to trading on a regulated market is made
based on a prospectus that requires approval by the NSC before publication. In cases
strictly provided by law, a simplifed prospectus is accepted.
26
Currently, BVB tries to reorganize REM as a multilateral trading facility.
27
The offcial website of Sibex is www.sibex.ro.
28
The offcial website of Depozitarul Central SA is www.depozitarulcentral.ro.
29
The offcial website of Depozitarul Sibex SA is www.depozitarulsibex.ro.
30
The offcial website of Casa de Compensare Bucureti SA is www.casadecompensare.ro.
31
The offcial website of the Investors Indemnifcation Fund is www.fondfci.ro.

Capital Market
Overview
During the past 6 years, since the enactment of the Capital Markets Law No.
297/2004 (the Capital Markets Law), the Romanian capital market has undergone
a process of transformation from an incipient market to a highly regulated
and complex market, in the effort to mirror and implement the principles at
work in the relevant EU Directives and the international market practices.
The development process is still underway and, although the regulatory authorities
in the feld are quite active, some of the operational aspects settled years ago in the
more developed markets are not fully implemented on the Romanian capital market.
However, the regulations currently applicable on the local capital market are,
in principle, in line with the EU Directives.
Relevant Institutions
Romanian capital market regulation and operation are placed under the authority
and supervision of one sole entity, the National Securities Commission (NSC)
24
.
Currently, Romania has two regulated markets, where both securities and
derivatives are effectively traded namely:
The Bucharest Stock Exchange (BSE)
25
operated by Bursa de Valori
Bucureti SA (BVB), in place since 1995. BVB also manages the RASDAQ
Electronic Market (REM), whose initial operator has legally merged with
BVB in 2005.
24
The offcial website of NSC is www.cnvmr.ro.
25
The offcial website of BSE is www.bvb.ro.

128
129
to the pre-validation mechanism
33
; in this respect, NSC has a decision (to become
effective as of the 14
th
of November 2011) whereby it has extended the use of
the global accounts also to the shares of the companies included in the BET
index of BSE.
The settlement of securities transactions involves, in principle, cash delivery.
Also, the enforcement of pledge over traded securities generally involves a
sale on the market, at the market price. The price of a transfer on the market
needs to observe certain preestablished fuctuation margin applied to the
daily reference market price. For fnancial instruments issued in the national
currency (RON) all market operations (e.g. price denomination, settlement,
quotations) have to be made in RON. Financial instruments issued in foreign
currency may be traded either in RON or in the currency of issue, in accordance
with the terms of the listing prospectus endorsed by the relevant authorities.
Securities lending is permitted mainly as a safeguard for the settlement of
securities transactions or for the physical settlement of derivatives, for the purpose
of short sales or for keeping the market maker position. Generally, short sales
are allowed only if preceded by the sellers borrowing the respective securities;
however, short sales are allowed to be made without such prior securities
lending if needed for keeping the market maker position, but only for the shares
for which the global accounts without pre-validation system is allowed.
Takeover Bids
Any public offer is allowed upon the NSCs approval of the offering announcement
and documentation. Any advertisement of the tender offering before obtaining
the NSCs approval of the offering documents is forbidden.
Mandatory takeover offering
According to the Capital Markets Law, once a person has reached (either alone or
jointly with persons acting in concert) more than 33% of the voting rights over
the issuer company, the respective person is bound to launch a public offering
addressed to all the other shareholders for all the remaining shares, the socalled
mandatory takeover offering (MTO).
33
Such situations would inter alia include, issuers whose shares are listed both on the Romanian
capital market and on an EU Member State capital market, issuers of T-bills, issuers whose shares are
registered with a Romanian central depository and which make object of a cross-border public
offering, issuers whose shares are registered with both a Romanian central depository and a central
depository located in a EU Member State with whom the Romanian central depository cooperates with
for the purpose of ensuring the transfer and the settlement of the shares, as well as in other cases
specifcally regulated by the NSC.
There are certain minimum requirements set forth by the Capital Markets Law
for admission to trading which are listed herein below.
Requirements referring to the issuer
To be incorporated and carry out operations in compliance with the law;
To have a preliminary level of capitalization of at least EUR 1,000,000 or, if
capitalization cannot be assessed, the value of the capital and the reserves
(including the proft or the loss of the last fnancial year) to be of at least
EUR 1,000,000;
The company must have operated for at least 3 years before submitting the
application for listing.
Requirements referring to shares
To be freely negotiable and fully paid;
To have suffcient spread to the public (in principle, 25% of the subscribed share
capital; special exemptions may be granted by NSC under certain conditions).
In addition, each market operator may set its own requirements to be met by issuers
when applying for listing their securities on their tiers (e.g. depending on the value
of companys capitalization, the BSE has established three listing categories,
the EUR 1,000,000 threshold being required for listing on the 3
rd
category,
while a capitalization of EUR 2,000,000 is required for the 2
nd
category and
one of EUR 30,000,000 for the 1
st
category).
As a principle, all transactions made through the stock exchange entail an
automatic prevalidation procedure aimed at ensuring that the shares exist
into sellers account both on the trade date and on the settlement date. Such
prevalidation mechanism is not applicable to trades with Tbills or with
shares also listed on another EU regulated market, to crossborder share
settlements, or to cross border public offers; also, to be effective as of the 14
th

of November 2011, such mechanism is no longer applicable to the trades with
shares of the companies included in the BET index of BSE
32
. Currently, the
securities are mainly held in and traded from individual accounts opened by the
intermediary on the clients name in the system of the central depository.
Based on a March 2010 NSC regulation, the use of global accounts is generally
allowed to all the local issuers provided that the trades with their shares are subject
to the pre-validation mechanism. Also, the said NSC Regulation provides for a series
of limited cases where the global accounts shall be used for shares not subject
32
The BET index of BSE includes the top 10 most liquid companies.

130
131
Protection of the offeror against material adverse effect actions by the target
company is ensured by the targets BoD being banned to take any measure or act in
a manner that may infuence on the status of the company or the takeover
objectives, save for the current management operations and operations deriving
from previous undertakings of the company or subsequently endorsed by the
Extraordinary GAS. Prohibited operations include share capital increases or issues of
securities granting subscription rights, or shares swaps, as well as charging or
transferring the companys assets representing at least 1/3 of its net assets as per
the last yearly fnancial statements.
On the other hand, the offeror is held liable for damages incurred by the issuer
company if it is proved that the VTO has been launched exclusively for the
purpose of determining the company not to proceed with certain operations.
The offeror and the parties that the latter acts in concert with may not launch
another VTO targeting the same company within one year after the closing
of a previous VTO.
Counter bids
Launching counter bids is allowed with regard to any purchasing tender offering,
with the counter bid envisaging at least the same quantity of securities or the
same participation level and the counter bid price being at least 5% higher than
the initial bid (the frst announced purchase offer). The counter bids may be
launched within 10 business days as of the publication of the announcement of
the initial bid. A contest is conducted by the NSC in order to select one bid. All
the competing bids are meanwhile suspended. The price contest process takes
place in several rounds until no other price increase is submitted. The offerors
have to increase the price by at least 5% of the highest price bided in the
previous round. After the fnal price is determined following the price contest
process, an amendment to the winning bid is published (refecting the respective
increased price) and all the other bids previously authorized are cancelled.
Exit of Minority Shareholders/DeListing
Minority shareholders may be forced by the majority shareholder to exit the
company (squeezeout) or may ask the majority shareholder to buyout
their holdings (sellout), once the latter has reached 95% of the shares having
attached voting rights in the listed company, or has acquired 90% of the shares
targeted in a public purchase offering addressed to all the shareholders for all
their shares. Both operations are to be made at a fair price for the minority
shareholders, determined according to the law or by an independent expert.
Following the squeezeout/sellout procedure, the company is delisted.
provided by law, including privatization, foreclosure proceedings conducted by
the Ministry of Public Finance or other authorized entities, share transfer between
the mothercompany and its subsidiaries or between subsidiaries of the same
mothercompany, voluntary purchase offering addressed to all shareholders for
all their shares. The MTO has to be launched within 2 months from reaching the
qualifed position, save for the case when the threshold was reached involuntarily
(e.g. pursuant to subscribing pro rata under a share capital increase or as a
result of merger/spinoff operations) when the deadline is of 3 months.
The price under an MTO must meet or exceed the highest price paid by the offer
or, or the persons acting in concert with it, within the last 12 months before
the MTO. Lacking this index, the MTO price shall be the highest of the following
(i) the weighted average shares trade price for the 12 months prior to the MTO,
(ii) the price resulting from dividing the companys net assets value (as per the latest
fnancial statements) to the number of publicly traded shares and (iii) the shares
value as valuated by an expert in accordance with international valuation standards.
Voluntary takeover offering
A public offering addressed to all shareholders for all their shares for the purpose
of acquiring more than 33% of the voting rights, when the offer or is not bound
to conduct a tender offering, is called voluntary takeover offering (VTO).
The price of the VTO should be at least the highest of the following: (i) the highest
price paid by the offer or/the persons it acts in concert with for the shares in the
target company, (ii) the weighted average shares trade price for the 12 months prior
to the VTO and (iii) the price resulting from dividing the companys net assets value
(as per the latest fnancial statements) to the number of publicly traded shares.
VTO proceedings require a preliminary procedure to be conducted by the
offeror with the issuing companys management. The offeror`s takeover
intention, included in a preliminary announcement approved by the NSC, is
communicated to the target company. The employees are also notifed on
such intention. Within 5 days as of receiving the preliminary announcement,
the target companys Board of Directors (BoD) has to provide the NSC, the
relevant market operator and the offeror with a document ascertaining its
position with respect to the takeover through the announced VTO, including,
if any, the opinion expressed by the employees representatives.
On the other hand, the BoD may convene a meeting of the general assembly of the
shareholders (GAS) following the receipt of the preliminary VTO announcement,
in order to inform the shareholders on its position with regard to the takeover.

132
133
Reporting Obligations
Any issuer of securities admitted to the offcial listing has to submit periodical
reports to the market and the NSC, mainly including fnancial data for the
reporting period or informing the market on certain special events (general
meeting of shareholders decisions/convening, etc). Each issuer has to submit
the regulatory authority, the market operator and the public with quarterly,
biannual and annual fnancial reports. Announcements are to be published in
at least one national newspaper informing the public on the locations where
such reports may be reviewed and the way they can be obtained. All the
periodical reports have to be maintained available to the public for at least
fve years. Also, certain events or circumstances must be immediately reported
to the market and the NSC. Reporting obligations are applicable both to
Romanian issuers and to foreign issuers admitted to trading on a Romanian
regulated market. Issuers listed on REM have lower reporting standards.
Information on Qualifed Positions
A shareholder that has reached or lost a qualifed position (5%, 10%, 15%, 20%,
25%, 33%, 50%, 75% or 90%) has to inform the target company, the NSC and the
market operator on the operation within 3 working days. The company thus
informed is also obligated to release the information to the public, the NSC and the
market operator within 3 working days as of being informed.
Cumulative Voting Procedure for Appointing
the Directors
Members of the BoD of companies listed on a regulated market may be appointed
under a special procedure, the socalled cumulative voting method. Any
shareholder may request to appoint BoD members by using this special method
(which implies appointment of BoD members by the shareholders on individual
basis, proportional with their voting rights), but the application of the method
becomes mandatory following the request of a signifcant shareholder (holding
at least 10% of the share capital or voting rights or a position giving a signifcant
infuence on the decisionmaking process of the company). The articles of
incorporation of the issuer may not cancel, amend or hinder the right of the
shareholders to request and obtain the use of the cumulative vote procedure. The
application of this special procedure shall regard all the members of the BoD.
In case of company merger or spinoff that would result in shareholders
receiving shares not admitted to public trade (e.g. that would lead to companys
withdrawal from public trade), the minority shareholders that dissent to the
GAS decision on the process are entitled to withdraw from the company and
receive the value of their shares as valuated by an expert. The same withdrawal
right is granted to minority shareholders if the companys GAS decides the
companys withdrawal from public trade. However, such delisting procedure
can only be conducted under very restrictive circumstances and requirements.
Protection of Minority Shareholders
One of the main concerns of the capital market regulations is offering protection
to minority shareholders. To this end, two main principles are clearly stated by
the Capital Markets Law: equality of investors and transparency of the market.
Protection of minority shareholders is ensured under the capital market laws
and regulationsin turn based on the relevant EU Directives (i.e. the Prospectus
Directive and the Transparency Directive, together with the relevant Level II
enactments)through specifc obligations imposed on issuers to make available
to investors information on a periodical or adhoc basis, or through special
rights of the shareholders in relation to the decisionmaking process in the
listed company, or special rules with regard to inside information/insider trading
and market manipulation. Minority shareholders with a higher quota have
some additional rights, such as the right to request the GAS be convened, or
reports of the fnancial auditor on specifc company operations be made, or the
election of the BoD members be made via the cumulative voting procedure.
Transparency of the market, the main tool for protecting the shareholders, is
ensured in the frst instance through the shareholders right to information,
which is regulated around the following major rules:
Admission to the offcial listing on a regulated market is conditional upon
the issuer providing investors with true and complete information regarding
the securities and the issuer, through the publication of an offering prospectus;
Publicly traded issuers are required to periodically inform investors on their
activity and fnancial standing;
Publicly traded issuers are required to immediately inform investors on any
major event concerning issuers activity and their securities;
Market manipulation and market abuse are strictly forbidden (and are also
punished as criminal offences);
Specifc rules are designed with regard to the concept and use of inside
information and inside persons; securities trade based on privileged
information being strictly prohibited.

134
135

Energy
Power and Heat
Overview on the reorganization of the Romanian power and heat sector
In the early 90s, an extensive reorganization process has been initiated in the power
and heat sector aimed at preparing the State-owned players for privatization. As
a frst step in this direction, the Regie Autonome for Power (Renel) was organized
by taking over all the assets and liabilities of 100 State-owned companies, research
and educational institutes and one training centre operating in the power sector.
Renels main business was in generation, transport and distribution of power, heat
generation and transport, maintenance and repairing of energy equipments and
installations, development of the national energy system, import and export of
power. In 1997, as a major new step in the reorganization process, a legal framework
was created for regies autonomes to be transformed into commercial companies,
owned solely by the State in the initial phase, but legally eligible for privatization.
Under the new legislation, Renel was split into 2 companies and 1 regie autonome:
The Power National Company (Conel) having three subsidiaries:
Hidroelectrica (subsidiary for power generation in hydropower plants),
Termoelectrica (subsidiary for power and heat generation in thermalpower
plants) and Electrica (subsidiary for power distribution);
The National Company Nuclearelectrica; and
The Regie Autonome for Nuclear Activities.
Conels reorganization continued in 2000 with the following entities being formed:
The Power Transportation National Company Transelectrica (Transelectrica),
the national power transporter and dispatcher responsible for operating and
upgrading the transmission grid, as well as for organizing and managing
the power market;
The cumulative voting method does not have t0 be observed by foreign issuers
admitted on the local market, which shall be bound by the corporate requirements
of their national law.
Super Majorities in the General Assembly
of the Shareholders
In order to protect minority shareholders against dilution by the majority
shareholders, there are certain special majorities provided by the Capital Markets
Law for share capital increase. Thus, a quorum of of the number of all
shareholders and vote of 75% of the share capital is required for a valid decision
in the GAS in the case of:
Increasing the share capital by contribution in cash with the cancellation
of the preference rights of the existing shareholders (which would allow
them to preserve their equity quota following the share capital increase);
Increasing the share capital by contribution in kind.
Such majorities are not applicable to the foreign issuers admitted to trading on a
Romanian regulated market, which shall apply the rules regarding corporate issues
that are provided by their national law.

136
137
(power and heat producers resulted from the reorganisation of Termoelectrica
in 2004) and the National Company of Lignite Oltenia, thus resulting CE
Oltenia; and, on the other hand, the merger between Electrocentrale Deva and
Electrocentrale Paroseni (subsidiaries of Termoelectrica) into CE Hundedoara.
Power
Authority regulating the power sector
The power sector is regulated by the Romanian Energy Regulatory Authority
(ANRE), an independent public body of national interest, coordinated by the Vice
Prime Minister, which operates on the basis of its own organization and operation
regulation. ANRE is entirely fnanced from the State budget, through the budget of
the Government General Secretariat. ANREs main competences in the power sector
include:
Issuing mandatory regulations for operators in the power sector;
Granting, amending, suspending and withdrawing power authorizations
and licenses;
Approving methodologies for establishing prices and tariffs and the tariffs
for system, transmission and distribution services;
Drafting framework supply agreements and framework agreements to be
concluded between undertakings in the power sector regarding the sale,
purchase, transmission, system service and distribution of power;
Monitoring the power market and how the operators on this market comply
with the relevant regulations; and
Settling disputes related to the conclusion of supply agreements,
interconnection agreements or agreements concluded between undertakings
on the power market.
The power sector is regulated mainly by Power Law No. 13/2007 (the Power Law
34
).
1
Activities and participants in the power sector
The power sector includes all the activities of power generation, transmission,
distribution and supply, system services, import and export of power, as well as
the establishment and operation of the related capacities. The generation is carried
out by legal entities licensed by ANRE, through the operation of the generation
capacities also authorized by ANRE.
The producers are entitled to trade the power they generate on the wholesale
market, as well as to supply it to fnal consumers based on a power supply license.
The main power producers on the Romanian market are Hidroelectrica,
Nuclearelectrica and CE Turceni. Transmission is a natural monopoly activity
carried out by Transelectrica, the Romanian Transmission and System Operator.
34
Published in the Offcial Gazette of Romania, Part I, No. 51 dated 23
rd
of January 2007, as further
amended and supplemented.
The Power Generation Company Hidroelectrica (Hidroelectrica), hydro
power producer and supplier;
The Power and Heat Generation Company Termoelectrica (Termoelectrica),
acting on the power generation and supply, as well as heat generation,
transmission, distribution and supply markets; and
The Power Distribution and Supply Company Electrica (Electrica), the
national power distributor and supplier, mainly responsible for operating and
developing the distribution grid.
Further, Electrica was reorganized by setting up 8 distribution and supply
subsidiaries, each having exclusivity over the power distribution service and related
infrastructure within a certain area, i.e. Electrica Oltenia, Electrica Muntenia Nord,
Electrica Muntenia Sud, Electrica Banat, Electrica Dobrogea, Electrica Moldova,
Electrica Transilvania Nord and Electrica Transilvania Sud. Although only the
monopoly activities in the power sector have been opened for privatization so
far (i.e. the distribution companies), while most of the competitive segment
of the market continues to be State-owned, privatizations in the power sector
saw key players in the European power sector entering the domestic market.
Five of the former subsidiaries of Electrica (power distributors and suppliers)
have been privatized through a simultaneous share sale and share
capital increase. As a result, CEZ a.s. has acquired the majority stake of
Electrica Oltenia, Enel S.p.A. became the majority shareholder of Electrica
Dobrogea, Electrica Banat and Electrica Muntenia Sud while E.ON. Energie
AG has acquired 51% of the share capital of Electrica Moldova.
In the heat sector, Termoelectrica is currently in process of establishing several
joint venture companies to be controlled by private investors, which would act as
independent heat producers. Termoelectricas participation in such joint venture
companies would consist in thermalpower plants or parts of them which
appear to be attractive for the investors due to a relative constant heat market
but which need signifcant investments for effciency increasing purposes.
An extensive reorganization process was initiated in the power and heat
generation sector at the beginning of 2010, consisting in concomitant mergers
and spinoffs of the main Stateowned power and heat producers so as to
result into two giant companies, i.e. the National Company Electra (Electra) and
the National Company Hidroenergetica (Hidroenergetica). Although important
steps were made along the lines of this restructuring plan, the process has been
abandoned and currently a new form of reorganization is envisaged in the
sector, but at a much smaller scale. The new process consists in two mergers,
namely, on the one hand the merger among CE Turceni, CE Rovinari, CE Craiova

138
139
Unbundling of power distribution and supply activities
In line with the principles laid down by the Directive 54/2003/EC concerning common
rules for the internal market in electricity and repealing Directive 96/92/EC (the
Power Directive
35
), the Power Law imposed unbundling of the distribution and
supply activities by the 30
th
of June 2007.
Unbundling was required of vertically integrated undertakings carrying out both
distribution and supply activities, except for vertically integrated undertakings
serving less than 100,000 connected customers, or small isolated systems.
Distribution operators part of vertically integrated undertakings were required to
become independent from activities not connected to power distribution, at least
in terms of legal form (legal unbundling), organization and decision making process
(functional unbundling). All eight distribution and supply operators (former and
current subsidiaries of Electrica) have completed the unbundling of distribution and
supply activities through spinoff into two separate entities, one for each activity.
Power market
In line with the principles laid down by the Power Directive, the Romanian
power market was fully liberalized as of 1
st
of July 2007, further to a gradual
liberalization which started in 2000. However, even after the 1
st
of July 2007,
ANRE continues to regulate several segments of the market, i.e. the natural
monopoly activities, the supply by the default suppliers and last resort suppliers,
as well as the transactions between the producers and the default suppliers
and last resort suppliers for the power supplied on the regulated market.
On the competitive market, transactions are performed (i) under a wholesale system
(for suppliers acquisitions of power from producers or from other suppliers
for reselling purposes) or (ii) under a retail system (for acquisitions of power
by fnal consumers for their own consumption).
On the wholesale market, transactions are concluded in the following forms:
Bilateral agreements concluded through direct negotiations (including
import/export agreements);
Bilateral agreements executed on the centralized market of the bilateral
agreements operated by the Power Market Operator Opcom;
Transactions closed on the Day Ahead Market operated by the Power Market
Operator Opcom;
Transactions concluded on the centralized balancing market operated by
Transelectrica; and
Transactions for technological system services.
35
Published in the EU Offcial Journal L 176 of 15
th
of July 2003.
Transelectrica operates, based on the concession granted by the Ministry of
Economy, Commerce and Business Environment over the entire power transmission
grid (i.e. the grid having a voltage exceeding 110 kv) belonging to the public
property of the State.
Power distribution entails the transportation of the power through the high,
medium and low voltage grid having a voltage of up to 110 kv. Similarly to the
transmission, the distribution is a natural monopoly activity carried out by 8 entities
holding (i) the concession awarded by the Ministry of Economy, Commerce and
Business Environment over the distribution service in a certain area and (ii) the
distribution license issued by ANRE.
The supply can be carried out by entities holding the power supply license issued
by ANRE. As a result of the full liberalization of the Romanian power market since
the 1
st
of July 2007, three categories of suppliers are recognized by the regulations in
force, namely (i) competitive suppliers, (ii) default suppliers and (iii) last resort
suppliers.
As a general rule, as of the 1
st
of July 2007, the suppliers can sell the power on
the competitive market at negotiated prices. The default suppliers (i.e. the
supply companies resulted further to the unbundling of the former distribution
and supply operators, namely CEZ Vnzare, Enel Energie, E.ON. Energie
Romania, Electrica Furnizare Transilvania Nord, Electrica Furnizare Transilvania
Sud, Electrica Furnizare Muntenia Nord and Enel Energie Muntenia) are
obligated to supply power, under terms and prices regulated by ANRE, to the
following consumers located in the area covered by the distribution license:
Household and nonhousehold consumers which have not exercised the right
to elect the supplier on the competitive market;
Nonhousehold consumers having a maximum capacity of 100 kVA and
household consumers which have participated on the competitive market
and decided to return to the regulated market; and
New household consumers which elect the default supplier and new non
household consumers having a maximum approved capacity of 100 kVA which
do not exercise the right to elect the supplier on the competitive market.
At the same time, ANRE nominates several last resort suppliers for supplying
power, under regulated terms and prices, in case of suspension/withdrawal of
the supply license of one or several suppliers. For the period between the 1
st
of
July 2011 and the 30
th
of June 2012, ANRE appointed as last resort suppliers the
default suppliers indicated above.

140
141
Access and connection to the power grid
Permitting access to the power transmission and distribution grids is a mandatory
service to be provided by the TSO and the relevant distribution operator. Access to
the grid can be restricted only provided that the connection affects the safety of
the national energy system through the breach of the relevant technical norms and
performance standards.
Considering the limited capacity of the Romanian power grids, access thereto
proved to be one of the crucial steps in the development of a new power
generation project in Romania. Connection to the power grid is done based
on a grid connection permit followed by the execution of the grid connection
agreement (if the connection requires works to the grid), and the payment
of the connection tariff. Applications for a grid connection permit should be
fled either with (i) the TSO, for power generation/consumption units having
a capacity exceeding 50MVA or (ii) the power distribution operator holding
the concession of the power distribution service in the respective area, for
power generation/consumption units having a capacity up to 50MVA.
Promoting the power from renewable energy sources
In line with the then in force Directive 2001/77/CE on the promotion of power
generation from renewable energy sources on the domestic market, starting with
2003, the Romanian legislation has been constantly supplemented in order to create
a legislative framework for the promotion of power from renewable sources of
energy. In the frst regulatory stage (i.e. 2004November 2008), the lawmaker
opted for the system of mandatory quotas combined with green certifcates trading,
under which for each MWh of power generated from renewable sources of energy,
the producers were entitled to one green certifcate. In the second regulatory stage,
Law No. 220/2008 establishing the system for promoting the power produced from
renewable sources of energy has been enacted (the Renewable Energy Law)
36
. The
Renewable Energy Law established initially two alternative systems for stimulating
the generation of energy from renewable sources of energy: (i) the system of
mandatory quotas combined with green certifcates trading and (ii) the feedin
tariff system. Only one of these systems was to be selected for application by way
of Government decision and, consistently, at the end of 2009, the Government
Decision No. 1479/2009
37
was passed opting for mandatory quotas combined with
green certifcates trading. However, this decision provided that the support scheme
shall apply only subject to being authorized by the European Commission.
36
The Renewable Energy Law was published in the Offcial Gazette, Part I, No. of 743 of 3
rd
of
November 2008.
37
Government Decision No. 1479/2009 on the establishment of the system for promoting generation
of power from renewable sources of energy was published in the Offcial Gazette, Part I, No. 843 of 7
th
of
December 2009.
Prices and tariffs
Further to the full liberalization of the market, transaction prices can be
negotiated by the parties, except for tariffs and prices which continue to be
regulated by ANRE, namely:
Regulated tariffs for the monopoly activities (i.e. power transmission, system
and distribution);
Regulated prices/tariffs applied by last resort suppliers and by default suppliers;
Regulated prices for transactions between the power producers and
the suppliers, for power sold to consumers on the regulated market;
Regulated tariffs for the acquisition of system technological services (until
a competitive market of technological system services will be created);
Regulated tariffs for the measurement activity;
Regulated tariffs for grid connection; and
Regulated tariffs applied by centralized markets operators.
Authorizations and licenses
Activities in the power sector being of public interest, they may be carried out
only provided specifc authorizations and licenses are obtained from ANRE:
developing and upgrading generation capacities having an installed power
exceeding 1 MW are subject to obtaining the setting up authorization; power
generation and supply activities, as well as power distribution, transmission and
system services are conditional upon obtaining the corresponding licenses.
Rights of the holders of authorizations/licenses over the lands and other
immovable assets owned by third parties
Considering the public interest power sector activities entail, holders of
authorizations and licenses beneft, by virtue of law, of certain rights over the
lands and other assets belonging to either the public domain or to private
individuals or legal entities, such as (i) a right of use of such assets in the event
works are necessary for the development, upgrading, operation or repairing
energetic capacities, (ii) easement rights (underground and aboveground) for
installing power grids and other equipments related to energetic capacities and
for accessing the location place thereof and (iii) a right to request the limitation
or cessation of the activities carried out near energetic capacities which may
endanger assets or humans. If the immoveable assets are owned by the state or
by the local authorities, the right of use and the easement rights are exercised
free of charge; if owned by individuals or legal entities, the owners are entitled to
compensation for all damages incurred further to exercising these rights, the value
of the compensation being agreed by the parties or, failing which, by court decision.
The terms and conditions to exercise these rights are established by convention
concluded between the two parties, at the owners request, which should
observe the framework convention recently approved by Government decision.

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For the period 20082025, the trading value of the green certifcates
both on the centralized market and on the bilateral agreements market
varies from EUR 27 (minimum value) and EUR 55 (maximum value) per
green certifcate; starting from 2011, such values are indexed with the
average infation rate of the Euro zone within the European Union
calculated for the previous year and communicated by Eurostat;
The quota of green certifcates acquisition shall be estimated by ANRE
each December for the following year and by the 1st of March of each year
ANRE shall establish the mandatory quota of green certifcates acquisition
for the previous year, based on the achieved production of renewable
energy and the gross fnal consumption registered in the previous year;
The suppliers have the obligation to purchase a number of green certifcates
which equals to the annual quantity of power purchased for fnal consumers
and for own consumption purposes multiplied by the mandatory quota of
green certifcates acquisition determined by ANRE for the respective year;
The producers have the obligation to purchase a number of green certifcates
which equals to the quantity of power used for own consumption purposes
(other the technological consumption) and for supplying consumers connected
directly to the power plant, multiplied by the mandatory quota of green
certifcates acquisition determined by ANRE for the respective year;
The amount to be paid by the power suppliers and producers failing to observe
the annual mandatory quota of green certifcates acquisition shall amount to
EUR 110 for each green certifcate that was not acquired; such amount shall
be also indexed with the average infation rate of the Euro zone within the
European Union calculated for the previous year and communicated by Eurostat;
The amounts resulting from the sanctions applied to suppliers and producers
for failing to observe the mandatory quotas of green certifcates acquisition
shall be collected by the Environmental Fund Administration
41
. Such amounts
shall be further allocated, to the natural persons for investments in renewable
power generation units having an installed capacity up to 100 kW;
The power generated from renewable energy sources shall be traded on the
wholesale power market at market price. However, the power generated from
renewable energy sources in power plants having an installed capacity below 1MW
can be sold to the default suppliers in the licensed areas where the power plants
are located at regulated prices to be further established by ANRE. The trading
conditions and the regulated prices shall be notifed to the European Commission.
The quantity of power sold against regulated prices shall not beneft from
the promotion system;
Power plants using renewable sources of energy shall be connected to the power
grid to the extent that the safety of the National Energy System is not affected.
41
The Environmental Fund is an economical-fnancial instrument targeted at supporting and
performing environmental protection projects and programs, in accordance with the applicable laws
in the environmental feld.
Furthermore, with a view to adapting local legislation to the changes brought in
April 2009 by Directive 2009/28/CE on the promotion of the use of energy from
renewable sources
38
, which repealed Directive 2001/77/CE, a law for the amendment
of the Renewable Energy Law was passed in 2010
39
. Finally, the support scheme for
power generated from renewable sources of energy has been recently approved
by the European Commission. During the authorization process of the support
scheme, the Romanian authorities undertook to bring some amendments to
the existing legal framework with the purpose of aligning it with the clearance
subsequently obtained from the European Commission. As such, a Government
Emergency Ordinance
40
has been recently passed for amending and supplementing
the Renewable Energy Law (the Amended Renewable Energy Law). The main
principles of the system of mandatory quotas combined with green certifcates
trading, as regulated by the Amended Renewable Energy Law, are as follows:
The national targets regarding the percentage of power generated from
renewable energy sources (including the power generated in hydropower
plants having installed capacities exceeding 10 MW) out of the total fnal
consumption will be 33% in 2010, 35% in 2015 and 38% in 2020;
The annual mandatory quotas of power generated from renewable energy
sources (excluding the power generated in hydropower plants having
installed capacities exceeding 10 MW) out of the total fnal consumption
shall be gradually increased from 10% in 2011 to 20% in 2020;
The number of green certifcates to be distributed by the TSO for each MWh
of power generated by power plants using renewable sources of energy
(with the exception of the power used for own technological consumption)
shall vary depending on the renewable energy source, as follows: (i) 3 green
certifcates for each MWh of power generated in the new hydropower
units having an installed capacity of maximum 10 MW, 2 green certifcates
for each MWh of power generated in the refurbished hydropower units
having an installed capacity up to maximum 10 MW and 1 green certifcate for
each 2MWh of power generated in other hydropower units than the new and
refurbished units mentioned above, having an installed capacity of maximum
10MW; (ii) 2 green certifcates up to 2017 and one green certifcate as of 2018
for each MWh of wind power; (iii) 2 green certifcates for each MWh of power
generated from geothermal energy, biomass, liquid biofuel, biogas, (iv) 1 green
certifcate for each MWh of power generated from landfll gas and sewage
treatment plant gas; and (v) 6 green certifcates for each MWh of solar power;
38
Directive 2009/28/CE on the promotion of the use of energy from renewable sources was published
in the Offcial Journal of the European Union No. L 140 of 5
th
of June 2009.
39
Law No. 139/2010 on amending and supplementing Law No. 220/2008 establishing the system
for promoting the power produced from renewable sources of energy has been published in the Offcial
Gazette, Part I, No. 474 of 9
th
of July 2010.
40
Government Emergency Ordinance No. 88/2011 for amending and supplementing Law No. 220/2008
establishing the system for promoting the power produced from renewable sources of energy, published
in the Offcial Gazette, Part I, No. 736 of 19
th
of October 2011.

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the number of green certifcates provided by the Amended Renewable
Energy Law. These measures shall be approved by means of a Government
decision and shall apply to producers which will start generating power from
renewable sources of energy after the entry into force of such decision;
In case of power plants benefting of one or more State aid(s) (including EU
grants), ANRE may reduce the number of green certifcates to be awarded
to such producers by decreasing the reference value of the investment/MW with
the value of the aid received/MW and maintaining the internal rate of return
considered during the authorization process of the promotion system by
the European Commission;
Until the fulflment of the national targets regarding the percentage of power
from renewable energy sources out of the total fnal consumption, the power
produced from renewable sources which benefts from the promotion system
may be traded only with a view to covering the gross fnal consumption of
power in Romania.
With a view to promoting the generation of power from renewable energy
sources, the Romanian authorities have adopted two State aid schemes
mainly aimed at fnancing the development and upgrading of installations for
generating power from renewable energy sources, as well as the development
of installations using clean technologies in all industrial sectors. The fnancial
support granted under these State aid schemes is fnanced from the European
Regional Development Fund
42
limitedly applicable by 2013. Currently, there
are no calls for projects opened by the management authority of the two
fnancing programmes, but, unless the funds allocated for each year are
disbursed, it is more likely that other calls shall be opened for the investors.
Promoting the production of highy effciency cogeneration power
The system for promoting high effciency cogeneration of power and heat,
regulated at European level by Directive 2004/8/EC
43
has been implemented in
Romania starting with 2007 by Government Decision No. 219/2007
44
. After the high
effciency cogeneration support scheme has been authorized by the European
Commission, ANRE has adopted, during the course of 2010 and 2011, extensive
secondary legislation for the implementation thereof. The support scheme for high
effciency cogeneration is administered by Transelectrica and entails the award of
bonuses to qualifed power producers, on a monthly basis, for each MWh of power
42
The European Regional Development Fund is a structural European Fund which aims to strengthen
economic and social cohesion in the European Union by correcting imbalances between its regions.
43
Directive 2004/8/EC on the promotion of cogeneration based on an useful heat demand in the
internal energy market and amending Directive 92/42/EEC has been published in the Offcial Journal of
the European Union No. L 52 of 21
st
of February 2004.
44
Government Decision No. 219/2007 on the promotion of cogeneration based on the demand of
useful heat, published in the Offcial Gazette, Part I, No. 200 of 23
rd
of March 2007.
The power generated from renewable sources of energy which benefts from
the support scheme and is sold on the market benefts of guaranteed access to
the grid, while the power sold against regulated prices benefts of priority
access to the grid, based on technical and commercial rules to be further
established by ANRE;
The support scheme shall apply for a period of (i) 15 years for energy generated
by new units (i.e. commissioned after the 1
st
of January 2004 and composed
entirely of new equipments), (ii) 10 years for power generated by refurbished
hydropower plants, with an installed capacity of no more than 10 MW, (iii)
7 years for wind power generated by units previously used on the territory
of other states, if such units are used in the isolated energy systems or have
been commissioned prior to application of the support scheme regulated by
the Amended Renewable Energy Law, (iv) 3 years for power generated by
non-refurbished hydropower plants with a maximum installed capacity of
no more than 10 MW. Such periods shall be diminished accordingly in case of
power producers which received green certifcates prior to the application of
the support scheme regulated by the Amended Renewable Energy Law;
The support scheme shall apply to all producers accredited by ANRE provided that
the commissioning, the refurbishment respectively, of the generation units
occurs by the end of 2016;
Developers of power plants generating renewable energy which have an
installed capacity of more than 125MW shall be subject to a detailed assessment
to be performed by the European Commission and shall be entitled to beneft
from the support scheme only after the completion of such assessment. In this
case, ANRE may modify the number of green certifcates to be awarded to the
developer of the respective power plant, in accordance with the provisions of
the authorization decision of the European Commission. However, producers
which as at the entry into force of the Amended Renewable Energy Law operate
power plants generating renewable energy that have an installed capacity of
more than 125MW shall be accredited by ANRE, and be entitled to receive the
number of green certifcates provided by the Amended Renewable Energy
Law for a period of 24 months. Such producers have the obligation to notify
the European Commission within three months as of accreditation, and any
positive differences between the number of green certifcates received during
the 24 month period and that provided by the authorization decision of the
European Commission shall be settled within 24 months as of such decision;
ANRE has the authority to monitor the producers benefting from the support
scheme. If further to the monitoring and assessment of ANRE, it follows that
there might be an overcompensation (defned by the Amended Renewable
Energy Law as an increase of the internal rate of return by more than 10% as
compared to the value thereof considered during the authorization process
of the promotion system by the European Commission) deriving from the
application of the support scheme, then ANRE proposes measures for reducing

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In view of benefting from the bonus, the producers have the obligation to trade
the high effciency power on the competitive power market. The remaining quantity
which was not sold on the competitive market may be traded on the regulated
market for regulated prices set yearly by ANRE at the level of 90% of the average
power trading price on the Day Ahead Market, during the previous year. For
20102012, the regulated price may not be lower than EUR 40/MWh, VAT exclusive.
As a side note, producers of power and heat from cogeneration which use
renewable energy sources have the obligation to choose one of the support
schemes, i.e. either the system of mandatory quotas combined with green
certifcates trading, or the bonus support scheme for high effciency cogeneration.
Heat
Overview on the heat provision service
The heat provision service covers all activities of theat generation, transmission,
distribution and supply carried out at the level of a territorialadministrative
unit, under the management of the local public administration authorities
or of the community development associations
45
, with a view to ensuring the
necessary heat used to prepare warm water for general consumption.
The heat provision service is carried out by a centralized system (SACET)
consisting in constructions, installations, equipments and metering devices
corresponding to heat generation, transmission, distribution and supply.
Authority regulating the heat sector
The main authority with competences in the heat sector is the National Authority
for Regulating the Community Services of Public Utilities (ANRSC), a public body
of national interest, subordinated to the Ministry of Administration and Interior,
empowered to:
Regulate activities entailed by the heat provision service;
Monitor and control the compliance of the SACET operators with the legal
requirements;
Grant licenses for the performance of activities part of the heat power
provision service;
Elaborate the framework regulations applicable to the service; and
Draft and approve the framework tender book for the performance of the heat
provision service and the framework documentation for the delegation of
management.
45
The community development associations are associations established by two or several
administrative territorial units for the purpose of jointly providing the community services
of public utilities.
produced from high effciency cogeneration and delivered into the grid, irrespective
of whether the power is sold on the competitive or on the regulated market.
ANRE is the authority establishing on an annual basis the producers who beneft
from the support scheme, the amount of the bonus to which each is entitled, and
the quantities of high effciency power benefting from the support scheme. The
bonus to be awarded to each producer may not exceed the annual reference
bonus which has been approved by the regulatory authority for the entire
applicability period of the scheme depending on the type of fuel used in
the cogeneration process (i.e. solid fuels, gas fuel taken over from the transmission
system and gas fuel taken over from the distribution system).
The bonuses are granted from the contributions collected by Transelectrica
mainly from power consumers (through their suppliers) and from suppliers which
export power generated in Romania.
The contributions are determined on a monthly basis by multiplying the annual
value set by ANRE in RON/kWh with the quantity of the power invoiced to
the consumers and/or exported during the respective month. Payment of the
contributions is made by the aforementioned suppliers on a monthly basis.
Suppliers which import power produced in high effciency cogeneration, certifed
as such through guarantees of origin, and deliver it directly to consumers in
Romania are entitled to the reimbursement of the contributions they paid.
ANRE analyses the costs and revenues corresponding to the high effciency
cogeneration activity estimated for the next year by the producers benefting from
the support scheme. Should the analysis reveal overcompensation, ANRE may
diminish the value of the bonus to be granted for the respective period and,
should the analysis prove that the cogeneration unit has been fully depreciated,
no bonus shall be granted.
Additionally, ANRE will assess in respect of each benefciary whether the
bonus granted in the previous year gave rise to overcompensation and, if so,
the concerned benefciary shall have to pay the amounts indicated by ANRE.
The frst period for which ANRE will assess the overcompensation is of three
years, after which overcompensation will be analyzed on an annual basis.
The support scheme is applicable for the period 2010-2023, provided that
no producer can beneft from it for more than 11 consecutive years. Should
the aggregate capacity of combined heat and power units benefting from
the scheme reach 4000 MW, then only high effciency cogeneration units
replacing the existing ones shall be eligible for the support scheme.

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ANRSC issues licenses based on a twostage procedure, as follows:
The frst license grants the benefciary thereof only the right to participate
within an unlimited number of procedures for being awarded the management
delegation agreement; such license is issued for a 1year period; and
Within 60 days as of the entering into force of the management delegation
agreement, the benefciary thereof must request ANRSC to issue a new license
allowing the actual performance of the services object of the agreement. This
license is issued for the duration of the management delegation agreement,
without exceeding a 5year period. 60 days before the license expiration
date, the benefciary thereof must request ANRSC to issue a new license.
Prices and tariffs
The following categories of prices are applicable in the heat sector: (i) local
reference prices and (ii) local prices for the population. The local reference
prices are established for each locality by ANRSC, with the exception of the price
for the heat produced from cogeneration, which falls under the competence
of ANRE. The local prices for the population (representing the prices at the
value whereof the heat is invoiced to the population) are established by
the local public administration authorities or the community development
associations. At the level of the same territorial administrative unit, the local
price for the population is unique, irrespective of the type of heat generation,
transmission and distribution technology or of the types of fuels used.
The local public administration authorities or the community development
associations can negotiate different formulas and rules for establishing/
adjusting the local prices for the population through the management
delegation agreements, with the prior endorsement of ANRSC/ANRE.
Gas
Overview of the gas sector
In the context of radical reforms that characterized the Romanian economy after
1989 aiming at liberalizing the national economy and supporting the free movement
of goods and services, the gas sector has undergone a major reorganization
process which entailed, inter alia, a clear separation of the generation, storage,
transmission and distribution activities, an increase of the competition in the
gas generation and a nondiscriminatory access to the transmission system.
The main steps made in this respect consisted in the establishment and
subsequent reorganization of the Regie Autonome for Gas Romgaz Medias
(Romgaz) and of the Regie Autonome for Oil Petrom Bucureti (Petrom).
In addition, limited competences in the heat sector have been grated to ANRE,
in respect of the production of heat from cogeneration, such as:
Granting, modifying, suspending or withdrawing licenses
for the production of heat from cogeneration;
Approving prices and tariffs for the production of heat from cogeneration
for the population; and
Elaborating specifc provisions to be inserted in the framework agreements
and in the documentation issued by ANRSC.
Management of the heat provision service
The management of heat provision service (including all the responsibilities
regarding the organization, management, operation and fnancing this service)
falls under the competence of the local public administration authorities or of
the community development associations, which can decide to carry out the
management either directly (through their internal structures) or by delegation
(transferring all or part of the rights and obligations related to the service and
granting concessions over the corresponding infrastructure belonging to their
public or private ownership based on a delegated management agreement).
The delegated management agreement is awarded based on public tender requiring
the participation of at least 3 bidders. If further to organizing two public tenders,
the minimum number of bidders is not met, a new procedure is launched (direct
negotiation) which must observe the same publicity requirements as the public
tender; negotiations are conducted with all eligible bidders, irrespective their
number, and the winner is selected based on the results of the negotiations.
Operators of the heat provision service
All activities part of the public service of heat provision within an administrative
unit (i.e. heat generation, distribution, transmission and supply) must be carried
out by a single licensed operator. Exceptionally, based on the decision of the local
public administration authorities or the community development associations,
heat generation activities may be carried out by one or several operators.
Licenses
All activities in the heat sector (heat generation, transmission, distribution and
supply) may be performed based on the license issued by ANRSC only. By way
of exception, the license for producing heat from cogeneration falls under the
exclusive competence of ANRE. As a general rule, only one license is issued for
all these activities but, if there are more operators for heat generation within
the same territorial unit, or if production is carried out as cogeneration, a single
license is issued by ANRSC for heat transmission, distribution and supply, while
generation licenses are issued by ANRSC or by ANRE, as the case may be.

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During 20042005, the gas sector has undergone a large privatization process
whereby the Romanian state sold its majority stakes in Distrigaz Nord and Distrigaz
Sud, as well as in Petrom.
As a result, E.ON. Rurhrgas AG became the majority shareholder in Distrigaz Nord,
Gaz de France acquired the majority shareholding in Distrigaz Sud while OMV
Aktiengesellschaft Austria became the majority shareholder in Petrom.
Another major breakthrough on the Romanian market was the admission of
Transgaz to trading on the Bucharest Stock Exchange, further to an IPO process
which took place in 2007 and which represented the greatest share demand
in the history of Romania, the offering being oversubscribed by more than 28
times. Moreover, this was the frst IPO on the Bucharest Stock Exchange that
had a new fnancial instrument attached thereto i.e. allocation rights.
In the following years, the development of the gas market is targeted on promoting
exploitation of gas resources with a view to encouraging the internal production,
diversifying the import sources and increasing competition among the suppliers.
The gas sector is regulated mainly by Gas Law No. 351/2004 (the Gas Law)
47
.
Authority regulating the gas sector
The main authority regulating the gas sector is ANRE, which merged in 2007 with
the former National Regulatory Authority for Gas Sector by taking over from the
latter all the competences, budget, fnancing sources, personnel, rights and
obligations thereof.
The main competences of ANRE in the gas sector are as follows:
Establishing the validity conditions of granted authorizations and licenses;
Drafting, approving and applying regulations for the organization and
functioning of the gas market;
Drafting and approving frame agreements for gas supply and for the provision of
storage, transmission and distribution services and related activities carried out
against regulated tariffs;
Drafting, approving and applying criteria and methods for the approval of
prices and for the establishment of regulated tariffs in the gas sector; and
Endorsing the terms and conditions of the concession agreements concluded
in respect of the assets, activities and services in this sector.
47
Published in the Offcial Gazette of Romania, Part I, No. 679 dated 28
th
of July 2004, as further
amended and supplemented.
Romgaz was established at the beginning of 1991, by taking over all the assets and
liabilities of several Stateowned companies, research institutes and educational
legal entities operating in the gas sector. Romgazs main object of activity included
geological research for identifying gas reserves, gas extraction, transmission,
distribution and supply, maintenance and repairing of related equipments
and installations.
Following subsequent reorganizations, Romgaz ceased to exist in 2000, being split
into fve new companies:
Transgaz, the national operator of gas transmission, transit and dispatch;
Distrigaz Nord and Distrigaz Sud, national gas distributors and suppliers;
Exprogaz, empowered to carry out geological research and gas generation,
supply and storage; and
Depogaz, performing geological research and gas generation and storage.
The reorganization process continued in 2001, through the merger between
Exprogaz and Depogaz, as result whereof a new company was established under
the former name of Romgaz.
Similarly to Romgaz, Petrom was set up also at the beginning of 1991, further to
the reorganization of numerous State owned companies, research institutes and
educational legal entities operating in the oil and gas sector. Petrom was responsible
for exploring, administering and identifying oil and gas deposits (except for gas
deposits under the administration and operation of Romgaz), selling the products
resulted therefrom, ensuring the maintenance and repairing of related equipments
and installations, importing and exporting related products, equipments and
technologies.
Currently, Romgaz and Petrom are the main gas producers on the Romanian market.
During the last years, the legislation governing the gas has been substantially
amended in order to refect the principles laid down by the European legislation,
in particular Directive 2003/55/EC concerning common rules for the internal
market in gas and repealing Directive 98/30/EC
46
(the Gas Directive), as well as
to speed up the privatization in the gas sector.
The main amendments envisaged to eliminate the gas distribution grids from
the public domain of the local authorities, thus stimulating the privatization
of the Stateowned gas distribution companies and the investments by
the consumers in the development of new gas distribution pipelines.
46
Published in the EU Offcial Journal L-176, dated 15
th
of July 2003.

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153
from a different state and destined to a third state) are also natural monopoly
activities carried out by Transgaz. Based on the concession agreement concluded
with ANRM, Transgaz operates the national transmission system and related assets
belonging to the public domain of the state.
Distribution entails the transportation of gas through the grid operating at a
pressure lower or equal to 6 bars. Gas distribution is a monopoly of entities holding
(i) the exclusive concession over the distribution service in a certain area based on
a concession agreement awarded by and concluded with the Ministry of Economy,
Commerce and Business Environment and (ii) a distribution license issued by ANRE.
The main operators of the distribution service are Distrigaz Sud Reele and
E.ON. Gaz Distribuie, entities resulted from the unbundling of Distrigaz Sud
and Distrigaz Nord.
The performance of supply is conditional upon obtaining the ANRE supply
license. Although further to the full liberalization of the Romanian gas
market as of the 1
st
of July 2007 the suppliers have the right to carry out
transactions on the competitive market under negotiated terms and
conditions, part of the gas supply continues to be regulated by ANRE.
Thus, the suppliers resulted from the unbundling of the vertically integrated
undertaking which fell under the unbundling requirements and the suppliers part
of a vertically integrated undertaking which did not fell under the unbundling
requirements, have the obligation to supply gas to the consumers having the
consumption places located in the area covered by the license, in case such
consumers choose to beneft from regulated supply. The regulated supply is carried
out at the prices and based on the framework agreements regulated by ANRE.
In view of protecting the consumers in case of withdrawing the gas supply license
of the suppliers thereof, a special category of suppliers has been established:
the last resort suppliers. Such suppliers are either nominated by ANRE (in case
of the mandatory last resort supply) or selected by ANRE based on the bids
submitted by the interested suppliers (in case of voluntary last resort supply).
The last resort suppliers nominated by ANRE are the same operators having the
obligation to supply gas to the consumers having the consumption places located
in the area covered by the license. Such suppliers are bound to supply gas, at prices
regulated by ANRE, to the household consumers, hospitals, schools, kindergartens,
public institutions and non household consumers whose consumption does not
exceed 12,400 m
3
/year/consumption point. The voluntary last resort supply is
carried out by suppliers selected by ANRE for the beneft of the non household
Limited competences in the gas sector have also been granted to the National
Agency for Mineral Resources (ANRM) consisting in the awarding and execution
of the following oil concession agreements:
Oil concession agreements for exploration, development and exploitation
activities;
Oil concession agreements for development and exploitation activities;
Oil concession agreements for exploitation activities;
Oil agreements for the concession of underground storage facilities of gas; and
Oil agreements for the concession of the gas national transmission system.
ANRM is also the competent authority to establish the reference price for gas
which is taken into account for the calculation of the concession royalty.
Activities and participants in the gas sector
The gas sector comprises all the activities performed by undertakings for the
generation, transmission, transit, storage, distribution, supply and consumption
of gas, as well as all the related installations and equipments. The generation
can be carried out by legal entities (i) having concluded with ANRM a concession
oil agreement in respect of a defned perimeter, (ii) holding a setting up
and an operation authorization for the surface technological installations
related to the generation activity and (iii) holding a gas supply license.
The main producers of gas on the Romanian market are Romgaz and
Petrom which ensured more than 97% of the internal gas production of
2010, the rest being covered by other 6 local producers. During 2010, the
internal production of gas covered around 83% of the gas consumption, the
remaining 17% having been ensured from the imports contracted mainly
by GDF Suez Energy Romania, Wiee Romania and E.ON. Energie Romania
(the company resulting from the unbundling of Distrigaz Nord).
The storage entails all activities and operations performed for the reservation
of storage capacities in the underground storages and for the injection,
storage and extraction of gas from these capacities. The gas storage is a
natural monopoly activity which may be carried out subject to concluding
a concession agreement for the underground storage facilities with
ANRM, and to obtaining the corresponding license from ANRE.
Currently, there are three operators of the gas storage service, namely Romgaz,
Depomure and Amgaz.
Gas transmission (i.e. transportation of gas through the grid operating at a
pressure exceeding 6 bars) and transit (i.e. transportation through the national
transmission system and/or through special transit lines of gas originating

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155
Regulated tariffs for interconnection to the transmission/distribution grid.
ANRM establishes the gas reference price based on which the concession royalty
is calculated.
Authorizations and licenses
The performance of activities in the gas sector is conditional upon obtaining
the authorizations and licenses issued by ANRE, as follows:
Authorizations for setting up capacities for gas generation, transmission,
storage, dispatching, transit and distribution and for the functioning and
revision of the capacities for gas generation, transmission, storage, transit
and distribution; and
Licenses for performing gas transmission, transit, storage, distribution and
supply.
The licenses are issued for a maximum period of 30 years (in case of the gas supply
and storage), 15 years (in case of the gas transmission and distribution) and a
period equal to the duration of the transit agreement (in case of the gas transit).
Rights of the holders of concessions over lands and other immoveable
assets owned by third parties
Considering the public interest activities carried out in the gas sector entail, the
holders of concessions in the gas sector beneft, by virtue of law, from certain rights
over lands and other assets whether they belong to the public domain or to the
private ownership of individuals or legal entities, such as: (i) the right to use such
assets with a view to performing works as necessary for the development, upgrading
or repairing of gas capacities, (ii) easement rights at underground, surface and
aerial level for installing gas grids and other related equipments and for accessing
the location place thereof and (iii) the right to request the limitation or cessation of
activities that may endanger assets and humans. The owners of the assets affected
by the exercise of the use and easement rights are entitled to compensation
as established by the parties agreement or, otherwise, by court decision.
consumers the consumption whereof exceeds 12,400 m
3
/year/consumption
point. The selected suppliers supply the gas at the prices offered in the bids.
Unbundling of gas distribution and supply activities
In line with the principles laid down by the Gas Directive, the Gas Law imposed the
unbundling of gas distribution and supply activities by the 30
th
of June 2007. The
unbundling requirements applied to the vertically integrated undertaking
carrying out both distribution and supply activities, except for the gas distributors
serving less than 100,000 connected customers.
Vertically integrated undertakings were placed under the obligation to become
independent from activities not connected to gas distribution, at least in
terms of legal form (legal unbundling) and of the organization and decision
making process (functional unbundling). As a result of unbundling, each of
the main distribution and supply companies Distrigaz Nord and Distrigaz
Sud was divided into two separate companies, one of which carrying out
gas distribution and the other carrying out gas supply, namely Distrigaz Sud
Reele and GDF Suez Energy Romania, in the case of Distrigaz Sud, and E.ON.
Gaz Distribuie and E.ON. Energie Romnia, in the case of Distrigaz Nord.
Gas market
In line with the principles laid down by the Gas Directive, the Romanian power
market was fully liberalized as of 1
st
of July 2007, further to a gradual liberalization
which started in 2001.
However, even after the full liberalization, ANRE continues to regulate several
segments of the gas market, as follows: (i) the natural monopoly activities (i.e.
transit, transmission, storage and distribution of gas), (ii) the gas supply to
consumers who opted for regulated supply and (iii) the gas supply provided by
the nominated last resort suppliers. The activities falling under the regulated
segment may be carried out based on framework agreements approved by ANRE.
Prices and tariffs
Further to the full liberalization of the market, the prices corresponding to
transactions carried out in the gas sector can be negotiated by the parties, with the
exception of the following tariffs and prices which continue to be regulated
by ANRE:
Regulated tariffs for natural monopole activities, namely gas transmission,
storage, distribution and transit, with the exception of the transit through
special transit pipelines having been developed under international agreements;
Regulated prices for gas supply to consumers who have opted for regulated
supply;
Regulated prices for gas supply by nominated last resort suppliers; and

156
157
The plaintiff claimed that GEO No. 50/2008 is incompatible with EU law, because it is
applied to secondhand cars brought in Romania from another Member State
and registered for the frst time in Romania, although no such tax was applied
to the similar cars already registered in Romania.
Therefore, in the plaintiffs opinion, the Romanian legislation encourages the
Romanian buyers to purchase cars which are already registered in Romania, to
the detriment of those from other Member States. Under these circumstances, the
Sibiu Tribunal decided to stay the proceedings and refer the case to the Court for
a preliminary ruling on the following point of law: Are the provisions of GEO No.
50/2008, as subsequently amended, contrary to the provisions of Article 90 EC,
and do they in fact constitute a measure which is manifestly discriminatory?.
The Court found that the pollution tax established by GEO No. 50/2008 does not
meet the conditions of a direct discrimination, because the regulation does not
distinguish between motor vehicles according to their origin or between the owners
of those vehicles according to their nationality. However, even if the conditions
for direct discrimination are not met, internal taxation may be indirectly
discriminatory as a result of its effects, as it was also upheld in Case C290/05
(Nadasdi and Nemeth).
From this perspective, the Court analyzed whether the pollution tax creates
any indirect discrimination between imported secondhand motor vehicles
and similar secondhand motor vehicles which are already on national territory,
approaching the two different situations as follows:
Further to comparing the status of imported secondhand vehicles with the
status of similar vehicles already registered in Romania and subject, at that
time, to the same tax, the Court concluded that there is no indirect
discrimination, because the respective tax is calculated by reference to the
actual depreciation of the vehicles, in addition to the pollution caused by such
vehicle and its cylinder capacity. Therefore, a system such as that established
by GEO No. 50/2008 which takes account, in calculating the tax on registration,
of the depreciation of the motor vehicle by using fxed, detailed and statistically
based scales relating to the age and actual annual average kilometrage of
the vehicle, which may, at the request and at the expense of the taxpayer, be
supplemented by an inspection of the general condition of the vehicle and its
equipment, ensures that when that tax is charged on imported secondhand
vehicles it does not exceed the residual tax incorporated in the value of similar
secondhand vehicles which were previously registered on national territory and
were subjected on that registration to the tax laid down by GEO No. 50/2008.
The Romanian Pollution Tax Versus
the European Union Law
Background
The frst special tax for motor vehicles and cars was provided at articles 214
1
to 214
3
of the Fiscal Code and became effective on the 1st of January 2007, when Romania
joined the European Union. It was known under the name of frst registration
tax. The application of this tax to secondhand cars was widely contested as
contrary to article 90 TEC (currently article 110 TFEU), even resulting in the opening
of infringement procedures against Romania by the European Commission
48
.
Moreover, most of the Romanian courts admitted the claims for the restitution
of the frst registration tax, precisely on the ground that the national regulation
is incompatible with EU law.
Under these circumstances, the Government issued Emergency Ordinance No. 50
of the 21
st
of April 2008 on the establishment of the car pollution tax (published
in the Offcial Gazette No. 327 of 25
th
of April 2008), effective as of the 1
st
of July
2008 and subsequently amended by a series of enactments (GEO No. 50/2008).
Case C402/09 Tatu
The European Court of Justice was seized by the Sibiu Tribunal, which in its turn
was adjudicating an action whereby the plaintiff requested the restitution of the
amount paid as pollution tax for the car he bought in July 2008 from Germany. The
car ranged in the M1 category, it complied with EURO 2 pollution standard and
was made in 1997. The pollution tax had been levied by the Sibiu Public Finance
Authority under a decision dated the 27
th
of October 2008, and the plaintiff fled
legal action on the 17
th
of December 2008.
48
See the Commissions letters of formal notice of the 21
st
of March 2007 (RO, EN) and the 28
th
of
November 2007 (RO, EN)
EU Community Law

158
159
Therefore, the Court found, for the second time in 2011, that the mechanism
of the pollution tax established by GEO No. 50/2008 is contrary to EU law.
Consequences on the domestic lawbrief comments
Even if the aforementioned judgments are given on different versions of GEO No.
50/2008, mention should be made that the subsequent amendments to GEO No.
50/2008 mainly referred to the method for the calculation of the tax and brought no
changes to its scope of enforcement (art. 4 letter (a) of GEO No. 50/2008). Therefore,
the Courts analysis on the incompatibility of a domestic provision discouraging
the marketing of secondhand vehicles purchased in other Member States with
article 110 TFEU remains fully applicable to any of the versions of GEO No. 50/2008.
Moreover, in the latest versions GEO No. 50/2008 no longer took into account,
in the calculation of the pollution tax, the annual mileage or the depreciation
of the vehicle subject to registration. Therefore, the domestic courts could
fnd an incompatibility between the provisions of GEO No. 50/2008 and article
110 TFEU even where the Court did not fnd so under the initial version of the
domestic regulation (i.e. neutrality of the pollution tax as regards imported
secondhand vehicles and similar secondhand vehicles previously registered
on national territory and subjected on registration to the same tax).
Nevertheless, the procedural methods by which the pollution tax may be reimbursed
were and probably will continue to be a matter of controversy and dissenting legal
practice. Briefy, some of the Romanian courts granted the restitution claims only
when the decision to calculate the pollution tax was challenged within 30 days
(a term which, especially considering the initial version of GEO No. 50/2008,
expired a long time ago), while other courts granted the restitution claims
if fled within the general period of prescription of 5 years applicable to
fscal matters, as provided by article 135 of the Fiscal Procedure Code, on the
ground that the regulation of the pollution tax is incompatible with EU law,
as also confrmed by the Court. However, as the Court already ascertained
taxpayers right to the reimbursement of the taxes charged by another Member
State in breach of EU law (C199/82 San Giorgio, C62/93 BP Soupergaz,
C441/98 and C442/98 Michailidis), it follows that all taxpayers who paid
the pollution tax must be allowed to recover the amounts they paid.
The method of reimbursing the tax charged under GEO No. 50/2008 in breach
of EU law is currently object of an appeal in the interest of law
49
, fled by the
general prosecutor of the Prosecutor Offce attached to the High Court of
Cassation and Justice on the 12
th
of May 2011. The respective appeal in the interest
of the law asks the High Court judges to decide whether an administrative
claim on the reimbursement of the tax charged by the fscal authorities under
49
http://www.mpublic.ro/recursuri/2011_civil/rc_12_05_2011.htm.
Further to comparing the status of imported secondhand vehicles and similar
vehicles registered in Romania before the establishment of the pollution tax,
the Court frst recalled that, although the Member States are not prevented from
introducing new taxes or from changing the rate or basis of assessment
of existing taxes, this does not mean that their powers to make new tax
arrangements are unlimited. Moreover, the Court pointed out that [o]n
the contrary, it is settled caselaw that the prohibition laid down in article
110 TFEU must apply whenever a fscal charge is liable to discourage imports
of goods originating in other Member States in favour of domestic goods
(para. 52). In this respect, an important issue is that motor vehicles present
on the market in a Member State are domestic products of that State
within the meaning of article 110 TFEU. Therefore, secondhand vehicles
purchased on the market of that Member State and those purchased in
other Member States in order to be imported and placed in circulation in
the former State are competing products. Since favoring the sale of domestic
secondhand vehicles is not allowed in the light of article 110 TFEU and the
provisions of GEO No. 50/2008 have such an effect, also proved by the statistics,
the Court concluded that, in the case at issue, the Romanian regulation
is contrary to EU law (more precisely, it is contrary to article 110 TFEU).
Therefore, the Court stipulated that the answer to the question is that article
110 TFEU must be interpreted as precluding a Member State from introducing
a pollution tax levied on motor vehicles on their frst registration in that
Member State if that tax is arranged in such a way that it discourages the
placing in circulation in that Member State of secondhand vehicles purchased
in other Member States without discouraging the purchase of second
hand vehicles of the same age and condition on the domestic market.
Case C263/10 Nisipeanu
On the 7
th
of July 2011, in case C263/10 Nisipeanu, the Court ruled again on the
compatibility of EU law with the provisions of the Romanian law on the pollution
tax applied upon the frst registration of vehicles.
Since this case is almost similar to C402/09 Tatu, the Court gave the same
solution. Thus, the Court showed that the pollution tax established by GEO No.
50/2008 does not meet the conditions for direct discrimination, because the
regulation does not distinguish between motor vehicles according to their origin
or between the owners of those vehicles according to their nationality. However,
even if the conditions for direct discrimination are not met, internal taxation may
be indirectly discriminatory as a result of its effects. The Court again pointed out
that favoring the sale of domestic vehicles is not allowed in the light of article 110
TFEU, and the mechanism provided in GEO No. 50/2008 leads to such favoring by
exempting the cars already registered in Romania from the payment of the tax.

160
2009 SCA uca Zbrcea & Asociaii. All Rights Reserved. 161
GEO No. 50/2008 is admissible when the decision on the calculation of this
tax has not been challenged (under art. 205 et seq. of the Fiscal Procedure
Code). The appeal also asks whether an administrative claim fled against the
institution in charge with the registration of vehicles is admissible, if the latter
refuses to register the vehicle unless the pollution tax is paid beforehand.
Moreover, currently a new draft enactment meant to replace GEO No. 50/2008
is being discussed in the Romanian Parliament. The draft enactment was even
approved by the Senate, as the frst chamber seized, on the 31
st
of October
2011
50
. The fnal vote is to be cast by the Chamber of Deputies. If the draft GEO
is approved, the tax on polluting emissions of vehicles will be owed only
once, both for new and for secondhand cars registered for the frst time in
Romania, no matter if the vehicle is manufactured in Romania or abroad.
50
http://www.senat.ro/Legis/Lista.aspx?cod=16234.

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