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CONFERENCE ON ACCESSION Brussels, 15 December 2000

TO THE EUROPEAN UNION

- ROMANIA - CONF-RO 37/00

POSITION PAPER

CHAPTER 5 - COMPANY LAW

1. ACCEPTANCE OF THE ACQUIS COMMUNAUTAIRE

Romania fully accepts the acquis communautaire laid down in Chapter 5 oncompany law in force on 31 December 1999. Romania does not request anytransition period or derogation, and declares that it will be able to entirely

implement the above-mentioned acquis by the date of accession.

Romania is ready to further examine the development of the acquis and tosystematically inform the Accession Conference or the AssociationCouncil on the legislation and measures adopted for the implementation ofthe new acquis or, whenever necessary, on the difficulties that might arisein transposing the new acquis.

Romania refers to the information supplied during the screening processand agrees with its continuous transmission to the Member States of theEuropean Union.

Romania has unilaterally assumed 1

January 2007 as a working hypothesisfor finalising preparations for the accession to the European Union.However, the Romanian authorities have committed to fully harmonise theinternal legislation in the field until 31 December 2004.

2. STRUCTURE OF THE ACQUIS COMMUNAUTAIRE

The acquis communautaire in the field of company law includes five distinctareas: company law, accounting, intellectual property rights, industrial propertyrights and civil law (Brussels and Lugano Conventions on jurisdiction, recognitionand enforcement of foreign judgements in civil and commercial matters, and theRome Convention on the law applicable to contractual obligations).

3. OVERVIEW OF THE HARMONISATION OF ROMANIAN LEGISLATIONWITH THE ACQUIS COMMUNAUTAIRE

I. COMPANY LAW

In the area of company law, six directives and one regulation have been adoptedin order to ensure a uniform legislation on the setting up of companies and the

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disclosure requirements these must comply with, on safeguards required formembers and third parties when the registered capital is altered or the statutesare amended by means of merger or division of a company, on supplementarysafeguards which have to be provided to third parties by single-member privatelimited-liability companies, and on disclosure requirements applicable to the

branches of a company.Regulation no. 2137/85 has created a new form of co-operation betweencommercial companies which have the nationality of different Member States.

The setting up and operation of companies is currently regulated by Law no.31/1990 on companies (consolidated), amended by Law no. 99/1999 onmeasures for accelerating the reform, and by Law no. 26/1990 on the traderegister (consolidated). These general provisions combine with the provisions ofLaw no. 241/1998 for the approval of the Emergency Ordinance of theGovernment no. 92/1997 on direct investments in Romania, of Law no. 64/1995on the procedure of judicial reorganisation and bankruptcy, amended by Law no.99/1999 on measures for accelerating the reform (consolidated), of Banking Lawno. 58/1998, amended by the Emergency Ordinance of the Government no.186/1999, of Law no. 32/2000 on insurance companies and insurancesupervision, and of Law no. 105/1992 on private international law relations. Theirprovisions are to a large extent harmonised with the acquis communautaire.Romania has also fully transposed the Directive 68/151/EEC on safeguardsrequired within the Member States to companies in order to protect the interestsof members and third parties.

Romania will amend its legislation in the area in order to ensure the fullharmonisation with the provisions of Directive 78/855/EEC, Directive 92/101/EECfor the amendment of Directive 77/91/EEC on the setting up, organisation and

operation of joint-stock companies, Directive 82/891/EEC on company division,Directive 89/666/EEC on disclosure requirements to which company branchesmust obey and Directive 89/667/EEC on single-member private limited-liabilitycompanies, and in order to assume the provisions of Regulation no. 2137/85 onEuropean Economic Interest Grouping. Romania commits itself to fully transposethe acquis communautaire in the area up to 31 December 2004. No derogationor transitional period is needed.

II. ACCOUNTING

The acquis communautaire in this area covers three directives aiming toharmonise the accounting rules for companies in the Member States: the fourthDirective (78/660/EEC) regarding annual accounts, the seventh Directive(83/349/CEE) regarding consolidated accounts and the eighth Directive(84/253/CEE) on the financial audit.

The provisions of the fourth Directive have been fully transposed into thedomestic legislation by the Accounting Law no. 82/1991, the rules for itsimplementation (Governments Decision no. 704/1993) and the Ministers ofFinances Order no. 403/1999 for the approval of accounting regulations

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harmonised with the fourth Directive and the International Accounting Standards.The transposition of these Community provisions had the objective of ensuringthe supply of relevant and reliable financial/accounting information. In order tofacilitate the comparability of the financial reports, a general format will beapplied to balance sheets and profit and loss accounts. The format requirements

provided by this directive have been integrated into the Romanian legislationthrough the adoption of basic principles and rules, as well as alternativetreatments allowing the analysis of the effects of inflation and other elementsinfluencing the financial results and that could ensure a larger disclosure of thefinancial situations to all types of users (investors, creditors, suppliers and others,clients, stock exchange, banks, Government and public institutions, generalpublic).

The seventh directive regarding the preparation of consolidated accounts hasbeen transposed into the Romanian legislation by the Methodological Norms forconsolidated accounts, approved by the Order no. 772/2000 issued by theminister of finance.

The eighth directive on financial audit has been fully transposed into theRomanian legislation by the Emergency Ordinance of the Government no.75/1999 regarding the financial audit, providing the establishment of theChamber of Financial Auditors. The Governments Decision no. 591/2000 hasapproved the rules for the set-up and operation of the Romanian Chamber of

Auditors. In October 2000, the first exam for accessing the financial auditorposition has been organised, and after that, the Chamber has begun its activityled by a board made up of members elected from the examined financialauditors.

The transposition of the European directives in the area involves the need to

ensure an appropriate implementation in all fields. To this end, a trainingprogramme for about 500 specialists has been launched in May 2000(accountants, chartered accountants, future financial auditors, academics, andemployees in central and local public administration).

Consequently, the European directives are fully transposed into the nationallegislation and Romanian authorities currently focus exclusively on theirimplementation. To this end, a training programme for the retrieval, analysis anduse of the accounting information by all categories of users is ongoing. A largerinvolvement of the professional institutions and associations is also envisaged.

III. INTELLECTUALPROPERTY RIGHTS

By Law no. 8/1996 on copyright and neighbouring rights, Romania has entirelytransposed the provisions of Council directives 91/250/EEC on the legalprotection of computer programmes, 93/83/EEC on the co-ordination of certainrules concerning copyright and rights related to copyright applicable to satellitebroadcasting and cable retransmission, and 93/98/EEC harmonising the term ofprotection of copyright and certain related rights.

The provisions of the Council Directive 92/100/EEC on renting rights and lending

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rights and on certain rights related to copyright in the field of intellectual property,and of the Council Directive 96/9/EC on the legal protection of databases havebeen partially transposed.

The number of elements in the Romanian law that are not in agreement with theCommunity provisions is low (Romanian law does not provide yet for a sui

generis right for database developers (Directive 96/9/EC) or a related right foraudio-visual producers (Directive 92/100/EC). These provisions will make theobject of the draft law amending Law no. 8/1996, which will be drawn up by theRomanian Office for Copyright.

Romania is committed to fully harmonise the Romanian legislation in this field by2003.

As for the implementation of the directives, according to Law no. 8/1996, theRomanian Office for Copyright is the only competent institution on the territory ofRomania to record, monitor and control the enforcement of copyright and relatedrights legislation. The Romanian Office for Copyright is also competent to monitor

the activity of collective administration organisations of authors and other rightsholders. The establishment of these organisations is another way to implementthe provisions in the field.

In order to reduce piracy in the field of intellectual property, the followinglegislation has been adopted:

Government Ordinance no. 45/2000 regarding several measures to fightunauthorised production and commercialisation of phonograms. Theordinance is applicable only in the sound recording field. The mostimportant elements brought in order to strengthen the legal framework are:

the set-up of the National Register of Phonograms,

administered by ORDA, and the introduction of a single hologramhallmark to be applied on every phonogram traded in Romania;

increasing the levels of fines, ranging now from 20 to 300millions lei.

Government Ordinance no. 124/2000 completing the legal framework oncopyright and related rights, which lays down several measures to combatpiracy in audio and video and computer programs field.

The Parliament ratified the new WIPO treaties of 1996: WIPO Copyright Treaty(WCT) and WIPO Performances and Phonograms Treaty (WPPT).

IV. INDUSTRIAL PROPERTY RIGHTS

According to the legislation in force, the industrial property rights protectioncovers currently the following subject-matters: inventions, trademarks,geographical indications, industrial designs, topographies of integrated circuits,new plant varieties. Romania assumes its obligation to fully harmonise theinternal legislation in this area until 2002. No transitional period or derogation isnecessary.

The domestic legislation in the trademarks field, namely Law no. 84/1998 on

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trademarks and geographical indications and Governments Decision no.833/1998, fully transposes the provisions of Council Directive 89/104/EEC for theapproximation of the laws of the Member States relating to trademarks, and isfully compatible with the provisions of Council regulations no. 40/94 on theCommunity trademark and no. 2868/95 on the means to implement the

Regulation no. 40/94.The extension of the Community trademark system to Romania could raiseproblems as to potential conflicts with the national trademarks already protectedbefore the date of Romanias accession to the European Union. Consequently,Romania is open to a dialogue with the European Commission in order to identifysolutions for the elimination of potential conflicts between Community trademarksand trademarks already protected in Romania.

Romanian authorities have fully transposed the acquis communautaire in thefield of new plant varieties protection by adopting Law no. 255/1998(corresponding to Regulation no. 2100/94 establishing a regime of Communityprotection for new plant varieties).

The acquis communautaire in the field of patents is partially transposed into theRomanian legislation. The Romanian law currently ensures a level of protectionsimilar to the one existing in the Member States. Moreover, Romania hasrequested and was subsequently invited to accede to the European PatentConvention as from 1 July 2002.

The draft law for the amendment of Law no. 64/1991 on patents is in process ofadoption by the Parliament, aiming to transpose the provisions of Directive 98/44on the legal protection of biotechnological inventions and to accomplish the fullharmonisation of the internal norms with the provisions of the European PatentConvention. A draft law concerning the supplementary protection certificate for

medicinal and phytopharmaceutical products has been also elaborated in orderto harmonise internal norms with the provisions of regulations no. 1768/92 and1610/96.

In the field of industrial designs, the Romanian legislation is partially harmonisedwith the Community instruments. The draft law for the amendment of Law no.129/1992 is under adoption, aiming to transpose the provisions of the Directive98/71 on the legal protection of industrial designs.

The Romanian legislation for the protection of integrated circuits, namely Law no.16/1995 and Governments Decision no. 535/1996, is partially harmonised withthe Community norms. A draft law amending Law no. 16/1995 is being drawn up

to fully transpose the provisions of Directive 87/54 on legal protection of thetopographies of integrated circuits.

V. MEASURES OF THE CUSTOMS AUTHORITIES FOR THE PROTECTION

OF THE INTELLECTUAL AND INDUSTRIAL PROPERTY

Pursuing the joint proposal of the General Customs Administration, theRomanian State Office for Inventions and Trademarks and the Romanian Office

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for Copyright, the Parliament adopted the Law no. 202/2000 concerningmeasures to ensure observance of the intellectual property rights within thecustoms clearance operations. Law no. 202/2000 is aiming harmonisation withthe following EU regulations:

Regulation (EC) no. 3295/1994 laying down measures to

prohibit the release for free circulation, export, re-export or entry for asuspensive customs procedure of counterfeit and pirated goods;

Regulation (EC) no. 1367/1995 laying down provisions for theimplementation of Regulation (EC) no. 3295/1994;

Regulation (EC) no. 241/1999 amending Regulation (EC) no.3295/1994;

Regulation (EC) No. 2549/1999 amending Regulation (EC) No.1367/1995.

The range of applicability of this law includes copyright, related rights,

trademarks, industrial designs, patents, geographical indications, complementaryprotection certificates.

The goods contained in travellers luggage or in small consignments for personaluse are exempted from the provisions of the law. The customs authorities mayact upon written request of the intellectual property right holder, or ex-officio.

The implementation norms of the law concerning measures to ensureobservance of the intellectual property rights within the customs clearanceoperations include also provisions transposing the provisions of EC regulationsnos. 1367/1995 and 2549/1999.

In order to implement the above-mentioned law, the General Customs

Administration has set up a Service for Counterfeited and Pirated Goods withinthe Surveillance and Customs Control Directorate.

VI. BRUSSELS AND LUGANO CONVENTIONS ON JURISDICTION,

RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGEMENTS. ROME

CONVENTION ON THE LAW APPLICABLE TO CONTRACTUAL

OBLIGATIONS

The acquis communautaire in this area includes three conventions: theConvention on jurisdiction, recognition and enforcement of foreign judgements,signed in Brussels on 27 September 1968, the Convention on jurisdiction,

recognition and enforcement of foreign judgements, signed in Lugano on 16September 1988, and the Convention on the law applicable to contractualobligations, signed in Rome on 19 June 1980.

The Romanian legislation is partially harmonised with the provisions of theBrussels and Lugano conventions. The jurisdiction to settle civil and commercialcases involving foreign elements is currently defined by Law no. 105/1992 on theprivate international law, while the recognition and enforcement of foreign

judgements in civil and commercial matters are based upon Law no. 105/1992

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and the bilateral conventions for judicial assistance in civil and commercialmatters concluded by Romania.

The recognition and the enforcement of foreign judgements are dealt with inSection IV of Law no. 105/1992 ("Effects of foreign judgements").

Romania will draw up a draft law for amending Law no. 105/1992, in order tomake internal provisions compatible with the provisions of the BrusselsConvention and the Lugano Convention. The amendment will aim to reshuffle the

jurisdiction in the area of consumer contracts, labour contracts, insurancecontracts, regulation of lis alibi pendens and joint affairs tried before courts fromdifferent countries, recognition of foreign judgements without any preliminaryexamination of the jurisdiction held by the court which has rendered them.

Romania will follow the progress of the acquis communautaire in this area(through the adoption of Community acts which will replace the 1st and 2ndBrussels conventions) and will take these amendments into account whendrawing up the draft law amending the Romanian legislation on private

international law.The Romanian authorities have taken the necessary steps in order to accede tothe Lugano Convention, after consultation with several Member States (Austria,Germany, Greece, France, Italy, and Spain) and request their support foracceding to the Convention.

Law no. 105/1992 is fully harmonised with the provisions of the RomeConvention concerning the law applicable to contractual obligations.

Adopted by the Government of Romania in its session of 22 July 2000 andupdated in its session of 24 November 2000.