They have done it again

One of the quirks of Romanian legislation incorporated in the Constitution is the use of Emergency Ordinances.  The intention originally was for them to be used when Parliament was not sitting and allowed the Government to pass “emergency” legislation which would then be ratified by Parliament later when they were in sitting.

Over the last 20 years this process has been used by various Governments to enable them to pass legislation quickly, even when Parliament was sitting and then for it to be subsequently ratified.  Parliament has to ratify the Ordinance within 30 days of it being published but cannot discuss the law contained in the emergency ordinance.

So it was a surprise this week when the Government passed a new law amending the law on Company liquidation/bankruptcy by way of Government Emergency Ordinance.  A number of advisers had been working with the Government and thought that more time would be given.

The law seems to be aimed at SMEs and their ability to trade out of an insolvent position and will make the position of these companies more precarious.  The law is to come into force on the 25th October.  The Government has stated that one of the reasons for them to pass the law in this way is to enable them to recover outstanding taxes, which many companies have avoided.

So now the law is passed and will be ratified in due course.  Various commentators have already commented upon the deficiencies in the law comprised in the Ordinance and therefore it will be interesting to see how the matter unfolds, and whether in due course the law will be ratified by Parliament or will be cancelled and a new law properly drafted to amend what some commentators describe as bad law.

One can only hope that the Government will not continue to pass other controversial laws by this method.


About Nicholas S Hammond

Nicholas is an English solicitor who has been practising in Romania since 1990. He has been a partner in a number of law firms in Romania as the principal partner. Hammond and Associates trading as Hammond Partnership is the culmination of many years experiance.

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