Thought Articles

Over the past few years prior to Romania's accession to the EU, the legal environment regarding employment experienced substantial changes. Efforts were made to finalize the transition from the legal framework inherited from the communist regime to a modern system matching the rules and principles applicable in EU member states, including employees' rights in the event of a transfer of undertaking.

This article is an extract from The 2007 Handbook of Competition Economics, a Global Competition Review special report - www.globalcompetitionreview.com In the last few years the decision-making practice of the Competition Council has been constantly growing and diversifying, as well as the complexity of legal and economic analysis undertaken in each case. Still, the assessment of the Council has not yet become as sophisticated as to reach the European Commission’s standards of investigation. While the Romanian legislator provided for different solutions to certain matters, the business environment is increasingly pressuring the Competition Council to have regard to the European Commission’s practice and the case law of the European Courts. Aligning to this trend, the Competition Council has also started to officially guide its decisions on the basis of the European precedents.

Romania has recently seen a surge in the number of cases brought against it by foreign investors, acting under bilateral investment treaties (BITs) — as has been the case in many of the neighbouring Central and Eastern European countries. Several disputes ended spectacularly, with multi-million euro awards against the host state of the investment, such as the case between CME and the Czech Republic, which has been ordered to pay approximately $350m (£176m) or, more recently, another case lost by the Czech Republic, which will have to pay damages of E225.4m (£17.3m) to a company based in the Netherlands.

In Romania, before the initiation of the European Union accession progress, the main statute that regulated product liability was Government Ordinance No. 21/1992 on consumer protection ("GO No. 21/1992"). Currently still in force, GO No. 21/1992 underwent subsequent amendments in order to update its contents with stricter consumer protection standards.

Prior to initiating any construction works, certain stages have to be undertaken in view of obtaining the necesary approvals from the local public administration bodies. The legislation underlying the issuance of such administrative deeds is Law no. 50/1991 on the authorization related to the performance of construction works, as republished in Official Gazette no. 933/13-10-2004 (thereinafter referred to as "Law no. 50/1991").

Subject Matter : An investor contemplates acquiring a complex of buildings with the destination of retail & office, erected on a private land, while the exterior parking places are located on a land conceded by the local council. The lease agreements on both the retail premises and the office premises have already been concluded by the vendor during the construction phase and shall fully come into force (the actual occupancy by the tenants shall occur) after the completion of the construction. What steps should the investor take before concluding the transaction?