On 31 January 1996 the Romanian Government issued an Ordinance for the "strengthening of the financial and foreign currency discipline." This was followed up by the issuance of guidelines for its implementation in mid February.
This Flash Report summarises the major provisions of the above-mentioned law and guidelines.
1. COMPANIES HOLDING HARD CURRENCY IN THEIR BANK ACCOUNTS THAT HAVE DOMESTIC ACCOUNTS PAYABLE OLDER THAN 60 DAYS, ARE REQUIRED TO CONVERT THE FOREIGN CURRENCY INTO LEI AND PAY THE RESPECTIVE DEBTS WITHIN 5 WORKING DAYS.
Exemption from the above is granted only if the company has foreign accounts payable maturing within 30 days, incurred for production imports and investments, as well as for the payment of loan installments and the corresponding interest on foreign loans of the company.
The fines applicable, in case of a breach of the above provision, range between ROL 5 million and ROL 10 million and may be imposed upon the bank manager, company and/or company manager.
2. THE REPATRIATION OF HARD CURRENCY FROM THE EXPORT OF GOODS SHOULD BE MADE WITHIN 5 DAYS OF THE TERMS STIPULATED IN THE CONTRACTS WITH FOREIGN PARTIES.
3. PAYMENTS BY LEGAL PERSONS CANNOT BE MADE IN CASH. THEY CAN ONLY BE MADE BY BANK TRANSFERS.
As exceptions to this rule, the legal persons can make cash payments in the following cases:
a) payment of salaries and of other employee rights;
b) other payment transactions to physical persons;
c) payments to legal persons, within a daily limit of maximum ROL 5 million.
Any payment exceeding ROL 5 million made or received in cash between legal persons, represents a legal violation, and may be punished by confiscation of the amount in excess of the limit as well as by the imposition of a fine. The fines range between ROL 2 million and ROL 50 million.
The granting of discounts to legal persons who make cash payments is forbidden.
Legal persons cannot generally hold in excess of ROL 5 million in cash at the end of each day. This limit may be exceeded for amounts to be used for salary payments, other employee general rights and other transactions with physical persons, within 3 days of the date established for payment.
4. LEGAL PERSONS ARE OBLIGED TO KEEP, AT THEIR HEAD OFFICE, SUPPORTING DOCUMENTS FOR THEIR LEGAL ACCOUNTING RECORDS AND MUST MAKE THEM AVAILABLE TO THE AUTHORISED BODIES.
A unitary system of numbering, recording and administration of financial and accounting documents used in determining the revenues of companies has been established.
SPECIFIC FORMS HAVE BEEN DEVELOPED FOR THIS PURPOSE
The official forms for the above may be purchased from 1 June 1996 from the National Printing House.
Companies using computers for issuing documents are also required to use the official forms. The approval obtained from the General Department of Public Finance for issuing the special regime forms remains valid for 1996. As of 1997, the companies must use the official standard printed and numbered forms, only using the computers for filling them in.
For detailed information please contact:
Ron Barden or Anca Troaca-Dragoman Price Waterhouse Romania Union International Center 11 Campineanu Street Sector 1, Bucharest Romania
Tel No.: 40-1-311-2455
Fax No.: 40-1-312-3334
DISCLAIMER
The above information represents a brief summary of the legislation mentioned therein and is not intended to be advice on any particular matter. Price Waterhouse expressly disclaims any liability towards any person in respect of any action or omission in reliance of the contents of this publication.
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