ROMANIA Law and Practice Contributed by: Luiza Ionescu, Andreea Paraschiv, Amanda Csaki and Cezara Mitea, Stratulat Albulescu Attorneys at Law
5.2 Primary Securities Market Regulators The primary regulatory body overseeing public M&A transactions is the FSA. Following the reorganisation of Romania’s financial authorities overseeing capital markets, insurance, and private pensions, as of 30 April 2013 the FSA became the exclusive regulator in these sectors, responsible for supervising and regu- lating market participants and operations, as well as enforcing secondary legislation applicable to the local capital markets. If the target company operates in a regulated sector (eg, banking, insurance, or financial services), sector- specific rules may apply, potentially requiring the involvement of other competent authorities, such as the National Bank of Romania. 5.3 Restrictions on Foreign Investments In Romania, investments exceeding EUR2 million may trigger the obligation to undergo foreign direct invest- ment (FDI) screening. Where specific conditions are met (the investment establishes or maintains lasting ties with the target, for example by allowing for effec- tive participation in its management or by granting control over the target, and the investment involves at least one of the 13 sectors listed by Decision 73/2012 of Romania’s Supreme Defense Council), FDI filing becomes mandatory. In this case, complet- ing the transaction before obtaining the authority’s approval may result in fines, and the transaction may be deemed null under Romanian law. Therefore, the transaction should be subject to a standstill obliga- tion. 5.4 National Security Review/Export Control From a national security perspective, an FDI filing obligation may arise if certain conditions are met, as mentioned in 5.3 Restrictions on Foreign Invest- ments . There are no specific restrictions or consid- erations for investors or buyers based in a particular region, except for the sanctions regimes imposed by the EU and the USA to which Romania adheres. National export control provisions apply to arms, mili- tary equipment, and dual-use products, while for all other goods, the applicable export control framework is governed by EU regulations.
5.5 Antitrust Regulations In addition to the FDI filing, a transaction may also be subject to merger control requirements. Filing for merger clearance in Romania in relation to a certain transaction (by means of which a certain form of con- trol is acquired) is mandatory, if the following turnover threshold conditions are cumulatively met: • the combined worldwide turnover of the undertak- ings concerned to exceed EUR10 million in the year previous to the transaction and • at least two of the undertakings concerned to have achieved a Romanian turnover exceeding EUR4 million, in the year previous to the transaction. 5.6 Labour Law Regulations In the context of an asset deal, acquirers should pri- marily consider the provisions of the Labour Code and of Law No 67/2006 on the protection of employees’ rights in case of transfer of businesses, units or parts thereof. Under this legal framework, both the seller and the purchaser are required to inform and con- sult with their employee representatives/trade unions/ employees in writing at least 30 (thirty) days prior to the business transfer date, indicating the following aspects: • the estimated business transfer date; • the reasons for the business transfer; • the legal, economic and social consequences of the business transfer for the employees; • any measures to be taken with respect to the employees; and • work conditions and work framing conditions. Although this formality is mandatory under the appli- cable law, such opinion is not binding in the context of the transaction. The seller’s and purchaser’s non-compliance with this formality does not impact the transfer of employ- ees and may only lead to a fine of up to RON3,000 (approximately EUR600) for each party. In the case of a share deal, no specific labour law provisions apply, as employees remain employed by the same legal entity.
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