We’re committed to giving legal insights and practical guidance on the impact of COVID-19 on Romanian businesses.

COVID-19 Resources

Impact of COVID-19 on Commercial Contracts

It is to be expected that the recent developments in the coronavirus pandemic will impact the companies’ ability to perform under ongoing agreements.

The Romanian legislation provides several grounds under which a contracting party may be relieved, under certain circumstances, from performing its contractual obligations, leading either to temporary postponement of the relevant obligations or to a termination without fault of the agreement.

Most commonly available options include force majeure (Romanian: “forta majora”); fortuitous event (Romanian: “caz fortuit”) and hardship (Romanian: “impreviziune”).

The interpretation and application of either of these grounds to the coronavirus pandemic must be made on a case-by-case basis and depends heavily on the wording of the contractual clause under consideration and the specific facts of the case.

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Impact of the COVID-19 Outbreak on M&A Transactions

In the context of the outbreak of COVID-19, eyes remain on the economy and the landscape of the M&A transactions will likely change as a result of this pandemic and of the measures taken by the states to protect the population.

The past few years saw economic growth and an increase in the number of the M&A transactions. These were largely carried out in a “sellers’ market”, with buyers pricing in the future growth.

The pandemic and some of the state measures taken bring volatility into transactions and will likely re-balance the commercial position of the parties.

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Impact of the COVID-19 Outbreak in Financing Agreements

While (many) companies and (some) public authorities gave up paper several years ago, the current context may help more of us “go online”. Companies’ activity now faces some practical issues and many of our clients enquire how to sign documents when working from home.

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New Emergency Ordinance Institutes a Grace Period of up to 9 Months in the Context of COVID-19 Pandemic

The Romanian Government approved the governmental emergency ordinance no. 37 dated 30 March 2020 (“GEO 37/2020”) introducing a payment suspension for credit instalments, upon debtor’s request, for a period of up to 9 months. Banks and non-banking financial institutions are obliged to apply the new rules to the benefit of both individuals and companies in the context of the new coronavirus (“COVID-19”) pandemic.

The provisions of GEO 37/2020 shall be further regulated by a set of detailed rules regarding the implementation of the new piece of legislation which is scheduled to be issued in the next 15 days.

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Support Measures for SMEs in The Context of The COVID-19 Outbreak

The Romanian authorities have recently adopted support measures for the business environment by way of several facilities meant to help companies overcome economic shortages in the context of the Covid-19 outbreak.

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Issuance of the Emergency Status Certificate

Presidential decree no. 195 dated 16 March 2020 for declaring the emergency status (the “Decree”) provided that the Ministry of Economy, Energy and Business Environment will issue, upon request, emergency status certificates (the “ESC”) to companies whose activity is affected by the emergency status.

The procedure for the issuance of the ESC has been detailed through Order no. 791/25 March 2020 issued by the Ministry of Economy, Energy and Business Environment (“Order 791/2020”).

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Impact of COVID-19 Outbreak on Insolvency and Enforcement Proceedings

Romania has registered in the last few years a constant and significant decrease of insolvency procedures, evidencing the companies’ economic health.

In such context, an increase in the number of insolvency proceedings throughout Romania was not expected this year. However, the initial projected number of insolvency proceedings for 2020 might soon become obsolete given the new coronavirus (“COVID-19”) pandemic.

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Impact of COVID-19 on Employment Relationships

The impact of the current crisis has put a significant strain on the economic activity and employment relationships. According to the Ministry of Employment, a significant number of employment agreements have already been suspended as a result of the COVID-19 outbreak and more are expected to follow.

The outbreak also raises work related health concerns, to which Romanian authorities have responded by issuing regulations and recommendations.

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Signing Documents when Working from Home

While (many) companies and (some) public authorities gave up paper several years ago, the current context may help more of us “go online”. Companies’ activity now faces some practical issues and many of our clients enquire how to sign documents when working from home.

Read more →