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 COVID-19 on Competition Rules

Given the impact of COVID-19 outbreak on the economy, competition authorities across European Union jointly decided to relax their assessment with regard to coordination between competitors on the market whose purpose is to avoid shortage or essential products or services and ensure their proper distribution to consumers.

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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 Requirements for a Legal Moratorium System on Credit Agreements in the Context of the COVID-19 Pandemic

The Romanian Parliament passed a new piece of legislation on 3 April 2020, introducing a legal moratorium system for borrowers subject to credit agreements (the “Proposed Law”). The Proposed Law has yet to enter into force as it must be approved by the Romanian President who has the right to request the Parliament to re-examine the Proposed Law once before approving it.

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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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State AID Scheme Approved by Romanian State for SMEs in the Context of COVID-19 Outbreak

The Romanian state has approved on 2 April 2020, through Government Emergency Ordinance 42/2020, a state aid scheme meant at supporting small and medium enterprises (“SMEs”) in the context of COVID-19 outbreak.

The scheme implements the measures provided within Government Emergency Ordinance 110/2017 regarding the Support program for small and medium-sized enterprises – IMM INVEST ROMANIA, as amended in the context of the pandemic crisis.

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Temporary Framework for State Aid Measures in the Context of COVID-19 Outbreak

The various measures taken by the EU Member States, such as social isolation, travel restrictions or quarantine, aim to make the impact of COVID-19 on the population as short and limited as possible. At the same time, they have a direct economic impact on both the demand and the supply of products and services and affect companies and employees in increasingly more economic sectors.

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Measures Available to the Romanian State in Order to Protect the Economy the Context of COVID-19 Outbreak

The precautionary measures taken to limit the risk of spread of COVID-19 have important economic consequences, and there are already a number of industries - such as tourism, event organization, hotel or advertising - that are affected, requiring rapid intervention from the Romanian state.

State aid rules established at European level allow the Romanian state - under certain conditions - to help companies cope with the liquidity deficit.

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New Proposed Legislation Regarding Rental Payments

The Romanian Chamber of Deputies approved on 29 April 2020 another bill of law regulating payment obligations under lease agreements during the emergency status period (the “Project”). This is not enacted legislation, as it still has to be endorsed by the President and published in the Official Gazette.

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Competition in Pharma – Exceptions to the Rules during Covid-19 Outbreak

The European Commission has recently issued a Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak.

Through this communication, the authority provides guidance to companies active in the pharmaceutical industry with regards to actions which could be undertaken in order to address the shortage of medicines and medical equipment that are used to test and treat COVID-19 patients or are necessary to mitigate and possibly overcome the outbreak, actions which (as a way of exception, and only for a limited period of time) shall not be considered as breaching competition rules.

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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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GDPR in Times of COVID-19

The need to contain the coronavirus pandemic has raised various issues regarding the processing of health-related data at companies’ level, and we are witnessing significant differences in terms of approach undertaken by data protection authorities on this subject matter.

Even so, if we were to find a common denominator regarding what can and what cannot be done by companies in relation to processing of health-related data in the context of COVID-19 outbreak, the following conclusions may be drawn:

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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.

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