16 August 2004 (Invest Romania)

The hard currency operations are regulated in Romania by the Regulation no. 1/2004 on hard currency operations (“Regulation”), designed to prepare Romania for a new stage towards accession to EU.

The current operations using hard currency and national currency (ROL) may be freely performed, respectively without the obligation to obtain the National Bank of Romania (“NBR”) authorization.

The same regime applies, as a general rule, to the capital currency operations, including those related to the external public debt. However, several exceptions still exist as the following operations need the NBR authorization: operations with financial instruments traded on the monetary market; operations into current accounts opened abroad by residents with credit institutions and other similar institutions, both in national and hard currency; operations into deposit accounts opened in Romania with credit institutions in national currency by non-residents as well as operations into deposit accounts opened abroad by residents with credit institutions and other such institutions, both in national and foreign currency.

The current legal framework confirms in the same time the previous trend to eliminate the authorization for the various types of loans required by the former Currency Regulation no. 3/1997, as the loans are no longer subject to a prior authorization procedure.

The recently adopted NBR Norm no. 3/2004 restricted the range of capital currency operations of external public debt nature on medium and long term that must be notified to the NBR. The following operations are still included: financial credits and loans as well as international trade credits having a maturity of over 1 year, received by resident borrowers from non-resident lenders; primary trading of financial instruments having an original maturity over 1 year issued by residents on foreign capital markets.

In addition, there are still certain operations that must be notified to the NBR, but only for statistic purposes: hard currency exchange operations with cash and cash substitutes for individuals, performed by resident legal persons and the Romanian branch offices of foreign credit institutions; transactions through foreign accounts by resident legal entities (the Romanian credit institutions and Romanian branch offices of foreign credit institutions are excepted); balances of the current and deposit accounts denominated in national currency (ROL) held by non-residents.

In comparison to the previous legal provisions, the Regulation provides several operations in convertible hard currency that may be performed by residents on the Romanian territory without any special authorizations: direct payments and cashing resulting from external trade operations, other external services agreements, lohn type service agreements; payments and cashing under subcontractor agreements resulting from international economic cooperation agreements, export agreements regarding complex works and products with long production cycle; operations performed with the implementation authority under international financing programmes (including PHARE, SAPARD, ISPA); operations performed abroad by individuals, legal entities and other entities.

Considering the new elements brought by the Regulation as well as recent amendment of the banking law and the issuance by the NBR of other regulations in the field, it becomes clear that Romania is currently undergoing one of its major reform steps in the banking sector in view of its accession to the EU and meeting the freedom of capital requirements thereof.



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