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LEGAL FRAMEWORK REFORM IN ROMANIA Major legislative changes: Reform of Labour Legislation Four new codes were elaborated:

d: The Civil Code The Civil Procedure Code The Criminal Code The Criminal Procedure Code A new Labour Code was implemented: Main objectives -1: - Increasing the flexibility of the work relationships. - Adapting the work relationships to the dynamics of the labour market. - Maintaining the Codes regulations in line with the European legislation. Main objectives -2: - Discouraging the illegal employment by adopting tougher sanctions.

Establishing performance as a criteria in the labour contract and in the work relationships since the entry into force of the new Labour Code, 1st May 2011, until 8th September 2011, the number of recorded employment contracts increased.

The Government decided to promote the Social Dialogue Law by assuming responsibility, according to art.114 in the Romanian Constitution. The Social Dialogue Law completes the Labour Code:

- It reforms the way the trade unions, the employers unions, the Economic and Social Council are organized. - It adapts to Romanias present needs the rules that concern the collective work contracts and labour conflicts solving. Four new codes were elaborated- the Civil Code, the Criminal Code, the Civil Procedure Code, the Criminal Procedure Code- in order to restore the judicial systems credibility, by enhancing the transparency, by simplifying the legal framework and by improving the accessibility degree. The aspects of these reforms are already visible in the reports issued by the Cooperation and Verification Mechanism. The Law of the Small Reform of the Judicial System was also adopted(Law 202/2010). Expected results: - The speeding up to the trials - The simplifications of the procedures - The diminishing of the costs - The improvement of the quality of the act of justice by enhancing the accountability and the specialization of both judges and prosecutors - A more effective delimitation of the material competence, the unification of jurisprudence and the transformation of the act of justice into a predictable process - The adjustment to normal limits of the sanctionating treatment - The development of the business environment, both by the revision of contract regulation and by inclusion of distinct regulation of contract specific to the banking sector GENERAL CONTEXT

After two years of deadlock following the adoption of the New Civil Code, Criminal Code, Civil Procedure Code and Criminal Procedure Code as draft laws, the Law for the enforcement of the New Civil Code(NCC) was published on 10th June 2011 and established 1st of October 2011 as the date these became law. The new Civil Code(Law no. 287/2009) was published in the Official Journal in 2009 and entered into force on October 1st 2011. Probably in one year at the most the other three new codes shall enter into force. The NCC was substantially amended by the Law no. 71/2011. This bill not only provides for the application of the Codes provisions, but also amends approximately 15-20% of its content. There is no comprehensive manual or doctrine on the new legislation yet. The new Civil Code(Law no. 287/2009) the current structure of the NCC generally pursues the same structure of the Romanian Civil Code from year 1865 and regulations: Book I: On persons Book II: Family Law Book III: Rights over goods Book IV: On successions and gratuitous deeds Book V: On obligations and the special contract Book VI: On the statutes of limitation and term forfeiture Book VII: On the private international law rapports

Book I Related to the statute of natural and legal persons, the protection of the natural persons, the organization of legal persons.

The NCC, comprises, in Book I, a special title on the protection of non patrimonial rights through specific legal means by developing and updating the present provisions briefly in art.54-56 in the Decree no. 31/1954 on natural and legal persons, which was abrogated. Book II In particular related to family law, the matrimonial relations(pre-marital conventions and the legal regime of the spouses goods). Book III Particular in matters related to land books regime and private and public property law. Book IV Civil law matters in the field of successions. Book V In the field of general obligations, securities and special Civil and Commercial contracts in particular. Book VI Civil law matters on statute of limitations, term forfeiture and calculation of term. Book VII Civil law matters with special emphasis on matters of privatee international law.

General provisions -1 The NCC emphasizes the importance of human rights and fundamental freedoms and offers strong guarantees for the right to private and family life. It establishes a series of institutions that were previously built on doctrinal or judicial interpretation, at the same time relieving court congestion.

The procedures have been generally simplified in order to provide a speedy trial and uniform case-law. General provisions -2 One of the most recently adopted codes in the world, the Civil Code of Quebec Province, Canada, together with the Italian, Spanish, Swiss, German and Brazilian Code were used as conceptual models. Based on these sources, the NCC radically altered the overall view on civil matters, comprising all regulations regarding persons, family-related issues and domestic relations as well as the provisions of Law no. 105/1992 regarding Private International Law. On its entry into force, the family Code and the Commercial Code were abrogated. Enforcement -1 Enacting this new Civil Code essentially leads to a formal unification, within the same legislative document, of several regulations regarding private law relations. Law no. 71/2011 for the enforcement of the NCC lays out the measures that will secure a streamlined transition from the old regulations. It is stipulated that the new law applies only to situations that arise after its entry into force, including any additional acts concluded after 1st October. Enforcement -2 The Code thusunifies civil and commercial law, incorporating the quasi-entirety of regulations referring to natural persons and legal entities, family and commercial relationships, as well as the provisions of international private law. The regulation does not include, among others, the provisions concerning commercial companies, insolvency, franchise or leasing agreements and consequently, these matters will still be dealt with by special law, which does not actually complement the manist concept implemented by the new Code. Enforcement -3

The new Civil Codes failure to synchronize with the other three fundamental codes was often criticized, considering the direct impact it will have on the course of civil and criminal proceedings. The Ministry of Justice is also considering the enactment of a new Civil Procedure Code, already approved by Law no. 134/2010 that will be coming into force at a later time. Enforcement -4 There have been opinions that a longer period was needed for the Romanian legal system to assimilate the new regulations, dute to: - The high importance of the regulations and the new legislative solutions and - Considering that the new Civil Code has already undergone major amendments when Law no. 71/2011, on its enactment, was adopted in June 2011.

New Viewpoints of the New Civil Code: FromENTREPRENEURStoPROFESSIONALS -1 Terminology: the concept ofentrepreneur/traderanddeeds of commerce/commercial acts or facts will disappear, replaced with the notions ofprofessionalandactivities of production, commerce or service rendering. Given the monist conception reflected in the new Civil Code, it will cover both the regulations regarding personal non-patrimonial relations and social relations with patrimonial content, irrespective of their scope( commercial, financial, labour, land, realstate etc.) between persons as subjects of social relationships. FromENTREPRENEURStoPROFESSIONALS -2 However, it should be stressed that certain subject matters( such as commercial companies, banking, consumer protection etc.) remains, in principle, subject to special laws.

The new Civil Code definesprofessionalsas: all those who operate anenterprise, and thus, the termprofessionalshas an area of much wider scope than that of the notion ofentrepreneur/trader in the previous regulation. e.g.: The liberal professions(lawyers, insolvency practitioners, evaluators, executors etc.) will came within the scope of the new concept ofprofessionals. The ENTERPRISE under the provisions of the New Civil Code The operation of an enterprise/undertaking is defined by the new Civil Code as: - A systematic practice- by one or more persons- of an organized activity, consisting of the productions, administration or selling of goods or services, whether or not operating for profit. Under the conditions of the NCC, the legal treatment of the commercial legal acts is the same as the one of the civil legal acts.(Currently, the regulation in the NCC only includes few provisions derogating from the principle of the unity of regulation for the civil legal relations and the commercial relations). The features of the enterprise: - Under the provisions of the NCC, the notion ofenterprisedesignates an activity being systematically organized, which is carried on permanently and according to own rules. - The organising of the activity has an autonomous nature; the one who organizes the activity is independent as to making the decisions. - The activity is carried on by one or several persons, at their own risk. - The persons who are carrying on the activity have the quality of professionals. - The object of the organised activity is to produce goods, execute works, or render services. - The purpose of carrying on the activity may be to obtain a profit, or to achieve a non-profit purpose.

An enterprise the purpose of which is to obtain a profit is an economic, commercial enterprise and reversely. An enterprise having a non-profit purpose is a civil(non-commercial)enterprise. - The activities representing the object of the civil(noncommercial)enterprise are mainly the activities being carried on within the liberal professions(lawyers, doctors etc.). The persons carrying on the activity have the capacity of professionals and are carrying on such activity under the structural law that regulates the legal treatment of the relevant profession. CONCLUSION Under the provisions of the New Civil Code: The enterprise is no longer a deed of commerce, but it represents the legal form for carrying on an economic or civil activity, having a professional nature.