Last updated: 6 February 2014
The 1st of February 2014 marks the entry into force of the New Criminal Code and of the New Code of Criminal Procedure, both aiming at modernizing the Romanian criminal legislation and harmonising it with the criminal legislation of the EU member states.
Generally, the new Criminal Code reduces sentences for numerous crimes committed by persons without past convictions, while repeat offenders are more harshly punished. Moreover, it amends several special laws. Some of these laws are of a special interest to the business environment because they refer to insolvency proceedings or companies; hereinafter you may find a presentation of these amendments.
INSOLVENCY PROCEEDINGS
The former provisions of Law no. 85/2006 on insolvency proceedings provided that the assets sold by the insolvency practitioner / liquidator during the insolvency proceedings are free from any movable securities, securities, mortgages or provisional measures, including those established during a criminal trial. At present, these assets shall no longer be released from the criminal distraint. Thus, the purchaser must take over the asset along with the distraint or the insolvency practitioner / liquidator must obtain the lifting of this penal measure. Consequently, the asset sale shall be blocked and the company’s reorganization / bankruptcy proceedings shall be hindered.
COMPANY DIRECTORS
Following the entry into force of the new Criminal Code, the limits of the penalties applicable to the companies’ founders, directors or supervisory board members for crimes such as the delivery in bad faith of inaccurate information concerning the company’s financial situation to its shareholders or presenting false information concerning the company’s economic or judicial situation were reduced. Thus, these actions are punished by a prison sentence between 6 months and 3 years, whereas Law no. 31/1990 previously provided a sentence of up to 5 years.
Moreover, before the entry into force of the new Criminal Code, the founder/director distributing false dividends or dividends that could not be distributed because of the lack of a clear annual financial statement was punished by a prison sentence between 2 and 8 years, whereas the new Criminal Code provides a lighter sentence, between 1 and 5 years.
NEW CRIMES
Among the new crimes provided by the Criminal Code one can find the misappropriation of public procurement proceedings; this crime is provided by article 246 of the New Criminal Code and it can also be found in the French law, at article 313-6 of the Criminal Code.
Thus, “during a public procurement procedure, excluding a bidder by constraint or corruption or agreements aimed at distorting the award price shall be punished by a prison sentence between one and five years”.
The provisions of the Criminal Code protect the parties who, for example, take part to an auction organised by a bailiff whose interests may be affected by an agreement in bad faith between the other participants. Moreover, the text could prevent illegal agreements during the organisation of auctions within a public procurement procedure.