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Chapter I - General Provisions

Art.1. State owned companies, whatever their managerial body, are organized and operate as autonomous companies or commercial companies, in conformity with the present Law's provisions. Also the state owned companies' goods or activities can be either conceded or rented with the observance of the present Law provisions.

Autonomous companies and commercial companies may, in terms of the present Law, join into associations to carry out productive and trade activities.
 

Chapter II - Autonomous Companies

Art. 2. Autonomous companies are organized and operate within the economy's strategic branches - armament industry, power industry, mining and natural gas exploitation, mail system and railway transports - as well as in other fields of activity established by the Government.

Art. 3. Autonomous companies are legal persons and operate on the basis of self-reliant economic and financial management. Autonomous companies of national interest can be created by Government decision or, for administration of local interest operating in branches and fields of activity mentioned in Art.2, by decision of district or municipal authority.

Art.4. The autonomous companies act of establishment sets up the domain of activity, capital assets, name and location.

Autonomous companies may set up their structure: plants, factories, workshops, services, branch offices and other subunits meant to support the object of activity. The establishment procedure and the relations within the autonomous company and with third parties are settled by the structure and operating regulations, issued by the Board of Directors and ratified by the institution which set up that autonomous company.

Art. 5. The autonomous company is the owner of its capital assets.

In exercising its title of property, the autonomous company freely possesses, uses and disposes of the goods in its property or, by case, benefits from them with a view to implementing the objectives for which it has been set up.

The transfer of the assets owned by the autonomous companies or the conclusion of transactions under dispute with a value over 10 million lei shall be done with the approval of the appropriate Ministry.

Art. 6. The returns of the autonomous company have to cover all expenses, including interest rates, investment amortization and credit repayment; there has to be a profit, too.The expenses may exceed returns only for sound reasons - especially for public interest works and services - with the approval of the State Minister for Economy at the proposition of the Ministry in charge and with the advice of the Ministry of Finance. In such cases, at the same time with the approval, the amount and sources of compensation for losses registered by the administration will be established.

Art. 7. The autonomous company shall draw up its annual budget, the balance sheet and profit and loss account on the patterns set up by the Ministry of Finance. The annual balance sheet and profit and loss account are to be approved by the Ministry of Finance or by the financial bodies the autonomous company is subordinated to.

The balance sheet and profit and loss account of autonomous companies of national interest are published in the Official Gazette of Romania, part III, and for the local interest autonomous companies, the publication is done in the local press.

Art. 8. Out of the total revenues, after the payment of expenses, the autonomous company forms a reserve and development fund, provides the necessary amounts to cover some social, cultural and sport expenses, or to cover the training or retraining of the personnel, as well as for incentives; it pays the duties, taxes, insurance and social quotas and makes other payments stipulated by the law.

The Board of Managers can decide upon the setting up of other funds besides those mentioned in the previous paragraph.

The income share left after raising its own funds and making the payments mentioned in the 1st paragraph represents the net profit of the autonomous company. 5% of this profit are used for setting up employee's profit share fund, the rest being paid to the state budget or to the local administration.

Art.9. In case, within one year, the autonomous company's financial resources are not sufficient to cover current expenses, the autonomous company may contract financial credits with the National Bank of Romania or other banks, to the amount of 20% of the gross income registered in the previous year.

To cover possible losses, the autonomous company may get subsidies from state or local budget or may contract banking credits.

Subsidies are alloted and managed by the Government or by local state administration within the amounts stipulated in their budgets, and may be used only for the purposes they were granted for.

Art. 10. The autonomous company decides upon investments to be made, according to its field of activity, which are financed from its own resources, banking credits, state budget allocations or, as the case may be, from the local budget. Investment credits over 50 million lei can be obtained with the prior approval of the State Minister for Economic Orientation.

Art. 11. The receipts and payments of the autonomous company are made through accounts opened with the banks.

For current necessities within the limits stipulated by the National Bank of Romania the autonomous company may collect and effect payments in lei and foreign currency, through its own pay office.

Foreign payments will be made through the Romanian Bank for Foreign Trade or other banks.

Art. 12. The Board of Managers is in charge of the management of autonomous companies and is formed of 7-15 persons, one being the manager, or general manager.

The Board of Managers compulsorily includes an official from the Ministry of Finance, and, as the case may be, officials from the Ministry of Resources and Industry, the Ministry of Trade and Tourism and from the Ministry in charge. The other members will be appointed from among the engineers, technicians, economists and jurists specialized in the field of the respective autonomous company.

The Board of Managers carries on its activities in accordance with its own structure and operating regulations and decides on all the matters concerning the administration's activity, excepting those which, in accordance with the Law, are under other bodies' competence.

Art. 13 . The Board members:

1. are appointed for a 4 year period, and half of them may be replaced every 2 years;
2. cannot sit on more than two Boards of Managers or they cannot participate in a commercial company with which that autonomous company has business relations or conflicting interests;
3. maintain their position at the institution or unit they came from and all the rights and duties resulting from this position;
4. are paid a salary established by the Board of Managers for their activity.

Art.14. In the first month of each year, the Board of Managers makes a report to the Ministry in charge or, as the case may be, to the local administration, on the activity carried out in the previous year and on the activity program for the current year.

Art. 15. The autonomous company's current activity is managed by a general manager appointed by the Board, with the advice of the Ministry in charge or, as the case may be, of the local authority.
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Chapter III - Commercial Companies

Art.16. State owned companies, excepting those set up as autonomous companies, will be organized as joint-stock or limited liability companies, under the terms stipulated by the Law.

Art.17. Economic enterprises of national interest are organized as commercial companies by Government decision, and those of local interest by decision of the local state administration.

Art.18. The Act of Establishment of the commercial company will assume the Statute of the Commercial company and will state:

1. the company's juridical form, field of activity, name and headquarters;
2. invested nominal capital, its structure and way of forming;
3. the possibility of taking over the assets and liabilities of the state owned company restructured as a commercial company.

Art. 19. The inventory of state owned companies restructured as commercial companies as well as the evaluation and the determination of the commercial company's capital set up in this way, are done under the terms set up by Government decision.

Art. 20. Initially, the nominal capital of the commercial companies that were set up according to Article 17 is fully owned by the Romanian state in shares and equity and vouchers depending on the legal form of the company and will be entirely deposited at the setting up date.

The goods registered in the commercial company's property are its own, except those acquired with another title.

Art. 21. The commercial companies set up under the present Law have a sole shareholder until total or partial transfer of shares to the third parties from private or public sector, in the country or abroad, in accordance with the special legislation.

Art. 22. With a view to preparing, organizing and coordinating the transfer of shares, the National Agency for Privatization, subordinated to the Government, is set up.

The Agency competence is established by a special Law and by the present Law as well, and its organizing structure will be set up by Government decision.

Art. 23. The commercial companies set up under the present Law will submit to the National Agency for Privatization securities equivalent to 30% of the amount of the established nominal capital, within 30 days of their setting up.

On the basis of these securities, the National Agency for Privatization will issue nominal securities in value of 5,000 lei each that will be alloted equally and free of charge to all the Romanian citizens living in the country, being over 18 years on or before December 31, 1990.

Excepted are persons sentenced for speculation, theft, robbery, deliberate destruction, fraud, fraudulent administration, breach of confidence committed to the public or private property detriment, manslaughter, murder, aggravated murder, indecent assault, bribery, illegal arresting and abusive judicial investigation and offenses against peace and mankind.

The previous paragraph provisions are not applied to those convicted for purloining agricultural products, committed until December 22, 1989.

The negotiation and transfer of the nominal securities by means of legal papers concluded among living persons will be possible after a year from the present Law publication, only among Romanian citizens living in Romania, and exclusively through the National Agency for Privatization, all transactions without its registration being null and void.

Nominal securities will be used by holders within the limits of their value to purchase shares of commercial companies set up through the restructuring of the existent state owned companies, in accordance with the special legislation.

The Government will forward to Parliament the privatization program and the principles of the process, with a view to finding solutions based on economic criteria and depending on each economic sector and unit specificity, and creating an employees' protective and preferential regime for the privatizing of the commercial companies.

Operations with nominal securities shall be taxed with a 1% stamp duty.

Art. 24. State capital commercial companies shall have to draw up the annual expenditures and receipts budget, the balance sheet and the profit and loss account, according to the legal provisions.

The balance sheet and profit and loss account will be published in the Official Gazette of Romania, part III.
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Chapter IV - Concession, Renting and Administrative Location

Art. 25. By Government decision, at the proposition of the State Minister for Industry and Trade, economic activities, public services, some autonomous companies, productive units and state owned lands can be subject of concessions.

Concession is granted only by public tender and on condition that, by concession, an annual fixed income is guaranteed to the State, at least equal to the net average profit realised over the last 5 years, by operating either the object of concession, or similar ones. This income cannot be lower than the National Bank's interest rate applied to the concession's estimated value established by the Government's decision.

The production units can be object of concession without the approval of the respective autonomous company if, in the last 2 years prior to concession, the autonomous company resorted to state subsidies.

The evaluation and the acceptance of all the tenders are done by the National Agency for Privatization.

Art. 26. Concession tender organizing and administration's articles and conditions containing concession's terms are approved by the Government and published in the Official Gazette of Romania, part III, as well as in the press, at least 30 days before the tender date.

Art. 27. The terms of the concession contract will comprise the following provisions:

1. the concession object;
2. the concession duration, which can be no longer than 20 years;
3. minimum program for works to be carried out by the concessionaire and for new potential investments;
4. concession price and potential royalties payment in kind from production;
5. transfer, at the end of concession, of all goods conceded or acquired during the existence of the concession, necessary for its operation, back to the owner without any obligation;
6. terms of concession buying back;
7. terms of the concession contract cancellation and concessionaire's responsibility in case canceling is his fault;
8. concessionaire's responsibility for failing to meet the obligations provided for by the terms of supply;
9. concessionaire's activity control performed by Ministry of Finance and appropriate Ministry representatives;
10. other obligations related to the concession object.

Art. 29. Subconcession may take place only with Government approval, granted at the proposition of the National Agency for Privatization.

Art. 30. State owned goods may be subject to a lease based on Government approval or, as the case may be, of the local administration.

Art. 31. The leasing contract is concluded on the basis of a tender and will include clauses meant to ensure the exploitation of the leased goods in accordance with their specificity.

The leasing contract may be concluded with any legal or natural person of Romanian or foreign origin, by the state body that manages those goods.

Art. 32. The autonomous companies or commercial companies may conclude, with Romanian or foreign natural or legal persons, contracts concerning administrative location, for sections, plants,works and other related economic subunits.

General terms concerning the conclusion of these contracts are approved by Government decision.
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Chapter V - Association and Free Competition

Art. 33. The autonomous companies and commercial companies may associate for joint activities of mutual interest. This association will not result in a new legal person and the relations between partners will be settled by the association contract.

Art. 34. The association contract will comprise the following:

a) contracting parties;

b) joint economic activities;

c) each party's contribution to the settled joint economic activities;

d) administration and management terms;

e) ways to distribute the results of the joint economic activities;

f) reasons for association termination and dissolution, modality of distributing the results of the liquidation;

g)any other necessary clauses for the association activity.

Art. 35. The autonomous companies and the fully or partially state owned companies may associate among themselves or with third Romanian or foreign legal or natural persons, in order to set up new commercial companies.

Art.36. Any agreement or association decision between commercial companies or autonomous companies and any concerted action which may distort the trade between business agents and whose object or effect is competition obstruction, restriction or distortion or abusive use of a dominant position on the market or on a consistent market share, are forbidden as follows:

1. setting and imposing directly or indirectly monopoly and dumping prices or other unloyal contract terms;
2. limiting or controlling production, sales, technical development or investments;
3. markets and supply sources sharing;
4. imposing on the commercial partners discriminatory terms for equivalent performances, generating thus a disadvantage in competition relations;
5. conditioning contract conclusion by the partners' acceptance of additional performances which, by their content or according to commercial usage, have no connection with the object of the respective contracts.

Activities of a business agent or of a business agents group who hold a market and have a dominant position expressed by a monopoly or by a relevant concentration of economic power, as far as these activities may affect the normal market performance under free competition, are forbidden.

Art. 37. Actions at law can be brought against practices and facts mentioned in Article 36 by any interested person and the law court is in charge of settling them.

Art. 38. Agreements, association decisions and concerted actions supporting production improvement and product marketing, promotion of technical progress, upgrading of Romanian products, works and services competitiveness on foreign markets do not represent unloyal competition.

Art. 39. For bringing into effect the present Law provisions when setting up commercial companies,the Government will proceed to the restructuring of the state owned companies - enterprises, groups, aggregate groups, trusts and other similar units operating on autonomous companies structure and financial administration in order to downsize enterprises and to raise the number of business agents who are producing similar goods and performing the same kind of works and services. For the local state owned companies, the provisions of paragraph 1 are applied by the Prefect's offices or the Municipality of Bucharest.

Art. 40. The state has the right to perform economic activities that will be exclusively organized as state monopolies. Such monopolies and their management are provided for under special laws.
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Chapter VI - General Provisions

Art. 41. The operating structure of the autonomous companies and commercial companies is established by their managerial bodies. The personnel of the autonomous companies and commercial companies is employed by the general manager or by the manager. The employees' wages are set up by the management body of the autonomous companies and commercial companies, depending on educational level and work performances and observing the minimum wages provided by the Law.

Art.42. The autonomous companies and the commercial companies, as well as the concessionaires and persons exporting rented goods under the present Law terms, are bound to perform their activity observing legal provisions concerning environment protection and to self-finance this objective.

Art. 43. The activity of the autonomous companies and commercial companies can be influenced by the state through economic levers such as special interest rate credits, state orders, subsidies, taxes and duties.

Commercial companies set up under the present Law can be subsidized, by Government decision, for a maximum period of 4 years, the subsidy amount being reduced yearly by 20%.

Subsidies are not granted in case of bankruptcy.

Art. 44. The autonomous companies and commercial companies established under this Law may engage in foreign trade activities in their own names. To this end, they shall organize specialized departments for export, import, marketing and market research activities, after compulsory consulting in advance with the Ministry of Trade and Tourism.

Art. 45. The autonomous companies and commercial companies established under this Law have the right to dispose of a 30% quota of their foreign currency net income. Beginning with 1991, February 1st, this quota will rise to 50%.

The rest of the foreign currency net income shall be exchanged for lei with the Romanian Bank for Foreign Trade, at the exchange rate valid at the date of the bank operation.

Under this Article, the net income means receipts out of export activities after deduction of payments for imports, commissions, taxes, duties and any other foreign currency expenses involved by the respective operation.

Art. 46. Foreign currency amounts left at the disposal of the above mentioned business agents are kept in special accounts opened in their name with the Romanian Bank for Foreign Trade, or with other banks which are located in Romania.

The Ministry of Trade and Tourism may deny the import license necessary for using these amounts of money only if goods intended to be imported can be acquired under competitive terms from domestic production, and if such decision is necessary for balance of payments reasons.Likewise, the Ministry may refuse to issue a license for the export of goods required for the domestic production.

Art. 47. Commercial relations among autonomous companies, those among state owned companies, as well as the relations among them, or those between them and the State will be conducted in accordance with the contract provisions.

Contracts concluded between the business agents, mentioned in the 1st paragraph, will be governed by the freedom of contract principle and by regulations contained in the Romanian Civil Code and the Romanian Commercial Code, with the exceptions resulting from the present Law.

Art. 48. In the business relations among them and between them and third parties, the autonomous companies and state owned companies will be able to charge the prices resulting from the combined action of demand and supply, except for the case when on the Romanian market at least three business agents do not market the same product, operation or service; exception is also made when prices are subsidized by the State following a Government decision. In the latter cases, the Government will establish the prices by negotiation with the business agents.

Art. 49. The Romanian Bank for Foreign Trade may organize foreign currency auctions at the request of business agents that, in conformity with legal provisions, have currency amounts they want to transfer, against payment in lei, to other business agents.

Art. 50. The autonomous companies and state owned companies may conclude contracts on a lei basis, with foreign entrepreneurs, for the sale of products, or for the implementation of various works or services, in case the amount they own in Romanian currency results from the exploitation of investments they made in Romania.

Art. 51. Any kind of disputes implying the autonomous companies or state owned companies shall be referred to the authority of Court. The autonomous companies and commercial companies may also resort to arbitration for settlement.
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Chapter VII - Final and Transitory Provisions

Art. 52. Until full liberalization of economic exchanges and the elimination of the distribution system, based on material balances, the regies autonomes and the state owned companies are bound to fulfil the supply tasks set up in balances drawn up by the Ministry of Resources and Industry.

If the distribution system beneficiary holds an excess of controlled materials, he may sell it on the market at prices exceeding the purchase ones. This kind of operations shall be instantly notified to the Ministry of Resources and Industry. The denominated supplier could act in the same way if the beneficiary notifies him, before concluding the contract, that he is not interested in taking over the allotted quota.

To refuse the conclusion of the contract by breaking the provisions of the present article entails the civil responsibility of the autonomous company or of the commercial company.

Art. 53. The goods left under state ownership, as Governmental buildings, goods required in the state administration activities, state reserves and others alike, will be registered with the State Reserves Department and directly managed by the institutions that will use them.

The decisions concerning these goods will be approved by the Ministry of Finance and by the Ministry of Resources and Industry, unless otherwise provided for by Law.

Art. 54. The provisions of the present Law also apply to companies, corporations, trusts, groups of enterprises and other similar institutions set up by restructuring of economic units, based on Government decision, until the date of the Law publication.

Art. 55. The existent enterprises and the other economic units with a similar status will cease their activity as the autonomous companies and commercial companies are created in conformity with the present Law.

Their fixed assets will be transferred to the newly established units in accordance with the Government decisions for each case.

Art. 56. The personnel of the dissolved enterprises as well as that of the state owned companies reorganized as autonomous companies and commercial companies, will be taken over by the latter ones. If this personnel has lower salaries, it is entitled to receive the difference up to the basic salary level the workers had before, and the seniority bonus as the case may be within 3 months. The difference is borne by the state budget.

Art.57. The establishment of autonomous companies and commercial companies in accordance with the present Law will take place within 6 months of the date it is coming into effect, except for the state agricultural units, for which a 9 month - period is stipulated.

All contracts, licenses or other deeds whereby enterprises, institutions, state owned companies, or a part of these have been privatized, conceded or rented after December 22, 1989, will be re-examined in accordance with the present Law provisions, by the National Agency for Privatization.

Art. 58. The present Law comes into effect within 30 days of its publication in the Official Gazette of Romania.

At the fulfillment of the terms stipulated in the Art.57, a series of laws will be abrogated, as follows: Law No.5/1978 on the organization and management of the state socialist units and their operation on the principle of workers' self-governing and of economic financial self-management; Law No.3/1988 on conclusion and implementation of economic contracts; Law No.14/1971 on fixed assets and material resources management and to technical and material supply, and all other provisions to the contrary.

At the publication date of the present Law, there will be also repealed the Government decisions on establishment, organization and operation in the domestic trade of joint-stock commercial companies and of autonomous companies, and also the decision on commercial units privatization or their management under the system of commission or mandate.