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Debt collection

HOW TO PREVENT HAVING RECEIVABLES

Before concluding a commercial contract with a Romanian partner, a foreign entity should check its financial situation. There are several Government and Non-Government bodies that can provide information in this respect.

Trade Registry

The Trade Registry can provide paid information regarding:

  • The shareholders and Administrators of a company;
  • The social capital of a company;
  • The companies where a person or company is shareholder or Administrator.

Finance Ministry

The Finance Ministry (www.mfinante.ro)1 can provide information on-line (if you know the fiscal code) regarding any company registered in Romania:

  • General fiscal data;
  • The Balance Sheet for several previous years;
  • The overdue taxes to be paid to the State Budget;
  • The VAT and other tax declarations to the Finance Ministry.

Payment Incidents Department

The Payment Incidents Department of the Romanian National Bank can provide paid information regarding the companies that have not paid the cheques and promissory notes they issued in the past.

Tribunal/Court

Information regarding the commercial litigations of the potential commercial partners can be found only from the Tribunal/Court where the litigation was judged. If the city where the trial took place is not known, it will be difficult to identify the possible litigations in which the potential partner was involved.

Stock Exchange

If the potential commercial partner is listed on the Stock Exchange, its compulsory financial reports (report of Administrators, Balance Sheet, P&L, etc) can be found on the following addresses: http://www.rasd.ro/index_en.html and http://www.bvb.ro/.

LEGAL PROCEDURE OF RECUPERATING A COMMERCIAL RECEIVABLE

In order to recuperate the money owed on the basis of a commercial report, Romanian Law stipulates the following ways:

1.Usual procedure, according to common law

Romanian Law (Civil Procedure Code) stipulates that a creditor should chose this procedure if the debt it has against the debtor is not evident and the judge would be required to appreciate if its claim is entitled or not. If the judge will declare the claim valid, he/she will convict the debtor to pay an amount in cash or in kind in order to recover the debt.

The Civil Procedure Code stipulates the fact that the judging of these claims can be done by two entities:

  • The First Instance Court, that has the competence to judge commercial claims for debts that can be evaluated in money at less than 100,000 lei (around 25,000 EUR) and civil claims for debts that can be evaluated in money at less than 500,000 lei (around 125,000 EUR) ;
  • The Tribunal, that has the competence to judge commercial claims that cannot be evaluated in money, commercial claims in money exceeding 100,000 lei (around 25,000 EUR) and civil claims in money exceeding 500,000 lei (around 125,000 EUR).

2. Special procedure, “payment summon”

In order to recuperate a commercial debt, a foreign investor can also initiate a special legal procedure called “payment summon”. The Romanian Law (Government Ordinance no. 5/2001 regarding the payment summon procedure) allows a creditor to start the payment summon procedure in order to recuperate its debts only if they resulted from a written commercial contract legally concluded and if they are certain, doubtless, liquid and overdue.

Consequently, in this special procedure the judge is not asked to observe the breaching of the contract or the guilt of one of the parties, because this would be a usual judging procedure, to be followed according to the point 1 above-mentioned. He/she is asked to check only if the debt meets the legal requirements (written contract, certain, doubtless, liquids and overdue) and if he/she observes the fact they are not met, he/she would irrevocably reject the payment summon request. In this case, the creditor will have the right to start the usual procedure to recuperate its debt.

1 Available in Romanian only.

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