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FIC: Amendments on Criminal Codes expose business environment to abuses from civil servants

de Razvan Diaconu , 27.11.2018

Some of the amendments to the criminal codes will generate mistrust regarding Romanian state’s ability to ensure the legality, stability and predictability of business relationships and may expose many companies to an insolvency risk, warns the Foreign Investors Council (FIC).

The warning appears in an open letter addressed to the presidents of the two parliamentary chambers and the Romanian President, a letter containing a list of the main amendments with the potential to seriously affect the business environment.

Possible effects identified by FIC analysis

Negative effects including on the business environment, especially from the perspective of abuses and weakening the mechanism for sanctioning civil servants with whom each professional interacts in their activity.

  • Distrust of the Romanian state’s ability to ensure the legality, stability and predictability of business relationships and overall the business environment.
  • Distrust in the state’s ability to protect the interests of companies and citizens operating in a transparent, fair and professional manner and by complying with legal provisions and commitments assumed.
  • Exposing many companies to a risk of insolvency, as many of those having the position of injured parties in criminal files, who reported on prejudices can be put in the position of being unable to recover the substantial losses, especially caused by corruption offences or offenses in the office. There is the possibility of a civil action in court, but that makes it more difficult to recover damages and equally implies significant costs for the injured party.
  • Limiting the modalities in which the offense is committed to the acts of claiming/receiving/accepting the promise only for some material benefits could have a negative impact in the sense of the impossibility of private companies to prove potential allegations of trafficking of influence in which strictly non-patrimonial benefits have been granted.

Amendments with a direct negative impact on business environment

  • Amendment on Art. 17 Criminal Code – in the new form, crimes committed through omission are decriminalised when there is a contractual obligation to act and the offense exists only when the obligation to act results from the law and not from the contract as well. For example, in a contract in which one party is the state, although the contractual non-enforcement (inaction/omission) may take the form of an abuse of office, the civil servant cannot be held liable because the obligation is only contractual; practically, the possibility of the injured party to file criminal complaints based on the abusive act of a civil servant is eliminated, based on the failure to perform an act that consists of an omission, a liability whose basis is a contractual obligation.
  • Repealing Art. 175 par (2) Criminal Code – the category of assimilated civil servants is eliminated, which unreasonably restricts the sphere of persons who, although they provide services of public interest (notaries, judicial experts, bailiffs, bankers, physicians from the public healthcare system, etc.), under certain conditions, they can no longer be a subject of corruption and office crimes, such as bribery, trade in influence, misappropriation, abuse of office, etc. In certain situations, these professional categories may play a determining role in the management of public money or funds from the general budget of the European Union; therefore, to the extent that entrepreneurs/companies intending to access financing/co-financing sources from such funds for various investment projects would discover potential corruption and/or offenses in office (e.g. bribery, misappropriation, etc.) committed, for example, by bank officials, would no longer have available the means of criminal complaints against them.
  • Amendment on Article 291 (1) Criminal Code – the content of trade of influence offense is modified and it accepted that the offense does not exist if benefits obtained are non-material. The change also makes the existence of trade of influence offense conditional on the promise of trading the influence followed by the intervention before a civil servant. Conditioning the offense on the actual intervention before the public servant considerably restricts the evidence used to prove the offense.
  • Amendment on Art. 297 paragraph (1) Criminal Code – redefines abuse of office crime, which greatly restricts the scope. For example, a civil servant violating the law and providing an undue material benefit to grandchildren, cousins, concubines, or other people can no longer be held responsible for the abuse of office crime. The notion of “material benefits” should continue to include non-patrimonial benefits (e.g. job promotion), all the more so as these acts are at least as common in Romanian criminal practice as material benefits.
  • 17 let. a) Criminal Code (unmodified form) – “the comissive crime involving the occurrence of a result is considered as committed also by omission when: a) there is a legal or contractual obligation to act.” The phrase “contractual obligation” has been deleted, which means a decriminalization of comissive crimes by omission in the event that the obligation to act is not provided for by the law, but only by the contract between the parties.
  • The following conditions are introduced: i) that the abuse of service offense is committed in order to obtain an undue material benefit to themselves, spouse, relatives or in-laws down to second degree, and ii) the loss is certain and effective and higher than the equivalent of a minimum national gross salary. By redefining the abuse of office offense, a substantial partial decriminalisation of this crime is practically made.
  • Similarly, for trade of influence offense, additional conditions are introduced such as i) that the criminal act is committed strictly in order to obtain a material benefit and ii) the promise is followed by the intervention.
  • Regarding the regulation that requires for the case to be closed if no suspect is identified within a year, the FIC claims that it allows and even encourages criminal prosecution bodies to commit abuses. Thus, they may be tempted to artificially attribute the suspect role to persons potentially innocent, the only purpose being to meet the conduct required by law in order to allow further prosecution. In criminal practice, there are many complex causes (e.g. fraudulent money laundering schemes), with a cross-border dimension and a plurality of perpetrators, which hinders the criminal prosecution that involves long-term technical surveillance measures, in order to identify the perpetrators and that makes it virtually impossible to limit this procedural phase to the deadline imposed.
  • To the defendant’s rights section, a new letter is added, lit. (b1), which reads as follows: “the right to be informed of the date and time when the criminal investigation or the hearing conducted by the judge of rights and freedoms takes place”. By introducing this new right, prerequisites are created for irreparably harming criminal prosecution, as the defendant must be aware of the date, hour and place of each criminal prosecution and can participate to them. Consequently, all the criminal prosecution activity will be carried out in the presence of the defendant (including the hearings of injured parties, civil parties, searches or other acts), although current legal provisions give the suspect’s/defendant’s lawyer the right to participate to criminal prosecution. This amendment makes it much harder to obtain evidence.
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