Romania A. Definitions and sources of data

Data on foreign direct investment (FDI) in Romania are reported by the National Bank of

Romania (NBR). Since the early 1990s, far-reaching market-oriented reforms have been initiated to achieve macroeconomic stability and structural change. Stabilization programmes have been implemented to speed up the privatization and restructuring of state-owned enterprises. Despite significant changes in the legal and regulatory framework, FDI inflows have not kept pace with expectations. Internal difficulties worsened the economic situation in 1998 and resulted in output declines and a depreciation of the local currency. GDP contracted in 1999 because of the Yugoslav conflict in Kosovo that adversely disrupted regional trade and transport infrastructure. Since January 2000, as the Government introduced a major financial reform which aimed to reduce public expenditure, accelerate privatization and reform the fiscal system, larger FDI inflows are expected.

The National Agency for Regional Development (comprising the former Romanian Development

Agency) is responsible for private business development. It provides information on investment opportunities, legal advice, and assists potential foreign investors to identify joint-venture partners and implement projects. Under the Foreign Investment Law No. 35/1991 and its amendments, foreign investors are granted national treatment and benefit from the same legal framework as local investors regarding guarantees and incentives. Although foreign investors may establish wholly foreign-owned enterprises, joint ventures are usually the pattern. The unrestricted transfer of profits and of invested capital is possible. Protection against expropriation is available. There are no performance requirements imposed as a condition for establishing, or expanding an investment. According to current legislation, a Romanian company in which foreign investors hold a controlling stake shall be considered as having the same nationality as its foreign investors. Any commercial company, irrespective of nationality, may acquire ownership rights on real estate for its productive activity. Moreover, foreign investments in Romania are governed by the provisions established by the foreign investment act which were in force at the time of incorporation, unless a subsequent law contains more favourable terms.

According to the 1990 Commercial Company Act, foreign contributions to investment capital

may be paid in cash, in kind, or in rights in any of the following forms: partnership, branch, wholly foreign-owned company, limited liability company, or joint-stock company. Foreign investors may purchase shares in existing entities, or engage in activities through the privatization process. The incorporation of an entity has to be made with the Trade Registry and the local taxation office. Corporations have the right to retain their foreign exchange earnings for their transactions. Concession in oil operations may be granted by the National Agency for Mineral Resources. Activities in banking are monitored and regulated by the NBR. Since late 1999, the country revised its taxation system to bring it more in line with the EU legislation. While the tax base has been enlarged, the corporate income tax has been lowered to 25 per cent from 38 per cent and the VAT reduced to 19 per cent from 22 per cent. These measures aim at enhancing exports by imposing only a corporate profit tax of 5 per cent on profits derived from exports. Romania provides for tariff preferences to entry of European Union goods under its association agreement with the EU. With a view to further encouraging FDI inflows, since June 2001 and under the Law No. 332/2001, any new investment (except in banking and insurance) of over $1 million is granted a fiscal credit of 20 per cent of the invested amount. An exemption from customs duties on imported machinery and equipment necessary for the capital base of a company and an accelerated depreciation of 50 per cent on fixed assets during the initial year of operations are authorized. Any loss incurred during a fiscal year may be carried forward during the next 5 years from the taxable profit. These investments also benefit from the guarantee of any change in the legal regime during their entire existence. Under the Free Trade Zone Act No. 84/1992, activities performed within an FTZ are exempt from the payment of VAT, customs duties and profit tax during the entire period of a company’s operations.

FDI data reported by the NBR are in accordance with the guidelines set out in the Balance of

Payments Manual, 5th edition, 1993 of the International Monetary Fund. They reflect an acquisition of 10 per cent or more of shares or of voting rights of a direct investor, resident of a foreign country, with a lasting interest in an enterprise. The level of investments is determined by the amount of cash transactions operated through commercial banks and non-cash investments reported by the Customs authorities. Information on reinvested earnings is not available. The data collection system does not provide any breakdown by geographical origin/destination or by industrial sector.

B. Statistics on FDI and the operations of TNCs

Table 1. Summary of FDI

Variable Inward Outward

1. FDI flows, 1999-2002 (annual average) 1 085.3 1.0

2. FDI flows as a percentage of GFCF, 1998-2001 18.3 -0.1 (annual average)

3. FDI stocks, 2001 7 613.3 126.9

4. FDI stocks as a percentage of GDP, 2000 17.6 0.4

Sources : Based on tables 3a and 4; UNCTAD, FDI/TNC database.

Table 2. Summary of international production

Variable Home-based TNCs

Affiliates of foreign TNCs in

Romania

Foreign affiliates of

home-based TNCs abroad

1. Number, 2002 .. 7 487 ..

Source: Based on table 17.

(Millions of dollars)

Intra- Intra-Reinvested company Reinvested company

Year Equity earnings loans Total Equity earnings loans Total

1990 .. .. .. .. .. .. .. 181991 .. .. .. 40 .. .. .. 31992 .. .. .. 77 .. .. .. 41993 .. .. .. 94 .. .. .. 71994 .. .. .. 341 .. .. .. ..1995 .. .. .. 419 .. .. .. 21996 .. .. .. 263 .. .. .. ..1997 .. .. .. 1 215 .. .. .. -91998 .. .. .. 2 031 .. .. .. -91999 .. .. .. 1 041 .. .. .. 162000 .. .. .. 1 037 .. .. .. -112001 .. .. .. 1 157 .. .. .. -172002 .. .. .. 1 106 .. .. .. 16

Source : National Bank of Romania, Statistics Department, unpublished data and website (http://www.bnro.ro/statistics).

Note : No breakdown by components is available.

Intra- Intra-Reinvested company Reinvested company

Year Equity earnings loans Total Equity earnings loans Total

1990 .. .. .. .. 18 .. .. 181991 40 .. .. 40 3 .. .. 31992 77 .. .. 77 4 .. .. 41993 94 .. .. 94 7 .. .. 71994 341 .. .. 341 .. .. .. ..1995 419 .. .. 419 2 .. .. 21996 263 .. .. 263 .. .. .. ..1997 1 215 .. .. 1 215 - 9 .. .. - 91998 2 031 .. .. 2 031 - 9 .. .. - 91999 1 041 .. .. 1 041 16 .. .. 162000 932 .. 93 1 025 - 11 .. .. - 112001 1 023 .. 134 1 157 - 11 .. .. - 17

Source : International Monetary Fund, March 2003 Balance of Payments CD ROM.

Table 3b. FDI flows, by type of investment, 1993-2001

(Millions of dollars)

Inward investment Outward investment

Inward investment Outward investment

Table 3a. FDI flows, by type of investment, 1990-2002

(Millions of dollars)

Intra- Intra-Reinvested company Reinvested company

Year Equity earnings loans Total Equity earnings loans Total

1990 .. .. .. .. .. .. .. 66.11991 44.6 .. .. 44.6 .. .. .. 87.41992 121.8 .. .. 121.8 .. .. .. 79.21993 215.6 .. .. 215.6 .. .. .. 103.51994 401.1 .. 1.3 402.4 .. .. .. 106.81995 418.1 .. 3.2 421.3 .. .. .. 120.61996 1 081.1 .. 16.1 1 097.2 .. .. .. 119.71997 2 305.1 .. 46.9 2 352.0 .. .. .. 114.41998 4 335.1 .. 82.8 4 417.9 .. .. .. 122.51999 5 297.1 .. 172.1 5 469.2 .. .. .. 133.02000 6 229.1 .. 250.8 6 479.9 .. .. .. 141.62001 7 252.1 .. 361.2 7 613.3 .. .. .. 126.9

Source : International Monetary Fund, March 2003 Balance of Payments CD ROM.

Inward investment Outward investment

Table 4 : FDI stocks, by type of investment, 1990-2001

(Millions of dollars)

Table 17 : The number of affiliates of foreign TNCsin the host economy, 1991-2002

Year Number 1991 5 5411992 11 7981993 10 5811994 11 0501995 3 3131996 3 5221997 5 1531998 8 6521999 7 2032000 8 5332001 7 1422002 7 487

Notes : Data refer to the number of companies with FDIregistered annually. At end-December 2002, thecumulative number of incorporated companies was89,911 and the amount of issued capital subscribed byforeign investors was $ 8,939.1 million.

Sources : National Trade Register Office, Bucharest, aspublished by the Ministry of Development and Prognosis,Incentives for Investors(http://www.andr.ro/engleza/investment/business/content/3_2_facilities_for_invest.htm), p.3; and Companies byforeign direct investment, Statistical Synthesis , December2002.

Table 22 : The number of affiliates of foreign TNCsin the host economy, by industry, 2002

Sector/industry 2002Total 89 911

Primary 3 776Agriculture, hunting, forestry and fishing 3 776

Agriculture and hunting 3 776Secondary 16 993Tertiary 69 141

Construction 2 697Trade 49 631Wholesale trade 33 267Distributive trade 16 364

Transport, storage and communications 6 923Transport and storage 6 923Supporting and auxilary transport activities 3 866

Other services 9 890

Source: National Trade Register Office, Companies by foreign directinvestment, Statistical Synthesis , December 2002.

Notes: Data refer to the cumulative number of companies with FDI asat end-December 2002. Supporting and auxiliary transport activitiesrefer to tourism.

Table 23 : The number of affiliates of foreign TNCsin the host economy, by geographical origin, 2002

Sector/industry 2002Total world 89 911

Developed countries 45 085Western Europe 37 914

European Union 36 429Austria 2 523Belgium 1 073Denmark 234France 2 825Germany 10 231Greece 2 351Ireland 173Italy 12 450Luxembourg 194Netherlands 1 566Portugal 74Spain 518Sweden 738United Kingdom 1 479

Other Western Europe 1 485Gibraltar 22Iceland 12Liechtenstein 147Monaco 23Norway 129Switzerland 1 152

North America 4 335Canada 823United States 3 512

Other developed countries 2 836Australia 377Israel 2 339Japan 120

Developing economies 39 414Africa 1 287

North Africa 1 242Egypt 1 242

Other Africa 45Cameroon 11Liberia 34

Latin America and the Caribbean 346Other Latin America and Caribbean 346

Bahamas 24British Virgin Islands 163Cayman Islands 7Netherlands Antilles 7Panama 112

US Virgin Islands 33Developing Europe 707

Yugoslavia 707Asia 37 068

West Asia 28 891Cyprus 1 021Iran, Islamic Republic of 2 538Iraq 5 675Jordan 3 029Lebanon 3 221Syrian Arab Republic 5 183Turkey 8 224

/..

Table 23 : The number of affiliates of foreign TNCsin the host economy, by geographical origin, 2002

(Concluded)

Sector/industry 2002South, East and South-East Asia 8 177

China 8 101Republic of Korea 76

The Pacific 6Marshall Islands 6

Central and Eastern Europe 6 028Bulgaria 450Hungary 3 978Poland 202Republic of Moldova 1 398

Notes: Data refer to the cumulative number of companies with FDIas at end-December 2002. Data recorded under 'Yugoslavia' referto the countries of the former Yugoslavia.

Source: National Trade Register Office, Companies by foreigndirect investment, Statistical Synthesis , December 2002.

Company Industry Sales

A. Industrial

Petrom SA Mining and quarrying ..

B. Tertiary

C. Finance and Insurance

Banca Commerciala Romana SA Banking ..Bankcoop-Banca Generala de Credit si Promovare SA Banking ..

Table 86 : Largest home-based TNCs, 1999

Sources : Dun and Bradstreet Ltd., Who Owns Whom , CD-ROM, United Kingdom, April 2001; The Europa World Yearbook 2000, Romania, vol. II, 41 edition (London, Europa Publications Ltd., 2000); pp. 3024-3048; Central and Eastern Europe Business Information Center, U.S. Companies in Romania (CEEBIC, Washington D.C. October 2000) (http://www.mac.doc.gov/eebic/countryr/romania/uscomp.htm).

Company Home economy Industry SalesA. Industrial

Automobile Dacia SA France Motor vehicles 405.0Daewoo Automobile Romania SA Republic of Korea Motor vehicles 384.5Petromidia SA Turkey Petroleum products 256.0Lafarge Romcim SA France Non-metallic mineral products 114.9Coca-Cola Romania SRL United States Beverages 98.3Lukoil Romania SRL Russian Federation Petroleum products 95.1Ursus SA United Kingdom Beverages 70.4Agricola International SA Germany Food 52.2Steilmann Bukarest SRL Netherlands Clothing 50.4Koyo Romania SA Japan Metal products 46.4Shell Romania SA Netherlands/United Kingdom Petroleum products 45.3Excellent SA Netherlands Food 44.6Europharm SA United States Chemicals 41.5MOL Romania Petroleum Products SRL Hungary Petroleum products 41.0Unirea SA Italy Food 30.9Quadrant Amroq Beverages SA United States Beverages 29.4Zaharul SA Austria Food 29.0Virolite Polimeri Functionali SA United Kingdom Plastic products 26.2Moldocim Bicaz SA Germany Non-metallic mineral products 26.1Sanex SA Netherlands Chemical products 25.4Astra Vagoane Arad SA United States Metal products 23.9Vilmar SA France Metal products 22.9Panasonic Romania SRL Japan Electrical equipment 20.5Angst RO SA Switzerland Food ..Bere Lichior Margineni SA Turkey Beverages ..Bere Miercurea Ciuc SA Austria Beverages ..Electroaparataj SA Cyprus Electrical equipment ..Electrolux Samus SA Sweden Electrical equipment ..Glaxo Wellcome Romania SRL United States Chemicals ..Kraft Jacobs Suchard Romania SA United States Food ..Michelin Romania France Rubber products ..Mondial SA Germany Non-metallic mineral products ..Nestle Romania Switzerland Food ..Otel Inox SA Republic of Korea Basic metals ..PCC Sterom SA United States Machinery ..Petrotel Russian Federation Petroleum products ..R.J. Reynolds Tobacco International United States Chemicals ..Ringier Romania SRL Switzerland Publishing ..Sidex Galati SA India Basic metals ..SNP Petrom SA India Petroleum ..Solelectron Romania SA United States Electronic equipment ..Timken Romania SA United States Metal products ..Uzina Mecania Timisoara (UMT) Germany Machinery ..

B. TertiaryMetro Cash and Carry SRL Germany Distributive trade 359.8Interbrands Marketing and Distribution SA Cyprus Distributive trade 193.7Mobil Rom SA France Telecommunications 110.8Alcatel Network Systems Romania SA France Telecommunications 48.4Media Pro International SA Netherlands Other services 47.3Colgate Palmolive (Romania) SRL United States Distributive trade 38.9Detergenti SA United States Distributive trade 32.3Unilever Romania SA Netherlands Distributive trade 23.8Athenee Palace Bucharest Romania United States Hotel ..Channel 2 TV Romana Canada/United Kingdom Other services ..Continental Hotels Romania France Hotel ..Crowne Plaza Bucharest Flora United States Hotel ..Global One Communication Romania Germany Telecommunications ..Holiday Inn Express Hotels United States Hotel ..Mobifon SA Canada/United States Telecommunications ..Rompetrol SA Netherlands Distributive trade ..RomTelecom Greece Telecommunications ..

C. Finance and InsuranceABN AMRO Romania Netherlands Banking ..Alpha Bank Romania SA Greece Banking ..Asigurareo Romaneasco SA (ASIROM) United Kingdom Insurance ..Asigurari Ion Tiriac SA Germany Insurance ..Banc Post SA Portugal/United States Banking ..Banca Comerciala Robank SA Turkey/United Kingdom Banking ..Banca de Credit Industrial si Comercial Turkey Banking ..Banca Romana Pentru Dezvoltare SA France Banking ..Banca Turco Romania SA Turkey Banking ..

/..

Table 88 : Largest affiliates of foreign TNCs in the host economy, 1999(Millions of dollars)

Company Home economy Industry SalesBank Austria Creditstalt Romania SA Austria Banking ..BNP-Dresdner Bank (Romania) SA France/Germany Banking ..Broadhurst Investments Ltd United States Finance ..Citibank Romania SA United States Banking ..Demirbank (Romania) SA Turkey Banking ..ING Bank Romania SA Netherlands Banking ..Raiffeisenbank (Romania) SA Austria Banking ..Romanian American Enterprise Fund United States Finance ..SC Unita SA Austria Insurance ..Societatea De Asigurari AIG Romania United States Insurance ..

Sources : Dun and Bradstreet Ltd., Who Owns Whom , CD-ROM, United Kingdom, April 2001; The Europa World Yearbook 2000,Romania , vol. II, 41 edition (London, Europa Publications Ltd., 2000); pp. 3024-3048; Central and Eastern Europe Business Information Center, U.S. Companies in Romania (CEEBIC, Washington D.C. October 2000) (http://www.mac.doc.gov/eebic/countryr/romania/uscomp.htm).

Table 88 : Largest affiliates of foreign TNCs in the host economy, 1999 (concluded)

(Millions of dollars)

C. Legal framework for FDI

1. National policy framework

Despite the presence of large state-owned government-subsidized enterprises, the Government of

Romania is increasingly realizing the role of FDI in its economic development. It seeks to attract foreign investment in many ways including the privatization programs. It welcomes suggestions coming from foreign investors, and various regional and international organizations including the EU, IMF and the World Bank for the improvement of its investment climate. It offers national treatment in may respects to foreign investors, with access to markets and permission to participate in privatizations. It is increasingly improving its regulatory frameworks including its taxation and foreign exchange systems. The legal framework for foreign investment in Romania is provided by the following laws: commercial register law (1990 as revised), commercial company law (1990 as revised), free trade zones law (1992), local taxes (1994, as revised), petroleum law (1995), copyrights and neighboring rights law (1996), competition law (1996), government ordinance on leasing (1997, as revised), bank privatization law (1997, as revised); government ordinance on privatization (1997 as revised), stimulation of direct investments (1997 as revised), mines law (1998), stimulation of private SMEs (1999, as revised); value added tax law (2002); privatization of tourism companies (2001); public procurements (2001 and secondary legislation) and privatization of agricultural companies (2001), law concerning the promoting of direct investments with significant impact on economy (2001), tax on profit law (2002), law on establishment and operation of industrial parks (2002), law on public procurement (2002), local taxes (2002), law on public–private partnership (2002). The main features of the national FDI regime are the following:

Admission and establishment: Foreign investors may invest without restrictions, in any field in

accordance with the law. The term of "direct investment" is defined as: participation in setting up or expansion of any legal type of company; purchase of shares or social parts in a company, except for portfolio investments; setting up or expanding in Romania of a branch of a foreign company. Direct investment may be made through contribution in kind - fixed or current assets, tangible or intangible; financial contribution in hard currency or in local one; participation in the increase of a company's assets, through any legal financing way. As of 2001, new direct investments exceeding US$1 million, capable of contributing to the development and modernization of the economic infrastructure, determining a positive spin-off effect in economy and creating new jobs may be carried on in all economic sectors with the exception of financial, banking, insurance and re-insurance sectors as well as the sectors regulated by special laws, provided that they are in compliance with the following conditions: do not infringe environment protection regulations; do not effect the interests of security and national defence of Romania and do not affect the public order, health or morality. Foreign investment may be undertaken individually as sole proprietorship or through incorporation of new commercial companies with partial or total ownership, subsidiaries or branches, or in partnership with existing legal entities; participating in the increase of the registered capital of an existing company or the acquisition of shares, bonds, or other securities of such companies. Business may be organized in one of the following forms a) partnership, whose obligations are guaranteed by the capital and by the unlimited and joint liability of the partners; b) limited partnership, whose obligations are guaranteed by the capital and joint liability of the general partners; the limited partners are liable only up to the value of their interest; c) limited partnership by shares, whose capital is divided by shares, and whose obligations are guaranteed by the capital and by the unlimited and joint liability of the general partners; the limited partners are liable only for the payment of their shares; d) joint-stock company, whose obligations are guaranteed by the capital; the shareholders are liable only for the payment of their shares and e) limited liability company, whose registered obligations are guaranteed by the registered assets; the shareholders are liable only for the payment of their contributions. Registration and approval are required for the establishment of a business enterprise and starting any business activity.

Operational Conditions: There are no performance requirements imposed as a condition for

establishing, maintaining or expanding an investment. However, certain benefits are subject to

performance or existence of certain conditions. Ownership and control: There is no limit on foreign participation in commercial entities. They

are allowed to participate in the management and administration and dispose of their investment. After the registration as legal Romanian person, a foreign company may acquire land for their business purposes. According to the Romanian legislation in force, the foreign legal or natural persons may not own land, but they may concession it for a period of 49 years.

Foreign exchange controls: All funds related to foreign investment including profits, proceeds

from the sale of shares, bonds, or other securities, debt service, capital gains, returns on intellectual property or imported inputs as well as from winding-up an investment may be converted or transferred with out restrictions, after payment of due legal rates and taxes.

Incentives: Investors (both foreign and domestic) are offered various kinds of incentives.

According to the profit tax law No.414 of 2002 and the VAT law No.345 of 2002, "direct investments with significant impact on economy" made in accordance with Law No. 332 of 2001 may benefit from certain incentives. "Direct investments with significant impact on economy" refers to investments with a value in excess of 1 million US dollars in equivalent, made in the forms and means provided by this law and which will contribute to the development and modernization of the Romanian economic infrastructure as well as determine a positive spin-off effect in economy and create new jobs. According to the profit tax law (law No.414), investors may apply for exception from the payment of customs duties on technological tools, installations, equipment, measuring and control devices, automation equipment and software products bought from abroad, produced 1 year at most prior to their bringing to Romania and never being utilized, necessary for achieving the investment. According to the VAT law (No.345), investors may benefit from delay in the payment of value added tax. New investment may benefit of a deduction of 20 per cent of their value. (valid until 31 December 2004). Fiscal loss may be carried forward during the following 5 years from the taxable profit.

Besides the rights and guarantees provided by the legislation in force for the direct investments,

one could find a quite wide range of incentives and incentives granted by different general laws or by laws referring to specific domains e.g. the law on SMEs; the use of accelerated depreciation, according to the specific legislation in force, for machines, installations, equipment and know-how providing that the enterprises do not register losses.

According to Law No. 490 of 2002 on industrial parks, companies setting up and administrating

an industrial park are granted incentives, including delay in payment of the value added tax until the start-up of the industrial park for the materials and equipment used for investments in the utilities system and park’s connection to main lines or existing utilities networks or their providers until setting into function of the industrial park; exemption from payment of taxes for modifying the destination or taking out from agricultural use of the land for the industrial park area; deduction of 20 per cent of the value of the new investments made in the industrial park in constructions for transporting and distributing electric and thermal power, natural gas and water; and carrying forward the fiscal loss from the taxable profit, during the following 5 years.

According to Government Ordinance No. 14 of 2002, scientific and technological parks receive

incentives in the form of tax reduction granted by the local authorities for the fixed assets and land given to the park for its use, as well as other incentives which may be granted according to the law, by the public local authorities for their establishment and operation; are granted by the central and local public administration, private companies and foreign financial assistance, donations, concessions and structural funds for development programs for infrastructure, investment and equipment.

Companies operating in the scientific and technological parks benefit from favourable location

conditions and infrastructure and communication use, by payment on installment basis, ensured or facilitated by the administrator for a determined functioning period; tariff reduction or free of charge

services offered by the administrator. According to the new profit tax law (No. 414 of 2002), (effective as of 1 July 2002), profits tax is

chargeable at a flat rate of 25 per cent on the accounting profit as prescribed by legislation, adjusted for certain items by tax legislation. The profits tax to be paid by companies, which earn any of their revenues from bars, night bars and casinos, may not be less than 5 per cent from the incomes obtained from such activities. Profits earned from export of self-manufactured goods and services are taxed at a reduced rate of 6 per cent, if the export proceeds are cashed in hard currency in a Romanian bank account. The reduced profits tax rate applicable for exports is adjusted to 12.5 per cent as of 1 January 2003 and to 25 per cent from 1 January 2004.

Taxpayers performing activities in free trade zones on a license basis are liable to pay a 5 per cent

profits tax rate for the taxable profit related to incomes derived from such activities. The reduced profits tax rate are effective up to 31 December 2004. However, such taxpayers who, until 1 July 2002, made investments of a minimum amount of US$1,000,000 in the respective zone in depreciable tangible assets used in the processing industry, continue to benefit of the profits tax exemption until 30 June 2007. This tax exemption no longer applies if the shareholding structure of the taxpayer changes. In case of listed companies, such change means the situation when, during one calendar year, more than 25% of the shareholding structure changes.

VAT is generally applied to transactions with goods and services, which are divided into supplies

within the VAT scope and supplies outside the VAT scope. The current VAT standard rate is 19 per cent. Source: based on information received from the Government of Romania, the Romanian Agency

for Foreign Investments; Ministry of Public Finance, Ministry for European Integration, Ministry of Foreign Affaires; Ernst & Young.

2. International Framework

a. Multilateral and regional instruments Romania is a party to the following multilateral and regional instruments: Paris Convention

for the Protection of Industrial Property of 20 March 1883, as amended and revised; the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958; the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 18 March 1965, signed on 24 Mars 1975, effective 1 June 1991; the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, adopted on 16 November 1977; the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, adopted on 5 December 1980 by the General Assembly of the United Nations (resolution 35/63); the Convention Establishing the Multilateral Investment Guarantee Agency of 11 October 1985, signed on 30 September 1996; the Declaration on International Investment and Multilateral Enterprises, adopted by the Council of the Organisation for Economic Cooperation and Development on 21 June 1976, the Declaration and the Guidelines for Multinational Enterprises attached to the Declaration were revised on several occasions (1979, 1984, 1991 and 2000); the Agreement on Trade-Related Aspects of Intellectual Property Rights, signed on 15 April 1994; in force on 1 January 1995; the General Agreement on Trade in Services, signed on 15 April 1994; in force on 1 January 1995(including the Fourth Protocol to the General Agreement on Trade in Services of 15 February 1997 and the Fifth Protocol to the General Agreement on Trade in Services of 12 December 1997 and the Energy Charter Treaty of 17 December 1994, effective since 16 April 1998.

b. Bilateral treaties

1. Bilateral investment treaties for the protection and promotion of investments: Sudan 1978, Gabon 1979, Cameroon 1980, Senegal 1980, Sri Lanka 1981, Malaysia 1982, Bangladesh 1987, Tunisia 1987,

Mauritania 1988, Ghana 1989, Italy 1990, Korea, Republic of 1990, Uruguay 1990, Cyprus 1991, Israel 1991, Kuwait 1991, Norway 1991, Turkey 1991, Finland 1992, Jordan 1992, Republic of Moldova 1992, United States 1992, Argentina 1993, Australia 1993, Czech Republic 1993, Hungary 1993, Portugal 1993, Russian Federation 1993, Switzerland 1993, Thailand 1993, United Arab Emirates 1993, Algeria 1994, Armenia 1994, Bulgaria 1994, China 1994, Croatia 1994, Denmark 1994, Egypt 1994, Lebanon 1994 Lithuania 1994, Morocco 1994, Netherlands 1994, Paraguay 1994, Peru 1994, Philippines 1994, Poland 1994, Slovakia 1994, Turkmenistan 1994, Viet Nam 1994, Albania 1995, Belarus 1995, Bolivia 1995, Chile 1995, France 1995, Mongolia 1995, Pakistan 1995, Spain 1995, Tunisia 1995, Ukraine 1995, United Kingdom 1995, Serbia and Montenegro 1995, Austria 1996, Canada 1996, Cuba 1996, Ecuador 1996, Germany 1996, Kazakhstan 1996 Malaysia 1996, Qatar 1996, Slovenia 1996, Belgium / Luxembourg 1996, Uzbekistan 1996, Georgia 1997, Greece 1997, India 1997, Indonesia 1997, Israel 1998, Democratic People's Republic of Korea 1998, Yemen 1999, The former Yugoslav Republic of Macedonia 2000, Mauritius 2000, Bosnia and Herzegovina 2001, Latvia 2001, Sweden 2002 and Azerbaijan 2002.

2. Bilateral treaties for the avoidance of double taxation: with Germany 1973, United States 1973, France 1974, United Kingdom 1975, Austria 1976, Belgium 1999, Denmark 1976, Japan 1976, Sweden 1976, Finland 2000, Italy 1977, Canada 1978, Pakistan 2001, Egypt 1979, Netherlands 1999, Spain 1979, Norway 1980, Cyprus 1981, Morocco 1981, Malaysia 1982, Jordan 1983, Sri Lanka 1984, Turkey1986, Bangladesh 1987, India 1987, Tunisia 1987, China 1991, Greece 1991, Ecuador 1992, Kuwait 1992, Nigeria 1992, Syria 1992, Czech Republic 1993, Hungary 1993, Luxembourg 1993, South Africa 1993, Switzerland 1993, Zambia 1993, Albania 1994, Algeria 1994, Poland 1994, Slovakia 1994, Malta 1995 Armenia 1996, Uzbekistan 1996, Serbia and Montenegro 1996, Belarus 1997, Georgia 1997, Turkey 1997, Israel 1999, Bulgaria 1996, Russia 1996, Moldova 1997, Lebanon 1998, Philippines 1998, Indonesia 2001, Ireland 2001, Israel 1999, Portugal 2000, Kazakhstan 2001, Namibia 2001, Syria 1992, Thailand 1998, Ukraine 1998, Vietnam 1997, Australia 2002 and Mexico 2002.

D. Sources of information

1. Official ____

Ministry of Development and Prognosis Ministry of Finance Ministry of Foreign Affairs National Agency for Regional Development National Bank of Romania State Ownership Fund

2. Secondary ______________________________ 1. Birsan, M. and G.J. Petrakis, “Foreign direct investment in a transition economy – Romania” (Cluj-Napoca,

Babes-Bolyai University, 1999) (http://www.iaes.org/conferences/past/vienna_47/prelim_program/o50-1/birsan.html).

2. Buch, C., R. Heinrich and D. Piazolo, “Southern enlargement of the European Union and capital-account

liberalization”, Institut fur Weltwirtschaft an der Universitat Kiel, Germany, Kiel Working Paper No. 871, July 1998, pp. 1-62.

3. Central and Eastern Europe Business Information Center, “Country commercial guide 2000: Romania”

(CEEBIC, Washington D.C., 2000) (http://www.mac.doc/eebic/countryr/romania/ccg2000/F7.htm). 4. Euromoney, “Eastern Europe: reshaping the future”, Euromoney, No. 348, April 1998, pp. 51-130. 5. The Europa World Yearbook 2000, “Romania”, Vol. II, 41 edition (London, Europa Publications Ltd., 2000),

pp. 3024-3048. 6. Henriot, Alain, “Economic interpenetration between the European Union and the Central and East European

countries”, Russian & East European Finance and Trade, Armonk, Vol. 34, January 1998, pp. 5-31. 7. Holland, D. and N. Pain, “The diffusion of innovations in Central and Eastern Europe: a study of the

determinants and impact of foreign direct investment”, National Institute of Economic and Social Research, United Kingdom, Discussion paper (New Series) No. 137, June 1998, pp. 1-48.

8. Marinov, Marin, “Foreign investor strategy development in the Central and Eastern European context”,

International Business Review, New York, Vol. 41, January 1999, pp. 107-130. 9. National Institute of Statistics and Economic Studies, “Romania: Your investment partner”, 2000/2001 edition

(http://www.aneir-cpce.ro/). 10. OECD and the UK Foreign and Commonwealth Office, “Stability Pact – Country fact sheets”, Paris, July

2000. 11. ___________________________________________, “Stability Pact – The investment compact for South East

Europe”, Paris, May 2001. 12. Pye, Robert, “Foreign direct investment in Central Europe: experiences of major Western investors”, European

Management Journal, London, Vol. 16, August 1998, pp. 378-389. 13. Tradeport, “Romania: Investment climate statement”, U.S. Department of Commerce – National Trade Data

Bank, 3 September 1999 (http://www.tradeport.org/ts/countries/romania/climate.html).