CMP assisted a Romanian subsidiary of Raiffeisen Leasing GmbH during the sale process of a large buildable plot of land in Aleea Viilor, Timișoara. The land was sold to a local investor and is planned for a landmark project comprising 12-story buildings.

Our lawyers assisted the client with both legal and tax support, such as structuring the transaction, drafting the preliminary documents and assisting with the negotiation, supervising the elaboration of the PUZ and drafting the final sale and purchase agreement.

On 29 July 2019, the Parliament passed a piece of legislation (Law no. 159/2019) which modified several articles of Law no. 350/2001 of territorial landscaping and urbanism.

A consistent part of the amendments brought by Law no. 159/2019 have no implication within the process of acquiring or developing real estate project. However, a single amendment of major importance was brought to Article 64 of Law no. 350/2001.

According to the amendment, all litigations concerning the issuance, revision, suspension or annulment of urbanism documentation are subject to a prescription term of 5 years from the approval date of such documentation.

In other words, if a term of 5 years lapses from the approval of an urbanistic documentation (PUG, PUZ and PUD), such documentation can no longer be challenged within a court of law. The aspect is of major importance and can constitute a mean of remedy when addressing due diligence findings.

Even if the law does not specify to which documentation it applies, a reasonable interpretation according to the legislative technique provisions is that it will only apply to documentations approved following its enactment (i.e. following 29 July 2019).

According to a press release the European Commission has prohibited the creation of a joint venture by Tata Steel and ThyssenKrupp under the EU Merger Regulation. The merger would have reduced competition and increased prices for different types of steel. The parties did not offer adequate remedies to address these concerns.

Taking into account that Tata Steel is the second producer of steel in EU, while ThyssenKrupp is ranked third, the Comission ruled that a future joint venture between the two would restrict competition on the laminated steel coated packaging market, as well as on the automotive hot dip galvanised steel market.

During its analysis, the Comission concluded that the clients of the above entities will not have real possibilities to buy the required materials from other suppliers, thus assessing that there will not be sufficient competition on the market, in case the joint venture is approved.

On 3 June 2019 the High Court of Cassation and Justice ruled with respect to a long controversy regarding the consequences of a building lacking a duly issued building permit.

In short, Romanian courts were interpreting in two different ways such consequences:

1. one interpretation stated that a court of law can recognize the ownership right of a person over a building, in spite of the lack of a validly issued building permit. Such interpretation was based on the provisions of the Civil Code regulating artificial accretion.
2. the other interpretation was that it is impossible for a court of law to recognize the ownership right of a person over a building in the lack of a validly issued building permit.

The High Court finally embraced the second opinion and ruled that the lack of the building permit is itself an obstacle to recognizing the ownership right of a person over a building. The interpretation of the High Court is mandatory starting at the publishing date (i.e. 3 June 2019).

The Constitutional Court unanimously decided that the regulation of the Fiscal Procedure Code which allowed the minutes prepared by ANAF during criminal investigations at the request of the prosecutor to be used as means of proof, is unconstitutional, including in relation to provisions of the ECHR.

In particular, Article 350 (2) and (3) of the Fiscal Procedure Code provided that:

“(2) In duly justified cases, after the initiation of the criminal prosecution, with the approval of the prosecutor, it may be requested that A.N.A.F. will perform tax audits according to established objectives.

(3) The result of the controls provided in paragraph (1) and (2) shall be recorded in the minutes, which shall constitute means of proof (evidence). Minutes shall not constitute a title to a tax claim for the purposes of this Code.”

The Court has established that proxies of the parties in the criminal proceedings (i.e. ANAF) cannot take over atributions of the prosecutor, due to the provisions of the fundamental law, especially to what concercns the capacity of the Public Ministry.

On 10 May 2019, the procedure regulation of the Competition Council was modified to the extent that all complaints sent by the Romanian Government to the Competition council will be resolved first and in a timely manner. The main procedures generated by the Government in front of the Competition Council include the state aid notifications and state aid information.