Bucharest, 10 October 2013
Last week, the EU Commission has officially requested Romania to align its rules on valuation and accounting of purchased debt claims with EU law. According to EU law, as a general rule, items shown in the annual accounts shall be valued using a method based on the principle of purchase price or production costs.
Under Romanian accounting legislation, the debts need to be recognised at nominal value. This incorrect provision of the Romanian law generated huge tax costs for the debt collection market in Romania.
Therefore the Commission requests Romania, in the form of a reasoned opinion, to take action to fully comply with EU rules. If the Romanian authorities do not notify measures taken to ensure compliance with EU rules within two months, the Commission may refer the matter to the EU Court of Justice. This means that the Romanian government should comply with the Commission's opinion and amend the accounting legislation within the two months term in order to avoid being penalised.
By means of position papers and discussions with the representatives of the Ministry of Finance, the Foreign Investors Council (FIC) together with other Associations in Romania such as Amcham and AMCC were raising this issue starting two years ago. We identified and therefore communicated to the Ministry of Finance representatives that the nonobservance of the EU Directives may represent an infringement that can be taken by the EU Commission against Romania regarding the incorrect accounting recognition of purchases of bad debts as per OMF 3055/2009. FIC will continue to be involved in the project until the local accounting legislation is amended.
The Foreign Investors Council (FIC) is an association of the leading investors in Romania. The FIC was established in 1997 when it officially began its activity with 25 companies as members.
Today, the FIC has 119 member companies whose cumulated investments in Romania exceed EUR 35 billion representing approximately two thirds of the total foreign direct investment made since 1990.
The FIC includes multinational companies providing the Romanian economy with a variety of goods and services and creating almost 200,000 direct and indirect jobs.
In Top 10 largest companies by turnover, 8 companies are FIC members, and 37 member companies are included in Top 100 - as per the report "Major Companies in Romania" published in 2012, by IBP.
Foreign Investors Council (FIC) - www.fic.ro