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Corruption

For almost three decades, the politicians governing Romania have stolen as much as possible - often with the help of a network including representatives and successors of the former communist party and the former dictator [Nicolae] Ceausescu's secret service Securitate. These politicians have undermined justice and the meaning of the state of law, governing with the aim of hiding their own corruption.

Liviu Dragnea, considered Romania's most influential politician, was sentenced to 3 1/2 years in prison on 21 June 2018 over a fake jobs scandal. Romania's top court found Dragnea, who led the ruling left-wing Social Democratic Party (PSD), guilty of keeping two women on the payroll of a child protection state agency, although they both worked for the PSD. Analysts said the court's decision was likely to weaken his ability to influence national politics along with Prime Minister Viorica Dancila's government. But the court allowed Dragnea to wait for his appeal before jailing him.

This wasn't the first time Dragnea had been convicted. He had been unable to serve as prime minister over a vote-rigging conviction, in which he received a two-year suspended sentence.

Freedom from corruption lags behind other countries in the region, and Romania's judiciary remains vulnerable to corruption and inefficiency. In Transparency International's Corruption Perception Index, Romania lost ground in 2008-2009 after steady improvement leading up to EU accession in 2007.

Romania's fight against high and medium-level corruption has become increasingly credible, with significant numbers of prosecutions and convictions of corrupt public officials in recent years. Its prosecutorial efforts have becomes a model in Southeastern Europe. Romania was ranked 58th of 175 countries in Transparency International's 2015 Corruption Perception Index, an eleven-spot leap from the previous year's rank (69), yet still among the lowest ranked EU member states, on par with Greece but ahead of Italy, Turkey, Bulgaria and other countries in its region. In addition, for the first time over the past few years the Transparency International index had Romania rising in the ranking.

The European Commission's (EC) 2015 Report on Progress under the Cooperation and Verification Mechanism (CVM) in Romania noted the role of the key institutions of the magistracy - the High Court of Cassation, the Public Ministry and the National Anti-Corruption Directorate, the National Integrity Agency and the Superior Council of the Magistracy - in building up the credibility and professionalism of the judicial system through establishing a track record. The report recommended transparent and merit-based selection procedures as a way to provide robust leadership, avoid political interference in senior appointments and support judicial independence. The report also noted that Romania needs to do more to combat low level corruption, especially in the health and education sectors.

Cumbersome and non-transparent bureaucratic procedures are a major problem in Romania. Foreign investors point to the excessive time it takes to secure necessary zoning permits, environmental approvals, property titles, licenses, and utility hook-ups. Romania enacted a "Silent Approval" Law in 2003 to reduce bureaucratic delays, but it has yet to be universally enforced or recognized. Furthermore, regulations change frequently, often without advance notice, and may be vaguely worded and poorly explained. These changes, which can significantly add to the costs of doing business, can complicate investors' business plans.

Romanian law requires consultations with the private sector and a 30-day comment period on legislation affecting the business environment (the "Sunshine Law"). However, not all ministries adhere consistently to this requirement. Even when they do observe the comment period, in many cases public input does not appear to be considered seriously or incorporated into the final legislation.

Despite some improvements, corruption remains a serious problem. Romania and Bulgaria shared the lowest ranking among EU member states in Transparency International's (TI) 2009 Corruption Perception Index. TI's 2007 report on judicial corruption pointed to poor judicial decision making and weak ethical values. International organizations such as TI and local non-governmental "watchdog" organizations operate in Romania.

U.S. investors have complained of government and business corruption in Romania, with the customs service, municipal zoning offices and local financial authorities most frequently named. In some cases, demands for payoffs by low- to mid-level officials reach the point of harassment.

Romanian law and regulations contain provisions intended to prevent corruption, but enforcement is generally weak. Corruption is currently punishable under a variety of statutes in the penal code. Prison sentences are sometimes imposed, but powerful and influential individuals have often evaded prosecution or conviction. Under pressure from the EU, the GOR is attempting to prosecute several high-level political officials from previous governments, including a former Prime Minister.

The Government announced a National Anti-Corruption Plan and passed an anti-corruption law in April 2003. The plan contains an impressive list of measures and benchmarks for judging the Government's commitment to combating corruption. A national strategy to combat corruption in local public administration was adopted in June 2008. However, the implementation of these measures and commitments has lagged.

In December 2002, Romania passed an anti-money laundering and terrorism financing law, which was amended in April 2008. With U.S. help, the Romanian Government established a new institution in September 2002--the National Anti-Corruption Prosecutors' Office (DNA)--staffed by prosecutors and police. A new criminal code came into effect in 2003. In the first half of 2008, Romania also established the National Integrity Agency, which is designed to monitor financial asset flows, limit conflicts of interest, and sanction unjustified increases in the personal assets of politicians and public sector employees.

Bucharest hosts the Southeast European Law Enforcement Center (SELEC), previously known as the Southeast European Cooperation Initiative (SECI) Regional Center for Combating Corruption and Organized Crime. Romania is one of the three members of the SELEC Joint Cooperation Committee. Romania has signed and ratified the Agreement on Cooperation to Prevent and Combat Trans-border Crime of May 1999.

In March 2002, to reduce corrupt practices in public procurement, the GOR inaugurated a web-based e-procurement system (http://www.e-licitatie.ro/). Initiated with seed money from USAID, the system is a transparent listing of both ongoing and closed solicitations, with the names of the winners and the closing prices made available to the public. The use of "e-licitatie" has increased government efficiency, reduced vulnerability to corruption, and improved fiscal responsibility in government procurement. E-procurement has increased from 159 government clients and 600 suppliers in its initial months to 11,535 state entities and 21,563 suppliers currently listed. Initially used solely for basic, standard procurements, the program is also now applied to more complex projects.

Romania's public procurement law, passed in 2006 and repeatedly amended since, establishes ex-ante controls on public procurement processes, stricter rules on eligible participants, and an appeals mechanism for complaints against the process. The National Agency for Public Procurement has general oversight over procurements and can draft legislation, but procurement decisions remain with the procuring entities. Notably, procurements of goods and services for projects that receive EU funding have to comply with the public procurement law.

The Romanian judicial system suffers from corruption, inefficiency, lack of expertise, and excessive workloads. Divergent and often contradictory rulings are not uncommon, complicating normal commercial activities. Companies routinely complain that commercial disputes take too long to resolve through the court system and, once a verdict is reached, court orders may not be enforced. Errors in court procedures, whether peripheral to the outcome or not, may result in complete retrials, further delaying verdicts. Courts are overburdened and the number of magistrates and judges is too small. Litigants in virtually all cases have a right to two appeals, contributing to clogs in court dockets throughout the system and lengthy delays. Final judgments are not binding until all appeals are exhausted. Clerks, attorneys and judges reportedly remain susceptible to bribes or other "extra-judicial" payments, most commonly to "speed up" litigation, to assure a particular judge is assigned to a case, or to create intentional procedural errors leading to retrial. Magistrates across Romania went on strike for several weeks in fall 2009 to protest proposed changes to their wages and bonus payments, paralyzing the court system and adding to already lengthy case backlogs.

Romania has one of the world's highest occurrences of Internet fraud. The problem is illustrated by a growing stream of complaints, some of which involve U.S. companies and their customers being defrauded of millions of dollars. The most common problems result from the use of stolen credit card numbers for the purchase of goods on-line, fraudulent use of on-line auction platforms, and sophisticated phishing schemes to defraud customers of legitimate e-commerce companies.

Romanian hackers also have gained notoriety for hacking into U.S. companies' servers and stealing proprietary information, including customer credit card data. There have been cases where Romanian hackers have offered to sell the means by which they hacked the company's server back to the victimized U.S. company. On other occasions, hackers have attempted blackmail by threatening to release sensitive data or the means to hack the system unless a specific amount of money is paid.

The National Anti-Corruption Directorate (DNA) continued to investigate and prosecute corruption cases involving medium- and high-level political, judicial, and administrative officials throughout 2015, with nearly 1000 indictments. Conflicts of interest, respect for standards of ethical conduct, and integrity in public office in general remained a concern for all three branches of government. Individual executive agencies were slow in enforcing sanctions, and agencies' own inspection bodies were generally inactive. The national fiscal authority (ANAF), however, increased financial audits through its fraud division of private companies.

The Ministry of Justice published in 2012 a national anti-corruption strategy for 2012-2015, focusing on strengthening administrative review and transparency within public agencies, preventing corruption, and implementing anti-corruption legislation. The objectives include increased and improved financial disclosure, conflict-of-interest oversight, more aggressive investigation of money laundering cases, and passage of legislation to allow for more effective asset recovery. With the Ministry of Justice in the lead, Romania is in the process of drafting a new national anticorruption strategy 2016-2020. As of March 2016, consultations with stakeholders were ongoing, with plans to publish the new strategy in summer 2016. The new strategy will include an increased focus on corruption prevention, including education in civics and ethics for civil servants, and a requirement for peer reviews of state institutions.

Romania was implementing revised Public Procurement Directives and projects passage in spring 2016 of several new laws to improve and make more transparent the public procurement process. The National Agency for Public Procurement has general oversight over procurements and can draft legislation, but procurement decisions remain with the procuring entities. The CVM report points to low acceptance and even resistance to integrity rules within a substantial number of local authorities, with implications for public procurement. The National Integrity Agency plans to implement in 2016 the "Prevent" IT system for ex-ante check of conflicts of interests in public procurement to avoid conflicts of interest by automatically detecting conflict of interests in public procurement before the selection and contract award procedure.

A party dominated by corruption suspects - afraid of losing their illegally attained wealth - or even politicians who were declared guilty of corruption won the parliamentary elections at the end of 2016. The Social Democratic Party and their smaller coalition partner, the liberal party ALDE, have a majority that permitted them to modify the existing legislation. This majority prepared an amnesty law that would wash away the sins of corrupt politicians and let them keep the money and possessions obtained illegally. The fear of being forced to pay for their deeds is so great that they are willing to risk not only the fate of their party - but also that of the country.

Romania's leftist government adopted an emergency law to decriminalize abuse of power crimes and corruption offences. Protests erupted 02 January 2017 in cities across the country after the government's announcement. The new measures, which took effect immediately, include pardons for convicts sentenced to less than five years and reduced sentences for prisoners over 60. They were likely to result in the release of at least 2,500 convicts, ostensibly to ease prison overcrowding. Protesters took to the streets across the country soon after the government announced its new measures late Tuesday. Tens of thousands of people protested against the proposed ordinance in the past few weeks, saying it would be a blow to a years-long anti-graft drive in Romania.

Romania's lower house of parliament overwhelmingly approved a government order to withdraw a bill which decriminalizes several corruption offenses. On 21 February 2017, the lower house endorsed the order with no votes against it and three abstentions. The upper house of parliament, the senate, approved the withdrawal of the decree last week after it triggered international condemnation and mass protests unprecedented since the fall of communism in 1989. The decree was repealed following mass demonstrations and the resignation of the main architect of the bill, Justice Minister Florin Iordache.



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