The Best of the Bureau/The_Best_of_the_Bureau_Bureau_Development_Inc._1992.iso/dp/0045/00453.txt

Text File | 1992-08-07 | 14KB | 305 lines

$Unique_ID{bob00453}
$Pretitle{}
$Title{Romania
Chapter 6B.   Trading with Romania}
$Subtitle{}
$Author{Donald E. deKieffer}
$Affiliation{Embassy of Romania, Washington DC}
$Subject{romania
foreign
romanian
trade
patent
trademarks
banks
export
financing
goods}
$Date{1990}
$Log{}
Title:       Romania
Book:        Doing Business with the New Romania
Author:      Donald E. deKieffer
Affiliation: Embassy of Romania, Washington DC
Date:        1990

Chapter 6B.   Trading with Romania

IMPORT AND EXPORT CONTROLS

     Romania has adopted the Harmonized System of tariff nomenclature, which
is the standard now used by every major trading country in the world. The
actual implementation of this system, however, will likely take several years.
In the meantime, exporters to Romania should check with the Romanian Ministry
of Trade and Tourism for advice concerning the prevailing duty rates on
products.

     All imports and exports to and from Romania are subject to licensing by
the Ministry of Trade and Tourism. It is the policy of the MFT, however, to
grant pro forma approval for all such applications. Foodstuffs and arms are
the
only items which will receive real scrutiny. Large imports for hard currency
may
also require approval from the Finance Ministry. Exporters to Romania should
be sure that their Romanian consignee makes appropriate inquiries at the time
the order is placed to determine whether such permission is required. In such
event, exporters should be sure to include this authorization as a condition
on any letter of credit.

     Romanian trade laws can be described as nascent at best. There are
currently no quotas or protective tariffs on any commodity. It is clear,
however, that the opportunity to impose such restrictions has not escaped the
attention of the new government, and foreign business executives should
inquire
about the existence of any quotas before signing long-term contracts. At a
minimum, provision should be made in any contract for delivery of products
over an extended period for the eventuality of higher tariffs or other
restrictive barriers.

Temporary Imports

     Temporary exports and imports, samples, personal-use objects of Romanian
and foreign travelers, and objects required by diplomatic and consular offices
and their members are exempt from customs duties.

     Should objects brought into or taken out of the country be of extremely
high value or exceed personal needs, however, they may be subject to duties.
The same applies for objects introduced into or leaving the country by parcel
post.

     Romania has recognized the advantage of foreign trade zones and has
established a free port at Sulina. Romanian laws with regard to this foreign
trade zone are essentially the same as those applying in the United States and
Western European countries. Storage, trans-shipment and even manufacturing can
be accomplished in the Sulina free port upon application.

     As noted previously, Romania's current policies regarding imports might
be described as "transitional." There are nominally few restrictions on what
may be imported or exported, and any individual or company is free to deal in
foreign trade. As a practical matter, however, most of the goods which can be
exported are still produced by the hold-over state-owned companies, and the
government controls most of the convertible currency which could be used to
purchase imported products. The lack of a sophisticated banking system also
limits the ability of independent companies to borrow the funds they need to
either import or export. It will likely be some time before the capital
resources of the country are sufficiently diffused to allow a truly "free"
international trade regime.

     In the interim, Western companies trading with Romania will mostly be
dealing with government-owned enterprises which have the cash (or products)
to engage in exporting or importing. Further complicating matters, the new
freedom of the producing entities to negotiate their own deals has put
individuals at the table who are inexperienced with international
transactions. Nevertheless, this system has sown the hardy seeds of
competition, and foreign traders are strongly advised to "shop around" before
signing any deals with Romanian entities.

     One of the most promising aspects of the New Romania is the willingness
of formerly state-controlled enterprises to provide imported consumer goods
to the local population. As noted before, although Romanian consumers do not
have the wherewithal to buy high-priced durable goods, there is a ready market
for lower-priced items such as footwear, clothing, electronics, etc.;
Comturist, now facing competition from the private sector, is scrambling to
build new outlets catering to the local population. They are willing to buy
products - for hard currency - that will get a fast turn-around. Ironically,
Romanians will buy almost anything made in the West, and Comturist is trying
to soak up the "excess" hard currency which is largely generated on the black
market.

Marking

     Like all countries, Romania has an extensive set of laws relating to
health, safety and marking requirements of imported consumer goods. In
general, Romanian labeling, safety and health requirements are similar to
those of the major Western European countries. These requirements vary,
however, depending upon the nature of the product involved; specific provision
should be made with regard to such matters in any contract negotiated with a
Romanian entity.

Boycotts

     For years, Romania maintained at least nominal boycotts against a variety
of countries such as South Korea, South Africa, Taiwan, etc.; these have been
abolished. Romania will now trade with anyone. Remember, however, that all
Romanian exports are subject to licensing. Licenses are now reviewed on the
basis of commercial and monetary considerations rather than political
"correctness."

Foreign Controls

     Export controls are imposed unilaterally on exports to Romania by the
United States, and multilaterally through COCOM, which includes Japan and the
15 NATO countries, excluding Iceland.

     These controls are designed to prevent the export of goods or technology
which could make a significant contribution to the military potential of any
nation when this would prove detrimental to the national security of COCOM
members. In addition to COCOM controls, the United States has a more
restrictive export regime under the provisions of the Export Administration
Act and other laws. These primarily apply to very high technology products.
Exporters to Romania of computers, telecommunications equipment and the
like should check with competent counsel in the United States before agreeing
to shipment of any of these goods.

     Recently, however, the restrictions under U.S. law have been liberalized,
and most products which are not of strategic or military importance can be
sold to Romania.

CONTRACTS AND DISPUTE SETTLEMENT

     Disputes arising from commercial contracts may be settled by arbitration
if the parties have so stipulated in their contract or if the parties agree to
resort to arbitration after the conclusion of the contract.

     The International Commercial Arbitration Commission (ICAC), an
independent body working within the organizational structure of the Chamber of
Commerce and Industry, is one entity which can resolve disputes arising from
foreign trade and economic, technical and scientific cooperation agreements
between Romanian and foreign entities or persons.

     The Arbitration Commission also adjudicates disputes arising from
contractual relationships between joint companies established in Romania. It
is governed by its own rules of organization and functions under the Civil Law
Code.

FINANCING TRADE

     In addition to Romania's ability to finance imports and exports, the
large commercial banks, located in the United States, Japan, and Europe, are
the most important institutions in financing trade with Romania.