RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/290
31 August 2001
(01-4192)
Council for Trade in Goods Original:  English
ROMANIA – REQUEST FOR EXTENSION OF THE TRANSITION
PERIOD UNDER THE AGREEMENT ON TRADE-RELATED
INVESTMENT MEASURES
The following communication, dated 28 August 2001, has been received from the Permanent
Mission of Romania.
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In accordance with the provisions of the WTO Decision of 31 July 2001 contained in
document G/L/465 of 7 August 2001, I have the honour to present you attached herewith the request
of Romania for an additional extension of the transition period under the Agreement on Trade-Related
Investment Measures.G/C/W/290
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The Government of Romania, pursuant to Article 5.3 of the Agreement on Trade-Related
Investment Measures (TRIMs Agreement) and to  the WTO Decision of 31 July 2001, contained in
document G/L/465 of 7 August 2001, requests an a dditional extension of the two-year transition
period for its measures notified under Article 5.1 of the TRIMs Agreement.
(i) Notified TRIMs
In its communication dated 31 March 1995 (d ocument G/TRIMS/N/1/ROM/1), addressed to
the Council for Trade in Goods, Romania notified measures applied by the Romanian Government
(GOR) according to Law 71/1994, falling under category 1(a) of the Illustrative List annexed to the
TRIMs Agreement.
The facilities provided under the above-mentioned Law are subject to an integration value
degree in Romania of a minimum 60% and an export  of a minimum 50% of the annual value of the
production, and were granted to the newly established companies in the industry, having foreign
capital participation, of which the foreign investors' share represents at least US$50 million.
(ii) Request for extension
One of the two companies benefiting from these facilities is Daewoo Mangalia Heavy
Industries S.A. (DMHI) in the field of the shipbuilding industry.
(iii) Period of extension requested
Up to 31 December 2003.
(iv) The basis of the request
Romania continues to encounter particular difficulties in phasing out the remaining TRIMs,
taking into account its development, financial and trade needs.
Within the context of still insufficient internal  sources of investment and  a relatively low rate
of foreign investment, it is important to the sh ipbuilding sector to maintain the activity of the
company created on the basis of Law 71/1994.
Romania is facing a period of major changes in the structure of its industry and the
above-mentioned investment, materialized in a modern industrial unit, DMHI, with performant
technologies, maintaining the 3,500 jobs which otherwise would have been eliminated.
The applied TRIMs did not affect the liberalizing process in Romania:  there are no import
restrictions and the only protection instrument is the customs tariff.
(v) The steps taken by Romania to date ai med at eliminating its remaining TRIMs
The applied TRIMs on 1 January 1995 were those contained in Law 71/1994, in force at that
time.  The subsequent changes initiated by the GOR starting with June 1997 were aimed at the
elimination of any future TRIMs.  The first step was made in June 1997, by issuing the Government
Emergency Ordinance No. 31/1997, amended by GEO No. 92 of December 1997 (approved by
Law 241 of 1998).
Furthermore, fully committed to the multilatera l rules, in May 1999, the GOR issued the GEO
No. 67 regarding measures for economic activity development, which grants a series of fiscal and
customs incentives to a certain category of new investments, namely the investments with majorG/C/W/290
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impacts on Romanian economic activity.  Under the current legislation the incentives granted to the
newly established investments are not anymore subject to local content or to compulsory export
requirements, not relying on TRIMs anymore.
Thus, the requested additional extension is ai med at preserving investors' advantages and
obligations.  The new legislation stipulates that the provisions of Law 71/ 1994 continue to apply to
investments made under that Law and for the time period foreseen therein.  Maintaining the regime
allowed represents, in fact, stability for the economic environment and observance of specific
obligations assumed through a privatization contract.
This extension would provide the shipbuilding industry the indispensable adjustment period
to institute progressive structural reforms and to enhance capability programmes in preparation foreven further trade regime liberalization.
The current legal framework concerning new investments is fully consistent with the TRIMs
Agreement.
Romania is committed to eliminate its remaining TRIMs no later than 31 December 2003.
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