Index of "1996 Country Commercial Guides"
Index of "Economic and Business Issues"
Electronic Research Collections Index
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U.S. Department of State 
Romania Country Commercial Guide 
Office of the Coordinator for Business Affairs 




                           F I S C A L  Y E A R  1 9 9 6


                 C O U N T R Y  C O M M E R C I A L  G U I D E 


                                      F O R


                                 R O M A N I A




TABLE OF CONTENTS

I.  Executive Summary

II.   Economic Trends and Outlook
    Major Trends and Outlook
    Principal Growth Sectors
    Government Role in the Economy
    Balance of Payments Situation
    
III.  Political Environment
    Nature of Political Relationship with the United States
    Major Political Issues Affecting Business Climate
    Synopsis of Political System

IV.   Marketing U.S. Products and Services
    Distribution and Sales Channels
    Use of Agents/Distributors; Finding a Partner
    Franchising
    Direct Marketing
    Joint Ventures/Licensing
    Steps to Establishing an Office
    Selling Factors/Techniques
    Advertising and Trade Promotion
    Pricing Product
    Sales Service/Customer Support
    Selling to the Government
    Protecting Your Product from IPR Infringement
    Need for a Local Attorney

V.    Leading Sectors for U.S. Exports and Investment
    Best Prospects for Non-Agricultural Goods and Services
    Best Prospects for Agricultural Products

VI.   Trade Regulations and Standards
    Trade Barriers (Tariffs and Import Taxes)
    Customs Valuation
    Import Licenses
    Export Controls
    Import/Export Documentation
    Temporary Entry
    Labeling, Marketing Requirements
    Prohibited Imports
    Standards
    Free Trade Zones/Warehouses
    Special Import Provisions
    Membership in Free Trade Arrangements

VII.  Investment Climate
    Openness to Foreign Investment
    Conversion and Transfer Policies
    Expropriation and Compensation
    Dispute Settlement
    Political Violence
    Performance Requirements/Incentives
    Right to Private Ownership and Establishment
    Protection of Property Rights
    Regulatory System: Laws and Procedures
    Bilateral Investment Agreements
    OPIC and Other Investment Insurance Programs
    Labor
    Foreighn Trade Zones/Free Ports
    Capital Outflow Policy
    Major Foreign Investors
  
VIII. Trade and Project Financing
    Description of Banking System
    Foreign Exchange Controls Affecting Trading
    General Financing Availability
    How to Finance Exports/Methods of Payment
    Project Financing and Insurance
    Banks with Correspondent U.S. Banking Arrangements

IX.   Business Travel
    Business Customs
    Travel Advisory and Visas
    Holidays
    Business Infrastructure

Appendices:

  A. Country Data
  B. Domestic Economy
  C. Trade
  D. Investment Statistics
  E. U.S. and Romanian Contacts
  F. Market Research
  G. Trade Event Schedule


I.   EXECUTIVE SUMMARY 

Since the revolution in 1989, Romania has made considerable progress 
towards the development of democratic institutions and a market economy.  
Romania's private sector is growing rapidly and has become the chief 
engine of economic growth.  Recently enacted economic reform legislation 
is helping to create a positive business and investment climate.

Romania started its transition to a market economy from a difficult 
position.  Unlike former communist countries such as Poland and Hungary, 
Romania had no transition of limited economic reform prior to 1989.  
Thus, the adjustment shock of the first transitional years caused a 
sharp contraction of GDP, with gross output falling by nearly a quarter 
through 1992.  However, the implementation of a strict macroeconomic 
stabilization program starting in 1992-1993 arrested this decline and 
brought about significant macroeconomic improvements.

Economic growth became positive in 1993 with GDP up 1.3 percent, 
followed by a rise of 3.5 percent in 1994.  In 1995 growth is expected 
by most observers to be a positive 4 percent.  On the inflation front, 
the tight monetary policy and fiscal austerity required by Romania's 
IMF-backed stabilization plan led to a decline in consumer price 
inflation from 292 percent in 1993 to 62 percent in 1994.  The target 
for 1995 is under 30 percent, and it looks like this will be achieved.

Another important factor in the improvement of the economy is the 
development of a vibrant private sector which now accounts for 35 
percent of gdp (compared to only 13 percent in 1989) and nearly half of 
employment.  Over 80 percent of romania's farmland is now in private 
hands and the private sector accounts for 70 percent of retail sales.  
Privatization lags in the industrial sector where 90 percent of output 
still originates in state-owned factories.

Romania's economy relies heavily on imports, especially for energy, raw 
materials, and capital equipment.  Total imports increased 8.8 percent 
in 1994 to reach US$7.1 billion.  Imports of food products and demand 
outstripped the ability of local producers to supply sufficient 
quantities of good quality consumer goods.  Romanian exports increased 
25 percent in 1994 to US$6.2 billion and are expected to exceed US$7.0 
billion in 1995.

Foreign investment in Romania since the revolution has been 
disappointing, totalling only US$1.40 billion as of mid-1995.  In 
contrast, over US$9 billion of foreign investment has flown into Hungary 
and US$4 billion into Poland during the same period.  After years of 
stagnation, inflows of foreign capital reached a record US$650 million 
in 1994.  However, it appears unlikely that this annual figure will be 
exceeded in 1995.  Korea is the largest investor in Romania (US$158 
million in investment), followed by the United States (US$132.4 
million), Germany (US$120.3 million) and Italy (US$118 million).  
American companies such as Coca Cola, Colgate-Palmolive, Philip Morris, 
McDonalds, M-I Drilling, Pepsi, and Reynolds Tobacco have invested in 
Romania, along with numerous other U.S. small and medium-sized 
companies.

Despite the existence of much of the essential legislation needed to 
operate a market economy, Romania remains a difficult business 
environment.  This is especially true for companies that have little 
experience in doing business in formerly-communist developing economies.  
However, experience has shown that problems can be overcome by 
persistent effort and a long-term commitment to the country.  Despite 
its difficulties, many U.S. firms have found Romania to be a market 
offering good returns due, in part, to the continuing absence of serious 
domestic competition in many areas.

One recommendation for any company planning to come to Romania is to 
send the best and the most competent representatives -- especially those 
that have experience in difficult operating environments.  Companies 
should be aware that shortcomings do exist, and can delay fully 
implementation of a company's investment program.  However, with 
tenacity and effort these problems can usually be overcome.

The following is a list of problems that have affected some foreign 
investors:

--  Absence of Transparency:  there is a lack of transparency in the 
manner in which deals and contracts are reached (especially those 
involving state-owned firms) and a perception that the Romanian legal 
system does not treat companies equally.

--  Government red tape and bureaucracy are extensive.

--  Land Ownership:  Romania's Constitution prohibits foreign persons 
(including foreign-owned companies) from owning land.  Some foreign 
companies have dealt with this restriction by entering into joint 
ventures with local partners or by leasing land directly from a Romanian 
owner.

--  Corruption is a major problem that can affect business operations.

--  Lack of developed capital markets:  commercial interest rates remain 
exceedingly high in Romania, and well-developed capital market does not 
yet exist.

--  Gaps in intellectual property protection:  Romania has no copyright 
law.

Despite the above mentioned shortcomings, Romania can offer companies 
excellent opportunities for both exports and investments.  Companies 
should consider this country of 22.7 million people, with its well-
trained labor force and central-european location offering access to the 
Former Soviet Union and the Middle East.


II.  ECONOMIC TRENDS AND OUTLOOK

Major Trends and Outlook

Since the revolution in 1989, Romania has made considerable progress 
towards the development of democratic institutions and a private sector 
environment conducive to boosting economic growth.

Romania started its transition to a market economy from an initially 
difficult condition.  The legacy of the communist regime, extreme 
centralization, a high degree of bureaucracy, and no experience of 
partial reforms such as those undertaken in other Central European 
economies during the 1980's, left Romania with one of the longest paths 
towards a market economy for which it was the least equipped 
sociologically and politically.

Today, much of the legislative framework and reform agenda for a market 
economy is in place, including the establishment of a two-tier system of 
banking, the introduction of a modern tax system, the freeing of most 
prices and elimination of most subsidies, and the adoption of a tariff-
based trade regime.  Agriculture has been largely privatized, and 
private enterprise is rapidly developing in trade and services.  The 
private sector has grown to account for 35 percent of GDP.  Currently it 
includes 80 percent of agricultural property (some five million new 
landowners, equal to nearly half the workforce), and accounts for 40 
percent of domestic trade, 30 percent of services, and 30 percent of 
foreign trade.  There are more than a half million private firms, most 
of them with less than ten employees, mainly in the services sector, and 
about 46,000 joint ventures with foreign capital.  In addition, sole 
proprietorships and family businesses number more than a quarter of a 
million.

In spite of evident successes, Romania has still a long way to go to 
achieve real economic reform.  Stiff opposition from conservatives has 
greatly slowed the implementation of market-economy legislation and, 
especially, progress in industry restructuring and privatization.  Five 
years after the end of communist rule, the state sector still accounts 
for 90 percent of industrial production.  Only about 1,000 of the 6,300 
state firms slated for privatization under the existing law have been 
comppleted, mainly through management-employee buyouts; and only about a 
dozen of these have been large enterprises employing over 2,000 workers.   

In May 1994, Romania's long-delayed stand-by agreement with the IMF was 
approved, opening the way for an inflow of USD 720 million to assist 
structural adjustment over 18-month period.  Now, a year later, 
dissatisfaction with the slow pace of restructuring and privatization 
has made the IMF delay the disbursal of a USD 265 million tranche from 
the special transfer facility, while the World Bank will not finalize 
negotiations on a USD 250 million loan.  Such pressures from 
multilateral creditors have prompted the Romanian government to take 
more concrete steps conducive to reform, specifically by issuing a law 
providing for the speeding up of the mass privatization (which entered 
into force June 19, 1995) and by adopting proposals for the 
restructuring of some 200 state-owned problem companies which account 
for the bulk of the economy's losses.

After several years of sharp decline, in 1993 Romania's economic 
performance started to improve.  In 1994, economy registered, for the 
second consecutive year, a positive growth, with GDP increasing by 3.4 
percent.  This growth was propelled by the best agricultural output in 
several years and by a slight increase in industrial production.  
Positive performance by the newly emerging private sector has been quite 
apparent.  Other achievements during 1994 include a steep reduction in 
the inflation rate, which was brought down from 300% to a little over 
60%, a significant narrowing of the current-account deficit from USD 1.2 
billion to USD 428 million, and a 24.7 percent increase in exports.

In April 1994, Romania's foreign exchange system was liberalized.  Since 
then, the rate of the depreciation of the national currency has slowed 
down, and the gap between the official and black market rates has all 
but vanished.  At least theoretically, there are now no limits for banks 
and companies when selling their lei for dollars at daily auctions.  
Investors, who had trouble getting dollars to pay for imports, are now 
able to better facilitate production runs and market development.  
Foreign investors, too, find it now easier to exchange and repatriate 
their profits.

Foreign investment in Romania during 1990-93 was quite low.  In 1994, 
however, foreign companies began to show more interest in the country.  
After small annual investments in the previous four years, the inflow of 
foreign capital in 1994 jumped to USD 650 million.  As of June 30, 1995, 
total foreign investment in Romania amounted to USD 1,373 million.
  
The functioning of Romania's economy relies heavily on imports, of which 
up to 80 percent are covered by raw materials (mainly oil and gas).  
Romania is also a net importer of minerals, machinery and electrical 
devices, plastics, and rubber.  Imports of food products and consumer 
goods were also quite large during 1990-94, when domestic production was 
unable to meet soaring demand in this area.  Romania's foreign trade 
registered dramatic disruptions after the 1989 revolution.  The decrease 
in the quality and quantity of domestic production, on the one hand, 
and, on the other, the dissolution of the Comecon market and the costs 
of observing U.N. sanctions against Iraq and Serbia (two of Romania's 
traditional trade partners) were the main factors causing a sharp 
decline in Romanian exports in 1990-92 and a significant increase in the 
country's balance of trade deficit.  As of 1993, exports began to 
revigorate, reaching USD 6.2 billion in 1994 (a 24.7% growth versus 
1993), while imports, which in 1994 stood at USD 7.1 billion, recorded a 
more modest growth (8.8% versus 1993).  Main Romanian exports in 1994 
were textiles, garments, leather goods, footwear (24.3%);  metallurgical 
products (17.6%); transportation equipment, machine-tools, bearings 
(15.1%); oil products (11.5%); and furniture (10.2%).  The balance of 
trade deficit in 1994 was  USD 957.7 million, 41.2% down from the 1993 
level.

To normalize the situation in a vital sector for the smooth running of 
the national economy, the GOR has redefined its foreign trade policy, 
putting at its center, as a prominent component, the country's 
integration into Western markets.  In agreement with this policy,  
Romania has sought association with the European Union (EU) and the 
European Free Trade Association (EFTA).  In 1994, about half of 
Romania's foreign trade was conducted with EU and EFTA member countries.

Romania has also made efforts to normalize its trade relations with the 
United States.  The provisions of the U.S.-Romanian trade agreement 
(ratified by Congress in November 1993), which restored MFN treatment to 
Romania, together with the provisions of the bilateral investment 
treaty, are now the underpinning for a stable bilateral economic and 
commercial relationship and for a stronger American presence in Romania 
in both trade and direct investment.  In 1994 the United States ranked 
fourth in Romanian imports (after Germany, Russia, and Italy) and ninth 
in Romanian exports (after Germany, Italy, France, China, Turkey, 
Holland, Russia, and the U.K.).

Membership in the EU and EFTA, together with greater access to the 
important U.S. market, promises to provide expanded opportunities for 
Romanian exports and supports growth in other areas of the economy as 
well.

Principal Growth Sectors

The following sectors have good prospects for growth over the next few 
years, especially due to the fact that they account for the highest rate 
of private ownership in Romania.

Agriculture:  With its 10 million hectares of arable land, mostly under 
wheat, corn, barley and industrial plants, with good fruit-tree growing 
and viticultural sectors, as well as with excellent conditions for 
animal husbandry, farming is a source of substantial potential national 
wealth for Romania.  It could easily not only meet domestic demand for 
food, but also generate surpluses for exports.  However, during 1990-92 
agriculture performed at very low levels.  Factors impeding growth in 
this branch included the inability of the nascent private sector to 
participate effectively in market development, a scarcity of credit and 
hard currency, and several years of drought.  Currently the situation is 
improving, as the government introduced policies to support farmers 
through low interest credits, tax relief, better access to farm inputs, 
and attractive producer prices.  This is expected to lead to marked 
increases in the production of all agricultural sectors. 

Food processing/Franchising:  Given the good potential of the Romanian 
agriculture, the food processing industry has very favorable conditions 
for development.  After 1990, the sector has been one of the first to be 
tapped into by foreign companies, which have formed a large number of 
joint ventures with local enterprises.  Such large U.S. companies as 
Coca-Cola, Pepsi Co., Kraft Jacobs Suchard, McDonald's, Pizza Hut are 
already present in the market.  Growth in this sector is expected to 
also encourage the rapid development of the food packaging industry, 
which currently is in dire need for modernization in Romania. 

Services:  The services sector in Romania is still far from meeting 
Western standards.  However, as compared with the situation existing 
before 1990, the progress achieved by the sector has been extraordinary.  
Having the best chances for a dynamic evolution, the sector is also a 
potential economic and social safety net, being capable of absorbing a 
substantial amount of the labor force currently unemployed (about 10 
percent) or which will be laid off as a result of industrial 
restructuring.

The greatest potential for development is offered by hotel and 
restaurant services, tourist services, and leisure activities.  Demand 
for these services has increased considerably since 1990 and can be 
safely expected to continue to grow.  Private initiative has produced 
some fine examples of progress in this area, but the general situation 
is far from satisfactory.  Especially in the tourist industry, 
facilities continue to be outmoded, and services are notably below 
Western standards.  Growth and modernization will depend on the Romanian 
government's willingness to encourage the restructuring and 
privatization of the sector, and on the sector's ability to attract 
foreign investors.

Other areas which offer ample room for Western-type upgrading are 
banking/insurance services, legal and financial advise, advertising and 
media development.  Some progress has already been made, with Western 
accountants, bookkeepers, lawyers, and consultants beginning to offer 
their services to the public.  

An area in need of great change is market research and advertising.  
Although independent companies have been established to offer services 
in this field, the scope of their activities is not comprehensive.  Many 
Romanian researchers are still prisoners of old-style methods of market 
research.  Several Western companies, however, have started to produce 
good research on specific topics.

Product positioning is in its infancy.  Romanian producers are awakening 
to the importance of brand identification, target marketing and 
effective mediums of advertising.  Although old-type managers may view 
the costs of repeat placements as a loss in the short term rather than 
as an investment for the future, younger managers realize the benefits 
of advertising. 

Consumer goods:  Accelerated growth rates are expected (partly as a 
result of export potentials opening because of restoration of MFN with 
the U.S.) in such traditional light industry subsectors as textiles, 
apparel, footwear, household appliances, glassware, and furniture.

Other sectors which may witness more substantial growth in the near 
future are those which currently get special attention from the Romanian 
government in the complex process of restructuring and modernization.  
The most important are the following:

Electrical Power:  In 1994, Romania produced 53.507 Gwh electricity and 
46.0 TCAL thermal power for district heating installations.  As a 
result, electricity imports were reduced by 38.7 percent reaching only 
1.1 TWH.  Power plants based on hydrocarbons provide 32 percent of 
electricity output, the share of coal-based thermal plants is 43 
percent, and hydropower plants cover 25 percent of output.  The 
upgrading of existing capacity and the start-up of the Cernavoda nuclear 
station in late 1995 will put Romania into a position to export 
electricity to its neighbors.

Oil and gas:  In 1995 Romania is expected to produce 6.7 million tons of 
crude and 19.2 billion cubic meters of natural gas.  To supplement 
domestic production, about 10 million tons of crude and 8 billion cubic 
meters of gas will be imported.  Growth in these sectors over the next 
years will be stimulated by EBRD/World Bank projects which aim at 
increasing oil and gas production via the introduction of new equipment 
and new production methods.  Such firms as Western Atlas and M.I. 
Drilling have already contributed importantly to an increase in oil 
production.  On the other hand, exploration activities and geological 
surveys currently conducted by foreign companies (including the U.S. 
company Amoco) are expected to lead to discoveries of new oil and 
natural gas reserves.

Oil Refining:  Romania's refining industry is by far the largest in 
Central and Eastern Europe.  In 1992, when its annual nominal crude 
distillation capacity amounted to 34 million tons, the industry launched 
a restructuring project under which excess capacity totaling 14 million 
tons was gradually closed down.  Trimming down of capacities was coupled 
with specialization, emphasis being put on products in demand, such as 
lubricants, bitumen, and fertilizers.  A feasibility study conducted in 
1994 by foreign experts put costs for the upgrading of refineries and 
for critical investments at some USD 230 million.  Under the scheme, 
Romania's five largest refineries, with a total capacity of 18 million 
tons a year, will operate as main cracking units.  The World Bank is 
expected to partially finance this project.

Shipbuilding:  The Romanian shipbuilding industry has eight shipyards of 
which six are situated on the Danube river and two on the Black sea 
Coast.  These yards have been producing a wide range of seagoing vessels 
( from 2,800 DWT cargo vessels to 165,000 DWT bulk-carriers adn 150,000 
DWT oil trankers), various rivergoing ships and boats as well as special 
structures such as offshore oil drilling platforms.  The shipyards 
located on the Danube have the capability of building ships up to 55,000 
DWT.  Bigger vessels are produced by the shipyards situated on the Black 
Sea coast (Constanta and Mangalia).  The ships built for the Romanian 
fleet have been equipped by with locally produced equipment.


Government Role in the Economy

The Romanian economy is still largely socialized.  The government owns 
virtually all industry and controls the state farms, which still account 
for about 10 percent of agricultural lands.  While it is true that the 
development of a private sector has started to modify the structure of 
the economy, it is obvious that basic industries have seen little 
change, expectations being that they will remain under state control for 
the foreseeable future.  Despite attempts since 1989 to grant more 
freedom of initiative to lower management levels, decision-making power 
still rests largely with controlling ministries.

At this critical time of transition, the government has an essential 
role to play in modifying its own function in the economy and in 
creating a more propitious framework for structural and systemic changes 
meant to encourage the progress of economic reform.  To monitor this 
complex process, the GOR has created a Council for Economic 
Coordination, Strategy and Reform, an Agency for Privatization, and an 
Agency for Industrial Restructuring.

By mid-1992, the essential elements of the legal framework for the 
privatization of state-owned enterprises and private sector development 
had been put in place.  About 6,300 state enterprises were converted 
into commercial companies (CCs), and by March 1993, certificates 
representing 30 percent of their shares (held on behalf of the 
population by five Private Ownership Funds) were distributed to every 
adult Romanian to be used for purchases of individual enterprises or in 
mutual funds to be formed by the Private Ownership Funds. The remaining 
70 percent of CC shares are currently held by a State Ownership Fund 
which is to divest itself of its holdings over several years by a 
variety of means depending on the size of enterprise.  

Some 900 public corporations were formed in sectors considered to be of 
special economic importance (energy, transportation, utilities, defense, 
etc.).  These corporations, whose social capital is entirely owned by 
the state, are, by law, entitled to budgetary subsidies.  Substantial 
efforts have been made to reduce their number since; they now number 
494, of which 79 of national importance and 415 of local interest.  
Ultimately, it is intended that only 44 public corporations of national 
importance will remain.

Currently, the most important challenges facing the government are the 
completion of privatization via the implementation of the mass-
privatization law (which will initially allow individual Romanians to 
buy shares in about 3,000 companies in the field of consumer goods, 
tourism, trade, light industry, food industry, and farm mechanization) 
and the restructuring of industry. 

The restructuring of key industries has been initiated by the profiling 
of large inefficient state-owned enterprises which are creating severe 
problems and economic blockage because of huge debts, idle capacities 
and underemployed work force.  The Council for Economic Strategy and 
Reform has been given the monumental task of drawing up plans for the 
restructuring of about 200 of these firms which account for at least 30 
percent of all losses.  Restructuring is partly associated with the 
privatization effort in that funds gained by the sale of some state-
owned assets will be re-channeled into revamping and modernizing 
strategic industries.  The Council will prioritize activities and 
program revitalization plans on an individual enterprise basis.  The 
first 30 problem enterprises -- operating in such energy-intensive 
sectors as the chemical, petrochemical, machine-building and 
metalworking industries -- have been put under economic and financial 
surveillance.  If incapable of recovery, they will be either shut down 
or split and privatized by the selling of shares.

Romanian national assets in industry are, in many sectors, antiquated 
and both energy intensive and inefficient.  Likewise, much of the 
nation's infrastructure shows signs of prolonged neglect.  Because of 
this situation, the success of industrial restructuring will depend, to 
a large extent, on the availability of investment funds.  Despite the 
fact that private sector activity in trade, services, construction and 
self-sufficient agribusiness has grown rapidly, private investment 
capital has been small.  The state remains the predominant owner of 
productive resources and provides nearly a fourth of national 
investment.  State-owned commercial enterprises provide another 48 
percent from their own sources.  Of considerable importance, in this 
context, will be the response of foreign capital, which currently is 
still growing in modest levels.

Investment funds needed for industrial restructuring vary from sector to 
sector.  An estimate of allocations for the next three years prepared by 
the Ministry of Industries shows that about 70 percent of available 
funds will go to energy and energy-related sectors (mining, oil, gas, 
chemical/petrochemical), which will be developed to facilitate recovery 
and development of the other sectors.  Restructuring of industry will 
rely in many cases on the ability of companies to generate needed 
financial support.  The main sources will be companies' own revenues (36 
percent), domestic (12 percent) and foreign (15 percent) loans, domestic 
(6 percent) and foreign (8 percent) private capital investment, state 
restructuring funds (16 percent) and budgetary allocations (7 percent).  
Budgetary allocations will be restricted to very few basic industrial 
projects in energy, mining and geology, and environment protection.


Balance of Payments Situation

Romania's national budget for 1995 totals about USD 8 billion.  Major 
revenue sources are a salary tax (26 percent), profit taxes (21 percent) 
and a Value Added Tax (18 percent).  The approved deficit for 1995 has 
been set at USD 1.06 billion.

As everywhere else in the region, the transition to a market economy has 
brought about fiscal tension.  Recession has eroded the income base, and 
the enterprises' lack of liquidity has led to bigger tax arrears.  Tax 
dodging has deepened and it has become difficult to control expenses at 
a time of growing unemployment.  In spite of this, imbalances in 
Romania's official budgets have been relatively reduced.  According to 
Romanian sources, the country ended 1994 with a budgetary deficit close 
to the 3.5 percent of GDP approved by the IMF.

Since 1990, Romania has run current account and trade deficits every 
year.  The 1994 balance of payments -- both on the credit and on the 
debt side -- stood at USD 11,353 million, versus USD 8,765 million in 
1993.  The 1994 current account deficit amounted to USD 428 million (of 
which USD 411 million represented FOB/FOB merchandise trade deficit), 
versus USD 1,170 million (of which USD 1,128 FOB/FOB merchandise trade 
deficit) in 1993.  The 1994 capital and financial account recorded a USD 
263 million surplus, thus raising the net credit of the 1994 balance of 
payments to USD 165 million, versus USD 155 million in 1993.

Current account deficits are financed largely via loans and grants from 
international financial institutions and bilateral donors.  Following 
the approval by IMF, in May 1994,  of a USD 700 million standby/special 
transfer facility package for Romania, G-24 also approved a Romanian 
request for USD 275 million in BOP assistance.  The EU, which 
traditionally has covered half of the BOP gap, is also granting support.



III.  POLITICAL ENVIRONMENT

Nature of Political Relationship with the United States

U.S.-Romanian bilateral relations began to improve following the 
overthrow of the communist Ceausescu dictatorship in December, 1989.  
However, the U.S. was dissatisfied with the imperfect March, 1990, 
national elections and the lack of movement toward substantial economic 
reform.  The U.S. also took a dim view of the June, 1990, coal miners' 
actions against anti-government demonstrators in Bucharest, and their 
intervention of September, 1991, which brought down the government of 
then Prime Minister Petre Roman.  Following these events, however, the 
government of Prime Minister Teodor Stolojan began to address more 
effectively Western concerns regarding democratic pluralism and a market 
economy.  Foreign observers considered the local elections of February, 
1992, and the national elections of September, 1992, to be free and 
fair.  The private sector has grown to account for about 35 percent of 
the GDP.  In May 1995, parliament enacted a program which will result in 
the privatization of 2,500 to 3,000 state-owned enterprises.  Both the 
current government of Prime Minister Nicolae Vacaroiu and the opposition 
parties advocate a foreign policy based on Romania's integration into 
the West, and Romania was the first country in the region to sign NATO's 
Partnership for Peace.  Despite the considerable costs resulting for 
Romania's economy, the Romanian Government has diligently enforced the 
UN sanctions against Serbia-Montenegro.  As Romania's policies have 
evolved, the U.S. has also moved to improve and strengthen bilateral 
relations.  The U.S. established an AID mission and provides assistance, 
including a growing Peace Corps contingent, to help Romania build 
democracy and restructure its economy.  A Military-to-Military program 
has enhanced defense cooperation, and Congressional restoration of 
Romania's MFN status in October, 1993, has given impetus to trade and 
commercial relations.


Major Political Issues Affecting Business Climate

In the past and, to a considerably lesser extent, at present, the 
business climate has been affected by a perception of Romania as a 
country where former communists are to be found at various levels of 
political and economic decision-making bodies; several extremist parties 
are represented in parliament, where they have an influence 
disproportionate to their size, and one has entered the government; 
human rights are not yet fully observed; and the intelligence services 
have not been subject to adequate parliamentary control.  In fact, 
however, Romania has made and is continuing to make significant progress 
toward the consolidation of a democratic political system and the 
establishment of a market economy.  In the fall 1992 parliamentary 
elections, the opposition won approximately 47 percent of the seats in 
parliament, with national minorities well represented.  Observance of 
human rights has improved significantly.  As the State Department's 1994 
Human Rights Report for Romania noted, the government respects most 
internationally recognized human rights, although further progress still 
needs to be made, particularly in ensuring respect for the rights of the 
Roma (gypsy) minority and proper treatment of detainees by the police.  
In June, 1993, a parliamentary joint committee was set up to oversee the 
activities of the domestic Romanian Intelligence Service, whose Director 
is subject to parliamentary approval, and parliament is currently 
working on the establishment of a committee to oversee the activities of 
External Intelligence Service as well.

Although the transition to a market economy has been relatively slow, 
the GOR's program for economic and social reform, passed by parliament 
in March, 1993, indicates its determination to restructure and modernize 
the economy, encourage privatization, and create a better and more 
inviting environment for foreign investors.  And with the May, 1995, 
passage of the mass privatization bill, the pace of structural economic 
reform is expected to accelerate.  The U.S. Congress recognized 
Romania's efforts by restoring MFN in October, 1993, and the IMF 
approved a major stand-by assistance program for Romania in April, 1994.


Synopsis of Political System, Schedule for Elections, and Orientation of 
Major Political Parties

Political System:  Romania is a constitutional republic with a 
multiparty parliamentary system.  Parliament is bi-cameral; the lower 
house is the Chamber of Deputies and the upper house if the Senate.  The 
President, elected by universal suffrage, serves for a four-year term.  
The Presidency is non-partisan under the terms of the Constitution.  The 
head of the government is the Prime Minister.  The President designates 
a candidate for the office of Prime Minister following consultation with 
the political parties represented in parliament.  The candidate Prime 
Minister and his Cabinet must be approved by parliament in a vote of 
confidence before they can assume office.

In September, 1992 presidential and parliamentary elections were held.  
Ion Iliescu was elected President with 61 percent of the popular vote.  
In November, 1992, President Iliescu's designee for Prime Minister, 
economist Nicolae Vacaroiu, won a vote of confidence from parliament for 
a Cabinet composed of technocrats and members of the Party of Social 
Democracy of Romania, which won a plurality in the parliamentary 
elections.  However, after the Vacaroiu government survived a vote of 
no-confidence in June, 1994, by a only a very narrow margin, the Prime 
Minister gave the nationalist Party of Romanian National Unity several 
Cabinet seats in order to ensure the government's parliamentary 
majority.

Schedule for Elections:  Romania's next scheduled elections will take 
place in the fall of 1996.  However, parliamentary elections could occur 
earlier in the event that the current government loses a vote of 
confidence in parliament and no new government can win a confidence vote 
within 60 days.

Orientation of Major Political Parties:
  
A)  Parties which support the current Government:

Party of Social Democracy of Romania (PDSR) won a plurality in the 1992 
elections taking 28.2 percent of the votes for the Senate and 27.7 
percent of the votes for the House, and is currently the governing 
party.  During the campaign, the PDSR advocated continued economic 
reform, but at a relatively slow pace, and called for social protection 
measures to ease the transition to the market economy.  Since the 
elections, however, the PDSR has supported the austere economic measures 
taken by the government in a successful effort to reduce inflation, 
stabilize the currency, and bring the budget into balance.  The PDSR 
considers itself to be social democratic in orientation. 

Party of Romania National Unity (PUNR) won 8.1 percent of the vote for 
the Senate and 7.7 percent of the vote for the House.  The PUNR was 
formed in response to the establishment of the Magyar Democratic Union 
of Romania, is nationalist in orientation and opposes any concessions to 
Romania's ethnic Hungarian minority.  It has supported the current 
government in votes of confidence.

Romania Mare Party (PRM) won 3.85 percent of the vote for the Senate and 
3.9 percent of the vote for the House.  It holds highly nationalistic, 
xenophobic, and chauvinistic views.  The PRM has supported the current 
government in votes of confidence.

The Socialist Workers Party (PSM) won 3.19 of the vote for the Senate 
and 3.04 percent of the vote for the House.  It calls for a mixed 
economy and is on the extreme left of the Romanian political spectrum.  
The PSM has supported the current government in votes of confidence.

B)  Parties which oppose the current Government:

The Democratic Convention (CDR) parties:  The CDR was established as an 
electoral coalition of opposition parties prior to the local elections 
of February, 1992.  In the fall, 1992, national elections, it won 20.16 
percent of the vote for the Senate and 20.01 percent of the vote for the 
House.  Its main constituent parties -- the National Peasant Party-
Christian and Democratic, the National Liberal Party, and the Ecological 
Party -- hold different views on some issues, but are united in 
advocating more rapid and thorough going political and economic reform.

The Civic Alliance Party (PAC), the Liberal Party-1993 (PL-93), and the 
Social Democratic Party (PSDR):  These parties were members of the CDR 
until March, 1995, when they left the Convention due to a belief that 
their views were not being given due weight in CDR decision making.  
However, they continue to share the belief of the CDR parties that the 
current government is not moving quickly or strongly enough on reform.  
 
Magyar Democratic Union of Romania (UDMR):  The UDMR won 7.58 percent of 
the vote for the Senate and 7.45 percent of the vote for the House in 
1992.  At that time, the UDMR was affiliated with the CDR, but it broke 
its ties with the Convention in March, 1995.  The UDMR was formed to 
promote the interests of Romania's ethnic Hungarian minority, focuses on 
issues of concern to that ethnic group, and calls for autonomy on an 
ethnic basis and collective minority rights.  However, it also advocates 
a policy of rapid political and economic reform for the country as a 
whole.

Democratic Party (PD-NSF):  The PD-NSF won 10.39 percent of the vote for 
the Senate and 10.19 percent of the vote for the House.  It has a social 
democratic orientation but, like the other opposition parties with which 
it cooperates on most issues, supports more rapid reform.


IV.  MARKETING U.S. PRODUCTS AND SERVICES


Distribution and Sales Channels

An encouraging development of the transition process in Romania has been 
the dramatic growth of the new private sector.  This growth has largely 
occurred in trade and services and, as yet, is mainly centered on small 
and medium-sized companies.

Nevertheless, these firms represent a respectable nucleus for U.S. firms 
seeking distribution channels.  Currently, the private sector accounts 
for 97% of all companies incorporated, generates 29% of the employment 
and 28% of the turnover.  In the trade area, though, private companies 
account for 56% of the turnover.  Also, in 1993, hotels and restaurants 
accounted for 70 percent of the gross value added in the private sector 
of the Romanian economy, and employed 529,000 persons.  This represents 
57 percent of the total private sector employment.  Data on private 
sector development in Romania, as in other transition economies, is poor 
and the bias, if anything, is towards understatement -- which means that 
private sector activity is probably higher than reported.

The explosive growth in private business increased registries to almost 
487,000 at end-1994.  About 60 percent of these are registered as 
commercial companies with the remainder being individual or family 
businesses.

An important impetus for private sector expansion has been provided by 
the leasing and sale of state enterprise assets which was initiated in 
1991.  During 1991-92, over 25,000 leasing contracts for shops, 
restaurants, hotels and office premises were concluded.  In some cases, 
the former state commercial enterprises became empty shells, receiving 
only the income from leased assets.  Some 6,100 shops, restaurants, and 
industrial facilities were offered for sale at the beginning of 1992, 
and about 1,700 more at the beginning of 1994; about 2,900 transactions 
have been completed, of which over 80 percent have been tourism assets.  
Through both the leasing arrangements as well as the sales program, the 
private sector has come to dominate activity in trade and tourism; in 
Bucharest alone some 66 percent of retail sales are now achieved through 
private firms.

Private firms have also expanded into foreign trade.  The monopoly of 
the former foreign trade organizations was abolished in February 1990, 
and private enterprises are permitted to participate freely in 
import/export activities.  The number of economic agents carrying out 
foreign trade activities has increased to over 30,000 commercial 
companies.  The new companies tend to focus on consumer goods.  Private 
sector trading now accounts for 32 percent of imports and 29.4 percent 
of exports.

Foreign goods are increasingly being imported into Romania. Importing 
has been in many cases the first and only activity of new private 
businesses.  One very interesting aspect of current foreign trade 
activity is that the intermediary role played by both state and private 
trading companies is coming under pressure as state-owned manufacturing 
companies are becoming more interested and capable of undertaking 
international transactions by themselves.  Indeed, private, but also 
autonomous state-owned companies, are now free to make their own 
business decisions and to import or export directly, without the help of 
intermediaries.  Moreover, these companies are entitled to retain 100 
percent of their after-tax foreign earnings for their own use.

These positive developments are accompanied, however, by some aspects 
that have a restrictive influence:

--  The wholesaling and retailing systems are not yet completely 
structured;

--  Obtaining information on the market is difficult due to the lack of 
published information;

--  The typical private company set up during this early period is a 
limited liability company, devoted primarily to conducting domestic 
trade or import-export activities.  These companies, again typically, 
have few partners and low capitalization. Shortage of capital, limited 
collateral, and lack of experience channels entrepreneurs towards 
activities where initial investments are low, and returns can be made 
rapidly - like trade and services;

--  Little improvement in the availability of local credit is seen in 
the short term.  Moreover, the financial means of companies are most 
often extremely limited and cannot be relied upon in terms of business 
financing.  Access to capital encompasses not only venture capital for 
private entrepreneurs, but also expansion of capital required to 
modernize existing installations, an issue particularly important in 
Romania;

--  The leasing program for shops and hotels was reconsidered after 
1992, partly owing to what were considered to be disappointing results.  
Leasing contracts were of short duration, with a maximum of three years.  
As a result, lessees extracted maximum profits and skimped on 
maintenance expenditures, with the result that leased assets are 
deteriorating.  The sale-of-assets program provided state companies with 
the opportunity to divest themselves of assets not central to their core 
business and which may not survive without the built in business of 
their former owners;

--  Sometimes "free market" appears to be confused with "no-rules 
market," where doubtful business practices may prevail;

--  The extent of personnel training, although good, is not comparable 
to what is found in other Eastern European countries.

During the first half of 1995 the Government has shown a tendency of 
enforcing state control on some areas such as the oil and gas industry 
and tourism.  For example, there has been proposed by the President of 
the Economical Committy of the Upper Chamber to form a national oil 
company - PETROROM - under the Ministry of Industries.  This "mammoth' 
company will monopolize oil and gas research, drilling, production, 
transport, most of the refining, import, and trade for fuels.  This is 
despite opposition by the World Bank.  Another example of state-control 
is a project promoted by the Ministry of Tourism for a Mountain Zone 
Hotel Operating Authority which would group 57 (44%) of the biggest and 
most attractive of the 130 Romanian hotels situated above 3600 feet of 
altitude into one enterprise.    

All these drawbacks do not offset the profitability of entering the 
Romanian market, but highlight that the search for a local partner 
remains difficult given the current situation of the Romanian economy 
and that U.S. companies will still have to fight hard bureaucratic 
obstacles.


Use of Agents/Distributors; Finding a Partner

The choice of a local partner is a critical step, and American managers 
must have access to local knowledge as a central foundation in making 
their decision.  Progressing through the early and unstable stages of 
the process toward a free market economy, the Romanian situation is 
complex and difficult for foreigners.  While the Commercial Section of 
the American Embassy can give some guidance, it is recommended that U.S. 
companies invest sufficient time on their own to satisfy themselves that 
the selected Romanian firm is fully capable and reliable.

Fortunately, well qualified expertise and capability exists in Romania.  
Romanian specialists are very skilled, very good at technical matters, 
although they have been isolated for nearly two decades from the main 
stream of technical knowledge.  What they need is a minimal updating and 
more experience in marketing techniques.  One very interesting point is 
that during the last two decades local specialists erected many 
industrial facilities in neighboring countries.  Indeed, a significant 
number of outside turn-key projects have been performed by Romanian 
firms.  The experience acquired through carrying out large works could 
be very useful to American firms who form associations with Romanian 
partners both locally and in third markets.


Franchising is graining rapidely in Romania.  Companies such as 
Computerland and and Israeli fast-food company, Burger Ranch, opened 
stories in 1993 and 1994, respectively.  They have been followed by 
Pizza Hut in January, 1995 and McDonald's in June, 1995.  Each of these 
companies plan to open more franchise outlets by the end of the year.  
We estimate that during the next few years franchising will dramatically 
increase throughout Romania.


Direct Marketing

Under the current business environment in Romania, it is recommended 
that direct marketing be done only after a thorough study of local 
conditions.  Potential problems that have to be considered are:

--  Relationship with the local municipal administration and other 
authorities is not always easy.  Much still depends on the personality 
of the public officer;

--  Commercial and fiscal legislation is sometimes unclear, reflecting a 
certain legal confusion existing in Romania;

--  Western accounting standards and procedures are difficult to 
implement;

--  The level of exposure to Western practices has been generally low.  
Romanians -especially officials- are often convinced of their own skills 
despite the fact that they lack experience and knowledge of Western 
business practices.  For this reason, providing a solid training 
foundation for employees is important.  It is also recommended that the 
foreign manager be highly visible and involved in day-to-day activities, 
with a high level of experience in Central European or other developing 
countries.


Joint Ventures/Licensing

Romanian production costs are among the lowest of the former Comecon 
countries and constitute a major attraction for foreign investors.  Most 
foreign companies involved in local manufacturing and practically all 
associations with large companies are organized under joint-venture 
agreements.  This is due to the fact that the joint venture often 
results from a negotiation process with large state entities.  Also, 
potential Romanian partners do not represent a continuum of size and 
types, but are rather polarized between large state complexes and small 
private entrepreneurs, reflecting the lack of medium-sized local 
companies, either private or public, and usually the previous lack of 
any competition.

The short-term advantages of joint ventures (quick market access by 
taking over existing installations) could theoretically be outweighed by 
long-term drawbacks in terms of management efficiency and freedom.  
However, joint ventures provide some advantages.  The knowledge of the 
local business culture, whether on the market or administrative sides is 
critical.  Having the right partner may considerably speed up and ease 
the process of creating and developing optimal local business.

Tax advantages for joint ventures are another frequent expectation of 
Western managers.  These tax advantages are linked to bringing foreign 
capital into Romania, as tax laws provide tax relief for both joint 
ventures and wholly-owned foreign subsidiaries.


Steps to Establishing an Office 

Foreign companies have numerous options available for organizing 
business operations in Romania.

Representative offices:  Foreign corporations are entitled to set up 
representative offices in Romania.  While representatives cannot enter 
into commercial contracts on their own, they are entitled to enter into 
contracts on behalf of their parent organizations.

Establishing a representative office with the Ministry of Commerce, 
Department of Foreign Trade, is a straightforward matter.  A nominal fee 
is levied and general information must be provided on the name of the 
office, its intended activities, and the name and address of the 
individual trade representative(s).

Branches and subsidiaries of foreign companies:  A foreign corporation 
can carry out business in Romania through a subsidiary or a branch.  Law 
No. 105/92 on International Private Relations adopts the accepted 
international practice by which a corporation is governed by the law of 
the jurisdiction of its incorporation.

In Romania, the branch of a foreign company is subject to the national 
law of the parent company.  Legally, the branch has no separate status 
from the foreign company itself, it is merely carrying on business in 
Romania.  The foreign company will be liable to the employees and 
creditors of the branch for the actions of, and debts contracted by, its 
managers and agents on behalf of the branch.  In contrast, the 
subsidiary of a foreign company in Romania is a Romanian legal entity 
and, consequently, it is subject to Romanian law.  It is liable on its 
own behalf for the actions taken by its management.  Subsidiaries and 
branches can carry on only the activities for which the parent company 
is chartered.

The registration procedures for subsidiaries and branches are not 
expressly regulated by the legislation on commercial companies.  In 
practice, subsidiaries are established following the steps of 
registering the commercial companies.

The establishment of a branch follows the same steps as that of a 
subsidiary, but no Court decision authorizing the functioning of the 
branch is necessary.

In order to establish a branch, a foreign investor should submit an 
application to the Romanian Development Agency.  The establishment of a 
subsidiary must comply with the minimum capital requirements in the 
company law, while the branch will need to have a minimum USD 10,000.

Commercial companies:  As in other industrialized countries, commercial 
enterprises may be formed in Romania as separate legal entities.  This 
means they operate in their own right and are distinct from their 
shareholders and managers.  Organizations have their own names, 
management, head office, and places of business.

Corporations established in Romania are legal entities subject to 
Romanian law.  Company Law No. 31/90 authorizes and defines five forms 
of commercial enterprises: general partnership; limited partnership; 
limited liability companies; joint stock companies; and limited joint 
stock companies.

The most commonly used forms of business organizations are limited 
liability companies and joint stock companies.

All commercial enterprises must be registered with the Commercial 
Register of the Romanian Chamber of Commerce; they take on separate 
legal status beginning with the date of this registration.  The 
Commercial Register is an organization mandated to maintain statistical 
information on business activity in Romania.  It also ensures that trade 
names, for example, are not duplicated.

All forms of commercial enterprises, whether partnership, limited 
liability, or joint stock companies, must publish their financial 
statements annually in the Official Gazette.  This requirement is 
currently under review.

Currently, the majority of corporations registered to do business in 
Romania, whether domestic or foreign-owned, are limited liability 
companies.

A limited liability company is known as an S.R.L. (Societate cu 
Raspundere Limitata).  A limited liability company is a corporation that 
issues share capital to a limited number of shareholders.  Shareholders 
can be as few as one but cannot exceed 50.  The registered capital of a 
limited liability company cannot be less than USD 10,000, of which no 
more than 60 percent can be contributed through assets in kind and the 
balance in cash.  At present, capital contributed by a foreign investor 
is converted to lei at the prevailing market exchange rate in effect at 
the time the capital is contributed for accounting purposes only.  
Companies may maintain bank accounts in foreign currency.  The 
registered share capital of a limited liability company is normally 
divided into shares with a registered or par value of not less than 
5,000 lei (USD 25.00).  Shares cannot be freely traded, making limited 
liability companies similar to what are known as private companies in 
other jurisdictions.  Shares of these companies cannot be pledged as 
collateral for loans.

A joint stock company is a limited liability corporation with registered 
capital of a minimum of 1 million lei (USD 500.00) and with at least 
five shareholders.  Share certificates may be issued in bearer form or 
may carry the name of a particular shareholder.  The nominal or par 
value of the individual shares should not be less than 1,000 lei.  A 
joint stock company may be set up privately or by public subscription.


Joint ventures:  Joint ventures in Romania are not separately regulated 
by Romanian law.  The term "joint venture" is a common-used term to 
describe any of a number of forms of economic activity with 
international investment, including:

--  a joint stock limited liability company with shareholders by both 
Romanian and international investors;

--  a partnership of two or more companies or individuals, including 
international investors;

--  a contract for production using imports with some type of production 
sharing (also known as a cooperation agreement).


Company Incorporation Procedure:  The procedure for company 
incorporation includes the following main steps:

--  Confirmation with Romanian Development Agency for investment 
registration, as well as with Private Ownership Fund and State Ownership 
Fund in case state owned companies are involved;

--  Notarization of the contract and statute of the company with the 
local public notary;

--  Opening bank account in the name of the company and depositing the 
statutory capital;

--  Local Court's decision authorizing company's establishment;

--  Publication of the Court decision authorizing company establishment;

--  Registration of the company with the Commercial Register;

--  Registration of the accounting books at the local taxation office;

--  Obtaining the Investor Certificate from Romanian Development Agency.

In practice this process can be very tedious and takes an average of six 
weeks.


Selling Factors/Techniques

Quality, price and payment conditions are the most important factors in 
determining who will succeed in concluding business in Romania.  The 
Romanian market, like all former East-European markets, is still cash 
poor - although Romania's low foreign debt situation may stand it in 
better stead than its neighbors.  A company's willingness to entertain 
long-term credit arrangements, barter transactions and such concepts as 
processing contracts will put it in a better competitive situation vis-
a-vis others interested in doing business in Romania.

Most germane to the Romanian industry, a considerable part of the 
equipment and technologies now in place is European in origin, purchased 
in the sixties and seventies.  U.S. companies will recognize that if 
competition's products are already in place, no matter how old, that 
competition may have the advantage when it comes to rehabilitation or 
replacement.  Again, price, payment conditions, and service can offset 
such effects.


Advertising and Trade Promotion

Accompanying Romania's change to a market economy has been notable 
growth in the advertising field.  Key aspects of this growth include: 
increased quantity and quality of media; and the development of 
professional advertising agencies and related services, some of them 
American.

Television is the predominant media followed by radio, press, outdoor 
advertising and movie advertising.  Television includes: TVR, the state-
owned national network with 100 percent reach; Canal 2, the second 
network (40 percent reach); Tele & ABC, Canal 31, a Cable News Network 
(CNN) Bucharest-based rebroadcasting facility which accepts local 
advertising; and several small independent television stations in major 
cities.

Radio is also important.  There are three national state-owned AM radio 
networks which can be characterized by their target audience segment 
(popular, cultural and youth).  In addition, there are a number of FM 
stations in Bucharest and other major cities which have a broad audience 
appeal.

The press includes both newspapers (daily and weekly) and magazines.  
Over 60 percent of the population is reported to read one or more 
newspapers a day.  There are about 10 national dailies, several of them 
have established their readership based on political philosophy (such as 
Romania Libera, the opposition newspaper); others are mass-market 
newspapers (such as Evenimentul Zilei, the most read periodical), or 
sport-oriented newspapers.  There are also daily and weekly newspapers 
published in the major cities.  Specialty publications (i.e. sports, 
business, entertainment 
and family) are a major aspect of the weekly newspaper and magazine 
segment.

Movie advertising is a rapidly growing form of advertising as it allows 
a high quality message to be delivered.  

Additionally, outdoor billboard advertising is growing rapidly and 
becoming more sophisticated.  Billboard locations are multiplying and 
simple painted billboards are being replaced by backlit models.  
Advertising on public transportation vehicles is also common.

The advertising agency industry is experiencing rapid growth of both 
branches/local representatives and domestic agencies.  Notable agencies 
with international affiliation include: BBDO/Graffiti; DMB&B/OFC; Grey; 
Ogilvy & Mather/Premiera; Saatchi and Saatchi/BBB Centrade; and Young 
and Rubicam.  Notable Romanian agencies include Plus Advertising and Rom 
KU.

Specialized services, such as market research and market testing are 
available from independent suppliers (IRSOP and IMAS) as well as 
established institutes (Institute of World Economy and Romanian Chamber 
of Commerce and Industry).  However, experienced companies and people in 
marketing studies are very rare.  For production, there are some 
independent facilities (Domino and Magnum) as well as the in-house 
operations of the major agencies.

The best known business newspapers and journals in English are the 
following:

--Romanian Investment Review (bi-monthly, summary of trade and 
investment information).  Publisher: Romanian Development Agency (RDA);
--  Investment Guides.  Publisher: RDA;
--  Romanian Law Digest (translated legislation).  Publisher: RDA;
--  Quarterly Bulletin (economic, financing, monetary and credit trend 
information together with statistics of the National Bank).  Publisher:  
National Bank;
--  Romanian Insights.  Publisher:  Romanian Chamber of Commerce and 
Industry.
--  Romanian Business News (11 issues per year).  Publisher: Cosmos 
Development SRL, Bucharest.
--  Romanian Economic Observer (weekly economic newspaper).  Publisher:  
Adriana Trading Company.


Other publications in English are: Romanian Economic Newsletter 
(published quarterly in the USA to report on and analyze Romanian 
economic developments); Nine O'Clock (Bucharest daily); Business Central 
Europe (published monthly by the Economist Newspaper Group, London); 
Balkan News (a weekly newspaper published by Balkan News in Athens).


Pricing Product

Motivated, since October, 1990, by desires to control the pace of price 
inflation, to limit immoderate markups by monopolies and to ease the  
costs of adjustment to new price levels, the policy of gradual price 
liberalization promoted by the government proved difficult to implement.  
In May 1993, the number of goods for which subsidies were being provided 
was dramatically reduced.  This action was accompanied by the 
elimination of government control on sales margins, and the elimination 
of advanced price increase notification.  Further, by March 1994, price 
controls on meat were eliminated, and only the prices of goods and 
services provided by public utilities (i.e. energy, railways), state 
procurement prices on some agricultural products, housing rents, and the 
prices of bread and milk remained administered.

Therefore, currently, price controls apply exclusively to a limited 
number of products manufactured by state-owned companies.  These limits 
do not apply to the sales of other companies.


Sales Service/Customer Support

As already mentioned, finding good local partners is a matter of careful 
effort.  The lack of good local service companies is also a problem.  
However, with suitable training this problem can be satisfactorily 
solved.  The lack of exposure to Western practices in the past has left 
a legacy of indifference to after sales service.  U.S. companies should 
pay attention to ameliorating these attitudes in their operations.

Selling to the Government

During the first years after the revolution many foreign companies 
avoided dealing with local state-owned firms.  However, they may be the 
only possible partner or customer in 
some market segments.  Although the Western manager should know that 
bureaucracy and corruption are quite a challenge, it is apparent that 
local authorities are as a whole anxious to collaborate with foreign 
companies and that changes in the legal framework generally are headed 
in the right direction (albeit very slow).  In those industries 
considered as "strategic" by the Romanian government, such as natural 
resource exploitation and essential basic industries and infrastructure, 
the American Embassy can be helpful in providing names of contacts and 
making introductions.


Protecting Your Product from IPR Infringement

(See Protection of Property Rights under Investment Climate below)


Need for a Local Attorney

Company incorporation, as well as conflicts resulting from possible late 
payments, debt recovery and bankruptcy might generate the need for local 
legal assistance.

Late payments and debt recovery:  The transformation of the state-run 
economy into a market economy has seen a tendency for some enterprises 
not to pay their debts on a timely basis.  As a result, a regulation has 
been introduced specifying that invoices and other agreed-on amounts 
unpaid within 10 days of presentation or at the specified due date will 
incur interest at the rate of 0.15 percent per day (54.75 percent per 
year).

Romania's civil law for contracts is set out in the Civil Code, which 
follows closely the French civil code, and the Commercial Code, which is 
modelled on the Italian commercial code.  Generally, the specialized 
body of law, the Commercial Code, would have precedence over the general 
body of law, the Civil Code.  The existing body of law covers the areas 
of title and pledging title, protective creditor remedies, and debt 
recovery.

Romanian law recognizes the existence of mortgages for immovable 
property and pledges for movable property.  Thus, assets can be pledged 
as collateral for loans and as guarantees.

To assist creditors, Romanian law provides for various remedies to 
protect their interests, including: the right to revoke sales agreements 
(Action Paulienne), summary actions to limit irreparable damage, and 
possessory liens (permitting vendor to withhold delivery of goods for 
which satisfactory payment terms have not been negotiated).

Debt recovery alternatives include property attachment (attachment of 
movable property for sale to satisfy an acknowledged debt), "action 
oblique," (the right for a creditor to recover funds on the receivables 
of an inactive or negligent debtor), juridical debt recovery (seizure by 
court order of assets to satisfy a due amount), and forced execution 
(seizure of collateral to satisfy debts).

Financial discipline and bankruptcy:  As part of the restructuring 
process, certain large enterprises with financial and other problems are 
now under a regime of financial discipline.  The regime, under 
coordination of the National Commission for Restructuring, involves 
limits on their abilities to incur debts as well as a requirement for 
development of a plan for restructuring or dissolution through 
bankruptcy.

New bankruptcy legislation, as part of restructuring and for operation 
of a market-based economy, was expected to be finalized by the end of 
1994 but now is expected to be passe by the end of 1995.  The draft law 
provides for creditors to be able to petition insolvent companies into 
either a process of economic reorganization or liquidation.  In the 
interim, a governmental decision provides for a form of bankruptcy; this 
decision has been used for several government initiated bankruptcies.

Legal assistance has improved considerably.  Western law firms, 
including some American ones, are available in Romania.


V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
  
Following is a listing of best prospect sectors for U.S. exporters to 
Romania through 1996.  Non-agricultural sectors have been ranked by the 
greatest estimated growth of U.S. exports over the coming year.

BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND SERVICES


Rank of Sector:  1
Name of Sector:  AIRCRAFT AND PARTS (AIR)

Narrative

Romanian demand for aircraft and parts is expected to witness a 
significant increase over the next years.  The increase will be linked 
to aircraft fleet modernization programs launched by the national 
airline Tarom, by several charter-flight operators, and by the country's 
general aviation company.  Programs for the rehabilitation of Romania's 
aircraft industry, which has the capability of producing gliders, light 
multipurpose aircraft, trainers, helicopters, and short/medium range 
twin-jet airliners, will call for imports of a wide range of aircraft 
parts.  Tarom's fleet currently includes B-737, A-310, BAC 1-11, TU-154, 
and AN-24 aircraft.  In accordance with the company's modernization 
program, all Soviet-made airplanes, Antonovs excepted, will be withdrawn 
from the fleet by mid-1996.  The gradual replacement of Antonovs with 
new turboprop short-range aircraft will begin in 1996.  The company also 
intends to sell its A-310 aircraft, purchasing instead either Boeing or 
McDonnell Douglas planes.  The total value of the aircraft to be 
purchased by Tarom during the next years could total as much as USD 300 
million.  Major charter-flight operators (Romavia, Jaro, Air Antares, 
and Air Special Service) have plans for purchasing MD-83's,
B-737's, and such smaller planes as Falcon 50, 900 and 2000, as well as 
helicopters.  General aviation plans for the next 3-5 years include the 
purchase of helicopters, micro-light aircraft, and small jet planes.  
Note should be made of the fact that there is no major competition for 
U.S. exporters to Romania in this sector.

Data Table
                               1994  1995  1996
                                (USD Millions)  
A) Total Market Size            180    235    280
B) Total Local Production        46     60     72
C) Total Exports                  6     10     12
D) Total Imports                140    185    220
E) Imports from the U.S.      124.8    165    200
F) Exchange Rate (lei/1 USD)  1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank:  2
Name of Sector:  TELECOMMUNICATIONS EQUIPMENT (TEL)

Narrative

In 1991 the Romanian government launched a 15-year, USD 7-8 billion 
program to expand and modernize the country's telecommunications system.  
Targets include increasing the penetration rate to 25% (6.2 million 
lines); creating a digital network with 8 main transit switching 
exchanges; replacing old rotary exchanges; digitalizing the rural phone 
network; creating a national data package switching network; and 
introducing cellular services.  Materials needed for the program include 
optical fiber cables, copper cables and associated splicing materials; 
switching, network monitoring and controlling equipment; pay phone sets; 
and instruments for network diagnostics, engineering, maintenance and 
repair.  The most important near-term contracts will be financed from 
World Bank and EBRD loans, government credits, and supplier credits.  
The most promising subsectors within the sector are:  broadcast 
equipment, microwaves, cable distribution networks, and cellular 
equipment.  Competition in the sector will be heavy from such countries 
as France, Germany, Spain, South Korea, Italy and Japan.  Nonetheless, 
U.S. firms, which are reputed for technological know-how in this area, 
stand good chances of getting contracts, especially in the field of 
fixed cellular services for rural areas, where investment over the next 
three years could reach as much as USD 150 million.


Data Table
                                  1994  1995  1996
                                    (USD Millions)  
A) Total Market Size               170    178    195
B) Total Local Production           95     95    100
C) Total Exports                     7      7     10
D) Total Imports                    82     90    105
E) Imports from the U.S.           8.3     10     25
F) Exchange Rate (lei/1 USD)     1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank:  3
Name of Sector:  ELECTRICAL POWER SYSTEMS (ELP)

Narative

Romania has a 22.3 MW installed electric power capacity, but uses only 
one third of it (6-7 MW), the other two thirds being in low-efficiency 
facilities.  To increase performance in this sector, the Romanian 
Electric Power Authority (Renel) is focussing on the following projects, 
which are slated for top priority investment:  the upgrading of coal-
fired plants running on medium and low-grade lignite (an IBRD loan has 
already been granted for this project), the upgrading of at least two 
major co-generating plants in Bucharest (estimated investment over USD 
225 million) the completion of Unit 2 of the Cernavoda nuclear power 
plant and of fourteen hydropower plants.  This would also include some 
significant imports of  high-technology parts and components.  U.S. 
exports in this sector are expected to consist mainly of turbine and 
generator parts for the Cernavoda project Unit 2 and, gas turbines and 
control equipment for thermal power plants.

Romania's large manufacturers of boilers, turbines and generators are 
seeking joint venture arrangements as a means of upgrading their 
production.  They could become important end users of western know-how, 
components, parts, and process controls, also of technology, and 
management skills.

Data Table
                              1994  1995  1996
                                          Estimate  
                                 (USD Millions)
A) Total Market Size            80    85    120
B) Total Local Production       70    78    100
C) Total Exports                15    20     20
D) Total Imports                25    27     40 
E) Imports from the U.S.         2     4      8
F) Exchange Rate (lei/1 USD) 1,850 2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank of Sector:  4
Name of Sector:  COMPUTERS AND PERIPHERALS (CPT)

Narrative

Romanian demand for computers is very large, given the virtual lack of 
computerization before the revolution of 1989.  Until now, the greatest 
demand has been from governmental bodies, public corporations, private 
companies, banks, and some state-owned companies.  After a surge in 
1991-92, sales of computers declined due to shortages of hard currency.  
Domestic production is still virtually nil, although there are Romanian 
companies which assemble clone computers (e.g. with Packard Bell - USA 
or FORTE Computers - Singapore) or could become co-production venture 
partners.  The most promising subsectors within the sector are high-
performance personal computers, computer peripherals, local area 
networks, and wide area networks.  Many U.S. computer manufacturers are 
already represented on the Romanian market.  U.S. exports in this sector 
increased in 1994, in spite of unfavorable customs duties applied to 
U.S. products following Romania's association with the EU and the EFTA 
countries and in spite of competition from such suppliers as Germany, 
Holland, Taiwan, Austria, France, Korea, Singapore and Japan. Romanian 
demand for computers and peripherals is expected to witness a 
significant increase over the next years.  The increase will be linked 
to major programs for the modernization of the national railway company 
SNCFR, the employment and social protection project, power sector 
rehabilitation and modernization project, telecommunications project for 
Rom-Telecom, cadastre project, as well as programs for the higher 
education reform program.


Data Table
                                  1994  1995  1996
                                    (USD Millions)  
A) Total Market Size               150    166    175
B) Total Local Production           11     13     15
C) Total Exports                     0      0      0
D) Total Imports                   139    153    160 
E) Imports from the U.S.            65     70     80
F) Exchange Rate (lei/1 USD)     1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank:  5
Name of Sector:  OIL AND GAS FIELD MACHINERY (OGM)

Narrative

Romania was one of the world's most important suppliers of oil and gas 
equipment.  In the 80's, about 85% of the industry's production was 
exported.

Currently the sector is confronted with serious problems because of 
collapse of the foreign markets.  However, this industry has potential 
for the American oil and gas field equipment exporters.  The main reason 
is the increased demand for specialized and sophisticated machinery 
(engines, pumps, compressors, control equipment) to upgrade the existing 
equipment and the technology.  In addition, Romanian on- and off-shore 
oil exploration/exploitation possibilities is a growing market for 
modern equipment in this area, and U.S.  companies are well positioned 
to provide the necessary equipment and technological assistance to the 
Romanian industry.  The excellent reputation enjoyed by U.S. oil and gas 
equipment manufacturers and the fact that Romanians have used such an 
equipment for decades to upgrade their drilling rigs can foster American 
exports to Romania.  Joint ventures and co-production schemes that would 
take advantage of Romania's low labor costs, skilled workforce and 
export markets could be of interest to both sides.  The modernization of 
this industry will require a large influx of western technologies and 
imports of various state-of-art components, materials and parts.


Data Table
                                 1994  1995  1996
                                   (USD Millions)  
A) Total Market Size               44     50     90
B) Total Local Production          42     47     80
C) Total Exports                    3      6     20
D) Total Imports                    5      9     30 
E) Imports from the U.S.          2.4      3      6
F) Exchange Rate (lei/1 USD)    1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank of Sector:  6
Name of Sector:  ENVIRONMENTAL EQUIPMENT (POL)

Narrative

Because of the inherent difficulties of the transition period Romania is 
facing today, environmental issues are still regarded as secondary, 
generally coming behind other priorities.  Romanian demand for 
environmental equipment is large, given the virtual lack of environment 
protection before the revolution of 1989.  Until now, the greatest 
demand has been from public corporations and some state-owned companies.  
Domestic environmental protection equipment production is still in its 
infancy, although there are Romanian companies which are producing the 
metal bulk components of some environmental protection equipment or 
could become co-production venture partners.  The most promising 
subsectors within the sector are high-performance electronic sensors for 
water treatment, air monitoring equipment, and liquid-solid integrated 
de-polluting equipment.  Some U.S. environmental protection equipment 
manufacturers are already represented on the Romanian market.  U.S. 
exports in this sector increased in 1994.  Romanian demand for 
environmental protection equipment is expected to witness a significant 
increase over the next years.  The increase will be linked to major 
programs for the petroleum sub-sector rehabilitation project for the 
national oil company PETROM and for the national gas company ROMGAZ, as 
well as to the power sector rehabilitation and modernization project for 
the national power company RENEL.


Data Table
                                 1994  1995  1996
                                   (USD Millions)  
A) Total Market Size              230    250    275
B) Total Local Production          40     82     85
C) Total Exports                    0      0      0
D) Total Imports                   59    105    160 
E) Imports from the U.S.            5      7     50
F) Exchange Rate (lei/1 USD)    1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


Rank:  7
Name of Sector:  AGRICULTURAL MACHINERY & EQUIPMENT (AGM)

Narrative

With its 14.8 million hectares of agricultural area, of which 9.4 
million is arable land, Romania has the potential to became a large and 
diversified market for farming equipment.  The Land Reform Act of 1991 
returned 80% of agricultural land to private ownership.  This resulted 
in Romania currently having about 5.5 million farmers with small 
holdings of up to 10 ha.  Domestic output of agricultural equipment is 
far from meeting, in either quantity or adequacy, the demand generated 
by the new land-ownership pattern.  Experts estimate a need for about 
720,000 new tractors, 400,000 new cultivators, and 60,000 new harvesters 
over the next 5 years, compared to only 150,000 tractors, 25,000 
cultivators, and 41,000 harvesters in operation at the end of 1993.  
There is also strong demand for irrigation equipment.  While straight 
imports for the sector is limited by Romania's shortage of hard 
currency, accessing the market via licensing agreements and joint 
ventures with the local industry (which has good basic technologies, 
skilled labor, and low labor costs) could be a rewarding option for U.S. 
manufacturers of agricultural equipment.

Some U.S. agricultural equipment exporters such as John Deere, Massey 
Ferguson, International Harvester (CASE), Rainke and Butler and Vallmont 
Irrigation are already on the market.


Data Table
                                   1994  1995  1996
                                     (USD Millions)  
A) Total Market Size                 99    125    145
B) Total Local Production           110    130    150
C) Total Exports                     26     30     40
D) Total Imports                     15     25     35 
E) Imports from the U.S.              2     10     20
F) Exchange Rate (lei/1 USD)      1,850  2,100  2,300

Note:  The above statistics are unofficial estimates.


BEST PROSPECTS FOR AGRICULTURAL PRODUCTS


Rank:  8
Name of Sector:  SOYBEANS

Narrative

Romania's soybean production is limited because of lower producer 
returns compared to other crops.  In 1994, Romanian soybean production 
totaled only 92,000 mt.  Conservative estimates place Romania's soybean 
requirements at about 500-600,000 mt per year.  However, because of 
foreign exchange shortages, actual imports are much below the normal 
feeding requirements of the Romanian livestock sector.  U.S. soybean 
exports to Romania will continue at high levels.  Competition is 
represented by South American countries.  The allocations of the GSM-102 
agricultural export credit program will be instrumental in boosting U.S. 
soybean exports to this country.

Data Table
                               1994  1995  1996
                                 (USD Millions)  
A) Total Market Size           98.0  115.0  120.0
B) Total Local Production      54.0   65.0   70.0
C) Total Exports                0.0    0.0    0.0
D) Total Imports               44.0   50.0   50.0
E) Imports from the U.S.       25.0   35.0   40.0



Rank:  9
Name of Sector:  COTTON

Narrative

Romania is not a cotton producer due to unfavorable weather conditions 
for this crop.  The United States continues to be a major cotton 
supplier to this market. In 1993, the United States supplied 11,300 mt 
cotton and in 1994 American cotton exports increased to 12,080 mt.  This 
represented 20 percent and 25 percent of total Romanian imports for the 
respective years.  American cotton exports were aided by allocations of 
the GSM-102 export credit guarantee program to Romania.  In 1995, the 
value of Romania's cotton imports from the United States is expected to 
total USD 25 million.  The main competitors are the Central Asian 
republics of Uzbekistan and Turkmenistan, as well as Greece, Turkey, 
India, and Pakistan.

Data Table
                               1994  1995  1996
                                 (USD Millions)  
A) Total Market Size           80.0  80.0  90.0
B) Total Local Production       0.0   0.0   0.0
C) Total Exports                0.0   0.0   0.0
D) Total Imports               80.0  80.0  90.0
E) Imports from the U.S.       20.0  25.0  30.0



VI.  TRADE REGULATIONS AND STANDARDS


Trade Barriers (Tariffs and Import Taxes)

The Romanian market is open, requiring no special conditions for access 
or operation.

Romania adopted an 8-digit customs tariff in March 1993.  This tariff is 
similar to the International Harmonized System of tariff nomenclature.  
The weighted average of customs duty is 11.7 percent with notable 
exceptions for fuels and ores for which the taxation is nil or reduced 
to 3-10 percent.  However, tariffs are considerably higher for such 
items as cigarettes (60 percent), furs, carpets, fuels, vehicles and 
photographic equipment and supplies (30 percent), bicycles (40 percent), 
TV sets and sound and video registration equipment (42 percent).  Duties 
applied to industrial equipment are generally about 15 percent ad 
valorem.  As already mentioned, within the customs duties list, certain 
items are currently not dutiable.  Examples include, in addition to 
various ores, coal, chemical products, and machine tools. 

A sharp turn from a policy of open markets has been recently announced.  
Starting July 1, 1995, the Romanian government will introduce 
prohibitive import taxes for a number of agricultural products.  The 
level of these taxes is unusually high: 236% for pork meat, 169% for 
veal meat, 143% for chicken meat, 135% for sugar and sugar products, 
171% for cheese and cheese products, 150% for potatoes, 98% for milk 
powder, 65% for rice and 25% for different vegetables.  This situation 
illustrates, to a certain degree, the "unpredictability" of the local 
business environment.   

A potential obstacle for U.S. exporters is the preferential tariff 
treatment for Western European competitors.  The free trade arrangements 
with the EU and EFTA are already triggering customs duty discriminations 
against some U.S. products.  For instance, products under Ch. 85 Heading 
8542 - "Electronic integrated circuits and micro-assemblies; parts 
thereof" are currently taxed 20 percent if imported from the U.S. and 
only 16 percent if imported from EU and EFTA countries.  In a 5-9 years 
period, taxes for many of the products imported from the EU and EFTA 
countries will be reduced to nil creating a barrier to American 
products.


Customs Valuation

In Romania, customs duties are ad valorem duties.  The customs value of 
imported goods is based on:

--  the external price of the transaction, converted into lei at the 
exchange rate set weekly by the National Bank; and
--  charges not included in the price of goods, such as freight, 
handling and insurance.

If documentation concerning the value of imported goods is not 
available, the specific GATT provisions will apply; import prices 
usually charged for such goods or similar items are then used as the 
basis for valuation.  As stated above, for most items customs valuation 
is based on the contract value.  For those items which cannot be 
valuated according to this general rule the valuation can be done based 
on international quotations.


Import Licenses

Romania has eliminated all import licenses.  However, sanitary and 
safety standards as well as special approvals for toxic substances, 
explosives and arms are in force.


Export Controls

As the pre-1989 monopoly of foreign trade enterprises has been removed, 
commercial companies can now import and export directly.  For the 
majority of goods, no import or export license is required.  
Authorizations are, however, required for:

--  Exports of goods with limited domestic supply, basically foodstuffs, 
fuels, and unfinished wood products;
--   Trade conducted through international clearing accounts;
--   Barter transactions; and
--   Transactions using government lines of credit.

Non-automatic export licenses are issued on a case-by-case basis by the 
Ministry of Commerce.  Details are included in Government Decision 
215/1992.  

Because imports have surged, some of the existing restrictions on 
exports have not been enforced, in order to help Romania reduce its 
trade deficit, thus meeting a requirement established by IMF and other 
international lenders.  This explains why the only restrictions that 
apply are temporary non-automatic authorizations for items with export 
ceiling (including lubricating oils, chemical fertilizers and copper 
alloys) or goods for which production is subsidized.


Import/Export Documentation

No special import documentation besides that normally asked for by 
customs officials is required.  The only exception is related to meeting 
sanitary and safety regulations.  Special documents are, however, 
required to introduce guns, ammunition, drugs, and environmentally 
dangerous products. 

As for exports, most export licenses are issued for statistical purposes 
only.  Consequently, for those products no special export documents are 
required.  A special case is represented by products under quotas, 
mainly wood and foodstuffs, for which additional documents may be 
required, on a case-by-case basis.


Temporary Entry

Romania has a customs duty draw-back system.  This system permits a 
refund of import duties previously collected at the time that the goods 
in question are exported from Romania in either the same condition or 
after having been transformed, processed or repaired, or after having 
been incorporated into products being exported.


Labeling, Marketing Requirements

Goods imported into Romania must comply with rules and regulations 
concerning health, safety and labelling; these rules are similar to 
those in other developed jurisdictions.  There are no special rules 
applying to foreign products.


Prohibited Imports

Prohibited imports include products such as arms, ammunition, illegal 
drugs and other similar items which can affect national security, public 
health or good morals.


Standards

Romanian standards of quality and safety are under the jurisdiction of 
the Romanian Institute for Standardization.  Generally, they match ISO 
and Western European Standards.  

Romania adopted, for instance, international quality control standards 
such as ISO 8402, 9000-9004 and 9004-2 and incorporated them in its 
national standardization system.

Although the ISO standards are not compulsory by law for individual 
companies, the buyers increasingly impose on the suppliers to prove the 
quality of their products and services by the certification of the 
quality control system they practice.  Generally speaking, American 
quality standards requirements are superior to local ones.  However, 
Western European countries are acting very aggressively to adapt local 
standards of their own and this might in time discriminate against 
American products if countering measures are not taken.

According to Decree No. 21/1992, an Office for Consumer Protection has 
been created.  This office supervises product quality compliance with 
compulsory standards referring to life, health protection, work security 
and environment protection.


Free Trade Zones/Warehouses

Free Trade Zones and warehouses operate under Law No. 84/1992.  General 
provisions include unrestricted entry and re-export of goods as well as 
exemption from customs duties and value added tax.  They also include an 
exemption from profit taxes for the duration of a company's operations 
in the free trade zones.  The law further permits the leasing or 
transfer of buildings or lands for terms of up to 50 years to either 
legal person or natural persons, Romanian and non-Romanian.

Currently, there are four free trade zones:

--  Sulina Free Trade Zone (located at the mouth of the Danube River);

--  Constantsa-South Free Trade Zone (located close to the Romanian port 
of Constantsa, at the entrance to the Black Sea-Danube Channel);

--  Galati Free Trade Zone (located about 100 km from the Danube mouth); 
and

--  Braila Free Trade Zone (located 30 km up river from Galati).

New free trade zones are approved to be opened at Cristesti-Iasi, 
Curtici-Arad, Giurgiu and Oradea.  For those already opened their are 
going to be held auctions for land concessions (for maximum 50 years).  
The free trade zones are operated by the Free Trade Zones Agency of the 
Ministry of Transportation.


Special Import Provisions

A)  Several categories of goods are exempt by law from customs duties.  
These include:

--  equipment imported as a foreign investor's initial or subsequent 
contribution to the capital of a company incorporated in Romania;

--  samples and models with no commercial value, as well as promotional 
materials; and goods classed as humanitarian materials or as legacies.

B)  An important objective during the transition to a market economy is 
the protection of Romanian companies from goods being dumped or 
subsidized.  Accordingly, in 1992 Romania introduced antidumping duties 
for goods imported at very low or dumping prices and countervailing 
duties for goods which have received subsidies.  Safeguard measures can 
also be implemented to assist domestic producers adversely affected by 
imports.  Safeguard measures may consist of additional customs duties or 
quantitative restrictions (quotas).  The Ministry of Commerce 
investigates and sets remedies in cases of dumping, subsidized imports 
and import surges.


Membership in Free Trade Arrangements

Romania has been a contracting party to the General Agreement on Trade 
and Tariffs (GATT) since 1971 and has ratified most codes of the Tokyo 
Round.  It has been an active participant in the Uruguay Round.

On February 1, 1993, Romania signed an Association Agreement with the 
European Union (EU), the very first step in Romania's long-term plans 
for European integration.  This Association Agreement will come into 
force after it has been ratified by the European Parliament as well as 
by the Parliaments of all EU member countries.  In the meantime, an 
Interim Agreement is in place, permitting the application in advance of 
certain commercial aspects of the Association Agreement.

Romania has also concluded a free trade pact with the European Free 
Trade Association (EFTA).  This agreement will be implemented on a 
bilateral basis as it is ratified by individual EFTA members countries.

Romania is also signatory to the conventions on Preferential Trade among 
Developing Countries ("The 16") and Generalized System of Trade 
Preferences among Developing Countries.


VII.  INVESTMENT CLIMATE


Openness to Foreign Investment

Recognizing the paramount importance of foreign direct investment to the 
country's economic development, the Romanian government has been trying 
to create a favorable investment climate.  To this end, it has 
repeatedly fine-tuned the pertinent legislation to increase Romania's 
attractiveness as a place to invest.  In spite of this, registered 
foreign investment in Romania has not kept pace with expectations.  
Initially (1990-92), the cautious attitude on the part of foreign 
investors reflected uncertainties over political stability, concern 
about productivity, and fears of inadequate return on investment.  Later 
on, and especially in 1994, investors gained more confidence in Romania.  
However, there are still structural as well as informal barriers that 
tend to impede foreign investment.

The legal framework for foreign investment in Romania is provided by the 
following laws:

--  Foreign Investment Law (No. 35/1991, revised in 1993);
--  Law on Foreign Investment in Exploration and Production of Oil and 
Gas (No. 66/1992);
--  Free Trade Zones Law (No. 84/1992);
--  Law on Stimulating Foreign Investment in Industry
(No. 71/1994);
--  Commercial Register Law (No. 26/1990);
--  Company Law (No. 31/1990;
--  Privatization Law (No. 58/1991; No. 55/95);
--  Accountancy Law (No. 82/1991);
--  Government Ordinance Regarding Tax on Profit
(No. 70/1994).
--  Bankrupcy Law

This body of legislation indicates that Romania's investment regime is 
open.  Foreign investors are granted national treatment, have free 
access to domestic markets, and are allowed to participate in the 
country's privatization programs.  There is no limit on foreign 
participation in commercial companies, foreign investors being entitled 
to establish wholly foreign-owned enterprises in Romania (although joint 
ventures are the normal pattern) and to convert and repatriate 100 
percent of after-tax profits.  They are allowed to participate in the 
management and administration of the investment (consistent with 
specific terms agreed upon with the local partner), as well as to assign 
their contractual obligations and their rights to other investors, 
Romanian and foreign.  For the duration of its existence, a foreign 
investment in Romania will be governed by the local conditions 
established by the Foreign Investment Law in force at the time of 
incorporation, unless a subsequent law contains more favorable 
provisions.

Foreign investors may engage in business activities in Romania in any of 
the following ways:

--  set up new commercial companies, subsidiaries or branches, either 
wholly-owned or in partnership with Romanian natural or legal persons;
--  participate in the increase of the registered capital of an existing 
company or the acquisition of shares, bonds or other securities of such 
companies;
--  acquire concessions, leases or agreements to manage economic 
activities, public services, or the production of sub-units belonging to 
commercial companies or state-owned public corporations;
--  acquire ownership rights over non-residential real estate 
improvements, with the exception of land;
--  acquire industrial or other intellectual property rights;
--  conclude exploration and production-sharing agreements related to 
the development of natural resources.

Foreign investor participation can take the form of:  foreign currency; 
equipment; means of transport; spare parts and other goods; services; 
intellectual property rights; know-how and management expertise; 
proceeds and profits from other businesses carried out in Romania.

Foreign investment is subject to a general screening, which is routine 
and non-discriminatory.  It is performed by the Romanian Development 
Agency, which checks on the compliance of company incorporation 
documents with Romanian laws and keeps a record of all companies with 
foreign participation established in Romania.  Foreign investment must 
that it comply with environmental protection regulations; does not 
affect Romania's national security and defense interests;  and does not 
affect public order, public health, and good morals.

Foreign investors can participate in privatization programs by acquiring 
shares and assets in Romanian commercial companies from either the State 
Ownership Fund or the five Private Ownership Funds.

There is no discrimination against foreign investors at the time of the 
initial investment or afterwards.

Visa, residence, and work permit requirements, although time-consuming, 
are not discriminatory or so onerous as to inhibit foreign investors.

A series of investment incentives is available to foreign investors (See 
"Performance Requirements/Incetives").  They are specified in law (i.e. 
not given in an ad hoc manner) and are not linked to performance 
requirements.


Conversion and Transfer Policies

Romanian legislation does not put any restrictions on converting or 
transferring funds associated with an investment.  All profits made by 
foreign investors in Romania may be converted into a hard currency, and 
transferred abroad, after payment of due taxes.  Proceeds from the sale 
of shares, bonds or other securities, as well as from winding-up an 
investment can also be repatriated.  There is no limitation on the 
inflow or outflow of funds for remittances of profits, debt service, 
capital gains, returns on intellectual property, imported inputs, etc.  
However, purchasers of dollars must generally pay a premium of 2-4 
percent above the official exchange rate.


Expropriation and Compensation

According to Article 5 of the Foreign Investment Law, foreign 
investments are not to be subject to nationalization, expropriation, 
confiscation, requisition or any other measures having similar effect, 
except when this is in the public interest, and then only under due 
process of law and with appropriate compensation.  Compensation shall be 
"prompt, adequate and effective."  As far as the Embassy is aware, there 
have been no record of expropriatory actions since 1989 affecting 
foreign investment in Romania.


Dispute Settlement

Five years December 1989 the revolution, Romania's legal system is still 
in flux, with some important pieces of legislation missing, incomplete 
or outdated.

Property and contractual rights are recognized. (Note:  since 1984, 
Romania has used a Civil Code for contractual law based upon the 
Napoleonic Civil Code of 1804.)  However, enforcement is not always 
effective, as suggested by specific cases brought to public attention by 
the media.  The media, also has often exposed cases of Government 
interference in the court system.

Romania has a body of commercial law, but since it needs to be updated 
and expanded, it is not consistently applied.  A key element of 
commercial law is the Commercial Code, which dates from 1887.  Since 
December 1989, many parts of the Commercial Code have been supplemented 
by new legislation based on current European standards.

A bankruptcy law was recently approved by the Parliament and promulgated 
by the President.  The law, although relatively weak, meets minimum IMF 
standards of acceptability.  It will somewhat improve the position of 
creditors, though still give primary emphasis to enterprise 
restructuring and the preservation of jobs.

Romanian legislation accepts the concept of a mortgage, but there is no 
reliable system of recording security interests.

Commercial arbitration is a very important feature of Romanian law for 
the foreign investor.  Foreign companies engaged in trade or investment 
in Romania often express concerns with respect to the international 
commercial experience of the Romanian Courts.  They fear entrusting the 
responsibility for resolving commercial disputes to judges who, 
admittedly, have had little opportunity to understand the functioning of 
a market economy, international business methods, or even the 
application of Romanian commercial laws which have not been in use in 
Romania for any extended period of time.  Consequently, many agreements 
involving international companies and Romanian counterparts provide for 
the resolution of such disputes through arbitration.

Arbitration offers a suitable form of dispute resolution which, by 
avoiding long trials before non-specialized legal courts, meets the 
requirements of modern international commerce.  The parties may choose 
one or more arbitrators who are specialists in international commerce 
and the particular industry that is the subject of the agreement.

Romania recognized the importance of arbitration in the settlement of 
commercial disputes when it became a signatory to the New York 
Convention of 1958 regarding the recognition and execution of foreign 
arbitration awards.  Romania is also a party to the European Convention 
on International Commercial Arbitration concluded in Geneva in 1961 and 
the ICSID Convention concluded in Washington in 1965.  Arbitration 
awards are enforceable through the Romanian courts under circumstances 
similar to those in Western countries.

The new regulations create a fresh and modern foundation for the pre-
existing International Commerce Arbitration Court administered by the 
Chamber of Commerce and Industry of Romania (the "Arbitration Court").  
The Regulations and Procedural Rules provide for the Arbitration Court 
to be a permanent non-governmental arbitration institution.

The Arbitration Court is totally independent and there is no financial, 
administrative or organizational dependence upon any state body or 
institution.  The Chamber of Commerce and Industry of Romania is also 
non-governmental, and is a self governing, public interest organization, 
statutorily charged with the duty to organize arbitration in Romania 
through the Arbitration Court and is in no way able to influence the 
arbitrator's awards.

Romanian law and practice recognize applications to other 
internationally renowned arbitration institutions, such as the ICC Paris 
Court of Arbitration.  In recent years, the Romanian International 
Commercial Arbitration Court has concluded cooperation agreements with 
arbitration institutions in such countries as the United States, 
Austria, Switzerland, India, South Korea, and others.

The Tribunal level of the Romanian Courts has jurisdiction to deal with 
the recognition and enforcement of legitimate awards rendered by any 
foreign arbitration court.


Performance Requirements/Incentives

There are no performance requirements imposed as a condition for 
establishing, maintaining or expanding an investment.

Currently, the main provisions granting incentives for foreign investors 
are the following:

a)  Capital equipment imported by foreign investors as their 
in-kind equity contribution to a venture or purchased from their equity 
cash contribution is exempt from customs duties (Article 12, Law No. 
35/1991).

b)  Imports of raw materials, consumables, spare parts, and other 
supplies needed for the operation of the investment are exempt from 
customs duties for the first two years from the date the project is 
commissioned or the activity commences.  (Article 13, Law No. 35/1991).

c)  Investments of at least $50 million made in industry are exempt from 
customs duties on raw materials, consumables, machinery and equipment 
for 7 years, and enjoy a tax holiday of 5 years from the date they start 
making a profit, on condition they manufacture products with at least 50 
percent Romanian content and export at least 60 percent of their annual 
production.  However, should such a company close its operation within 
14 years from the date of its registration, it will have the obligation 
to pay, retroactively, all relevant taxes and duties (Article 1, Law No. 
71/1994).

Legislation in force until December 31, 1994, granted a series of tax 
incentives, including 2-5 year tax holidays and reductions in succeeding 
years, to all foreign investment that met certain criteria related to 
field of activity, reinvestment of profits, job creation, etc.  These 
incentives were abolished as of January 1, 1995, when Government 
Ordinance No. 70/1994 on Tax on Profit entered into force.  It should be 
mentioned, however, that tax holidays granted to investments made prior 
to January 1, 1995, remain in force until the expiration of the 
exemption period. According to the Ordinance No. 40/1994, the tax on 
profit is, as a general rule, 38 percent for all companies, with some 
exceptions depending on the field of activity (e.g. 25 percent for 
companies which derive at least 80 percent of their income from 
agriculture;  60 percent for companies which derive at least 50 percent 
of their income from night clubs, games, etc.).  In addition, there is a 
10 percent withholdy tax for dividends.


Right to Private Ownership and Establishment

Until 1990, the most real estate in Romania was owned by the state.  
Industrial and commercial (office and retail) properties were state-
owned.  Agricultural land was either state-owned (and operated as state 
farms); nominally privately-owned but under state control 
(cooperatives); or owned by individuals.  The majority of the urban 
housing stock was state-owned, having been either nationalized or built 
after 1950. 

The new Romanian Constitution, adopted in December 1991, guarantees the 
right to ownership of private property.  However, mineral rights, air 
rights and similar attributes are excluded from private ownership.

By virtue of the Land Law No. 18/1991, about 80 percent of the arable 
land, formerly under cooperative control, was privatized.  Land received 
from a cooperative by a member who did not directly contribute must be 
held for a period of 10 years.

In the residential housing sector, most housing units built with state 
funds (generally after 1950) have been sold to their occupants.  Prices 
and interest rates recognize the rent already paid and the condition of 
the units in question.  The issue of how to privatize nationalized 
residential properties was resolved by the Romanian Parliament in June 
1995.  The new Law on Nationalized Dwellings awards most ownership 
rights to tenants rather than former owners. 

For commercial and industrial property, land and real estate are being 
assigned to the commercial companies into which state enterprises were 
organized as a consequence of Privatization Law 58/91.  These commercial 
companies are now being privatized.  As private owners take control of 
the companies, the land is moving to private control.

Art. 41.2 of the new Romanian Constitution prohibits the ownership of 
land by foreigners.  This prohibition severely hinders foreign 
involvement in the Romanian economy.  It effectively eliminates the 
possibility of secured foreign lending on real property since lenders 
will be unable to foreclose and take possession of the secured property.  
The Constitutional Court in its Decission 831 of March 1994, ruled that 
Romanian-registered enterprises whose capital is 100 percent owned by 
foreigners are to be considered foreign entities for the purposes of 
land ownership( i.e. that such firms can not legally buy land).


Protection of Intellectual Property Rights

Romania is a signatory to international conventions concerning 
intellectual property rights and has enacted same basic legislation 
covering patents and trademarks o protect these rights.  At the present 
time, however, Romania does not have a copyright law providing 
intellectual standards protection.  Romania's Association Agreement with 
the EU includes specific provisions requiring it internationally agreed 
standards for the protection is field.

Romania has concluded a number of bilateral conventions designed to 
protect industrial property.  Signatory countries include Belgium, Great 
Britain, Italy and Russia.

--  Patents: Romania is a party to the 1883 Paris Convention for the 
Protection of Industrial Property and has subscribed to all of its 
amendments.  Foreign investors are therefore entitled to the same 
treatment as Romanian citizens.  A new Patent law, Law No. 64/91, was 
adopted broadening and clarifying the basis on which a patent is 
granted.  Patents valid for 20 years.  The period for contesting a 
patent application is six months.

As a member of the Stockholm Convention of the World Organization of 
Intellectual Property, Romania is currently prepared to sign the 
Convention for Supplementing the Paris Convention on Patents.

--  Copyrights:  Romania is a member of the Bern Convention on 
Copyrights.  A Copyright Law has been in force since 1956, with periodic 
amendments of the royalty regulations.  However, the absence of clear 
and specific provisions covering direct and indirect rights of 
authorship has led to endemic piracy of copyrighted music, printed 
material, films, and software.  The absence of adequate copyright 
protection prevents many foreign firms from entering the Romanian market 
since there is no way that they can prevent unauthorized duplication of 
their products.  A new draft copyright act incorporating recommendation 
by EU and US copyright experts, is under preparation since late 1993, is 
currently in the legislative commission of the Senate.

--  Trademarks:  Romania joined the 1894 Madrid Agreement relating to 
the International Registration of Trademarks.  According to the 
provisions in force, trademark registrations are valid for 10 years from 
the date of application, being renewable for similar periods.  The first 
applicant is entitled to the registration.  The period for contesting a 
trademark is six months.  The current trademark legislation has been in 
force since 1967/1968; a draft law is under preparation updating the 
law's terminology and harmonizing the domestic provisions with 
international standards.

The industrial property legislation now also includes the Law on the 
Protection of Industrial Drawings and Models which came into force 
January 1, 1933; legislation is presently being drafted on the 
protection of integrated circuit design.

The State Office of Inventions and Trademarks reviews patent and 
trademark applications, issues patents and registers trademarks.


Regulatory System:  Laws and Procedures

Although it pays lip service to the benefits of competition, the 
Romanian government does not have a transparent policy to foster 
competition.  The continued preponderance of state-owned enterprises in 
the economy, some of which are kept alive at enormous cost, is a major 
impediment to the efficient mobilization and allocation of investment 
capital.

Cumbersome and non-transparent bureaucratic procedures are a major 
problem.  Foreign investors complain bitterly of the excessive time it 
takes to secure the necessary zoning permits, property titles, licenses, 
and utility hook-ups, etc. that are required to conduct business in 
Romania.  One of the reasons that many foreign investors take on a local 
Romanian partner is to navigate these byzantine bureaucratic 
requirements, although even that does not guarantee success.

A corollary of red tape is corruption.  It is endemic to Romanian 
society and pervades all levels of Government.  The customs service, 
municipal zoning offices, and local and national financial authorities 
all are affected to some degree by this problem.  In some cases, demands 
for pay-offs and bribes by mid- to low-level officials can reach the 
point of harassment.  Corruption in Romania can constitute an actual 
business risk, especially for small and medium-sized companies that are 
perceived as lacking political clout.


Capital Markets and Portfolio Investment

Romania sees and accepts the need for capital markets in which financial 
instruments can be freely bought and sold and where the transaction 
prices are set by supply and demand.  However, because of the slow pace 
of the privatization process, and the absence of the enabling 
regulation, capital markets  are not yet fully operational in Romania.

Ordinance No. 18/93 and Government Decision No. 552/92 have established 
a securities commission; the commission is charged with regulating the 
securities market in order to protect investors.  The process 
principally provides for: registration and licensing of brokers and 
financial intermediaries, filing and approval of prospectuses; and 
approval of market mechanisms.

Romania officially opened its stock exchange on June 22, 1995.  However, 
the exchange is not yet functioning due to the present absence of of 
companies which have qualified for a listing.  Several applications are 
now uder review.

The initial activity on the exchange will probably be concentrated in 
trading of government and private debt issues and in shares of 
greenfield investment projects.


Political Violence

Over the past few years, there have been no incidents in  Romania 
involving politically motivated damage to foreign investments (projects 
and/or installations).  Major civil disturbances are not likely to occur 
in Romania in the near future.   


Bilateral Investment Agreements

Romania has concluded bilateral investment protection agreements or 
treaties with the following countries: Albania, Algeria, Argentina 
(1994), Australia (1994), Austria (1977), Bangladesh (1987), Belarus, 
Belgium + Luxembourg (1980), Bulgaria (1991), Cameroon (1981), China 
(1984), Croatia, Czech Republic (1985), Cyprus (1993), Denmark (1981), 
Egypt (1977), Finland (1993), France (1978), Gabon (1982), Germany 
(1981), Ghana, Greece (1992), Hungary (1991), Indonesia, Israel (1992), 
Italy (1991), Jordan, Kuwait (1992), Lebanon, Lithuania, Malaysia 
(1984), Moldova (1994), Mauritania (1989), Morocco, Nigeria, Norway 
(1991), Netherlands (1984), Pakistan (1979), Paraguay, Peru, 
Phillipines, Poland (1991), Portugal, Russia (1992), Senegal (1984), 
Singapore, Slovakia, South Korea, Sudan, Sri Lanka (1982), South Korea, 
Spain, Switzerland (1994), Tunisia (1989), Turkey (1994), Turkmenistan, 
Ukraine (1994), United Kingdom (1976), USA (1994), and Uruguay (1993).

The U.S.-Romanian Treaty on the Reciprocal Encouragement and Protection 
of Investment (signed May 1992, ratified by the U.S. party in 1994) 
guarantees national treatment for American and Romanian investors.  It 
provides a dispute resolution mechanism and intellectual property rights 
protection.


OPIC and Other Investment Insurance Programs

Following the signing of an Investment Incentive Agreement in June 1992, 
the Overseas Private Investment Corporation (OPIC) began operations in 
Romania in late 1992.  An OPIC investment mission visited Romania in 
October 1993.

In 1992, Romania became a member of the Multilateral Investment 
Guarantee Agency (MIGA).


Labor

Except for some high-tech fields requiring very specialized skills, 
Romania can offer good-quality labor in most economic sectors.  
According to many reports by foreign investors in Romania, with 
appropriate on-the-job training local labor can be made to perform well 
with new technologies and more exacting quality requirements.  However, 
there is a shortage of Western-type managers.

Since the revolution of December 1989, labor-management relations have 
occasionally rather tense, mainly as a result of economic restructuring, 
which has raised unemployment to 10 percent of the country's active 
labor-force.  Trade unions are powerful, and the Government adheres to 
the ILO convention protecting worker rights.

A holdover from the socialist era, Romanian tradition presumes that the 
first priority for an enterprise is to preserve jobs rather than turn a 
profit.  Individual dismissals for poor performance must be carefully 
documented and are subject to legal challenge by the affected employee.  
Romanian unions have little sympathy for the use of lay-offs in business 
downturns.  Some foreign investors have run into explosive labor 
problems when they have tried to trim staff in loss-making product 
lines.  Foreign investors must be wary about purchasing an enterprise 
that is in need of substantial restructuring.

Steep salary taxes also generate problems.  Romania currently levies a 
marginal tax rate of 60 percent on all salary income above 816,000 lei a 
month (about USD 450).  The law makes it very costly to locate 
expatriate staff in Romania.  To get around these taxes, foreign 
companies often resort to expensive staff rotations, special consulting 
contracts, and non-cash benefits.


Foreign Trade Zones/Free Ports

Free trade zones in Romania are regulated by Law
No. 84/1992.  According to this law, free trade zones are Romanian 
territory, subject to Romanian law.  The customs control is applicable 
only at the borders of free trade zones, which have to be strictly 
delimited.

Transportation means, goods and other merchandise are admitted into free 
trade zones without restrictions as to country of origin or destination, 
provided that the import of such goods into Romania is not prohibited.

Free trade zones are established by Government decision, at the proposal 
of interested ministries and local public administrations.  They are 
managed by a Board of Directors, under the supervision of the Free Trade 
Zones Agency within the Ministry of Transport.

Activities to be carried out in free trade zones (storing, weighing, 
handling, packaging, processing, banking and financial operations, etc.) 
are authorized by a license issued by the Board of Directors of the 
respective zone.  The license is issued following a concession or 
renting contract concluded by the Board of Directors with the client.

According to the provisions of Law No. 84/1992, land and buildings can 
be rented or concessioned to Romanian or foreign legal or natural 
persons for a maximum of 50 years.

According to article 13 of Law No. 84/1992, means of transport, goods 
and any merchandise brought from abroad or in transit to other countries 
are exempted from customs duties and taxes.

Foreign-owned firms have the same investment opportunities in free trade 
zones as Romanian entities.  In case of liquidation of activity, foreign 
legal or natural persons can transfer abroad the capital and profit, 
after due payment of their obligations to the Romanian state and to 
their business partners.

Currently, there are four free trade zones in Romania:

--  Sulina, established by Government Decision No. 156/1993;
--  Constantza-Sud, established by Government Decision
No. 410/1993;
--  Galati Free Trade Zone, established by Government Decision
No. 190/1994; and
--  Braila Free Trade Zone, established by Government Decision
No. 190/1994.

New free trade zones are approved to be opened at Cristesti-Iasi, 
Curtici-Arad, Giurgiu and Oradea.


Capital Outflow Policy

The legal framework for Romania's participation in joint ventures abroad 
continues to be provided by the pre-revolution Decree No. 52/1975, which 
stipulates that Romanian enterprises, commercial companies, and banks 
can participate in joint ventures in foreign countries, can contribute 
to the capital of the joint venture and, if needed, grant credits 
(generally under the form of supplies of Romanian equipment, designs, 
and technology).  Joint ventures of this type operate according to the 
legislation in force in the country in which the company has its 
headquarters.

No accurate statistics on current Romanian investments abroad are 
available.  While capital outflow of the official sector and of 
commercial banks is monitored by the Ministry of Finance and the 
Romanian National Bank, investments made abroad by other economic 
entities, especially privately-owned companies, are extremely difficult 
to trace. 

According to the National Bank of Romania's latest annual report (for 
1993), capital outflow statistics show a total investment of $1,384.4 
million, as follows:

a) General Government (participation in international bodies and other 
assets):  USD 161.0 million;
b) National Bank: USD 1,055.3 million;
c) Banking sector:  USD 137.5 million;
d) Non-bank sector: USD 30.6 million.

The report acknowledges the difficulty of collecting statistical data on 
the real estate and movables held abroad by Romanian residents.


Foreign Direct Investment Statistics

Despite some substantial gains achieved in 1994, direct investment flows 
into Romania (equivalent to about 1.5 percent of GDP in 1994) remain far 
below the levels that the economy needs to achieve a sustained rate of 
growth.  While the number of the officially registered foreign 
investments as of July 15,1995 (46,021 companies from about 140 
countries) is one of the highest in Eastern Europe, the volume of total 
investment is modest, reflecting the fact that the vast majority of 
direct investments made by foreigners are small.  Many of these small 
investments (and even some of the large ones) represent capital inflows 
from members of the Romanian emigre community.  Investments of over one 
million dollars (which account for 72 percent of total investment) were 
made by only 156 firms.

Romanian Development Agency statistics indicate that at the end of 1994 
registered foreign direct investment in the country totaled USD 1.37 
billion (of which USD 87.3 million in 1990, USD 129.2 million in 1991, 
USD 275.0 million in 1992, USD 129.8 million in 1993, USD 650.5 million 
in 1994, and USD 100 million through June 15, 1995).  This total 
excludes subsequently reinvested profits.

The largest foreign investor in Romania (USD 158.0 million) is now Korea 
(which in 1994 acquired 51 percent interests in Romania's second-largest 
automobile producer and third-largest ship-builder), followed by the 
U.S. (USD 132.4 million), Germany (USD 120.3 million), France (USD 108.9 
million), and Italy (USD 118.2 million).

In general, preferred areas for foreign investment in Romania include 
oil exploration (Shell, Amoco, Enterprise Oil, and Occidental); banking 
and finance (Sita Invest, Credit Lyonnais, Manel Finanz, and the 
Wasserstein Perella Group); food processing (Coca-Cola, Pepsi, Leonida 
Teohari, Heinz Schorsch, and Efem Inc.); and commercial construction and 
development (Bouygues and Compagnie Immobiliere Phenix).


Major Foreign Investors 

As of the end of 1994, the top ten corporate foreign investors in 
Romania were Daewoo (Korea; USD 156.0 million), Shell (Netherlands; USD 
44.0 million);  Coca-Cola (U.S.; USD 32.8 million);  Leonida Teohari 
(Canada; USD 23.9 million);  Stima Engineering (Italy; USD 21.0 
million);  Sita Invest (Switzerland; USD 20.6 million);  Credit Lyonnais 
(France; USD 19.2 million);  Amoco (U.S.; USD 17.1 million);  Enterprise 
Oil (U.K.; USD 17.0 million);  and Purolite International (U.K.; USD 
15.8 million).

As regards U.S. direct investment, most of the approximately 1,700 
Romanian-U.S. joint ventures are small and medium-size companies.  Next 
to Coca-Cola and Amoco, larger U.S. investors include Colgate-Palmolive 
(USD 7.5 milliom), Kraft General Foods (USD 6.2 million), Wasserstein 
Perella Group (USD 4.7 million), and Efem Inc. (USD 4.0 million).


VIII.  TRADE AND PROJECT FINANCING

  
Description of Banking System

The Romanian banking system has undergone major restructuring to assist 
the country in its transition toward a market economy.  Key elements 
have been the transformation of the National Bank of Romania (NBR) into 
an entity having the traditional role of the central bank, and the 
development of a network of commercial banks.  On June 1, 1991 the Law 
on Banking Activity (Law 33/1991) and the Statutes-Law of the NBR (Law 
34/1991) entered into force creating the legal framework for modern 
banking.

The Romanian government has been quite cautious in the implementation of 
the banking reform.  The number of banks has gone up from 5 in December, 
1990 to 24 in 1994, and to 29 in 1995, including 7 domestic banks of the 
private sector and 8 foreign or mixed banks.  Under the agreement with 
the IMF, Romania has pledged to privatize two of the state-owned banks.  
The system remains concentrated as four of the five state banks which 
control 90% of the loans to the commercial sector.  The former 
specialized banks, for development, agriculture and foreign trade 
control most of the commercial activities in these fields.  The Romanian 
Commercial Bank is still the banker of the majority of Romanian firms, 
while CEC (The Savings Bank) holds a virtual monopoly over personal 
savings.

The Romanian economy operates mainly on a cash basis, with commercial 
banking still in the early stages of development.  Approximately 29 
commercial banks (state-owned, private Romanian, foreign, and joint-
venture) handle foreign exchange transactions.  Branches of state banks 
operate in all major Romanian cities and several foreign countries, and 
correspondent bank relations are expanding.  In spite of improvements, 
further development is required in handling accounts, in transfering 
funds and in granting loans.

The major domestic commercial banks in Romania are: the Romanian 
Commercial Bank, the Romanian Bank for Foreign Trade (Bancorex), the 
Agriculture Bank (Agrobank), and the Romanian Bank for Development.  
They operate in a manner similar to that of commercial banks in other 
parts of the world, taking deposits and offering a variety of personal, 
commercial, and foreign trade services to their customers.  In addition, 
the Savings Bank (CEC) provides limited banking services in the national 
currency (leu) to individuals.  A number of new banks with private 
capital have been licensed to begin operations including: the Bank for 
the Development of Small and Medium- Sized Industries (Mind 
Bank),"Transilvania" Bank, "Dacia Felix" Bank, BankCoop (cooperatives' 
bank), and the "Ion Tiriac" Commercial Bank.  Seven, of the total 29 
banks operating in Romania, are foreign bank branches and therefore are 
not required to have domestic capital base.  These are Chemical Bank, 
Societe Generale, ING Bank, Frankfurt Bukarest Bank, MISR Romanian Bank, 
Banca Franco-Romana, and Banca Anglo-Romana.

In addition to making loans, banks may buy, sell, maintain in custody, 
and manage monetary assets.  They may also carry out transfers, clearing 
operations, and other operations for their own account as well as for 
the account of third parties.  In time, commercial banks will be able to 
carry out operations and activities with respect to the investment, 
custody and trading of securities, banking consulting services, 
trusteeship, etc.  Commercial banks may, within the limits specified in 
their licenses, carry out operations in foreign currency.

The Stock Exchange, was inaugurated on June 23, 1995, and is expected to 
begin operations by October, 1995.  Its initial staff will come from the 
former Securities Agency (Ministry of Finance), which, along with the 
National Bank have been preparing the Exchange Rules.

The Stock Exchange will be organized in multiple tiers (three or four).  
All companies that have had a public offering and meet the provisions of 
the Securities Act will be accepted into the lower tier.  They would be 
upgraded into a higher tier at their request and according to financial 
disclosure requirements.  Meanwhile, the National Bank has acquired and 
started testing the software to be used in the Stock Exchange.

A special committee is due to select profitable local companies to trade 
their shares on the Romanian Stock Market later in 1995.  Only a small 
number of local companies are expected to qualify.  The first companies 
that will be listed by the Stock Exchange are those privatized by public 
offer (URSUS, brewery, 1992; APULUM, chinaware producer, 1993; the 
companies under privatization November 1994 and April 1995) and several 
private companies.  Companies privatized by public offers can be quoted 
on the exchange.  But to be quoted on the bourse, companies will also 
have to meet a set of minimum criteria, including profitability over 
three years and a solid business plan.

A number of brokerage companies (24) have already been licensed, and 
formed an Association to run the Bucharest Stock Exchange.  The rules 
and regulations of the Stock Exchange have been drafted, with Canadian 
technical assistance.  The Stock Exchange will initially trade 
securities and shares, with futures and options later.  In April 1995, 
the National Commission of Securities (NCS) formally announced the 
creation of the bourse with an initial budget of Lei 1.0 billion (USD 
530,500), and a nine-member committee has elected to run the bourse.

The Law no. 52 on securities and stock exchange, in force since 
September 10, 1994, apply to all securities transactions taking place in 
whole or in part in Romania, to the public distribution of all 
securities and to the secondary trading by all securities dealers.  The 
National Commission of Securities (NCS) is responsible for the licensing 
and supervision of all securities professionals (securities dealers, 
investment advisors, securities analysts) and of all stock exchange and 
other securities markets, whether structured around a physical trading 
floor or through computers.  The NCS is charged with carrying out and 
enforcing the Securities Law and adopting rules to implement the various 
provisions of the law, approving or rejecting all rules and rule changes 
proposed, promoting rules and practices consistent with international 
practices and standards.

The NCS is authorized (1) to conduct periodic examinations of the books 
and records of securities dealers and investment advisors and 
investigate suspicious activity and customer complaints, (2) to require 
them to collect and maintain information about customers' financial 
ability and sophistication and follow prudential practices that take 
that information into account, and (3) to create and operate a self-
insurance fund designed to give some protection to customers with 
respect to their securities and funds in the possession of securities 
dealers and investment advisors that fail.

The Parliament appointed the NCS, consisting of five commissioners, last 
October: a president (appointed for five years), a vive president (four 
years), and three members (with 3 - 1 years of service).


Foreign Exchange Controls Affecting Trading

The exchange authorities opted for a policy of gradual liberalization of 
the exchange regime which was intended to lead to eventual 
convertibility.  In the process, the leu has undergone a substantial 
devaluation.  By the end of 1993, the leu was trading at 1,276 to the 
dollar from the rate of 20 to the dollar in October, 1990.  During the 
first part of 1994, the leu settled at about 1,650 to the dollar, and 
has now remained in a narrow trading range. The 1995 exchange rate (end 
of month) was starting at Lei/USD 1,780.0, then was of about Lei/USD 
1,847.0 in March, reaching Lei/USD 1,879.0 in April.

The course of exchange policies of the government has been dictated by a 
desire to avoid a vicious spiral of inflation-depreciation that was 
feared would occur if the rate were freed in the absence of supporting 
macro-economic policies.  The government also wanted to ensure secure 
access to foreign exchange for imports of energy and raw materials.

In February, 1994, the National Bank of Romania implemented a program to 
gradually libertize the national currency's exchange rate and the 
transition to an interbank currency market.  By the end of July, 1995, 
the interbank currency market will fully replace the currency auctions 
organized by the NBR.  The interbank currency market will integrate all 
authorized intermediaries (banks and exchange offices) which will be 
able to sell and buy currency without any limitations at freely 
negotiable rates.  The currency market will be in agreement with 
international standards, being decentralized and continuous.


General Financing Availability

During 1990-93, Romania's considerable demand for foreign goods and 
services was constrained by severe hard-currency shortages.  Currently, 
domestic sources of financing are loss limited.  Moreover, in early 
1994, a number of external financial resources have become available.

Romania financed its post-revolution development first by drawing on its 
foreign exchange reserves, estimated at USD 1.7 billion at the end of 
1989.  By the end of 1993, even with external assistance, the National 
Bank's reserves had shrunk to about USD 50 million, while the 
liquidities kept by commercial companies in Romanian banks stood at 
about USD 450 million.  On April 14th, 1995 the NBR's reserves amounted 
to USD 529 million, and gold reserves have increased due to the domestic 
production to 82.3 tons, a total increase of more than USD 1 billion.  

Since January, 1995, there has been a relaxation of monetary constraints 
as the NBR continues to reduce interest rates concurrently with the 
curbing of inflation.  At the beginning of 1995 it reduced its 
refinancing rate from 58% to 55%.  In November the monetary reserve was 
133% higher than the level of the previous year, and prices were by 70% 
higher.  Beginning with May, 1994, except for October, the monthly 
growth rate of the monetary reserve exceeded the monthly inflation 
average.   Until November, nongovernmental credits had increased by 81%, 
to Lei 8.875 million, compared with 58.4% inflation rate of the same 
period, which reflected a growing demand in the latter half of the year, 
when commercial banks started reducing their interest rates.

Virtually debt-free at the time of the revolution, Romania has since 
increased its foreign debt to USD 4.873 billion at the end of 1994 (of 
this, USD 1.7 billion is short-term debt).  Loans from international 
financial institutions totalled USD 2.84 billion.  Foreign debt 
servicing amounted to USD 431 million, of which USD 264 million 
represented interest paid.  The debt service ratio in 1993 was 7.2 
percent of hard-currency export earnings.  Romania's external debt is 
expected to increase by USD 1.54 billion in 1994.  On the other hand, 
Romania is still owed USD 2.6 billion, of which more than USD 1.7 
billion is owed by Iraq.

During the last 4 years Romania has worked closely with the 
International Monetary Fund (IMF) to implement its economic/financial 
reforms.  In spite of this, two standby programs were terminated by 
mutual consent before final tranches were disbursed when it became 
obvious that Romania would be unable to meet all program targets.  
Despite all that, in 1994 Romania adopted a much more comprehensive 
program.  In May 1994, the IMF approved a stand-by agreement worth USD 
720 million and funds to assist structural adjustment for an 18-month 
period.  The terms of the framework policy which were agreed upon 
consisted of a severe monetary policy, fiscal caution and a significant 
acceleration of the structural reforms.  They included the adoption of 
an austerity budget and of several fiscal reforms; the liberalization of 
the market of trade exchanges and regulations concerning foreign 
investment, as well as a severe monetary policy and a rise in interest 
rate.

A number of terms, linked particularly to restructuring and 
privatization, were set in exchange for the considerable loans Romania 
expects from other donors, including the World Bank, the European Union, 
EBRD and the European Investment Bank.  At the end of 1994 the World 
Bank negotiated a Finance and Enterprise Structural Adjustment Loan 
(FESAL).  The prospects for a successful stabilization are better than 
in the previous program: the leadership seem to be committed to reform; 
the majority of prices have been liberalized; and the economic crisis is 
less severe.  At the forefront of the recovery have been sectors such as 
the light industry, financial services, construction and agriculture, 
which together contributed to an increase of 3.4% in gross domestic 
product last year, while exports rose 22.6% according to official 
statistics.

Since 1990, the World Bank has approved loans totaling USD 1,350.6 
million, including a USD 400 million structural adjustment loan (SAL) to 
support economic stabilization, industrial restructuring and social 
welfare.  However, disbursement of the second tranche of the SAL (USD 
150 million plus USD 33 million from Japan's Eximbank) was delayed 
pending completion of negotiations with the IMF and further measures by 
the GOR to assure compliance with conditions of the loan agreement.

Other World Bank loans include a USD 150 million for the health sector, 
USD 120 million for transportation system improvements, USD 175.6 for 
the modernization of the oil and gas sector (granted for 20 years, with 
a 5-year grace period), USD 175 million for industrial development, and 
USD 100 million for supporting private farmers.  Loans were also granted 
for critical imports (USD 180 million) and for education (USD 50 
million).

World Bank loans under consideration include USD 250 million for the 
restructuring and privatization of industry and the banking system, USD 
200 million for energy sector development, USD 75 million for the 
development of telecommunications, and USD 114.5 million for 
environmental and social programs.

But, with one eye on next year's general elections, the country's 
leaders are balancing the requirements of multilateral lenders and the 
need for reforms against how much they think the population will be able 
to bear next winter.

For assistance in working with the World Bank, U.S. companies should 
contact Janice Mazur, the U.S. Department of Commerce procurement 
liaison officer to the Bank.  She can be reached on Tel. (202) 482-4332 
or Fax (202) 477-2967.

The European Bank for Reconstruction and Development (EBRD) has so far 
funded 17 projects in Romania (total loans: 424.7 ECUs) of which 4 are 
devoted to the development of the banking system.  Main infrastructure 
projects include telecommunications modernization, European roads 
rehabilitation, agribusiness development, petroleum sector pilot 
modernization, and upgrading of the garment industry.

It should be noted that the U.S. capital subscription to the EBRD totals 
USD 1 billion over five years.  U.S. companies are eligible to compete 
for and bid on all EBRD financed projects.  

For information on EBRD projects in Romania, interested U.S. companies 
should contact Office of the U.S. Executive Director, One Exchange 
Square, London EC 2EH, U.K.; Tel. 44-71-338-6569; Fax 44-71-338-6487.

Last but not least, commercial lending to Romania has improved, although 
lenders remain extremely cautious.  In 1994 commercial loans totaled 
about USD 350 million.


International Technical Assistance Programe, of a nonrepayable nature, 
is also been granted to Romania.  The most extensive has come from the 
EU's PHARE program, which in 1991-92 disbursed a total of 230 million 
ECUs. The United Nations provided USD 869 million in 1991, and could 
give as much as USD 4 billion by 1996.

Individual countries have also initiated technical assistance programs.  
U.S. assistance was limited to humanitarian and food aid in 1990 and 
most of 1991.  In 1992, technical assistance, soft credits, and other 
financial support became available.  The most sizeable was a USD 10 
million loan given under G-24 auspices for agricultural sector 
assistance.

Romania became eligible for U.S. Trade and Development Agency (TDA) 
program funding in November 1991.  Since then it has received nine 
grants (with a combined value of USD 3,137,000) for feasibility studies 
covering such important sectors as electric power (modernization of the 
energy management system for the national electric power grid; 
development of Bucharest's district heating system), land reclamation 
(irrigation system modernization), telecommunications (telephone local 
distribution project; network management center project); private sector 
(feasibility study on a liquid food packaging project); and  
transportation (the modernization of the Oradea airport; automated 
railway ticketing system; the Bucharest metro ventilation system).  TDA 
also funded Romanian participation in international conferences and in 
procurement trade missions in the fields of electric power technologies, 
telecommunications, food processing and packaging equipment, printing 
equipment, and highway development.

A USG-funded, privately-managed Romanian-American Enterprise Fund was 
approved in April 1993 and started operations in June 1995.  It is 
capitalized at USD 50 million in foreign assistance appropriations over 
a 3 year period.  The purpose of the Fund is to promote private sector 
development in Romania.  The Fund has authority to make equity 
investments and loans, and offers technical assistance to promote new 
private initiatives and privatization of existing enterprises, with 
special emphasis on the promotion of small and medium-sized businesses.  
The Fund may support joint ventures which involve U.S. investors with 
Romanian partners.

Export Financing and Methods of Payment

Although the supply of hard currency is adequate, Romanian companies, 
both state-owned and private, currently have considerably higher amounts 
of hard currency in their bank accounts than was the case in 1990-93.  
With about USD 1 billion in Romanian banks, individual companies are now 
in a better position to pay for imports of Western goods.

Until November 1993, when the bilateral Trade Agreement was ratified by 
Congress, Romania's access to USG financing and insurance programs was 
limited.

The Export-Import Bank of the United States (Eximbank) opened for short-
term (180 days) coverage for exports to Romania in May 1992.  So far, 
the largest U.S.-Romanian transaction (USD 78,957,827) covered by 
Eximbank has been the export of two Boeing 737's purchased by the 
Romanian national airlines Tarom.  However, it should be noted that 
special Eximbank rules apply for the financing of aircraft exports 
(pending letters of interest are estimated of about USD 8.5 million).  
Eximbank's latest vote (May 1995) on the sovereign and private risk 
ratings for Romania appears not to have changed the country's rating, 
Romania not being eligible for medium-term and long-term coverage, 
except for the state-owned sector (total non-aircraft outstanding 
letters of interest being estimated at about USD 529,211,582, the total 
aircraft business, loan and guarantees, exposure being estimated of 
about USD 122,330,795, and with a total potential - pending letters of 
interest - exposure of about USD 653,682,895).

Other U.S. agencies fill various market niches.  The U.S. Department of 
Agriculture, the Small Business Administration, and the Agency for 
International Development have initiated a variety of programs in 
Romania, some of which present direct business opportunities for U.S. 
companies.

The most widely accepted method of payment is by confirmed letter-of-
credit, since it provides the greatest protection to the seller against 
payment delays.  Of other, less desirable arrangements, unconfirmed 
letter-of-credit terms are preferable to cash-against-documents or open-
account terms.  Contracts should stipulate interest payment if the 
Romanian partners do not meet their obligations on time.

The financing environment in Romania has encouraged methods of payment 
which circumvent the problems generated by the lack of hard currency.  
One solution is offered by barter/countertrade.  Compared with the old 
system, under which countertrade was not only mandatory but also subject 
to sourcing restrictions, the current mechanisms provide for 
considerable flexibility.

Co-production arrangements, deferred payment plans, and self-financing 
packages are other means of coming to terms with the situation.  In 
general, the more willing the U.S. company is to be creative, the 
greater the chances of concluding a contract.  Many Romanians, 
especially small private entrepreneurs, admit their inexperience in 
financing, so it is largely up to the U.S. partner to suggest options.

In 1995, alternatives include: bank deposits, shares, bonds, T-bills, 
foreign currency, certificates of ownership, investment titles to the 
mutual funds.

Unfortunately, the access to financial speculation in the market is 
still low and the regulations insufficient.

According to the official statistics, the total Romanian exports in May 
1995 amounted USD 607.9 million, 30.6% higher than in May 1994, 
representing a 25.5% growth rate for the 1995 first five months as 
referred to the same period of 1994.  The May 1995 FOB imports are 5.9% 
less than in April 1995, however growing 42% in respect of May 1994, 
thus explaining a total 40.6% increase rate of January-May 1995 imports 
with respect to the same period of 1994.  All these figures are 
indicating, for the 1995 first five months a trade deficit of about USD 
476.8 million.  The monthly inflation average rate is estimated over the 
first five months of 1995 at 1.4%, significantly decreased than the 
inflation rate for the same period of 1994 (which was of about 6%).


Project Financing and Insurance Available

Romania's program of economic restructuring and modernization includes 
an impressive number of projects which are scheduled to be implemented 
during the next 10-15 years.  As in the case of major projects underway, 
future projects will be financed, to a large extent, from Romanian 
sources (Government and industry funds), but an essential part of 
financing is expected to come from multilateral institutions and foreign 
investors.  Priority projects supported by multilateral institutions are 
mainly related to infrastructure modernization, including such sectors 
as transportation, telecommunications, power generation, and environment 
protection.  Viable private sector projects are also supported on a 
priority basis.

Welcoming foreign capital, technical knowledge, and management expertise 
is a top priority on the GOR's agenda.  Foreign capital is essential to 
Romania's economic reforms.  It performs two roles: (1) supplying extra 
financial resources to raise the overall productive output of the 
economy; and, (2) providing the managerial, technological and 
entrepreneurial skills that underpin Romania's free market reforms.  In 
order to encourage foreign investment, the GOR claims that the treatment 
of foreign investors is based on three basic principles: (1) equal 
treatment for national and foreign investors; (2) free access to the 
various Romanian markets and economic sectors; and, (3) minimum 
government intervention.  The Romanian legislation in place specifically 
permits foreign investors to engage in business activities in any, of 
the following ways: (1) creation of new commercial enterprises either 
wholly owned or in partnership with Romanian legal persons; (2) 
participation in the increase in the registered capital of an existing 
commercial company or the acquisition of shares, bonds, or securities of 
such companies; (3) acquisition of concessions, leases or agreements to 
manage economic activities, public services, or production subunits 
belonging to commercial companies or state owned enterprises; (4) 
acquisition of ownership rights over non residential real estate 
improvements, the exception being land; (5) acquisition of industrial 
and other property rights; and, (6) conclusion of exploration and 
production sharing agreements related to the development resources.

Foreign investment may be developed in any sector in industry, 
exploration, and production of natural resources, agriculture, 
infrastructure and communications, civil and industrial works, 
scientific research and technology development, trade, transportation, 
tourism, banking and insurance services, and other services, except for 
some specially restricted areas internationally acknowledged.  

Apart from the favorable foreign investment legislation, advantages of 
Romania as a good place for investment, generally include: (1) excellent 
location in Central Europe for access to both Western and Central 
European markets, nearby Middle East and former Soviet Union (in a 
radius of 1,000 km, there are over 200 million potential customers); (2) 
the second largest market in Central and Eastern Europe, with a wide 
range of natural resources including fertile agricultural land and 
tourism potential; (3) a low-cost and technically high-skilled labor; 
and (4) the country offers a diversified economy, mainly in the 
industrial sector.

In June 1994, the Romanian Parliament adopted a law on "facilities for 
attracting foreign investment and capital in industry".  As a general 
comment, the Romanian government has moved away from blanket taxation 
exemptions towards focused incentives which are clearly intended to 
encourage investment in particular sectors.  For a minimum invested 
capital of USD 50 million, with a minimum share of local components of 
60% and with at least 50% of production exported, companies with foreign 
capital enjoy certain tax exemptions, particularly in the case of 
imports of machines, tools and equipment needed by the project for a 
period of at least 7 years from the company's establishment date.  Such 
qualifying companies will be exempted from profit tax for 5 years from 
the date they start making a profit, but no longer than 7 years from the 
start of production activities.

While USD 50 million investment is very high, all foreign investors will 
continue to benefit from the customs exemption for equipment and 
machinery representing a contribution to capital or being bought with 
their cash share to capital.  Exemption is also valid for raw materials 
and by-products supplied for the first two years of activity.

Profits due to the foreign investor may be fully repatriated.   The Law 
No. 35/1991 was amended so as to clearly stipulate the right of foreign 
investors to freely transfer abroad their annual profits, after paying 
due taxes, as well as the amounts resulted from the sale of shares, 
bonds or from liquidation of the investment.  The profit tax is set at 
38%, with some differences depending on the nature of the taxpayers' 
business.  Thus, taxpayers with more than 50% of revenues originated in 
entertainment, restaurants and night clubs are liable to pay an 
additional 22% tax.  Taxpayers are subject to a 25% tax, provided at 
least 80% of their revenues comes from agricultural activities.

Foreign legal entities, with profit making activities headquartered in 
Romania, are subject to an additional 6.2% over the standard 38% stated 
tax.  Profits repatriated from Romania to the source country are 
subjected to a 10% dividend tax.  Foreign investments are not subjected 
to nationalization, expropriation, confiscation, requisition or nay 
other measure of similar effect except when this is in the public 
interest and then only under due process of law and with appropriate 
compensation.  In this respect, Romania has concluded bilateral treaties 
for mutual guarantee and encouragement of investment, becoming a member, 
in 1992, of the Multilateral International Guarantee Agency (MIGA).

U.S. project financing and insurance can be provided by the  Overseas 
Private Investment Corporation (OPIC), which began operations in Romania 
in late 1992.  The only major project approved to date is an OPIC loan 
of USD 5 million, plus investment insurance of up to USD 15 million, 
granted to a U.S.-Romanian manufacturer of ion-exchange resins to be 
used for industrial and domestic water purification.  The project was 
co-financed by EBRD.  Four American companies intend to apply for 
guarantees from OPIC: Cleveland Treacher and Detroit Diesel are 
negotiating investments in the machine building industry; McDermott, a 
subsidiary of Babcock & Wilcox, plan to make investments in construction 
and oil industry; Nynex is in negotiation with the Ministry of 
Communications in order to publish a Romanian directory.  The Swiss 
company Kraft Jacobs Suchard (KJS), a subsidiary of the American group 
Philip Morris, increased its stake in the confectionery manufacturer 
Poiana Brasov from 82% to 97.3% last year.  Accordingly, KJS will invest 
USD 12 million to modernize the equipment and increase the output 
capacity from 12,000 tons to 21,000 tons per year.  "Poiana" is 
accounting for one third of the Romanian confectionery market.

Financing packages for Romanian projects has generally included one or 
more multilateral lenders -- the World Bank (or its International 
Finance Corporation), EBRD, the European Investment Bank -- plus foreign 
and Romanian commercial banks.  Romanian government guarantees are 
issued by the Ministry of Finance for projects of up to USD 30 million.  
Guarantees for larger projects have to be submitted by the Ministry of 
Finance to the Government for approval.

GOR guarantees are approved on the basis of feasibility studies which 
must contain a clear description of the financial package for the 
project.  Project funding for technical assistance has so far been 
offered by EU's PHARE program and by TDA.

The total investment figures for the first quarter of 1995 are estimated 
of about Lei 1,62 billion, representing a 5.8% increase over the period 
of time of 1994, out of which a higher figure (11.9%) is registered in 
the private investment sector.


Romanian Banks with Correspondent U.S. Banking Arrangement

Romanian Commercial Bank:  U.S. corespondents:  CitiBank New York, NY; 
American Express Bank Ltd. New York, NY; Bank One Columbus, Columbus, 
OH; Bank One Dayton, Dayton, OH; The Bank of New York, NY; The Chase 
Manhattan Bank, New York, NY; Comerica Bank Inc., Detroit, MI; Commerce 
Bank of St. Louis, St. Louis, MO; Amtrade Int'l Bank, Atlanta, GA; First 
National Bank of Chicago, New York, NY; First Wisconsin, Milwaukee, WI; 
Swiss Bank Corp., New York, NY; The Pacific Bank, San Francisco, CA; 
Philadelphia National Bank, Philadelphia, PA; Standard Chartered Bank, 
New York, NY; Trust Co. Bank, Atlanta, GA; Seattle First National Bank, 
Seattle, WA; Marrinne Midland Bank New York, NY; Republic National Bank 
of New York, NY; Credit Lyonnais, New York, NY; Bank America Corp., San 
Francisco, CA; Bank of Tokyo/New York Agency, New York, NY.

Agricultural Bank:  U.S. correspondents:  American Express Bank Ltd. New 
York, NY; Bankers Trust Co., New York, NY; CoBank-National Bank for 
Cooperation, Denver, CO; Robabank Nederland New York, NY; ABN AMRO 
Chicago, Chicago, IL.

Romanian Bank for Development:  U.S. correspondents:  American Express 
Ltd. New York, NY; CitiBank New York, NY; Credit Lyonnais New York, NY; 
Republic National Bank, New York, NY; The Riggs National Bank, 
Washington, DC.

Romanian Bank for Foreign Trade:  U.S. correspondents: CitiBank, New 
York, NY; Morgan Guaranty Trust Co., New York, NY; Bankers Trust Co., 
New York, NY; First Chicago International, New York, NY; Chase Manhattan 
Bank, New York, NY; Credit Lyonnais, New York, NY; Bank of New York, NY; 
European American Bank, New York, NY; American Express Bank, New York, 
NY.

Bank Post S.A.:  U.S. correspondents:  First Wisconsin National Bank 
Milwaukee, WI; American Express Bank, New York, NY; The Riggs National 
Bank, Washington, WA.



IX.  BUSINESS TRAVEL

  Business Customs
  Travel Advisory and Visas
  Holidays
  Business Infrastructure (e.g. Transportation, language, 
communications, housing, health, food)

Business Customs

Special customs do not figure significantly in business dealings in 
Romania; Western business conduct standards apply.

Romanians have genuine regard and admiration for Americans.  The quality 
of U.S. products and services, the efficiency of American management 
practices, and the reliability of U.S. business partners are widely 
recognized.

Romanian nationals are friendly, industrious people, and foreigners are 
usually made very welcome.  Shaking hands is the normal form of 
greeting, and normal courtesies are observed when visiting people's 
homes.  It is important to take business cards to meetings and to give a 
card to each person present.

Flowers are very popular in Romania culture, and are given for almost 
every occasion, including name day celebrations, weddings and visits to 
Romanian homes.  Casual wear is the most suitable form of dress for most 
social occasions, but attire should be more formal when specified for 
entertaining in the evening or in a restaurant or theater.  The 
Romanians use the formal addresses of "Domnul" (sir) and "Doamna" 
(madam) when addressing one another, although first names are used among 
younger people and in business with English-speaking partners.  When 
dinning, it is usual to say "Pofta Buna" (bon appetit) before eating, 
and "noroc" (cheers) before drinking.


Travel advisory and Visas

It is advisable that Romanian visas be obtained in advance from the 
Romanian Embassies in the countries of residence if you intent staying 
for more than one month in Romania.  The cost varies, and must be paid 
for in hard currency.  To exit Romania without problem, the visa must be 
still be valid, and you must have your "exit visa" (talon de iesire), 
which was filled out when you entered the country, and is a small white 
sheet of paper placed in your passport.

If a Romanian visa expires while in Romania or your visit extends to 
more than one month, the visa can be extended/obtained at the Police 
Headquarters in any larger city (the fee is USD 31).  If somebody loses 
the "exit visa," the person must contact the Romanian passport office. 
If the passport is lost you have to contact the American Consulate 
office and request a temporary one.  Be advise that it could take more 
than one day.

The situation regarding purchase of Romanian currency is in a constant 
state of change.  Private exchange bureau located throughout the city 
often offer the best rates;  however, this changes daily.  In any case, 
it is advisable to bring along enough cash dollars for your stay , 
however, the major hotels do accept both credit cards and travelers 
checks.  Romanian law allows foreigners to bring up to 50,000 US dollars 
in cash into Romania, but requires them to declare any amount above 
1,000 US dollars upon entry.  No amount in excess of that declared upon 
entry may be taken out of Romania upon departure.  Sums larger than 
50,000 US dollars must be transferred through banks.  No more than 2,500 
Romanian lei, local currency, may be brought into or taken out of the 
country.  There is no requirement to change any specific amount of money 
per day while you are in Romania.

Travelers should be advised that money exchanging schemes have become 
increasingly common in Romania.  Some of the scams are rather 
sophisticated, involving individuals posing as policemen.  Travelers 
need to be aware of this activity in addition to the problem of 
pickpocketing.  If the traveler has any questions about this matter, 
they should contact Post's Regional Security Officer (RSO) at the 
Embassy, phone (40-1) 210-4042, ext 250.

Holidays

--  January 1-2 (New Year's Day) 
--  (Orthodox Easter)
--  May 1-2 (Labor Day)
--  December 1 (Romanian National Day)
--  December 25 (Christmas Day)


Business Infrastructure

--  Language: The official language of Romania is Romanian.  This 
language, which uses the Latin alphabet and is a Romance language, 
evolved from the Latin used in the Roman colony of Dacia.  English, 
French and German are also widely spoken.

--  Transportation: Three Romanian airlines, Tarom, LAR, and Romavia, 
serve major points in Romania, Europe, Asia, and North America.  
International carriers currently serving Romania include Air France, 
Alitalia, Austrian Airlines, British World Airways, Delta, El Al, 
Lufthansa, Swissair, and Turkish Airlines.  Other  Eastern European 
carriers include Aeroflot (Russia), Balkanair (Bulgaria), CSA (Czech 
Republic and Slovak Republic) LOT (Poland), and Malev (Hungary).

All major cities and towns of Romania have airline service nearby and 
are connected to the Bucharest hub.  Timisoara and Constanta airports 
are also ports of entry.

Sofitel and Intercontinental hotels provide scheduled shuttle bus 
service to and from the hotel as well as rent-a-car service, should you 
wish to use these services.  In addition, taxis are readily available at 
Otopeni airport at approximately USD 15-20.  Price should be agreed upon 
prior to hiring taxi.  Immediately upon leaving the arrival hall (after 
clearing customs) there are a plethora of bootleg taxi operators.  These 
should be avoided.  Regularly marked taxis are available outside the 
terminal.  Romania is also well served by an international and domestic 
rail system.  The daily Wiener-Waltzer Express from Vienna takes roughly 
20 hours to reach Bucharest.

The current domestic highway network is extensive and the road quality 
is adequate. Intercity roads are currently being upgraded.  The highway 
system in Romania is still under development, however, and the 
construction of a new highway that bypasses the capital is in progress.

Driving to Bucharest in December-February is not advisable because 
mountain passes can be hazardous.  Driving after dark at any time of 
year also is not recommended because of pedestrians, animals, or slow-
moving vehicles often encountered on the roadway; otherwise, the main 
roads are reasonably good.

--  Accommodations:  Romania offers a wide variety of hotels and long-
term living accommodations that can be reserved through international 
travel agents or by direct contact.  Major hotels offer fax, telex, and 
international telephone service.  Payment for accommodation, meals, and 
other services can be in lei, convertible currency, travellers' cheques, 
or by major credit cards.  US dollars in cash are easily exchanged and 
very widely accepted as a payment medium.  It is advisable to reserve 
hotel accommodations before arriving in Romania, especially during peak 
periods.

Office rentals are available at the ROKURA Business Center at the Hotel 
Dorobanti, Modern Business Center, World Trade Business Center near the 
Sofitel Hotel and the International Fairgrounds (Piata Presei Libere).

--  Medical and Health:  Due to lack of equipment, medical care is often 
below Western standards.  Hotels sometimes have doctors on call, and 
more private clinics are opening each year.

In case of emergency, you may go to Emergency Hospital in Bucharest 
(Spitalul de Urgenta), Calea Floreasca 8, on the corner with Soseaua 
Stefan cel Mare (tel. 679-64-00), or its equivalent when outside of 
Bucharest.

For less serious medical problems, you may like to contact Dr. Adrian 
Strainu-Cercel at Colentina Hospital: 210-5070 ext. 206 or 140 or at 
home: 614-0791, or Dr. Mackenzie who is available at his office: 210-
5580 or on his mobile phone: 018-600-261.

--  Telecommunications:  Local telephone service is automatic and fairly 
dependable.  International telephone and telegraph connections are 
generally good, but delays may occur in placing calls, and they are 
quite expensive, with price per minute rising with the length of the 
call.  Romania is seven time zones ahead of U.S.-Eastern standard time.

--  Getting Dollars in Romania:  The best way to get dollars in Romania 
is to bring them with you.  Traveler's checks will be accepted for 
payment of hotel, airline, car rental and railroad bills.  Traveler's 
checks can be cashed for dollars for a fee in Bucharest at the Romanian 
Bank for Foreign Trade (BRCE), Str. Eugen Carada 1-3, (corner of Str. 
Liptcani) or other banks.  Outside of Bucharest you should go to the 
local branches.

To transfer funds to Romania commercially, there are two methods.  Your 
bank abroad can wire money to the Romanian Bank for Foreign Trade 
(BRCE), telex EBANK 11235 or 11703.  Or your bank abroad may get in 
touch with Chemical Bank, which has a branch in Bucharest, Blvd. Carol 
I, No. 5 (tel. 312-03-25, 312-35-48, 312-04-70, fax: 312-10-76).  Make 
sure to specify to whom the money is payable, and that it be paid in 
dollars or other hard currency.  Total transaction time is usually three 
to four working days.



  APPENDIX A

   COUNTRY DATA1

Population: 22,748,000 (as of January 7, 1992)
Population Growth Rate: -0.1%
Religions:  Orthodox 87%, Roman Catholic 5%, Reformed 3.5%
Government System:  Constitutional republic
Languages:  Romanian 89.5%, Hungarian 7.1%, Gypsies 1.8%
Work Week:  Monday - Friday, 8:00-16:00.


  APPENDIX B

  DOMESTIC ECONOMY

                                1994  1995  1996
                        (USD Millions, Except Where Noted)

GDP                            23,018  23,708  24,420
GDP Growth Rate 1996 (%)         3.4%      3%      3%
GDP Per Capita (USD)            1,012   1,402   1,500
Government Spending (% of GDP)   14.1    14.0    14.0
Inflation (%)                   61.7%     30%     20%
Unemployment (%)               10,410  12,000  12,000
Foreign Exchange Reserves         590*   431*  
Average Exchange Rate For $1.00 1,850   2,100   2,300
Foreign Debt                    4.417    5.00    5.50
Debt Service Ratio (% of hard    71.6    76.0    77.4
  currency exports)



  APPENDIX C

                                      TRADE
                               1994     1995     1996
                          (USD Millions, Except Where Noted)

Total Romanian Exports      6,151.3  6,582.0  7,108.0
Total Romanian Imports      7,109.0  7,465.0  7,839.0
U.S. Exports                  465.2    512.0    564.0
U.S. Imports                  193.4    223.0    257.0

U.S. Share of Romania's        6.55     6.99     7.19
  Imports (%)

Imports of Manufactured Goods
- Total (From World)        6,780.1  7,351.0  7,939.0
- From the U.S.               392.0    432.0      476
- U.S. Share of Manufactured
  Imports (%)                   5.7      5.9      6.0
- Manufactured Goods Trade Balance
  with U.S.                    2.05     1.96     1.89
- Projected Average Annual Growth Rate
  from World Through 1996 (%)**   -     7.00     8.00
- Projected Average Annual Growth Rate
  from U.S. Through 1996 (%)**    -    10.00    10.00

Imports of Agricultural Goods
- Total (From World)          238.9   168.0   143.00
- From the U.S.               73.20   52.00    45.00
- U.S. Share of Agricultural
  Imports (%)                 30.60   31.00    31.50
- Agricultural Goods Trade Balance
  with U.S.                   33.30   10.40     6.40


Trade Balances with 3 Leading
  Partners in 1994:

          Exports  Imports
Russia:    60.00     96.00
USA:      193.40    465.20
Germany:  795.00    841.00

Principal U.S. Exports***:  Aircraft (HS 8802); Telecommunications 
equipment (HS 8517); Automatic data processing machines (HS 8471); 
Office machines (HS 3469-8472); Coal (HS 2701); Woven Fabrics (HS 5801)

Principal U.S. Imports***:  Apparel(HS 6200); Footwear (HS 6401, 6403); 
Glassware (HS 7003-7015); Tractors (HS 8701); Taps, Valves and Other 
Appliances (HS 8481); Ball or Roller Bearings (HS 8482); Steel Products 
(HS 7201-7326); Oil Products (HS 2710); Rubber Tires (HS 4011)


  APPENDIX D

  INVESTMENT STATISTICS


- Total Foreign Direct Investment as of June 30, 1995 (USD Millions):  
1,373.
- U.S. Direct Investment (USD Millions and Percent Share of
  Total Foreign Investment):  132.5 (9.7%)
- Principal Foreign Investors:  South Korea (USD 158 million), USA (USD 
132.5 million), Germany (USD 120.8 million).

Notes:
1. All data are official Romanian statistics, unless otherwise noted.
2. Embassy estimate.
3. USDOC data.
  


  APPENDIX E

  U.S. AND ROMANIAN CONTACTS**


I.  WASHINGTON-BASED USG CONTACTS

U.S. Department of Commerce

US Commercial Service
Office of International Operations
George Knowles, Regional Director for Europe
U.S. Department of Commerce - Room 3130
14th and Constitution Avenue, N.W.
Washington, DC 20230
Tel. (202) 482-1599
Fax: (202) 482-3159

International Economic Policy
Central and Eastern Europe Division
Brian Toohey, Romanian Desk Officer
U.S. Department of Commerce - Room 3319
14th and Constitution Avenue, N.W.
Washington, DC 20230
Tel. (202) 482-4915
Fax: (202) 482-4505

Central and Eastern European Business Information Center (CEEBIC)
U.S. Department of Commerce - Room 7414
14th and Constitution Avenue, N.W.
Washington, DC 20230
Tel. (202) 482-2645
Fax: (202) 482-4473

U.S. Department of State
Frank Collins, Desk Officer for Romania
U.S. Department of State - Room 5219
2201 C St., N.W.
Washinton D.C. 20520
Tel. (202) 647-4272
Fax: (202) 736-4853

U.S. Trade and Development Agency
Eric Thoreson, Country Manager
U.S. Trade and Development Agency
Washington, D.C. 20523-1602
Tel. (703) 875-4357
Fax: (703) 875-4009


II.  U.S.-BASED MULTIPLIERS RELEVANT FOR ROMANIA


U.S. Chamber of Commerce
Gary Litman, Executive Director, CEE Business Councils
1615 H Street, N.W.
Washington, D.C. 20062-2000
Tel. (202) 463-5460; (202) 463-5488
Fax: (202) 463-5460; (202) 463-3114

Romanian-American Chamber of Commerce
Mark A. Meyer, Chairman
Kelly Swanson, Associate Director
Chevy Chase Metro Building
Two Wisconsin Circle, Suite 1030
Washington, D.C./Bethesda, MD 20815
Tel. (301) 656-9022
Fax: (301) 656-9008

Dr. Daniel Grindea, President
460 Park Avenue, New York, NY 10022
Tel. (212) 339-5402
Fax: (212) 935-3121


III.  ROMANIAN COMMERCIAL REPRESENTATION IN THE U.S.


EMBASSY OF ROMANIA
Marian Voicu, Economic Councellor:   Tel. (202) 332-4830
1607 23rd St., N.W.
Washington, D.C. 20008
Tel. (202) 232-4747 or 232-6593
Fax: (202) 332-4858

Consulate General of Romania
Gheorghe Lupes, Consul General
Gheorghe Vasilescu, Vice Consul, Economic Affairs
New York, NY 10016
Tel. (212) 682-9120 or 682-9123
Fax: (212) 972-8463

Consulate General of Romania in Los Angeles
Mihai Sion, Consul General
11766 Wilshire Blvd.
Suite 1230
Los Angeles, CA 90025
Tel. (310) 444-0043
Fax: (310) 445-0043

IV.  U.S. EMBASSY TRADE PERSONNEL

William H. Crawford, Commercial Attache
Rodica Tinis, Commercial Specialist
Dan Floru, Commercial Assistant
Doina Brancusi, Commercial Assistant

Tel. (40-1) 210-4042, 210-0495
Fax: (40-1) 210-0690

International Mail:
American Embassy
Foreign Commercial Service
Str. Tudor Arghezi 7-9
Bucharest, Romania

U.S. Mail:
AmEmbassy Bucharest
Foreign Commercial Service
Unit 1315
APO AE 09213-1315

State Mail:
American Embassy Bucharest
Commercial Section 
Department of State
Wash. DC 20521-5260

American Chamber of Commerce
Andrei Barbu, Manager
Str. M. Eminescu 105-107, Ap. 1
Tel. (40-1) 211-7515
Tel/Fax (40-1) 210-9399

Romanian-American Chamber of Commerce
Gilbert P. Wood, Director
World Trade Center, Floor 2, Room 25
Tel. (40-1) 222-8888; 222-9261
Fax: (40-1) 223-4444

Romanian-American Enterprise Fund
Obie Moore, Managing Director
Rokura Business Center
1-7 Calea Dorobantilor, Hotel Dorobanti
Tel. (40-1) 211-86-93; 211-4603
Fax: (40-1) 211-76-94


V. ROMANIAN GOVERNMENT AGENCIES

Government of Romania (General Secretariat)
Victor Hrebenciuc, Secretary General
Piata Victoriei 1, Bucharest
Tel. (40-1) 613-6178
Fax: (40-1) 223-2998

Council for Economic Coordination, Strategy and Reform
Mircea Cosea, State Minister
Piata Victoriei 1, Bucharest
Tel. (40-1) 312-4767
Fax: (40-1) 222-4682

Romanian Development Agency
Nicoale Jantea, State Secretary
Florin Bonciu, American Desk Officer
Blvd. Magheru 7, Bucharest
Tel. (40-1) 615-6686, 614-5160
Fax: (40-1) 613-2415, 312-0371

National Agency for Privatization
Iacob Zelenco, President
Daniela Gheorghe, Director, Foreign Relations
Str. Ministerului 2-4, Bucharest
Tel. (40-1) 615-8558; 614-9495
Fax: (40-1) 312-08-09

National Agency for Restructuring
Dumitru Popescu, President
Marion Day, President Advisor
Calea Victoriei 152
Tel. (40-1) 212-2424; 659-3633
Fax: (40-1) 212-1176

State Ownership Fund
Emil Dima, President
Vintila Florin, JV Division
Str. C.A. Rosetti 21
Tel. (40-1) 211-4810; 211-4814
Fax: (40-1) 211-9290; 210-4459

State Office for Inventions and Trademarks
Mioara Radulescu, President
Str. Ion Ghica 5, Bucharest
Tel. (40-1) 615-9066
Fax: (40-1) 312-3819

Romanian Customs
Mihai Panzariu, General Manager
Octavian Flescariu, Director
Str. Matei Millo 13
Tel. 615-5852
Fax: 613-8251

National Commission for Statistics
Blvd. Libertatii 16
Tel. (40-1) 312-4875
Fax: (40-1) 312-4873


MINISTRIES:

Ministry of Foreign Affairs
Teodor Melescanu, Minister
Gheorghe Duta, Director, North America Desk Officer
Aleea Modrogan 14, Bucharest
Tel. (40-1) 633-4060, 312-7597
Fax: (40-1) 312-7589

Ministry of Finance
Florin Georgescu, Minister
Str. Apolodor 17, Bucharest
Tel. (40-1) 410-1895; 410-3249
Fax: (40-1) 312-1630

Ministry of Trade
Petre Crisan, Minister
Constantin Boiciu, Director, American Division
Str. Apolodor 17, Bucharest
Tel. (40-1) 614-1141, 312-0388
Fax: (40-1) 312-2342

Ministry of Industries
Dumitru Popescu, Minister
Ioan Gaf-Deac, State Secretary
  Department of Mines and Geology
Virgil Popa, State Secretary
  Department for Electrical Engineering and Electronics  Alexandru 
Stanescu, State Secretary
  Department of Material and Financial Resources
Lucian Gheorghe Motiu, State Secretary
  Department of Management, Legislation and Human Resources
Virgil Musatescu, General Manager
  Department of Energetical Resources
Victor Mocanu, Director
  Department of Wood, Glass and Ceramic Industry
Traian Branzaru, General Manager
  Foreign Trade Department
Calea Victoriei 152, Bucharest
Tel. (40-1) 650-3790, 211-0820
Fax: (40-1) 311-0727, 312-9669

Ministry of Communications
Adrian Turicu, Minister
Emilia Dumitru, Director, Foreign Relations
Blvd. Libertatii 14, Bucharest
Tel. (40-1) 400-1737, 312-0017
Fax: (40-1) 400-1556; 312-5642

Ministry of Transport
Aurel Novac, Minister
Alexandru Constantinescu, Foreign Relations Department
Blvd. Dinicu Golescu 38, Bucharest
Tel. (40-1) 222-3636; 312-1919; 637-7991
Fax: (40-1) 312-5419; 312-0772

Ministry of Agriculture and Food Industry
Ioan Oancea, Minister
Zincuta Opran, General Manager, Trade and Int'l Cooperation
Blvd. Carol I No. 24, Bucharest
Tel. (40-1) 614-4020, 311-2276
Fax: (40-1) 613-0322

Ministry of Health
Iulian Mincu, Minister
Victor Olsavzky, Head of Foreign Relations
Str. Ministerului 2-4, Bucharest
Tel. (40-1) 614-1526, 613-1682
Fax: (40-1) 312-4889, 312-4883

Ministry of Tourism
Dan Matei Agaton, Minister
Traian Iordanescu, Director, Foreign Relations 
Str. Apolodor 17, Bucharest
Tel. (40-1) 312-3731, 410-0554
Fax: (40-1) 312-2345; 312-0481

Ministry of Water, Forests and Environment Protection
Constantin Aurel Ilie, Minister
Blvd. Libertatii 12, Bucharest
Tel. (40-1) 631-6146
Fax: (40-1) 312-0403

Ministry of Public Work and Territorial Development
Dan Mircea Popescu, Minister
Str. Apolodor 17, Bucharest
Tel. (40-1) 615-6263, 781-3903
Fax: (40-1) 312-0187

Ministry of Research and Technology
Florin Teodor Tanasescu, State Secretary
Str. Mendeleev 21-25
Tel. (40-1) 312-6617
Fax: (40-1) 312-1410


VI. ROMANIAN NON-GOVERNMENT AGENCIES

Chamber of Commerce and Industry of Romania
Aurel Ghibutiu, President
Liliana Deac, Director, American Division
Blvd. Nicolae Balcescu 22, Bucharest
Tel. (40-1) 614-0448; 614-3965
Fax: (40-1) 613-0091

  National Trade Register Office
  Sofia Andreoiu, Deputy Director
  Blvd. Expozitiei 4, Bucuresti
  Tel. (40-1) 312-7845
  Fax: (40-1) 312-9661


Association of Foreign Investors
Iosif Aslan Seroussi, President
Calea Victoriei 135
Tel. (40-1) 659-6295
Fax: (40-1) 312-1049; 650-2398

The Fairs and Exhibition Company (ROMEXPO)
Gheorghe Cojocaru, General Manager
Blvd. Marasesti 65-67
Tel. (40-1) 618-3746; 618-1160
Fax: (40-1) 312-8400



VII.   AMERICAN & MULTINATIONAL ACCOUNTING/AUDITING FIRMS
  WITH OFFICE IN ROMANIA

Arthur Andersen
Viorel Bitu-Tudoran, Managing Director
St. Spiridon 12, Ap. 16
C.P. 22-164
Tel. (40-1) 211-2922; 210-7209; 210-7229
Fax: (40-1) 210-7260

Coopers & Lybrand
Jerome Muriaux, Tax Lawyer
Str. Hristo Botev 28
Tel. (40-1) 312-09-79; 312-36-00; 312-36-02
Fax: (40-1) 312-09-78

DRT-Touche-Tohamatsu Deloitte
Brian H. Lait, Managing Partner
Constantin Sandu, Director
Splaiul Unirii 6, Et. 5, 75101
Tel. (40-1) 330-57-75
Fax: (40-1) 330-57-60

Ernst & Young
Pierre Chellenberg, President
Dan Vinesiu, Director
Blvd. Maresal Averescu 8-10
Tel. (40-1) 665-25-40
Tel./Fax (40-1) 312-87-03

Price Waterhouse
Philip G. Makris, Senior Manager, Head of Office
Charles Smedmor, Director Business Consulting
Daniel Udrescu, Manager
Str. Vasile Conta 3-5, Sc. C, Ap. 72
Tel. (40-1) 311-24-55
Fax: (40-1) 613-4174

Roland Berger & Partner - Int'l Management Consulting
Herman Korte, Manager
Str. Ion Dragalina 8, 70109 Bucharest
Tel. (40-1) 311-0316; 781-0343; 420-2077
Fax: (40-1) 311-0316



VIII.  AMERICAN LAW FIRMS WITH OFFICE IN BUCHAREST

Hall, Dickler (Romania) SRL
Victor Tanasescu, President
Gilbert P. Wood, Director
Viorel Florin, Office Manager
World Trade Center, Floor 2, Room 25
Tel. (40-1) 222-8888; 222-9261
Fax: (40-1) 223-4444

Nestor Nestor - Kingston & Petersen
Ion Nestor, Legal Advisor
Manuela Nestor, Legal Advisor
Andrew Kingston, Legal Advisor
Patricia Petersen, Legal Advisor
Str. Iuliu Teodori 1
Tel. (40-1) 312-51-96; 312-53-18
Tel./Fax (40-1) 311-06-46

Peter Buzescu
Peter Buzescu, Managing Partner
Emilian Ijdelea, Lawyer
Nicolae Burchel, Legal Advisor
Splaiul Independentei 7, Bl. 101, Ap. 57
Tel. (40-1) 211-13-66
Fax: (40-1) 211-17-55

Taylor Joyson Garrett 
Nicholas S. Hammond, Associate
Blvd. N. Titulescu 1, Bl. A7, Ap. 88
Tel. (40-1) 210-7173; 210-6738
Fax: (40-1) 211-7589



IX.  ROMANIAN MARKET RESEARCH FIRMS

Aromar
Constantin Fota, President
Gheorghe Feteanu, General Manager
Tel. (40-1) 615-0658, 615-3923

Institute of World Economy
Nicolae Nistorescu, President
Blvd. Carol I No. 12, Bucharest
Tel. (40-1) 614-1653;  Fax: (40-1) 311-0759

Instrument Association of Romania
Calea Floreasca 242
Tel/Fax. (40-1) 688-4864
Fax: (40-1) 312-7683


X.  PUBLIC AUTHORITIES

ROMANIAN POWER AUTHORITY - RENEL
Victor Romert, President
Gen Gh. Magheru Blvd., 33
Tel. (40-1) 312-3163
Fax: (40-1) 312-0291

PETROM R.A. - ROMANIAN OIL CORPORATION
Mr. Nicolae Zafiu, Technical Manager
Calea Victoriei 109
Tel. (40-1) 650-3485
Fax (40-1) 312-9635

RAFIROM S.A. 
HOLDING COMPANY FOR OIL REFINING AND PETROCHEMICAL INDUSTRY
Mr. Ion Ocneanu, Managing Director
Splaiul Independentei ,202 A
P.O. Box 12
Tel. (40-1) 637-7320
Fax (40-1) 312-4991

ROMGAZ R.A. - ROMANIAN NATIONAL GAS CORPORATION
Gheorghe Iliescu, Executive Manager
Calea Victoriei 109
Tel. (40-1) 659-4742
Fax: (40-1) 312-9575

STATE NATIONAL RAILWAY ADMINISTRATION (SNCFR)
Nicolae Ionescu, President
Vasile Olievschi, Vice President
Blvd. Dinicu Golescu 38
Tel. (40-1) 222-3480
Fax: (40-1) 312-3200

ROMANIAN ROAD ADMINISTRATION
Danila Bucsa, Director General
Blvd. Dinicu Golescu 38
Tel. (40-1) 312-8495
Fax: (40-1) 312-0984

XI.  BANKS

Romanian National Bank
Mugur Isarescu, Chairman
Str. Lipscani 25, Bucharest
Tel. (40-1) 613-0410, 614-0262
Fax: (40-1) 312-0787

Romanian Commercial Bank
Ion Ghica, Chairman
Blvd. Republicii 12-16, Bucharest
Tel. (40-1) 615-7560, 614-1190
Fax: (40-1) 614-3213

Agricultural Bank
Gheorghe Barbulescu, Chairman
Str. Smirdan 3, Bucharest
Tel. (40-1) 615-7762, 614-4260
Fax: (40-1) 312-0340

Romanian Bank for Development S.A.
Marian Crisan, Chairman
Str. Doamnei 4, Bucharest
Tel. (40-1) 615-8909, 613-3200
Fax: (40-1) 312-1562

Romanian Bank for Foreign Trade
Razvan Temesan, Chairman
Calea Victoriei 22-24, Bucharest
Tel. (40-1) 613-1089, 613-9190, 613-8010
Fax: (40-1) 614-1598

Bank Post S.A.
Elena Petculescu, President
Blvd. Liberatii Bl. 113, Bucharest
Tel. (40-1) 311-0606, 400-1114
Fax: (40-1) 311-0604

Eximbank S.A.
Petru Rares, Chairman
Str. Stavropoleus 6, Bucharest
Tel. (40-1) 311-3085, 311-0493
Fax: (40-1) 312-1350

MindBank S.A.
Ioan Pruntus, Chairman
Calea Plevnei 46-48, Bucharest
Tel. (40-1) 613-0788
Tel\Fax: (40-1) 615-7727

BankCoop S.A.
Alexandru Dinulescu, Chairman
Str. Ion Ghica 13, Bucharest
Tel. (40-1) 615-7390, 312-0035
Fax: (40-1) 312-0037

"Ion Tiriac" Commercial Bank
Constantin Duna, Chairman
Str. Doamnei 12, Bucharest
Tel. (40-1) 638-7560, 615-8856
Fax: (40-1) 312-1058, 312-5878

"Dacia Felix" Bank
Ioan Sima, President
Str. Memorandumului 28
Cluj-Napoca, Romania
Tel. (40-64) 114-433

"Renasterea Creditului Romanesc" S.A. (Credit Bank)  
Emil Chioclan, President
Str. Corbeni 30, Bucharest
Tel. (40-1) 211-4131, 211-5114
Fax: (40-1) 211-4160, 312-1860

CREDITANSTALT INVESTMENT BANK
Guy Verduystern, General Manager
Str. Jean Louis Calderon 38
Tel. (40-1) 210-5567
Fax: (40-1) 210-5590

ING BANK
J.J.M. van der Heijden, General Manager
Rino G. Raicovich, Executive Manager
Blvd. Expozitiei 2, WTC, 3rd Floor
Tel. (40-1) 312-8998; 312-8944; 212-2721
Fax: (40-1) 223-0988

Frankfurt-Bukarest Bank
Oscar Neum, Director
Calea Victoriei 22-24, Bucharest
Tel. (40-1) 613-1030, 613-0040
Fax: (40-1) 615-8094

MISR Romanian Bank
(Romanian-Egyptian Bank)
Dumitru Lungu, General Director
Str. George Enescu 4, Bucharest
Tel.: (40-1) 312-0564, 312-0893
Fax:  (40-1) 312-0908

Romanian-Turkish Bank
Erdogan Gunay, Chairman
Victor Juganaru, Vice-President
Ahmed Akdogan, Vice-President
Str. I. Campineanu 16
Tel. (40-1) 312-1006; 312-3370
Fax: (40-1) 311-1732

Banque Franco-Roumaine - Bucharest Branch
Florian Iliescu, General Director
Xavier de Beausse, Director
Blvd. Nicolae Balcescu 11, Bucharest
Tel.: (40-1) 615-0003, 614-9902, 614-7923
Fax:  (40-1) 312-1358

Chemical Bank - Bucharest Branch
Robert Dolan, Branch Manager
Blvd. Carol I No. 16, Bucharest
Tel. (40-1) 312-0470; 312-1392; 312-1988; 312-2709
Fax: (40-1) 312-1076

Societe Generale - Bucharest Branch
Jean Robert, General Director
Blvd. Nicolae Balcescu 16, Bucharest
Tel. (40-1) 638-2494
Fax: (40-1) 312-0060



  APPENDIX F

  MARKET RESEARCH


Available and Upcoming Industry Sector Analyses and Major IMI's

1.  Bottling and Container Packaging Equipment (December 1990)
2.  Food Processing Plant Storage Facilities (December 1990)
3.  Agricultural Transport and Cold Storage Equipment
   (December 1990)
4.  Basic Medical Supplies (March 1991)
5.  Telecommunications Network Switching and Transmission Equipment 
    (March 1991)
6.  Road Construction Equipment (August 1991)
7.  Oilfield Equipment (September 1991)
8.  Hotel and Motel Services (September 1991)
9.  Business Applications Software (March 1992)
10. Personal Computers (May 1992)
11. Mining Industry Extraction/Processing Equipment
   (June 1992)
12. Pulp and Paper Machinery (June 1992)
13. Auto Repair/Maintenance Equipment and Tools (June 1992)
14. Agricultural Tractors and Combines (September 1992)
15. Offset Printing Machinery (September 1992)
16. Agricultural Irrigation Equipment (April 1993)
17. Electric Power Generation Equipment (December 1993)
18. The Romanian Bearings Industry (IMI - February 1994)
19. Romanian Man-Made Fiber and Yarn Industry
    (IMI - February 1994)
20. Romanian Petrochemical Industry (IMI - February 1994)
21. Oil and Gas Transport Facilities (March 1994)
22. Restructuring of the Romanian Iron and Steel Industry
    (IMI - March 1994)
23. Major Projects. Romanian Steel and Iron Industry
    (IMI - March 1994)
24. Restructuring of the Romanian Iron and Steel Industry
    (IMI - March 1994)
25. Petroleum Exploration in Romania (IMI - March 1994)
26. Constantza Port Development (IMI - April 1994)
27. The Romanian Machine Tool Industry (IMI - May 1994)
28. Romania on the way to a Market Economy (IMI - May 1994)
29. Romanian Lignite Mine Privatized (IMI-June 1994)
30. The Development of Private Enterprise in Romania
    (IMI - July 1994)
31. Romanian Technical Standards - Would Obstacles to American Exports 
    (IMI - September 1994)
32. Modernization and Expansion of Romania's Airport System
    (IMI - January 1995)
33. Romanian Market for Aircraft and Parts (IMI - February 1995)
34. Romanian General Aviation:  Opportunities for U.S. Business 
    (IMI - March 1995)
35. Romanian Petroleum Law Developments (IMI - June 1995)


Available and Upcoming Agricultural Commodity Reports
and Market Briefs

1.  Forest Products (February 1995)
2.  Sugar (April 1995)
3.  Tobacco (May 1995)
4.  Grain and Feed (May 1995)
5.  Oilseeds and Products (June 1995)
6.  Cotton (June 1995)
7.  Poultry (June 1995)
8.  Livestock and Products (June 1995)
9.  Fresh Deciduous Fruits (September 1995)
10.  Agricultural Situation (September 1995)
11.  Dairy (November 1995)

Note:  FCS and FAS reports are available on the National Trade Data 
Bank.



  APPENDIX G

  TRADE EVENT SCHEDULE

1.    Bucharest International Fair
  Sector: General Industrial Equipment
  Date: September 30 - October 5, 1995
  Location: Bucharest Fairgrounds, Bucharest, Romania

USDOC is sponsoring a National Pavilion at this event.  All recruitment 
is performed by FCS Bucharest.

2.    Romtherm
  Sector: Heating, cooling, air conditioning and insulating equipment
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

3.   BITME
  Sector: Equipment and technologies for textile industry
  Date: March 25-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

4.    RomMedica
  Sector:  Medical equipment and instruments
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

5.  RomControla
  Sector:  Control tools and apparata
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

6.  RomPharma
  Sector:  Drugs for human and veterinary applications
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

7.  RomDent
  Sector:  Dentistry
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

8.  RomEnviroTec
  Sector:  Equipment and technologies for environment protection
  Date: March 26-29, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

9.  Construct Expo
  Sector:  Construction equipment
  Date: April 22-26, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

10.   Expomet
  Sector:  Technologies and equipment for the metallurgical industry
  Date: May 14-18, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

11.  TIBCO
  Sector: Consumer goods
  Date: May 27 - June 2, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

12.  Sports
  Sector: Tourism and fishing apparel and accessories, cosmetics and 
medicines, foodstuffs.
  Date: June 13-17, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

13.  BIFE-TIMB
  Sector: Furniture, glassware, ceramics, bric-a-bracs,
  wood-processing equipment
  Date: September 2-7, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania

14.  RomHotel
  Sector: General equipment and accessories
  Date: September 4-8, 1996
  Location: Bucharest Fairgrounds, Bucharest, Romania
     *  National Bank Reserves.  About USD 2.5 billion of the trade 
banks reserves are not included. 
     **  For each contact, the following information has been entered:  
organization, contact name and title, address, phone, and fax
```

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