# EUR-Lex - 52012DC0056 - EN

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# 52012DC0056

**REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL INTERIM REPORT On Progress in Romania under the Co-operation and Verification Mechanism /* COM/2012/056 final */**

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REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL

INTERIM REPORT
On Progress in Romania under the Co-operation and Verification Mechanism

1.           Introduction

This report is an interim report under the
Cooperation and Verification Mechanism ("CVM")[1] providing a technical update on
significant developments during the last six months in Romania since the
Commission's last report in July 2011. The update focuses on measures that have
been completed or will be completed shortly, while also identifying actions
which remain to be taken.

The recommendations of the last progress report
adopted by the Commission on 20 July 2011 are the point of reference for the
assessment of progress achieved against the benchmarks and the identification
of the remaining challenges. In summer 2012, the Commission will provide an
overall assessment of progress in Romania under the CVM since accession.

2.           Judicial Reform and the
Fight against Corruption: Summary of Developments in the light of the
Commission's recommendations

Romania's response to the Commission's
recommendations shows several developments. The new civil code entered smoothly
into force in October 2011 and the civil procedure code is foreseen to follow
in June 2012. The acceleration of high-level corruption trials by the High
Court of Cassation and Justice has helped to respond to the Commission's
recommendation concerning the risk of some high level corruption cases reaching
statute-barred periods. This could have a longer-term impact in terms of streamlining
the judicial process and securing timely final court decisions. Draft
legislation on extended confiscation has made progress in Parliament. The
National Anticorruption Directorate (DNA) and the National Integrity Agency
(ANI) have continued to carry forward a series of important cases, including
with regard to a significant number of senior politicians and officials. The
new laws on the reform of appointments to the High Court of Cassation and
Justice and on the disciplinary responsibility of magistrates set out
frameworks which aim at more clarity and rigour. A comprehensive National
Anti-Corruption Strategy has been drafted.

Developments in Romania over recent months also
point to a number of areas where further action is needed in line with the Commission's
recommendations. Preparations to implement the criminal
code and criminal procedure code should continue in areas like targeted
recruitment and rebalancing resources between courts, and should be put in the
framework of a clear and comprehensive implementation plan. The ability of the leadership of the
judiciary to adequately respond to problems concerning integrity and
accountability within the judiciary remains an issue of public concern. Decisions in key court cases will need to further contribute to effectively
dissuading high-level corruption. The welcome given to the draft National Anti-Corruption Strategy should be backed up by a
clear endorsement by all institutions, to maximise the leverage of this
strategy. Further efforts are needed to secure more convincing results in the
recovery of the proceeds of crime.

Ongoing efforts are therefore needed during the
coming months in order to demonstrate convincing results in view of the
Commission's overall assessment of progress achieved by Romania under the CVM
since its accession to the EU in summer 2012. The Commission will continue to
support Romania in this endeavour.

3.           Update on the State of
Play

Reform of the Judiciary

In order to pursue judicial reform, the
Commission notably recommended to Romania to adopt an implementation plan for
the Civil Procedure Code, the Criminal Code and the Criminal Procedure Code, to
provide sufficient resources for the necessary re-organisation of the
judiciary, improve training and recruitment, strengthen the capacity of the
National Institute of the Magistracy and create a framework of cooperation with
the judiciary and civil society to monitor progress in judicial reform.

The new civil code entered smoothly into force
on 1 October and was accompanied by various training and awareness-raising
initiatives. On the basis of the impact studies finalised in November 2011, the
entry date of the civil procedure code has recently been announced for June
2012. The remaining codes will enter into force in March 2013, giving time to
recruit large numbers of magistrates and clerks and to restructure the court
system. Steps have been taken in recent months on the implementing legislation
for the civil procedure code, the criminal code and the criminal procedure
code, and the impact studies for all codes were finalised in November. The
recent announcements on implementation should now be followed up by adoption of
the implementing legislation and in the finalisation of a comprehensive
implementation plan, involving all stakeholders in Parliament, Government, the
judiciary and civil society, including the necessary preparatory measures, such
as prioritising recruitments, reorganisation of the court system, and training.

Since the Commission's last report, Romania has
launched a project to develop optimal workload standards for courts, and first
results are expected in the summer of this year. A functional review of the
judicial system will be launched shortly and finalised by the end of 2012. Some
vacancies have been reallocated by the Superior Council of the Magistracy;
however important imbalances persist in the workload between different courts
and prosecution offices.

A proposal to harmonise entry exams and to
strengthen the initial training given to magistrates is awaiting approval by
the Superior Council of the Magistracy. Proposals to allocate additional
positions to the National Institute of the Magistracy and to improve training
facilities have also been made. Financing has been provided for 15 additional
trainers at the Institute.

In order to improve the accountability of
the judicial system, the Commission notably recommended to Romania to
demonstrate a track record of transparent and objective management decisions,
to continue the reform of the judicial inspection and achieve the electronic
publication of all jurisprudence and the timely issuing of motivations by
court.

Since the Commission's last report, Romania
adopted legislation seeking to strengthen the disciplinary responsibility of
the judiciary. This law amends the scheme of disciplinary offences, increases
sanctions, and strengthens the independence of the Judicial Inspection. It also
eliminates the possibility of magistrates escaping disciplinary sanctions
through retirement whilst a disciplinary process is ongoing. In November the
Superior Council of the Magistracy adopted a strategy and action plan to
improve integrity within the judiciary. However, some recent criminal
investigations involving senior magistrates raised public concern regarding the
Council's resolve and ability to safeguard integrity and accountability within
the judiciary. In one important case of alleged high-level corruption, the
judicial authorities did not remove the judge in question from a management
position. Disciplinary investigations in this case were initiated, but were
subsequently suspended on the grounds of a pending criminal investigation. This
case revealed clear shortcomings in the ability of the judicial leadership to
take action when faced with serious risks to the reputation of the judiciary.
There have been few significant developments to address the Commission's
recommendations concerning the effectiveness of the Judicial Inspection.

Appointments to positions in the High Court of
Cassation and Justice in August were criticised for a lack of transparency and
objectivity. However, Romania adopted a new law in December which had been re-introduced
by the government to reform appointments to the High Court of Cassation and
Justice. The law introduces substantial improvements to appointment procedures
and can make an important contribution to the reform of the High Court. The
impact of this law will depend on the commitment of the competent institutions
to ensure its implementation. It should be followed by a swift filling of vacancies,
in particular within the criminal section, through a transparent and
merit-based recruitment process. A further reorganisation of the High Court would
help to strengthen the Court's capacity to deal effectively with the procedure
of preliminary ruling, which will be introduced as a key instrument for legal
unification by the new codes.

There is still no comprehensive,
up-to-date online publication of motivated court decisions. The release of
motivations for court decisions within the legal deadlines need to be generally
enforced, especially as there is a risk that in some high-level corruption
cases, delayed motivations could trigger the statute-barred period by delaying
any appeals.

Fight against Corruption

In order to improve the effectiveness of
judicial action regarding high-level corruption, the Commission notably
recommended to Romania to improve case management and judicial practice in the
trial of high-level corruption cases and to improve the dissuasiveness and
consistency of court sanctions in this area. The Commission also recommended
continuing the reform of the High Court of Cassation and Justice, to
demonstrate better results regarding fraud in public procurement and to adopt
procedural rules for the lifting of Parliamentary immunity.

Since the Commission's last report, the High
Court of Cassation and Justice has taken a number of managerial and
administrative measures to improve the celerity of high-level corruption
trials, notably those which risked reaching statute-barred periods. These
measures included the prioritisation of cases closer to statute-barred periods
and the temporary use of spare court rooms in other courts, to allow for more
frequent hearings. An additional building was allocated to the High Court in
November 2011. These measures led to the acceleration of a number of cases
which were pending at the High Court and also resulted in an increased number
of verdicts. During 2011, 15 cases were solved in first instance at the level
of the Penal Chamber of the High Court of Cassation and Justice, compared to
two cases in 2010. The High Court issued final decisions in nine high-level
corruption cases.

The High Court of Cassation and Justice
published sentencing guidelines regarding certain corruption offences on the
basis of an analysis of final court decisions. These guidelines are considered
useful by practitioners and could be expanded, further disseminated and
integrated into training curricula, with their application monitored. Analysis
of court sentences for high-level corruption indicate that verdicts often
remain close to the legal minimum, and over 60% of sentences are suspended.

The DNA continued to act as an effective
prosecution service in high level corruption cases. 2011 saw increases in the
number of indictments, court decisions and convictions. With the acceleration
of cases in the High Court of Cassation and Justice, this was shown most
notably in final court decisions: 158 final court decisions in DNA cases were
concluded in 2011, compared to 85 in 2010.This activity continued to include
significant numbers of senior politicians and officials. The Anti-Corruption
General Directorate of the Ministry of Administration and Interior has taken
steps to consolidate its work to tackle corruption.

Since last July, there have been 5 convictions
in first instance against 13 defendants in public procurement cases. Regarding
offences committed against the financial interests of the European Union, there
have been 5 final convictions and 4 non final convictions since July. The importance
of public procurement in the Romanian economy suggests that a special effort is
needed to ensure that cases are taken forward efficiently and expeditiously.
Improving financial and accountancy expertise among magistrates and increasing
the availability of qualified external experts remain necessary to ensure the
efficiency of court proceedings. A proactive approach to developing consistent
jurisprudence in public procurement trials would also help to ensure that cases
can be brought successfully to court.

To address weaknesses in judicial practice in
high-level corruption trials, several seminars, meetings and training sessions
have been organised by the National Institute of Magistracy and the High Court,
supported by DNA. These steps could usefully be applied in a more systematic
manner and consolidated in a comprehensive action plan in order to achieve
general improvements to judicial practice of high level corruption trials.
Particular attention could be given to enhancing the standards for authorisation
and funding of expert evidence in court and to the justifications used to
postpone court hearings.

Romania has prepared a comparative
analysis of practice in other Member States regarding the procedure for lifting
immunity of Members of Parliament and included the issue in the draft new
National Anti-Corruption Strategy. As the competent authority to adopt new
rules, the Parliament now needs to take this issue forward.

In order to improve the effectiveness of the
implementation of integrity policies, the Commission recommended to Romania to
demonstrate a track-record of sanctions in follow-up to decisions of the
National Integrity Agency (ANI), to improve and unify practice of Wealth
Investigation Commissions and to improve the investigative capacity of ANI and
its cooperation with other institutions.

Since the Commission's last report, the
National Integrity Agency (ANI) has received a significant increase in its
budget and attracted substantial EU funds to improve its information system and
procedures. ANI concluded a number of cooperation agreements with other
institutions and carried out a first targeted risk assessment and large-scale
checks regarding conflict of interest in public procurement on local and
regional level.

The track record of ANI has developed further
in recent months. Under its new legal basis, since 2010 ANI has identified 18
cases amounting to a total of EUR 5.7 million of potential unexplained assets,
23 cases of administrative conflict of interest and 118 cases of incompatibilities.
The judicial and administrative follow-up to these cases has been mixed. In two
first cases which were raised by ANI under its old law, final decisions by the
High Court confirmed the existence of unjustified assets and ordered their
confiscation. As a result of findings of incompatibility issued under the new
law, one holder of public office was dismissed, sanctions were applied in two
other cases and six other holders of public office resigned.

A host of other cases, in particular cases
related to conflict of interest, are still pending before judicial authorities.
The process has been complicated by the establishment of the Wealth
Investigation Commissions, created in August 2010 as an intermediary between
ANI and the courts. Common guidelines or rules of procedure aimed to improving
the efficiency of proceedings and unifying practice are currently being
developed. A number of training seminars have been carried out in recent months
to encourage best practice. A test case will still need to be decided by courts
in order to establish whether or not ANI has the power to launch an appeal
against the dismissal ordinances issued by the Commissions.

The potential dissuasive effect of ANI
cases is hindered by the delays and lack of consistency in the judicial and
administrative follow-up to ANI cases. Attempts at reopening ANI's legal and
institutional independence have also diverted attention from consolidating
ANI's track record. The forthcoming appointment of a new ANI President provides
an opportunity to underline ANI's institutional stability and integrity.

In order to reach better results in the
fight against corruption, the Commission recommended to Romania to improve
coordination at the highest level, develop a new multi-annual anti-corruption strategy
and create a monitoring group for this purpose. The Commission also recommended
demonstrating convincing results in the recovery of proceeds of crime and money
laundering, adopting a new law on extended confiscation, developing rules for
the prevention of conflict of interest in the management of public funds and
strengthening procedures and capacity of competent authorities in the area of
public procurement.

Since the Commission's last report, Romania has
developed a new draft anti-corruption strategy which has been well received by
experts and practitioners. The effective implementation and the impact of the
strategy will depend on broad political support and endorsement. The adoption
of the strategy by Parliament would be an important positive signal. A visible
monitoring mechanism could further enhance its impact, as well as a requirement
for all parts of government to implement the strategy in their own areas, and
report on results. Since the summer, financing has also been obtained from EU
funds for a number of anti-corruption projects, including in the Ministries of
Education, Health and Administration and Interior. Implementation has started
and results are now awaited. In terms of dissuasiveness, the exclusion of a
politician from his party upon the launch of investigations for high-level
corruption in November has been recognised as a strong example of effective
public accountability. However, six other members of Parliament with
convictions for corruption remain as sitting members of Parliament.

If the draft law on extended confiscation
currently under discussion in Parliament is adopted as proposed, it would add
significantly to the dissuasiveness of penalties. It would need to be
accompanied by measures to ensure that court sentences imposing financial
penalties are effectively collected. Convincing results have still to be
demonstrated in the recovery of the proceeds of crime. Steps taken by the
General Prosecutor led to a significant increase in the amount of frozen assets
in 2011. A guidance note has been disseminated to prosecution offices to
encourage the pursuit of money laundering as a stand-alone offence within
existing legislation.

In December, Romania adopted a code of conduct
concerning incompatibility and conflict of interest in the management of EU
funds. A working group has been tasked to develop monitoring mechanisms to
enforce the provisions of this new code of conduct.

Since the Commission's last report, legal
amendments and administrative measures were taken to strengthen the protection
against irregularities and conflict of interest in the management of public
funds. Measures include developing standardised tender documentation and
strengthening the capacity of the National Authority for Regulating and
Monitoring Public Procurement (ANRMAP) to carry out ex-ante verification. The
ANRMAP concluded cooperation agreements with other institutions. Further steps
are now under discussion which could help to enhance the effective application
of the public procurement rules.

[1]               Commission Decision 2006/928/EC of 13 December 2006
establishing a mechanism for cooperation and verification of progress in
Romania to address specific benchmarks in the areas of judicial reform and the
fight against corruption (OJ L 354, 14.12.2006, p. 56).