REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL On Progress in Romania under the Co-operation and Verification Mechanism
Date: 2011-07-20
Institutions: European Commission
Subjects: EU control, Romania, cooperation policy, corruption, exchange of information, judicial reform

EUROPEAN COMMISSION 

Brussels, 20.7.2011 
COM(2011) 460 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

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

{SEC(2011) 968 final} 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

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

1. 

INTRODUCTION 

The Co-operation and Verification Mechanism1 (CVM) has been established on the 
accession  of  Romania  to  the  EU  to  help  Romania  put  in  place  an  impartial, 
independent and effective judicial and administrative system. Changing the legal and 
judicial  system  to  further  align  it  with  other  Member  States  is  a  national  task.  It 
requires  the  government  to  prepare  and  propose  the  key  framework  laws,  the 
Parliament to adopt them and the judiciary to change its procedures and practise to 
implement  them  as  intended.  Since  2007  the  CVM  has  played  a  supportive  role  in 
helping Romania put in place the structures of a modern judicial system. At times the 
CVM  has  been  contested  and  criticised  by  one  or  other  element  of  this  necessary 
national  consensus  but  today  it  is  widely  acknowledged  that  it  has  helped  promote 
change in a positive direction. The Romanian Government has shown determination 
and commitment in driving the reform process. The Parliament or, until recently, the 
judiciary have not always showed the same determination. In five years the emphasis 
has  shifted from the  preparation and  adoption of laws to their implementation. The 
elements of the legal framework needed for the reform are now largely in place, even 
if  not  complete.  As  will  be  seen  from  this  report  the  next  necessary  steps  in  this 
process should focus on implementation by the judiciary of the new laws.  

This  report  is  the  fifth  annual report  since  the  CVM  was  set  up2.  In  summer  2012, 
five  years  after  the  inception  of  the  CVM,  the  Commission  will  make  an  overall 
assessment  of  Romania's  progress  under  the  CVM  since  accession,  and  will  make 
appropriate  proposals  in  the  light  of  this  assessment.  The  present  report  includes  a 
number  of  specific  recommendations  in  order  to  help  Romania  to  prepare  for  this 
overall assessment. 

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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). 
The  report  is  based  on  regular  input  received  from  the  Romanian  authorities  notably  in  response  to 
detailed  questionnaires  from  the  Commission.  The  Commission  has  been  assisted  in  its  work  by 
independent experts and has drawn on documentation and input provided by a variety of sources. The 
accompanying supporting document sets out the Commission's detailed assessment of progress in each 
of the benchmarks set by the decision on the CVM. 

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2. 

STATE OF THE REFORM PROCESS IN ROMANIA 

Achievements and Challenges 

Since the Commission's last annual report, Romania took significant steps to improve 
the efficiency of judicial procedures and continued preparations for the entering into 
force of four new codes which are the foundation for a modern judicial process. In 
advance of the implementation of the new codes, the Small Reform Law has brought 
improvements  for  the  celerity  of  the  judicial  process.  Romania  also  responded 
swiftly to the Commission’s recommendation by adopting a new legal framework for 
the National Integrity  Agency. The  National Integrity Agency has been operational 
under  this  new  legal  framework  and  started  to  re-establish  its  track  record  of 
investigations. Although not part of the CVM benchmarks, the authorities decided to 
carry out reviews of the judicial system and of public procurement and to make an 
evaluation  of  anti-corruption  policy.  During  the  same  period,  the  National 
Anticorruption Directorate (DNA) showed a continuously convincing track record in 
the investigation of high-level corruption cases.  

Despite  this progress since July 2010, consistency and results in a number of areas 
remain a challenge. Progress in the fight against corruption  still needs to be pursued. 
Several important high-level cases remain delayed in court for several years and have 
also  seen  little  movement  during  this  period.  Urgent  action  must  be  taken  to 
accelerate  these  trials  and  prevent  them  being  struck  down  because  of  reaching 
statute-barred periods. The fight against corruption should remain a top priority and 
be  coordinated  with  the  help  of  a  new  comprehensive  and  robust  anti-corruption 
strategy.  Urgent  measures  are  needed  to  improve  the  recovery  of  the  proceeds  of 
crime, the pursuit of money laundering and protection against conflict of interest in 
the  management  of  public  funds.  Better  results  should  be  demonstrated  in  the 
confiscation  of  unjustified  assets  and  in  delivering  dissuasive  sanctions  for 
incompatibilities. 

In  order  to  increase  the  pace  of  judicial  reform  during  the  next  period,  Romania 
should    take  active  steps  to  accompany  the  entry  into  force  of  the  Civil  Code  and 
adopt an implementation plan for the remaining three new codes to be introduced in 
2012,  as  well  as    create  a  framework  of  cooperation  with  the  judiciary  and  civil 
society  to  facilitate  the  necessary  structural  adjustments  to  the  judicial  system.  For 
this  purpose,  Romania's  judicial  reform  strategy  should  be  formally  adopted 
following  completion  of  the  functional  review  and  complemented  with  an  action 
plan, a timetable and adequate budget. The newly constituted Superior Council of the 
Magistracy  still  needs  to  demonstrate  its  commitment  to  reform  through  concrete 
results.  

Reform of the Judiciary 

Since  the  Commission's  last  assessment,  Romania  improved  the  efficiency  of  the 
judicial  process  through  a  simplification  of  some  judicial  procedures  and  the 
introduction  of  new  legal  tools,  such  as  greater  possibilities  for  the  prosecution  to 
dismiss cases where existing evidence does not warrant further investigation, or the 
possibility  for  a  defendant  to  plead  guilty  in  court  and  shorten  trial  proceedings. 
These  legal  amendments  have  contributed  to  strengthening  the  efficiency  of  the 

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prosecution and to speeding-up a number of cases in court.3 In addition, Romania has 
started  preparations  to  carry-out  an  independent  functional  review  of  the  judicial 
system.  This  review  should  define  measures  for  a  more  comprehensive  reform  of 
structures, procedures and human resources, which will be necessary to accompany 
the entry into force of the new codes. 

The  four  new  codes  must  be  considered  a  significant step  in  judicial  reform  and  in 
improving  the  consistency  and  efficiency  of  the  judicial  process.  Since  the 
Commission's  last  assessment  in  July  2010,  some  delays  have  appeared  in  the 
preparations  for  the  implementation  of  the  new  codes.  Although  the  date  of 
implementation  on  1  October  has  been  fixed  for  the  Civil  Code  and  implementing 
laws  for  the  other  codes  are  being  drafted  and  finalised,  impact  studies  are  not 
foreseen  to  be  completed  until  the  end  of  the  summer,  little  training  has  been 
delivered  and  a  comprehensive  implementation  plan  is  still  missing.  It  will  be 
important to avoid diverging practice and good preparation will be essential for the 
smooth implementation of the other codes. 

Since  the  Commission's  last  annual  assessment,  some  progress  has  been  made  to 
establish  a  transparent  dialogue  between  the  Government,  the  judiciary  and  civil 
society  on  judicial  reform.  However,  the  strategy  for  justice  reform  developed  in 
spring  2010  has  not  been  endorsed  by  the  Government  and  has  still  not  been 
complemented by an action plan and a timetable. The foreseen functional review of 
the judicial system should provide a catalyst for this process. An interesting initiative 
for a judicial reform strategy by a group of magistrates, lawyers, academics and civil 
society representatives also presents a useful contribution to this work. 

last  summer 

tangible  progress  has  been  made  since 

Little 
in  addressing 
recommendations by the Commission to tackle pressing capacity imbalances of the 
judicial  system:  A  proposal  by  the  Government  to  close  a  smaller  number  of  non-
viable  courts  was  diluted  by  the  Parliament.  In  addition,  the  Commission's  call  for 
immediate  measures  to  reduce  capacity  imbalances  has  not  been  followed  up 
systematically.  Likewise,  proposals  to  strengthen  the  recruitment  and  training  of 
magistrates  which  were  also  developed  in  autumn  have  not  yet  been  adopted.  The 
National  Institute  of  the  Magistracy  (NIM)  has  not  been  strengthened  despite  its 
important role in preparing for the implementation of the new codes. 

Through  the  Small  Reform  Law,  Romania  has  revised  the  attributions  of  the  High 
Court of Cassation and Justice with a view to enabling the Court to function more 
effectively  as  a  cassation  court.  However,  these  reforms  do  not  go  far  enough  to 
effectively  tackle  the  problem  of  non-unified  jurisprudence.  The  new  procedure 
codes  introduce  a  new  mechanism  for  unifying  jurisprudence,  the  preliminary 
ruling,4  which  will  complement  the  existing  appeal  in  the  interest  of  the  law.  An 
interpretative  ruling  by  the  High  Court  in  July  should  prolong  the  special  statute-
barred period of a case when a decision on a Constitutional exception is pending. The 
application  of  strict  rules  to  accompany  the  new  mechanism  will  be  necessary  to 
avoid  that  unfounded  requests  for  preliminary  rulings  unduly  delay  trials.  Romania 

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For  instance,  since  January  2011,  as  of  May  3  final  convictions  and  20  non-final  convictions  were 
rendered after guilt was accepted by the defendant in high-level corruption cases. 
Under this new procedure, judges may request a preliminary ruling of the High Court of Cassation and 
Justice (HCCJ) in an ongoing case if conflicting jurisprudence can be identified. 

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has not yet achieved a full electronic publication of jurisprudence. Furthermore, court 
motivations are often issued with considerable delay after the verdict is pronounced. 

Improving the accountability of the judiciary remains an important challenge. Since 
the  Commission's  last  annual  assessment,  new  recruitment  rules  for  judicial 
inspectors  were  adopted  and  some  steps  were  taken  to  improve  the  efficiency  and 
transparency  of  the  Judicial  Inspection  and  to  unify  its  practice.  However,  the 
capacity  and  track  record  of  the  Inspection  has  not  improved  significantly.  An 
analysis of a sample of high-level corruption cases which remain delayed in court by 
the Inspection has not led to any significant findings or recommendations regarding 
judicial  practice.  Romania  has  not  yet  engaged  in  a  thorough  reform  of  the 
disciplinary  system.  An  important  reform  of  appointments  to  the  High  Court  of 
Cassation  and  Justice,  with  the  aim  of  increasing  the  objectivity,  thoroughness  and 
transparency  of  procedures  has  been  proposed  by  the  Government  in  May  and  is 
under debate in Parliament.  

A new Superior Council of the Magistracy has taken office in January, although its 
full  establishment  was  delayed  pending  legal  challenges  and  partial  re-elections. 
Since  entering  into  office,  the  Council  has  taken  some  first  welcome  initiatives  to 
strengthen the Judicial Inspection and to facilitate the entering into force of the Civil 
Code.  Progress  in  a  number  of  areas  relevant  for  the  CVM  will  depend  on  the 
Council's  commitment  to  judicial  reform  during  the  next  period.  This  should  be 
demonstrated by transparent and objective appointment decisions, the strengthening 
of  the  National  Institute  of  the  Magistracy  and  progress  in  human  resources 
management.  

Fight against Corruption 

The track record of the National Anti-Corruption Directorate (DNA) in investigating 
and  prosecuting  high-level  corruption  cases  including  against  current  or  former 
Members of Parliament or Government, has remained convincing and an increase in 
the  number  of  convictions  could  be  observed.5  However,  the  results  by  courts 
continue  to  show  a  mixed  picture.  Although  the  majority  of  high-level  corruption 
trials  are  decided  within  a  period  of  three  years,  a  significant  number  of  important 
cases  involving  dignitaries  are  currently  pending  before  courts  for  more  than  three 
years. A number of these cases have already reached the statute-barred period in full 
or in part and several other cases approach these deadlines.  

Since the Commission's last annual assessment, Romania identified typical causes of 
delays  in  high-level  corruption  cases  and  created  a  joint  working  group  to  address 
them.  Some  important  procedural  obstacles  have  been  removed  since  last  July.6 
Other reasons relating namely to capacity, internal organisation7 and judicial practice 
must  still  be  effectively  addressed.  Furthermore,  the  analysis  by  the  Commission 

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Overall since July 2010, as of 1 April DNA had opened 269 new cases and had filed 159 indictments 
against 611 defendants. Statistics of DNA show that during the last 5 years over 90% of its indictments 
have lead to convictions and that 90% of all investigations last for a maximum of 1.5 years.  
These include amendments contained in Law 177/210 to the Law on the Constitutional Court to remove 
the  suspension  of  trials  pending  the  resolution  of  exceptions  of  unconstitutionality  and  provisions  in 
Law 202/2010 (Small Reform Law). 
There  is  an  important  shortage  of  courtrooms  and  significant  numbers  of  vacancies  at  the  criminal 
section of the High Court of Cassation and Justice where many high-level corruption cases are pending. 

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showed that courts tend to adopt a permissive and excessively cautious approach to 
procedural challenges raised by defendants, such as requests for additional expertise, 
postponement  of  hearings  or  procedural  exceptions.  Basic  case  management 
measures  such  as  giving  priority  to  important  or  complex  cases  are  not  routinely 
applied.  In  order  to  meet  its  commitments  regarding  the  fight  against  high-level 
corruption,  Romania  must  take  urgent  measures  to  assure  that  final  decisions  are 
taken swiftly in important high-level corruption cases and prescriptions are avoided 
in all cases. 

Results in the fight against corruption depend on political will and the commitment of 
the  judiciary.  There  are  several  good  examples  that  show  an  efficient  treatment  of 
high-level corruption cases in court and demonstrate how investigations in complex 
cases can be carried out effectively in the cooperation of different authorities.8 Strong 
political  support  to  the  fight  against  corruption  by  Parliament  is  crucial  in  this 
respect. Since the Commission's last assessment, Parliament voted against allowing 
an  investigation  on  corruption  charges  against  one  former  Minister  and  current 
Member of Parliament, vetoed a search in another ongoing investigation and refused 
the preventive arrest of another Member of Parliament. However, both cases went to 
trial. 

Since the adoption of its new legal framework in August 2010, the National Integrity 
Agency  (ANI)  has  begun  to  re-establish  its  former  track  record  and  forwarded  a 
number  of  cases  regarding  conflict  of  interest,  incompatibilities  and  unjustified 
wealth  for  decision  to  the  competent  institutions.  Although  ANI  has  improved  its 
methodology  and  the  efficiency  of  its  investigations,  the  follow-up  by  competent 
judicial  and  administrative  bodies  should  be  significantly  improved.  Few  sanctions 
have  been  applied  as  a  result  of  ANI's  findings  and  those  applied  are  rarely 
dissuasive.9  Most  conflict  of  interest  decisions  by  courts  in  the  area  of  public 
procurement  generally  come  too  late.  It  appears  that  the  Wealth  Investigation 
Commissions established under the revised ANI law at the level of courts of appeal 
de facto rule on merits of cases transmitted by ANI to the same evidential standard as 
the trial court. Such a procedure not only delays the judicial decision-making process 
but also duplicates the role of the Courts of Appeal, which should be competent to 
rule  on  ANI  cases.  For  this  reason,  measures  will  need  to  be  taken  to  avoid 
inconsistent practice by the Wealth Investigation Commissions. There is a need for a 
further  amendment  to  the  law  to  allow  ANI  to  appeal  decisions  of  the  Wealth 
Investigation Commission. Since the Commission's last annual assessment, only two 
cases  of  unjustified  assets  have  been  confirmed  by  courts  in  first  instance.  At  the 
same time, a number of important cases investigated under the old law have been lost 
due to reaching statute-barred periods which were introduced in the revised law on 
ANI last August.  

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In  an  important  operation  at  the  borders  at  the  beginning  of  the  year,  widespread  corruption  among 
border  police  and  customs  was  uncovered  through  a  well  planned  joint  operation  of  different  police 
forces and the judiciary. In May, a first instance decision against a judge in a high-level corruption case 
was  achieved  after  only  6  months  with  hearings  set  weekly  including  on  Christmas  Eve  and  30 
December. 
For  instance,  out  of  a  total  of  82  decisions  of  incompatibility  confirmed  by  courts,  disciplinary 
commissions applied sanctions in only 14 cases of which 5 were dismissals and 5 merely warnings. 

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Since  the  Commission's  last  assessment,  Romania  prepared  an  independent  impact 
evaluation  of  its  anti-corruption  policy.  The  recommendation  contained  therein  put 
emphasis on giving high political priority to the fight against corruption, developing 
a  comprehensive  new  anti-corruption  strategy  with  long-term  objectives  and 
involving stakeholders from the three branches of power and civil society.  

The effectiveness of the fight against corruption is hindered by serious weaknesses in 
recovering the proceeds of crime. The track record of confiscated criminal assets in 
Romania  is  very  low10  mainly  due  to  limited  confiscation  possibilities  provided  by 
law, restrictive court practice and a lack of pro-active behaviour by the prosecution.11 
Efforts are being made by the General Prosecutor to address the last point, but they 
are  hindered  by  resourcing  and  in  particular  by  the  legal  framework.12  In  practice, 
criminal  assets  can  only  be  confiscated  if  they  are  the  direct  proceeds  of  crime  for 
which a conviction had been achieved or when they are linked to damage caused by a 
proven criminal offence. Problems are also encountered in confiscating assets passed 
on to third parties. In this way a substantial amount of criminal assets escapes legal 
scrutiny  which  has  been  illustrated  recently  in  the  case  of  large-scale  corruption 
investigations among border police and customs where only a relatively small sum of 
assets are expected to be confiscated although it can be assumed that these criminal 
activities have been carried out in a systematic way over a long period.  

Since  the  Commission's  last  assessment,  Romania  took  steps  to  provide  for  more 
effective  verifications  of  public  tenders  against  irregularities  following  risk 
assessments.  Since  the  Commission's  last  assessment,  Romania  re-established  the 
legal base for the Department for the Fight against Fraud (DLAF), the counterpart of 
OLAF  to  carry  out  investigative  actions.  These  improvements  are  welcome,  but  at 
the  same  time,  administrative  capacity  and  the  quality  of  administrative  action 
remain weak, and are the main challenges in the field of public procurement.  

3. 

CONCLUSIONS 

Since the Commission's last assessment in July 2010, Romania took significant steps 
to improve judicial efficiency, re-established the legal basis of the National Integrity 
Agency, continued preparations for the implementation of four new codes, launched 
preparations for a functional review of the judicial system and carried out an impact 
analysis  of  its  anti-corruption  policy.  Continuous  commitment  over  the  next  period 
will  be  necessary  to  implement  the  new  codes,  to  take  the  necessary  decisions  to 
further restructure the judicial system,  to consolidate the anti-corruption policy and 
to  deliver  better  results  in  the  confiscation  of  unjustified  assets  and  in  delivering 
dissuasive sanctions for incompatibilities. 

Urgent  action  is  needed  to  accelerate  a  number  of  important  high-level  corruption 
trials  and  to  prevent  their  collapse  because  of  reaching  statute-barred  period.  The 

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Statistics supplied by the Romanian authorities indicate that in 2010 final confiscation orders were ruled 
against criminal assets deriving from all types of criminality totalling EUR 1.8 million, of which EUR 
0.2 million was actually recovered.  
Elements  of  Article  44  of  the  Romanian  Constitution,  including  one  clause  which  establishes  that  all 
wealth is presumed to be legally acquired, hinder effective asset transparency and asset recovery. 
A  draft  law  regarding  extended  confiscation  has  recently  been  submitted  by  the  Government  to 
Parliament. 

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fight against corruption should remain a top priority, with support from Parliament, 
and urgent measures should be taken to improve the recovery of proceeds of crime, 
the pursuit of money laundering and the protection against conflict of interest in the 
management of public funds.  

4. 

RECOMMENDATIONS 

The Commission invites Romania to take action in the following areas in the light of 
in  Romania  since  July  2010.  These 
its  assessment  of  progress  achieved 
recommendations  should  help  Romania  to  focus  its  efforts  in  preparing  for  the 
Commission's overall assessment of progress in Romania under the CVM in summer 
2012. 

1.  Reform of the judicial system  

(a)  Actively  accompany  the  entry  into  force  of  the  Civil  Code  and  adopt  a 
comprehensive  implementation  plan  for  the  remaining  three  new  codes, 
provide sufficient resources for training and the re-organisation of courts 
and prosecutors offices, increase the capacity of the National Institute of 
the  Magistracy  and  adopt  its  proposals  to  improve  training  and 
recruitment standards; 

(b)  Complete  a  detailed  analysis  of  the  imbalances  of  workload  within  the 
judicial  system  in  preparation  of  the  upcoming  functional  review  of  the 
judicial system; 

(c)  Finalise  the  proposed  functional  review  of  the  judicial  system  and 

follow-up on its recommendations;  

(d)  Create  a  framework  to  monitor  progress  in  judicial  reform  involving 
stakeholders  from  the  judiciary  for  the  implementation  of  this  action 
plan; 

2.  Accountability of the judicial system  

(e)  Demonstrate  a  track  record  in  transparent  and  objective  management 
decisions  within  the  judiciary,  for  example  through  appointments, 
disciplinary  decisions,  appraisals  and  the  promotion  system  to  the  High 
Court of Cassation and Justice; 

(f)  Demonstrate a track record by the Judicial Inspection in the analysis and 
improvement  of  judicial  practice  and  continue  the  reform  of  the 
Inspection;  

(g)  Achieve  the  electronic  publication  of  all  jurisprudence  and  apply 
measures to assure that court motivations are issued in accordance with 
the law in a timely manner. 

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3.  Effectiveness of judicial action 

(h)  Take urgent measures to improve judicial practice and case management 
and  accelerate  important  high-level  corruption  cases  to  avoid  reaching 
statute-barred periods in all cases; 

(i)  Continue the reform of the High Court of Cassation and Justice in order 
to  strengthen  its  cassation  role  and  to  increase  its  capacity  to  deal  with 
high-level corruption cases; 

(j)  Continue  to  improve  the  dissuasiveness  and  consistency  of  court 
sanctions in high-level corruption cases and demonstrate better results in 
investigating, prosecuting and judging cases of fraud of EU funds and in 
public procurement; 

(k)  Adopt  clear  procedural  rules  for  decisions  of  Parliament  to  lift  the 
immunity  of  its  members  based  on  best  practice  in  other  EU  Member 
States. 

4.  Integrity  

(l)  Demonstrate a track record in prompt and dissuasive sanctions taken by 
administrative  and 
incompatibilities, 
conflicts of interest and the confiscation of unjustified assets in follow-up 
to the findings of the National Integrity Agency (ANI); 

judicial  authorities  regarding 

(m)  Take  measures  to  unify  the  practice  of  the  Wealth  Investigation 
Commissions  and  to  assure  that  they  handle  cases  efficiently  without 
prejudging the decision of court; 

(n) 

Improve  the  cooperation  between  ANI  and  other  administrative  and 
judicial  authorities,  particularly  in  the  area  of  public  procurement  and 
improve  the  investigative  capacity  of  ANI  through  upgrades  to  their 
information system and through targeted risk assessments; 

5.  Fight against corruption  

(o) 

Improve  coordination  of  anti-corruption  policies  at  highest-level  and 
develop  a  new  robust  multi-annual  strategy  to  prevent  and  sanction 
corruption  following  the  recommendations  of  an  independent  impact 
assessment; and create a monitoring group together with civil society to 
oversee implementation of the strategy; 

(p)  Demonstrate convincing results in the recovery of the proceeds of crime 
by  following  best  practice  in  other  EU  Member  States,  adopting  a  new 
law  on  extended  confiscation  and  strengthening  judicial  practice. 
Romania  should  also  demonstrate  a  proven  track  record  in  pursuing 
money laundering as a stand-alone offence; 

(q)  Develop rules for the prevention of conflict of interest in the management 
of public funds and within the authorities that regulate, verify and decide 
on  complaints  in  the  area  of  Public  Procurement;  strengthen  the 
procedures  and  capacity  of  the  competent  authorities,  including  by 
following up on the ongoing functional review in this area. 

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