The use of lawyers in Romania has in the past has often been limited to using them for legal advisory and court work. Most clients should consider using their lawyers in other fields in Romania. They should be used not only for legal matters but for commercial matters which have a legal angle.
When asked to draft or consider a contract the lawyer should also be instructed to review the whole legal basis of the transaction not only the drafting and amending of a contract. The boards of companies who are intending or are doing business are aware that as well as legislation and regulation to be observed and complied with that there are other matters which have a legal perspective which will affect their business.
Reputation and reputational damage now figure on a number of companies agenda. As well as knowing the client within the narrow parameters as set out in such legislation as the UK Bribery Act and the US Foreign Corrupt Practises Act and expanding EU legislation questions are now being raised as to other legal risks which may affect a company. These risks may not directly arise out of the contract but may arise out of the whole legal atmosphere surrounding the transaction.
Fortunately in Romania, some of these additional questions can be answered quickly and relatively easily and we have noticed that whilst we would often consider these questions they are beginning to be asked by the client companies themselves. Despite the recent actions by DIICOT and ANAF, Romania still has a poor reputation with regard to corruption and clients, therefore, need to consider how these acts of corruption will/could affect their business. A good commercial decision has to be taken in the light of all factors. There are a number of checks that can be undertaken on the client’s behalf by a law firm in Romania which will lead to some clarification.
The first is public awareness. A quick search on the internet and a review of a number of publications will reveal if the Romanian partners or its directors or staff has been involved in any action which may adversely affect the reputation of the client. Whilst such a review will not disclose many details it will allow a view to be taken and permit further in-depth enquiries to be made. In addition, there are a number of institutions including the courts and Trade Registry who have their records published online which enable further information to be obtained. The courts now publish details of all court cases and one can check in which cases the potential partner is involved either as defendant or plaintiff. The local financial administration can be searched to see if there are any outstanding claims in relation to tax matters and tax debts. This can be particularly important if monies are being advanced to cover future orders or the Romanian party is to provide funds in a venture.
There is a Romanian Electronic Achieve which is maintained by the State and it is a register of registered charges and claims over non-land and property assets. Again particularly important if monies are being advanced or an order is being placed for future goods. This may also clarify what other indebtedness the potential partner/client has and how they have conducted their business in the past.
A simple check-in all the above will give the client a better view of the third party in Romania.
Even a simple discussion with the lawyer about the current legal political and financial situation in Romania will allow a better understanding of the business climate to be arrived at and this will allow a more accurate business decision to be taken. The commercial reputation of the incoming investor/company will, therefore, be better protected.
We see our role here in Romania, as do many of our contemporaries who are aware of the ways of doing business outside of Romania, to be not only the Romanian law firm on the ground but also the initial eyes and ears of the incoming investor.