Regional Factbooks

Trade Barriers, including Tariffs, Non-Tariff Barriers, and Import Taxes

The Romanian market is open, requiring no special conditions for access or operation.

Romania is a signatory to the conventions on Preferential Trade among Developing Countries ("The 16") and Generalized System of Trade Preferences among Developing Countries.

Romania adopted an 8-digit customs tariff in March 1993. This tariff is similar to the International Harmonised System of Combined Nomenclature.

A potential obstacle for U.S. exporters is the preferential tariff treatment for European competitors. The free trade arrangements with the EU, EFTA, and CEFTA are already triggering customs duty discrimination against some U.S. products. To give just an example, products under Chapter 84, Heading 8461 - Machine tools for planing, are currently taxed 20 percent if imported from the United States, 7 percent if imported from EU and EFTA, and exempted from customs duties if imported from CEFTA countries. Over the next years, taxes for many of the products imported from EU, EFTA, and CEFTA countries will be reduced to nil creating a barrier to U.S. products.

The customs duty rates vary depending upon the product being imported. The weighted average of customs duty is 11.7 percent with notable exceptions for ores and fuels, for which the taxation is nil or reduced to 3-10 percent. However, tariffs are considerably higher for such items as cigarettes, furs, carpets, vehicles, photographic equipment and supplies, bicycles, TV sets and sound and video registration equipment. Duties applied to industrial equipment are generally about 15 percent
ad valorem.

Import incentives are currently available to private SMEs (under Law No. 133), for current account imports for goods to be exported within 45 days, as well as for equipment imported for investments in excess of $1 million. Also, customs incentives are granted for goods imported inside Romanian Free Trade Zones and disfavored areas, as provided by specific regulations.

The following imported goods are exempted from duties: a) samples and models with no commercial value, as well as promotional materials, if certain conditions are met; b) humanitarian materials and legacies.

Imported goods can be replaced/repaired during the warranty period. The damaged ones can be exported and re-imported under import duty exemptions. To benefit from the exemption upon the re-import of the goods the replacement/repairs should be performed within the warranty period and the re-imported goods should have the same tariff classification and same technical characteristics as the exported ones.

In case the intention is to replace/repair the goods and the warranty clause has expired, then the re-importation is only partially exempted (i.e. the customs value is represented by the value of repairs).

With few exceptions, imports from all countries are subject to value-added-tax (VAT). VAT generally applies to the supply of goods, transfer of real estate, and services. Exempted activities include healthcare, scientific, educational, and charitable activities, banking and financial services, insurance, and schoolbooks editing.

The tax reform in late 1999-early 2000 lowered the standard VAT rate to 19 percent; no reduced rate is available, and zero rate applies for export of goods and services for which the hard currency was effectively cashed in Romania. Imported raw materials designed exclusively to the manufacturing of finished products which are exported within 45 days from importation are eligible for VAT exemption. Under the new legislation, the products and services previously taxed at the lower rate of 11 percent are now subject to the standard rate. These include: milk and dairy products, fish and fish products, meat and meat products, edible oils, medicines, livestock, fertilizers, and agricultural services. Under the new law, essential products and services as bread, electricity for domestic use, fuel, wood, and coal for domestic use, public transportation, and public utilities, which previously were VAT exempt, are now subject to the standard VAT rate.

Customs Valuation

An important objective during the transition to a market economy was the protection of Romanian companies from goods being dumped or subsidized. Accordingly, in 1992 Romania introduced anti-dumping 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 Trade investigates and sets remedies in cases of dumping, subsidized imports and import surges.

In Romania, customs duties are ad valorem duties. The customs value of imported goods is based on: a) the external price of the transaction, converted into lei at the market exchange rate; and b) charges not included in the price of goods, such as freight, handling and insurance on external
route.

If documentation concerning the value of imported goods is not available, the specific World Trade Organization (WTO) provisions will apply; import prices usually charged for such goods or similar items could be then used as the basis for valuation. Romania values goods on the basis of the WTO Valuation Code (i.e. Article VII of GATT). As stated above, for most items customs valuation is based on the contract value (i.e. transaction value). Customs duties must be paid at the time the goods are imported into Romania.

For the main Romanian customs contact, see Chapter 11 below.

Import Licenses

Import licenses are required for such products as pharmaceuticals, chemicals, and toiletry. Also, sanitary and safety standards as well as special approvals for wastes and residues, toxic substances, explosives and firearms are in force.

Export Controls

Exports of goods and services are not subject to customs duties or VAT. For the majority of goods, no export license is required. Authorizations are, however, required for exports of fuels, unfinished wood products, metallurgical products, and ferrous and non-ferrous waste.

Non-automatic export licenses are issued on a case-by-case basis by the Department of Foreign Trade within the Ministry of Foreign Affairs.

The National Agency for the Control of Strategic Exports and Prohibition of Chemical Weapons (ANCESIAC) is the authority responsible for the implementation of the procedures for exports of conventional arms and related technology.

Exports of strategic goods can only be authorized by ANCESIAC. The license may be individual or general. A general license may be issued based on the goods' level of sensitivity and the ultimate consignee of the goods.

Along with the application for an export license, the exporter must submit an import certificate or any other document issued by the importer's country certifying that the goods are to be used in the respective country and for the stated purpose.

After the goods have arrived at their destination but no later than four months after their arrival, the exporter has to obtain from his foreign partner a delivery verification certificate or any other equivalent document proving that the goods have arrived at their stated final destination. The exporter has to submit the document to ANCESIAC.

Romanian companies wishing to export weaponry can negotiate with their foreign partners the sale agreement without any prior notification to ANCESIAC, but cannot have the export license issued without submitting the above-mentioned import certificate to ANCESIAC.

An export license issued can be cancelled if there are any violations of export control regulations, as well as when the original conditions for which the license was issued are changed.

Import/Export Documentation

Regular import documentation is required by the Customs Office depending on each specific import/export operation. Generally, the consignments must be accompanied by the invoice, by specific lists describing the goods in detail (if needed), by international transport documents and by documents of origin (if applicable).

Additional documentation (e.g. corporate documents/by-laws of the Romanian importing entity, customs forms, such as: statement of value, customs declaration, etc.) should be presented by the importing entity at the customs office of destination where the clearance formalities are completed. Depending on the type of the customs regime (e.g. bonded warehousing, temporary admission/leasing), relevant contracts between the parties should also be presented for clearance purpose. Also, specific documents are required to introduce guns, ammunition, drugs, and
environmentally dangerous products.

Temporary Goods Entry

In accordance with EU customs regulations, Romania applies inward processing relief operations. The inward processing relief operates either through a "duty suspension" or a "duty draw back" method. As a general rule, under the "duty suspension" method the importer should not pay duty at importation and will become liable to duty if later places any products onto Romanian market. Under this structure the importer will only guarantee the import duties through a bank letter of guarantee.

Goods brought temporarily into Romania for repairing and re-export are placed under the inward processing regime.

The "duty drawback" system permits a refund of import duties previously paid at the time that the goods in question are exported from Romania after having been transformed, processed or repaired or after having been incorporated into products being exported.

Labeling, Marking Requirements

Labeling and marking requirements for goods imported into Romania follow rules and regulations similar to those in other developed jurisdictions.

Prohibited Imports

Prohibited imports include products such as firearms, ammunition, illegal drugs and other similar items that can affect national security, public health or good morals.

Standards (ISO 9000 usage)

Romanian standards of quality and safety are under the jurisdiction of the Romanian Association for Standardization (ASRO). Generally, they match ISO and Western European Standards. Romania adopted international quality control standards such as ISO 9000 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.

Free Trade Zones/Warehouses

Free Trade Zones (FTZs) 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 (for specific activities performed inside). They also include an exemption from profit taxes for the duration of a company's operations in the FTZ. 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 six FTZs: Sulina (located at the mouth of the Danube); Constanta-Sud Agigea (located close to the port of Constanta, at the entrance to the Black Sea-Danube Canal); Galati (located about 100 km from the Danube mouth); Braila (located 30 km up the Danube from Galati); Curtici-Arad (located about 30 km from the cross border with Hungary); and Giurgiu (located on the Danube, 60 km south of Bucharest)

The administration of each FTZ is responsible for all activities performed within the zone. FTZs are under the authority of the Ministry of Public Works, Transportation and Housing.

Membership in Free Trade Arrangements

Romania is a founding member of the World Trade Organization, has ratified most codes from the Tokyo Round, and 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. In December 1999, it opened EU accession negotiations.

Romania is also an associate member of the European Free Trade Association (EFTA) and of the Central European Free Trade Association (CEFTA).

Demographics & Economic Situation

Source: Factbook.net