Following the letter sent on Monday by the IMF to the Justice Minister, Robert Cazanciuc, to the Central Bank’s Governor, Mugur Isarescu and to the chairman of the Legal Committee with the Chamber of Deputies, Bogdan Ciuca on the individual insolvency law, representatives of the above-mentioned institutions, as well as political leaders, have promptly reacted. The International Monetary Fund (IMF) sustains that if endorsing the individuals’ insolvency law without an adequate impact study and without consulting the associations involved, could never attain its goals and could have a negative impact on the financial market.
“The IMF supports the authorities efforts to promote a legislation in this domain, but we are extremely worried that the endorsement of the insolvency law with no impact study, with no consultation of the involved associations could not attain its goals. If not carefully planned, well-structured and well-implemented, such a law could have a negative impact on the financial market, “reads the letter.
BNR: Such a law requires a previous study
National Bank of Romania (BNR) Legal Department Director Alexandru Paunescu at the Palace of Parliament on Monday underscored that a law with a negative impact, such as the one on individual insolvency, is only natural to require a previous study.
‘When you issue a law having such a negative impact on the payment discipline, it is natural to conduct an impact study, which those with the Foreign Investors’ Council have initiated. And, because the funding entities were mentioned, I understand they voiced their availability to do it pro bono and we can support this impact study with the data we have at our disposal as Central Bank,’ Paunescu said, while present in the meeting of the parliamentary sub-committee that analysed the draft law on the individual insolvency.
He said that this law also brings a multitude of constraints.
‘In the first place, it would reflect in the payment discipline and the public opinion should very well know that this law, besides the rights of the natural persons, also draws a multitude of constraints concerning the availability of their own funds. We are talking about a law of natural persons’ insolvency and, with objectivity, without any passion, an assessment on both the benefits and the obligations should be carried out,’ Paunescu said, when asked what would the risks be in case this law is approved in haste.
CSM: An extrajudicial procedure is required
The Supreme Council of Magistracy (CSM) on Monday analysed, upon request of the Deputies Chamber’s Committee on legal affairs, discipline and immunity, the draft law regarding the insolvency of individuals, concluding that, under a procedural aspect, a preponderantly extrajudicial procedure would be required first, to be subjected, at times, to a judicial review.
‘The plenary Council is not opposing in principle the adoption of such a normative act to deal with insolvency in the case of individuals, it only deems necessary that such act should only be drafted after a proper preparation of the judicial system and while taking into account the legislation already existing in this field in other European states,’ showed the CSM release on Monday sent to Agerpres.
Following analysis, the conclusion was that the body to solve such requests regarding the insolvency of individuals cannot be established, in principle, until the impact study is made to show the possible effects of such a normative act and also to estimate the budgetary effort the whole process will imply, both for the courts and for the payment of the legal administrations, and also the conditions under which such costs are to be supported by the debtor or not.
Moreover, they said that the category of individuals to have access to this procedure should be very clearly delimitated, so that the body authorised to be able to carry out the required background check.
‘The plenary Supreme Council of the Magistracy believes that the hasty adoption of an imperfect normative act of such a great importance, by skipping a real debate on the draft meant for its improvement, would only affect the activity of the judicial system, the purpose of the whole process and even the beneficiaries of it,’ showed the release.
Justice Minister: An enforceable law in insolvency area to solve people’s problems, and not creating more, is needed
Justice Minister Robert Cazanciuc on Monday said that the Ministry he runs wants an enforceable law in the insolvency area, solving peoples’ problems and not creating more problems.
‘The Ministry has participated in several meetings with various institutions in order to find a formula. We have worked together with the experts of the World Bank to find a formula for the insolvency code. We cannot draw up a law that can truly be enforceable in a very short time. The Ministry showed such a law is needed, this is the reality, there are European models, but we want to create an enforceable law, solving peoples’ problems and not creating more problems in procedures that would take up a very long time,’ Cazanciuc said when exiting the headquarters of the Superior Council of Magistrates (CSM).
He pointed out that a procedure getting to court at the shortest time would block the judiciary system and wouldn’t help those having real problems.
According to the discussions in the CSM plenary sitting on Monday, before drawing up such a law, a study needs to be conducted to see the impact on the courts that are to take over these cases.
Justice Minister Robert Cazanciuc on January 22 said he was ‘absolutely convinced’ that ‘a European formula concerning the natural persons’ insolvency’ will be reached, ‘but only after thorough debates.’
The Justice Minister showed that those who discussed the need of a law coming into force ‘starting tomorrow’ ‘most likely’ haven’t thought about the court infrastructure that would get hundreds of thousands requests in terms of natural persons’ insolvency.
CSM member, judge Adrian Bordea on January 21 in the debates within the legal committee of the Deputies’ Chamber on the draft law on natural persons’ insolvency said that the judiciary system cannot take over approximately one million insolvency files and that a modification of the personnel structure and of the judiciary system infrastructure is needed.
PM Ponta: PSD, in favour of an individual insolvency bill to protect debtors
Prime Minister Victor Ponta on Monday said that the Social Democrats are in favour of a draft law on individual insolvency that should ‘protect debtors.’
He insisted on pointing out that, concerning the draft law on individual insolvency, the position of the parties in the ruling coalition differs, as the Liberal Reformist Party (PLR) and the Conservative Party (PC) representatives support the business environment more.
‘The IMF proposals concerning the individual insolvency law were sent to the legal committee of the Deputies’ Chamber and to the coalition. Here, our opinions do not coincide. The Social Democratic Party is in favour of a legislation protecting the natural persons, as we are a left-wing party. The PLR and the PC, as right-wing parties, do not quite agree with something like this and a vote must be cast in Parliament. (…) It is also a matter of ideology. We, as a left-wing party, find it natural to back the debtors more. The right-wing parties are expected to be in favour of the business environment and banks,’ Ponta pointed out on Monday evening, at the end of the ruling coalition meeting, having taken place in Parliament.
Victor Ponta criticised the National Liberal Party (PNL) position concerning this law, saying that the Liberals have even an extreme left-wing position in report with the PSD.
‘Here, by far, the PNL has the most inexplicable position, as it is a right-wing party and has an extreme left position in report with us . But our MPs, we have discussed and we shall discuss again in the parliamentary group, are in favour of a law protecting debtors (…) and regulating the protection of natural persons,’ Ponta added.
At the same time, the Prime Minister maintained that the draft law could be submitted to vote in the Deputies’ Chamber, a decision-making forum in this case, if the deputies in the legal committee manage to draw up the report during the week.
‘As soon as possible. If they draw up the report these days, the draft law goes on the plenary sitting agenda next week,’ Ponta said.
When asked if in his capacity of deputy he would vote the draft law on individual insolvency, Victor Ponta pointed out that, before voicing his option, the provisions of the law must be known.