GOVERNMENT OF ROMANIA

Progress achieved in preparing the accession

to the European Union 24 March 2006 – 21 April 2006

- April 2006 -

2

C O N T E N T S

INTRODUCTION ........................................................................................................................ 6

1. POLITICAL CRITERIA........................................................................................................... 6 DEMOCRACY AND THE RULE OF LAW........................................................................... 6 HUMAN RIGHTS AND PROTECTION OF MINORITIES.................................................... 9

2. ECONOMIC CRITERIA ........................................................................................................ 12 ASSESSMENT IN TERMS OF THE COPENHAGEN CRITERIA...................................... 12

3. COMMITMENTS AND REQUIREMENTS RESULTED FROM THE ACCESSION NEGOTIATION......................................................................................................................... 16

FREE MOVEMENT OF GOODS ...................................................................................... 16 FREE MOVEMENT OF PERSONS .................................................................................. 18 FREE MOVEMENT OF SERVICES.................................................................................. 19 COMPANY LAW............................................................................................................... 20 COMPETITION POLICY................................................................................................... 21 AGRICULTURE ................................................................................................................ 22 TAXATION........................................................................................................................ 28 SOCIAL POLICY AND EMPLOYMENT ............................................................................ 31 REGIONAL POLICY AND THE COORDINATION OF STRUCTURAL INSTRUMENTS... 32 ENVIRONMENT ............................................................................................................... 35 COOPERATION IN THE FIELD OF JUSTICE AND HOME AFFAIRS.............................. 38 FINANCIAL CONTROL..................................................................................................... 46

ANNEXES ................................................................................................................................ 48 Annex No 1 ....................................................................................................................... 48 Annex No 2 ....................................................................................................................... 50 Annex No 3 ....................................................................................................................... 64 Annex No 4 ....................................................................................................................... 67 Annex No 5 ....................................................................................................................... 72

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ABBREVIATION LIST

ABREVIATIONS ROMANIAN ENGLISH AE Acordul European Europe Agreement

ANA Agentia Nationala Antidrog National Antidrog Agency

ANAF Agentia Nationala de Administrare Fiscala

National Agency of Tax Administration

ANCPI Agentia Nationala pentru Cadastru si Publicitate Imobiliara

National Agency for Cadastre and Land Registration

ANIMMC Agentia Nationala pentru Intreprinderi Mici si Mijlocii si Cooperatie

National Agency for Small and Medium Sized Enterprises and Cooperatives

ANM Agentia Nationala a Medicamentului

National Drug Agency

ANPDC Autoritatea Nationala pentru Protectia Drepturilor Copilului

National Authority for Child Rights

ANPH Autoritatea Nationala pentru Persoane cu Handicap

National Authority for Persons with Handicap

ANR Agentia Nationala pentru Romi National Agency for Roma

ANRMAP Autoritatea Nationala pentru Reglementarea si Monitorizarea Achizitiilor Publice

National Regulatory and Monitoring Authority in the field of Public Procurement

ANSPDCP Autoritatea Nationala de Supraveghere a Prelucrarii Datelor cu Caracter Personal

National Supervisory Authority for Personal Data Processing

ANSVSA Autoritatea Nationala Sanitara Veterinara si pentru Siguranta Alimentelor

National Sanitary Veterinary and Food Safety Authority

ANV Autoritatea Nationala a Vamilor National Customs Authority

APDRP Agentia de Plati pentru Dezvoltare Rurala si Pescuit

Paying Agency for Rural Development and Fisheries

APIA Agentia de Plati si Interventie in Agricultura

Paying and Intervention Agency for Agriculture

AVAS Autoritatea pentru Valorificarea Activelor Statului

Authority for State Assets Recovery

BAAR Biroul Asiguratorilor de Autovehicule din Romania

Romanian Motor Insurers Bureau

CC Consiliul Concurentei Competition Council

CSA Comisia de Supraveghere a Asigurarilor

Insurance Supervisory Commission

CSM Consiliul Superior al Magistraturii

Superior Council of Magistracy

DGASPC Directia Generala de Asistenta Sociala si Protectia Copilului

General Directorate for Social Assistance and Child Protection

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Sociala si Protectia Copilului Assistance and Child Protection

DGCCO Directia Generala de Combatere a Crimei Organizate

General Directorate for Combating Organised Crime

DGPMB Directia Generala a Politiei Municipiului Bucuresti

General Directorate for Bucharest Police

DIICOT Directia de Investigare a Infractiunilor de Crima Organizata si Terorism

General Directorate for Investigation of Organised Crime and Terorism

DLAF Departamentul de Lupta Antifrauda

Anti-Fraud Department

DNA Directia Nationala Anticoruptie National Anticorruption Directorate

EWSE Sistemul privind schimbul de avertizari timpurii

Early Warning System Exchange

FC Fondul de Coeziune Cohesion Fund

GF Garda Financiara Financial Guard

IACS Sistemul Integrat de Administrare si Control

Integrated Administration and Control System

ICCJ Inalta Curte de Casatie si Justitie

High Court of Casation and Justice

IGPF Inspectoratul General al Politiei de Frontiera

General Inspectorate of Border Police

IGPR Inspectoratul General al Politiei Romane

General Inspectorate of Romanian Police

MAI Ministerul Administratiei si Internelor

Ministry of Administration and Interior

MAPDR Ministerul Agriculturii, Padurilor si Dezvoltarii Rurale

Ministry of Agriculture, Forests and Rural Development

MEC Ministerul Economiei si Comertului

Ministry of Economy and Commerce

MEdC Ministerul Educatiei si Cercetarii Ministry of Education and Research

MFP Ministerul Finantelor Publice Ministry of Public Finance

MIE Ministerul Integrarii Europene Ministry of European Integration

MJ Ministerul Justitiei Ministry of Justice

MVS Sistemul privind verificarea circulatiei

Movement Verification System

OMAI Ordinul ministrului administratiei si internelor

Order of the ministry of administration and interior

ONPCSB Oficiul National pentru Prevenirea si Controlul Spalarii Banilor

National Office for Prevention and Control of Money Laundering

ORA Oficiul Roman pentru Adoptii Romanian Office for Adoptions

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ORDA Oficiul Roman pentru Drepturile de Autor

Romanian Copyright Office

OSIM Oficiul de Stat pentru Inventii si Marci

State Office for Inventions and Trademarks

PICCJ Parchetul de pe langa Inalta Curte de Casatie si Justitie

Prosecutor’s Office attach to High Court of Casation and Justice

PIF Punct de Inspectie la Frontiera Border Inspection Posts

SEED Sistemul privind schimbul de informaţii in domeniul accizelor

System of Exchange for Excise Duty

SNIIA Sistemul National de Identificare si Inregistrare a Animalelor

National System for the Identification and Registration of Animals

VIES Sistemul privind schimbul de informaţii in domeniul TVA

VAT Information Exchange System

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INTRODUCTION Completing the Romanian contribution submitted on the 24th of March, as well as fulfilling the need to keep the European Commission well informed as regards the latest progress achieved, the document entitled “Progress achieved in preparing the accession to the European Union” details the most important developments registered during 24 March – 21 April 2006 the process of Romania’s accession to the European Union. This document focuses mainly on those issues of serious concern (red flags), as well as on those issues for which increased efforts are needed in order to complete its preparations for accession (yellow flags). 1. POLITICAL CRITERIA

DEMOCRACY AND THE RULE OF LAW Public administration reform The draft law for amending the Law 188/1999 on the civil servants statute, approved in the Government meeting of 26 January 2006 was debated and favourably endorsed by the specialty committees of the Romanian Senate, as first noticed chamber. The draft is pending debate in the Parliament. The draft framework law on decentralisation was adopted by the Chamber of Deputies in its plenary meeting of 7 March 2006. The draft was favourably endorsed by the speciality committees of the Senate and is scheduled on the agenda of the Senate plenary session of 26 April 2006. The draft law on local public finance was favourably endorsed by the two Senate committees, as first noticed chamber: the Committee for Budget, Finance and Banks (on 28 February 2006), the Committee for Public administration, territorial planning and environment protection (on 7 March 2006). The draft is scheduled on the agenda of the Senate plenary session of 26 April 2006. The draft law for amending and completing the Law 215/2001 on local public administration, adopted by the Chamber of Deputies, in its meeting of 28 March 2006 is now under debates within the Committee for Public administration, territorial planning and environment protection of the Senate. The Prime Minister’s Decision no. 38/5.04.2006 (OJ no. 314/7.04.2006) on the appointment of the Committee for contests and of the Committee for solving the disputes concerning the senior civil servants’ recruitment was adopted. The methodology concerning the organisation and functioning of the one-stop shop for local community public services was approved by the Order of the minister of administration and interior no. 1260/10.04.2006. These one-stop shops take the citizens applications concerning the IT person’s records, vehicles registration, and car driving licenses regime, as well as passports issuance. The Judiciary The Government approved on 29 March 2006 the EGO no. 27/2006 (OJ no. 314/7.04.2006) ensuring an overall increase of the judges and prosecutors’ incomes and eliminating the previous discriminations („the 40% bonus“) among different categories of magistrates. The bill entered into force in April 2006 and rendered judges and prosecutors the best-paid public officials in Romania. In order to improve the management of the personnel schemes in courts and prosecutors’ offices, GD no. 376/22.03.2006 (OJ no. 296/3.04.2006) was adopted which provides for the following:

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- Setting up a “vacancies’ reserve fund” of judge and prosecutor positions, in order to ensure the practical possibility of permanently filling in vacant positions during secondments of judges and prosecutors, as opposed to the previous situation when these vacancies could have been only temporary filled in.

- Setting up of a statistics office with 5 employees within the MJ, under the co-ordination of the Secretary General, in order to improve the system for collecting and processing statistical data. A twinning light programme is also to be contracted by mid 2006, in order to support the activity of this statistics office.

- Supplementation of the MJ personnel scheme (including the courts) with the 200 positions approved by EGO no. 1/2006. These positions are divided between the MJ (38) and the courts (162). The latter represent positions for: economic staff, IT specialists and clerks. The exact number of positions for each category of personnel will soon be decided, according to the courts’ needs, which are currently being assessed.

53 leading positions for judges and 31 for prosecutors were filled, following a contest organised by the CSM between March 4th and 26th, 2006. CSM approved the organization and the curriculum of a contest for filling in 108 prosecutor positions, scheduled for May 21st, 2006. For improving the infrastructure of courts and prosecutors’ offices, the delivery of the 13,300 computers and other additional IT equipment purchased in January 2006 for courts and prosecutors’ offices ended in March 2006, according to the contract. At present, each judge, prosecutor and clerk has his/her own computer. Supplementary funds were re-allotted within the MJ budget in March 2006 (GD no. 366/2006, OJ no. 274/27.03.2006), for the finalisation of the future premises of the Bucharest Tribunal, as well as for the finalisation countrywide of the local area network (LAN)1. 12 million EUR were supplemented for the budget of the Ministry of Justice and the National Administration of Penitentiaries, by Government decision, on April 19th, 2006. Out of these, 7 million EUR are for court infrastructure and 5 million EUR are for the improvement of detention conditions. The first stage for the elaboration of the manual on standards for courts’ premises was finalised on March 31st, 2006. In this stage, a cost analysis for the future investments/construction works was carried out and the main directions for the future projects and for the efficient use of the available space and resources were established. This manual will be mandatory for all new investment objectives and future furniture endowments, as it will be approved by Order of the Minister of Justice and published in the Official Journal. The overall budget for legal aid in 2006 (5.98 million EUR) is with approximately 160% higher than the 2005 budget for legal aid (2.3 million EUR). Regarding collaboration of judges and prosecutors with former Securitate and intelligence services, the Supreme Council for State Defence notified the Superior Council of Magistracy, on April 11th, 2006, that the verifications carried out so far showed that 1 prosecutor and 1 judge were involved before 1989 with the External Intelligence Service and other 2 prosecutors were included during their military service (before 1989) in the records of the Military Intelligence Service. The information related to these magistrates resulted from the data notified to the Supreme Council for State Defence by the National Council for Studying the Archives of former Securitate. The Supreme Council for State Defence confirmed that none of the 4 magistrates

1 LAN is part of the automation process and it is necessary in order to install the ECRIS system and to complete the countrywide IT judicial network.

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elaborated informative notes. These persons became magistrates after leaving the intelligence services mentioned above. In view of this fact, they are not incompatible under the law with holding the office of magistrate. Only current agents or collaborators of intelligence services are incompatible. According to the current legislation, when entering magistracy, the judges and prosecutors must submit a statement regarding their involvement with former Securitate and a statement regarding the collaboration with intelligence services. The judges and prosecutors who were either agents, or collaborators of the intelligence services before 1990 may not hold leading positions, nor be members of the Superior Council of Magistracy. The Ministry of Justice signed the contract for distributing to all courts 600 copies of each issue from the quarterly Cassation Digests of the High Court of Cassation and Justice published in 2006, in order to continue the similar contract of 2005. The new law on insolvency1 (previously reported) was adopted by the Parliament on March 14th, 2006 promulgated by the President of Romania on April 3rd, 2006 and became Law no. 85/2006. The PHARE 2002 programme on “Support for the improvement and the enforcement of legislation and judicial decisions on bankruptcy” was successfully finalized on April 19th, 2006. The programme is expected to improve financial discipline in the Romanian economy, by developing the legislation and the jurisprudence on bankruptcy. All objectives of the programme were dully achieved: - A good practices manual was drafted and is being distributed to judges and

insolvency practitioners. - A manual on Economics applied during insolvency procedures was drafted and is

being distributed to judges and insolvency practitioners. - Training on the new law on insolvency was carried out between March 7th and April

7th, 2006. The training programme included 267 judges (distributed in 11 groups), 109 clerks (distributed in 4 groups) and 135 insolvency practitioners (distributed in 5 groups).

Fighting against corruption On April 19, 2006, the draft law amending the legal framework on financing political parties was approved by the Government and sent to Parliament for adoption. The main improvements include very clear and strict rules on transparency (i.e. each party shall publish in the Official Journal, Part I the total amount obtained from all income sources including membership fees, donations and other sources); reducing substantially the ceiling of the membership fee from 100 minimum salaries to 12 minimum salaries, in order to eliminate the relation between the public function and the membership fee; prohibition of abuse of public resources; rethinking the formula for state subsidies taking into account the results obtained by the party not only in the general but also in the local elections and suspension of the state subsidy granted to the party in case of breaches of the legal provisions. Also, on April 19, 2006, the Government approved a new law on public procurement. At the level of the Financial Guard (GF)

The Financial Guard (GF) drafted the law on Status of the financial guard commissar. The draft law is pending the endorsement procedure by the Ministry of Public Finance. Between 1 March – 31 March 2006, GF performed 27 verifications on the request of the National Anticorruption Directorate (DNA) and 6 verifications on the request of the Prosecutors’ Office attached to the High Court of Cassation and Justice (PICCJ).

1 pending publication in the Official Journal.

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During the same period, GF sent 16 notifications to DNA and 299 notifications to PICCJ. At the level of the National Customs Authority (ANV)

Between March 23 and April 17, 2006, the Internal Verification Service (SVI) from the National Customs Authority (ANV) performed 16 controls. As a result, DNA was notified regarding 1 case, 22 customs employees were temporary changed to other positions, 24 customs employees were sent to the Disciplinary Commission and in 6 cases disciplinary sanctions were proposed. At the level of the Ministry of Administration and Interior (MAI)

General Anticorruption Directorate within Ministry of Administration and Interior (MAI), drafted the Activity Plan for 2006. During March, 2006 DNA started investigations in 14 files upon the notifications received from MAI structures. Results in fighting corruption

Between April 1 and 19, 2006, DNA indicted 1 deputy. Currently, 4 deputies, 1 former deputy, 1 senator, 2 members of the Government and 2 former members of the Government are investigated by DNA. Between March 1 and April 1, 2006, DNA indicted 15 cases, regarding 44 defendants, for committing 100 corruption offences, as follows: - 28 classical corruption offences (giving bribe, taking bribe, trading in influence,

receiving undue advantages) - 30 offences assimilated to corruption (i.e. cases of unlawful crediting; use of credits

for other purposes than those for which they were granted; use of confidential information for personal purposes; obtaining undue advantages by persons with control attributions)

- 42 offences directly connected to corruption offences (i.e. association with a view to committing offences; forgery and use of forgery; money laundering; abuse of office against public interests; tax evasion; fraudulent bankruptcy).

Examples of indicted persons between 1 March – 1 April 2006: 1 judge; 1 lawyer; 2 inspectors from a General Directorate of Public Finances; 1 inspector and 1 counsellor from the General Directorate for Labour and Social Protection; 1 counsellor from a Local Council; 6 police officers; 1 customs clerk; 6 directors from branches of a bank. Between 1 March – 1 April 2006, in cases indicted by DNA, the courts rendered 12 conviction decisions, regarding 18 defendants. Among the defendants, there are: 1 judge; 1 lawyer; 1 chief of service from the Bucharest City Hall; 6 police officers and sub-officers. In the same period, courts rendered 12 final conviction decisions regarding 26 defendants. Among the defendants, there are: 1 officer from the Ministry of National Defence; 1 prosecutor; 1 lawyer; 1 local counsellor; 2 commissars from the Financial Guard; 6 police officers and sub-officers.

HUMAN RIGHTS AND PROTECTION OF MINORITIES Regarding the conditions in penitentiaries and detentions centres, a building under construction and the corresponding land were allotted to the National Administration of Penitentiaries, by Government Decision, on April 19th, 2006, for a new penitentiary in Bucharest outskirts. On 3.04.2006, the closing of the arrest premises of the General Directorate for Bucharest Police (DGPMB) was agreed upon. The operation of moving the detainees to the arrest premises of the Directorate for Criminal Investigations (DCP) and Police Unit no. 12 started on April 11th (21 persons were transferred to DCP and 8 to Unit

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12). On April 14th the DGPMB arrest premises were permanently closed, after all detainees were transferred. The temporary locations for the DGPMB arrest premises will be Police Units 12 and 22, until the rehabilitation works on the Bucharest Centre for Preventive Arrest will be finalized. A chart of measures and actions for rehabilitating detainment and preventive arrest premises has been drawn up at the level of the Directorate for Criminal Prosecutions and of the Directorate for Logistics. The chart was the result of analysing the possibilities of taking over some premises from other structures or modernizing the existing ones, in order to fit out the arrests according to the new concept regarding the organization and functioning of detainment and preventive arrest premises in units subordinated to the Ministry of Administration and Interior. The activities for rehabilitating detainment and preventive arrest premises of the Directorate for Criminal Prosecutions and Buzau and Caras Severin County Police Inspectorates continued during the reference period. In March 2006, at the level of the IGPR Department for Human Rights and Humanitarian Law, 20 files of alleged human rights infringements or abuses committed by police officers were investigated/reinvestigated, out of which 8 cases refers to accusations of abuse committed by police officers at police units, during escorts to police units or on persons under detainment in police arrest premises. The results of the 8 cases investigations/reinvestigations is as follows: - non initiation of criminal prosecution in 3 of the cases; - in 2 cases, 2 agents and respectively 3 agents were given disciplinary sanctions,

the commencing of criminal prosecution was ordered for another 2 agents involved in one of the two cases and the criminal trial has not been finalized yet;

- the criminal trial is not finalized yet in 2 cases; - in 1 case the accusations were not confirmed after the verifications. In March 2006, in the field of freedom of expression, the territorial units of the Romanian Police recorded a case of injury or other types of violence concerning journalists. The case has been solved. Currently there are four cases with unknown authors in the Romanian Police records regarding aggressions of journalists related to the journalism activity, three of the cases from the previous years and one recorded in February 2006. Regarding child protection, the National Authority for the Protection of Children’ Rights has elaborated the Framework Action Plan aiming at the social reintegration of the street children, approved by the Order no. 100/15.03.2006 (OJ no 297/03.04.2006) of the secretary of state of the National Authority for the Protection of Children’ Rights. In the area of adoptions, activities carried on by the Working group for auditing the cases (international adoption applications) taken over by the Romanian Office for Adoptions (from the former Romanian Committee for Adoptions) were finalised. Following this analysis, on March 27, 2006 the Working group approved the Final Audit Report. Until the end of March 2006, responses have been sent to all 1100 persons/families who submitted international adoption applications during the moratorium on international adoptions; the family files (documents) submitted by the persons/families in view of adoption have also been sent back. The implementation (in partnership with the private sector) of the project on training of professionals who are working in the adoption services within the General Directorates for Social Assistance and Child Protection (DGASPC) regarding the evaluation and training of the potential adopting families were finalised. The results of the project are the following:

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- Elaboration of an assessment instrument and a preparation curriculum for the adopting persons/families in view of obtaining the certificate of person/family qualified to adopt

- Training of 44 professionals (working in the adoption services within DGASPC) based on the instrument and curriculum

- Training of 31 professionals (working in the adoption services within DGASPC) regarding the carrying on of the support groups for adoptive parents.

Currently, 1909 Romanian persons/families certified to adopt, 886 court decisions on the initiation of internal adoption procedure (for 886 children) and 1165 court decisions for adoptions approvals (232 national adoptions approved according to the new legislation and 933 national adoptions approved according to the previous legislation) are registered in Romanian Office for Adoption database. Regarding the protection of persons with disabilities, through Order no 23/2006 of the president of the National Authority of Persons with Disabilities, the working group on combating beggarliness was set up and a timetable of activities was elaborated. The timetable represents the background of planned activities for the period 2006 - 2007, which National Authority of Persons with Disabilities will implement, within the on going activities or through collaboration with others partners. The followed up objective is reducing the vulnerability of the persons with disabilities to the persons’ traffic. The National Authority of Persons with Disabilities will monitor the timetable activities (Annex No 1). In the area of medical assistance to the persons with psychiatric disabilities, the Order of the minister of health no. 372/10.04.2006 regarding the Norms of Application of the Law on Mental Health and Protection of the Persons suffering from mental disabilities with the following amendments, was adopted. This order contains provisions regarding the promotion and protection of the mental health and the prevention of mental illnesses, evaluation of the status of mental health, services of mental health, rights of the persons suffering from mental disorders, non-voluntary admission. Also, the Order of the minister of health no. 374/10.04.2006 regarding the approval of the Mental Health Strategy was adopted. The Strategy of the Ministry of Health in the field of mental health is based upon 5 pillars of action, respectively the prevention pillar (primary prophylaxis), healthcare pillar (secondary and tertiary prophylaxis), legislation pillar, resources pillar (financial and human resources), connections with other systems pillar (general medical system, higher education and scientific research, mass-media, organizational system). The Order of the minister of health no. 373/10.04.2006 regarding the setting up and functioning of the National Centre of Mental Health within the National Institute of Research – Development in Health from Bucharest was adopted. The National Centre of Mental Health represents the technical and methodological forum for the activities of promotion, monitoring and evaluation of the mental health activities, necessary for the Ministry of Health to elaborate mental health policies. The Order of the minister of health no. 375/10.04.2006 regarding the setting up, organizing and function of the mental health centres was issued. The mental health centres are created through the reorganizing of the mental health laboratories, ensuring the community treatment of the patients suffering from mental disorders. The Order of the minister of health no. 288/27.03.2006 for increasing the efficiency of the social assistance activity and respect of the human rights in the psychiatric sanitary units or in other units that have in their structure sections and compartments of psychiatry was adopted. The social assistants who will be employed in accordance with the provisions of the Order will have the responsibility to ensure the respect of the patients’ rights.

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Regarding the protection of minorities, the Law for the ratification of Protocol 12 of the Convention for the Protection of Human Rights and Fundamental Freedoms was adopted by Parliament on April 5th, 2006 and promulgated by the President of Romania on April 20th 2006. On April 12, 2006, the Romanian Government approved a Memorandum for contracting a loan from the International Bank for Reconstruction and Development (BIRD), amounting to 58,5 millions USD, designated to finance the social inclusion programme for vulnerable groups. Out of the total sum, the amount of 23 millions USD is allocated for financing of projects for starting of the pilot phase of early education and strengthening the institutional capacity of the National Agency for Roma (ANR). On April 19, 2006, the Government has approved the community development Programme for Hădăreni locality, county Mures, designed for 2006-2008; thus, the commitment assumed by the Government of Romania to the European Court for Human Rights was fulfilled. The coordination of this programme will be carried out by the General Secretariat of the Government, the National Agency for Roma and the line ministries involved in its implementation. The financial side of the program will be ensured by the National Agency for Roma. Also, on 19 April 2006, the Government Decision regarding the amendment and completion of the Strategy of the Romania’ Government for Improving the Roma Situation was approved.

2. ECONOMIC CRITERIA

ASSESSMENT IN TERMS OF THE COPENHAGEN CRITERIA The existence of a functional market economy A. Sustainability of public finances Revenues collection1 Within the first quarter of 2006, the revenues collected by ANAF amounted 21.650,04 mil. RON, higher by 19,37% than those registered for the similar period of 2005 (18.136,62 mil. RON), as it is presented in the table below:

Mil. RON

2005 2006 % in GDP

2005 2006 BUDGET

QUARTER I QUARTER I

Nominal INDEX

Real INDEX 1,084

2006/ 2005

287.200 330.300 STATE BUDGET

(including amounts

distributed to the local budgets)

11.280,38 14.015,73 1,24 1,15 124,25% 3,93% 4,24%

State Social Security Budget* 4.326,90 4.676,71 1,15 1,06 108,08% 1,51% 1,42%

Unemployment Budget* 534,10 548,83 1,04 0,96 102,76% 0,19% 0,17%

National Health Insurance Budget

1.995,24 2.408,77 1,21 1,11 120,73% 0,69% 0,73%

TOTAL 18.136,62 21.650,04 1,19 1,10 119,37% 6,31% 6,55%

1 The data for Quarter I, 2006 are definitive

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* Note: the achievements include the expenditures deducted directly by the employers that represent revenues. GDP was updated by the National Commission for Prognosis at 31.03.2006. The increase of the revenues collected by ANAF in the first quarter of year 2006 is determined both by the increase of the voluntary compliance and the strengthening of the enforcement measures applied by the tax bodies. Within the first quarter of 2006, the revenues collected by ANAF for the state budget (including amounts distributed to the local budgets) amounted to 14.015,73 mil. RON, that is with 2.735,35 mil. RON higher than the amounts collected within the same period of 2005, respectively higher by 24,25%. The share in GDP of the state budget revenues at the end of the first quarter of 2006 was 4,24 % while the share in GDP at the end of the first quarter of 2005 was 3,93%. The situation regarding the achievement of the budgetary revenues for the analysed period is presented below:

mil. RON

QUARTER I % in GDP 2005

% in GDP 2006 INDICATORS 2005

(definitive data)

2006 (definitive

data)

Dif.(+/-) % Nominal INDEX

Real INDEX (1,084) 287.200 330.30

0

TOTAL STATE BUDGET REVENUES (including amounts distributed to the local budgets)

11.280,38 14.015,73 2.735,35 124,25% 1,24 1,15 3,93% 4,24%

- Out of which: Profit tax 1.680,64 1.823,44 142,80 108,50% 1,08 1,00 0,59% 0,55%Income tax + wages tax 1.712,36 2.089,31 376,95 122,01% 1,22 1,13 0,60% 0,63%VAT 4.615,70 6.221,89 1.606,19 134,80% 1,35 1,24 1,61% 1,88%Excise duties 1.795,23 2.201,53 406,30 122,63% 1,23 1,13 0,63% 0,67%Customs duties 379,21 501,98 122,77 132,38% 1,32 1,22 0,13% 0,15%Other revenues 1.097,24 1.177,58 80,34 107,32% 1,07 0,99 0,38% 0,36%

The situation, in structure, on the main taxes and duties: - For profit tax, the collection for the first quarter of 2006 was by 142,80 mil. RON

higher compared with the same period of 2005, which is by 8,50% higher. The share in GDP was by 0,04% lower, compared with the same period of 2005 – the revenues decreased because the fact that the collection from profit tax is afferent to the fourth quarter of the previous year, under the circumstances that for the fourth quarter of 2004, the tax rate was 25% compared to the current rate of 16%.

- For income tax, the revenues within the first quarter of 2006 were by 376,95 mil. RON higher compared with the same period of 2005, that is by 22,05%. The share in GDP was by 0,03% higher, compared with the same period of 2005.

- VAT collection - For VAT, the revenues within the first quarter of 2006 were by 1.606,19 mil.

RON higher compared with the same period of 2005, that is by 34,80%. The share in GDP was 1,88 % in Q1,2006, against 1,61 % in Q1, 2005, that is 0,27 % higher.

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Out of the total revenues on 31.03.2006, amounting to 14.015,73 mil. RON, the revenues from VAT represented 44,39%. The increase of the VAT revenues collected, compared with the same period from 2005, is due, mainly, to the following factors: - The increase of the cashing from domestic operations (by 14,97%) and,

respectively, the significant increase of the cashing from imports (41,97%); - The increase of inflation; - The legal amendments – eliminating some VAT exemptions, starting with

June 1, 2005. The situation of the cashing in the VAT account, at the end of the quarter I of 2006, is the following: Mil. RON

MONTH VAT

collected, out of which:

Collection from

domestic operations

Collection from

imports

VAT

Refunded

Interests and

penalties Total VAT

0 1=2+3 2 3 4 5 6=1-4+5 TOTAL

Quarter I 2006, out of which: 7.951,27 4.024,27 3.927,00 1.768,47 39,09 6.221,89 January 2.689,85 1.602,03 1087,82 418,53 3,08 2.274,40 February 2.426,06 1124,46 1301,6 483,46 8,93 1.951,53

March 2.835,36 1.297,78 1.537,58 866,48 27,08 1.995,96

- Excise duties collection - For excise duties, the revenues within the first quarter of 2006 were by 406,30

mil. RON higher compared with the same period of 2005, respectively by 22,63%. The share in GDP was 0,67% in Q1, 2006, against 0,63 % in Q1, 2005, that is 0,04 % higher. The increase of the revenues from excise duties intervened under the conditions that the foreign exchange rate RON / EURO taken into account for computing the excise duties decreased from 3,9378 RON / EURO for the first quarter of 2005 to 3,6771 RON / EURO for the first quarter of 2006. Other factors considered were: - The increase of the level of the excise duties; - The introduction of the excise duties for electricity; - The increase of the production in the field of oil processing by 9%, the

increase of the production in the field of beverages by 18% and of the turnover in the same area by 9%, the increase of the turnover in the area of selling gas for vehicles by 18,1%.

Out of the total revenues registered on 31.03.2006 and amounting to 14.015,73 mil. RON, the revenues from excise duties represented 15,71 %. The largest share in the excise duties collected within the first quarter of 2006 is held by the excise duties collected from domestic operations (93,04%). The situation of the cashing in the excise duties account, at the end of the quarter I of 2006, is the following:

15

Mil. RON

MONTH Total excise

duties, out of which:

Alcohol Tobacco products Mineral oils Other products

TOTAL Quarter I 2006, out of which: 2.201,53 249,31 674,89 1.184,03 93,30

January 689,23 84,86 241,38 337,17 25,82

February 683,36 54,28 172,00 424,85 32,23

March 828,94 110,17 261,51 422,01 35,25

The total amount of excise duties collected in the first quarter of 2006, of 2.201,53 mil. RON, has the following structure: a) Excises for mineral oils = 1.184,03 mil. RON (53,78%); b) Excises for tobacco products = 674,89 mil. RON (30,66%); c) Excises for alcohol = 249,31 mil. RON (11,32%); d) Excises for other products = 93,30 mil. RON (4,24%). - The revenues from customs duties collected in the first quarter of 2006 amounted

501,98 mil. RON, being with 122.77 mil. RON higher compared with the same period of 2005 (that is by 32,38% higher). This evolution was determined by the increase of the imports by 29,9% together with the decrease of the average foreign exchange rate by 3,9%.

The situation of the collection from excise duties, taking into account the GDP and the evolution of the exchange rate, within the period 2000 – 2005: Revenues from excises increased significantly in absolute terms in RON and slightly as a percentage of GDP starting with 2002. In 2005 the excises (as a % of GDP) were staying at the same level as in 2004 in the context of a GDP growth of 4.1% and despite of a significant RON nominal appreciation. (Excises2005 - Excises2004)/AvgExchRate2004 = (1114.3 mil RON)/4.0532 = 275 million EUR (the effect of appreciation)

2000 2001 2002 2003 2004 2005Excises (RON mil) 1870.21 2729.3 3243.4 6040.8 7965.1 9079.4Excises (% GDP) 2.3 2.3 2.1 3.1 3.2 3.2Average exchange rate (EUR/RON) 1.9955 2.6026 3.1255 3.7555 4.0532 3.6234Excises (EUR bill) 0.937 1.048 1.037 1.608 1.965 2.505

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Revenues from excises in absolute terms during 2000-2005

0

2000

4000

6000

8000

10000

2000 2001 2002 2003 2004 2005

RON

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excises (RON mil*)

Revenues from excises and average exchange rate EUR/RON

0

1

2

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5

2000 2001 2002 2003 2004 2005

excises (% GDP)

avg exchange rate(EUR/RON)

B. The structural reform in economy; the privatisation and restructuring of the state owned companies In order to speed up the privatisation of companies deemed fit for privatisation and owned by public institutions involved in privatisation, the Government approved on 12 April 2006 an integrated privatisation plan for 2006 and 2007. This document comprises a total number of 184 companies, out of which 120 companies in the AVAS’ portfolio, 24 companies in the portfolio of the Ministry of Economy and Commerce, 2 companies in the portfolio of the Ministry of Public Finance, 15 companies in the portfolio of the Ministry of Transport, Construction and Tourism, 14 companies in the portfolio of the Ministry of Agriculture and Rural Development, 5 companies in the portfolio of the Ministry of Culture and Cults and 3 companies in the portfolio of the Ministry of Communication and Information Technology.

3. COMMITMENTS AND REQUIREMENTS RESULTED FROM THE ACCESSION NEGOTIATION

FREE MOVEMENT OF GOODS Concerning public procurement, the primary legislation on public procurement has been adopted by the Government through an Emergency Ordinance on the 19th of April 2006 and shall enter into force at 01.07.2006. Also – for the completion of the new

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regulatory framework for public procurement – the process of drafting the operational tools and guidelines has been launched. Also, a detailed presentation of the provisions of the Emergency Ordinance adopted by the Government on 19th of April 2006 on the verification function of the procedural matters during the award of the public procurement contracts is presented within the “Regional policy and the coordination of structural instruments” chapter. As the new public procurement law was adopted by the Government, the main focus of ANRMAP is the elaboration of the secondary legislation. Currently the work on the secondary legislation is ongoing and it will be finished in due time, respectively in a time limit of maximum 60 days from the publication of the new public procurement law. The new public procurement law will enter in force on the 30th of June, thus ensuring 6 months of application of the new legislation before the accession date. As concerns the setting up of the National Council for Solving Complaints (NCSC), the work for the elaboration of the draft Government Decision for organising and functioning of the NCSC is also ongoing and the proposed time limit for finishing it is 2 weeks top. After the adoption and publication of the Government Decision, the contest for hiring the Council Members will be launched. As an indicative date, the Authority takes into consideration the date of 15th May for launching the approval procedures for this contest. In the field of horizontal and procedural measures necessary for the acquis in the new approach sector, concerning accreditation, on the 30th of March 2006, RENAR has submitted the application in order to obtain the quality of signatory of EA-MLA for the following fields: quality management systems certification bodies and product conformity certification bodies. In the same application, RENAR requested the obtaining of the quality of signatory of the EA-MLA for a new field, respectively calibration laboratories. In the field of sectoral legislation under the new approach, concerning the equipment and protective systems intended for use in potentially explosive atmospheres, in order to ensure a full alignment with the provisions of Directive 94/9/EEC, G.D. no 752/2004 regarding the establishment of the conditions for placing on the market of the protective equipment and systems intended to be used in potential explosive atmospheres, has been amended on the 5th of April 2006, following to be published in the OJ. As regards the old approach sector, concerning chemicals, by adopting GD no. 199/2006 (OJ no. 223/10.03.20006) which amends GD no. 490/2002 for the approval of the Methodological Norms for the enforcement of the G.E.O. no. 200/2000 regarding the classification, labelling and packaging of dangerous chemical substances and preparations, the provisions of Directives 2001/59/EC, 2004/73/EC, and the corrigendum of 2004/73/EC were transposed into the Romanian legislation. Concerning good laboratory practices, in order to take over some definitions included in the consolidated version of the Directives 2004/9/EC and 2004/10/EC and to include the recommendations of the European Commission experts, G.D. no. 266/2006 (OJ no. 217/09.03.2006) was adopted. This G.D. is amending the G.D. no. 63/2002 regarding the approval of the Principles of good laboratory practice, as well as the inspection and verification of their abidance in the case of tests carried out on chemical substances. Concerning medicinal products for human use, the Law regarding the reform in the health sector, including Title XVII- Medicinal products for human use, has been promulgated by the President of Romania on the 13th of April 2006. Title XVII transposes the provisions of Directive 2001/83/EC relating to a community code for medicinal products for human use, with the exception of the annex, amended by: Directive 2002/98/EC setting standards of quality and safety for the collection, testing,

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processing, storage and distribution of human blood and blood components, Directive 2003/63/EC, Directive 2004/24/EC and Directive 2004/27/EC. In the field of the genetically modified organisms, MAPDR Order No 237/07.04.2006 (OJ No 337/14.04.2006) regarding the authorization the authorizing process of the economic agents growing genetically modified plants has been adopted. Its text can be found in Annex No 2. During the reference period, the National Sanitary Veterinary and Food Safety Authority organized meetings and trainings at county level with the operators producing, processing, storing, using or trading soy products, regarding the modalities of application of the new adopted national legislation regarding the traceability and labelling of GMO.

FREE MOVEMENT OF PERSONS The draft law regarding the reform of the health sector was promulgated by the President of Romania on 13 april 2006, and will be published in the Official Journal of Romania. That comprises the following titles, transposing community regulations: - Title IX – “European Card and National Card for Social Health Insurances”. - Title XII – “The exercise of the profession of physician. The organizing and function

of the Physicians’ College from Romania”. - Title XIII – “The exercise of the profession of dentist. The organizing and function of

the Dentists’ College from Romania”. - Title XIV – “The exercise of the profession of pharmacist. The organizing and

function of the Pharmacists’ College from Romania”. Title IX - „The European Card and National Card of Social Health Insurances” was elaborated in accordance with the european provisions in this area. Title XII – “The exercise of the profession of physician. The organizing and function of the Physicians’ College from Romania” – The provisions of this title integrally transpose the provisions regarding the practice of the profession of physician, included in: a) Directive no. 93/16 from 5 April 1993 regarding the facilitation of the free movement

of physicians and the mutual recognition of physicians’ diplomas, certificates and titles, with the subsequent amendments, published in the Official Journal of the European Communities (OJEC) no. 165 from 7 July 1993;

b) Directive 2005/36/EEC from 7 September 2005, regarding the recognition of the professional qualifications, published in the Official Journal of the European Communities (OJEC) no. L 255 from 30 September 2005;

c) Regulation no.1612/68/EEC from 15 October 1968 regarding the free movement of workers within the European Community, published in the Official Journal of the European Communities (OJEC) no. L 257 from 19 October 1968 ;

d) Directive 2003/109/EEC from 25 November 2003 regarding the status of the third state citizens who are long term residents, published in the Official Journal of the European Communities (OJEC) no. L 16 from 23 January 2004.

Title XIII – “The exercise of the profession of dental practitioners. The organizing and function of the Dental Practitioners’ College from Romania” – The provisions of this title integrally transpose the provisions regarding the practice of the profession of dentist, included in: a) Directive no. 78/686/CEE from 25 July 1978 concerning the mutual recognition of

diplomas, certificates and other evidence of the formal qualifications of practitioners of dentistry, including measures to facilitate the effective exercise of the right of establishment and freedom to provide services, with the subsequent amendments

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and supplements, published in the Official Journal of the European Communities (OJEC) no. L 233 from 24 August 1978;

b) Directive 2005/36 EEC from 7 September, 2005, regarding the recognition of the professional qualification, published in the Official Journal of the European Communities (OJEC) no. L 255 from 30 September, 2005;

c) Regulation no.1612/68 EEC from 15 October 1968 regarding the free movement of workers within the European Community, published in the Official Journal of the European Communities (OJEC) no. L 257 from 19 October 1968 ;

d) Directive 2003/109/EEC from 25 November 2003 regarding the status of the third states citizens, who are long term residents, published in the Official Journal of the European Communities (OJEC) no. L 16 from 23 January 2004.

Title XIV – “The exercise of the profession of pharmacist. The organizing and function of the Pharmacists’ College from Romania” – The provisions of this title integrally transpose the provisions regarding the practice of the profession of pharmacist, included in: a) Regulation no.1612/68 EEC from 15 October, 1968 regarding the free movement of

workers within the European Community, published in the Official Journal of the European Communities (OJEC) no. L 257 from 19 October 1968;

b) Directive no. 85/432/EEC from September 16, 1985 concerning the coordination of provisions laid down by law, regulation or administrative action in respect of certain activities in the field of pharmacy, with the subsequent amendments, published in the Official Journal of the European Communities (OJEC) no. L 253 from 24 September 1985;

c) Directive no. 85/433/EEC from 16 September 1985 concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications in pharmacy, including measures to facilitate the effective exercise of the right of establishment relating to certain activities in the field of pharmacy, with the subsequent amendments, published in the Official Journal of the European Communities (OJEC) no. L 253 from 24 September 1985;

d) Directive 2003/109/EEC from 23 November 2003 regarding the status of the third states citizens, who are long term residents, published in the Official Journal of the European Communities (OJEC) no. L 16 from 23 January 2004.

e) Directive 2005/36/EEC from 7 September 7 2005, regarding the recognition of the professional qualifications, published in the Official Journal of the European Communities (OJEC) no. L 255 from 30 September 2005.

FREE MOVEMENT OF SERVICES Regarding the recommendation of the Peer Review Mission on assuring the operability of the Information Center, of the Compensation Body, as well as the independence of the Romanian Motor Insurance Bureau, the special provisions were introduced in the Draft Law for approving the Emergency Government Ordinance No 201/2005 on the amendment and completion of the Law No 32/2000. The Law was adopted by the Parliament following to be enacted by the President. The Law provides that “the Romanian Motor Insurance Bureau is a professional association, independent and autonomous, which on the basis of the Green Card International Agreement has responsibilities in the field of regulating the activity of the insurance undertakings issuers of international insurance documents.” Meanwhile, CSA has taken all the necessary administrative measures to prepare the setting up of the Information Center and of the Compensation Body, as soon as the Law will come into force.

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Regarding the motor vehicle insurance, the second comparison of the CSA and Ministry of Administration and Internal Affaires (MAI) databases has been done, on 7 April 2006, resulting that over 90% of the data compared between the two databases matched. The results of this comparison are presented below, next to the results obtained after the first comparison:

1st comparison03.02.06

2nd comparison 07.04.06

Number of insured vehicles 2.439.732 2.633.519 Number of registered vehicles identified as insured 1.570.537 2.387.222 Number of unidentified TPL policies 955.702 246.297

The most remarkable aspect of these results is a marked decrease in the number of unidentified policies (due to inconsistent data). This trend is likely to continue, as these policies will be again submitted for rectification to the insurance companies. This measure, combined with the information submitted by the general public, will ultimately increase the reliability and performance of the MTPL database (CEDAM). In the last four weeks, CSA has implemented several measures aimed at improving the quality of the MTPL database (CEDAM): - Raising the public awareness of the existing of a MTPL database by advertising on

the CSA website, several press releases, media appearances and interviews on national TV;

- A call center was established at CSA headquarter office with the purpose of helping the general public understand and use the MTPL database. It currently has 4 lines (2 dedicated and 2 shared) and has already received several hundred calls. The personnel have access to troubleshooting manuals and procedures and are able to address the vast majority of requests and complaints it receives. Additionally, an online complaint form has been implemented with the purpose of facilitating the direct communication between the vehicle owners and the insurance companies, thus greatly improving the response times associated with the common complaints.

These actions, combined with the addition of more stringent validation criteria for the information submitted to the database has resulted in a high percentage of corrected policies, evaluated before the second comparison to a level of more than 95%. Regarding the activity of the Ministry of Administration and Interior, there was drafted the notification model that will be sent to the owners of the registrations that did not fulfill their legal obligations regarding the conclusion of the Civil Responsibility Mandatory Motor Vehicles Insurance and the Periodical Technical Inspection. At the same time, the public procurement procedure was initiated with the aim of sending the notifications to the owners of the registrations that did not fulfill their legal obligations regarding the conclusion of the Civil Responsibility Mandatory Motor Vehicles Insurance and the Periodical Technical Inspection. As regards, the activities performed by the Traffic Police in view of identifying the uninsured motor vehicles, during 23 March - 15 April 2006, 151.489 motor vehicles were checked and 485 penalities were levied. Representatives of mass-media were invited to assist when these checkings were made. In view of informing the citizens about the checkings made by the Traffic Police concerning the existence of the motor third party liability insurances, their representatives had 326 interventions in mass-media, all over the country, during the same period.

COMPANY LAW As regard the administrative capacity, in order to create a database of operative interest, the necessary equipment was purchased within the specialized department of the Prosecutor’s Office attached to the High Court of Cassation and Justice. The

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database will be created as part of the PHARE Programme 2005. On 29 March 2006, at the headquarters of the European Commission Delegation, was made the selection of Danish partners for concluding a twinning agreement. Until the project will become operational, General Inspectorate of Romanian Police (IGPR) and General Inspectorate of Border Police (IGPF) are sending data regarding the current causes in electronic format, every month, to the Public Ministry. For a proper supervision and coordination of the activities related to finding and prosecuting the offences in this field, made by the prosecutors assigned in causes of intellectual property, specialized department of the Prosecutor’s Office, monitors on a monthly base, the complex causes investigated by the prosecutor’s offices and by the Police (currently, 73 complex causes are monitored, out of which 25 are related to brand counterfeiting, 45 to violations of copyright and connected rights and 3 to design and industrial models counterfeiting). The analysis regarding the solutions of these causes, solved by the prosecutor’s offices during the second semester of 2005, was transmitted to the territorial prosecutor’s offices, which ordered remedial measures. Regarding the enforcement of the legislation on IPR, during January – March 2006, the Public Ministry’s assigned prosecutors drew up 31 indictments. In 2005 there were 9 final convictions (from 2 months to 2 years detention) and 35 final criminal fines. At the border points, especially with Bulgaria, Moldova and Ukraine border, joint teams of custom and border officers have identified and seized an important quantities of goods suspected of infringing an intellectual property right. A large awareness campaign will be organised by each of the following institutions, separately, addressing a different public, but all related to the celebration of the International Day of the Intellectual Property, on April the 26th 2006: the Romanian Copyright Office (ORDA), the State Office for Inventions and Trademarks (OSIM), the Chamber of Commerce and Industry as well as by the REACT-Romania – Romanian Association for Fight against Counterfeiting. The authorities responsible for enforcing the IPR’s, as well as the representatives of the private sector are involved and will take part to this event, which represents a very important occasion for raising public awareness on the matter of IPR.

COMPETITION POLICY In the area of anti-trust, during the period 15.03 – 15.04.2006, the Competition Council (CC) has issued 28 decisions, out of which: 21 referring to economic concentrations, 6 to notification failure and 1 to the recalculation of the authorization fee. Moreover, 3 new investigations were opened, out of which one ex-officio. In the reporting period, CC issued 6 sanctioning decisions for failure to notify economic concentrations, in the amount of RON 237,829. In the area of enforcement of state aid regulations, CC adopted 7 state aid decisions, classified as follows: 1 authorizing decision, 6 conditional authorizing decisions and 1 decision for the recovery of the state aid. Regarding the type of aids authorized, CC authorized 6 aid specific allocations and 1 state aid scheme. Depending on the objective of the aids, 5 decisions were for restructuring, 1 for rescue and 1 for services of general economic interest. During the reporting period, the cooperation with EC experts under the pre-consultation mechanism has continued. In this context, the Competition Council submitted to the European Commission 13 draft decisions and 1 draft Note on the opening of an investigation. Concerning the 13 draft decisions, the EC experts have sent their opinion on 2 of them, without raising any further comments. Currently, more than 80% of the CC decisions are accepted by the EC experts from the initial stage of consultation, the clarifications that are requested having no impact on the analysis of the Romanian competition authority.

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The recovery of the State aid granted over the maximum admissible intensity to the undertakings operating in deprived areas has continued. Thus, until 15 April, the total amount of the illegal State aid recovered in this area is bigger than RON 1,930,000. Moreover, in the steel sector, illegal State aid has been recovered from SC Mittal Steel SA Galati (RON 42,625,985) and Silcotub Zalau (RON 1,370,338). To conclude, the total amount of illegal state aid recovered reaches more than RON 46 million (over 13 million EUR). CC finalized the investigation opened at SC Romned Company SRL, operating in Constanta free trade zone, by issuing a decision on the recovery of state aid granted over the maximum admissible intensity. As regards State aid control and monitoring, in the reporting period, the Report on monitoring state aids granted to shipyards was finalized. The report will be sent to the European Commission in the following period. The following control activities were also performed: 145 control actions covering fiscal and social state aid, as well as payment deferrals, 170 control actions scrutinizing the administrative acts issued by local authorities, aiming to identify potential local state aid not notified to the CC, 977 monitoring actions of state aids by which the undertakings from deprived area have benefited, 28 monitoring actions of state aids by which the undertakings in the free trade zones have benefited. The document on “The State Aid Policy for the 2006-2013 period” was finalized, after including the comments of the EC experts. The document is currently under approval procedure, in order to be adopted by the Government. The working group (Task Force) set up at the CC level for the accomplishment of the specific attribution in the State aid sector after the EU accession has continued to organize working meetings with the representatives of 5 management authorities and the representatives of the intermediate bodies involved, with a view to finalize the drafting of the operational programs. As regards the situation of the steel companies not included in the National Restructuring Programme, SC Silcotub SA Zalau voluntarily reimbursed the illegal state aid received, along with the respective interest, in the amount of RON 1,370,338, and SC ARTROM SA Slatina forwarded to the CC its commitment to reimburse, until the end of May 2006, the illegal state aids and the respective interest, in the amount of RON 1,980,658. As concerns the investigation opened for SC Lamdro SA Dr. Tr. Severin, CC requested from the company and the Ministry of Public Finance additional information on the shareholders structure and the financial aid measures received. For SC Intfor SA Galati, the draft Note on the opening of the investigation is currently being analysed by the CC and EC experts. As regards the Competition Council’s administrative capacity, the training of the personnel continued, by participating in intra-department meetings, seminars, workshops, etc. (11 on competition issues and 11 on state aid), both in Romania and abroad. The themes discussed focused on the EC cases, commercial policy and competition policy, punitive measures for economic concentrations, etc.

AGRICULTURE The Paying and Intervention Agency for Agriculture (APIA) Romania decided to use an external audit service for the accreditation of the 2 Paying Agencies and of the Coordinating Body. To this end, the Tender Dossier was finalised and the international tender announcement was already published on 7.04.2006 in the Romanian Official Monitor. The final deadline for submission of tenders is 29.05.2006 and the date foreseen for contract signature is 20 June 2006. 300.000 Euro is allocated from the national budget for this activity. The Technical Specifications request that the

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external audit company has to provide also training to the Competent Authority experts throughout the contract execution. For the accreditation process, the Competent Authority will also use the accreditation experience of the SAPARD Agency. A plan for preparing the accreditation was elaborated at APIA level. This Plan includes several packages of procedures that are to be elaborated by the set-up working groups, based on a precise schedule. The Division for Monitoring the Accreditation Process that is subordinated to the General Director supervises the activity performed by these working groups. The following procedures were finalised: the Manual for direct payments, the acquisitions of intervention cereals, the storage and monitoring of intervention stocks for cereals, the establishment of intervention centres for cereals and the procedure for avoiding the conflict of interests in the organisation and operation of APIA. As regards the trade mechanisms, the export and import certificates system and the system of guarantees corresponding to the import and export of certain agricultural products is operational and in the period 01.03 – 14.04.2006, 170 import licences were issued, as well as 22 export certificates. As well, 93 guarantees deposits were established, out of which 31 were released. The Certifying Body, given its duties related to the two Paying Agencies and other bodies in Romania increased its staff by 50 positions. Specialised training activities were also organised for its staff. Also, the Competent Authority, together with the Certifying Body, organised a working procedure as regards communication. According to the new organisational chart adopted in April 2006, the Audit Division is organised within MAFRD. Within this Audit Division a special service is set up that will be responsible with the enforcement of Regulation 4045/1989. The Service will be managed by a Head of Service and will be staffed with 7 persons by the end of the year. In the near future, 3 positions will be subject to employment contest. As regards staffing, two phases of contests were organised during February 2006 – 15 April 2006. Following these contests, the Agency currently operates with 3,600 staff members, out of which 300 at central level and 3,300 at county and local level. The third recruitment phase, for 1,400 positions, is organised in September 2006. Until this date, out of the total of 261 managerial positions, 155 positions are occupied (accounting for 59% of the total), out of which, at central level, 1 position of General Director; 2 positions of Deputy General director, coordinating the IACS Department, IT, direct payments and respectively foreign trade, Economic Division, Budgetary planning and Inspections Division; 6 positions of Directors out of the 13 allocated positions; 13 positions of Head of Service, out of the 18 allocated ones and 7 positions of Head of Office out of the 17 allocated ones. At local level, 42 positions of Directors for all the 42 county branches and 84 positions of Head of Service out of the 168 allocated ones are filled. The managerial positions within the central APIA – that are presently unoccupied – will be subject to employment contests in May 2006. As regards training of staff, APIA identified the training needs at the beginning of April 2006. The APIA management approved the training plan proposed by the Human Resources Department, and this plan was included in the final version of the approved Master Plan (MAPDR Order no. 242/13.04.2006). The training sessions focussed on general aspects on the role and functions of the PIAA as well as on specific aspects as: role of IACS and the organisation and implementation of on-spot controls; creating the link to the farmers; enforcement of measures within the Common Market Organisations (market and foreign trade measures, including technical control and payment authorisations; interventions in the vegetal, milk and milk products, meat and sugar sectors), support measures (top-up) and direct payments.

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Training activities were also organised with the support provided by the European Integration Advisors within MAPDR and APIA. The topics covered were of general nature - related to the CAP Reform – but as well a specific nature – respectively the EU Regulations in the meat, sugar and meat sectors. Based on the “training of trainers” approach, 200 experts will be trained and the proposed topics cover payment schemes, inspection, financing and accounting, internal audit and management quality. These training activities started in March 2006 and will go on throughout 2006. As regards funding, APIA has its own budget ensuring the full coverage of organisational and operation costs. The budgetary allocation also includes the staff expenditures for all the 5,000 positions. The expenditures needed for the payment of staff transferred to APIA are also included in the budget. The APIA budget includes the amounts needed to purchase the software system, the IT equipment needed at central and territorial level for the full structure of 5,000 staff (additionally to the amounts foreseen for IT procurement in the PHARE Programme) as well as for LPIS-related expenditures. At present, APIA has a central headquarters and 210 local headquarters out of which: 42 county branches and 168 local offices. Currently the APIA has buildings for each of the county and local headquarters. All of the 42 county branches were endowed with the needed furniture, phones and Internet connection and cars. In order to render functional all the headquarters, all the requests for repairs sent by the county branches (including local offices) were centralised. The works awarding procedures will be completed on 31.05.2006 (request of offer, tenders, etc), so that all headquarters will be compliant with the requirements in 30 September 2006. The APIA has foreseen the budget needed for this works. As regards the endowment with IT equipment, the tender for the acquisition of 950 computers and 50 laptops with APIA budget is on-going. The tenders will be opened on 8.05.2006 and the equipments delivery will start on 10.06.2006. The tender procedure for the purchase of the software application for the APIA and IACS was launched on 13.03.2006. The tender assessment will take place between 5.05.2006 – 30.05.2006. 45 Tender Dossiers were purchased until 14.04.2006. The Technical Specifications for the purchase of IT equipment from Phare funds (6.798.000 euro) are delivered for contracting to the PHARE Central Financing and Contracting Unit (CFCU). As for the delegated bodies, based on the Protocol concluded with the National Sanitary Veterinary and Food Safety Authority (ANSVSA), meetings were organised with the aim of detailing the Protocol objectives and the collaboration manner. In this manner, it was ensured that the Technical Specifications for the APIA software allow access to the database on the identification and registration of animals. The Protocol between PIAA and the National Custom Authority was finalised. The performance of the on-spot control will be under the responsibility of the county branches of APIA. At present, at the central APIA, within the IACS Division, there is an “On-spot control” Service staffed with 5 persons that work for the elaboration of procedures manuals. The person in charge with this activity at the level of each county branch of PIAA will be trained as regards the on-spot control procedure, through the participation in the working group under the PHARE twinning project. As regards the Internal Audit, according to the organisational chart, the Audit Division is directly subordinated to the General Director. 5 staff members are currently employed in this Division. The audit procedure is finalised and a plan of internal audit activities was devised.

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The Paying Agency for Rural Development and Fisheries (APDRP) On 30.03.2006, the Competent Authority for SAPARD (National Fund - Ministry of Public Finances) informed the European Commission on the respect of the SAPARD accreditation criteria following the transformation of SAPARD Agency into APDRP and the taking over of the Delegated Technical Bodies to APDRP (including staff, premises and equipment). This information included also the SAPARD procedures modification due to the integration of the Delegated Technical Bodies within the Agency structure as well as the conclusions of the Internal Audit Report regarding the procedures modification review. As regards the administrative structure, the MAPDR Order no. 93/14.02.2006 regarding the setting up of a common database for the management of the European Funds for agriculture and rural development was approved. This Order stipulates: the setting up of the common database, according to the MAPDR IT strategy, the possibility of the database usage by other structures under the coordination of the MAPDR, the interface with Animal Identification & Registration system, as well as the way of access and use of the database will be established based on specific procedures related to each database component. Currently, the Paying Agency for Rural Development and Fisheries (APDRP) includes a total numbers of 1262 job positions, out of which 883 are occupied as follows: 173 at central level, 247 at regional level and 463 at county level. On 11 April 2006, the number of vacant job positions was 379. In order to fill up the vacant job positions contests are organized on 17 April 2006 as well as in May and June 2006. For the contest on 17.04.2006, 106 positions are available. The total number of APDRP positions is 1262, distributed as follows: - 213 posts at central level out of which 181 posts with attributions for SAPARD

Programme, 32 posts with attributions for the new measures regarding the European Fund for Rural Development and European Fund for Fishery.

- 327 posts at regional level out of which 295 posts with attributions for SAPARD Programme, 32 posts with attributions for the new measures regarding the European Fund for Rural Development and European Fund for Fishery.

- 722 posts at county level out of which 386 posts with attributions for SAPARD Programme and 336 posts with attributions for the new measures regarding the European Fund for Rural Development and European Fund for Fishery.

At present, within the APDRP structure there are 221 management positions (at 3 levels: central, regional and county level) out of which 143 management positions are filled up. The vacant management job positions will be filled up following contests that will be organized during April-May 2006. As regards the training of staff, the existing personnel, on the principle of “cascade training”, trains the new recruited staff. At central level the training shall be carried out in 5 stages with duration of a day per week. For the beginners, the training period is of 6 months. Other training sessions take place within several twinning projects. Training sessions are also performed in the field of implementation of policies and management systems under EARDF and EFF and the implementation of the technical and financial controls concerning the EARDF and EFF management. All the County Offices have the necessary endowments: PC, copy machines, cars, office furniture as well as other endowments (video cameras, video projectors, telephones, fax machines, internet system etc). In order to further strengthen the activity of the county offices, APDRP has elaborated an investment and procurement Action Plan. The Technical Specifications have been drafted and tenders are on going for the purchase of office furniture, office items, PCs, network servers, cars, other IT equipment, etc. APDRP has operational premises at

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regional and county level. Out of the 42 County Offices, for 33 County Offices, the existing premises are operational and for the other 9 County Offices, supplementary spaces for operational premises are under identification process. The IT system will be established based on the current APDRP IT system: The present IT system is under development in order to be compatible with an Integrated IT system for APDRP that will provides an adequate interface to IACS system and will ensure the common use for both Managing Authorities. According to the EC Regulation no. 1290/2005 regarding the financing of the Common Agriculture Policy “APIA may receive the aid applications for area based measures under rural development and pay the public subsidy to the final beneficiary”. In this respect, APDRP will make the payment of the Community part to APIA and will declare the amounts to the Commission, by keeping the exclusive responsibility of financial management. A Framework Agreement will be concluded between APDRP and APIA, which will stipulate the IACS common use in order to ensure that APDRP will have all the necessary information. The above mentioned Agreement will detail the following information: clear tasks of the involved administrations, procedural stages regarding Community payment reimbursement, as well as the controls performed by APDRP in order to ensure a sound financial management, as well as the report documentation and its periodicity. The Agreement deadline: 30 April 2006. As regards the internal procedures of APDRP, a strategy for the procedures elaboration has been prepared by setting up working groups with experts from the departments involved. The Competent Authority shall initiate the external audit for the APDRP accreditation in accordance with the established timetable. The Integrated Administration and Control System (IACS) Presently, the Farm Registry was finalised. The number of farms registered in the Farms Registry is 1.410.000 holdings, summing up to 8.665.000 ha. The percentage of the number of farms registered into the database is 75%. The contractor delivered to the APIA, in electronic format at a scale of 1: 5000 the boundaries for all territorial administrative units (cities, municipalities and communes). The percentage of the delivered orthophotoplans is 64%, respectively 162.362 sq km. The percentage of the digitised orthophotoplans and the status as compared with the calendar included in the digitisation contracts – 40% of the delivered orthophotoplans are digitised, and out of these 10 % are with the quality control for receiving the approval for copying in the graphic material. The link between the farmers and the digitised orthophotoplans started on 14.04.2006 and the process will continue with field activities and training of staff (the trainings will be finalised on 31.05.2006). The trainings take place within the Twinning project entitled “Support for the full implementation of the IACS system” As regards the Complementary National Direct Payments (CNDP) a decision was taken to transfer 20% of the rural development funds to CNDP, by increasing the SAPS per hectare. Also, MAPDR decided on the sectors to be supported by additional payment from the state budget (CNDP). A draft MAFRD Order was elaborated for the establishment of CNDP and will be discussed with the European Commission and will be adopted afterwards. The Joint Order of MAFRD and the Ministry of Environment and Water Management on the Good Agricultural and Environment Conditions (GAEC) was approved and was sent to the Official Monitor for publication on the 6th April 2006. The manual of procedures on GAECs is under elaboration.

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The Milk Quota Administration Department The monitoring process of milk quantities delivered to the purchasers or used for direct sales (for the reference year that ends on 31.03.2006) will be completed in the near future. In order to strengthen the administrative capacity of the Department, a competition for filling 140 posts was organized. The personnel was trained during the PHARE project entitled ’’Support for establishment of the milk quota system’’ Sanitary Veterinary Sector As regards the animal identification and registration, on 30 March 2006, following the final and irrevocable sentence pronounced by the Court of Appeal in Bucharest regarding the court case which had blocked for a long period the identification of ovine, caprine and swine, the remaining payments related to services carried out during 2005 were made to the operator of the database. Starting with 11.04.2006, the ear-tags for ovine, caprine and swine necessary for the identification of the livestock for the year 2006 were distributed in the territory From 5.04.2006, the remaining payments related to the identification and registration procedure of ovine, caprine and swine for 2005 have started to be made to the free practice authorised veterinarians. The second additional document to the contract no. 722/2004 regarding the system of identification and registration of ovine, caprine and swine was signed. Through this document, the ear-tags application procedure is eliminated from the contract; this is to be paid by ANSVSA directly to the authorised veterinarians. This document clearly stipulates ANSVSA’s ownership of the database for identified and registered animals and of the hardware equipment that constitutes the technical support for system of animal identification and registration In the field of Control measures of animal diseases, the contingency plans for Avian Influenza, Newcastle disease, Classical Swine Fever, Foot and Mouth disease and Equine Infectious Anaemia have been drawn up and approved. Those plans are to be submitted for approval to the European Commission in accordance with the provisions of accession Treaty. The contingency plans already transposed are in process of being updated in accordance with the last evolutions of important diseases in the Member States, and in Romania. At this time Romania disposes of the administrative and organisational capacity necessary to manage animal disease crisis situations at the central level as well as at territorial level. During the Avian Influenza crisis, the central command structures (National Centre of Disease Control, Central Anti-epizootic Commandment, National Committee for Emergency Situations) have been actively coordinating the territorial networks, in which the network of veterinary services including veterinary diagnosis laboratories have played an important role. The surveillance for Bovine Spongiforme Encephalopathy (BSE) is carried out according to the provisions of the Community Law transposed into the National Law. The necessary funds for procuring the diagnostic kits for BSE for 2006 are ensured by the PHARE program with co-financing from the Ministry of Agriculture, Forests and Rural Development. All bovines over 24 months, sent for emergency slaughter, diseased or showing signs of disease at the ante-mortem inspection as well as carcasses are tested for BSE. All bovines over 30 months slaughtered for human consumption (in good health conditions) are tested for BSE. The National Sanitary Veterinary and Food Safety Authority established at country level a system designed to monitor the neutralisation of animal origin waste through processing into protein meal. The system also monitors the final use or disposal of the protein meal.

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The Order transposing the Regulation of the European Parliament and of the Council no. 999/2001 laying down rules for the prevention, control and eradication of certain Transmissible Spongiforme Encephalopathies, has received technical expertise and is currently being verified by legal experts. As regards the setting-up of a system for neutralising animal by-products, the period for submitting as well as the period for answering the contestations has ended. Also, the negotiations of the contracts for all the 8 regions have been finalised. Currently, the tender winners are signing the contracts. Romania has joined the Animal Disease Notification System (ADNS). As from 30.03.2006 the recording of the Avian Influenza outbreaks in the ADNS system began, thus demonstrating that the system is operational. At present, all avian influenza outbreaks on the Romanian territory have been closed. As regards the process of upgrading of agri-food establishments, compared to the evaluation performed on 20.03.2006, the overall number of red meat establishments has decreased from 469 to 460 (12 D category establishments were definitively closed and 3 other new A category establishments have been set up). The D category classified establishments number (the establishments that did not draw up upgrading programs) has decreased from 69 to 54. From the total number of red meat establishments, 29 establishments meet the European Union norms requirements and 359 have drawn up upgrading programs that have as deadline 31.12.2006. Compared to the evaluation performed on 20.03.2006, the overall number of milk processing establishments has decreased from 398 to 392. The D category establishments (the establishments that did not draw up upgrading programs) have decreased from 81 to 65. From the overall number of milk processing establishments, 46 establishments meet European Union norms and 258 have elaborated upgrading programs that have as deadline 31.12.2006. ANSVSA has continued the monitoring of the upgrading programs for the food-industry establishments seeking to be reclassified as C category establishments and has identified a number of 154 establishments (60 red meat, 80 milk and milk products, 6 poultry meat, 8 fish and fish products). The files drawn up by the establishments are being evaluated and endorsed by NSVFSA at central level in order to be transmitted to the European Commission before 15 June 2006. Construction of the 8 Border Inspection Posts is ongoing, and, as regards, equipping the eight BIPs, the tender file for procurement of equipment by PHARE 2005 program have been submitted to the Delegation of the European Commission in Bucharest for evaluation and approval. In the field of animal welfare, ANSVSA Order no. 83/2006 (OJ no. 307/05.04.2006) for the approval of the sanitary veterinary norm regarding the compliance with the animal welfare conditions during the transport has been adopted. This is an Order that creates the necessary legal framework for the direct application from the date of accession of Regulation No 1/2005 on the protection of animals during transport and related operations. Law No. 71/2006 (OJ no. 319/17.04.2006) on the ratification of the European Convention for protection of animals during international transport (revised), signed at Chisinau, on 6 November 2003, has been adopted. The necessary work has been carried out for the personalisation of the database for authorised transporters of live animals (currently a database which contains both means of transportation intended for products of animal origin and live animals exists).

TAXATION The situation regarding the revenues collection is presented in section 2 – Economic Criteria.

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The situation of the controls made by the ANAF control bodies (tax inspection) in the first quarter of 2006, compared with the same period of 2005, is the following:

Quarter I 2005 Quarter I 2006 no. of taxpayers at which control were

made 31,558 26,875

supplementary VAT established (mil. RON)

221.4 158.4

supplementary excise duties established (mil. RON)

20.9 27.8

no. of fines applied 7,880 12,507

The number of controls made in the first quarter of 2006 decreased in comparison with the same period of 2005 because of the increase in voluntary compliance. The situation of the canceled, revoked or suspended authorizations for fiscal warehouses on 31.03.2006 Total authorizations, out of which:

Authorized warehouses

keepers *

Authorized warehouses *

Canceled, revoked, suspended

2004 644 1,026 91 2005 188 212 151 Quarter I 2006 78 78 101 TOTAL 910 1,316 343

* The fiscal warehouses (locations) are included in SEED database, these being working places of the authorized warehouses keepers (economic agents) that are also included in SEED Register. In the Government meeting from April 19, 2006, the Emergency Government Ordinance for amending and supplementing the Fiscal Code Law no. 571/2003 was approved (the Emergency Government Ordinance is presented in Annex No 3). This ordinance includes the following elements: - stipulates that the health tax is introduced in the excise duty, - establishes new levels for the excise duties, - stipulates that the measures needed for implementing the system of exchange of

information with the EU will be adopted through Orders of the minister of public finance,

- regulates the way the electronic database for operators of products subject to excise duties is made. The excise code configuration will be settled according to the provisions stipulated by order of the minister of public finance.

VIES & SEED In order to implement the two IT systems, within the PHARE 2004 programme, it is foreseen a technical assistance project “Establishment and implementation of the IT structures regarding the administrative cooperation with the other Member States”. The project is divided in two lots: LOT 1 – VIES and LOT 2 – SEED. LOT 1 – VIES was acquired by ORACLE Ireland and LOT 2 – SEED by IBM Romania. Both contracts were signed at the end of March 2006 by the beneficiary and by the contractors and the running of the contract began. The contractors were invited to a first meeting with the minister of public finance and the president of ANAF, within which have assumed the deadlines foreseen in the Terms of Reference, assuring the Romanian party of all their availability for accomplishing the commitments in relation to European Commission. Both teams had several meetings with the representatives of the IT Department to organize the future work and to receive the first support documents about the existing

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systems. The Ministry of Public Finance and the contractors have prepared an Action Plan, which is part of the Inception Report – submitted on April 15, 2006, that includes a detailed planning on weeks of the measures to be undertaken and the activities to be made. In order to assure the best conditions for the project implementation, it was issued an Order establishing the working groups for VIES and SEED and appointing more persons that will work on full time basis on these issues (the Order is presented in Annex No 4). Several activities have been achieved so far, in accordance with the planning made by the contractors and the beneficiary: - Identification of the existing hardware equipment; - Identification of the supplementary hardware needs; - Presentation of the solutions; - Regarding Lot no. 1 – VIES, the main phases for the project were:

- Base Software Installation (the Base Software Installation Phase is based on the decisions made in the initial project meetings regarding the hardware and software configuration of the VIES server and of the application server; Oracle team together with MFP/ANAF have decided on the necessary hardware configuration, MFP/ANAF have installed the Operating System, and Oracle team has installed the database software);

- Preparation the VIES software installation (the network access was provided and the user account for EU was created).

Also, the following activities have started and are ongoing: - Create Users for gateway; - Intra-Community Operators Registration; - Database Objects packaging (cutting dependencies); - Save designer application folder; - Forms, reports gathering; - Check the base installations.

- Reagarding Lot no. 2 – SEED, the analysis phase has been going on for the 3 main subsystems: SEED, EWSE and MVS:

- Assess the relationship with other IT IS subsystems; - Analyze the EU recommendations and RO procedures; - Define the detailed requirements; - Design Seed/EMCS subsystem database; - Design interfaces.

The work included extensive interviewing and meetings with the end-users and other stakeholders of the SEED/EWSE/MVS applications (end-users: Excise Liason Office, Authorization Directorate, General Directorate for Information Technology, related programmes: Portal project). The following main internal work products have resulted as output of this work and are currently reviewed with the Beneficiary:

- Business requirements (SEED/EWSE/MVS); - Portal/SEED interface specification;

The following internal work products are being finalized and are under review: - Logical data model (database model) (SEED/EWSE/MVS); - Functional System Specifications (SEED/EWSE/MVS).

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SOCIAL POLICY AND EMPLOYMENT Social dialog The Draft-Law amending the Law no 356/2001 – the employer’s law was aproved by the Government, during its session of 19 April 2006. The Draft-Law for the transposition of the Directive 2002/14/EC establishing a general framework for informing and consulting employees was elaborated and is under the MoLSS’ referring procedure. By Government’ decisions for the application of the framework-law, the Directives 2003/72 and 2001/96/EC will be transposed. Public health The law regarding the reform of the health sector was promulgated by the President of Romania on 13 April 2006, and will be published in the Official Journal of Romania. That comprises the following title, transposing community regulations: Title VI – “Drawing and Transplant of Organs, Tissues and Cells of Human origin for therapeutic use.” Labour law It was adopted the Law no 67/2006 (OJ no 276/28.03.2006) on the protection of the employees’ rights in case of transfer of undertaking, organization or of any parts of these, which transposes the Directive 2001/23/EC. On 26 January 2006, the Draft-Law on the payment of the wage debts, which transposes the Directive 80/987/EEC, was approved by the Government and on 30 March 2006, the Draft-Law was adopted by the Senate. Currently, the Draft-Law is under the Chamber of Deputies’ debate and is foreseen to be adopted by the end of April 2006. The Draft-Law on the posting of workers in the framework of the provision of cross border services, elaborated for fully transposition of the Directive 96/71/EC, is under referring procedure and is foreseen to be adopted by the parliament by the end of July 2006. Health and safety at work The draft-law on health and safety at wok, which transposes the Directive 89/391/EEC, approved by the Government, is under parliamentary debate and is foreseen to be adopted by the Senate during 17-21 April 2006. It was adopted the Government Decision no 300/2006 (OJ no 252/21.03.2006) on the minimum requirements of health and safety at wok for temporary and mobile sites, which transposes the Directive 92/57/EC. The Government Decision regarding the minimum health and safety requirements concerning the workers’ exposure at risks generated by noise, which transposes the Directive 2003/10/EC, was approved by the Government on 12 April 2006 and now it is at the Official Journal. European Social Fund Currently, within the MA SOP HRD, 53 positions are filled from the total of 59 positions foreseen to be filled by the end of June 2006, according the commitments assumed by Romania. For the end of 2006, MA SOP HRD has 75 positions allotted. Social assistance The Government Decision no 385/2006 (OJ no 308/5.04.2006) regarding the setting up of the Committee director for the monitoring the implementation of the commitments assumed through the Joint Inclusion Memorandum was adopted.

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The Order of the minister of labour, social solidarity and family no 246/27.03.2006 (OJ no 344/17.04.2006) on the approval of the minimum specific quality standards for the home care services for the elderly persons and for the residential centers for the elderly persons was adopted. With the aim of the development of the social services network at national level, with financial support from projects with international financing, the Operational Manual/ the Guide of the applicant for the grant scheme implementation it is on the MoLSSF’ site. Employment The Law no.68/2006 (OJ no 268/24.03.2006) on aproving the Government Emergency Ordinance no.144/2005 for the modification and completion of Law no 76/2002 regarding the unemployment insurance system and employment stimulation was adopted. The National Action Plan for Employment for the 2006 was finalized and is under the referring procedure and is foreseen to be adopted by the Romanian Government by the end of April 2006. Equal treatment between women and men The Government Decision no 319/2006 on the approval of the National Strategy for equal opportunities between women and men for the period 2006 – 2009 and the General Action Plan for the implementation of the National Strategy for equal opportunities between women and men for the period 2006 – 2009 was published in the Official Journal no 270/24.03.2006. The Draft-Law amending the Law no 2002/2002 on equal opportunities between women and men was elaborated and is under referring procedure and is foreseen to be adopted by the Parliament by the end of June 2006.

REGIONAL POLICY AND THE COORDINATION OF STRUCTURAL INSTRUMENTS Legislative and institutional framework. Administrative capacity Successive contests have been organized both in the Managing Authorities and in the Intermediate Bodies in order to fill in the vacant positions (including the additional ones allocated according to the EGO no 1/2006). Thus, for SOP Economic Competitiveness new staff was recruited: 19 in the Managing Authority, 20 in IB for Energy, 2 in the National Authority for Tourism, 6 in the Ministry for Communications and Information Technology. For SOP Environment Infrastructure, contests have taken place within 5 Intermediary Bodies (Regional Environment Protection Agencies - REPAs) and 22 vacancies have been filled in. Besides, new contests are on going in order to fill in 24 positions within Timisoara and Bucharest IBs and another contest was advertised to fill in the 8 vacancies for the management staff within the Managing Authority for SOP Environment (Ministry of Environment and Waters Management). Particular attention was focused on developing the capacity of the IBs. Thus, the Managing Authority for SOP Environment has elaborated a training plan for the 8 IBs (REPAs) and has organized for each Regional Environment Protection Agency training courses concerning SOP Environment. As regards the MA for SOP Transport Infrastructure following the last organised contest 28 additional persons were recruited; the training plan for the personnel involved in the Community funds management has been approved.

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For SOP for Human Resources Development additional 19 persons were recruited at regional level in the IB (the National Agency for Employment) and for the remaining 24 vacant positions contests are currently organized. As for the IB for education, at regional level, all the 8 Regional Units (organized within the County School Inspectorates) are operational; presently, 33 positions are filled in out of the 56 positions allocated. New recruitment sessions are on going. As regards the Regional Operational Programme, the re-organization process as well as the process of setting up of the new, improved internal structures (to be involved in the management of structural instruments) has been started according to the provisions of the GD no 243/2006 regarding the organization and functioning of the Ministry of European Integration. Planning and programming The National Strategic Reference Framework and the OPs have been finalised and approved in the Government Meeting of 19th of April. The European Territorial Cooperation

The drawing up of the OP Romania-Bulgaria and OP Hungary-Romania is going on and the Task Force meetings have been organized. For the OP Romania-Bulgaria the Task Force meeting has been organized in Romania and during the meeting have been confirmed the nomination made in the joint programming structures by both countries and have been launched the discussion on the objectives and priorities which can be financed under the OP. During the Task Force meeting for the OP Hungary-Romania, organized in Hungary, the members have discussed the working methodology and the calendar for the OP preparation, the projects generating process and the stage of contracting the TA for supporting the drawing up of the OP. The meetings of the Task Forces involved in the elaboration of the programming documents for ENPI and IPA Programmes are planned. Up to their taking place the preparatory work is underway - at the level of regional offices for cross border cooperation - in order to identify a first set of priorities to be discussed with the programmes partners. Partnership and Project Pipeline Development Consistent measures have been taken in the ongoing process of partnership consultations, with particular attention to the regional level and the NGO sector. Thus, workshops, conferences and public debates were organized at the regional level, involving the Regional Development Agencies, the County Agencies for Employment, with active participation of representatives from the institutions ensuring the management of structural instruments. These meetings benefited from broad attendance of the representatives of local councils, prefects’ offices, town halls, local agencies for employment, county school inspectorates, universities and business environment – trade unions and employers’ organizations – and civil society (associations, foundations, other NGOs). For example, on March 24th, in Oradea took place the meeting of the County Centres Association of Romania and on 7th of April, the National Trade Union “MERIDIAN”, in partnership with the Ministry of Administration and Interior and North-West Regional Development Agency organized a debate on “Sustainable Regional and Local Development”, at the Local Council Assembly Room in Cluj-Napoca. Also, the Regional Units of IB SOP HRD organized consultations in six regions. At these consultations participated the main stakeholders in education (members in the regional consortium), including NGOs, employers’ organizations, trade unions, local administration, county school inspectorates and universities. The discussions focused

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on the main axis of SOP HRD relevant for education and training, complementarities with other OPs. In order to achieve the project pipeline, the National Agency for Employment, through IB SOP HRD, is currently developing in the RDA South-Muntenia, a pilot stage simulation of financing requirement procedure, for the Priority Axis 4 “The modernization of Public Employment Service” of SOP HRD. Thus, on 12th of April took place an informative meeting with the executive directors of the RDA South-Muntenia, County Employment Agencies and with the members of the working teams established at the employment agencies level. On the18th of April the Ministry of European Integration organized a meeting (with the participation of the Sectoral Operational Programmes Managing Authorities, local authorities, regional development boards, regional development agencies, non-governmental organizations) aimed at mutual informing on operational programmes content and their implementing systems. Special forums dealing with Structural Funds have been created on the web pages of institutions involved in structural funds management. Relevant posted proposals and suggestions have been included in final drafts of the OPs (for example SOP HRD). Monitoring As concerns the development of software application, the testing exercise in view of acceptance has been carried out for all three sub-systems: SMIS-PHARE, SMIS-ISPA and SMIS-NSRF. In view to developing of the human resources for SMIS use a group of 20 users from managing authorities, certifying authority and audit authority have been trained in using SMIS-NSRF sub-system. A special training session has been organised for 20 persons with leading positions inside the managing authorities, certifying authority and audit authority concerning SMIS-NSRF sub-system. A group of 13 persons have been also trained in SMIS maintenance and administration procedures. The Maintenance Manual and Disaster Recovery Plan have been elaborated. Evaluation A second meeting of the Evaluation Working Group (EWG) was held on the 12th of April and was attended by a number of approx. 40 civil servants from the Managing Authorities. A first training session in evaluation (included in a wider training programme initiated by the Evaluation Central Unit) was provided to participants on this occasion. EWG members have also endorsed the documents previously drafted by the Evaluation Central Unit and referring to the EWG mandate, the standards of evaluation, the proposed model for the organization of the evaluation function in Romania and the EWG activity programme for the year 2006. As concerns the drafting of the National Evaluation Strategy, the first outcomes of the assessment of the Romanian evaluation culture were presented within the second meeting of the EWG. The Evaluation Awareness Raising Plan was finalized and approved by the Managing Authority for Community Support Framework at the end of March. According to the schedule set by the Plan, the first conference on evaluation will be organized on the 23rd of May 2006. The first two sessions of the training course on the evaluation of the socio-economic development programmes have been organized in the framework of the Phare technical assistance. 31 participants from the private sector, academic media and civil society have attended. The topics were related to the definition of evaluation concept, the types of evaluation, the principles followed in the evaluation activities, the role and utility of evaluation as a separate stage in the project cycle management.

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Public Procurement In order to comply with the commitments undertaken in respect with the ex-ante public procurement control system, the EGO regarding the verification function of the procedural matters during the award of the public procurement contracts was approved in the Government meeting of April 19th. According to this legal act, the designed system takes into account that the responsibility for the decisions made during all procurement stages is borne by the contracting authority. The Ministry of Public Finance is to be responsible for carrying out the public procurement verification function of the procedural matters related to the awarding process of the contracts falling under the legislation regarding the award of the public procurement contracts. The verification of the contracts shall cover the procurement stages after the publishing of the participation notice until the contract awarding and signing. In the exceptional cases provided by the law, that allows the contract to be concluded without a prior publication of the participation notice, the verification shall cover the procurement stages starting from the transmission of the invitation for negotiations until the contract awarding and signing. The Ministry of Public Finance through its specialized bodies at central and local level shall carry out the verification function, in a selective way based on a risk analysis of the public procurement contracts that exceed the thresholds indicated in the Emergency Ordinance. In order to fulfill its tasks, the Ministry of Public Finance shall appoint observers, who will attend the selected processes for the awarding of public procurement contracts. The draft of the methodological norms for the application of the above-mentioned EGO has been also drawn up and sent to the EC for consultation.

ENVIRONMENT As regards the strengthening of administrative capacity, in order to fill in all the remaining vacant posts for 2005, as well as the posts approved for 2006, competitions were organized in April at the level of the National Environmental Protection Agency, the Regional Environmental Protection Agencies and at the level of the Local Environmental Protection Agencies. Thus, out of the 1,660 additionally posts approved to be filled in until the end of 2006, presently, 1,293 posts are occupied. As concerns the Intermediate Bodies for Structural and Cohesion Fund, 124 job positions are currently occupied and the training plans. For the 44 remaining positions, competitions will be organized until the end of April. All 218 additional positions approved for 2004 and 2005 and assigned only for the implementation activity of the Directive 96/61/CE on integrated pollution prevention and control (IPPC) were filled in at the national, regional and local level. At the same time, Law No 84/05.04.2006 (OJ No 327/11.04.2006) for the approval of EGO No 152/2005 on integrated pollution prevention and control has been adopted. On 10 April 2006, the total number of integrated environmental permits issued was 130 and the total number of applications submitted for requesting integrated environmental permits was 302; in this way, more than 67.7% of installations have the specific application already submitted to the environmental authorities and 20% of installations have integrated environmental permit. The quality of applications and the integration of all specific requirements into the permit (water license in particular) are closely monitored. Referring to waste management, for the implementation of Directive 1999/31/EC on the landfill of waste, by now, environmental audits level I and level II and environmental risk assessments (where appropriate) were elaborated for: - 65 landfills for non-hazardous waste (out of 76); - 44 landfills for hazardous waste (out of 47);

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- 27 catch pits for waste from crude oil extraction (out of 43); - 20 tailing ponds (out of 21); - 23 landfills for non-hazardous waste for which transition period was obtained for

liquid waste landfills (out of 23); - 179 landfills for municipal waste (out of 240). Presently, out of the 450 environmental audits level I and level II and environmental risk assessments, 358 are elaborated (79.6 %). Periodical inspections of non-complying landfills and application of penalties are developed by the National Environmental Guard. Regarding the status of complying capacities for hazardous waste landfilling, the preliminary data show that the additional complying landfilling capacity for hazardous waste in this moment is about of 20,000 t/y. The necessary additional landfilling capacity (80,000 t/y) will be definitely established at latest on 1 September 2006, after the presentation by the economic operators of the final alternatives for hazardous waste management generated after 01.01.2007. The Report on the status of complying capacities for hazardous waste landfilling was sent to the European Commission on 19 April 2006. As regards Directive 2000/76/CE on incineration of waste, the process of closing the non-complying installations for 2006 started. Thus, until 17 April 2006, out of the 114 installations for the incineration of hazardous medical waste, planned to be closed in 2006, 23 ceased their activity. The quantity of hazardous waste generated by sanitary units has been estimated by the Ministry of Health to 15,226 t in 2005. Comparative with 2004 (17,553 tone), a decrease of about 13.3% was registered. The Report on the closure of non-complying incinerators for medical waste, as well as the quantity of medical waste treated in 2005 was sent to the European Commission on 14 April 2006. For the implementation of Directive 2002/96/EC on waste electrical and electronic equipment (WEEE), 99 collection points, out of which 52 in counties, 40 in the 24 cities with more than 100,000 inhabitants and 7 in Bucharest were established until now. In the sector of water quality, the Law for amending the Water Law No 107/1996 was adopted by the Parliament and sent to the Presidency to be enacted. As regards Directive 91/271/EEC on urban wastewater treatment, presently, out of 2,346 agglomerations with 2,000 – 10,000 p.e., 308 local councils or public services were authorized (183 in 2006), following to be authorized another 59 local councils or public services. As concerns Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources, the Romanian Government approved the financing for extending the project “Pollution Control in agriculture“ (developed by World Bank in Calarasi County) at national level (amounting to USD 50 million). For the implementation of Directive 76/464/EEC and “daughter” directives on pollution caused by certain dangerous substances discharged into the aquatic environment, presently, out of 646 water users, 404 were authorised. In the Nature protection sector, presently, the Natura 2000 database has 200 registered users (specialists involved in the process of data verification, validation and filling-in of standard forms for Natura 2000). There are 135 standard data forms filled in for Special Protection Areas proposals that will be included in the Natura 2000 network at the accession date. The total number of the Standard data form currently filled in by the working group for potential Sites of Community Importance is 183. These sites covering approximately 20% of the country surface will be included in the national list of future Natura 2000 sites.

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Presently, 26 projects were approved to be financed by the National Environmental Fund, amounting to RON 67,124,087 (about EUR 18,543,000): - 12 project on domestic and industrial wastewater treatment – RON 13,866,876

(about EUR 3,831,000); - 3 projects on hazardous waste incineration (including medical waste) – RON

10,424,635 (about EUR 2.880.000); - 1 project on IPPC – RON 175,960 (about EUR 48,600); - 1 project on protection and conservation of biodiversity – RON 26,700 (about EUR

7,400); - Works intended to prevent, mitigate and/or decrease the effects produced by floods

(2 projects) – RON 42,240,000 (about EUR 11,669,000); - 7 projects for education and awareness of the public regarding environment

protection – RON 389,916 (about EUR 107,700). For other 19 projects, amounting to RON 11,182,599 (about EUR 3,089,000), on waste incineration, IPPC, biodiversity, nature protection, wastewater treatment and education and awareness of the public, approved by the Environmental Fund Administration’s Steering Committee, financing contracts will be concluded. During 1 January – 7 April 2006, the National Environmental Guard’s control activity was concretized through 12,081 controls, out of which 5,852 planned controls to the significant impact objectives and 6,229 unplanned controls. During this period, 10,313 economic agents were controlled within control and inspection activities, out of which 5,533 within planned controls and 4,780 within unplanned controls. 2,580 contravention sanctions were applied for non-complying, out of which 2,532 principal sanctions and 48 complementary sanctions (15 proposals for environmental agreement/permit suspensions, 33 mandates for activities shut-down). Out of the 2,532 main sanctions, 765 are warnings and 1,767 are contravention fines amounting to RON 11,735,360 (about EUR 3,242,000). As regards the planned controls, 5,852 controls were made at 5,533 economic agents and 748 contravention fines in total amount of RON 5,707,860 (about EUR 1,577,000) were applied, out of which: - 477 controls at economic agents owning IPPC installations, 82 fines were applied

amounting to RON 844,100 (about EUR 233,000); - 129 controls to economic agents owning SEVESO installations, 15 fines were

applied amounting to RON 260,000 (about EUR 72,000); - 28 controls to economic agents owning LCPs installations, 2 fines were applied

amounting to RON 7,900 (about EUR 2,200); - 491 controls to economic agents witch use organic solvents in certain activities and

installations, 57 fines were applied amounting to RON 397,700 (about EUR 110,000);

- 116 controls to domestic wastewater treatment, 15 fines were applied amounting to RON 234,600 (about EUR 65,000);

- 52 controls to units which generated industrial wastewater and discharged into natural receivers, 7 fines were applied amounting to RON 20,000 (about EUR 5,500);

- 88 controls to units which discharge priority dangerous substances into surface water and groundwater, 5 fines were applied amounting to RON 38,300 (about EUR 10,600);

- 48 controls to storage, recovery and processing hazardous waste units with capacities <10 tons/day;

- 12 controls to incineration and co-incineration installations, 1 fine was applied amounting to RON 20,000 (about EUR 5,500);

- 4,411 controls to the other types of objectives witch significant environmental impact, 564 fines were applied amounting to RON 3,885,260 (about EUR 1,073,000).

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As regards the control in the field of natural habitats, biodiversity and protected areas, during 1 January – 7 April 2006, 419 controls were developed, out of which: 177 controls for observing the legal requirements, 10 controls as a result of the National Environmental Guard’s intimations and 17 controls as a result of the intimations addressed to the National Environmental Guard, 200 thematic controls, 2 controls regarding accidental pollution, 33 controls developed together with other authorities and 3 activities together with other institutions. Following these controls, 104 fines were applied amounting to RON 389,150 (about EUR 107,500).

COOPERATION IN THE FIELD OF JUSTICE AND HOME AFFAIRS In the area of border management and security, the revision of the Schengen Action Plan (SAP) began in April 2006. A methodology and a clear timetable were established in this respect. The process will take into account the following actions: revising and updating to the relevant acquis; evaluating and validating the measures planned in 2005 SAP; updating the relevant sections of 2005 SAP; drafting a Report on implementing 2005 SAP. 2006 Schengen Action Plan will contain clear references to the provisions of the relevant acquis. Each section will indicate the relevant Schengen acquis, will describe the present situation as well as the legislative, institutional and administrative-technical measures foreseen for the adoption and implementation of the relevant acquis. A timetable with clear deadlines will be set for each of the planned measures and the institutions responsible for their implementation will be indicated. The Romanian authorities took note of the publication, on 13.04.2006, of the Regulation no 562/2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code). A working group analysing the implications of the new legislative act for the Romanian legislation was set up at the MAI level. The technical projects for the Control and Surveillance Subsystems have been drafted. 3 co-ordination meetings between the management of EADS and MAI and 5 working meetings between the experts of MAI and EADS took place in the referred period, with the purpose of improving common co-ordination and understanding in implementing the project. Also, mixed expert teams carry out site survey missions for implementing the IT Backup Subsystem. In the first three months of 2006, 1128 positions were filled in at the Border Police. The process of filling in the vacancies with the Border Police was focused on the external borders with Ukraine, Moldova and the Black Sea. The present percentage of filled positions at the future UE external border is of 97.27%. The Methodology on organizing and conducting the characteristic risk analysis activities at the level of the Romanian Border Police territorial structures was drafted and is pending approval at the General Inspectorate of Border Police level. After the drafting of final form of CIRAM by the FRONTEX agency, the Romanian Border Police methodology will be harmonized accordingly. Regarding the preparations for participating in SIS II, the methodological norms for implementing EGO no. 128/2005 were drafted and are currently undergoing consultation procedure. In the area of international cooperation, the third round of negotiations concerning the Agreement between the Government of Romania and the Government of the Republic of Bulgaria on Romanian – Bulgarian state border legal regime, the cooperation and mutual assistance in border related issues took place in Ruse at 14 April 2006. With this occasion, the final form of the document was agreed upon. During 10-14 of April 2006, a working meeting took place in Ruse (Bulgaria) and Giurgiu (Romania) with a view to draft the measures (legislative, administrative/technical) to introduce one-stop control at common border after EU accession.

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The Agreement between the Romanian Government and the Cabinet of Ministers of Ukraine on readmission of own citizens and aliens and the Implementing Protocol were agreed upon and are pending signature. Between 28-29.03.2006, in Bucharest, a new round of negotiations for the delimitation of the maritime boundary between the continental shelf and exclusive economic zones of the two states in the Black Sea took place. Following repeated requests from the Romanian side, on 04.04.2006, the Ukrainian counterparts forwarded a reply to the draft Agreement on setting up the Common Contact Centre in Galati. The document is currently analysed by the Romanian side. The Protocol implementing the Agreement between the Romanian Government and the Government of Moldova on the readmission of aliens is pending signature. The first round of consultations on the Agreement between the Romanian Government and the Government of the Republic of Moldova on the regime of the state border, co-operation and mutual assistance in border related issues took place between 13-14.04.2006. Operative results of the Border Police for the first quarter of 2006

- 20,587 illegal deeds were discovered, 24.1% less than the same period of 2005 when 27,147 illegal deeds were identified.

- Out of the Romanian citizens trying to exit the country (1,736,800 persons), 53,079 were not allowed to, because they did not fulfil the legal requirements in force.

- At the green border, 53 Romanian citizens were discovered, out of which 33 Romanian citizens trying to illegally exit the country and 20 Romanian citizens trying to illegally enter Romania.

- 17 networks of illegal migration involving 172 persons were dismantled. - 24 guides/transporters were discovered. In the field of visa policy during the referred period, 10 consular missions were connected to the visa on-line system. So far, 26 consular missions have been connected within the frame of the third stage. Regarding data protection, during 15th of March – 15th of April 2006, 160 personal data processing notifications were registered, out of which 5 regarded the transfer of personal data abroad. During the referred period, 7 authorizations for the transfer of personal data abroad were issued. Also, during the same period, 16 investigations were carried out. Based on the results of these investigations, in 2 cases decisions of sanctioning were issued amounting to 2000 RON (555 EUR), respectively 1200 RON (333 EUR), in 4 situations the data controllers were sanctioned with warnings, in one case the ending of the processing operations and deletion of processed data was ordered and in one case the criminal prosecution bodies were notified. In the other investigations recommendations were issued to data controllers on observing the rights of the natural persons whose personal data are processed, on modifying the notifications or submitting notifications to the supervisory authority for personal data processing that were ascertained and on observing the security measures. On the 29th of March a seminar regarding “Protection of personal data within the activities carried out by professional training services” was organized and on the 7th of April a training meeting with the authority's staff, regarding the procedures on investigations, was organized. In the area of police cooperation and combating organised crime, in the referred period have been adopted:

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- Law no. 79/23.03.2006 (OJ no. 293/31.03.2006) on approving the EGO no. 157/2005 for the amendment of paragraph 3, art. 3 from the Law nr. 682/2002 regarding the witness protection;

- OMAI no. S/1237/17.03.2006 has been issued for the approval of the Methodology for the administration and control over managing the necessary funds for financing the Witness Protection Program.

Within the Communication & IT Directorate, the Security component for the Information and Communication Technology has been set up at the compartment level with the aim to secure classified information at the level of General Inspectorate of Romanian Police. In order to continue the efforts to reduce personnel deficit, on 30 March 2006 a contest was organized for filling in 917 vacancies from external source. On this occasion, 841 candidates were admitted - 688 men and 153 women, among which 198 are bachelor’s degree holders. Also, in order to increase the number of the national minorities and other ethnic groups’ representatives, 46 vacancies were allotted exclusively to them - 26 for Hungarians (16 were admitted) and 20 for Roma people (5 were admitted). The vacancies that have not been filled in yet will be again open for contest on 28.04.2006. The present percentage of filled positions at the Romanian Police is of 87.9 %. As far as filling in the managing positions is concerned, at the level of Romanian Police, as a result of the organized contests, 122 managing positions have been filled, mainly at the level of territorial units. On 18.04.2006 200 positions for Romanian Gendarmerie were approved and the contests are to be organized for filling these positions. In March 2006 police structures specialized in fighting organized crime have discovered 999 crimes (515 in organized crime, 246 anti-drug and 238 in the area of serious economical – financial criminality). 630 persons have been investigated (295 in the area of organized crime, 230 in the area of anti-drug and 105 in the area of economical – financial macro criminality), 132 persons being investigated while under arrest. In March 2006, in the area of fighting trafficking in human beings, 69 causes have been registered, concerning 131 traffickers (out of them 1 foreigner), out of them 42 having been arrested. Out of the 131 traffickers, 95 are men, 29 are women and 7 minors. 183 victims have been identified; out of them 148 were women (28 of them, minor ones). As far as the way victims were exploited, 130 have been sexually exploited, 34 were exploited through labour, 15 were forced to beg and 4 in other ways. As far as the victims’ identification is concerned, 19 of them have been identified as a result of complaints and intimations, 163 as a result of investigations and 1 in other ways. On 14.03.2006, MAI operatives and DIICOT prosecutors together with Spanish judicial authorities, acted to annihilate a network, which had international branches, dealing with trafficking in human beings, drugs, prostitution and card and currency counterfeit. The action led to the arresting of 297 Romanian citizens, out of which 283 in Spain and 14 in Romania. On March 6, 2006 by an Order of the Minister of Administration and Interior, the President of the National Agency for Preventing the Trafficking in Human Beings and for Monitoring the Assistance provided to the Victims of Traffic was appointed. The President of the Agency is the national coordinator of the activity for preventing trafficking in persons and for granting protection and assistance to the victims of trafficking in human beings. Three officers and one agent from the National Office for preventing trafficking in human beings were appointed in the organizational chart of the new agency, on their free will. In the first half of April, 4 positions were filled in by contest (1 deputy director, 1 chief of compartment and 2 execution positions). The

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other positions will be filled in through an open and transparent selection process, both from the internal resources of MAI and from outside the system. On 27.03.2006 the Memorandum of Understanding between Romanian Ministry of Administration and Interior and the Home Office in the United Kingdom of Great Britain and Northern Ireland was signed, regarding the continued support of project Reflex Romania until March 2007. On 30.03.2006 the Convention between Romania and Spain was signed regarding Cooperation Against Criminality. On 30.03.2006, within PHARE Project – Resource Centre for countering trafficking in human beings, the equipments stipulated in this contract were delivered, the total value being of 190,341.19 EURO. In March 2006, in the area of countering money and travelling cheques counterfeit, 85 crimes have been discovered, 43 persons being investigated. In March 2006, in the area of countering international trafficking with stolen vehicles, 74 crimes have been discovered, 40 persons have been investigated and 5 automobiles have been seized. In March 2006, in the area of countering trafficking in strategic materials, 4 crimes have been discovered, 2 persons having been investigated. In March 2006, in the area of countering IT criminality, 141 crimes have been discovered, 81 persons have been investigated, 27 of them being arrested. In March 2006, in the area of countering serious economic and financial criminality, 238 crimes were discovered, out of which 45 on countering money laundering, 36 on countering fiscal frauds and 157 on economic-financial serious criminality within organized crime area. 105 persons were investigated, out of which 26 on countering money laundering, 19 on countering fiscal frauds and 60 on economic-financial serious criminality within organized crime area. Regarding information analysis at the level of DGCCO, between March 01st and April 17th 2006, at the DGCCO structures a number of 522 informative reports have been implemented and processed in the unitary information management system, which collects informative materials in the 5x5x5 system. A number of 9 tactical and operational analysis reports have been written. In these reports a number of 372 relational maps have been drown. These informative packages have been forwarded to DIICOT prosecutors via case officers. During 1st - 31st of March 2006, the police officers within TRIDENT PROJECT ROMANIA finalized and forwarded directly to DIICOT a number of 22 analytical packages and 27 relational maps, as follows: Constanta 10 analytical packages and 11 relational maps; Giurgiu 6 analytical packages and 7 relational maps and Otopeni 6 informational reports and 9 relational maps. Out of 22 de analytical packages, 12 have been of economic sort (tax evasion, money laundering, smuggling), 3 on drug trafficking, 6 organized criminality (4 IT crimes and 2 of another sort), while 1 was a strategic analyses on merchandise and people trafficking through Ostrov Customs, which has been made by Giurgiu Trident Office. Between 1 March and 17 April, the DGCCO flagranto delicto service has carried out 4 actions (2 for countering drug trafficking and use and 2 on the line of organized crime). Out of these actions, 3 have been carried out in Bucharest and 1 in rural areas, and in order to be carried out under optimal conditions, the personnel carried out investigation and surveillance activities. The contest for joining the police force for civilians has taken place in Tg. Mures. 5 officers and 14 non-commissioned officers (agents) have filled in the vacancies at the Service for Operative Surveillance and Investigations. At central level, 25 operative surveillance actions, 102 undercover investigations have been conducted and 140 informative reports have been forwarded in the CAMAS system.

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Regarding international co-operation and professional training in the field of countering organised crime at DGCCO level, the training process continued for the 30 police officers who have joined the force as civilians at Craiova, Galati and Timisoara Operative Surveillance and Investigations Services. At DGCCO level, within IGPR, between March 01st and April 17th 2006: 340 messages have been exchanged with foreign police units, especially with European partners. Out of them, 172 messages received and 168 sent; 20 meetings with liaison officers and foreign interior attaches in Bucharest took place; 38 meetings with different delegations, as well as seminars and professional training activities, organized together with foreign representatives, such as representatives from Germany, Italy, Austria, France, Spain and Great Britain, international organization such as SPOC (Stability Pact), ICMPD (Program for Countering Migration). Between 1 March and 17 April, 22 training courses and seminars took place in Romania and also abroad, in the following areas: countering trafficking in human beings, money laundering, countering drugs trafficking, undercover police officers, countering organized crime, cyber crime, intelligence analysis and others. 151 police officers within DGCCO attended these training courses and seminars. 8 internal training courses and seminars took place attended by 132 police officers within DGCCO and 14 training courses took place abroad attended by 19 officers. As a result of the activities carried out by the criminal investigation police, the statistic data from March 2006, compared to March 2005 showed: - the decrease by 4% in the number of life threatening crimes, body integrity and

health, out of which we mention: the decrease by 5% in the number of murders, the decreased by 26% in the number of the serious body injuries;

- the number of rapes has decreased by 12%; - as far as robberies is concerned, an increase by 32% in solved crimes in March

2006 compared to March 2005 has been recorded, respectively 439 compared to 332.

Pursuing persons in order to implement the law resulted during the first quarter 2006 in catching 794 wanted persons, who avoided penalty execution, arrest or investigation warrants in the files that are in progress with unknown authors or known authors, out of which 376 have been arrested. The good cooperation with the Interpol National Bureau has led to arresting for extradition a number of 87 international wanted persons and locating of 21, 44 being extradited. The manner of approaching the economic and financial criminality, as well as the efforts made in this area resulted in discovering 10,569 economic and financial criminality representing 32.51% from the total of 32,510 crimes discovered by the Romanian Police (+28% compared to March 2005). In March 2006, the Fraud Investigation Police has declined competencies in 61 criminal files regarding 147 crimes according to the offence cases to Prosecutors Offices according to Law no. 508/2004, amended and completed, out of which 26 fiscal fraud and embezzlement offences bringing prejudices of over 500,000 EURO each, 44 money laundering cases and 76 offences of other types, bringing total prejudices of 12,777,288 EURO. Measures were also taken in order to increase and extend investigations on acts with very serious outcomes from the point of view of the prejudices caused and of persons involved. In the reference period, from the total number of 664 complex files of economic and financial nature 160 were solved as follows: 88 through Reports on Finalizing Criminal Prosecution; 58 by declining competencies; 14 by other means. 415 persons were accused/prosecuted, 8 under detainment or preventive arrest. The

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prejudices brought were in value of 37,688,690 EURO. 14,959,999 EURO was recovered. The IGPR provision no. 200/03.04.2006, on the Organisation concept and action of the public order police structures has been approved. During 03-07.04.2006, in the area of proximity police, working shops and a practical project in the field of security marketing were organised in Constanta and Piatra Neamt attended by 100 policemen from Constanta, Calarasi, Ilfov, Prahova, Ialomita, Neamt, Vaslui, Iasi, Suceava and Botosani. During 13-16 March 2006, the Central Unit for Intelligence Analysis (UCAI) has organised a competition for filling in vacant positions at central level. Following this competition, 13 analyst officers and 6 inputers were hired. During 27-28.03.2006 a competition was organised for filling in strategic analysts for 13 counties. 7 officers from external source were hired after this competition. Also, during 10-12 April 2006, after the UCAI employment competition, organised at central level, 2 officers and agents were employed from external source,. During April 2006, the National Office for Witness Protection acquired and distributed to the operational services materials and USB technique, annex to the existing equipment. During 24-28.04.2006, 3 representatives of the National Office for Witness Protection will take part to the forth Training Module organized by Austrian specialists. The main theme during the module is the inclusion of foreign witnesses in the witness protection program, respectively the way of requesting and according the qualification of protected witness. During the analysed period, 14 people were verified and investigated in order to establish the opportunity of according the quality of protected witness. Specific activities were carried out for protecting and assisting 18 protected witnesses. Operative investigations were carried out for 2 persons included in the program by the prosecutor office. In March 2006, the forensics structures carried out technical – scientific investigations at the crime scene in 11,189 cases. On this occasion 24,861 footprints have been collected and material evidence means. The 2,805 fingerprints processed using AFIS IT identification System leading to the identification of 338 perpetrators and 396 criminal facts. At national level, 2,013 technical-scientific findings and forensics expertise have been operated, leading to the identification of 548 perpetrators who committed 692 anti social deeds. Bio forensics expertise played an important role in this kind of activities which through genotyping established the genetic prototype of 18 perpetrators involved in committing 16 criminal facts of high violence or high social risk. Following the EU policemen requests and with the help of the International Cooperation Centre and by own verifying activities of re-turned/banished persons from this countries, in the first quarter of 2006, 5887 dactiloscopic files were compared in the AFIS system, 182 persons being identified, which committed 221 crimes in the territory of other states. In order to implement the praxis of the European Forensic Science Institutes (ENFSI), the experts and forensic specialists Behaviour Code was elaborated and approved by the IGPR order no. 210/11.04.2006. This document is very useful for stating the forensic experts rights and obligations at European standards. Regarding inter-institutional cooperation, IGPR signed the following protocols: - Collaboration agreement with MEC – National Commission for recycle materials –

for preventing, detecting, combating, and approving of legal acts in the field of managing industrial recyclable fells;

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- Collaboration agreement with the Resource Centre for Intercultural Diversity – forum promoting good manners in relation with the Police – multicultural communities;

Progress in the field of improving conditions from the detention centres are presented in the chapter Political Criteria, section human rights and the protection of minorities. Regarding preventing and combating money laundering and terrorism financing, during 23 March - 12 April 2006 representatives of the ONPCSB performed, together with specialists from National Bank of Romania – Supervision Directorate, controls to three credit institutions (commercial banks – central headquarter/branch), verifying the compliance to the provisions of the Law no. 656/2002, with subsequent modifications and completions. Also, during 04 March 2006 – 17 April 2006, the representatives of the ONPCSB performed together with the representatives of the Financial Guard 10 control actions to: one leasing company, 8 pawn hoses (to 7 from these entities the written warning sanction was applied), and one real estate agency. On April 19, 2006, the Government adopted the new internal regulation of the National Office for Preventing and Combating Money Laundering (ONPCSB). By the new regulation, the staff of ONPCSB increased from 84 to 120. During 04.03 – 17.04.2006, ONPCSB received 6,622 reports on cash operations whose minimum limit represents the equivalent of 10,000 Euro out of which: 949 from banks and 5,673 reports from other institutions, as follows: notaries – 5,576; securities companies – 1; currency exchange houses – 1; casinos/gambling houses – 7; treasury – 64; other financial institutions – 3; other legal persons – 21. In the same period, 1,027 reports were received from banks on cross-border transfers whose minimum limit represents the equivalent of 10,000 Euro. Also, during the same period, ONPCSB registered 112 reports on suspicious transactions out of which from: reporting entities – 81 reports; financial control and supervision authorities – 14 reports; notifications from law enforcement authorities – 2 reports; notifications from FIUs – 15 reports. After the finalization of the analysis within the Implementation Specific Legislation Directorate 28 cases were submitted to the Prosecutor Office attached to the High Court of Cassation and Justice. Also, the Office sent 15 information requests to foreign FIUs and received 15 requests from foreign FIUs. In the area of specialized training, ONPCSB organized a training session for the banking inspectors from National Bank of Romania, which presented the typologies and case studies of money laundering. The General Inspectorate of Police organized a training session for the police structures focused on the legislative developments, the role of ONPCSB and the best practice in inter-institutional cooperation. ONPCSB and National Institute for Magistracy organized training for over 40 magistrates, covering the implementation of the Third Directive and typologies and case studies of laundering the money obtained from corruption offences involving politically exposed persons. In the area of drugs, the National Anti-drug Agency and the Anti Drug Directorate – Service for precursors, illicit laboratories and crops within the General Directorate for Countering Organized Criminality have started to develop a draft law amending the legal regime of the precursors which can be used in the drugs manufacturing process, according to EU Regulations no. 273/2004, 111/2005 and 1227/2005. In the drug demand area, the Drug Prevention, Evaluation and Counseling Centers (CPECA) have drafted and submitted for financing a number of 36 local projects. Other 57 project are currently implemented and 14 were finalized. Besides these local projects, the CPECAs are developing 4 national programs initiated by the National Anti-drug Agency, which were adapted to the local realities: “My Anti-drug Message”, „PROTEGO”, „Classes without Smoking”, „I am a V.I.P. (Vigilant – Independent - Powerful) with no alcohol”.

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Two cooperation protocols were concluded between the National Anti-drug Agency and the following NGO’s: Education Foundation and Teen Challenge Foundation which aims at developing prevention programmes and providing specialized services. Subsequent to signing the agreement with the State Secretariat for Cults, the Drug Prevention, Evaluation and Counselling Centres concluded cooperation protocols with the following religious structures: Bishopric of Vrancea and Buzau, Bishopric of Bistrita, Bishopric of Dunarea de Jos, Bishopric of Arad, the Christian – Adventist Church Husi and Vaslui, Catholic Episcopal Office of Miercurea Ciuc. Three projects were carried out in cooperation with the Romanian Patriarchy, Christian Baptist Church from Alexandria and the Bishopric of Alexandria and Teleorman. Regarding drug supply reduction, the 2005 Annual Evaluation Report on the implementation of the 2005-2008 National Anti-drug Strategy has been developed. This document represents an objective analysis of how the Romanian public institutions and authorities, involved in implementing the Action Plan related to the 2005-2008 National Anti-drug Strategy, understood and engaged themselves in implementing the strategic targets assumed during the European integration process. The Report’s synopsis can be found in Annex No 5. During the first three months of 2006, the law enforcement agencies uncovered 582 drug related crimes and 578 individuals were investigated, out of which: - 528 crimes to Law no. 143/2000 on countering illicit drug trafficking and abuse -

493 individuals (10 foreign citizens) were investigated; - 11 crimes to Law no. 300/2002 on the legal regime of the precursors used for the

illicit manufacturing of drugs - 13 individuals (1 foreign citizen) were investigated; - 3 crimes to Law no. 39/2003 for preventing and countering organized criminality - 1

individual was investigated. In March, the anti-drug structures uncovered 246 drug related crimes and 230 individuals were investigated (64 individuals in custody/under arrest) and 11 criminal networks operating in the drug and precursor field were dismantled. The drug seizures made by the police, border police and customs officers are as follows:

DRUG TYPE January - March 2006 HIGH RISK DRUGS

104.85013 kg 6993 pills

122 ampoules 24 dots

heroine (g) 2528.24 cocaine (g) 8083.47 MDMA (pills) 6227 MDMA (g) 10.2 amphetamine (pills) 2 amphetamine (g) 998.55 methadone (pills) 764 methadone (g) 5.67 green cactus (mescaline)(g) 93128.4 opium (g) 95.6 morphine (ampoules) 62 petidine (ampoules) 60 LSD (dots) 24

RISK DRUGS

7.61272 kg 928 pills

67 ampoules cannabis (g) 6240.16

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hashish (g) 1370.53 diazepam (pills) 622 diazepam (ampoules) 26 diazepam (g) 2.03 midazolam (pills) 16 clotiazepam (pills) 1 clonazepam (pills) 50 pentazocina (pills) 100 pentazocina (ampoules) 27 amobarbital (pills) 8 alprazolam (pills) 33 Phenobarbital (ampoules) 14 Phenobarbital (pills) 90 nitrazepam (pills) 8

TOTAL DRUGS

112.46285 kg 7921 pills

189 ampoules 24 dots

PRECURSORS & ESSENTIAL CHEMICALSUBSTANCES

537.3021 kg 64.2 l

ephedrine 153 toluene (l) 10 piperidine (l) 49.9 permanganate K (g) 1302.1 permanganate K (l) 4.3 sulfuric acid (g) 536000

The experts working in the Bucharest, Cluj and Iasi Laboratories for drugs and precursors analysis performed physical-chemical analyses for 1124 samples and 322 technical and scientifically finding reports were issued. The following assets were frozen: 1 villa with 20 rooms and 3 luxury vehicles (one valued to 150,000 euro) and aprox. 11,000 euro were confiscated in order to be seized. In the area of judicial cooperation in civil and criminal matters, the co-operation agreement with Eurojust, signed in Brussels, on December 2nd, 2005, within the JHA Meeting, was ratified by the Romanian Parliament (Law no. 58/22.03.2006, OJ no. 300/4.04.2006). The agreement ensures the framework for the co-operation with Eurojust until the date of accession and for the appointment of a Romanian magistrate as national member of Eurojust after the date of accession. The draft law for the amendment of Law no. 302/2004 on international judicial co-operation in criminal matters was adopted by the Senate in March 2006 and is currently pending debates before the Chamber of Deputies. The amendments will completely transpose the Schengen acquis and correct potential difficulties in the application of the Council Framework Decision on the European Arrest Warrant. The laws for the ratification of the European Convention on Prevention of Terrorism and of the European Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism (Warsaw, May 16th, 2005) were drafted and are now pending endorsement by the relevant ministries.

FINANCIAL CONTROL In the field of public internal financial control, from the 24th of March 2006 to present, 23 civil servants with attributions in financial management, within public institutions at central and local level, have been trained.

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In the field of protection of EU financial interests, in the reference period, DLAF opened eight new investigations regarding the community funds and closed five investigations, out of which four cases of possible irregularities and frauds were discovered. Three files were forwarded to DNA and in one case the possibles irregularities/ frauds were not confirmed. DLAF currently has 23 investigation files ongoing, out of which 12 files for PHARE program, 10 files for YOUTH program, 3 files for Leonardo da Vinci program, 2 files for ISPA program and 1 file for SAPARD program. In order to ensure a full transparency, in April 2006, DLAF has elaborated and presented the Quarterly Synthesis of the actions and measures taken at national level for the protection of the EU financial interests in Romania, during January-March 2006. Concerning the control over structural action expenditure, the Audit Authority, associated to the Romanian Court of Accounts, currently has 66 employees, for the rest of the available positions new contests following to be organized.

ANNEXES

Annex No 1 Activities Schedule

Area Activities Actions Responsibilities Deadline Legislative Granting of rights and facilities for

persons with disabilities

- monitoring the observance of rights for persons with disabilities

ANPH DGASPC

2006 - 2007

Information Awareness Campaign of the public opinion “Information of persons with disabilities regarding their rights and services which they can access as well as the engagement against discrimination and blemishing” – PHARE project

- elaboration and delivery of information materials regarding rights for persons with disabilities

ANPH 2006 - 2007

Working sessions on areas of interest in the protection of the persons with disabilities – ANPH own project

- information delivery regarding the risks of exposure to traffic of persons to participants at the working sessions (DGASPC directors, protected units’ administrator, presidents of evaluation commissions of persons with disabilities)

ANPH 2006

Information regarding the risks of persons traffic

- elaboration and distribution of informative materials regarding persons with disabilities - identifying non-governmental organizations which develops project/activities/services in traffic of persons area; maintaining connection with these organizations;

ANPH ANOFM Counseling Offices for Citizens

2006 - 2007

The increase of the employment

Vocational training for the integration in labour of persons with disabilities –

- organization of vocational training for 300 persons with disabilities from all country range

ANPH Social services

2006

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opportunities National Interest Program providers, public or private

Work places stock for persons with disabilities – ANOFM program

- organization of work places stock in two sessions (June and September)

ANPH ANOFM

2006 - 2007

Collaboration and partnerships

Collaborations with Inter-ministry Work Group for coordination and evaluation of warning activity

- participations to work meetings ANPH 2006 - 2007

Collaborations with Disability National Council – Romania (DNCR)

- implication of non-governmental organizations in the identification of trafficked persons cases and resolution of concrete risk situations - analyzing the intimations of the non-observance of persons with disabilities rights and identification the solutions of resolution/amendment - implication of non-governmental organizations in the development and implementation of actions plans and programs regarding exchange of persons

ANPH DNCR

2006 - 2007

Collaborations with Ministry of Education and Research

- introduction of information regarding exchange of persons to persons with disabilities, especially inside school program at “Civic culture” discipline

ANPH MEdC

2007

Collaborations with National Authority for Protection of Child’s Rights

- monitoring concrete situations of exchange risk

ANPH ANPDC DGASPC

2006 - 2007

Annex No 2

ORDER OF THE MINISTRY OF AGRICULTURE, FORESTS AND RURAL DEVELOPMENT No 237 / 07.04.06

Concerning the authorising process of the economic agents growing genetically modified plants

According to the provisions in Article 4 paragraph (1) point c) in the Government Ordinance no. 49/2000 concerning the regime for obtaining, testing, use and trade of the genetically modified organisms through modern techniques of biotechnology, as well as of the products generated by them, approved with further modifications and completions through Law No. 214/2002, According to the provisions in Article 87, points c) – h) and Article 94 paragraph (3) in the GEO no. 195/2005 concerning environment protection, According to the provisions in Article 1 G.D. no. 173/2006 concerning traceability and labelling of genetically modified organisms and food and fodder traceability, obtained through genetically modified organisms,

Having examined the approval letter issued by the General Direction for Elaboration of Sector and Market Strategies and Policies, No. 78713 / 23.03.2006, According to the provisions of the Government Decision No. 155/2005 concerning the organisation and functioning of the Ministry of Agriculture, Forests and Rural development, The Minister of Agricultural, Forests and Rural Development issues the following order: Art. 1. - According to this Order, the terms and expressions below are defined as following: a) NACP – National Authority for Consumers’ Protection; b) NSVFSA– National Sanitary Veterinary and Food Safety Authority; c) farmer – physical personae or legal body which grows up genetically modified organisms; d) unique identification code (UIC) of GMO – a simple numeric or alphanumeric code assigned by OCDE to each transformation event, in order to detect and identify genetically modified organisms, aiming at inspection and control operation facilitation; e) double crop – crop set-up during the same year, on the same field, after getting in the main crop; f) ARDD – Agriculture and Rural Development Directions; g) SVFSD – Sanitary Veterinary and Food Safety Directions; h) isolation distance – distance between parcels cultivated with plants belonging to the same species, deemed to prevent the biological contamination through crossed pollination; i) TISSMQ – Territorial Inspectorate for Seeds and Seeding Material Quality; j) CLSSMQ– Central Laboratory for Seeds and Seeding Material Quality; k) MAFRD – Ministry of Agriculture, Forests and Rural Development; l) MEWM – Ministry of Environment and Waters Management

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m) genetically modified organisms or “GMO” – each organism, except the human one, whose genetic material has been modified in other modalities than through crossing and/or natural recombination. According to this definition, the genetic modification is a consequence of using the techniques specified in Annex 1, Part A, in the G.O. no. 49/2000, concerning the regime for obtaining, testing, use and trade of the genetically modified organisms through modern techniques of biotechnology, as well as of the products generated by them; n) genetically modified plants – superior plants, belonging to taxonomic Gymnosperm and Angiosperm species, which trough techniques of genetic engineering, have been transferred some genes “of interest”, which can ensure resistance against some vectors or diseases, tolerance to some herbicides or to some environment unfavourable factors, superior nutritional qualities, etc; o) genetically modified agricultural product – any product obtained of plants genetically modified, which has not suffer any processing, destined to processing and/or usage as food or fodder; p) buffer area – protection curtain growing genetically unmodified products, usually of tall size, around one parcel cultivated with genetically modified species, created in order to prevent the pollen transfer to the neighbouring crops and herbs r) variety – type or hybrid belonging to a cultivated plant species Art. 2. – In order to set up a strict control over the genetically modified plants and the subsequent production, the following measures shall be adopted, deemed to ensure the traceability and labelling of the genetically modified products, provided in the relevant national and community legislation. Art. 3. – In Romania, for research, trade or self-consumption, genetically modified plant can be cultivated only if the companies or institutions, having ownership right over the respective varieties, have received an authorisation for environment or market placement of the respective products, issued by the MEWM, according to the provisions of Government ordinance No. 49/2000 concerning the regime for obtainment, testing, use and trade of the genetically modified organisms through modern techniques of biotechnology, as well as of the products generated by them, approved with further modifications and completions through Law No. 214/2002.

Art. 4. - Genetically modified plants growing is forbidden in close neighbourhood of certified surfaces or of the surfaces in conversion period for ecologic agriculture. Art. 5. (1) Genetically modified plants growing is forbidden in within the natural protected areas, legally set up, as well as around them, according to law.

(2) The Local Agency for Environment protection or the Environment Guard Commissariat shall make available for the ARDD the maps and the natural protected areas in each county. Art. 6. – Genetically modified plants can be grown only by farmers authorised by the MAFRD through the county ARDD and Bucharest ARDD. Art. 7. – In order to be authorised, every year, the farmers must hand over to the competent ARDD where they intend to grow genetically modified plants, a request, its model is enclosed in Annex 1, together with a file containing the following documents: a) Identification documents:

- For natural personae: photocopy of the ID bulletin / card; - For legal entities: photocopies of the registration certificate and fiscal registration

certificate;

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b) documents certifying the registration in the Farms’ Register; c) a declaration of the applicant responsibility, according to the model presented in

Annex 2. Art. 8. - (1) Farmers growing genetically modified plants are obliged to use only

certified seeds. (2) Both the farmers using seed produced by third parties or those using seeds

produced by themselves, shall apply for an authorisation to register in the county register no later then 1st of May every year.

(3) In case of double crops, the authorisation request shall be handed-over no later then 1st of July every year. (4) Setting up a culture of genetically modified plants on surfaces smaller than 2 ha, in compact formation shall be banned, except for the ones that have scientific purposes. Art. 9. – Within the inner structure of the MAFRD, the GMO Compartment shall be set-up, with attributions concerning the legislation and the records of the genetically modified cultures. Art. 10. – (1) Within the county ARDDs and Bucharest ARDD, the Compartment for policy implementation, monitoring, vegetal production statistics, GMO authorisation and the Compartment “inspections of vegetal production, GMO, and food and animals industry” shall be set-up. (2) The attributions of this Compartment for GMO Inspections within the county and Bucharest ARDDs are provided in Annex 7. (3) The specialists within the Compartment for GMO Inspections shall check the received application files, register the economic agents and monitor the activity of genetically modified plant growing, as well as their storage, processing and trade, and monitor the compliance with the relevant legislation. (4) The specialists within the Compartment “inspections of vegetal production, GMO, and food and animals industry” shall carry out inspections and controls for all economic agents growing genetically modified plants, by verifying the way in which they are applying the relevant law for GMO. Art. 11. – Within the county ARDDs, the County Register of the Farmers growing genetically modified plants, hereinafter the County Register shall be set-up.

Art. 12. – (1) Authorising the economic agents shall materialise through issuing an Authorisation Certificate, representing the approval for growing genetically modified plants. (2) In case of production of genetically modified seeds destined to sowing, the registration certificate shall be issued only to the authorised seeds producers, according to Law No. 266/2002 concerning production, processing, quality control and certification, seeds and sowing material trade, as well as registration of different varieties of plants. (3) the Authorisation Certificate shall be issued within maximum 10 days since the file registration. (4) The model of the Registration Certificate is enclosed in Annex 3. (5) The providers of certified seeds for GMO are obliged to request to the genetically modified seeds buyers photocopies of their Authorisation Certificates. These copies shall be kept for 5 years in a Register for genetically modified seeds sales, together with the buyer identity and the bought seeds quantity.

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Art. 13. - (1) Within 30 days from the sowing process finalisation, the authorised economic agents are obliged to fill in, in two copies, a statement concerning the cultivated surface, seeds origin, used varieties, according to the model presented in Annex 4. (2) One copy of the statement shall be handed-over to the ARDD, and one shall be kept for 5 years, together with the Authorisation Certificate, in a special folder, at the residence place, i.e. at the economic agents’ headquarter, for the control made by the persons empowered by the competent authorities specified in Article 29. Art. 14. – (1) After the gathering the crops, the authorised economic agents are obliged to fill in, in two copies, a statement concerning the obtained production and its destination, according to the model provided in Annex 5. (2) One copy shall be handed-over to the ARDD until the 15th December, and the other one shall be kept in the same file mentioned in Article 13 paragraph (2). Art. 15. – In case of genetically modified cultures destined to seeds production for sowing, a copy of the Authorisation Certificate of the economic agent, drawn up according to the model presented in Annex 3, shall be handed-over to TISSMQ or to CLCSMS, which shall control the cultures and shall certify the seeds according to the provisions in Law No. 266/2002 and to the specific enforced Rules and Norms. Art. 16. - (1) The statement filled in according to the models presented in Annexes 4 and 5 shall be signed, and if appropriate, stamped by the farmer and shall be certified by the specialist from the Agricultural Centre competent for the surfaces cultivated with this type of plants. (2) The ARDDs specialists mentioned in Article 10(3) shall receive, check and input in the County Register the data written in the statements filled in according to the models presented in Annexes 4 and 5. Art. 17. – The specialist in the agricultural centres shall centralise, at the commune level, in a special folder, the authorisation certificates issued by the ARDDs. Art. 18. – The specialists in ARDDs mentioned in Article 10(3) and the specialists in the agricultural centres within the ARDDs shall supervise the filling in and sending on time, by the involved economic agents, of the statements filled in according to Annexes 4 and 5.

Art. 19. – The farmers growing genetically modified plants are obliged to set-up, at their residence place or headquarter, a Register concerning the seeds origin and production destination resulting from genetically modified plants; in this Register all information shall be kept according to the model described in Annex 6, for a period of 5 years. Art. 20. – When providing the production, the economic agents shall clearly mention on the labels and in the goods accompanying documents, that the product has been ”genetically modified”, as well as the unique identification code of the genetically modified organism, according to the ruling legislation. Art. 21. - (1) The farmers growing genetically modified plants are obliged, depending on the cultivated species and based on the measure authorising the respective species, to take all the necessary measures in order to ensure some minimum isolation distances, according to the ruling legislation concerning seeds certification, creation of a buffer area, sowing time phasing, in order to prevent crossed-pollination pollution of the ecologic or conventional cultures belonging to the owners of the parcels situated in the neighbourhood of the genetically modified cultures. (2) During the crops collection, transport, storage and conditioning of the production resulted from genetically modified cultures, the economic agents shall take

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all necessary measures to prevent the physical mixture of the genetically modified products with those ecological or conventional: separate production storage, cleaning of the sowing machines, of the conditioning machines, means of transport, according to the ruling legislation for seeds production for sowing. Art. 22. – (1) The farmers growing genetically modified plants are obliged to inform, in written form, both the legal owners and the landowners in the neighbourhood, as well as the town-hall in the administrative-territorial area where these terrains are located, on their intention to grow genetically modified plants. (2) the owners of the lands nearby the genetically modified cultures, under the limits specified for the isolation distances provided in the specific rules and norms related to the seeds cultures, established on the basis of Law No. 266/2002, as well as under the limits of the distances specified in the authorisation issued by the MEWM, can hand in an appeal, in written form, both to the grower and to the county ARDD competent in the area where the land is located, within 10 calendar days since having received this information. Art. 23. – The ARDDs are obliged to make available for the economic agents, proving a relevant interest for prevention of ecologic and conventional cultures pollution, the information on the type of agriculture practised by the landowners of the neighbouring parcels. Art. 24. - (1) In case of proved pollution of the conventional and ecologic cultures caused by GMO, the affected economic agents can appeal in written to the competent instances of common right. (2) The analysis necessary for assessing the pollution level shall be made in the acreditated laboratories in the country or in the EU countries. Art. 25. – The specialists in the ARDDs mentioned in Article 10(3) shall supervise the modality in which the farmers growing genetically modified plants apply the measures necessary to ensure the coexistence of the genetically modified cultures with the ecologic and conventional ones. Art. 26. – (1) The National Register recording the farmers growing genetically modified plants in Romania, hereinafter the national register, shall be set up and administrated by the GMO Compartment with MAFRD. (2) The GMO Compartment within the MAFRD shall draw up the digital models for data taking over, which they shall disseminate to the county ARDDs, to be applied, within 15 days since this order is enforced. Art. 27. – The specialists in the ARDDs mentioned in Article 10(3) shall receive, check and transmit periodically to the GMO Compartment within the MAFRD, in digital format, the information contained in the statements filled in the Annexes 4 and 5, representing the database in the National Register. Art. 28. – For the elaboration on time of the inspection and control programmes by the MEWM, NSVFSA and NACP, the GMO Compartment within the MAFRD shall transmit, in digital format, to the institutions previously mentioned, the information in the national register, as following: Data concerning the surfaces cultivated with genetically modified plants – until 15th June (main crop) and until 15th August (double crop); Data concerning the productions obtained and their destination – until 15th December every year; Art. 29 – The farmers growing genetically modified plants are obliged to submit to the inspections and controls carried out by the empowered personnel of NSVFSA, MEWM, MAFRD and NACP in order to check the insurance of traceability and labelling

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of the genetically modified products, i.e. to check the accuracy of the information transmitted to the ARDD. Art. 30. – The empowered personnel within the authorities mentioned in Article 29, shall register all found issues and the measures taken during inspection and control in the Register containing the seeds origin and the destination of the production obtained from the genetically modified plants, drawn up according to the model presented in Annex 6. Art. 31. – The empowered personnel within the authorities mentioned in Article 29, shall notice the contraventions and shall apply the appropriate sanctions provided in the G.D. No.173/2006 concerning traceability and labelling of genetically modified organisms and food and fodder traceability, obtained through genetically modified organisms, taking into account the provisions of Government Ordinance No. 2/2001 concerning the contraventions legal regime, approved with modifications and completions through Law No. 180/2002, with further modifications and completions. Art. 32. – Annexes 1 – 7 represent integrant part of this order. Art. 33. – The standard forms presented in Annexes 1 - 7 are made available to the farmers by the county ARDDs. Art. 34 – This Order shall be published in the Official Journal of Romania, Part 1.

MINISTER

Gheorghe FLUTUR

Annex 1

MAFRD ARDD County......................…. Registration No........…./...............…. (shall be filled in by authorities)

REQUEST

for issuing the Authorisation Certificate for the farmers growing genetically modified plants in the year …………

A. 1. natural personae……………………………., with residence in locality.......………………., Street………….……, No…...., county/sector…..………..…., identified with I.B./I.C. series…....., no. …….....…….., issued by…................………., on ......………., PNC_ _ _ _ _ _ _ _ _ _ _ _ _, request issuing the Authorisation Certificate for the farmers growing genetically modified plants.

2. the genetically modified species…………………… 3. estimated surface……….. ha 4. culture goal…………….

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5. location................................. I certify on my own responsibility the accuracy of the data written in this request. Date Signature

B. 1. Legal entity ……................................, with the headquarter in locality..............................…., street. ……...................…, no. ….., county/sectorul …...….....……., unique registration number (URN) …………………, represented by …………....................…….., in quality of legal representative, identified with I.B./I.C. series…....., no. …….....…….., issued by…................………., on ......………., PNC_ _ _ _ _ _ _ _ _ _ _ _ _, request issuing the Authorisation Certificate for the farmers growing genetically modified plants.

2. the genetically modified species…………………… 3. estimated surface……….. ha 4. culture goal……………. 5. location.................................

I certify on my own responsibility the accuracy of the data written in this request. Date Signature and stamp

Annex 2

STATEMENT concerning the surface in holding

and compliance with the relevant legislation for GMO

The undersigned..................................., with residence in locality.......………………., Street………….……, No…...., county/sector…..………..…., identified with I.B./I.C. series…....., no. …….....…….., issued by…................………., on ......………., PNC_ _ _ _ _ _ _ _ _ _ _ _ _, state on my own responsibility that I exploit a surface of ................ ha, in the locality ..............................................., the county of ...........................

I have also noticed and I commit to comply with the provisions of the current and future ruling legislation concerning the genetically modified organisms.

Date Signature (stamp for legal bodies)

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Annex 3 MAFRD ARDD County......................…. Registration No........…./...............….

CERTIFICATE

authorising growing genetically modified plants in the year…………

According to Article No .… in the MAFRD order No. …..…. /.…...............…,

concerning the authorisation of the economic agents growing genetically modified plants, the economic agent is authorised to grow genetically modified plants with the following goals:

research seed production consumption

genetically modified species…………………… estimated surface……….. ha location.................................

A. Natural personae ……………………………., with residence in locality.......………………., Street………….……, No…...., county/sector…..………..…., identified with I.B./I.C. series…....., no. …….....…….., issued by…................………., on ......………., PNC_ _ _ _ _ _ _ _ _ _ _ _ _, B.

Legal entity ……................................, with the headquarter in locality..............................…., street. ……...................…, no. ….., county/sectorul …...….....……., unique registration number (URN) …………………, represented by …………....................…….., in quality of legal representative, identified with I.B./I.C. series…....., no. …….....…….., issued by…................………., on ......………., PNC_ _ _ _ _ _ _ _ _ _ _ _ _. The economic agent is obliged to inform the issuer of this authorisation on any modification occurred in the documentation handed-over for the authorisation achievement, within 15 days since the modification has been made. Date, Executive Director

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Annex 4 Certified Agricultural Centre...................

No. ......../.............. STATEMENT

concerning the surface growing genetically modified plants in the year…………

Natural personae Farmer’s name: Legal entity UIC Address: County: Locality:

Street: No: Bl: Ap:

Telephone: Fax: E-mail: Name and surname of the agricultural holding leader:

PNC Address: County: Locality: Telephone:

Street: No: Bl: Ap:

Authorisation Certificate Number............/...................

Provider

Culture Loca

lity

Cul

tivat

ed s

urfa

ce

- ha

Tota

l see

ds

quan

tity

-tO

ut o

f whi

ch: o

wn

self

prod

uced

se

ed:T

Boug

ht s

eed:

t

Name UIC Locali

ty Branch

Phone

Total culture …………………

Of which :

- variety…

Signature

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Annex 5

Certified Agricultural Centre................... No. ......../..............

STATEMENT concerning the production generated by genetically modified plants culture

in the year…………

Natural personae Economic agent name:

Legal entity

UIC Address: County: Locality:

Street: No: Bl: Ap: Telephone: Fax: E-mail: Name and surname of the agricultural holding leader:

PNC Address: County: Locality: Telephone:

Street: No: Bl: Ap: Authorisation Certificate Number............/................... Registration Number of the statement concerning the cultivated surface (annex no. 3) ...................

Din care: Self consumption

Provided

Cul

ture

Loca

lity

Cul

tivat

ed

surfa

ce –

ha

–

Tota

l obt

aine

d pr

oduc

tion

– t –

Total - t

For s

eed

- t

Qua

ntity

- t

Buye

r na

me

UIC

-

t Lo

calit

y - t

Ph

one

Signature

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Annex 6 Farmer’s name .............. Address........................................ .................................................

REGISTER including seeds origin and production destination for the genetically modified plants

cultivated in the year ………… 1. Culture and type of genetic modification …....................

2. Seed origin

Total used seed (t), d.c.

Bought Kept from personal production

Provider Name Address

Provision document (no./date)

Variety

No. sow lot

Quantity Variety Quant

ity

3. Destination of the obtained production

Total harvest (t), d.c.

Provided Self consumption

d.c. Beneficiary Production Destin.

Name Address Provision document (no./date)

Seed Processed t

As fodder

t

Kept for

sowing t

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Annex 7 Attributions in GMO field

Of the relevant county ARDDs of the Compartment for policy implementation, monitoring, vegetal production

statistics, GMO authorisation The Compartments shall:

- Analyse the authorisation requests for the crops of genetically modified plants and

issue the authorisation certificates;

- Check and input in the county Register the data concerning the surfaces cultivated

with genetically modified plants, seed origin, cultivated varieties, obtained

productions, productions destination;

- Supervise the filling in process and transmission in time, by the farmers, of the

annexes concerning the records related to the economic agents’ growing

genetically modified plants.

- Check and periodically transmit to the GMO Compartment within the MAFRD, on

electronic format, the information contained in the annexes concerning the records

related to the farmers growing genetically modified plants, in order to set-up the

National Register;

- Supervise the modality in which the farmers growing genetically modified plants

apply the measures for insuring the coexistence between genetically modified

products and the ecologic and conventional ones.

the Compartment “inspections of vegetal production, GMO, and food and animals industry”

The Compartments shall: - Carry out inspections and controls at the economic agents growing genetically

modified plants, in order to assess the modality in which they apply the legislation

relevant for the GMO domain;

- Cooperate with the specialists within the County Sanitary Veterinary and food

Safety Direction, within the Environment Guard Commissariat, within Consumers’

Protection Offices, in order to execute the respective controls;

- Participate at the information of the public, farmers and consumers, on issues

regarding the legislation relevant for the GMO domain.

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ROMANIA

MINISTRY OF AGRICULTURE, FORESTS AND RURAL DEVELOPMENT GENERAL DIRECTION FOR ELABORATION OF SECTOR AND MARKET STRATEGIES AND POLICIES Bucharest, 24 Carol I Blvd, Sector 3 phone: 021-30.78.625 fax: 021-30.78.635 No. on 2006 Approved SECRETARY OF STATE Nicolae Flaviu LAZIN

APPROVAL LETTER

The European Union has elaborated a specific legislation in the domain of biotechnology, aiming at environment and people health protection, consumers information, as well as creation of an unique market for the genetically modified products. The main normative acts in the GMO domain, entered into force between 2002 and 2004, set up a harmonised communitarian frame regarding the traceability of the genetically modified organisms, introduce the genetically modified fodder labelling, strengthen genetically modified food labelling rules. The traceability ensure the modalities to trace back the products containing or obtained by genetically modified organisms following the entire production and distribution chain, including their withdrawal from the market if harmful effects on people’s or animals’ health or environment protection are found. In Romania, introduction in environment and on the market of the genetically modified plants shall be made according to the provisions of the Government Order No. 49/2000 concerning the regime for obtaining, testing, use and trade of the genetically modified organisms through modern techniques of biotechnology, as well as of the products generated by them, approved with further modifications and completions through Law No. 214/2002. The law does not stipulate detailed measures concerning the growing conditions the genetically modified plants by the economic agents. The measures proposed through this order allow the elaboration of an efficient system of farmers’, cultivated surfaces and obtained production registration, as well as their destination. This information is necessary for the verification of the traceability and labelling insurance of the genetically modified products, and offers to the authorities the possibility to identify and locate the GMO in all phases of their introduction in environment and on the market.

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On this purpose, this Order of the Minister of Agriculture, Forests and Rural Development has been elaborated, concerning the authorisation of the economic agents growing genetically modified plants, which we are kindly asking you to analyse and approve.

DIRECTOR GENERAL Toma Adrian DINU

SECRETARY OF STATE Nicolae Flaviu LAZIN SECRETARY OF STATE Mugur CRĂCIUN GENERAL SECRETARY Sorin CHELMU MINISTER ADVISOR Dacian CIOLOŞ GENERAL DIRECTION FOR EUROPEAN INTEGRATION General Director Roxana ZARMA GENERAL DIRECTION FOR IMPLEMENTATION OF SECTOR AND MARKET POLICIES General Director Dumitru COSMESCU GENERAL DIRECTION FOR ELABORATION OF SECTOR AND MARKET STRATEGIES AND POLICIES Director general Adrian Toma DINU DIRECTION FOR IMPLEMENTATION OF POLICIES IN THE VEGETAL AND TRANSFORMED VEGETAL PRODUCTS SECTOR Director Elena TATOMIR DIRECTION MARKET POLICIES Director Daniel LICĂ PHYTO-SANITARY AND VEGETAL SELECTION DIRECTION Director Elena LEAOTĂ HUMAN RESOURCES MANAGEMENT DIRECTION Director Luminiţa Aurora JÂJÂIE LEGAL DIRECTION Director Laurenţiu LUPU

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Annex No 3

ROMANIAN GOVERNMENT

EMERGENCY GOVERNMENT ORDINANCE for amending and supplementing the Fiscal Code Law no. 571/2003

In order to support the Romanian accession programme to the European Union, as well as the investments in public health infrastructure system and for financing the national health programmes, it is essential to adopt under emergency procedure this legal act. Whereas the art. 115 align (4) of the Constitution, republished, and art. 176 of the Fiscal Code Law no. 571/2003 with its subsequent amendments and supplements, Romanian Government adopts this emergency ordinance. Single Article – The Law no. 571/2003 regarding the Fiscal Code, published into Official Journal, Part I, no. 927/ 23 December 2003, with its subsequent amendments and supplements is amended and supplemented as follows: 1. After art. 12, a new article, art. 121 is introduced, with the following content: “Special provisions regarding the exchange of information with Member States” Art. 121 - The Ministry of Public Finance will provide through Order any measures needed for implementing the administrative cooperation and information exchange system with Member States in the VAT, excise duties and income tax field.” 2. After art. 158, a new art. 1581 is introduced with the following content:

“Art. 1581 – The Ministry of Public Finance – National Agency of Tax Administration will take measures for establishing an IT data base with information about the transactions carried on by the taxable persons registered for VAT purposes in order to achieve the information exchange in the VAT field with the EU Member States”. 3. Art. 176 will have the following content:

“Art. 176 – (1) The excise duties levels for the following products are:

No. Name of the Product

Measure Unit (M.U.)

Level of Excise٭

(euro/M.U.)

Level of Excise∗∗

(euro/ M.U.) 0 1 2 3 4

Beer: From which 1.1 Beer – made by independent producers with an annual production capacity less than 200 thousands hl

Hl/1 Plato1) degree

0,740

0,43

0,748

0,43

Wines Sill wines Sparkling wines

Hl/product 0,00

34,05

0,00

34,05

Fermented beverages, others than beer and wines still sparkling

Hl/product

0,00 34,05

0,00 34,05

Intermediary products Hl/product 51,08 51,08

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No. Name of the Product

Measure Unit (M.U.)

Level of Excise٭

(euro/M.U.)

Level of Excise∗∗

(euro/ M.U.) Ethylic alcohol hl pure2) alcohol 665,35 750.00

Tabbacco products Cigarettes 1000 cigarettes 15,53+30% 16,39+29% Cigars and cigarillos 1000 pcs. 32,13 34,50

Tobacco intended for smoking from which: 8.1 Tobacco for rolling

Kg

Kg

42,51

42,51

46,00

46,00 Mineral oils

Leaded petrol ton 1000 l

480,00 369,60

513,00 395,01

Unleaded petrol Ton 1000 l

425,06 327,29

425,06 327,29

Gas oil Ton 1000 l

307,59 259,91

307,59 259,91

Heavy fuel oil 1000 kg 6,81 9,50

Liquid petroleum gas 13.1 used as fuel 13.2 used for heating 13.3 used in household consumption3)

1000 kg 1000 kg 1000 kg

128,26 113,50

0,00

128,26 113,50

0,00

Natural gas used for fuel used as fuel used for heating

Gigajoule

1,59 0,00

2,00 0,00

Kerosene4) 15.1 used as fuel 15.2 used for heating

ton

1000 l ton

1000 l

469,89 375,91 469,89 375,91

469,89 375,91 469,89 375,91

Benzen, toluene, xylene and others aromatic hydrocarbon mixtures

ton 469,89 469,89

Electricity

Electricity used for commercial purposes

MWh

0,14

0,19

Electricity used for non-commercial purposes

MWh 0,30 0,39

*) The excises level is applied starting with the date of entering into force of the present emergency ordinance; **) the excises level is applied starting with 1st of July 2006; 1) Plato Degree represent the sugar weight in gram, contain in 100g solution measured at origin, at temperature of 200/40 C. 2) HL pure alcohol represent 100 l refined ethylic alcohol with 100% concentration in volume, at temperature of 200 C, contained in a given alcoholic product. 3) Liquid petroleum gas used in household consumption are the liquid petroleum gas distributed in gas cylinder. The gas cylinders are those bottles with a volume of maximum 12,5 kg. 4) The lamp oil used as fuel by the physical persons is not subject of excises duties.

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(2) – The excise duties level stipulated at art. 5-8 from align (1) contains also the contribution for financing some health expenses provided at the title XI from the Law no……/2006 regarding the reform within health system. The amounts related to this contribution are transferred in the Ministry of Public Health account. 4. Alignment (1) to art. 177 is amending and will have the following content:

“(1) - For cigarettes, the excise duty due is the sum between specific excise duty and ad valorem excise duty, but not less than 30,83 Euro/1000 cigarettes, which represents the minimum excise duty. When the sum between the specific excise duty and ad valorem excise duty is less than the minimum excise, than the minimum excise duty is paid”. 5. After art. 206 a new section, section 81 is introduced, as following:

“SECTION 81

Registration of the operators of products subject to excise duties IT Data Register

Art. 2061 – (1) The competent Authority will take the necessary measures for establishing an IT database which contains the authorized warehouse keepers and registered operators, as well as the places authorized as fiscal warehouses.

(2) The registered operator is the natural or legal person, authorized to receive within its economic activity products subject to excise duties under suspensive regime, provided by the authorized warehouse keepers from other Member States. The registered operator cannot own or send products under suspensive regime.

(3) The competent tax authority will give to all the authorized warehouses keepers and registered operators, as well as to the places authorized as fiscal warehouses an excise code of which configuration will be settled according to the provisions stipulated by order of the minister of public finance”.

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Annex No 4

MINISTRY OF PUBLIC FINANCE

ORDER NO. 563

regarding the establishment of some measures in order to carry on the Technical Assistance PHARE Project 2004 “Establishment and implementation of the IT

structures regarding the administrative cooperation with the other Member States”

MINISTER OF PUBLIC FINANCE,

Whereas the Government Decision no. 208/2005 on organization and functioning of the Ministry of Public Finance and of the National Agency for Tax Administration, with the subsequent amendments and completions,

Taking into account the recommendations of the 2005 Comprehensive Monitoring Report for Romania, issued by the European Commission and of European Commission evaluation missions regarding the IT interoperability,

Taking into account the provisions of the Technical Assistance PHARE Project 2004/016-772.03.01.03.02 “Establishment and implementation of the IT structures regarding the administrative cooperation with the other Member States”,

Issues the following

ORDER

Art.1 It is set up within the Ministry of Public Finance the Working Group for monitoring the Technical Assistance PHARE Project 2004/016-772.03.01.03.02 “Establishment and implementation of the IT structures regarding the administrative cooperation with the other Member States” with the following nomination:

1. Victoria Stancu – Head of Central Liaison Office - Directorate for Methodology and Procedures for Fiscal Inspection, NATA

2. Nicoleta Pirlitescu - counselor, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

3. Mihai Ciobanu - inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

4. Liviu Toader – inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

5. Alina Petrescu – inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

6. Andreea Damian – counselor, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

7. Sorin Vlad – inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

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8. Ioan Lungu - inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

9. Bogdan Ristache - referent, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

10. Dan George Danielescu – assistent expert, General Directorate for Taxes and Contributions Management, NATA;

11. Emilia Feldioreanu – principal expert, General Directorate for Taxes and Contributions Management, NATA;

12. Marilena Claudia Boboc - counselor, General Directorate for Information Technology, Ministry of Public Finance;

13. Gherghina Margareta Dinca – counselor, General Directorate for Information Technology, Ministry of Public Finance;

14. Dan Popescu - counselor, General Directorate for Information Technology, Ministry of Public Finance;

15. Carmen Ioanes - counselor, General Directorate for Information Technology, Ministry of Public Finance;

16. Anda Zancu – counselor, General Directorate for Information Technology, Ministry of Public Finance;

17. Ion Diaconu – counselor, General Directorate for Information Technology, Ministry of Public Finance;

18. Elena Chiritescu – counselor, General Directorate for Information Technology, Ministry of Public Finance;

19. Simona Ruta – counselor, General Directorate Legislation of Indirect Taxes, Ministry of Public Finance

20. Adriana Nutu – counselor, General Directorate Legislation of Indirect Taxes, Ministry of Public Finance

21. Marina Opran – expert, General Directorate Legislation of Indirect Taxes, Ministry of Public Finance

22. Sorina Vizireanu – expert, Directorate for Authorisations, Ministry of Public Finance;

23. Madalina Bragadireanu – assistant inspector, Directorate for Information Technology, Communication and Custom Statistic, Customs National Authority

Coordinator: Alin GHIURCA – Director, Directorate for Methodology and Procedures for Tax Inspection, NATA

Secretary: Mihai Antonio CIOBANU – Assistant Inspector, Central Liaison Office, Directorate for Methodology and Procedures for Fiscal Inspection, NATA

Art. 2 The members of the Working Group have the following attributions:

To participate to all project activities;

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To provide the contractors all the documents needed for a proper development of activities;

To provide to the Secretary the necessary information for elaborating the regular reports;

To inform permanently the superior management about the issues discussed within Working Group reunions.

The Group Coordinator has the following attributions:

To coordinate all the Working Group activities, using the necessary management tools and to collaborate with Romanian and foreign project Leaders in order to ensure the running of the project under the best possible circumstances and the observation of the established deadlines;

To receive and to endorse the project deliverables (tangible and papers)

The Group Secretary has the following attributions:

To prepare short weekly reports about the status of the activities achieved within the project with the emphasis of the way in which the initial planning was respected;

To ensure the submission of the weekly reports towards all the directorates involved within the Working Group;

To prepare the papers needed for the periodical meetings of the Working Group.

The Group Members will be “full time” involved on the entire implementation period of the technical assistance project, in order to fulfil the requirements regarding the IT administrative cooperation with the Member States.

Art. 3 For ensuring a monthly informing of the European Commission, a contact person is nominated, Miss Cosmina Geabunea, Head of Unit within the General Directorate for Legal Approximation and European Integration – PHARE Programmes Implementing Unit.

For ensuring a persuasive, information flow, the contact person nominated previously will receive weekly, every Thursday, from the Group Secretary the reports on the status of the developed activities.

Art.4 Excepting for the persons mentioned above, the directorates involved within the implementation of the project have appointed other specialists who will intervene only in specific situations, if they are needed:

24. Alina Constanta Cojan - principal inspector, Directorate for Methodology and Procedures for Tax Inspection, NATA

25. Adriana Ene – superior counselor, Directorate for Methodology and Procedures for Tax Inspection, NATA

26. Narcisa Andrei Coman – assistant inspector, Directorate for Methodology and Procedures for Tax Inspection, NATA

27. Mihai Chioveanu – assistant inspector, Directorate for Methodology and Procedures for Tax Inspection, NATA

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28. Stefan Daia – deputy general director, General Directorate for Information Technology, Ministry of Public Finance

29. Cristian Niculita –Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

30. Virginia Moraru – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

31. Virgil Paun – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

32. Denisa Niculescu Duca – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

33. Laura Bulai – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

34. Mihai Ionescu –Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

35. Laura Alecu – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

36. Lucian Grosu – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

37. Gabriela Banu – Head of Unit, General Directorate for Information Technology, Ministry of Public Finance

38. Manuela Constantinescu – counselor, General Directorate for Information Technology, Ministry of Public Finance

39. Alina Meculescu – counselor, General Directorate for Information Technology, Ministry of Public Finance

40. Irina Dragomir – counselor, General Directorate for Information Technology, Ministry of Public Finance

41. Maria Mazilu – counselor, General Directorate for Information Technology, Ministry of Public Finance

42. Maria Iliescu – counselor, General Directorate for Information Technology, Ministry of Public Finance

43. Adriana Brinza – counselor, General Directorate for Information Technology, Ministry of Public Finance

44. Cristina Dragomir – counselor, General Directorate for Information Technology, Ministry of Public Finance

45. Maria Tanasescu – counselor, General Directorate for Information Technology, Ministry of Public Finance

46. Gabriela Stan – counselor, General Directorate for Information Technology, Ministry of Public Finance

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47. Emil Dendiuc – counselor, General Directorate for Information Technology, Ministry of Public Finance

48. Mihaela Ghiru – counselor, General Directorate for Information Technology, Ministry of Public Finance

49. Elena Grecu – counselor, General Directorate for Information Technology, Ministry of Public Finance

50. Mihai Mironov – counselor, General Directorate for Information Technology, Ministry of Public Finance

51. Eugen Dobrovie – counselor, General Directorate for Information Technology, Ministry of Public Finance

52. Petrica Balanescu – counselor, General Directorate for Information Technology, Ministry of Public Finance

53. Gabriela Niculita – counselor, General Directorate for Information Technology, Ministry of Public Finance

54. Corina Gheorghiu – counselor, General Directorate for Information Technology, Ministry of Public Finance

55. Cristina Vecim – expert, General Directorate for Information Technology, Ministry of Public Finance

56. Adrian Iorga – expert, General Directorate for Information Technology, Ministry of Public Finance

57. Gabriel Visinescu – expert, General Directorate for Information Technology, Ministry of Public Finance

58. Romica Neacsu – expert, General Directorate for Information Technology, Ministry of Public Finance

59. Cosmina Geabunea – Head of Unit, General Directorate for Legal Approximation and European Integration

Lavinia Constantin – assistant expert, General Directorate for Legal Approximation and European Integration

Art. 5 General Directorate for Information Technology, Directorate of Methodology and Procedures for Fiscal Inspection, General Directorate Legislation of Indirect Taxes, General Directorate for Taxes and Contributions Management, Directorate for Authorizations, Directorate for Information Technology, Communications and Customs Statistics and General Directorate for Legal Approximation and European Integration will implement the provisions established by the current Order.

Done at Bucharest, on 10th April 2006.

MINISTER OF PUBLIC FINANCE,

SEBASTIAN TEODOR GHEORGHE VLÃDESCU

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Annex No 5

2005 ANNUAL EVALUATION REPORT ON THE IMPLEMENTATION OF THE NATIONAL ANTI - DRUG STRATEGY

The Action Plan for the implementation of the National Anti-drug Strategy 2005-2008 was conceived according to five main directions: drug demand reduction, drug supply reduction, international cooperation, information and evaluation and institutional coordination. For all these key fields the Action Plan scheduled 40 main activities for 2005 of which 30 activities were fully achieved, resulting in a 75% success rate. The information-evaluation field registered a 100% success rate as all main activities set for this chapter were entirely achieved and the lowest success rate of 66% was registered in the institutional coordination chapter, where only 6 main activities of 9 were accomplished as scheduled. In the drug demand reduction field, of the 14 main activities scheduled for 2005, 11 were entirely completed and 3 only partially, which shows a success rate of 78.57%. Some of these activities targeted school-based drug prevention and their success meant a more solid theoretical basis for future drug prevention interventions. Thus, a questionnaire was set up to support school-based information-education projects, the minimal quality standards for drug prevention interventions were designed in line with the European standards and proper standards for the school curricula regarding leisure time activities were also adopted. In terms of community-based prevention, 2005 meant a national premiere occasioned by a governmental decision regulating for the first time the harm reduction activity. In 2005, this type of activity conducted by non-governmental organizations expanded in scope and number of beneficiaries. There were 8,465 people who benefited from syringe exchange, counseling sessions prior and post HIV testing and other specific services. The syringe exchange programs only registered 4,878 beneficiaries, 2.5 more than in 2004. Of the 1,548,765 syringes distributed free-of-charge, 47,250 were returned. In the same field, a sign of fruitful internal cooperation was the common order of three ministries (Ministry of Health, Ministry of Justice and Ministry of Administration and Interior), which detailed on how integrated programs of medical, psychological and social care for drug using prisoners should be conducted. Another positive signal in this field came from the National Penitentiary Administration, which trained its medical staff involved in drug dependence treatment and took steps to purchase rapid drug tests. According to the data provided by the Penitentiary Administration, of the total number of prison inmates amounting to 37,600, 2,402 self-reported as drug users, which showed a prevalence of drug use in the prison environment of 63.88‰.

Prison inmates self-reported as drug users

2001 2002 2003 2004 2005

Average number of prison inmates

50 035 50 156 46 224 39 265 37 600

Drug use self-reports 1 065 1 131 1 504 2 013 2 402

Drug use prevalence (for 1000 prison inmates)

21.29‰ 22.55‰ 32.54‰ 51.26‰ 63.88‰

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Source: Ministry of Justice – National Penitentiary Administration

Additionally, progress was registered once a Phare Project conducted in the penitentiary system resulted in the Social reintegration strategy in the penitentiary 2005-2012 and a cooperation protocol was signed between this Penitentiary Administration and the N.A.A. This protocol should enable the inclusion of drug using prison inmates in the integrated bio-psycho-social care system, the development of joint drug prevention activities and of surveys on former drug users in prisons and on the prison inmates’ attitude to drug use. In the medical care field for drug users, progress was also registered. In 2005, the Ministry of Health allocated ~13 900 EURO (5 billion ROL) for the treatment of drug-dependence. The funds, foreseen by the same Ministry for 2006, amount to ~ 33 300 EURO (12 billion ROL). The trend in the level of drug users seeking medical treatment in the last five years is somewhat irregular, as only 1,538 people sought medical treatment in 2005 in comparison to 2,134 in 2001.

Trend in the level of people under treatment for drug use, in 2001-2005

1538

1502

20701737

2134

0

500

1000

1500

2000

2500

2001 2002 2003 2004 2005

Source: Centre for Calculation, Sanitary Statistics and Medical Documentation 2005

Of the total number of drug related treatment demands, 46.48% were for heroin use, followed at great distance by alcohol use (11.31%), tobacco use (10.27%), cannabis (2.27%) and cocaine use (0.31%). Even though heroin users register the highest level in treatment demand, their demand for medical care has been decreasing since 2001, from 93% to 46.4%. On the other hand, treatment demand for cannabis use has been rising in 2005. Progress was made in terms of reliable data provision once a new data collection fiche regarding the people under treatment was introduced. It presented several new advantages: personal data protection, case by case recording, elimination of double counting. Additionally, the IT monitoring system of people under treatment for drug addiction was expanded at national level through a project financed by the Global Fund for the Fight against HIV/AIDS, Tuberculosis and Malaria and the World Bank. The same wish for more reliable information, prompted the National Anti-drug Agency to conduct for the first time a General Population Survey on the knowledge, attitudes and practices regarding drug use. The survey was in line with the methodology recommended by the EMCDDA aiming to ensure comparable results at European level. The structures involved in drug supply reduction used all available resources to reach the strategic targets set in the Action Plan for 2005.

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Thus, multi-agency teams made up of specialist from the General Directorate for Countering Organized Criminality, General Inspectorate of Border Police and the National Customs Authority should work better based on the new work methodology created in the TRIDENT Project Romania. On the other hand, homogeneous and more reliable and detailed statistics should be available as the NAA, the National Agency for Fiscal Administration and the General Inspectorate of Romanian Police created a new common methodology for the statistic recording of seized drugs. In the field of precursors, a new database of notifications and pre-export and import notifications was set up at the level of the Anti-drug Directorate. Additionally, the National Drug Control System, in use in the General Directorate for Countering Organized Criminality since 2003, was connected to the NAA. According to the Law no.381 of 2004 regarding certain financial measures in the field of prevention and fight against illicit drug trafficking, the National Anti-drug Agency kept records of the court decisions upon which the proceeds of drugs and precursors law offences were confiscated and records of the seized goods and values. Thus, as a result of 211 court decisions 84,856 USD, 71,655 EURO and the equivalent of almost 43,000 EURO (1,542,438,000 ROL), were confiscated. On the other hand, based on the current drugs legislation and guided by EU experts and, Romania was able to create a new framework methodology for controlled deliveries of drugs and precursors. In terms of measurable progress in the field of drug supply reduction, 2005 showed both increases and decreases of the relevant indicators. During 2005, the qualified institution in the fight against drug and precursors law criminality registered a total of 2712 drug law offences, of which 2305 are drug law offences and 150 precursors offences. The total figure represents a decrease of 1.88% in relation to 2004. Thus, in 2005, 914.16 kg of drugs were confiscated in order to be seized, of which 404.12 kg were high risk drugs and 510.04 kg were risk drugs.

DRUGS CONFISCATED IN ORDER TO BE SEIZED - 2005 Amounts/kg. A: HIGH RISK 404.12 - heroine 285.07 - cocaine 109.71 - opium 6.25 - other classes of high risk drugs 3.09 - amphetamines (pills) 42,472 B: RISK DRUGS 510.04 - cannabis 510.04 TOTAL 914.16 C: PRECURSORS AND ESSENTIAL CHEMICAL SUBSTANCES

- kg 1,378.35 - litters 456.40 D: MEDICINE WITH NARCOTIC CONTENTS - pills 15,222 - ampoules 220 - kg 4.34

In 2001-2002 quantities of green mass of industrial hemp were included under cannabis-hashish seizures; therefore a comparison with this period of time would not be in place because of the difference between the compared elements.

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Trend in drug seizures in 2001-2005 (kg)

0.1

1

10

100

1000

10000

100000

total amounts of seizeddrugs (kg)

25220 43674 408.36 446.16 914.16

heroine 33.45 202.18 320.7 65.4 285.07

cannabis/hashish 16300.698 14895.3 72.1 298.31 510.04

cocaine 2.751 2.726 12.68 24.57 109.71

opium 2.04 0.794 0.57 4.9 6.25

2001 2002 2003 2004 2005

The seized amounts of precursors and essential chemical substances reached 1,378.35 kg and 456.40 litters which is 91.15% respectively 83.63% less than in 2004. Most of the seizures came from trade companies and laboratories that didn’t take all necessary steps to obtain the licenses needed for this kind of substances. In 2005, the drug law enforcement agencies didn’t receive any information on clandestine laboratories on the national territory, nor were such labs discovered.

Trend in the seizures of precursors and essential chemical substances, 2003-2005

1936.67

15575.28

1378.354133.94 2788.95

456.40.00

5,000.00

10,000.00

15,000.00

20,000.00

2003 2004 2005

kg litters

In the field of international cooperation, apart from having participated, through its representatives, to several significant meetings such as of the TAIEX Office, of the EMCDDA, of the National Drugs Coordinators, of the Pompidou Group, and of the UNODC, Romania sought to strengthen its relations with foreign partners by concluding several cooperation protocols targeting the fight against drugs. Thus, protocols were signed with qualified ministries and institutions in Hungary and Slovakia. Additionally, the N.A.A. fulfilled its commitments by submitting to the UNODC the questionnaires regarding the drugs situation at national level and the questionnaire on the dimension, pattern and trends of drug abuse in Romania. Moreover, it achieved its second task to the EMCDDA by submitting in due time the National Report of Drugs Situation 2005 (based on 2004 data), and publishing it in both English and Romanian.

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As regards the communication between the National Anti-drug Agency and its territorial Drug Prevention, Evaluation and Counseling Centers, the qualified staff of these centers received the newly designed good practices in public communication that should be useful in their future activity. Additionally, in terms of information and communication, the web site of the National Anti-drug Agency is a daily updated tool including materials translated in 4 languages, a unique website among the websites of the Romanian governmental structures. In 11 months, the www.ana.gov.ro website was visited by 120.000 users. CONCLUSIONS Statistical data regarding drug supply reduction in 2005 reveal both decreases and increases as follows: - a 1.88% decrease of the drug and precursors law offences in relation to 2004; - a 6.3% increases of the drugs trafficking offences; - a 23.46% decrease of the drug cases solved by courts as compared to 2004,

although the number of indictments accompanied by proposals for legal action is 25.12% higher than in 2004.

The establishment of the Drug Prevention, Evaluation and Counseling Centers in each county and in all the districts of Bucharest, and the initial steps taken to set up within the courts of law the Centers for Integrated Addiction Care (CAIA), represent the foundations of a proper services offer for drug users. A comparison between the data registered by several drugs indicators in Romania and the data reported in the EMCDDA 2005 Annual Report on the State on the Drugs Situation (based on 2003 data) reveals similarities of several aspects of the drugs phenomenon. Thus, heroin use is reaching a stable level as cocaine use is increasing. The same trend is shown by the trend in the seizures of the two types of drugs.