President Klaus Iohannis has decided to resubmit the offshore Law to the Parliament for review. One of the reasons put forward is the need to analyze “from the perspective of a potential breach of the principle of not affecting the budget revenues”. In this regard, Iohannis reports an article in the law which states that royalty payments and taxes on additional income go into a special fund to finance public-private partnership contracts without any analysis being made. Another reason put forward by Iohannis is that some provisions of the law were not debated in the Senate, the first chamber, and given the importance of the field, it is necessary “to ensure full respect for the constitutional principle of bicameralism,” according to Hotnews.ro.

If the law had not been resent to Parliament, the Government would have modified it immediately after promulgation by Emergency Ordinance. “We believe that the law under review needs to be reconsidered by Parliament in terms of long-term stability and predictability of the legal framework applicable to this sector and to avoid potential negative effects. We also appreciate that the provisions of the law subject to review should contain clear disposals, lacking equivocal situations and with a sustainable perspective, ensuring the necessary framework for the development of the state-investor partnership in order to ensure the necessary predictability, and the Romanian economy to benefit from the exploitation of the natural resources in the Black Sea area in the long term.

We also believe that the law needs to be reconsidered also in view of a potential breach of the principle of not affecting the budget revenues. In this respect, we note that the law subject to the re-examination stipulates that the amounts resulting from royalties and tax on extra offshore incomes are made to the Special Fund for the financing of public-private partnership contracts in accordance with the provisions of art. 13 par. (3) of the Emergency Ordinance no. 39/2018 regarding the public-private partnership, without having to analyze in advance the alternative allocations of the expected budget revenues, according to the investment priorities that must stimulate the economic and social development of Romania “, quotes the request for review of the offshore law submitted by President Klaus Iohannis to the President of the Senate, Calin Popescu Tariceanu.

PSD Chief Liviu Dragnea said last week that it was necessary to amend the offshore Law through an Ordinance, which himself assumed when would have been was approved by Parliament and sent to the presidency for promulgation. The Ordinance was to contain essential amendments to the Law in favor of Black Sea operators. Also, deductions should be provided for the investments made by operators, as well as possible tax freezes during the oil agreements. However, the ordinance in this case is still unnecessary, following the presidency’s move.