Authors: Roxana Roșca (senior associate), Antonia Cioploiu (associate)
In practice, investment screening has become a nearly unavoidable phase in the structure of transactions in strategic sectors. Romania’s foreign direct investments (FDI) screening regime is entering a stage of maturation following the amendments introduced by the Romanian Government on 13 March.
The need for a careful analysis of this framework goes beyond the strictly legal sphere. In practice, sanctions for non‑compliance can reach up to 10% of the investor’s global turnover, and transactions carried out without authorization risk being annulled.
Expanding the scope of investments subject to screening: asset deals enter the perimeter
The amendment with the greatest impact for transactional practice is the explicit inclusion of acquisitions of tangible and/or intangible assets in sensitive domains within the scope of screening. Whereas the mechanism previously focused primarily on share deals or greenfield investments, the new framework extends the analysis to asset deals as well. In this context, the list of sensitive domains relevant for asset deal transactions mainly includes:
- critical and advanced technologies, such as artificial intelligence, robotics, semiconductors and electronic components, cybersecurity, aerospace technologies, defense technologies, energy storage technologies, quantum technologies, nuclear technologies, nanotechnologies and biotechnologies;
- critical infrastructure, including infrastructure in the fields of energy, transport, water, health, communications, or data processing and storage, as well as aerospace, defense, electoral or financial infrastructure, together with land or real estate essential for the operation of such infrastructure;
- the pharmaceutical sector, covering research, development, production, distribution and supply of medicines, medical devices and active substances;
- the defense sector and the defense industry; and
- the agri‑food sector, including agricultural land, irrigation infrastructure, grain port terminals, silos, warehouses and gene banks.
Value threshold: increased from EUR 2 million to EUR 5 million
The threshold above which investments are subject to mandatory screening by CEISD has been increased from EUR 2,000,000 to EUR 5,000,000. The amendment responds to reasonable criticism raised in previous years, which pointed out that the low threshold generated notifications for transactions with a low level of security risk.
Successive investments: aggregation of operations and consolidation of notifications
The increase in the value threshold is accompanied by rules designed to clarify how investments carried out in several phases are treated. In essence, the new framework introduces two complementary mechanisms, relevant for transactions structured over the course of one year:
(i) The prohibition of fragmentation for interdependent operations
Where two or more interdependent operations are carried out by the same persons or between the same persons, their values are aggregated and they are treated as a single investment.
(ii) The possibility of consolidating the notification
Where several transactions with a similar or interdependent object are carried out between the same persons in relation to the same undertaking, the investor may opt to submit a single authorization request covering all the operations.
From a practical standpoint, these rules require an integrated approach when assessing notification obligations. The analysis can no longer focus exclusively on each transaction separately but must be carried out in the context of previous operations and those planned within an approximate 12‑month period.
Intra‑group reorganizations: clarification for EU investors, extended to OECD states
The new framework introduces an exemption from the notification obligation for intra‑group restructuring operations involving entities from the European Union or OECD states, such as the United States, the United Kingdom or Switzerland — states not covered by the initial draft version of the project.
Exemption applies if two conditions are cumulatively met:
- operation does not lead to a change in the effective control or the ultimate beneficial owner; and
- financing originates exclusively from intra‑group sources or from jurisdictions within the European Union or OECD states.
However, this rule does not automatically apply to all corporate structures: a company established in the EU but controlled by an entity from a jurisdiction outside these areas may still fall within the scope of the screening mechanism, including in the case of intra‑group reorganizations.
Procedural amendments: new deadlines, dedicated IT system
Procedurally, the reforms introduced by the subsequent amendments address several friction points identified during the first years of the mechanism’s operation.
The deadline for providing supplementary information requested by CEISD has been extended from 15 to 30 days, with the possibility of an additional 15‑day extension, and failure to meet the deadline results in the closure of the procedure and the need to submit a new notification.
At the same time, the standard deadline for issuing the endorsement has been reduced from 60 to 45 days from the moment the notification is declared complete. The procedure will also be managed through a dedicated IT application developed by the Chancellery of the Prime Minister together with the Special Telecommunications Service.
Investment control – an evolving mechanism
Overall, the recent amendments do not fundamentally change the architecture of the investment control mechanism but adjust its parameters based on the experience accumulated in the first years of its application. For investors, the implication is clear: the analysis of FDI risks becomes a structural component of transaction planning, alongside competition, tax or regulatory analysis.