Drastic measures imposed by the national autorithy for consumer protection under a legal proposal submitted to parliament

According to a legal proposal submitted to the Parliament and currently in public debate, the National Authority for Consumer Protection (“NACP”) shall become an autonomous and independent administrative authority. At present, according to the Government Decision no. 700/2012 on the organization and functioning of NACP, this authority is subordinated to the Government.

The initiators of this legal proposal have set out in the Explanatory Memorandum that repeated reorganizations within this governmental body not only did not confer upon it the desired stability, but, on the contrary, they lead to the vulnerability of the same, consequently potentially affecting consumers’ rights. It has been argued that amending the organization and functioning of this public institution, respectively subordinating it to parliamentary control by means of the Parliament appointing the members of the collegial body which would perform its management, shall ensure autonomy and independence. Consequently, NACP would become a stable authority with its own budget, able to take decisions in the interest of consumers, and without being subjected to pressure from a third party, including from a state institution.

The president of NACP shall have, under this legal proposal, the rank of a minister and the vice-president of NACP and the counselors in the consumers’ protection domain shall have a rank similar to that of a secretary of state. At present, the president and vice-president of NACP have similar positions respectively to a secretary of state and a sub-secretary of state.

In addition to the aforementioned significant changes relating to the status and effective organization of NACP, the legal proposal sets forth strict measures to be imposed in case of violation of the legislation on consumer protection, compared to the measures that can be presently enforced. Thus, depending on the gravity and duration of the offence, NACP will be entitled to apply to the offender a fine between 0.5% – 10% computed on the value of the aggregate turnover achieved in the previous financial year. If during the financial year prior to the sanctioning, the relevant company did not register any turnover or this cannot be determined, NACP representatives shall take into consideration the turnover registered by the company in the financial year immediately preceding the year of reference for computing the fine, or, if not available, then the last recorded turnover of the company shall be taken into consideration.

Furthermore, the legal proposal establishes a leniency policy to be applied when the offence is acknowledged. If a company expressly admits to the offence before any hearing and, when appropriate, proposes adequate remedies for eliminating the circumstances leading to the violation, NACP may reduce the fine by a percentage of between 10% and 30% computed on the value of the fine, as originally set. In case where NACP grants such leniency, the fine shall be reduced even when it has been initially established at the minimum stipulated by law, however the final fine must not be smaller than 0.2% of the turnover recorded in the preceding financial year or relevant year.

Pursuant to the legal proposal, applying the leniency policy shall be possible only following the specific request of the relevant entity. The request must contain the company’s express and unequivocal admission of the offense, as well as a statement of the maximum amount of fine the company is willing to pay. In a case where NACP does not find acceptable the company’s statement of admission, it will not grant a reduction of fine and the company’s recognition of guilt will not be used in evidence.

As regards the turnover considered for fine computation, the legal proposal sets forth that such turnovers represents the amount of revenues from sales of products and/or services performed by the company in the last financial year or relevant year when the figure cannot be determined for the preceding year, minus the amounts due as fiscal obligations and the value of exports performed directly or by proxy, including intra-Community supplies. If the penalized company is part of a group, when establishing its turnover NACP representatives shall consider the aggregate turnover of that group, according to consolidated financial statements.

Stratulat Albulescu - Attorneys at law