GOVERNMENT OF ROMANIA

Progress achieved in preparing the accession

to the European Union 28 February 2006 – 24 March 2006

- March 2006 -

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C O N T E N T S

INTRODUCTION ........................................................................................................................ 8

1. POLITICAL CRITERIA........................................................................................................... 8 DEMOCRACY AND THE RULE OF LAW........................................................................... 8 HUMAN RIGHTS AND PROTECTION OF MINORITIES.................................................. 13

2. ECONOMIC CRITERIA ........................................................................................................ 17 MACROECONOMIC DEVELOPMENT ............................................................................. 17 ASSESSMENT IN TERMS OF THE COPENHAGEN CRITERIA...................................... 20

3. COMMITMENTS AND REQUIREMENTS RESULTED FROM THE ACCESSION NEGOTIATION......................................................................................................................... 25

FREE MOVEMENT OF GOODS ...................................................................................... 25 FREE MOVEMENT OF PERSONS .................................................................................. 27 FREE MOVEMENT OF SERVICES.................................................................................. 27 COMPANY LAW............................................................................................................... 28 COMPETITION POLICY................................................................................................... 29 AGRICULTURE ................................................................................................................ 32 FISHERIES....................................................................................................................... 35 TAXATION........................................................................................................................ 36 SOCIAL POLICY AND EMPLOYMENT ............................................................................ 37 INDUSTRIAL POLICY ...................................................................................................... 38 CULTURE AND AUDIOVISUAL POLICY ......................................................................... 38 REGIONAL POLICY AND THE COORDINATION OF STRUCTURAL INSTRUMENTS... 38 ENVIRONMENT ............................................................................................................... 46 COOPERATION IN THE FIELD OF JUSTICE AND HOME AFFAIRS.............................. 52 CUSTOMS UNION ........................................................................................................... 63 FINANCIAL CONTROL..................................................................................................... 64

ANNEXES ................................................................................................................................ 66

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ABBREVIATION LIST

ABREVIERI ROMANA ENGLEZA ADR Agentia de Dezvoltare Regionala Regional Development Agency

ADS Administratia Domeniilor Statului Agency of State Domains

AE Acordul European Europe Agreement

AM Autoritate/Autoritati de Management

Management Authority

AMPOSDRU Autoritatea de Management pentru Programul Operational Sectorial pentru Dezvoltarea Resurselor Umane

Management Authority for Sectoral Operational Programme for Human Resources Development

AMPOSDCA Autoritatea de Management pentru Programul Operational Sectorial pentru Dezvoltarea Capacitatii Administrative

Management Authority for Sectoral Operational Programme for Administrative Capacity Development

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

ANFP Agentia Nationala a Functionarului Public

Civil Servants National Agency

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

ANP Autoritatea Nationala a Penitenciarelor

National Penitenciary Authority

ANPA Agentia Nationala pentru Pescuit si Acvacultura

National Agency for Fisheries and Aquaculture

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

ANPM Agentia Nationala pentru Protectia Mediului

National Agency for Environment Protection

ANR Agentia Nationala pentru Romi National Agency for Roma

ANRGN Autoritatea Nationala de Reglementare in domeniul Gazelor Naturale

National Authority for Natural Gas Regulation

ANRMAP Autoritatea Nationala pentru Reglementarea si Monitorizarea

National Regulatory and Monitoring Authority in the field of

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Achizitiilor Publice Public Procurement

ANRP Autoritatea Nationala pentru Restituirea Proprietatilor

National Authority for Property Restitution

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

APM Agentia de Protectia Mediului Environmental Protection Agency

ApS Autoritatea pentru Straini Authority for Aliens

ARIS Agentia Romana pentru Investitii Straine

Romanian Agency for Foreign Investments

ARPM Agentia Regionala de Protectia Mediului

Regional Environmental Protection Agency

ASRO Asociatia de Standardizare din România

Romanian Standards Association

AVAS Autoritatea pentru Valorificarea Activelor Statului

Authority for State Assets Recovery

BAAR Biroul Asiguratorilor de Autovehicule din Romania

Romanian Motor Insurers Bureau

BCR Banca Comerciala Romana Romanian Commercial Bank

BEI Banca Europeana de Investitii European Investment Bank

BERD Banca Europeana pentru Reconstructie si Dezvoltare

European Bank for Reconstruction and Development

BM Banca Mondiala World Bank

BNR Banca Nationala a Romaniei National Bank of Romania

CC Consiliul Concurentei Competition Council

CCR Curtea de Conturi a Romaniei Romanian Court of Accounts

CENELEC Comitetul European de Standardizare in Domeniul Electrotehnic

European Committee for Electro Technical Standardisation

CES Consiliul Economic si Social Economic and Social Council

CNA Consiliul National al Audiovizualului

National Audiovisual Council

CNP Comisia Nationala de Prognoza National Commission for Prognosis

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CPM Cancelaria Primului Ministru Prime Minister’s Chancellery

CSA Comisia de Supraveghere a Asigurarilor

Insurance Supervisory Commission

CSC Cadrul de Sprijin Comunitar Community Support Framework

CSM Consiliul Superior al Magistraturii Superior Council of Magistracy

DACL Departamentul de Administrare a Cotelor de Lapte

Milk Quota Administration Department

DGA Directia Generala Anticoruptie Anticoruption General Directorate

DGASPC Directia Generala de Asistenta Sociala si Protectia Copilului

General Directorate for Social Assistance and Child Protection

DGCCO Directia Generala de Combatere a Crimei Organizate

General Directorate for Combating Organised Crime

DGPA Directia Generala de Protectie Anticoruptie

General Directorate for Anticoruption Protection

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 Departamentul National Anticoruptie

National Anticorruption Department

FC Fondul de Coeziune Cohesion Fund

FMI Fondul Monetar Internaţional International Monetary Found

FS Fonduri Structurale Structural Funds

FSE Fondul Social European European Social Fund

GF Garda Financiara Financial Guard

GIRMIFS Grupul Interministerial Roman pentru Managementul Integrat al Frontierei de Stat

Romanian Interministerial Group for Integrated State Border Management

GNM Garda Nationala de Mediu National Environment 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

IMM Intreprinderi Mici si Mijlocii Small and Medium sized Enterprises

INA Institutul National de Andministratie

National Institute of Administration

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INM Institutul National al Magistraturii National Institute for Magistrates

INS Institutul National de Statistica National Institute for Statistics

MAE Ministerul Afacerilor Externe Ministry of Foreign Affairs

MAI Ministerul Administratiei si Internelor

Ministry of Administration and Interior

MAPDR Ministerul Agriculturii, Padurilor si Dezvoltarii Rurale

Ministry of Agriculture, Forests and Rural Development

MApN Ministerul Apararii Nationale Ministry of National Defence

MCC Ministerul Culturii si Cultelor Ministry of Culture and Cults

MCTI Ministerul Comunicatiilor si Tehnologiei Informatiei

Ministry of Communications and Information Technology

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

MMGA Ministerul Mediului si Gospodaririi Apelor

Ministry of Environment and Water Management

MMSSF Ministerul Muncii, Solidaritatii Sociale si Familiei

Ministry of Labour, Social Solidarity and Family

MS Ministerul Sanatatii Ministry of Health

MTCT Ministerul Transporturilor, Constructiilor si Turismului

Ministry of Transports, Construction and Tourism

OMAI Ordinul ministrului administratiei si internelor

Order of the ministry of administration and interior

OMMGA Ordinul ministrului mediului si gospodaririi apelor

Order of the ministry of environment and water management

OMS Ordinul ministrului sanatatii Order of the minister of health

OMTCT Ordinul ministrului transporturilor, constructiilor si turismului

Order of the minister of transport, construction and tourism

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

ORDA Oficiul Roman pentru Drepturile de Autor

Romanian Copyright Office

OSIM Oficiul de Stat pentru Inventii si Marci

State Office for Inventions and Trademarks

PEP Programul Economic de Preaderare

Pre-Accession Economic Program

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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

PNAinc Planul National Anti-Saracie si Promovare a Incluziunii Sociale

National Anti-Poverty for Social Inclusion Promotion Plan

PND Planul National de Dezvoltare National Development Plan

PO Program Operational Operational Programme

POR Program Operational Regional Regional Operational Programme

POS Program Operational Sectorial Sectoral Operational Programme

PPP Parteneriat Public Privat Public Private Partnership

SGG Secretariatul General al Guvernului

General Secretariat of the Government

SISF Sistemul Integrat de Securizare a Frontierei

Integrated System for Border Security

SNG Scoala Nationala de Grefieri National School for Clerks

SNIIA Sistemul National de Identificare si Inregistrare a Animalelor

National System for the Identification and Registration of Animals

SRI Serviciul Roman de Informatii Romanian Service of Informations

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INTRODUCTION Completing the Romanian contribution submitted on the 28th of February, as well as fulfilling the need of 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 28 February 2006 – 24 March 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 During 30 September – 15 March 2006, the Government’s right of legislative initiative was exercised through a number of 200 draft laws sent to the Parliament (116 in October, November and December 2005, and 84 in January, February and March 2006). With regard to the number of emergency ordinances, out of the 200 draft laws, the Government adopted 70 EGO’s within 30 September – 31 December 2005, and 20 EGO’s within 1 January – 15 March 2006. The figures indicate a descendent trend of resorting to the means of legislative delegation through the adoption of emergency ordinances. The situations which generated the issuing of EGO’s by the Government were determined by the necessity of adopting in emergency procedure of several regulations necessary for the harmonization of the domestic legislation to the European one, as well as by the need of adopting emergency measures as a result of the floods and the avian flu. In the field of civil service, the draft Law on modifying the Law no. 188/1999 on the Statute of Civil Servants is under debate at the specialized committees of the Senate, as first Chamber notified. So far, the draft law has received approvals from 3 committees (the Committee on Public Administration, Territory Organization and Environment Protection, the Juridical Committee on Nominations, Discipline, Immunities and the Human Rights, Religious Denominations and Minorities Committee). With regard to the legislative framework package on the public administration reform, the Chamber of Deputies adopted the draft framework-law on decentralization, in plenary session, on March 7, 2006. The Commission for Budget, Finance, Banking and Stock Market and the Commission for Public Administration, Territory Organization and Environment Protection of the Senate approved the draft law on local public finance on February 28, 2006, and respectively, on March 7, 2006. The Commission for Public Administration, Territory Organization and Environment Protection of the Chamber of Deputies approved the draft law on amending and completing the Law no. 215/2001 on local public administration on March 1st, 2006. The draft law is to be debated in the plenary session of the Chamber of Deputies. In order to clearly define the assignment of functional competences exercised by local public administration authorities (villages, cities and counties), on February 16, 2006, the Government of Romania approved a Memorandum concerning “Assuming by the Government of the situation with regard to the allocation of competences to local public administration authorities at the county, commune and town levels, respectively, in providing local public services, according to the legislation in force”.

The Law no. 51/8.03.3006 (OJ no. 254/21.03.2006) concerning the community public utilities services establishes a unitary legal and institutional framework, the specific

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objectives, competencies, responsibilities and instruments necessary for establishing, organising, managing, financing, monitoring and controlling the functioning of the community public utilities services. Regarding the co-ordination process between the General Secretariat of the Government (SGG) and the Prime-Minister Chancellery (CPM) for the coordination of the public policy formulation, a working group was set up to analyse and clarify the attributions of the two institutions with regard to the coordination of public policy process. At present, the drafting of the normative acts has been finalized so as to modify the competences of the CPM and the SGG and to eliminate overlapping of competences. These proposals have already been submitted for inter-ministerial consultation, and they are currently in the endorsement stage, formal adoption of the two legal documents being scheduled for March. The Judiciary In order to strengthen the administrative capacity, especially regarding the improvement of the management of the personnel schemes in courts and prosecutors’ offices, the draft amendments to the GD no. 83/2005 on the organization and functioning of the Ministry of Justice (MJ), soon to be presented to the Government, provide for the setting up of a "vacancies’ reserve fund” of 70 judge positions and 90 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 present situation when these vacancies may only be temporary filled in. The Superior Council of the Magistracy (CSM) decided to set up a reserve of 10% of the judge/prosecutor positions from each court of appeal, tribunal and prosecutors’ office attached to them. These positions will be filled in based on a promotion contest, to be organized in May 2006. The judges/prosecutors passing the promotion exam will remain at the same court/prosecutors’ office and will effectively start their activity at the court/prosecutors’ office where he/she was admitted as soon as a position will become vacant at that court/prosecutors’ office. The process of filling in the vacancies for judges and prosecutors continued. The number of vacancies has been reduced as a consequence of filling in 190 clerk positions at courts of first instance and prosecutors’ offices attached to those, as well as for the National Anti-corruption Directorate (171 positions were filled in). Currently, 385 judge positions, 603 prosecutor positions and 199 clerk positions are vacant at the level of courts (excepting the High Court of Cassation and Justice (ICCJ)) and prosecutors’ offices attached to them (excepting the Prosecutors’ Office attached to the High Court of Cassation and Justice (PICCJ)). Presently, a contest is being carried out for occupying leading positions in courts and prosecutor’s offices. CSM approved on March 9th, 2006 the criteria for selecting the candidates for the position of inspector judge and inspector prosecutor, as well as a selection procedure, based on which 9 judge inspector positions and 5 prosecutor inspector positions will be filled in. In order to improve the infrastructure of courts and prosecutors’ offices, standards for the courts’ and prosecutors’ offices premises are being drafted through a technical assistance contract financed by World Bank, between March and May 2006. These standards will be taken into account during the rehabilitation works on courts’ premises. The delivery of the IT equipment purchased from the 22 million EUR is ongoing and is to be finalized by the end of March 2006. The draft amendments to the Government Decision on the organization and functioning of the MJ provide for the 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. CSM elaborated a manual on statistics,

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which will allow the unitary collecting of statistical data at the level of courts and prosecutors’ offices. The manual was approved by the CSM Plenum on March 9th, 2006 and was transmitted to courts and prosecutors’ offices. Regarding the random distribution of cases, CSM is working on the establishment of complexity degrees for cases, on each level of jurisdiction and category of court. Up to present, for each field of specialization, each jurisdictional level and each type of court, a group of 10 categories of cases was established, based on the assessment of the complexity degree as reflected by the difficulty of the matter tried and the evidence administered. Starting with March 1st, 2006, (until April 30th, 2006) cases from each category are monitored at the level of 18 pilot courts (6 courts of appeal, 6 tribunals, 6 courts of first instance), for a period of 6 months – 1 year, in order to determine the duration for each judicial/administrative activity of judges/clerks. After undergoing the stages presented above, CSM will standardize the complexity degree, in order to balance the workload, in two steps: May – June 2006 and January 2007. In order to improve access to legislation, a contract for the 2006 subscription to the electronic form of the Official Journal was signed and is applicable since March 1st, 2006. The subscription covers 99 courts (all courts of appeal, all tribunals and the courts of first instance included in WAN) and ensures access to the Official Journal on a daily basis. In the reporting period, the training activity of the judiciary personnel continued. A unitary strategy for decentralized continuous training for courts and prosecutors’ offices was drafted by the National Institute of Magistracy (INM) and adopted by CSM on March 9th, 2006. For 2006, the curriculum was established by INM and, following CSM approval, all courts and prosecutors’ offices will elaborate as soon as possible their own seminar schedule. The socio-professional profile of judges and prosecutors was approved by CSM on March 1st 2006. The profile will be used for reforming the conditions for the admission in the magistracy, self-evaluation of the judges and prosecutors in office and for improving the evaluation procedure for judges and prosecutors. A contract was signed by CSM, INM and an IT company, to extend the database on continuous training created by INM, in order to reunite data concerning magistrates. Both institutions will have access to the database. Input on the career of judges and prosecutors will be provided by the CSM, while the INM will input information on their training. 14 continuous training seminars attended by approximately 25 judges and prosecutors each were organized between February 1st and March 10th, 2006, on the following topics: human rights, intellectual property, IT matters, money laundering, court management. Important steps were taken in order to improve the judgements enforcement procedures. The Government, on March 2nd, 2006, adopted amendments to the Civil Procedure Code regarding the simplification of the enforcement procedure. The amendments provide for: the elimination of court approval for initiating the enforcement procedure and therefore of all related means of judicial review; strengthening the active role of the bailiffs during the enforcement procedures; instituting sanctions for the debtor, if he/she does not comply with the obligations prescribed by the Civil Procedure Code (an obligation for the debtor to present the bailiff a declaration comprising all its assets was introduced); procedural rules for direct selling of goods, which are meant to increase celerity of coercive enforcement; the correlation with the provisions of the coercive enforcement procedure in fiscal matters. Upon entry into force, these amendments will considerably improve the enforcement of judgments in civil and commercial matters, with a view to apply the European legislation on the recognition and enforcement of judgments.

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In this respect, mention should be made of the implementation of Law no. 187/2003 (entered into force in 2004), which takes over the procedures provided for by Brussels I Regulation for recognition and enforcement in Romania of judgments rendered in EU Member States. Thus, between 2004 – 2005, out of 1,914 requests for recognition and enforcement of judgments registered at Romanian courts, 1,745 requests were solved and out of these, 1,661 were admitted. Anticorruption measures With regard to the DNA, on March 2, 2006, the EGO 134/2005, which reorganized the National Anticorruption Department (DNA), was approved by the Parliament, through Law no. 54/2006 (OJ no. 226/13.03.2006). The main amendments to the ordinance are: DNA becomes a Directorate; DNA is now led by the General Prosecutor of the Prosecutors’ Office attached to the High Court of Cassation and Justice (PICCJ), through the chief prosecutor of DNA; the chief prosecutor of DNA is secondary credit ordinator (the expenses of DNA are ensured from the state budget and distinctly evidenced within the budget of PICCJ). The DNA has maintained its exclusive and unrestricted competence in fighting high level corruption including that involving members of the Parliament. With regard to the declaration of wealth and interests, MJ drafted the law on the National Department for Integrity, a competent body to verify and control the compliance with the legal provisions on wealth declarations, declarations of interests, incompatibilities regime. The Department is designated as an independent structure, in the coordination of the President of ANAF. On March 2, 2006 the draft law was published on the MJ’s site, for public debate. During February – March 2006, the reports on the implementation of Law 544/2001 concerning the free access to the information of public interest and of Law 52/2003 concerning the decisional transparency in the public administration for year 2005 were finalized. With regard to Law no. 544/2001: the total number of requests for information decreased as compared to 2004 (over 710,000 in 2005, compared to 815,000 in 2004), mainly due to the development of the ex officio presentation of public interest information by the public authorities; the institutional transparency and the free access to public interest information have become a genuine part of the public authorities’ activity (the large majority of the requests - 96% - were answered favourably and this represents a continuous and positive trend); the number of oral applications for information significantly decreased, from 71-73% in 2002-2004 to 57.5% in 2005, due both to the enhanced professional competence of the public employees in processing such requests and to the increased interest of the public in obtaining consistent information, which can not be delivered on the spot; more than 83% of the requests for public interest information were addressed to the local level public authorities and institutions, as a result of a better awareness of citizens with regard to the provisions of the law, increased as a result of the 2005 public information campaigns implemented nation-wide. With regard to Law no. 52/2003, it is worthwhile mentioning the following: increased and more informed participation of citizens in the decision-making process, which also is a result of the public information campaigns implemented in 2005; the interest shown at central level (ministries, agencies, etc.) regarding normative acts drafts under debate is higher, as compared to the local level (local counties, city halls); the recommendations submitted at central level have a lower degree of acceptance, as compared to those submitted at local level (52% of civil society recommendations were included in the normative acts drafts at central level, compared to 71% at local level); Law 52/2003 acted in 2005 as a stimulating factor for the active participation of citizens and associations in the decision-making process. In 2005, the public meetings were

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attended by 365,283 persons and 31,700 recommendations were submitted, while in 2004, there were 321,000 persons and 19,000 recommendations, and in 2003, 6,460 persons and 1,035 recommendations (in the eight months of law implementation). At the level of the National Customs Authority (ANV)

Between February 10 and March 10, 2006, the Internal Verifications Service within the ANV performed 14 controls. As a result, 3 customs employees were disciplinary sanctioned and the Disciplinary Commission of ANV was notified regarding 11 customs employees. DNA was notified regarding 5 custom employees. 6 customs employees were temporary removed to other positions. At the level of the Ministry of Administration and Interior (MAI)

At operative level, in February 2006, structures fighting corruption and to corruption related crimes have carried out specific activities, with regard to 575 persons, investigated in a number of 245 criminal files. These files were solved with the proposal for transferring the competence to the prosecutor’s office (out of which 16 where transferred to the DNA, for crimes in the exclusive competence of this institution). Corruption crimes were disclosed in the following fields: - Local and central public administration: 27 criminal files were solved and sent to the

prosecutor’s office, with regard to 61 persons; - Transportation and public works: 20 criminal files (with regard to 48 persons) were

solved and sent to the prosecutor’s office; - Health and medical inspection field: 14 criminal files (with regard to 29 persons)

were solved and sent to the prosecutor’s office; - Agriculture, food and forestry field: 11 criminal files (with regard to 43 persons)

were solved and sent to the prosecutor’s office; - Education and research field: 9 criminal files (with regard to 69 persons) were

solved and sent to the prosecutor’s office; - Banking system: 15 criminal files (with regard to 30 persons) were solved and sent

to the prosecutor’s office. At the level of the National Agency for Fiscal Administration (ANAF)

Between February 13 and March 10, 2006, ANAF disseminated the Guide for fiscal inspection in 2000 copies among the personnel involved in fiscal inspection activities. Since February 2006, the Methodology for Controlling VAT was disseminated within the public finances general directorates and the General Directorate for the Administration of the Main Tax Payers. At the level of the Financial Guard (GF)

Between 16-18 January 2006, a joint control operation of the PICCJ, the General Inspectorate of the Border Police, the customs authority and the GF was performed to duty-frees from the south and western part of the country. Based on a preliminary expertise, 1,880,000 packages of cigarettes, amounting over 1.8 millions euro were declared forgery and were seized. As a result of the same control, GF applied fines amounting approx. 21,937 euro, for breaches of financial and fiscal legal obligations. 820 euro were confiscated and the activity of 2 duty-frees (from Petea and Nadlac Customs Bureaus) was suspended. Between January and February 2006, on the request of DNA, GF performed 29 verifications. Also, the Disciplinary Commission of GF notified DNA regarding one commissar under suspicion of committing a corruption act. At the level of National Office for Preventing and Combating Money Laundering (ONPCSB)

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Based on a joint control plan, starting on January 1st, 2006, ONPCSB and GF performed 17 controls to 10 exchange offices (sanctions amounting to approx. 4,275 euro were applied) and 7 car-leasing companies (sanctions amounting to approx. 25,655 euro were applied). Between February 1 and March 3, 2006 ONPCSB sent to DNA (through PICCJ) 5 notifications regarding money laundering activities, in connection to which solid ground of corruption offences were also identified. Results in fighting corruption

Between February 7 and March 1, 2006 DNA sent to trial 6 cases regarding 25 defendants for committing 24 corruption offences and offences assimilated or connected to corruption offences, as follows: 12 classical corruption offences (giving bribe, taking bribe, trading in influence, receiving undue advantages); 6 offences assimilated to corruption (especially cases of unlawful crediting; use of credits in other purposes than those they were granted for; providing information which was not meant for the public; obtaining undue advantages by persons with control attributions); 6 offences directly connected to corruption offences (especially association with a view to committing offences; forgery and use of forgery; money laundering; abuse of office against public interests; tax evasion; fraudulent bankruptcy). The 25 defendants are as follows: 1 Member of the Romanian Parliament – Chamber of Deputies; 2 colonels in reserve from Romanian Intelligence Service; 1 general director from “Astra” Refinery; 4 directors, the National Administration of Forests “ROMSILVA”; 1 chief of the Service for Investments and Development, National Administration of Forests “ROMSILVA”; 1 counsellor, Ministry of Industry and Resources; 1 deputy director, General Directorate of Public Finances from Mures; 1 chief of the Bureau for Urbanism, City Hall of the District 1 Bucharest; 1 director Romanian Commercial Bank; 1 credits officer; 1 chief of service “Credit and Discount” from a bank; 9 administrators of a commercial company; 1 partner of a commercial company. During the reference period, in the cases sent to trial by DNA, the courts pronounced 3 conviction decisions, regarding 3 defendants. During the same period, 10 conviction decisions regarding 15 defendants remained final. HUMAN RIGHTS AND PROTECTION OF MINORITIES Regarding the conditions in penitentiaries and in police detention centres, between February-March 2006, the rehabilitation activities continued at detention centres of the Directorate for Criminal Investigation and at the County Police Inspectorates in Arad, Bihor, Bistrita Nasaud, Brasov, Braila, Botosani, Buzau, Calarasi, Caras Severin, Cluj, Covasna, Dambovita, Galati, Gorj, Giurgiu, Harghita, Maramures, Neamt and Satu Mare. At Arges County Police Inspectorate 7 video surveillance cameras have been installed and a medical isolation room and a medical cabinet became operational. In order to improve the prison and detention centres conditions, during the reporting period, the activities in the field of TB and HIV/AIDS and combating drug consumption were further developed. In the field of preventing and controlling of tuberculosis, in the framework of the program regarding the Setting up and endowing rooms for testing TB and isolating the infected persons works were finalized in 152 rooms (110 respiratory isolating rooms and 42 test rooms), located in 40 units; by the end of March 2006, the works in the remaining 3 units are to be finalized; in 25 units (penitentiaries and hospitals penitentiary), the set up rooms are already functioning. Additionally, 4 workshops for training the staff (142 medical assistants and supervisors) were organized during 8 – 19 March 2006 in the field of preventing their infection with TB inside the special rooms.

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In the field of HIV/AIDS, a CD was designed for the use of personnel and detainees, containing information on preventing HIV infection. Furthermore, on preventing drugs consumption in penitentiaries, a guide was elaborated for the training of the prison personnel, with regard to the types of drugs and their effects. A multidisciplinary anti-drug team was established in each penitentiary (44 teams) composed of a medical doctor, a specialist in social reintegration and a staff member of the safety department. In the area of freedom of expression, during the reference period two cases were solved as follows: the destruction case mentioned above, the author has been sent to trial for destruction and outrage and the file on the aggression of a female journalist on 25.07.2003, in Petrosani has been solved after a multiple specific activities carried out by the Hunedoara County Police Inspectorate police personnel, under the coordination of the Directorate for Criminal Investigation. The two authors have been identified, the file being forwarded to the Petrosani Court for the crimes of hitting and other violent offences and for instigating to hitting and other violent offences. Implementation of the legislative package in child protection field continued. The 6 Programs of National Interest (PIN) for 2006 were adopted. The methodology concerning the approval and financing of PIN was drawn up and is under approval procedure. The Programs of National Interest are the following: “Developing family type placement centres – houses and apartments for children from institutions larger than 100 places, which were not yet restructured into family type modules”, “Developing of alternative services for children with disabilities/HIV/AIDS”, "Developing of specialized services network for the children victims of abuse, neglect and exploitation”, "Promoting the minimum compulsory standards within the child protection and the monitoring of child’s rights protection field”, "Supporting the maternal assistants network for the special protection of the child up to 2 years old, who is temporarily or definitively lacking the parents care” and "Development of the community social services for the child and family, support of the families in crisis, in order to prevent child separation from his/her family”. Within the reporting period, the Control Body of the ANPDC has performed one control action in Vrancea County, in order to verify the handling of two reintegration cases, as well as the post-reintegration monitoring. Furthermore, the Inspection Department of ANPDC has performed inspection activities in the Arges County and in the districts 3 and 6 of Bucharest. 22 services were inspected (residential services, maternal centres, day centres, day and night shelters for street children, recovering centres for the children with disabilities). The inspections have evaluated the observance of minimum compulsory standards entitling the granting of the functioning license according to the new legislation. In order to public awareness raising and education of the professionals who enter into contact with children, activities have continued within the Educational Public Campaign concerning children’ rights “Children’ Rights are Law!”. Thus, 10 informative programs on the child’s rights issues were realized and broadcasted within the news programs of the national television. The recommendations approved by the participants at the conference held in Bucharest on 2-3 of February 2006 were posted on the ANPDC’s web site and are about to be disseminated to all the participants. A new educational campaign for an 18-month period is being carried out as a follow-up on the “Children Rights are Law!” campaign and includes an informative campaign for the parents and children in Romania, as well as training activities for different groups of professionals who enter into contact with the children, as well as for the decision making officials at local level. In the field of adoption, the Working Group set up for auditing the cases taken over by the Romanian Office for Adoptions (ORA) has continued its activity. Until now, a number of 1103 responses (and the connected files) have been sent to

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persons/families who submitted applications for international adoption before the entry into force of the new legislation. The training of the professionals, who are working in the adoption services within the DGASPC, has continued. Thus, during 9th -11th of March the training of 21 professionals from 18 DGASPC units took place. Also, measures were initiated for solving 36 international adoption cases, which have not produced their legal effects (the adoptive families did not take the respective children). Until now, 17 adoptions were terminated/declared null and the other 19 are either in the process of being terminated/declared null or under analysis. Currently, the National Register for Adoption, in electronic version, has registered a number of 1738 persons/families who qualify for internal adoption and 757 decisions for the initiation of internal adoption procedure. 164 court decisions for adoption were approved according to the new legislation. In the area of protection of persons with disabilities, GD no 183/2006 (OJ no. 186/27.02.2006) was adopted, regarding the allocation of certain sums from the reserve fund of the 2006 state budget, for several County Councils and for the Local Council of District 2 of Bucharest. The decision aims at carrying on the project works for the capital and current rehabilitation, hygiene and refurbishment of the residential centres for persons with disabilities. The total sum allocated for 59 residential centres amounts to 4.02 millions Euro. GD no. 197/2006 (OJ no. 195/01.03.2006) was also adopted, regarding the approval of the National Interest Programs in the field of the protection of the persons with disabilities, the social assistance of elderly people, homeless and victims of family violence, as well as for financing these Programs. In the field of medical assistance to the persons with psychiatric disabilities a 2006–2008 National Action Plan on Mental Health has been drawn up, with clear deadlines and responsibilities. The Plan foresees the creation of Community Mental Health Centres, which will contribute to reducing the number of confinements in mental institutions, as well as improving the quality of medical assistance in the field. A special emphasis is placed on the patients’ social re-insertion. On medium and short term, 51 mental health laboratories are to be transformed into community mental health centres, under the coordination of the Mental Health National Centre. In this respect, an Order of the Minister of Health has already been drafted, regarding the setting up of the Mental Health National Centre, as a specialized strategic unit of the Ministry of Health. Also, a Strategy has been elaborated for the training of the managers of the psychiatry units, as well as of the nurses. All the patients hospitalised in the psychiatry institutions will be shortly re-evaluated, according to a draft order of the minister of health. Special focus is placed on increasing the number of specialists in this field, as well as on their training. In order to cover the personnel deficit, a residency contest in the psychiatry specialty will take place, for the specialization of 300 psychiatrists. The training curricula for the residency in psychiatry will also be revised. The 2006 funding allotted for the improvement of the psychiatric medical assistance is five times superior than that in 2005 (approx. 110,000,000 RON), aiming at setting up eight pilot community mental health centres, as well as at the partial rehabilitation of six psychiatry hospitals. Also, the Ministry of Health is to present to the Government a Memorandum on the financial requirements for the psychiatry system. Regarding the restitution of property, the National Authority for Restitution of Properties (ANRP) activity has been strengthened by adoption of GD no.240/2006 (OJ no. 185/27.02.2006) concerning the establishment, organization and functioning of the ANRP. Accordingly, in every county and in Bucharest a county office/an office for Bucharest will be organized, for the monitoring of the unitary application of the property

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restitution laws. The offices will be set up through reorganization of the office for the monitoring of the unitary application of Law No.10/2001. The offices’ main task will be to monitor the correct and unitary implementation of laws regarding property restitution, counselling persons on administrative proceedings of restitution and solving of the petitions. Regarding the Property Fund, the tender procedure for establishing the fund manager is ongoing. The shares of the Fund will be listed at the national and the international capital markets, so that the owners can immediately use them. On February 28th 2006, the Central Commission for Ascertaining the Damages decided the issuing of the first decisions for granting the compensation titles. The titles are to be forwarded in ten days after their issuing to the Commercial Society Property Fund SA and to the entity, which has the role of storing the funds’ shares. Afterwards they will be converted into shares in this Fund. The Ombudsman’s activity, in the field of human rights protection, at the level of its central and territorial offices, consisted in: examining and solving 240 complaints addressed by individuals from Romania and abroad; 426 hearings regarding alleged violations of human rights; 205 registrations of telephonic reports concerning the infringement of the civil rights; 1 inquiry concerning the examination of legal provisions enforcement, with regard to the right to a decent living standard and the right of a person prejudiced by a public authority, as provided by art. 47 and art. 52 of the Constitution of Romania; 41 opinions regarding the objections of unconstitutionality of laws and ordinances referring to individuals’ rights and freedoms, formulated at the request of the Constitutional Court; 1 internal training seminar with the investigators and counsellors working within the office. Regarding the rights and the protection of the minorities, the draft law for the ratification of Protocol 12 to ECHR was approved by the Chamber of Deputies on March 9, 2006 and is currently under debate in the Senate. With regard to the improvement of the legislative framework, the draft law for the ratification of the European Charter for Regional or Minority Languages was approved by the Government on the 2nd of March 2006 and was sent to the Presidential Administration (according to the Constitution, the president concludes international treaties (negotiated by the Government) in the name of Romania and sends them for ratification to the Parliament, within a reasonable period of time). The draft law offers protection to a number of ten minority languages used on the territory of Romania in the fields established in Part III of the European Charter for Regional or Minority Languages: education, justice, administrative authorities and public services, media, cultural activities and facilities, economic and social life, cross border exchanges. The minority languages thus protected are the following: Bulgarian, Czech, Croat, German, Hungarian, Russian, Serbian, Slovak, Turkish, and Ukrainian. The provisions of the Charter referring to "justice", "administrative authorities and public services", "education", "media", "cultural activities and facilities", “economic and social life”, “cross border exchanges” will be applied in accordance with the Romanian legislation in force. The draft law on the statute of the national minorities is currently under debate at the specialized commissions of the Chamber of Deputies. So far, the Commission of culture, arts, and mass-media approved the law. DRI finalized the study on the “Application of the legislation concerning the rights of national minorities in Romania", which gives an overview of the current situation in all counties, together with an array of detailed maps, statistical data, and photographs. The results of the study is to be published on the DRI website. Through GD no. 122/2006 (OJ no. 96/1.02.2006), the Department of Inter-ethnic Relations (DRI) budget was supplemented with 2,500,000 RON, for the financing of

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several interethnic and non-discrimination programs and projects. Also, 36,380,000 RON were allocated, for supporting the organizations of the national minorities. Regarding the adoption of the modifications to the Government Strategy for improving Roma Situation, the process of obtaining the approval from the line Ministries is ongoing. Also, the “Hadareni Programme” (Government commitment at the ECHR), is currently under the notice procedure from the ministries. On 22 February 2006, “Fund for Roma Education” was launched in Romania, as part of the Decade for Roma inclusion. Regarding the local community development, ANR took part in the launching meeting of the Local Action Plans for 12 local communities mainly inhabited by Roma in Bihor County. The elaboration of the local community development programs for Roma from Brahasesti, Galati County and Pitesti, Arges County, was finalized, as well as ANR’s contribution to the sectoral operational program concerning the human resources development. Within the cooperation memorandum with OSCE and Romani CRISS, the methodology for filling in the form for assessing the police activity in relation with Roma minority has been elaborated and sent to the prevention and analysis structures in all the counties. At present, the centralization of the assessment forms from all counties is underway. As part of the project entitled “Promoting the good governing of the multicultural communities. Minorities access and involvement in the public life”, which took place between 20 - 22 of February 2006, in Cluj-Napoca, officers from the analysis and prevention, public order and criminal investigations structures from 8 counties have been trained.

2. ECONOMIC CRITERIA

MACROECONOMIC DEVELOPMENT Macroeconomic achievements in 2005 In 2005 the economic growth has diminished as compared to 2004, but still remains at a high level, of 4.1 percent respectively, if we take into account the extremely difficult internal and external conditions, such as: floods, national currency’s appreciation, liberalisation of textile trade with China and the increase in world’s oil price. If we keep out agriculture from the gross domestic product, thus eliminating only the flood’s effects upon agriculture, which are easier to be quantified, it results that the gross domestic product increased by 6.7 percent. As in 2004, the growth was exclusively based upon domestic demand, investments and consumption, respectively, but the share between them has improved. Therefore, gross fixed capital formation increased by 13.0 percent while household’s actual individual consumption increased by 9.0 percent. Despite the increasing in real wage and consumption credits respectively, the private consumption registered a lower increase than in 2004, while the investments recorded in the private sector increased by 24.9 percent.

The evolution of the main economic indicators - Percentage changes against the same period of previous year, unless otherwise indicated 2003 2004 2005 GDP growth, in real terms 5.2 8.4 4.1 Industrial production 3.1 5.3 2.0

Final consumption 8.3 11.9 8.5 Of which: Household’s actual individual consumption 8.3 12.9 9.0

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- Percentage changes against the same period of previous year, unless otherwise indicated 2003 2004 2005 Gross fixed capital formation 8.6 10.8 13.0 Stock changes1 0.1 0.5 -1.1 Domestic demand 8.4 12.1 8.1 Net export1 -3.6 -4.5 -5.0

Annual average inflation rate - December/December

15.3 14.1

11.9 9.3

9.0

8.6

Exchange rate - RON/Euro 3.75 4.05 3.62 Unemployment rate – end of period 7.4 6.3 5.9

General consolidated budget balance % of GDP -2.2 -1.2 -0.8 Exports of goods 6.4 21.3 17.5

Imports of goods (CIF) 12.3 24.0 23.9 Current account balance % of GDP Bill. Euro

-5.8 -3.1

-8.4 -5.1

-8.7

-6.9 Even though the main factor of economic growth remained the household’s actual individual consumption, its contribution to the real growth of gross domestic product reduced (from 9.7 percentages in 2004 to 6.9 percentages in 2005). Nevertheless, gross fixed capital formation consolidated its contribution by 0.5 percentage points, reaching 2.8 percent. It is significant and at the same time encouraging that the economy responded accordingly to the difficult situation created by floods. Thus, while gross fixed capital formation growth rates increased by each quarter (5.2 percent in the 1st quarter 2005 as compared to 1st quarter 2004, 8.9 percent in the 2nd quarter, 10.8 percent in the 3rd quarter and 21.3 percent in the 4th quarter), the growth rates of household’s actual individual consumption had a descending trend (12.5 percent in the 1st quarter 2005 as compared to 1st quarter 2004, 11.6 percent in the 2nd quarter, 7.7 percent in the 3rd quarter, 6,4% in the 4th quarter). The reconstruction of infrastructure and buildings that had been destroyed by floods represented one of the reasons for intensifying the investment activity, reaching the highest growth level after 1994 when it was 20.7 percent. This evolution determined a sound increase in imports of capital goods, by 30 percent, respectively. Investment rate, computed as the ratio between gross fixed capital formation and gross value added, increased by almost 2 percentage points, from 24.3 percent in 2004 to 26.2 percent in 2005. Government’s actual collective consumption registered a moderate increase as compared to the other components of demand, by 4.9 percent, respectively but this can be explained by the orientation of budgetary funds to priority areas such as education and health. As a result of the evolution of domestic demand, being followed by the weaker economic evolution of the commercial partner countries and the loss of competitiveness on external markets due to the national currency’s appreciation, the imports of goods and services registered a significant increase, as compared to the export of goods and services. Therefore, the net export had a negative contribution to the real increase of GDP, by 5.0 percent, respectively.

- Annual percentage changes - 2003 2004 2005 Gross domestic product 5.2 8.4 4.1 Domestic demand 8.4 12.1 8.3 Final consumption 8.3 11.9 8.5

1 Contribution to the real growth of GDP (percent).

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- Household’s actual individual consumption 8.3 12.9 9.0 - Government’s actual collective consumption 8.5 4.6 4.9 Gross fixed capital formation 8.6 10.8 13.0 Changes in stocks a) 0.1 0.5 -1.1 Net export a) -3.6 -4.5 -5.0

a) Contribution to the real growth of GDP Source:National Commission for Prognosis’ calculations based on the data provided by the National Institute for Statistic.

A characteristic of the Romanian economy consists in the fact that domestic demand could not find the corresponding coverage in domestic supply, especially for the year 2005, when the cumulated effect of unfavourable factors mentioned before led to a modest increase of gross value added in industry (2.5 percent as compared to 2004) and to a significant reduction of gross value added in agriculture (-13.9 percent). The GVA’s evolution for agriculture has as explanation not only the climateric conditions but also the base effect of 2004, when it registered an outstanding increase of 18.9 percent. The activity in the constructions sector registered a strong increase due to the natural disasters produced by floods. Thus, gross value added in construction had significantly increased, by 9.9 percent respectively. An important characteristic of economic growth in 2005 consists in the tendency of changing the economic structure in the advantage of the service sector, which registered an increase by 8.1 percent.

- Annual percentage changes - 2003 2004 2005 Gross domestic product 5.2 8.4 4.1 Agriculture 5.2 18.9 -13.9 Industry 4.4 6.5 2.5 Construction 7.0 9.1 9.9 Services 5.5 6.8 8.1 Net taxes 6.5 8.5 9.2

Source: National Commission for Economic Forecast’ calculations based on the data provided by the National Institute for Statistics.

In 2005, regarding the occupational degree of labour force, according to the provisional data of AMIGO survey, both total active population and total employed population diminished by 1.1 percent and 0.1 percent, respectively. The activity rate decreased by 0.8 percentage points (from 63.2 percent to 62.4 percent) while the employment rate decreased by 0.2 percentage points (from 57.9 percent to 57.7 percent). The unemployed number, defined according to the International Labour Office-ILO, decreased by 12 percent in 2005 (from 799 thou. persons to 704 thou. persons) and the unemployment rate ILO was 7.2 percent as compared to 8,0 percent in 2004. Macroeconomic achievements in 2006

At the end of February 2006, the registered unemployment was 555 000 persons (of which 220 000 women), the unemployment rate being of 6.3 percent. At the same time, the women unemployment rate was 5.3 percent. Following the trend of the last part of 2005, industrial production increased by 4.2 percent in January 2006 as compared to the same period of 2005. The same increase

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was also registered in manufacturing. Labour productivity in industry increased by 8.0 percent. In January, exports of goods increased by 16.9 percent as compared to the same period of 2005. Significant increases registered the exports of mineral products (78.3 percent) and of the building car industry (41.5 percent). Import of goods continued to outpace the exports, thus recording an increase by 26.9 percent as compared to January 2005. The evolution was determined by the import of food products which increased by 38.6 percent, mineral products (+34.8 percent), wood products (+36.6 products) and building car industry (+28.2 percent). The 10 percentage points gap between imports and exports determined the deepening of trade deficit by EUR 255 million, this representing a worsening of 67 percent.

ASSESSMENT IN TERMS OF THE COPENHAGEN CRITERIA The existence of a functional market economy A. Achievement of macroeconomic stability, including the adequate prices’ stability and the sustainability of public finances and current account Monetary and exchange rate policy for supporting disinflation Disinflation resumed in February 2006, with the annual inflation rate touching 8.5 percent, 0.4 percentage points below the previous month’s reading. This development was widely due to the impact of the recent appreciation of the national currency against the euro and occurred despite the pressures that continued to be exerted by volatile prices (mostly prices for vegetables, as last year’s adverse weather conditions took a heavy toll on the supply of such products). Significant progress in disinflation is expected starting with the second quarter of 2006, partly as a result of the base effect generated by the steep increase in administered prices (natural gas price in particular) and excise duties on fuels, tobacco and alcohol (April 2005). Measures taken by the NBR in order to improve procedures for risk-based supervision were mainly aimed at: Extending the co-operation with other domestic supervision authorities

On 10 March 2006 the following two documents have been signed: (i) a new tripartite Protocol concluded by the National Bank of Romania, the National Commission for Securities and the Insurance Supervision Commission providing for co-operation with a view to fostering the stability of the financial system as a whole and by its components; and (ii) the Regulation regarding the organizing and holding of tripartite meetings at the level of the NBR, NCS and ISC management. These two documents aim at strengthening the co-operation among the three supervision authorities without prejudice to their competences and autonomy. Their main objective is to address in an efficient and coherent manner the inter-sectoral issues and to establish practical co-operation arrangements. As regards the new tripartite Protocol, by comparison to the former protocol, it clearly stipulates the principles governing the co-operation among the three parties, namely: clear separation of responsibilities among the three authorities, transparency, co-operation in drafting new legislation and specific regulations, on-going exchange of information, and confidentiality. The new protocol also provides for setting up inter-institutional working groups and elaborating their terms of reference. Thus, the setting up of five standing technical committees has been decided, in order to cover the main aspects of the three authorities’ domains, namely: the Financial Stability Committee, the Supervision and Control Committee, the Regulation Committee, the Payment Systems Committee and the Financial Statistics Committee. The committees are to be set up immediately after the entry into force of

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the protocol and will function according to the regulations they will elaborate themselves. The protocol also allows for the creation of ad-hoc committees depending on the new emerging issues. An important role in ensuring a smooth co-operation among the above mentioned authorities and in supporting the activity of the technical committees will be played by the Protocol’s Secretariat set up within the NBR. Extending the co-operation with other foreign supervision authorities:

On 7 March 2006 a co-operation agreement on the exchange of information in the field of banking supervision was signed with the Austrian supervision authority. Budgetary policy The budgetary execution within the first two months of 2006 confirms the favourable evolutions from the previous year, taking into account that the balance of the general consolidated budget remains positive, at 0.6 percent – 0.7 percent at the end of February, thus being in accordance with the estimations as percent of GDP. Operative data of the budgetary execution during January – February 2006 reveals the following: - A dynamic trend of the budgetary revenues compared with the same period of the

previous year, the estimated nominal increase of the general consolidated budgetary revenues being of 21.2 percent;

- The contraction trend of the general consolidated budgetary expenditures was maintained, recording an increase by 6.1 percent as compared with the same period of 2005, thus being in accordance with estimations.

Important increases have been recorded as regards the revenues at the state budget (30.5 percent) and at the health social security unique national Fund budget (23.3 percent). Prudence of the wage policy within the budgetary sector The average wage increases in the budgetary sector, during 2006 compared with 2005, amount to around 6.59%, being granted differently among various categories of employees. Therefore, several legal acts have been adopted, as follows: - The GO No 2/2006 (OJ No 57/20.01.2006) regarding regulation of salary rights and

other rights of civil servants for year 2006; - The GO No 3/2006 (OJ No 59/23.01.2006) regarding salary increases which will be

granted in 2006 to budgetary personnel remunerated according to the EGO No 24/2000 regarding the salary establishment system for the contractual personnel from budgetary sector and personnel remunerated according to annexes no II and III of the Law No 154/1998 regarding the basic salary establishment system in the budgetary sector and of indemnities for persons who are occupying functions of public dignity;

- The GO No 4/2006 (OJ No 57/20.01.2006) regarding salary increases which will be granted in 2006 to educational personnel from education units and institutions, remunerated according to Law No 128/1997 regarding the Status of educational personnel;

- The GO No 19/2006 (OJ No 83/30.01.2006) regarding salary increases which are assigned to military personnel and to civil servants with special status from public institutions of national defence, public order and national safety;

- The GO No 23/2006 (OJ No 80/30.01.2006) regarding salary increases which will be granted in 2006 to contractual personnel from public sanitary units from the sanitary sector;

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- The GO No 29/2006 (OJ No 92/31.01.2006) regarding salary increases which will be granted in 2006 to the personnel remunerated according to the Law No 495/2004 regarding the salary system and other monetary rights of personnel from central administration of Ministry of External Affairs and from diplomatic missions, consular offices and Romanian cultural institutions abroad.

Financial discipline Based on the Law no. 64/1995 regarding the judicial reorganization and bankruptcy procedure, with subsequent amendments and completions, a number of 295 introductive applications for budgetary claims, amounting RON 176,8 million have been submitted during January 2006, and a number of 208 applications amounting RON 48,9 million have been submitted at the competent Courts in February 2006. The recovered amount of budgetary claims from small and medium taxpayers being in bankruptcy procedure according to Law No 64/1995 was of RON 8.4 million in January 2006 and RON 5.1 million in February 2006, respectively. Monitoring of arrears reduction at large taxpayers

As compared to December 2005, in January 2006, the number of companies monitored was reduced from 352 to 328. For 24 large taxpayers the procedure of judicial reorganization and bankruptcy was applied according to Law No 64/1995, republished. The situation of arrears recorded at 31.01.2006 for the companies for which targets for reducing the arrears have been established, is the following:

- Million RON - Arrears 31.01.2006

1. Registered arrears 743,92. Amounts converted in shares in 2004 1.767,43. Amounts cancelled from payment according to legal provisions 367,84. Total arrears (4=1+2+3) 2.879,15. Target established for reducing the arrears on 31.12.2005 3.164,26. Differences from the target (6=4-5) -285,1

As shown above, the arrears recorded on January 31, 2006, (RON 2.879,1 million) were reduced by RON 285.1 million, compared to the target established for December 2005, i.e. RON 3.164,2 million. The current account deficit in 2005 amounted to EUR 6,891 million, up 35.1 percent year on year, due to the widening of trade and services deficits2. The negative impact of goods and services flows on the current account balance was limited by the increase in net current transfers, as well as by the decrease of incomes deficit. Consequently, the ratio of current account deficit to GDP did not increase significantly, being 8.7% compared to 8.4% in 2004 and 5.8% in 20033. The current account deficit was covered 94 percent through direct and portfolio investments and capital transfers4, while the remaining gap was financed via medium and long-term loans and credits.

2 in 2005, the services deficit has doubled against the previous year, on the back of higher freight costs for imports.

3 For 2003 and 2004 the ratio of the current account deficit to GDP was modified following of revision of annually data by NIS.

4 in 2005, net direct and portfolio investments and net capital transfers reached EUR 6,476 million, out of which EUR 5,208 million represents net direct investments.

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B. The structural reform in economy; the privatisation and restructuring of the state owned companies Privatization of companies from AVAS portfolio

During the 1st of February – 15 March 2006 a number of 9 announcements have been made public, out of which 2 were advertisements for the sale of majority share packages and 7 were announcements for the sale of minority share packages. A number of 7 share sale-purchase contracts have been concluded, out of which 1 contract for the sale of majority share package and 6 contracts for the sale of minority share packages. The total social capital sold is of RON 1.9 million, and the volume of investments committed is of EUR 221,000. Regarding the recovery of debts, since the beginning of 2006, a number of 61.204 debtors have been under foreclosure proceedings. Upon such debtors, pursuant to conveying writs of execution and payment summons, their traceable goods are offered in auction processes or their bank accounts are placed under garnishment. Following the 45 public auctions organized by AVAS and attended by participants (out of the 152 auctions made public by AVAS), during the aforementioned time an amount of RON 12.45 million was obtained. Since the beginning of 2006 till now, proceedings of account garnishment have been instituted for over 1.768 debtors. Pursuant to such proceeding, an aggregate amount of RON 15 million has been recovered from the accounts opened for 735 debtors. Moreover, conveyance of writs of execution and payment summons, as well as enforcing of distraint, and even the publishing of the sale announcements, brought about directly to obtaining cashing of RON 27 million. Privatisation and restructuring of companies from the Ministry of Transport Constructions and Tourism portfolio During February 28 - March 15, 2006, in the field of tourism the privatisation procedures at 2 trades companies (SC Amara SA and SC Ardealul Arad) have been started while in the field of road and naval transportation, at 2 trade companies (VIASTAR SA Bucureşti and STARD SA Feteşti) the whole stock is under sale procedures. The sale-purchase contracts haven’t been concluded yet. Privatisation and restructuring of companies from the State Domains Agency During February 15–March 15, 2006, the State Domains Agency has performed activities as follows: - In the field of privatisation – restructuring, further actions have been carried on in

order to reorganize a number of 15 research stations with agricultural profile into trading companies with state capital, according to the Law No 290/2002, further modified and completed. Five announcements have been published in order to sell certain supplementary share stocks held by ADS to the privatised trading companies in the portfolio resulting from the increasing of the registered capital with the value of land within the company. During the same period, measures have been taken for the approval of increasing the share capital for a company with cash contribution representing the investment committed by the stock sale–purchase contract and the note for the basic approval has been drafted, for concluding some leasing contracts with irrevocable clause of sale for buildings within the patrimony of one trading company. For a number of 4 trading companies, (2 were under the incidence of Law No 359/2004 with further modifications and completions and 2 under restructuring

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procedure) the procedure of legal reorganization and bankruptcy, according to Law No 64/1995 republished, with further modifications and completions has been initiated. Furthermore, the administrative liquidation procedure of the trading companies, under the incidence of Law no. 359/ 2004, with further modifications and completions and for which there were appointed the liquidators was carried out.

- As regards leasing of lands with agricultural destination, the bidding procedure at a number of 16 trading companies has been initiated. Thus, the land surface with agricultural destination offered for leasing is of 9978.4 ha agricultural land and 1247.19 ha non-agricultural land. Moreover, a number of 5 leasing contracts have been initiated, through the method of direct attribution for a surface representing 340.62 ha of land with agricultural destination.

- Referring to the land fund activity, 31 protocols of delivery to local authorities, in the view of retrocession, according to the Laws no. 1/2000 and 18/1991, corresponding to a surface of 1.893,96 ha, have been concluded. The land surface of 567.752 ha with agricultural destination remained in the SDA patrimony.

Privatisation of the energy sector Oil and natural gas sector

Following the valuation process of the offers submitted in the view of privatisation SC ROMGAZ SA, the consultant Credit Suisse First Boston got the best score. At present, the provisions of the consulting services contract are being negotiated with the selected advisor. Electrical and thermal power sector

Regarding SC Electrica Muntenia Sud SA, based on the analysis of the submitted bids and according to the privatisation strategy, the privatisation coordination committee decided to continue the privatisation process, requesting improved binding bids from the 5 selected investors based on the approved selection criteria (CEZ a.s., ENEL SpA, Gaz de France International SAS, Iberdrola SA and RWE Energy AG). Concerning SC Electrica Transilvania Nord SA, SC Electrica Transilvania Sud SA and SC Electrica Muntenia Nord SA following the valuation of the submitted offers, the advisor was selected and the consulting services contract and success fee contract have been signed. The legislative act that approves the success fee is going to be adopted by the Romanian Government. Having in view the restructuring process for electric and thermo energy, so that the new energy structures to be capable to compete on the energy market with equal chances, at SC Termoelectrica SA it was decided to establish a joint working committee, which will elaborate a study based on predictions of the financial flow at the level of each energy production unit. The valuators that have drawn up the Valuation Reports for company’s branches and subsidiaries were selected. This method will take into account knowing or quantifying different elements in each year of the analysis period, respectively 2005 – 2025. Regarding privatisation of S.C. Rovinari Energy Complex S.A. and S.C. Craiova Energy Complex S.A. the advisor Deloitte Central Europe Ltd and the Romanian American Enterprise Fund drew up the diagnostic analysis on technical, legal, financial, commercial and environmental aspects. The reports for the preparation phase of the privatisation have been submitted, and their analysis is in progress. Regarding S.C. Hidroelectrica S.A. the process for attracting private capital for micro hydro power plants has continued. Following the auctions, the micro hydro power plants on Doftana and Manaileasa rivers have been sold. The negotiations in order to conclude the sale agreements are in progress.

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The privatisation in the defence sector

Concerning S.C. Uzina Mecanica Filiasi S.A. the privatisation process was re-launched. The privatisation announcement was published on March 6, 2006 in national and local newspapers. The potential investors will be able to submit the participation documents and the final bid until April 5, 2006. In case of S.C. Uzina Mecanica Orastie S.A. the privatisation documentation regarding the shares sale is in process, as well as the sale documentation for some assets belonging to the company and the sale documentation for participations owned by the company in the joint venture S.C. PRELMEC S.A. Privatisation in the banking sector

The Savings Bank (CEC) privatisation strategy will be amended in March 2006 by a government decision. According to the new strategy, CEC will sell the majority stake of shares amounting to 85 percent of the total share capital to an internationally reputable financial-banking institution or to a consortium including at least one internationally reputable financial-banking institution. Furthermore, five percent of the total share capital shall be sold to the employees, while the remaining shares held by the State will be sold totally or partially by public sale offers on the domestic and/or foreign capital market, including to the existing shareholders through regulated markets specific methods. According to the new amendments, the first two highest bids are automatically qualified to participate in the final privatisation stage, but three competitors might be accepted in case that the third ranking investor’s score will be less than 10 percent below the first bidder. The new version of the privatisation strategy stipulates that the purchase price will represent 75 percent of the evaluation score grid. C. The existence of a judicial system whose decisions are meant to be enforced, including the issues concerning the regulation of the ownership rights Insolvency regulations The draft of the new law on insolvency (previously reported) was adopted by the Parliament on March 14th, 2006 and is pending promulgation. Training of insolvency practitioners A good practices manual was drafted within the PHARE programme on insolvency and is being distributed to judges and insolvency practitioners. Training on the new law on insolvency is being carried out within the same PHARE programme. The training programme includes 267 judges (distributed in 11 groups), 109 clerks (distributed in 4 groups) and 135 insolvency practitioners (distributed in 5 groups). The seminars started on March 7th and will be finalised in April 7th, 2006. Additional information regarding inflation, industrial output and privatisation of companies in AVAS portfolio is presented in Annex 1.

3. COMMITMENTS AND REQUIREMENTS RESULTED FROM THE ACCESSION NEGOTIATION

FREE MOVEMENT OF GOODS Concerning public procurement, the draft primary legislation on public procurement, including the recommendations of the European Commission’s experts, shall be

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adopted by the Government through an Emergency Ordinance in the first part of April 2006 and shall enter into force at 01.06.2006. Regarding the secondary legislation on public procurement, a first draft of the contract models for works, services and consultancy has been elaborated. In the field of horizontal and procedural measures necessary for the acquis in the new approach sector, concerning standardisation, starting with the 1st of February 2006, ASRO is a full member of CENELEC. In the field of sectoral legislation under the new approach, concerning conformity assessment, OMMSSF no. 161/06.03.2006 amending OMMSSF no. 10/ 09.01.2006 for the approval of the List of recognized bodies performing conformity assessment for industrial machines, has been approved. By this order, the Certification Body for construction products and waste management within the Institute for Research for Construction Equipment and Technologies ICECON – SA Bucharest, has been designated and recognized. The Decision 2005/484/EC concerning the attestation procedure for the conformity of construction products was transposed into the Romanian legislation through OMTCT no. 132/03.02.2006 (OJ no. 154/17.02.2006) for the completion of OMTCT no.1558/2004 concerning the Regulation on conformity attestation for construction products (with its subsequent amendments). As regards the old approach sector, by adopting OMTCT no. 2218/2005 (OJ no. 159/20.02.2005), which is amending OMLPTL no. 211/2003 on Regulations concerning the technical conditions to be fulfilled by motor vehicles in order to be admitted on the public roads in Romania- RNTR 2 (with its subsequent amendments), Romania transposed into its legislation the following Directives: 2004/3/EC, 2004/78/EC, 2004/86/EC, 2004/104/EC and 2005/11/EC. The technical provisions shall apply until 1st of January 2007, except for the provisions that shall be applied after 1st January 2007, according the directives. In this case, the application dates are those stipulated in the directives. OMS no. 1451/2005 regarding the “Guidelines on the updating and amending the authorization documentation of medicinal products for human use, authorized in Romania, in order to comply with the EU requirements”, was completed and amended by OMS no. 92/2006 (OJ no. 175/23.02.2006). The National Medicines Agency’s representatives continued the meetings with the Romanian medicinal producers and representatives of the foreign medicinal producers in order to inform them and discuss the application of OMS no. 92/2006. In the field of the drug precursors, during February - March 2006, the operational exchange of data regarding the notifications and pre-notifications sent by the European countries’ authorities, related to import and export of precursors in and out of Romania, continued. The National Customs Authority has been connected to the NDCS (National Drug Control System) database from the Anti drug Directorate within the General Directorate for Combating Organized Crime. The anti-drug police workers in the field of precursors can access the ANV database regarding the imports and exports of goods. As regards food safety, in order to increase the administrative capacity, during 3 – 4.03.2006 a competition has been organized, which led to the hiring of 47 specialists in the General Directorate in charge of food safety issues. ANSVSA Order no. 38/21.02.2006 (OJ no. 204/06.03.2006) for the approval of the sanitary veterinary and food safety Norm which establishes the required procedures for imports and exports of food of non-animal origin that are subject to food safety monitoring and control.

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FREE MOVEMENT OF PERSONS In the field of citizens' rights, in order to ensure the right of non-national European Union citizens to participate in the European Parliament and municipal elections, the Romanian authorities have drafted the law on election of the Romanian representatives to the European Parliament and the law on amending the law regarding elections of the local public administration authorities. The two drafts laws (transposing the acquis communitaire on electoral rights) are currently under public debate and shall be adopted by the Romanian Parliament at the end of June 2006. As regards the amendment of the legislation on schooling, the Ministry of Education and Research has elaborated the draft Law regarding the completion of article 5 from Law of Education, no.84/1995 and article 1 from Government Ordinance on tuition fees for foreign students, no.13/1993. This draft Law will be submitted to Parliamentary debate and approval through an emergency procedure. In the field of recognition of professional qualifications, the draft Law regarding the reform in the health system includes the doctor, dentist and pharmacist professions, as foreseen by the communitary acquis. Currently, this normative package is at the Constitutional Court for debate. Its approval is expected by the end of March.

FREE MOVEMENT OF SERVICES In the area of motor vehicles insurance, the Insurance Supervisory Commission’s database (CEDAM) has been updated with the information sent by the insurance undertakings. All information was sent to the Ministry of Administration and Interior database, making it possible for the first comparison between the information of the two databases to take place. In March 2006, the first corrections have been applied to the results of the first comparison. The errors have been eliminated from the ISC database, following the data re-checking performed by the responsible insurance undertakings. A second comparison shall be performed at the beginning of April 2006, according to the recommendations of the Peer Review mission and the results shall be communicated until April 10, 2006 to the European Commission. In conformity with the MTPL Insurance Action Plan measures, the traffic police have conducted controls on the existence of insurance documents, in order to detect the uninsured vehicles participating in traffic. Following the analysis of the traffic police data at national level, out of 358,795 vehicles controlled since the beginning of 2006, only 2978 (less than 1%) were identified as having no MTPL insurance; penalties were applied according to law. As regards to the recommendations of the Peer Review mission on strengthening the administrative and institutional capacity in the insurance field, CSA has introduced special provisions in the Draft Law for approving EGO no. 201/2005 for the amendment and completion of Law no. 32/2000, regarding the insurance undertakings and insurance supervising (see Annex no. 2). The provisions refer to the setting-up of the Information Centre and of the Compensation Body, as well as to the independence of the Romanian Motor Insurance Bureau, which manages the Green Card Bureau. The draft law is currently under debate in the Parliament and is planned to be adopted at the beginning of April. In the area of personal data protection, detailed information is included in the chapter of Cooperation in the field Justice and Home Affairs.

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COMPANY LAW Protection of intellectual property rights (IPR) As regards the administrative capacity, in order to improve the specialization of the involved personnel in the field of protection of intellectual property rights, training sessions and seminars have been organized. Also, Romanian Copyright Office’s (ORDA) experts lectured for a number of 310 Police and Gendarmerie representatives about the provisions of the GEO 25/2006 on strengthening the administrative capacity of ORDA, which stipulates that commercialising phonograms, videograms and IT software on street or in public spaces is forbidden. Regarding the inter-institutional cooperation, under the coordination of the Prosecutor’s Office, several meetings of the inter-institutional working group were organized. Thus, the representatives of public and private sectors set-up 3 sub-working groups focused on counterfeiting, piracy and collecting agencies issues respectively. Also, on a mutual basis the members of the working groups decided to have monthly meetings. As regards the enforcement of the legislation on IPR, at the level of General Inspectorate of Romanian Police (IGPR), specialized police officers carried on informative and operative activities of investigation in 1,278 criminal files, out of which 998 in copyrights and related rights and 280 in industrial property sector. A number of 618 criminal files were solved, out of which, 100 with criminal pursuit finalized as regards copyright and 35 in the industrial property field. In the field of copyright, 26 contraventions were applied with a total value of 100,067 RON and a number of 5,163 audio tapes, 71,506 CDs and DVDs, 13,912 covers, 19,332 cases and 50 devices have been seized. Also, 18 illegal phonograms, video grams and computer programs recording studios were identified in various areas of the country. In the field of industrial property rights, the police officers have seized counterfeited goods (clothes, footwear, electronics, cosmetics, sanitary products, alcoholic drinks, tobacco products, coffee etc.), on a total value of 574, 6 thousands RON. 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 (over 391,200 units of clothes, cosmetics, electronics, etc.). Based on the information and reports from the prosecutors office and police (IGPR and IGPF), the Public Ministry specialized Department, identified a number of 73 complex cases throughout the country (45 copyright and related rights, 25 counterfeiting trademark, 3 industrial design) The enforcement of the GEO No. 25/02.02.2006 on strengthening the administrative capacity of ORDA, led to the application of the procedures regarding the registering in the four National Registers, namely the National Register of Phonograms (49 certificates for economic agents, 207 certificates for phonogram register and for hologram delivery and 1.562.963 delivered holograms), the Software Register (75 register certificates of the economic agents, 311 registered software programs), the National Register of Private Copy (2 register certificates), the National Register of Videograms (474 audiovisual registered titles, 555,031 delivered holograms) As a result of the intensification of the raids performed by the Police and other authorities with competence in intellectual property rights protection, ORDA performed a number of 146 technical-scientifically expertises on 32.435 products (audiocassette, CD’s, DVD’s, music, soft, film, hard discs, etc).

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COMPETITION POLICY In the area of anti-trust, during the reference period, the Competition Council (CC) has issued 9 decisions, out of which: 7 referring to economic concentrations, 1 to notification failure and 1 to acts of public administration. Moreover, out of 26 investigations opened by the Competition Council in the previous period, 25 investigations are in final stage. 9 of the latter ones are to be finalized in April-May 2006. By Order no. 37/03.03.2006 of the CC President, the investigation opened on the steel market in view to identify alleged infringements of article 5 of the republished Competition Law no. 21/1996 of the companies active on this market, was extended. CC issued 1 sanctioning decision for failure to notify the economic concentrations, in the amount of RON 3.000. In the area of enforcement of state aid regulations, the CC adopted 20 state aid decisions, classified as follows: 13 authorizing decisions, 5 conditional authorizing decisions, 1 negative decision with recovery of the State aid from 19 undertakings and for 1 undertaking to stop the granting of aid and one decision concluding that a notified measure represents no State aid. Regarding the type of aids authorized, CC authorized 2 aid specific allocations and 16 individual aids. Depending on the objective of the aids, 2 decisions were for regional development, 3 for restructuring and 13 for services of general economic interest. The cooperation with EC experts under the pre-consultation mechanism has continued. In this context, the Competition Council submitted to the European Commission 9 draft decisions and 1 draft Note on the opening of investigation to the National Company “Romania Lottery” SA. CC opened 2 ex-officio investigations: an investigation having as subject the analysis of financial support measures by which SC LAMDRO SA has benefited, as well as the effects over the competition (CC President Order no. 36/02.03.2006) and an investigation having as subject the analysis of the financial support measures by which the National Company “Romanian Lottery” SA has benefited, as well as the effects over the competition (CC President Order no. 38/06.03.2006). Moreover, CC decided to close the following investigations: - the investigation opened to the 20 undertakings operating in the deprived areas.

The investigation was finalized by issuing the Decision no. 52/09.03.2006 on the recovery of State aids granted over the maximum admissible intensity.

- the investigation opened at SC Romned Company SRL, operating in Constanta free trade zone. The investigation was finalized and the investigation Report was sent to the beneficiary and to the involved parties for analysis.

- the investigation opened to SC IMUT SA Moreni. After analysis, there was issued the authorizing conditioned Decision no. 54/13.03.2006.

The amount of illegal State aids recovered from the undertakings in deprived areas reached the sum of RON 70,000. Thus, the total amount of the illegal State aid recovered further to the enforcement of the Competition Council Decisions no.184/30.09.2005 and no. 52/09.03.2006 on the recovery of the State aid granted over the maximum admissible intensity and further to the voluntary reimbursement of the aids by the controlled undertakings is bigger than RON 1,870,000. As regards State aid control and monitoring, in the reporting period, the following monitoring reports were finalized and sent to the European Commission: the Report on monitoring the State aids granted to industrial parks (sent to the Commission on 20.02.2006), the Report on the transparency of financial relations between the public authorities and public undertakings as well as the financial transparency within certain

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undertakings (sent to the Commission on 03.03.2006), the Report on monitoring the implementation of the restructuring plans by the beneficiaries of rescue-restructuring State aid (sent to the Commission on 17.03.2006). Furthermore, the territorial competition inspectorates continued to perform the following control and monitoring actions: 92 control actions covering fiscal and social State aid, as well as payment deferrals, 155 control actions scrutinizing the administrative acts issued by local authorities, aiming to identify potential local State aid not notified to the CC, 97 monitoring actions of State aids by which the undertakings from deprived area have benefited, 23 monitoring actions of State aids by which the undertakings in the free trade zones have benefited. Last 2 types of actions are ongoing. The State Aid Policy Paper was finalized and sent to the European Commission for analysis on 09.03.2006. For the enforcement of the State Aid Policy Paper an Action Plan will be worked out. The working group set up at the CC level for the accomplishment of the specific attribution in the State aid sector after accession to EU, organized working meetings with the representatives of the Ministry of European Integration as Management Authority and with the representatives of the Ministry of Public Finance as Management Authority for the Community Support Framework. These meetings were organized in the context of strengthening the efforts to provide assistance to the management authorities and to the intermediate bodies involved in implementing the European structural instruments. The purpose of the provided assistance is to observe the State aid rules when Romania as Member State shall apply the operational programs. As regards the steel industry, further to the opening the investigation to SC Mittal Steel SA Galati, the company voluntarily reimbursed the amount of RON 34,664,058 and related interests amounting of RON 7.961.927. These amounts represent the facilities granted under the form of exemption from the payment of budgetary obligations, penalties and additional amounts due to delay payment owed to the Local Council, Galati County Council and to the Ministry of Public Finance. After this reimbursement, the Competition Council has issued the decision no. 56/13.03.2006 establishing that the investigation remained without subject as concerns the reimbursed sums and the other sums do not represent State aid. As regards the situation of the steel companies not included in the National Restructuring Programme, the Competition Council received the approval of the EC on the Note having as subject the analysis of financial measures granted to SC Lamdro SA, susceptible to represent State aid. The decision of opening the investigation was communicated to SC Lamdro SA Dr. Tr. Severin and the Ministry of Public Finance. For SC Artrom SA Slatina, SC Intfor SA Galati and SC Silcotub SA Zalau, in the reporting period there were discussions with the European experts and the beneficiary companies as concerns the State aid received by the companies. As regards the Competition Council’s financial and human resources, in order to further strengthen the CC administrative capacity and reduce the personnel turnover, by the amendments of the Competition Law the salaries of the specialised personnel were effectively increased. The salaries of the competition inspectors are 3 times higher than those of the other public servants. Moreover, the financial resources allocated to the Competition Council in 2005 increased by over 30% in comparison with 2004 allowing a proper and stable functioning of the authority. Furthermore, the new State Budget adopted by the Parliament provides for another increase of 36% in the Competition Council financial resources in 2006 as compared to 2005.

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Since the autumn of 2004, four sessions for recruiting new personnel were organised. The recruitment process was completely transparent as the contest announcement and all the information necessary were available on the Competition Council’s website and published in the Official Gazette in accordance with the relevant legislative requirements. The new 47 competition inspectors, required to fill in the vacant jobs of the Competition Council, were employed after a strict selection based on professional skills, IT knowledge and foreign languages proficiency. Currently, out of the 268 employees of the Competition Council, 175 are allocated at central level and 93 at local level.

Competition Council’s personnel

35%

65%

Territorial level Central level

A new recruitment process will be organised in the period March 27 - April 3, 2006. As the Competition Council became a well-known and respected institution, working in the Romanian competition authority has become more attractive. Due to the increase of salaries the fluctuation of staff has been significantly reduced. In this context, when

Competition Council's Budget (Million RON)

3.5

19.2

25.4

34.6

2003 (before merging with the Competition Office)

2004 (after merging with the Competition Office)

2005

2006

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recruiting contests are organised, the Competition Council receives from well-qualified candidates more than 15 applications per published vacancy.

AGRICULTURE Horizontal Aspects During 16-17 of March, the Paying and Intervention Agency for Agriculture (APIA) has organised a competition in order to fill in 51 vacant posts out of which: 25 posts are at the central level and 26 posts are at a local level. Currently 2,015 persons are hired within APIA, distributed as follows: - At the central level 136 persons are hired and are organised in 12 different

Directorates: National support and direct payments; Integrated Administration and Control System (IACS); market intervention mechanisms, trade mechanisms, EU payments, control, finances, IT, anti-fraud, audit, legal and human resources.

- At county level, 468 persons are hired, having as main attributions the implementation of the APIA strategy at county level, implementation of IACS for the registration and control of the support granted for farmers, control of the data within the Farm Registry, the electronic administrative control of the farmers’ applications and on-the-spot controls.

- At the local level, 1,411 persons are hired, having as main attributions the receiving and the first administrative control of the applications.

As regards the locations where the branches of APIA will base their headquarters, 90% of the needed county spaces and 100% of the needed local spaces have been ensured. Also, vehicles have been purchased for 28 of the county branches. In the month of February, the procedures required for the accreditation of APIA have begun. The main actions will regard direct payments, trade mechanisms, market intervention for cereals and the organisation and functioning of APIA. As regards the Paying Agency for Rural Development and Fisheries, the legal and institutional framework necessary has been set-up by the entry into force of EGO no. 13/22.02.2006 (OJ no. 185/27.02.2006) regarding the setting-up, organisation and functioning of APDRP. Also, at the end of February, by a Ministerial Order, the organisational chart and the Organisation and functioning Regulation have been approved. The Agency’s structure comprises 3 levels, the central and regional level, taken over from the SAPARD Agency, but also the county level, by taking over the Designated Technical Services from MAPDR. A competition is currently being organised for filling 136 vacant posts within APDRP. The results will be known starting with 01.04.2006. The institutional structure of the Agency ensures the observance of the following principles and criteria required for accreditation: separation of the responsibilities between the technical implementation function and the paying function; separation of activities within the paying function: authorisation, payment, accountancy, independent internal audit; double control (the “four eyes” principle). An inventory of the current equipment existing at every regional and county Centre has been made. This has helped establish the investments required for every entity for 2006. The financial resources are foreseen in APDRP’s budget. Until 30.03.2006, the Agency will draft the tender books for the purchase of IT equipment, office equipment and vehicles. As regards the Integrated Administration and Control System, the technical specifications for the necessary software have been finalised at the end of February and the tender has been started on 13.03.2006. The assesment of submitted offers will

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start in May 2006. The technical specifications for the necessary hardware for APIA will be finalised by the end of March 2006, so that the call for tender will be published in April. In order to set up a Land Parcels Identification System (LPIS), the delivery of orthophoto images will be completed by the end of April 2006. The photos that are already delivered by the National Cadastre Agency are currently being digitised into physical blocks. This process will be finalised by the end of June. The agricultural farms registration campaign required for the completion of the Farm Registry has started in October 2005 and has led to the registration of 1,247,140 farms (accounting for 7.212.664 ha), 83% of the total number of farms. 48% of these have been introduced in the database. Before, but also during the registration process, the farmers have been informed as to the basic principles of direct payments and the registration procedures. The information campaign has comprised press conferences, newspaper articles, leaflets, posters, information sessions both at local and general sessions of farmers. The process of creating a link between the farm registry and LPIS will also be accompanied by an information campaign for farmers. Furthermore, the technical assistance project for IACS will also organise a campaign meant to raise the awareness of the rural population of Romania on the direct payments issues. In the field of trade mechanisms, starting with March 2006, Romania has introduced a simplified version of export and import certificated and the guarantees system for imports and exports for certain agricultural products (for exports: bottled wine with origin controlled denominations and bottled sparkling wine, for which an export premium is granted, while for imports, for poultry meat and pork, within the quotas established together with the European Union through the Additional Protocol to the European Agreement). The following normative acts have been adopted: - Common MAPDR/MFP Order no. 75/248/2006 (OJ no. 176/23.02.2006) on the

granting of premiums for wine exports; - GD no. 255/22.02.2006 (OJ no. 189/28.02.2006) for establishing the products for

which export and import certificates are issued and the amount of export and import guarantees for agricultural products;

- MAPDR Order no. 150/28.02.2006 (OJ no. 194/01.03.2006) for the approval of establishing additional quotas for the import in Romania of certain pork and poultry meat products form the European Union and the administration of these quotas during the period of March – December 2006.

For the administration of the import and export certificates system, 10 persons were designated from the Directorate of market mechanisms and foreign trade within the Paying and Intervention Agency for Agriculture and 2 from the Financial Directorate, the guarantees compartment. The system is functional, during 01.03 – 20.03.2006 170 import licences, as well as 12 export licences being issued. Also, 10 guarantee deposits have been made. Currently the legislative framework regarding the organisation and implementation of APIA of a compliant intervention system for the cereal market is undergoing adopting procedures. For 2006, the wheat market will be regulated through an intervention mechanism, by purchasing a determined quantity of wheat at the intervention price, observing the minimum quality and quantity requirements, which will ensure stability for wheat prices in case the supply will be superior to the demand. 12 persons are currently hired within the Directorate of market intervention for crops.

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As regards the allocation of milk quotas, 299 applications were received and registered for the Milk buyers’ registry. Also, the draft procedure for the allocation of individual milk quotas has been discussed within the Milk Council within MAPDR. Sanitary veterinary sector In the field of animal disease control measures, the Government Decision no. 89/2006 regarding the Strategic Program for the monitoring, control and eradication of Classical Swine Fever in Romania was adopted. Also, a contingency plan for Classical Swine Fever and a National Program for accelerated eradication of Equine Infectious Anaemia (EIA) have been drafted. Equine exports from Romania have been banned until the normalisation of the epidemiological situation caused by EIA. As regards avian influenza, 2240 inspections have been made, with 80 sanctions worth 100,825 RON being applied and 554 warnings being given. In the field of collecting and neutralising animal by-products (rendering), the Agency of State Domains has organised the tender for the concessioning of the rendering activity for animal waste. According to the call for tender, the calendar is as follows: - Submitting of offers -until 15.03.2006; - Opening of offers and designation of the winning companies – 16.03.2006 –

27.03.2006; Until 15.03.2006, the tender books purchase is as follows: - 47 purchased tender books; - 21 purchasing companies: 15 Romanian and 6 foreign companies (from Hungary,

Slovenia, Germany, Italy, Austria); The contract with the winning companies will be signed by the end of April 2006. 16,443 inspections have been made according to the provisions of the National Control Program. 126 ordinances for definitive closing of sanitary-veterinary activities and 35 ordinances for temporary suspension of sanitary-veterinary activities have been issued. 361 fines, worth RON 4,163,000 were given. In order to check the observance of the interdiction to use animal protein based feeds, 71 controls were performed. No irregularities were found as regards the implementation of the legislation in force. As regards the identification and registration of animals, on 16.03.2006, within the National Animal Identification and Registration System (SNIIA) 2,682,139 bovines (97% of the total livestock), 7,727,683 ovine and caprine (78% of the total livestock) and 3,614,535 swine (65.8% of the total livestock) and 285,069 equines (27.8% of the total livestock) are recorded. Also, until 16.03.2006, a number of 1.094.281 exits of animals from the system were recorded within the SNIIA. These exists consist of slaughtering, exports, death, disappearing, etc. The system allows the registration by the identification code of origin for animal imported from EU Member States and can issue reports on the location where the imported animals are registered. Romania has decided that the second means for the identification of sheep and goats will be a second ear tag, with the same technical characteristics as the one that is currently used. The first date for the judgement of the appeal submitted by the Daploma – Caisley consortium was 27.02.2006. The decision was postponed for 13.03.2006, when the

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appeal has been rejected and the Court pronounced in favour of ANSVSA. This decision is final and irrevocable. In the field of public health in the sanitary veterinary sector, all D category units that have not drawn up upgrading plants or will not be reclassified as direct sale units have been definitively closed. Compared to the evaluation on 15.02.2006, the total number of red meat units has decreased from 515 to 496 (21 D category units have been definitively closed and 2 new category A processing units were approved). The number of D category units has decreased from 201 to 133. 23 red meat units are compliant with EU hygiene rules and 315 have drawn-up upgrading programs with deadline 31.12.2006. Compared to the evaluation on 15.02.2006, the total number of milk processing establishments has decreased from 428 to 398. The number of D category units has decreased from 189 to 81 (30 units have been definitively closed). 46 milk processing units are compliant with the EU hygiene rules and 247 have drawn-up upgrading plans with deadline 31.12.2006. Construction works have begun for all the 8 Border Inspection Posts (BIP), and the works are progressing according to the agreed schedule. It is estimated that the operationalisation of the BIPs will take place in June 2006. As regards animal welfare, during 15.02 – 20.03.2006 a number of 115 inspections were performed. 13 sanctions were given, worth 7200 RON. 2 ordinances for temporary suspension of activity and one ordinance of suspension of activity were issued. The personnel within the animal welfare sector have been trained throughout the first trimester of 2006 in order to correctly implement the transposed acquis. Rural Development The implementation stage of the SAPARD Program in Romania The implementation stage of the SAPARD Program in Romania at 8.03.2006 is: - 2036 contracted projects from which: 237 projects measure1.1, 605 projects

measure 2.1, 681 projects measure 3.1, 495 projects measure 3.4, 7 projects measure 4.1 and 11 projects measure 4.2.

- 751 finalized projects from which: 89 projects measure 1.1, 395 projects measure 2.1, 197 projects measure 3.1, 67 projects measure 3.4 and 3 projects measure 4.2.

From the total of 1.133,03 million EURO, representing financial allocations in accordance with the Financial Annual Accord for 2000-2005 period, concordant with the accredited measure in the SAPARD Program framework, the situation of commitment sums and the effectuated payments is as it follows: - The value of the contracted projects = 710,37 mil. EURO - The value of the effectuated payments = 465,30 mil. EURO The most attractive sub-measures in the SAPARD Program framework are represented by „ Meat, meat products and eggs ” (99 contracted projects) and „ Milk and milk products” (59 contracted projects) from the measure 1.1, „ Fields crops ” (424 contracted projects), „Dairy cows/buffaloes” (166 contracted projects) from the measure 3.1, respective „Rural tourism” (272 contracted projects) and „Other activities”(187 contracted projects) from the measure 3.4.

FISHERIES As regards the Management of fleet and live aquatic resources, the administrative and operational capacity of the National Agency for Fisheries and Aquaculture (ANPA) has been consolidated by the supplementation of personnel by 38 new posts,

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especially for the management of the structural policy and for activities of inspection and control. ANPA continues a process of cancellation of the concessioning contracts existing in the Danube Delta and the National Company for the Administration of the Fisheries Fund has cancelled the concession contracts existing in the Danube area. In order to set up the first fishing harbour at Cap Midia, the necessary documentation is currently being drafted. Also, a Government Decision regarding the transfer of land from the administration of the Ministry of Transports, Construction and Tourism to the Ministry of Agriculture, Forests and Rural Development is undergoing approval procedures. As regards the catches recording system, the existing data is being registered and processed in order to have the possibility of cross checking the fishing log, the disembarking statement and the note of first sale for each fishing vessel. As regards the Fishing Fleet Register, ANPA has made its latest report to the European Commission at the beginning of March. There are 386 fishing ships and vessels that are registered at the Black Sea (measured in gross tonnage), out of which 17 are longer than 15 meters. In the field of market policy, until now 44 fishing organisations have been recognised, out of which: 17 in the Danube Delta, 4 at the Black Sea and 23 on the Danube and other areas. As regards the structural policy, EGO no. 13/22.02.2006 (OJ no. 185/27.02.2006) regarding the setting up, organisation and functioning of the Paying Agency for Rural Development and Fisheries by the reorganisation of the SAPARD Agency has modified Law no. 192/2001 regarding live aquatic resources, fisheries and aquaculture, abrogating the provision which stated that the National Company for the Administration of the Fisheries Fund was the intermediary organism for the implementation of the Operational Program for fisheries. APDRP will manage all payments from the European Fisheries Fund. State aid is currently being given for the preservation of the fisheries genetic heritage. Romania intends to grant state aid for education and scientific research in the fisheries field.

TAXATION The tax inspectors on VAT management have solved within the period January – February 2006, at national level, a number of 8,574 VAT refund requests, amounting 957.42 million RON and have rejected from refunds the amount of 32.94 million RON. In order to combat the tax evasion, 18,634 tax inspections were carried on during the first two months of 2006 and were established additional payments of 306.3 million RON. The Financial Guard performed 5,837 controls, during 1 – 17 of March 2006, collected fines amounting to 8.76 million RON and sent to responsible institutions 69 notices for an estimated prejudice amounting 17.60 million RON. Regarding the adjustment of the legal framework for VIES and SEED systems, the database for SEED Register was completed with all the contributors. The evaluation reports and the contract with the developer for the interconnectivity of taxation IT systems were sent to the Delegation of the European Commission in Romania for approval and it is estimated that the contract will be signed at the end of March – beginning of April 2006.

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SOCIAL POLICY AND EMPLOYMENT In the field of social dialog, during the reference period, a twinning project with German partners and Phare financing was concluded. The project entitled “Promoting Autonomous Social Dialogue” – promoting the bipartite social dialogue, concerns the relations between employers and employees. As regards public health, the draft laws regarding the reform in the health system was adopted on 21 February 2006 by “the vote of confidence” procedure. Currently, this normative package is at the Constitutional Court for debate. Its approval is expected by the end of March. For labour law, the Romanian Parliament adopted the Law regarding the protection of the employees’ rights in case of transfer of the undertaking, of the unit or of parts of these, which transposes the provisions of the Directive 2001/23/EC, at the end of February 2006. Currently this Law is pending promulgation. On 26 January 2006, the Government approved the draft law on the Guarantee Fund for payment of the wage debts. Currently, this draft law is on the agenda of the Senate in order to be adopted. After its adoption by the Senate, the draft law will be sent to the Chamber of Deputies for debate and adoption. The parliamentary procedure is foreseen to be finalized by the end of May 2006 In the field of health and safety at work, the GD no. 300/2006 (MO nr. 252/21.03.2006) regarding minimum health and safety requirements indications for temporary or mobile construction sites was adopted by the Government and which fully transposes the Directive no 92/57/EEC. The Draft Law on health and safety at work, which fully transposes the Directive 89/391/EEC regarding measures that should be taken in order to promote the improvement of health and safety of workers at the workplace, has been approved by the Government on 8 March 2006; currently is under parliamentary debate. As regards the European Social Fund, currently, 52 positions are filled in within AM POS DRU from a total of 59 positions included in the commitments assumed to be filled in till the end of June 2006. At the National Agency for Employment level – at the Intermediate Body for POS DRU all the 30 allocated positions have been filled. At the regional level, beginning with 1 February 2006, the total number of positions increased by 70, according to GD 138/2006. Currently, from a total number of 174 positions, 131 are filled. At regional level, the Ministry of Education and Research is organized in 8 regional points/units of the IB POS DRU directorate, currently organized within County School Inspectorates, with 56 positions (7 positions /region). Currently, there 44 positions out of 86 positions are filled (14 positions within the directorate and 30 positions within regional points). As regards social inclusion, the “Strategic Plan in Social Inclusion Field” was elaborated. The Plan includes also the quantitative and qualitative indicators that will be the basis for drafting the Monitoring report in June 2006. The Department of Social Assistance and Family Policies proposed some changing of the Organization and Functioning Regulation, in order to organize a specialized compartment on social inclusion within the territorial Directorate for labour, social solidarity and family. The main responsibilities of this compartment are the following: assuring the monitoring of the priorities established in the Strategic plan for social inclusion; collecting the data and social indicators at county level; organizing working groups with representatives from public authorities and civil society on issues related with social inclusion. In the field of social assistance, the Law 47/2006 (OJ no 239/16.03.2006) regarding the social assistance system was adopted.

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The National Agency for Employment (NAE) has granted job-matching services to over 507,000 persons, representing an employability vacancies degree of 83,5%. Also, 55,360 long-term unemployed were employed (18,407 women), out of which: 11,948 are young long-term unemployed (4,462 women) and 43,412 are adult long-term unemployed (13,945 women The National Strategy for equal opportunities between women and men for the period 2006 – 2009 and the General Action Plan for the implementation of this Strategy were approved in the Government session on 8 March 2006.

INDUSTRIAL POLICY The privatisation and restructuring process for the companies in the AVAS portfolio A number of 9 announcements have been made public (1st February – 15 March 2006), out of which 2 were advertisements for the sale of majority share packages (Laminorul SA Braila, S.P.C. Splai Bucuresti) and 7 were announcements for the sale of minority share packages. A number of 7 share sale-purchase contracts have been concluded, out of which one contract for the sale of majority share package (SC Constructii Feroviare Moldova, Iasi) and 6 contracts for the sale of minority share packages. The total sold share capital is of RON 1.9 million, and the volume of investments committed is of EURO 221,000. Within the debts’ recovery activity carried on by AVAS, the number of AVAS debtors under foreclosure proceedings beginning 2006 until now is 61,204. Following participation at 45 public auctions organized by AVAS an amount of RON 12.45 million was obtained, the number of debtors for which proceedings of account garnishment have been instituted beginning of 2006 until now is 1,768. Pursuant to such proceeding, an aggregate amount of RON 15 million has been recovered from the accounts opened by 735 debtors. Moreover, conveyance of writs of execution and payment summons, as well as enforcing the distraint, and even the publishing of the sale announcements, brought directly cash of RON 27 million.

CULTURE AND AUDIOVISUAL POLICY The draft Law for the approval of EGO no 3/09.02.2006 (OJ no 133/13.02.2006), modifying the audiovisual Law no 504/2002 was adopted by the Chamber of Deputies on 7.03.2006 and submitted to the Senate on 9.03.2006. Following this, the draft law will be debated in a plenary session of the Parliament. As regards the draft of the approval Law of GO nr. 39/2005 on cinematography, the Parliament’s Commission for Culture, Arts and Media adopted on 8.03.2006 the text amended as result of the consultations with the European Commission. The approval by law of the ordinance as amended above is expected to take place before the end of June 2006.

REGIONAL POLICY AND THE COORDINATION OF STRUCTURAL INSTRUMENTS Legislative and institutional framework. Administrative capacity POS Increase of Economic Competitiveness

In accordance with the Order of the Minister of Economy and Trade no 74/23.02.2006, the Intermediate Body for the implementation of measures within the energy intervention field was organized in 4 departments and operates within the General Directorate for Energy Policy.

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By the adoption of the Order no 262/23.02.2006 of the Minister of Transports, Constructions and Tourism the Regulation for the organization and functioning of the National Tourism Authority designated as Intermediary Body POS Increase of Economic Competitiveness was approved. POS Environment Infrastructure

In order to strengthen the administrative capacity of the Intermediate Bodies for POS Environment Infrastructure, the staff recruitment contests for both management and executive level were organized. Out of 168 available positions (21 for each Intermediate Body), 104 of them were filled in. At the Managing Authority level, following the competition organized in this period, the position of director for Financial Control Directorate was filled in. Approximately 20 experts from the Managing Authority participated in 7 training sessions on the following topics: monitoring and evaluation of projects and programmes; project management and supervision; public awareness, impact assessment and permitting process; PRAG training (basic); preparation of projects for water/wastewater sector; investment schemes for small waste management projects; projects for nature protection/biodiversity. POS Transport Infrastructure

Within the framework of the PHARE 2004 programme, a SWOT analysis of the institutional has been elaborated. A new contest was organised in order to fill in 50 places (44 places within the General Directorate for Financial Affairs and 6 places within the Public Internal Audit Directorate). POS Human Resources Development

17 positions have been filled. Currently within the Management Authority for Sectoral Operational Programme for Human Resources Development (AM POSDRU), out of a total of 75 positions, 52 are occupied. A new recruitment session is ongoing. The Intermediate Bodies

Currently, all 30 positions allocated to the National Agency for Employment are filled in filled in. At regional level, beginning with 1 February 2006, the total number of positions increased with 70, according to GD no 138/2006. Currently, from a total number of 174 positions, 131 are filled in. PO Administrative Capacity Development

By the adoption of the GD no 137/2006 regarding the organizational structure of the Ministry of Administration and Interior the General Directorate for Administrative Capacity Development was designated as AM PO Administrative Capacity Development. In order to achieve the transfer of expertise, 5 members from Phare Implementation Unit were transferred from the Central Unit for Public Administration Reform to the AM PODCA. Following the recruitment contest 8 staff positions and 2 contractual positions have been occupied. PO Technical Assistance

4 positions out of 6 were occupied within Technical Assistance Directorate. Currently, The Managing Authority for PO AT has 21 allocated positions out of which 17 are already occupied.

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Regional Operational Programme

Through the GD no 243/2006 (OJ no 194/1.03.2006) the new organizational chart of the Ministry of European Integration has been established. According to the new legal act, MIE fulfils the following functions: Implementing Agency for Phare Economic and Social Programmes and Implementing Agency for CBC Programmes; Managing Authority for POR; Managing Authority for European Territorial Cooperation Programmes (under the Objective 3). To comply with its responsibilities as AM POR and in the same time to ensure the Phare phasing-out process according to EDIS requirements, in parallel with the smooth transfer of expertise from Phare to Structural Funds, the internal organizational chart ensures the bridge, in terms of structures and staff, between the pre-accession and post-accession capacities. Within the chart, 147 positions are provided for the AM POR and Phare ESC Implementing Agency. Thus, 16 positions are occupied out of 49 allocated positions for AM POR. The Intermediate Bodies

As concerns the regional level, in the first Quarter of 2006, the 8 RDAs will continue to recruit the necessary supplementary personnel for managing and implementing the regional projects under POR priorities. In order to fulfil the delegated tasks for the Implementation of the Regional Operational Programme in parallel with Phare phasing-out process carried out in compliance with EDIS requirements, the ARDs have elaborated a comprehensive Recruitment and Training Plan. In order to accelerate the progress on Structural Funds compliance, both from the point of view of technical expertise of future IBs and the development of the administrative and institutional capacity, there have been set up special units for preparation for SF within the 8 ARDs, coordinated directly by the ARDs’ directors. Meanwhile, MIE has intensified the dialog and the joint work with the 8 ARDs. The process has been extended from the meetings, workshops, debates organized on the occasion of the POR elaboration to the implementation system, delegated attributions, financial management and control and internal audit. With the support of the national twinning project Phare 2004, a comprehensive training package has been elaborated for the AM POR and IBs, focussed on technical issues and details of the whole implementation system and mechanism, on project selection and appraisal, on verification of expenditures and of payment claims, on the role and functioning of regional and local partnerships in the process of implementation, monitoring and evaluation of the projects and programme financed by Structural Funds. The training themes have been redrafted and adjusted to accommodate with the requirements, both of the AM and IBs, resulted from a more advanced elaboration of the delegated attributions, and compliance with sound financial management and control. Taking into account the important role that the final beneficiaries will have in dealing with management and implementation issues under the ROP, MIE has carried out an intensive awareness campaign, targeted on local public authorities (county councils, city halls, administrative levels of the small and medium towns, local Chambers of Commerce and Industry, Small and Medium Size Enterprises, primary and secondary level education, etc). The European Territorial Cooperation

Taking into account the future management of the Objective 3 and the existing Phare CBC Programmes, the new organizational chart foresees the current CBC Directorate to be transformed into a General Directorate for European Territorial Cooperation.

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The General Directorate for the European Territorial Cooperation will include 3 directorates: a CBC Directorate dealing with the existing Phare CBC Programs, an Internal Borders Territorial Cooperation Directorate and an External Borders Territorial Cooperation Directorate. The last two directorates will cover the Objective 3 – European Territorial Cooperation Programmes as follows: Cross Border Programmes with Hungary and Bulgaria, Trans-national and Interregional Programmes at the internal borders and the IPA Programme with Serbia and Montenegro and ENPI Programmes with Ukraine and Moldova, at the external borders. For the new General Directorate, there are 69 positions for civil servants, excluding the existing 9 counsellors for European integration. Planning and programming The elaboration of the National Strategic Reference Framework and the OPs is ongoing, in order to finalise them until the end of March and submit them to the EC. The European Territorial Cooperation

In order to start up the process of elaborating the programming documents, the necessary structures have been created: the Programming Committee - a bilateral partnership structure that will discuss and decide on the strategic and institutional content of the programme; the Coordination Group (Task Force); the Working Groups established at the national level. In order to elaborate the POs for the European Territorial Cooperation at the internal borders, the activities of the Joint Groups of the experts from the three countries involved in the elaboration of the PO Hungary-Romania and PO Romania-Bulgaria have already started, by organizing working meetings. Partnership POS Increase of Economic Competitiveness

Two Intermediate Bodies (General Directorate for Energy Policy from Ministry of Economy and Trade and National Authority for Tourism) organised debates and partnership consultations as follows: - On February 20th the IB for implementation of measures within Energy intervention

field organized a meeting with the potential beneficiaries from the energy complexes (coal and power integrated systems), in order to disseminate information regarding the manner of accessing Structural Funds for co-financing projects in the energy field and to discuss the project proposals.

- On March 14th – meeting with the representatives of professional associations, tourism employers, The National Institute for Tourism Research and Development, in order to present and comment upon the drafts of the Priority Axes within the sectoral operational programs and the regional operational programme.

POS Transport Infrastructure

In this period there have been organized meetings between MTCT and all involved ministries as well as the operational sections of MTCT dealing with air, maritime, rail and road transport. Several meetings with the AM POR took place in order to clarify the overlapping between POS Transport Infrastructure and POR. POS Human Resources Development

A consultative meeting was organized on 10th of March in Bistrita-Nasaud, North- West Region, with the participation of representatives from the business environment, employers’ association and trade unions, NGOs interested in accessing European

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funds. Within the POS DRU presentation, the priority axis, the key areas of intervention and indicative operations have been emphasized, as well as the financial allocations on each priority axis. Also, aspects regarding project promoters’ preparation and developing of the social economy were clarified. PO Administrative Capacity Development

Bilateral meetings with the main stakeholders took place. Debates on the draft PO for Administrative Capacity Development and discussions with some of the most important NGOs in the field took place on 22nd of March. PO Technical Assistance

Until now, among general and bilateral meetings with partner institutions, the Technical Assistance Working Group (established in October 2005) met four times, the last meeting being held on 15th of March 2006. The issues discussed in the Technical Assistance Working Group are the content of the OP AT, of the TA priority axes of other POs, the training coordination mechanism and implementation issues. In this regard, a common structure of all AT axes and a set of specific indicators have been proposed. Regional Operational Programme

At the end of February, a working meeting with the ARDs representatives was organized in order to finalize the POR, to discuss each priority axis and to agree on the operations’ final version to be financed under the programme. The discussions for establishing the priority axis final version continued with the participation of ADRs representatives and other ministries - Managing Authorities of Operational Programmes and the Ministry of Public Finances. Operations financed under POR were established in order to avoid the overlapping with the other Operational Programmes. Moreover, POR major fields of intervention were established. Project Pipeline Development POS Increase of Economic Competitiveness

Following the meetings with potential beneficiaries, the IB for implementation of measures within Energy intervention field has prepared a preliminary list of project proposals compatible with the POS Increasing Economic Competitiveness priority axis for the energy sector, projects that could be financed from Structural Funds. POS Environment Infrastructure

In order to prepare the project pipeline financed from post-accession funds, the activity focused on the preparation of Tender Documents for the Technical Assistance projects financed by ISPA and PHARE – 6 contracts prepared from ISPA, with a total value of 25 billion Euro, and 1 contract from PHARE, with a value of 5.5 billion Euro. Their completion is foreseen for the end of March. POS Transport Infrastructure

A new version of the indicative project pipeline has been developed. This version is more refined and closer to the final product. This version will be included in the final draft SOP Transport Infrastructure to be sent to the EC by the end of March. PO Administrative Capacity Development

In order to implement the PO strategy, the following types of projects have been envisaged: nation-wide projects (service contracts) and demand-based project (grant schemes). Regional Operational Programme

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At present, there is a first draft of projects to be financed under POR (under ERDF) identified by ARDs together with the regional partners. Monitoring The activities for the SMIS are gradually implemented and the information system will be operational by the end of 2006.In this regard, the following SMIS implementing dimensions have been set up: - Defining the SMIS concept – fulfilled;

- Developing the IT infrastructure - fulfilled;

- Developing the software application - three Oracle web software applications have been developed on the basis of the requirements analysis.

The NSRF-SMIS application is generally completed, only some small adjustments are still needed in order to better meet the requirements of the draft of the new Implementation Regulation, especially those for the categorization of intervention and the five dimensions. The formal acceptance testing exercise will take place in April 2006. At this moment, SMIS is capable to fulfil all the relevant functions for the programmes’ definition and management, projects’ approval and modification, monitoring and evaluation, audit and funds flow management. The immediate priority for the SMIS further development is the SMIS interfacing with the management information system of the European Commission (Information system under development within the SFC2007 project – Electronic Data Exchange). In this respect, the Managing Authority for the Community Support Framework has started the analysis of the developing possibilities of this interface. - The human resource development for the SMIS use

This dimension is structured bellow on activities and sub-systems as follows: Activity 1 - The training for SMIS users has been implemented as a continuous mechanism according to the role that users have during the programme’s life-cycle. The training has been delivered within some dedicated successive sessions to each user-group with the same role. Activity 2 - The process of drawing up the NSRF-SMIS procedures’ manuals is ongoing. These manuals establish the SMIS user-groups and their roles according to the system’s windows and levels, explain the type of information which should be filled in the system and the source which provides that information and gives orientation regarding the best moment for entering the information into the SMIS. Activity 3 - Help-Desk is an interactive module of SMIS through which documents and relevant information for SMIS users will be available on-line (such as procedure manuals), as well as a forum by which users will raise questions and receive answers in a precise time-scale according to the problem emergency. This instrument is now being tested and will be used in April 2006. - Development of the communication infrastructure

A study was made in order to develop the SMIS communication infrastructure. The study reveals several aspects which affect the infrastructure characteristics, such as: the system expansion, usability forecast, sizing parameters, workload estimations, technology changes and the market supply for internet connecting services. The tender dossier for the SMIS communication infrastructure was drawn based on this survey. It is envisaged that this infrastructure will be functional by the end of December 2006. - Development of a website for public information

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As for the public awareness regarding the programmes co-financed by the EU, a website will be created, its source of information being a reduced copy of the main SMIS database which, from the security and performance reasons, will be installed on a separate computer from the SMIS central servers. The Managing Authority for the Community Support Framework is analysing now the types of information that will be published on the site. Evaluation The activities of the Evaluation Working Group

The first meeting of the Evaluation Working Group (EWG) was held on the 22nd of February 2006. The main objective of this working group consists in strengthening the institutional framework responsible for the evaluation of the Operational Programmes financed through the Structural and Cohesion Funds, as well as in the overall methodological coordination of the evaluation exercises to be performed during the 2007-2013 programming period. The Evaluation Central Unit (ECU) established within the Managing Authority for Community Support Framework has drafted and disseminated within the EWG a set of documents on the following aspects: the EWG mandate, the standards of evaluation, the proposed model for the organization of the evaluation function in Romania – the latter document describes the institutional set-up for evaluation, the types of evaluations that will be performed during 2007-2013 programming period, the responsibilities of the evaluation units established within the Managing Authorities as well as the responsibilities of ECU. The National Evaluation Strategy drafting stage

As regards the draft of the National Evaluation Strategy (NES), an analysis of the national legal framework that concerns evaluation have been accomplished, in order to identify the relevant provisions regarding the evaluation process and to improve the legislation in this field. A second stage of NES drafting process is currently underway. It consists in an assessment of the Romanian evaluation culture, by reference to the 9 indicators for ranking the evaluation culture laid down in the International Atlas of Evaluation and to the 3 additional indicators which refer to the monitoring capacity, evaluation diversity and information flow within the Government relating to evaluation. The drafting of the section related to evaluation within the Operational Programmes

In order to ensure a unitary approach of evaluation within all the Operational Programmes, as well as to fully comply with the new requirements on evaluation set through the new General Regulation on Structural and Cohesion Funds, ECU has drafted the section related to evaluation from the chapter dealing with the OP monitoring and evaluation systems. This section describes the institutional and procedural evaluation framework to be established for the 2007-2013 programming period, the types of evaluations that will be performed and an indicative planning of the OP evaluation exercises. Evaluation capacity building actions

ECU, with the support of the technical assistance granted through the Phare Programme, has drafted an Action Plan that comprises measures structured on two dimensions: (i) strengthening the institutional capacity of the structures that will be involved in the management of evaluation activities and (ii) individual capacity building measures for the staff dedicated to evaluation activities. Actions for raising the evaluation awareness

Another initiative pursued by ECU, with the support of Phare technical assistance, consisted in the development and implementation of measures aimed at raising the

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awareness of political and decision-making factors towards the importance and utility of evaluations. To this purpose, ECU has overseen the preparation of an Evaluation Awareness Raising Plan, which is at an advanced drafting stage and which will allow the development of a common understanding of the evaluation concept and the promotion of the use of evaluation, as an inseparable tool for managing publicly funded programmes. This plan will also allow introducing to the target audience the benefits of evaluation, both in connection with the public interventions implementation phase as well as in connection to the programming process. Development of a professional evaluation community

Within the framework of the complex actions aimed at developing a professional evaluation community, MFP – AM CSC has launched a training course in the evaluation of publicly-funded socio-economic development programmes, addressed to the private sector and consisting in 12 weekly 1-day sessions and a summer school on evaluation, which will be implemented in the period March-July 2006. Throughout this training programme, the participants will receive basic information on evaluation as well as detailed presentations of the following aspects: the types of evaluation, the evaluation criteria, performance indicators, evaluation techniques, drafting evaluation reports, evaluation at the level of the European Union. Internal audit In this period, within the Phare Project - “Development of the system and performance audit in Romania” implemented by the Ministry of Public Finance there have been achieved the following results: printing and distributing of the Manual on internal audit – basic level (400 ex); printing of the Training course on performance audit; reviewing the final draft of the Manual on internal audit – advanced level; finalization of the last joint audit missions of the 25 missions planned, that included also a presentation of the experience achieved of the Romanian auditors as a result of the mission performed with the foreign consultants. 9 methodological guides on performance audit on different areas of activity have been elaborated. Certification and payments Financial flows generated by the structural instruments were set up by the Memorandum approved by the Minister of Public Finance at the end of February 2006. Thus there have been foreseen direct payments (from the Paying Authority to the final beneficiary) and indirect payments (grant schemes - through the payments units within the Managing Authority). Co-financing There has been established, through a Memorandum approved in February that the amounts necessary for ensuring the co-financing from the state budget for projects financed by Structural and Cohesion Funds will be allocated in a global position in the State budget, at the level of the Paying Authority. Public Procurement The developments as regards the adoption of the new public procurement legislative framework (in order to align with the current acquis) is presented in the Chapter “Free Movement of Goods”. Concerning the ex-ante control, a working group was set-up in order to clearly define the ex-ante control in the public procurement field, to establish the principles and mechanisms of its implementation at central and local level. The draft legal act on the ex-ante control is under elaboration and will be adopted after the consultations of March 30th with the European Commission.

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ENVIRONMENT On 27 February 2006, a new meeting of the Inter-Ministerial Committee for the Coordination of the Integration of Environmental Protection into the National Sectoral Strategies and Policies was held. The meeting had as main purpose to analyse the preliminary conclusions of Peer Review Mission of the European Union representatives in Romania (during 7 – 10 February 2005) and to establish the priorities in next period. Also, commitments status assumed during negotiation process was analysed and a plan for acceleration of this process was established. As concerns the strengthening of the administrative capacity at levels of environment administration, during the reference period, in order to fill all the remaining vacant posts, as well as the posts approved for 2006, competitions were organized at the level of the Ministry of Environment and Water Management, the National Environmental Protection Agency, all Regional Environmental Protection Agencies and at all Local Environmental Protection Agencies level. So, out of the 1660 additionally posts approved to be filled until the end of the year 2006, presently, 1.267 posts are filled in. At the same time, as regard the strengthening of the administrative capacity of bodies for SOP – Environment (REPAs), competitions were organized at all REPAs level for fill in all 168 posts approved by EGO 1/2006. Competitions for filling in the posts for Deputy Director Executive at the level of each REPA were held during 27-28 February 2006. Out of the 8 posts, 4 were filled in. Competitions for execution level were organized during March 2006. Out of the 160 posts, presently 100 posts are filled in. For the implementation of Directive 96/61/CE concerning integrated pollution prevention and control (IPPC), presently, out of the 218 additional posts approved for the implementation of this Directive, for 2004 and 2005, 211 posts are already occupied at ANPM, ARPM and APM level. On 17 March 2006, the total number of issued integrated environmental permits was 102 and the total number of applications for requesting integrated environmental permits was 302. The stage of filling the applications and the stage of issuing the integrated environmental permits for IPPC installations is reported weekly at NEPA level. During the reference period, the meeting of the Technical Working Group for Category 3.5 – “Installations for the manufacture of ceramic products by firing, in particular roofing tiles, bricks, refractory bricks, tiles, stoneware or porcelain”, was held. The meeting had as main purpose to assess and develop guidelines for the best available techniques (BAT). In the sector of horizontal legislation, as regards the implementation the following activities were developed: - Establishing the database (including data validation) for the sectoral reporting

system to the European Commission; - Starting the drawing up of the first leaflets edition containing the public rights

according to GD 878/2005 - Finalizing and transmitting to the European Environmental Agency on March 2nd

2006 the 2004 Report on the status of the environmental factors in Romania. Presently, the 2005 national Report on the status of the environmental factors is being drawn up.

- Elaborating and transmitting to the Secretariat of Aarhus Convention the Report on implementation of Aarhus Convention in Romania;

- Elaborating the Report for the implementation of ESPOO Convention in Romania during 2003-2005.

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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: - 62 landfills for non-hazardous waste (out of 76); - 40 landfills for hazardous waste (out of 47); - 22 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); - 164 landfills for municipal waste (out of 240). Currently, out of the 450 environmental audits level I and level II and environmental risk assessments, 331 are elaborated (73.5 %). According to the proceed data following the statistical inquiry on waste generation and management, in 2004, 6.63 million tonnes of waste were landfilled, out of which 2.02 million tonnes on complying landfills. Out of the total amount of municipal waste landfilled, about 49% are bio-wastes. The procedure to set up the National Laboratory on waste management was started. The establishing areas for the laboratories at the national levels and for the 2 regional laboratories (Bacau and Galati) are under preparation. As regards Directive 2000/76/CE on incineration of waste, until 1 march 2006, out of the 114 installations for the incineration of hazardous medical waste, forecasted to be ceased in 2006, 19 ceased their activity. The Bucharest Public Health Institute with the help of Flemish experts’ help, within the Cooperation program between Flanders and Romania, elaborated a brochure named “Medical waste management”. The brochure is in the editing procedure and is going to be distributed to all sanitary units in the country, local public health directorates, as well as to other concerned authorities. With regard to the fulfilment of the investments: - The IF Technologies (ECOBURN) Cluj incinerator (2550 tones/year) is functioning; - Incinerator IRIDEX with a total capacity of 12,000 tons/year is under construction;

by the end of the first quarter 2006 this incinerator will function; - According to the commitments that were assumed during the negotiations, the

investment on the capacity extension for the hazardous waste incinerator with heat recovery owning PRO AIR CLEAN Company from Timisoara (with a capacity of 9.8 tons/day, 2,040 tons/year) was finalized; by the end of the first quarter 2006 will begin the technological tests;

- The construction of the hazardous waste incinerator in Craiova city, with a capacity of 10,000 t/year is under was finalized;

- There are approved for financing by the Environmental Fund Administration 4 investment projects for hazardous incineration plants with a minimum capacity of 10, 000 tons/year and, also, 2 projects for thermal sterilization plants for hazardous medical waste;

- S.C. ARPECHIM S.A. Pitesti obtained the environmental agreement to build an Installation for the thermal oxidation of liquid and gaseous residues from the acrylonitrile installations I and II.

As concerns Directive 94/62/EC on packaging and packaging waste, as amended by Directive 2004/12/EC, during the reference period, the following activities were developed:

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- Starting the action on collecting data in order to achieve the national data base on packaging and packaging waste for 2005

- Training done by the representatives of MEWM and NEPA of the personal involved in designing the data base according to the Ministerial Order no. 927/2005, in February 2006.

The Committee of the assessment and permitting the economic operators is ongoing institution, in order to assume the responsibilities regarding the annual packaging waste recovery and recycling objectives. As regards the implementation Regulation 259/93 on shipment of waste, during 15 February – 16 March 2006, 63 notifications (out of which 29 for waste import, 32 for transit and 2 for inward processing) and an environmental license for export of hazardous waste were issued (2,000 tones lead accumulators waste). These notifications were issued for 32,876 tons of waste, out of which: 17,286 tons imported waste (4,486 tons used tyres, 3,000 tons metals, 8,600 tons paper, 1,200 tons tobacco vein), 12,610 tons transited waste (only metals) and 2,980 tons metals in inward processing. During the reference period, the following activities were developed for the implementation of Directive 2002/96/EC on waste electrical and electronic equipment (WEEE): - The localities with more than 20.000 inhabitants have been identified and the

activity to aware the involved factors in the establishment of the collecting points was started;

- NEPA made a register of producers and importers in order to collect information, on an annual basis, including estimation, regarding the: - Quantities and categories of electrical and electronic equipment put on the

market; - Quantities and categories of electrical and electronic equipment collected

through all routes, reused, recycled and recovered; - Collected waste exported, by weight or by number;

- The registration procedure of producers at NEPA started and it will be finished in April 2006; each producer will get a registration number that will be communicated to all commercial networks that sell EEE.

In the sector of water quality, the Memorandum no 168/2006 “The principial agreement regarding the approval to contract a IBRD loan by the Ministry of Public Finance, in a total value of 191,000,000 EUR, to finance some prioritary projects on water management” was approved, namely: 1. Municipal services – investments in the water and wastewater infrastructure for the

Arad and Bucharest Municipalities; 2. Financing projects preparation and strengthening institutional capacity on structural

instruments management, at the regional level; 3. MEWM assistance to line up with the provisions set out in the Nitrates directive. As regards the Water Framework Directive 2000/60/EC, within WATFRAME project, at the end of February the revised working plan, the volume contending the existing information analysis, system management of data referring to the project, 5 pre-feasibility projects for the water infrastructure works in the selected localities for the development of the project, as well as a technical-economical and financially methodology were sent to the Ministry of Environment and Water Management on the base of which will be realized the feasibility study extinction at Siret basin level.

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For the implementation of Directive 91/271/EEC on urban wastewater treatment, until now: - 200 notices, permits and phasing programs were revised and issued at entire

country level by the National Administration „Romanian Waters” representatives, according with the terms and conditions established during negotiation;

- 31 local council or public services for agglomerations with 2,000 – 10,000 e.i. were authorized and 51 local council or public services are to be authorized;

- Investments works promoting collection systems for wastewaters were inventoried in 28 agglomerations with 2,000 – 10,000 e.i. and execution works for 9 agglomerations with 2,000 – 10,000 e.i.

- Investments works promoting endowment with wastewaters treatment plants were inventoried in 30 agglomerations with 2,000 – 10,000 e.i. and execution works for 3 agglomerations with 2,000 – 10,000 e.i.

- 6 execution works to enlarge and rehabilitate the sewage systems and the treatment plants were accomplished.

As concerns Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources, based on “The study regarding the assessment of the existing monitoring network and establishing the network for vulnerable areas and the monitoring of these sections from these areas”, 2 existing drilling in vulnerable areas were rehabilitated, such as 35 drilling in vulnerable areas are rehabilitated in the present. The Study for the monitoring of the evolution of nitrates quantities in transitional and coastal Black Sea waters, as well as in lakes situated near the sea has been realised. The proposals for action plans for remedying the ecological status of coastal area and the technical framework action Program for drafting the actions programs for vulnerable areas were realised and approved. As regards the Directive 76/464/EEC and “daughter” directives on pollution caused by certain dangerous substances discharged into the aquatic environment, there were adopted OMMGA No 161/16.02.2006 regarding the assessment of the surface water quality with the purpose of establishing the ecological status and OMMGA No 31/13.01/2006 (OJ No 234/15.03.2006) regarding the approval of the Manual for the modernization and development of the Integrated Monitoring System in Romania. The process of re-authorisation has continued and, by common agreement with the economic operators, there were established programmes for reducing pollution with List II substances. Thus, until now, 28 water terminals were authorised. Presently another 69 are due to be authorised. For the implementation of Directive 80/68/CEE on the protection of groundwater against pollution caused by certain dangerous substances, both the list of dangerous substances – object of the yearly minimum monitoring and the base list of dangerous substances – object of the regular monitoring performed every 6 years have been established by MO of MEWM no 31/13.01.2006. Within the 2006 yearly water quality-monitoring program there have been introduced as ground water dangerous substances monitoring sections new drills situated downstream from the main dangerous substances potential polluting units based on the water directorates proposals and previous studies. Within the process of updating the groundwater cadastre the inventory of all the hydrogeological drills from Romania is to be finalized with the identification of the present owners, their activity field and of the substances used in the technological processes in order to improve their monitoring by the water management authorities and to minimize the risk of ground water pollution with dangerous substances.

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In the Nature protection sector, there were adopted: - GD no 249/2006 (OJ No 187/28.02.2006) regarding the financial support granted to

the Romanian beneficiaries of Life-Nature projects for the 2005 – 2007 period - OMMGA No 207/03.03.2006 regarding the approval of the Standard Data Form

Natura 2000; the Order also presents the Guidelines on filling up the standard data forms for Natura 2000 sites.

As regards the implementation, the Informational system for the implementation in Romania of the network of natural sites of community importance for realization of the national inventories for Natura 2000 was designed. The system was structured in order to provide the necessary information for characterizing and evaluation of the Natura 2000 network of protected areas. Presently, the database has 130 registered users (specialists involved in the process of data verification, validation and filling-in of standard forms for Natura 2000). The application is available to public starting with 15 March 2006 and also presents the Guide of Completing the Standard Data Forms for Natura 2000 sites characterisation. A working group comprising the principal stakeholders interested in Natura 2000 site proposals was established. This working group aims completing the database (Natura 2000 standard date forms) for proposed sites and the analysis of other proposals. Presently, there are more than 130 standard data forms filled in for Special Protection Areas proposals (covering approximately 13% of country surface) that will be included in the Natura 2000 network at the accession date. Considering Species Protection, the database on natural protected areas given in custody (many of them being future Natura 2000 sites) was updated, comprising a number of 360 natural protected areas. At the end of 2005, the status of the management plans for the protected areas was as follows: 2% of them were noticed, 42% are in progress of endorsement, 34% are drafted and 10% are not yet realized. During 1 January – 10 March 2006, National Environment Guard’s (GNM) control activity in the environmental protection field was concretised through 8,203 controls, out of which 4,302 planned controls to the significant impact objectives and 3,901 unplanned controls (inspections made as a result of a complain, accidental pollution, thematic controls, inspections for certifying the complying with the imposed provisions through regulatory acts for drafts and new activities). During 1 January – 10 March 2006, 7,063 economic agents were controlled within control and inspection activities, out of which 4,106 within planned controls and 2,957 within unplanned controls. 1,757 contraventional sanctions were applied for non-complying, out of which 1,590 principal sanctions and 167 complementary sanctions (117 proposals for notification, 13 proposals for environmental agreement/permit suspensions, 22 mandates for activities shut-down and 15 penal intimations). Out of the 1,590 principal sanctions, 491 are warnings and 1,099 are contraventional fines in total amount of RON 7,455,210 (about Euro 2,100,000). As regards the planned controls, during 1 January – 10 March 2006, were made a number of 4,302 controls at 4,106 economic agents and 548 contraventional fines in total amount of RON 4,156,660 (about Euro 1,150,000) were applied, out of which: - 328 controls at economic agents owning IPPC installations, 57 fines were applied

in total amount of RON 540,600 (about Euro 150.000); - 85 controls to economic agents owning SEVESO installations, 12 fines were

applied in total amount of RON 185,000 (about Euro 52,000); - 22 controls to economic agents owning LCPs installations, 2 fines were applied in

total amount of RON 7,900 (about Euro 2,200);

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- 381 controls to economic agents witch use organic solvents in certain activities and installations, 45 fines were applied in total amount of RON 358,700 (about Euro 100,000);

- 83 controls to domestic wastewater treatment, 13 fines were applied in total amount of RON 189,600 (about Euro 52,000);

- 37 controls to units that generated industrial wastewater and discharge into natural receivers, 5 fines were applied in total amount of RON 16,500 (about Euro 4,500);

- 61 controls to units which discharge prioritary dangerous substances into surface water and groundwater, 3 fines were applied in total amount of RON 35,000 (about Euro 10,000);

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

- 10 controls to incineration and co-incineration installations with one fine applied in total amount of RON 20,000 (about Euro 5,500);

- 3,258 controls to the other types of objectives witch significant environmental impact, 410 fines were applied in total amount of RON 2,803,360 (about Euro 774,500).

As regards the control in the field of natural habitats, biodiversity and protected areas, 215 controls were conducted, out of which: 100 controls regarding respected conditions from legal acts, 3 controls as a result of the the National Environmental Guard’s intimations and 8 controls as a result of the intimations addressed to the National Environmental Guard, 96 thematic controls, 2 controls regarding accidental pollution, 3 controls developed together witch other authorities and 3 activities together witch other institutions. Follow-up controls, 54 fines were applied in total amount of RON 289,750 (about Euro 80,000). Presently, there are 18 projects on going financing by the National Environmental Fund, a total value of RON 59.810.752 (amount Eur 16.523.000): - 8 project on domestic wastewater treatment – RON 5.744.840 (about Euro

1.587.000); - 3 projects on hazardous medical waste incineration – RON 11.620.200 (about Euro

3.210.000); - Works intended to prevent, discard and decrease the effects produced by floods –

RON 42.240.000 (about Eur 11.669.000); - 5 projects for the education and awareness of the public regarding environment

protection – RON 205.712 (about Euro 57.000). A number of 38 projects on waste incineration, IPPC, biodiversity, nature protection, wastewater treatment and education and awareness of the public have been approved by Environmental Fund Administration’s Steering Committee in total amount RON 57.634.437 (about Eur 15.950.000). For these projects will be concluded financing contracts. On 10 March 2006, 12 ISPA Memoranda amounting to 292 million EUR, out of which 217 represent non-reimbursable EU financial assistance, were signed. The sum will be allocated for environment infrastructure projects (drinking water, sewage systems, waste) and road and railway transport infrastructure. The projects are the following: - ISPA 2004/RO/16/P/PE/007 - „Integrated waste management in Bacau county and

neighbourhood areas”; - ISPA 2005/RO/16/P/PE/001 - „ Integrated solid waste management in Arges

county”;

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- SPA 2005/RO/16/P/PE/002 - “Rehabilitation and modernisation of drinking water and waste water systems in Deva and Hunedoara cities”;

- ISPA 2005/RO/16/P/PE/004 – „ Rehabilitation and modernisation of drinking water, waste water and sewage systems in Suceava”;

- ISPA 2005/RO/16/P/PA/001 – „Technical assistance for preparing the environment projects in Romania”.

COOPERATION IN THE FIELD OF JUSTICE AND HOME AFFAIRS In the area of border management and security, important steps were undertaken for modernizing the equipment and the infrastructure at the green border, blue border and in the border crossing points. On 09.03.2006 the reception of the 3 maritime surveillance boats P-157 type, purchased from Germany was finalized. They entered the endowment of Constanta Border Police County Inspectorate (2 completes) and Tulcea Border Police County Inspectorate (1 complete). The German Federal Ministry of Interior donated the Romanian Border Police two new intervention boats MF 580 project. These 2 fast intervention boats entered the endowment of Caras Severin Border Police Inspectorate. Procedures for public procurement started for: air conditioning devices for technical rooms necessary for IT Back-up system and for the territorial forensics offices; heating installations for boats; trailers specialized for transporting boats. Procurement notice was published and the documentation for drafting and presenting the offer on the public procurement of “Consultancy services for achieving and implementing the Integrated Border Surveillance System” is being drafted. Also, procurement notices were drafted and technical specifications are being drafted for the public procurement of: telecommunication services for the IGPF IT Back-up system and containers for IGPF IT Back-up system. The technical specifications are being drafted for purchasing computers and other IT equipment necessary for IGPF. Regarding voice-data communications system, the tender dossier for “Extending IGPF voice and data communications system” for Maramures, Satu Mare, Timis, Caras Severin, Mehedinti counties, a 2004 PHARE fiche, was submitted to ECD and published on the EU website. Regarding integrated system of surveillance and control at Black Sea, on 23.02.2006, the Twinning Covenant with France and Spain RO/2003/IB-JH-02 “Improving IGPF’s training to implement Black Sea surveillance and control system” was concluded. Thus, the first phase of SCOMAR was finalized. On 21.01.2006, the contract for implementing the second phase –realizing the communications infrastructure was signed. The deadline for the second phase of SCOMAR is 21.01.2007. In order to accelerate the preparations for the future participation in the Schengen Information System (SIS II), a working group was set up at the level of MAI, to draft the methodological norms for the application of EGO no. 128/2005 on the setting up, organizing and functioning of the National IT System on Alerts, approved by Law no. 345/2005. For strengthening risk analysis structures, the equipments acquired on 08.11.2005 were distributed to the structures specialized in risk analysis within IGPF, both at central and territorial level. Also the testing of the database was initiated, the central server was configured and the licenses were installed. During 14-21 February, the seminar “Risk analysis in the field of Border Police” organized by TAIEX took place. 5 foreign experts and 32 analysts within the territorial analysis compartments and the IGPF Risk Analysis Bureau participated. Starting with March a new field in risk analysis was included – cigarettes smuggling – as part of the monthly risk analysis.

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In the field of human resources after the contests organized in the reference period, 103 officers and 974 agents positions from external source were filled in and 387 agents occupied positions resulted from transforming border police operatives into agents. The employment percentages at the future UE external border, on 15.03.2006, increased to: Ukraine – 96.1%, Moldova – 94.4 %, Black Sea – 96.3 % and Serbia&Montenegro – 97.4 %. Regarding the training of personnel during 1 February – 24 March 2006, 90 officers and agents were trained and for over 1200 persons the training is ongoing. On 02.03.2006, a Co-operation Plan for improving the Danube river naval traffic surveillance was signed, between the General Inspectorate of Border Police and the Romanian Naval Authority. In the field of international cooperation, during 14 – 16.02.2006, a Romanian Border Police delegation took part in an experience exchange on in-depth border control, in Oroshaza – Hungary. This activity took place on the basis of Romania – Hungary Bilateral Co-operation Program for 2006. During 28.02 – 02.03.2006, a Romanian Border Police delegation took part in a seminar, in Hungary, within ARGO Program “International joint actions at the future EU external border aiming at improving the fight against trafficking in human beings and illegal migration”. The Protocol between the General Inspectorate of Border Police within the Ministry of Administration and Interior of Romania and the Border Guards Service of the Republic of Moldova on information exchange for fulfilling specific duties – signed in November 2005 in Chisinau, is following the internal procedures necessary for the entry into force. Annex 3 presents the operative results at the level of Romanian Border Police. During 15.02 – 09.03.2006, 7 border policemen, which had broken the professional deontology or the provisions of the General Inspectorate of the Border Police provisions in the field of countering corruption, were brought in the attention of internal investigations bodies. Also, 1 criminal file was forwarded to the criminal investigations authorities, concerning the facts committed by 2 border policemen. In the same time, following the notices made by border policemen, 5 criminal files were drafted, regarding five 5 persons for crimes related to offering bribe and trafficking in influence. A number of 523 undercover actions, integrity tests and unannounced checks were performed, aiming at verifying the border policemen on respecting the specific border control methodologies, as well as IGPF provisions in the field of corruption. In the area of visa policy, the Government approved the beginning of the negotiations with the Government of the Republic of Moldova, as well as the draft visa agreement proposed by Romania. The draft agreement has been sent to the Republic of Moldova, a first round of negotiations being planned for the beginning of April 2006. The administrative procedures for modernizing the consular section in Chisinau, as well as for supplementing the consular staff started. During 16-17 March, a round of bilateral consultation took place in Bucharest between Romanian and Ukrainian experts, and the final version of the Protocol for amending the Bilateral Agreement on regulating the cross border flows of Romanian and Ukrainian citizens was drafted and endorsed. Thus, all the Agreement provisions were fully aligned to the Schengen acquis. During the reference period, other 6 consular missions have been connected to visa on line system. Up to now, 16 consular offices have been connected, in the framework of the third stage of visa on line project. A risk analysis from the false and forged documents point of view has been done. According this analysis, 9 consular offices have to be endowed with sophisticated equipment for detection of false and forged documents corresponding to high-risk level.

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The technical requirements of such equipment have been set up, following to launch the procurement procedures. In the area of data protection, within the timeframe of the 15th February – 15th March 2006, the vacant positions were filled in, thus presently all 50 positions are occupied. At the end of February 2006, the IT equipment necessary for the entire staff was purchased and installed. During 15th February – 15th March 2006, 100 personal data processing notifications were registered, out of which 4 regarded the transfer of personal data abroad. 6 authorizations for the transfer of personal data abroad were issued. Also, in the same period 16 investigations were carried out. Based on the results of these activities, 8 decisions were issued (6 decisions on sanctioning data controllers and 2 warnings) and in 3 cases the criminal investigation bodies were noticed. 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. During February 2006, 500 brochures and leaflets were published and distributed, 3 press releases were issued and an article on the supervisory authority’s activity was published. Also, in order to improve the activities of preliminary controls and investigations, on the 27th of February 2006, a collaboration Protocol was signed with the General Inspectorate of the Romanian Police. The main objectives of the protocol are the following: information and data exchange for carrying out certain investigations or controls or with a view to developing some analysis and statistics of mutual interests; notifying the other part, concerning the cases related to protection of personal data, which are detected in exercising the legal duties; carrying out mutual investigations or controls; supporting the control activities developed by the authority for personal data protection, whenever there are some difficulties for the authority to get access in places where personal data are processed. On the 17th of February an exchange of experience was carried out with the supervisory authority from Hungary. On the 1st of March 2006 the authority’s phone service was opened, with a schedule of Monday to Friday from 10 a.m. to 1 p.m.. On the 2nd of March 2006, 7 professional associations were informed of their obligations in accordance with the provisions of Law no. 677/2001, to issue and submit for the supervisory authority’s approval codes of conduct, which must contain adequate provisions on the protection of individuals whose personal data are processed by members of these associations (The Romanian Association of Banks, the College of Physicians of Romania, the Association for Information Technology and Communication from Romania, the Romanian National Association of Internet Services Providers, the Romanian Press Club, the Romanian Hotel Industry’s Federation, the Romanian National Union of Insurance Companies). Also on the 2nd of March the supervisory authority’s official web site (www.dataprotection.ro) was opened, which contains information on the legal framework on personal data protection, the supervisory authority’s contact data, frequently asked questions and, in a draft stage, the procedures on solving complaints, notices and requests and on investigations and transfers of personal data abroad, the notification forms in order to unify the notification procedure and the notification guide to aid data controllers are also posted. In the referred period, in the field of police cooperation and fighting against organised crime, have been adopted: - GO no. 178/09.02.2006 (OJ no. 158/20.02.2006) on approving the Understanding

Memorandum signed by the Romanian MAI and Ministry of Economics and

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Finances of Italy in the area of informative collaboration for fighting economic and financial criminality, signed in Bucharest, on 14.12.2005;

- GD no. 180/09.02.2006 (OJ no. 183/27.02.2006) on approving the Agreement between the Romanian Government, represented by the MAI and the Government of the Swiss Confederation, represented by the Agency for development and cooperation, concerning the implementation of the “Introducing the concept of proximity police” programme in Romania, stage January 1, 2005 – March 31, 2007, signed in Bucharest on November 9, 2005.

In order to continue the process of decentralisation of the decision-making, the Romanian Police General Inspector’s Decision no. 141/03.03.2006 has been approved. It concerns the decentralisation of decision, working procedure simplification, increase in responsibilities and optimum resource use. It also provides for redistribution of decision attribution, in some areas, from the General Inspector’s deputies to some directors of the central directorates. Also, at the level of the IGPR’s command structure, IGPR’s general secretary and Directorate for Management of Organisation and Public Relations, the IT system for documents management has been implemented. In the area of professional training, in the referred period, 1036 officers and agents participated in programmes for structural training in career initiation, UN monitors training, capacity, specialisation and improvement in different activity profiles. Also, courses for training the trainers took place in the areas: public order – rural environment with 41 participants; road police – 44 participants. Regarding fighting against organised crime, in February 2006 police structures specialised in fighting organised crime have discovered 787 crimes (417 in organised crime, 203 anti-drug and 167 in the area of serious economical – financial criminality). 616 persons have been investigated (292 in the area of organised crime, 229 in the area of anti-drug and 95 in the area of economical – financial macro criminality), 90 persons being investigated under arrest. In February 2006, in the area of fighting against trafficking in human beings, 230 crimes have been discovered, 169 persons being investigated and out of them 25 arrested. From the casuistry point of view, in February 2006, 63 causes have been registered, concerning 119 traffickers (including 2 foreigners), out of them 20 having been arrested. Out of the 119 traffickers, 73 are men, 19 are women and 27 minors. 197 victims have been identified, out of them 144 were women (including 40 minors). As far as the way victims were exploited, 115 have been sexually exploited, 54 labour exploited, 27 forced to beg and one in other ways. As far as the way victims’ identification is concerned, 34 of them have been identified as a result of complaints and intimations, 28 as a result of raids, 132 as a result of investigations and 3 in other ways. On 14.03.2006, prosecutors from DIICOT, together with police workers from the DGCCO, simultaneously with Spanish judicial authorities, acted to annihilate a trafficking in human beings network, which had international ramifications. Simultaneously with similar actions carried in Spain, 7 concomitant searches have been conducted in Iasi and 3 in Constanta, 6 indicted persons having been caught. In February 2006, in the area of trafficking with migrants, 28 crimes have been discovered, 23 persons being investigated and out of them 2 arrested. In February 2006, in the area of fighting money and travelling cheques counterfeit, 82 crimes have been discovered, 52 persons being investigated and out of them 6 arrested. On 01.03.2006, the Standard operative procedure – Working methodology for the National Central Office for fighting money and travelling cheques counterfeit, no. S 451804/01.03.2006 has been approved. It will be multiplied and forwarded to all the subordinated units. Thus, a unitary working model has been realised, according to the European standards.

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In February 2006, in the area of fighting international traffic with stolen vehicles, 22 crimes have been discovered, 7 persons have been investigated and 7 vehicles have been seized. In February 2006, in the area of fighting trafficking in strategic materials, 14 crimes have been discovered, 13 persons having been investigated. The Operational Procedures on organising and carrying out of specific activities in fighting trafficking in strategic and NBC materials, no. S/451710/03.03.2006 have been elaborated and approved. In February 2006, in the area of fighting IT criminality, 41 crimes have been discovered, 28 persons have been investigated, 4 of them being arrested. EnCase software has been purchased and assigned to territorial Brigades as part of the assistance programme offered by the USA Embassy in Bucharest. Thus, all the territorial Brigades have been endowed with the necessary equipment and officers have been trained to conduct IT searches. In March, the methodology in the area of prevention and fight against electronic means of payment criminality has been drafted and distributed to all territorial structures. Regarding information analysis at the level of DGCCO, between February and 15 March 2006, at the DGCCO structures a number of 376 informative reports have been implemented and processed in the unitary information management system, which collects informative materials in the 5x5x5 system. A number of 10 tactical and operational analysis reports have been written including a number of 384 relational maps. These informative packages have been forwarded to DIICOT prosecutors via case officers. In February 2006, workers from TRIDENT ROMANIA PROJECT have completed and forwarded directly to DIICOT a total number of 23 analytical packages and 43 relational maps. Out of the total 23 analytical packages, 12 were on economic offences (tax evasion, money laundering and smuggling), 6 on trafficking in human beings, 2 on drug trafficking, 2 on cyber crimes (credit cards forgery) and one on international traffic with stolen cars. In the referred period the DGCCO flagranto delicto service has carried out 9 actions (3 for countering drug trafficking and use and 6 on the line of organized crime). Out of these actions, 7 have been carried out in Bucharest and 2 in other areas. At central level, 38 operative surveillance actions, 133 undercover investigations have been conducted and 140 informative reports have been forwarded in the CAMAS system. Regarding international co-operation and professional training in the field of countering organised crime at DGCCO level, between February and March 13, 2006, 321 messages have been exchanged with the foreign police units, especially with European partners, out of them, 149 messages received and 172 sent. In the referred period, at internal and international level, training courses and seminars took place in the following areas: fighting against trafficking in human beings, fighting against drug trafficking, fighting against serious economic and financial criminality, fighting IT and electronic means of payment criminality, money and travellers’ cheques counterfeiting. As a result of the activities carried out by the criminal investigation police, the statistic data from February 2006, compared to February 2006 showed: - A decrease by 16% (-207) in the number of life threatening crimes on body integrity

and health, out of which we mention: the decrease by 41% (-21) in the number of murder attempts, the decreased by 11% (-10) in the number of the serious body injuries, the decreased by 37% (-64) in the number of injuries or other violent acts;

- The number of rapes has decreased by 19% (-14); - As far as robberies are concerned, an increase by 7% in solved crimes in February

2006 compared to February 2005 has been recorded.

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Between February and 15 March 2006, 555 wanted persons who avoided penalty execution, arrest or investigation warrants in the files that are in progress with unknown or known authors were caught, out of which 221 (40%) have been arrested. The good cooperation with the Interpol National Bureau has led to arresting for extradition of 57 international wanted persons, locating of other 13 and extraditing of 25. In order to track down wanted persons, until now, on the Romanian Police web page, 3053 files have been implemented. Cases concerning organised crime, violence, missing children, as well as serious economic crimes have been best brought to media attention. At present, on the Romanian Police web page are 2288 files, the 765 files difference representing solved cases. At present, the Service for fighting crimes committed by Romanian citizens abroad has 7 rogatory commissions working. In February 2006, the Romanian Police has transferred 970 offence cases to Prosecutors Offices according to Law no. 508/2004, amended and completed (the total amount of prejudices was of 31,439,166 EUR), 31 of the cases were on money laundering and 58 customs frauds (23,498,611 EUR). Activities for increasing and developing actions for investigating offences with severe outcomes, from the point of view of the prejudices brought and persons involved continued. In February, from the total of 638 complex files of economic and financial nature, 101 were solved by: 42 through reports on finalizing criminal prosecution; 45 by declining competencies to prosecutors’ offices; 14 other solutions. 242 persons were inquired/prosecuted, 11 under detainment or preventive arrest. The prejudices were of 40,791,797 EUR out of which 22,683,159 EUR were recovered. Statistics results on the line of recording economic and financial offences stipulated in the Criminal Code show the following structure: 30 fraudulent administration cases, 586 economic frauds, 216 embezzlements, 419 abuses in service, 87 negligence cases at work places, 1,545 false documents, 35 false declarations regarding the quality of goods and 13 offences related to import and export operations. In the area of offences stipulated by special laws (which prescribe the legal framework of market economy), the following crimes were recorded: 252 incriminated by the law of CEC; 83 regarding Law 31/1990 on commercial entities; 56 crimes incriminated by the Law of unfair competition; 111 crimes regarding the Law on accountability; 360 crimes regarding the Law on tax evasion; 686 crimes regarding Law 8/1996 on copyright and connected rights; 89 crimes regarding the customs regime; 37 related to Law no. 656/2002 on preventing and countering money laundering and 107 regarding the Law on geographic trademarks and indications. A substantial increase in percentage recoveries of prejudices resulted from criminal activities were recorded, in value of 70,961,944 EUR (+68% compared to February 2005), from the total caused prejudice worth 174,763,333 EUR. In the reference period, public order police structures recorded 13,675 offences (48% of the total recorded in Police), divided in: 3,127 of economic nature (39% of the total recorded in Police), 6,735 in the legal area (51% of the total recorded in Police) and 3,738 in other areas (52% of the total recorded in Police). Of the total number of offences recorded, 2,431 were discovered in delicto (38% of the total recorded at police level). In the same period of time, public order police structures have solved 3,816 criminal records with unknown authors and have settled 17,669 conflicts. In the field of proximity police, GD no. 180/09.02.2006 (OJ no. 183/27.02.2006) on approving the Agreement between the Romanian and the Swiss Government for implementing the program “Introducing the concept of proximity police in Romania” was adopted. 417 police officers attended the modules of the training course on transactional analysis (ATI) at national level. On 15.02.2006, the official launching of the program “Integral security in large cities” took place in Oradea County. Dutch experts and 30

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police officers from Arad, Timis, Bihor and Satu Mare counties and the Directorate for Public Order Police attended the launching. From 13 to 17 February 2006, 15 officers attended a basic training course in the area of intelligence analysis at the Central Unit for Intelligence Analysis Headquarters. In the area of witness protection, between 14-16.03.2006, Module III of the workshop organized by the European Commission within TAIEX twinning programme in the witness protection field took place. On the line of the employees’ special training in the field, 3 officers within National Office for Witness Protection participated between 13-17.03.2006 in a course on judicial psychology. This course aimed at presenting the general and practical aspects of carrying out the assessment activities on the occasion of becoming part of the program, as well as providing psychological assistance to the protected witnesses. In March, performance and assessment indicators have been introduced allowing for highlighting IGPR’s activity carried out in collaboration with Gendarmerie units, in countering criminality as well as in the contravention field. In February 2006, the forensics structures carried out technical –scientific investigations at the crime scene in 11,928 cases. On this occasion 25,775 footprints have been collected and material evidence means. 2,651 fingerprints have been processed using AFIS IT identification System leading to the identification of 309 perpetrators and 361 criminal facts. At local level, 1884 technical-scientific findings and forensics expertise have been operated, leading to the identification of 457 perpetrators who committed 601 anti social deeds. Bio forensics expertise played an important role in this kind of activities which through genotyping established the genetic prototype of 16 perpetrators involved in committing 16 criminal facts of high violence or high social risk. In order to make the territorial palaeographic laboratories fully operational, 2 modules of theoretical training and 2 modules of practical training were organized, which were attended by 15 recently hired psychologists. In order to expand the area of forensics investigations, laboratories for IT documents examination, judicial anthropology and microprints examination were set-up. In order to hire specialists in these fields, as well as to solve in real time the increasing requirements of the criminal investigations structures, the Forensics Institute has allotted 17 positions – biologists, IT engineers, chemists – of which 7 were filled. Contests are to be organized for filing the other vacant positions. In the area of inter-agency cooperation IGPR has concluded 19 cooperation protocols, of which we mention: - The Protocol between IGPR and the National Supervisory Authority for Personal

Data Processing (ANSPDCP), signed on 27.02.2006 in the field of individuals’ protection against personal data processing and the free movement of this data.

- The Protocol between IGPR and the National Association of Detectives from Romania, signed on 02.03.2006, for performing information exchange and the mutual support in solving common interests problems.

- The Protocol between IGPR and National Customs Authority, signed on 06.02.2006 for preventing, discovering and countering criminal or contravention facts affecting the national cultural patrimony.

In the area of international cooperation, on 24.02.2006 the Phare Project for the Resource Centre for fighting trafficking in human beings was launched. The project is conducted in cooperation with Austria and its beneficiary is DGCCO. The project will be carried out over an eight-month period, having a total budget of 134,069.39 euro, out of which, 118,300 euro are non-refundable funds from the European Union and 15,769.39 euro represents co-financing.

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During February – 15 March 2006, the Institute for Crime Research and Prevention have initiated the following programs: - “Promoting a good governing process in multicultural communities. The access and

participation of ethnic minorities in public life”. Within this project, between 20-22 February in Cluj-Napoca, the training of the officers within analysis and prevention of criminality structures, public order and criminal investigations structures from 8 counties took place.

- The Project „Let us work together for a better child protection – a better managing of child abuse cases and better prevention opportunities” within AGIS program, carried out in partnership with Munster Management Academy from Germany.

- “Preventing Domestic Violence” campaign – project of preventing domestic violence in Botosani County, in partnership with Swiss government within the program of proximity police structure implementation.

The recorded progress in the filed of improving the conditions in detention premises are presented in Political Criteria, human rights and the protection of the minorities section. In the field of drugs, the connection of the National Customs Authority to the database of NDCS (National Drug Control System) software of the Anti-drug Directorate was approved. The anti-drug police officers with attributions in the precursors field were approved to access the ANV database on imports and exports of goods. 40 officers from the General Directorate for Countering Organised Criminality together with representatives of the General Inspectorate of Border Police, the Transport Directorate from the General Inspectorate of Romanian Police, ANV, and the Public Ministry attended the seminar ”Best practices regarding fight against drugs trafficking” and the workshop ”Work procedures and Protocols regarding fight against drugs trafficking”, organised in the framework of the MATRA bilateral project with the Netherlands MAT04/RM/9/A ”Fight against drugs”. Regarding drug demand reduction, the project “Development and strengthening of the medical and psycho-social assistance system regarding the drug addictions” was drafted within the 2nd phase of the Program financed by the Global Fund of Countering HIV/AIDS, TB and Malaria. The project of professional training for 20 physicians from the Drug Prevention, Evaluation and Counselling Centres, financed by the Inter-ministerial Mission for Fighting against Drugs and Addictions (MILDT) from France, was developed. The contract regarding the implementation of the Peer Education Project for Young Drivers to Prevent Alcohol and Drugs in Connection with Road Use - Drive Clean, implemented by the National Anti-drug Agency (ANA) and the International Council on Alcohol and Addictions (ICAA) was signed. A pilot-survey regarding the prevalence of the drug use in penitentiaries was developed, based on a questionnaire applied to 50 interviewed inmates in the Jilava Penitentiary (randomly chosen), aged between 18-21 and 21-60. ANA signed two new cooperation protocols with the following non-governmental organizations: the Theatrical Union of Romania (UNITER) and the Romanian Anti-drug Association (ARA), having as the main target the development of various prevention programs and providing specialized services. At the same time, various steps were taken to develop the cooperation with the Anti-AIDS Romanian Association (ARAS), the Foundation for Education, the Red Cross National Society, and the Youth for Youth Foundation and the Youth Centre of the Metropolitan Library. Various seminars, conferences and professional training sessions were organized in cooperation with various bodies of the civil society in order to intensify the drug use prevention activity. Regarding the cooperation between the ANA and the religious

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cults, steps were taken for enhancing the partnerships on a national level in the field of drug prevention and treatment by creating the connections with the leaders of the regional religious structures. Thus, the Drug Prevention, Evaluation and Counselling Centres concluded collaboration protocols with 10 such regional religious structures. In the area of drug supply reduction, the National Customs Authority signed a Co-operation Protocol with SC WORLD MEDIATRANS SRL – a courier operator witch operates at Timisoara Airport. This protocol’s main objective is the fight against illicit drugs trafficking. Drug seizures made by police, border police and customs officers in the reference period:

DRUG TYPE Period: 27.01 - 27.02.2006

A. HIGH RISK

- heroine (kg) 0.037

- opium (kg) 0.09

- cocaine (kg) 0.305

- amphetamines and derivates (pills) 5082

- amphetamines and derivates (kg) 0.01

- cactus San Pedro (mescaline) (kg) 92.280

- LSD (timbre) 15

HIGH RISK DRUGS - TOTAL:

92.728 kg 5082 pills 15 dots

B. RISK

- hashish (kg) 0.825

- cannabis(kg) 1.678

- diazepam (pills) 412

- diazepam (kg) 0.0001

- diazepam (ampoules) 2

- clonazepam (pills) 50

- pentazocin (pills) 36

- amobarbital (pills) 8

- alprazolam (pills) 31

- phenobarbital (ampoules) 14

- phenobarbital (pills) 50

- nitrazepam (pills) 8

RISK DRUGS - TOTAL:

2.5 kg 595 pills

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- 16 ampoules PRECURSORS

- sulphuric acid (kg) 536

PRECURSORS - TOTAL: 536 kg

Active substances

- potassium permanganate (l) 4.3

- potassium permanganate (kg) 0.922

Statistic data for February 2006: 203 drug-related offences, 229 individuals under investigation, out of which 53 under arrest. The Central Laboratory for drugs and precursors analysis’ experts performed physical-chemical analyses for 659 samples and issued 193 technical and scientific finding reports. Cluj-Napoca Territorial Laboratory for drug analysis’ experts performed analyses for 85 samples and issued 46 finding reports. Iasi Territorial Laboratory’s experts performed analyses for 34 samples and issued 18 finding reports. In the reference period, the National Anti-drug Agency experts attended various activities, such as: the 49th session of the Commission on Narcotic Drugs, the 5th reunion of the Prevention Programme of Pompidou Group, seminar on community trade control legislation on drug precursors. In the field of drug precursors monitoring, the General Inspectorate of Romanian Police continued the operational data exchange on the notifications and pre-notifications (62 messages), sent by/to the European countries authorities regarding the precursors import and export operations from and out of Romania. At the same time, the activities linked to the international operations PRISM and COHESION for preventing the diversion from the licit circuit were carried out. Officers from the General Inspectorate of Border Police attended a meeting with DEA officers – Athens, having as objective the dismantling of an important network of international drug trafficking. The National Customs Authority experts attended the international conference on countering cross-border organised crime, in Greece, within the Stability Pact for South Eastern Europe. In the same time, the Romanian customs officers attended a series of activities within the component of the Twinning Project with the Spanish Customs Authority ”Enhancement of the customs participation into the integrated border management system and alignment in implementation of EC simplified customs procedures to EC standards”.

In the process of improving the legislation intended to raise the efficiency of the prevention and combating money laundering and terrorism financing system, the Parliament adopted the Law no. 36/01.03.2006 (OJ no. 200/3.03.2006) for the approval of the EGO no. 135/2005 amending the Law no. 656/2002 for prevention and sanctioning money laundering, as well as for the institution of some measures for prevention and combating terrorism financing. The main amendments introduced trough this legal act refer to the following aspects: - The information received by the Office, according to the law, are processed and

used under a confidentiality regime (unlike the former level of classification, i.e. “restricted”, which generated difficulties in processing with celerity the information received by the Office from reporting entities);

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- The executive management of the legal persons with reporting obligations (excepting the independent legal professions) shall develop internal politics and procedures in order to combat money laundering and terrorism financing, including high standards in hiring of the personnel and ongoing training programs;

- New contravention sanctions were introduced, besides the fines previously provided: the confiscation of goods intended, used or originated from contravention; the suspension of the agreement, approval or authorization for performing of an activity or, in certain cases, the suspension of the economic agent’s activity, for a period from 1 month to 6 months; the withdrawal of the license or agreement for certain operations or for foreign trade activities, for a period from 1 month to 6 months or definitively; freezing the account for a period from 10 days to 1 month; cancellation of the approval or authorization for performing of an activity; closing the unit.

Following the meeting between the ONPCSB, National Bank of Romania (BNR) and Romanian Banks Association (RBA), the presentation within quarterly meetings with BNR representatives and RBA members by ONPCSB’s experts of typologies on money laundering and terrorism financing was agreed. The first activity took place on February 27, 2006, at RBA’s headquarter attended by the representatives of the Office and by compliance officers within commercial banks. During 21-24 February 2006, the representatives of ONPCSB participated at training sessions on prevention of money laundering, organized by the National Bank of Romania together with Bank of France, and attended also by the credit institutions representatives. During 20 February – 03 March 2006, representatives of the Office participated at the training programmes on rules for casinos, organized by the Technical Assistance Office within US Treasury Department, in which participated specialists within institutions with law enforcement attributions and casino’s representatives. Starting with 1st of January 2006 until 15 March 2006, representatives of ONPCSB together with representatives of Financial Guard performed 17 control actions on 10 foreign exchange offices, on which were applied contravention fines amounting to 15,000 RON and 7 auto-leasing companies, on which were applied contravention fines amounting 90,000 RON. During 01.02 – 03.03.2006, ONPCSB received 2,200 reports on cash operations whose minimum limit represents the equivalent of 10,000 Euro out of which: 992 from banks and 1,208 reports from other institutions, as follows: notaries – 1,117; securities companies – 3; currency exchange houses – 1; insurance/reinsurance companies – 4; casinos – 4; real estate agencies – 1; treasury – 71; postal offices – 1; other legal persons – 6. In the same period, 833 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 384 reports on suspicious transactions out of which from: reporting entities – 368 reports; financial control and supervision authorities – 6 reports; notifications from law enforcement authorities – 5 reports; special sources – 1 reports; notifications from FIUs – 4 reports. After the finalization of the analysis within the Implementation Specific Legislation Directorate 8 cases were submitted to the General Prosecutor’s Office and 5 cases were submitted to the National Anticorruption Department. During 1 February – 3 March 2006, ONPCSB performed 5 controls (2 casinos, 3 foreign exchange offices) and applied contravention fines amounting to 74,700 RON (24,546 Euro). Also, the Office sent 44 information requests to foreign FIUs and received 6 requests from foreign FIUs. In the area of judicial cooperation in civil and criminal matters, the situation of main draft laws is:

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- Draft Law on the modification and completion of the Law No. 302/2004 on international judicial cooperation in criminal matters - was adopted by the Senate on 15 March 2006 and sent to the Chamber of Deputies for debates.

- Draft Law on the ratification of the Agreement between Romania and the Italian Republic on the transfer of the convicted persons whereto it was applied the measure of their expulsion or that of seeing them off to the frontier, Rome, September 13, 2003, was adopted by the Chamber of Deputies on 13 February and by the Senate on 13 March and sent to Presidency for promulgation.

The Agreement on the cooperation between Romania and EUROJUST, was ratified by Law 58/22.03.2006. The contact points from the Ministry of Justice and from the Public Ministry took part in the European Judicial Network plenary reunion organized in Brussels on 27 February 2006. On February 23-24, 2006, in Bucharest, representatives of the European Institute of Public Administration (EIPA) met senior officials from the Ministry of Justice, Prosecution Office attached to the High Court of Cassation and Justice, National Institute of Magistracy and members of the Romanian Judicial Networks in order to convey on the 2006 Assistance Program for the traineeship of the trainers for the two networks (for criminal and for civil and commercial matters, respectively). Prosecutor from the DIICOT participated at the seminar “The fight against fraud”, during 20-24.02.2006 at Brasov and, during 16-19.03.2006, at the seminar organized by OLAF in Sopot (Poland) on “Protection of financial interests of EU. New provocations, new obstacles”. At the end of December 2005, the equipment for videoconference has been installed at the Bucharest Court of Appeal and similar equipment shall be delivered for the Courts of Appeal in Alba-Iulia and Iasi. Until the setting up of a national network, the mentioned three courts of appeal will ensure the access of all soliciting courts to the equipments for videoconferences. The equipments for videoconferences represent an important step in creating a modern judiciary by facilitating the communication with institutions in other states within the procedures for international judicial assistance, the hearing of persons in need for special protection (e.g. minors, protected witnesses) and the rapid exchange of information between the Romanian courts. Annex 4 presents statistics on international judicial cooperation.

CUSTOMS UNION Order no. 4312/10.02.2006 (OJ no.204/6.03.2006) of the Vice-president of the National Agency of Fiscal Administration approving the Technical Norms for the implementation of the Convention on a Common Transit Procedure, concluded in Interlaken on 20 May 1987, was adopted. As concerns the strengthening of the administrative capacity, during the reference period, efforts for combating corruption continued. Besides conducting controls for monitoring the observance of the Code of Conduct of the Public Servant in the Customs Authority and testing the obligation to declare the amount of money owned when entering the shift, the means to encourage public participation to signalling corruption acts was also monitored. As regards the interoperability of the IT systems with the DG TAXUD systems, the text platform was finalized for the purpose of interfacing the Customs Declaration Automated Processing System (CDPS) – Asycuda++ version 1.18b with the TARIR system, as well as its testing in the operational environment in a pilot customs office. A permanent monitoring was carried out over the operation of the New Computerised Transit System and solving the issues signalled by the Help Desk structures in the European Commission and the countries signatory of the Convention on a Common

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Transit Procedure. A trainer was specialized and three members of the administration team were trained for the exchange of messages with the common domain of the European Commission, for the administration of CCN/CSI. Activities for improving inter-institutional cooperation continued, through the conclusion of protocols with the Environment Guard, for exchange of information and organization of joint actions for detecting and sanctioning any irregularities, and with the National Sanitary Veterinary and Food Safety Authority for ensuring control over import, export and transit of live animals, products of animal origin, non-food products, other products and matters subject to inspection and sanitary-veterinary controls and for the safety of food from third countries. Cooperation protocols were also concluded for combating drugs traffic, with six express delivery operators that operate in international airports.

FINANCIAL CONTROL In the field of public internal financial control, during 11th of February – 20th of March 2006, 75 civil servants with attributions in financial management, within public institutions at central and local level, have been trained. In the field of internal audit, the Basic Internal Audit Manual was printed and disseminated in 400 copies, the Performance Audit Course was printed and also the ISPA audit Manual was translated. During the reference period, 80 internal auditors have benefited of a series of professional training actions. In the field of external audit, the draft law concerning the Romanian Court of Accounts is being discussed within the Romanian Senate. The Budget, Finance and Banks Commission and the Juridical Commission approved it, following to be adopted by the Plenum of the Senate. In the field of protection of EU financial interests, in the reference period, DLAF opened 15 investigations regarding the community funds, all of them still being ongoing. Being the training programs’ coordinator in the field of fight against fraud, DLAF, together with OLAF, have organized during February 2006, two training seminars on „Specific Investigation Techniques in ISPA, SAPARD & PHARE Funds” and “Financial Investigations”. The seminars were attended by representatives of the national institutions with responsibilities in the field of fight against fraud. The Emergency Ordinance no. 186/ 14.12.2005 (OJ no. 1171/ 23.12.2005) on increasing the number of counsellor positions financed from the budget of the Prime Minister’s Chancellery in 2006 increased the number of financed counsellor positions within DLAF from 26 to 45. The law on the approval of the Emergency Ordinance no. 186/2005 is currently in Parliamentary procedure. On 14th of March 2006, DLAF has made public its Activity Report for 2005, in the presence of the Prime-Minister of Romania, Mr. Jonathan Scheele – Head of the European Commission Delegation in Romania, representatives of EU Member States’ embassies in Bucharest, national institutions involved in the protection of EU’s financial interests in Romania, as well as media representatives. Concerning the control over structural action expenditure, the Audit Authority, associated to the Romanian Court of Accounts, carried on the audit activities related to the use of ISPA and SAPARD funds, taking into consideration the provisions of the Manual for management and control systems for assistance granted under Cohesion Fund in Member States, drawn up by DG Regional Policy within the EC, and respectively, Guide for carrying out the external audit of SAPARD Programme. Thus, in the period March – December 2005, the auditors of the ISPA directorate performed the following:

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- audit of the management and control systems of ISPA Implementing Agency in the National Company for National Motorways and Roads;

- two audits for the verification of at least 15% of the total eligible expenditure declared to the Commission, for two ISPA measures in the road transport sector;

- audit for the issuance of the winding up declaration of a TA ISPA measure and the related report, in the IA organized within the National Preaccession Fund;

- audit of the management and control systems of ISPA Implementing Agency and 15% checks in the MTCT (water transport);

- audit of the management and control systems of ISPA Implementing Agency in the National Railway Company;

- audits for the verification of at least 15% of the total eligible expenditure declared to the Commission, for one ISPA TA measure in the railroad transport sector.

In the period April 2005-March 2006, the auditors of the SAPARD directorate performed the following: - finalization of the audit for the certification of the accounts 2004 of SAPARD

Agency and the EURO Account, drawing up the audit certificate and the related audit report;

- carrying on the interim audit mission in view of certification of the 2005 accounts and EURO Account;

- performance of the audit for the certification of the accounts 2005 of SAPARD Agency and the EURO Account, drawing up the audit certificate and the related audit report (ongoing).

In order to assure the continuity of external auditing, the Strategy concerning the audit of the ISPA Programme and the Guide for carrying out the external audit of SAPARD Programme were separately approved, taking into account the provisions of applicable Community regulations.

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ANNEXES Annex 1

CMR - Additional questions General comment: Please also provide figures for October 2004 to March 2005 so we can see the year-on-year change. Recent macroeconomics development In the first 9 months of 2005 the registered inflation was 6.8 percent, by 1.1 percentage points below the inflation level of the same period of 2004 (7.9 percent September/December 2003). In the winter months (October 2005-February 2006) inflation was practically placed at the same level (3.95 percent) as compared to the previous corresponding period (3.91 percent). The industrial output has recovered by the end of 2005 and early 2006. Thus, during October 2005 – January 2006, the industrial output has picked up by 2.4 percent, (against the previous corresponding period), while in the first 9 months of 2005, the increase of the industrial output was 2.0 percent. Privatisation of companies from AVAS portfolio During October 2005 – March 2006, a number of 8 contracts for the sale of the majority share packages were concluded, and 17 contracts for the sale of the minority share packages. The total share capital sold was of RON 328.9 million RON (including the share capital corresponding to the sale of the minority stake of 36.8825% owned by the state at BCR, which is of RON 292.3 mill.). The volume of investments undertaken within the privatisation contracts is of EURO 4.4 million (as there were stipulated in EURO in the share sale-purchase contracts). During October 2004 – March 2005, a number of 21 contracts for the sale of the majority share packages were concluded, and 6 contracts for the sale of the minority share packages. The total share capital sold was of RON 244.3 million. The volume of investments undertaken within the privatisation contracts was of EURO 46.3 million and USD 3.4 million (as there were stipulated in EURO and USD in the share sale-purchase contracts).

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Annex 2

CMR – Additional questions Please provide us with updated information on follow-up measures after the peer review in February. Have the recommendations of the experts been taken into account so far and, if so, have there been any new developments, in particular as regards the institutional set-up (information centre, compensation body, green card bureau, guarantee fund)?

Following the peer review mission in February, the Insurance Supervisory Commission (CSA) has taken the measure to introduce special provisions in the Draft Law approving EGO no. 201/2005 amending and completing the Law no. 32/2000 regarding the insurance undertakings and insurance supervision, namely: Point 51, a new point of article I: 51. After point 48 of the article 2, point 481 is introduced with the following content: 481. Compensation body - entity granting claims to injured parties following an accident occurred on the territory of a Member State, other than the residence one, of the injured party, caused by a vehicle registered and insured within the territory of a Member State. ................................ Point 651, new point of article I: 651. Article 25, paragraph (3) shall have the following content: (3) a) The insurance undertakings issuers of Green Card international insurance documents, shall set – up the Romanian Motor Insurance Bureau, according to the provisions of the Green Card International Agreement. b) 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. Point 67 of article I: 67. After article 25 a new article is introduced, article 251: Art. 251 (1) All insurance undertakings authorized to pursue compulsory third party liability motor insurance (class 10 from letter B of Annex no. 1, excepting the civil liability of the transporter), must set – up the Street Victims Protection Fund, hereinafter named the Fund. (2) a) The Fund is set – up as an association, private law legal person with no patrimonial purpose, according to the legal provisions regarding the associations and foundations, of the present Law and of the Regulations issued in its application. b) The Constitutive Act of the association as well as the subsequent amendments shall be prior notified by the Insurance Supervisory Commission. c) The Fund is run by a Board of Directors composed of 5 members, which are subject to the prior notification of the Insurance Supervisory Commission. d) One of the members of the Board of Directors shall be appointed by the Insurance Supervisory Commission. (3) a) The members of the Fund are obliged to contribute, by subscription, to the setting – up and to the maintenance of its financial stability, proportional to the volume of gross earned premiums from selling of the third party liability insurance which covers

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claims arising from the use of the terrestrial vehicles, excepting the civil liability of the transporter, until all payment liabilities are covered. b) The level of the subscription and the payment deadlines are yearly established by the Insurance Supervisory Commission. The amount of the subscription can go up to 5% from the volume of gross earned premiums for this insurance. c) The Fund’s incomes and expenses budget, as well as its corrections, are approved by the Insurance Supervisory Commission Council. d) In case of deficit, the Insurance Supervisory Commission may increase the subscription during the year. (4) The Fund is set – up for the purpose of:

a) providing information to the persons injured in vehicle accidents, as Information Centre (CEDAM)

b) compensating the persons prejudiced in vehicle accidents, if: - the author remained unidentified or the vehicle, the tram respectively,

that caused the accident did not have third party liability motor insurance, although, according to the provisions of the law in force, its owner had the obligation of concluding such insurance;

- within three month from the date it has submitted a claims request, the person resident in Romania that has suffered a prejudice following a vehicle accident occurred within the territory of a state situated within the territorial limits, excepting Romania, or within the territory of a third country whose national office has jointed the « Green Card » system, by a vehicle registered in a Member State of the European Economic Area or Switzerland, did not receive an reasoned answer from the insurance undertaking of the vehicle liable for the accident or from its claims representative, or if the insurance undertaking did not appoint a claims representative within Romanian territory or if within two months from the occurrence of the accident the insurance undertaking could not be identified. The Fund fulfils these attributions as Compensation Body.

(5) The insurance undertakings mentioned in paragraph (1), have the obligation to appoint in each state belonging to the European Economic Area and Switzerland, a representative responsible with claims adjustment caused by vehicles subject to registration within Romania to the residents of these states, on condition that the accident occurs on the territory of another state than the residence state of the injured person. (6) The fund has active legal procedural identity, in any Court trail against the persons having a legal relationship with it, for the payment obligations paid or which are certainly to be paid by the Fund. (7) a) The act by which the payment obligation of an insurer to the Fund is established and identified represents a debt title, according to the law. b) At the due date the debt title becomes writing of execution, on the basis of which the Fund shall start the by-enforcement procedure for recovering the debts, according to the provisions of the civil procedure Code. (8) In order to recover the amounts spent the Fund has regress right against the entity that determined the prejudice. (9) Yearly, the Fund shall submit to the Insurance Supervisory Commission Council an activity report, whose form and content shall be established through Regulations issued for the application of the present Law.

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(10) The report shall be accompanied by the annual financial statements drawn – up according to the legislation in force and audited according to the provisions of the present Law and of the Regulations issued for its application. (11) Within 6 month from the end of the previous year, the Fund shall publish a report, whose form and content shall be established through Regulations issued for the application of the present Law. (12) The way of setting – up, use and placement of the amounts available to the Fund and the persons having the right to compensation are established through Regulations issued for the application of the present Law by the Insurance Supervisory Commission. After article III a new article is introduced, article III1, having the following content: Art. III1. 1) The Street Victims Protection Fund, shall be set – up until the 31st of October, at the latest. 2) Within 60 days from the registration of the Street Victims Protection Fund to the Associations and Foundations Register, this shall take over the entire activity, the mobile and fixed assets with regards to its activity as well as the availabilities from the Administrator of the Street Victims Protection Fund appointed according to article 2 paragraph 1 from the Regulations enacted by Order no. 3108 of June 14, 2005. 3) At the date of the takeover, according to paragraph 2), article 61 of the Law no. 136/1995 regarding insurance and reinsurance in Romania, with the subsequent amendments and completions, is abolished. 4) From the date of the takeover, the provisions of article 611 of the Law no. 136/1995 regarding the insurance and reinsurance in Romania with the subsequent amendments and completions shall be interpreted as referring only to the Policyholders Protection Fund. In addition, following the meetings with peer review mission experts, the CSA has continued the consultation with Romanian Motor Insurance Bureau (BAAR) and with the representatives of the Ministry of Administration and Interior, in order to establish a common way for implementing the recommendations of the CE experts.

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Annex 3

ROMANIAN BORDER POLICE OPERATIVE RESULTS 1 February – 28 February 2006

1. Persons and vehicles traffic During 01.02.2006 - 28.02.2006, traffic values recorded in the Border Crossing Points were as follows: 1,608,624 persons (953,318 Romanians and 655,306 aliens) and 484,973 vehicles crossings. 2. Legal procedures developed for countering cross border crime including illegal migration During the reference period a number of 6,367 persons were found as having committed illegal deeds (893 persons having committed crimes and 5,474 persons having committed minor offences), most of them in the fields of persons illegal migration, goods smuggling and illegal fishing. On crimes category, the situation is the following:

Crimes 01- 28.02.2006 Attempt to illegally enter/exit the country 34

Illegal border crossing (crime found while it was committed) 36

Cross-border guiding 8

False in documents and use of false 96

Drugs 5

Stolen cars 7

Romanians returned for having committed crimes 192

Aliens returned for having committed crimes 14

Financial – economic crimes 61

Other crimes 440

TOTAL 893 In the field of finding and sanctioning the minor offences, a number of 5,474 persons were sanctioned (3,924 Romanians and 1,550 aliens), with minor offences fines in a value of approximately 0.1 millions RON. 2.1. Legal procedures performed towards Romanian nationals = 15.553 persons 2.1.1. In Border Crossing Points Out of the total number of the Romanian nationals that wanted to exit Romania (522,597 persons), a number of 507,658 persons effectively exited Romania and for 14,939 Romanians was refused the exit due to not fulfilling the travel conditions provided by the legislation in force. From the total amount of 507,658 Romanians that exited the country, a number of 170,672 persons stated that they were travelling to the Schengen states, representing approximately 33.6 % from the total number of persons that exited the country. From the other states borders a number of 1,024 Romanians were returned for having illegally exited the country, the main reasons being: violation of the laws in force in those states or the existence of the interdiction measure for a determined period.

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2.1.2. At the green border At the border, a number of 22 Romanian nationals were found, out of which a number of 18 Romanian nationals tried to illegally exit the country, by illegally crossing the green border and a number of 4 Romanian nationals tried to illegally enter the country in order to avoid the legal consequences of the crimes committed in the country and abroad. 2.1.3. Romanian nationals found in the competency area During the analysed period a number of 592 Romanian nationals were also found (223 in the border crossing points and 369 in the competency area), violating the legislation in force, against them the legal measures being undertaken (the facts committed are not related to illegal migration). 2.1.4. Romanians returned During the analysed period the legal measures were undertaken (including the criminal files drafted for different criminal acts), against a number of 1,828 Romanians returned. The percentage of returned persons, namely 0.3%, comparing to the number of persons that exited Romania, proves the decrease of the number of criminal acts committed by Romanian nationals in other states. 2.2. Legal procedures performed towards aliens = 2,882 persons 2.2.1. In border crossing points = 2,840 The entry in Romania was refused, for different legal reasons, for a number of 2,700 aliens. The exit from Romania was refused, for different legal reasons, for a number of 140 aliens. 2.2.2. At the green border During the reporting period, a number of 16 aliens were found, out of which a number of 4 persons tried to illegally entry Romania and 12 persons tried to exit Romania by illegally crossing the state border. 2.2.3. Aliens found in the competency area In the competency areas, a number of 26 aliens were also found violating the legislation in force, against them the legal measures being undertaken (the facts committed are not related to the illegal migration). 3. Main findings From the analysis of the operative situation recorded at Romanian borders, during the reference period the following aspects are to be mentioned: A. Illegal migration Findings: - 4 illegal migration networks, with 49 persons involved - 9 guides/carriers (8 Romanians and 1 aliens) – with their support Romanian and

foreign citizens were trying to illegally cross the border by using different methods. The main origin countries of the persons that illegally acted at the green border (both when entering and when exiting Romania) are the following: R. Moldova, China, Romania. B. Trafficking in human beings A number of 2 trafficking in human beings networks were found, involving 34 traffickers (Romanians) and 15 victims (women) were identified.

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Annex 4 STATISTICS ON INTERNATIONAL JUDICIAL COOPERATION

11.02.2006 to 15.03.2006

Ministry of Justice I. International judicial cooperation in criminal matters 1. Extradition and transfer of sentenced persons

Total of extradition requests: 52 – Romania as a Requesting State 2 – Romania as a Requested State Total of requests for transfer from Romanian nationals: 12

1 The statistical data concern the number of extradition requests that were examined from the point of view of international regularity during 11.02.2006 - 15.03.2006. As regards the total number of works, in matters of extradition, approximately 471 works have been carried out during 11.02.2006 - 15.03.2006.

2 The statistical data concern the number of requests for transfer that were examined from the point of view of international regularity during 11.02. - 15.03.2006. As regards the total number of works, in matters of transfer of sentenced persons, approximately 123 works have been carried out from 11.02.2006 to 15.03.2006.

3 Extradition requests sent to EU Member States during 11.02.2006 – 15.03.2006. 4 Extradition requests received from EU Member States during 1.01.2006 – 15.03.2006. 5 Requests for transfer received during 11.02.2006 – 15.03.2006 from Romanian nationals sentenced

by the authorities of EU Member States. 6 Requests for transfer received during 11.02.2006 – 15.03.2006 from nationals of other EU Member

States sentenced by Romanian law courts.

Extradition1 Transfer of sentenced persons2 EU Member State active3 passive4 active5 passive6

1 Austria 2 7 - 2 Belgium 2 - - 3 Cyprus - - - 4 Czech Republic - 1 - 5 Denmark 1 - - 6 Estonia - - - 7 Finland - - - 8 France 3 1 - 9 Greece 3 1 -

10 Germany 1 - - 11 Italy 21 1 - - 12 Ireland - - - 13 Latvia - - - 14 Lithuania - - - 15 Luxembourg - - - 16 Malta - - - 17 United Kingdom - - - 18 Netherlands 1 - - 19 Portugal - - - 20 Poland - - - 21 Sweden - - - 22 Slovakia - - - 23 Slovenia - - - 24 Spain 12 1 3 - 25 Hungary 6 - -

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2. Letters rogatory and judicial assistance in criminal matters

Total of requests for rogatory letters: 12 – sent by the Romanian judicial authorities

9 – received from by foreign judicial authorities

Total of requests for assistance received from foreign authorities: 88

Total of requests sent by Romanian authorities: 26

1 The statistical data concern the number of requests for letters rogatory (hearing of witnesses or

defendants, performing of specific procedural acts) that were examined from the point of view of international regularity during 11.02.2006 – 15.03.2006. As regards the total number of works, in this matter, approximately 71 works have been carried out during 11.02.2006 – 15.03.2006.

2 The statistical data concern the number of requests for judicial assistance (service of judicial documents: summonses, court judgements, information) that were examined from the point of view of international regularity during 11.02.2006 – 15.03.2006. As regards the total number of works, in this matter, approximately 336 works have been carried out during 11.02.2006 – 15.03.2006.

3 Requests for letters rogatory sent to EU Member States during 1.01.2006 – 15.03.2006. 4 Requests for letters rogatory received from by the authorities of EU Member States during 1.01.2006

– 15.03.2006. 5 Requests for judicial assistance received from authorities of EU Member States during 1.01.2006 –

15.03.2006. 6 Requests for judicial assistance sent during 1.01.2006 – 15.03.2006 by the Romanian judicial

authorities. 7 During the criminal pursuit. 8 During the trial.

Letters rogatory1 Judicial assistance2 active3 passive4 active5 passive6

EU Member State

UP7 J8 UP J UP J UP J 1 Austria 1 - - 1 - 1 - 4 2 Belgium - - - - - - - - 3 Cyprus - - - - - - - - 4 Czech Republic - - - - - - - 1 5 Denmark - - - - - - - - 6 Estonia - - - - - - - - 7 Finland - - - - - - - - 8 France 1 - - - - 3 - 4 9 Greece 1 - - - - 1 - - 10 Germany - - 5 - - 7 - 5 11 Italy 5 - - 1 - 6 - 1 12 Ireland - - - - - - - - 13 Latvia - - - - - - - - 14 Lithuania - - - - - - - - 15 Luxembourg - - - - - - - - 16 Malta - - - - - - - - 17 United Kingdom 2 - - - - 1 - - 18 Netherlands - - - 1 - - - 1 19 Portugal - - - - - 1 - - 20 Poland 1 - - - - - - - 21 Sweden - - - - - - - - 22 Slovakia - - - - - 1 - - 23 Slovenia - - - - - - - 3 24 Spain 1 - - - 4 - - 25 Hungary 1 - - - - 1 - 69

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II. International judicial cooperation in civil and commercial matters1

Type of work Number of works

Service from abroad 121

Service abroad 175

Exequatur 4

Legal information 20

Apostille a) 7 requests for information b) 68 requests concerning 160 documents

Rogatory letters 40

Private international law 5

Civil aspects of international child abduction 35

Recovery from abroad of maintenance 46

Public Ministry Number of received files, 274 of which: - Requests of rogatory commission – 54 - Transfer of criminal procedure – 52 - Handing over of documents – 110 - Other works – 58 Files solved by the prosecutors - 315: - Requests of rogatory commission – 62 - Transfer of criminal procedure – 22 - Handing over of documents – 167 - Other works – 64 Department for the Investigation of Organised Crime and Terrorism (DIICOT) - there have been received 22 requests for judicial assistance, issued by the foreign authorities and have been transmitted 19 requests issued by the structures of DIICOT.

1 Period of reference: 11 February – 15 March 2006.