President passes law protecting the Romanian National Securities Commission from the investors in the FNI

President Traian Băsescu passed the law which institutes protective measures for the Romanian National Securities Commission (CNVM) and the Authority for State Assets Recovery (AVAS), against the victims of the National Investment Fund (FNI).

The law, which stipulates that the amounts intended for organization and functioning expenses, including employee expenses, will no longer be subject to garnishment, comes just on time for the CNVM, since the six months period in which the victims of the FNI were prohibited from garnishing the wage accounts of the CNVM would have expired in a few days.

According to the law, "the fulfillment of the payment obligations of the CNVM which result from claims established as enforceable by law will only be paid out of the amounts which exceed five million lei, representing the monthly average of the revenues earned by the CNVM". Furthermore, the law stipulates that any lawsuits, as well as the avenues of attack used by the CNVM to challenge the garnishment, will be exempt from the payment of stamp duty, any other fees and from the payment of the amounts set as bail.

The capital market watchdog was sentenced by the courts to compensate the former FNI investors, but so far the amount that it would be required to pay has not been clearly specified, even though sources in the market are talking about tens of millions of Euros. The representatives of the Romanian National Securities Commission warned that the Budget of the Commission is not big enough to cover the compensation and the institution is at risk of being unable to continue to operate.

The provisions of the law will remain in effect until December 31st, 2013.

Concerning the AVAS, the law stipulates, among other things, that the debts of the Authority will be paid out of the revenues of the budget allocated for the privatization and recovery of state assets and that the amounts allocated from the state budget for the payment of salaries, the functioning of the institution and for representing Romania before the International Court of Arbitrage may not be garnished.