Customers of Bank Of Cyprus Romania - they have their accounts frozen, but the National Tax Administration still expects them to pay their taxes

The case of the suspension of the operations of the Romanian branch of Bank of Cyprus has raised questions over the status of companies that have accounts opened with banks and are required to pay their taxes to the government.

As the bank's customers can't conduct operations at the counter or through internet banking, they can't pay their liabilities to the state budget. The representatives of the National Tax Administration stated, at the request of the BURSA newspaper, that "this is not a matter that falls under the competence of the institution".

Government Ordinance 92/2003, concerning the Tax Procedure Code, only stipulates that the taxpayers are legally responsible, if their payments made through the bank are more than three days late. Thus they will need to bear the interests and penalties pertaining to the payment delay.

Recouping the funds from the banks is also the responsibility of the companies.

The legislation in effect does not provide protection against the companies that are expected to conduct payments to the state budget through bank settlement, if the bank that they have their accounts with has suspended its operations. According to Government Decision 109/2009 concerning the organization and functioning of the National Tax Administration Agency (ANAF), with its subsequent amendments and modifications, this kind of matter does not fall within its competency, the officials of the institution told us.

The failure to pay to the state budget the amounts owed to the consolidated state budget, within three working days from the date the account of a company has been debited, does not exonerate the company from the obligation to pay those amounts and it will be forced to pay interest and default fees, according to the Government Ordinance 92/2003, concerning the Tax Procedure Code. "In order to recoup the amounts owed to the state budget which banks have failed to settle, the taxpayer can turn against the bank in question", the emergency ordinance states.

The Ministry of Public Finance recently passed a law which lowers the minimum amount for the transactions which companies are required to conduct through banks, from 10,000 lei to 2,000 lei.

Since the domestic branch of Bank of Cyprus (BoC) has halted its operations on April 1st, companies and individuals that have accounts opened with this institution, are restricted to withdrawing a maximum of 4,000 lei from the bank's ATMs. With the exception of exceptional situations, such funeral aids or hospitalization cases, BoC România has not honored any other requests for payments made by its customers. The payment of the salaries by a company does not constitute an exceptional circumstance, but companies that have accounts opened with the branch of the Cypriot bank were able to conduct the payment of the salaries, if they had money in their accounts, the representatives of the bank said.

On Monday night, the Central Bank of Cyprus (CBC) has decided to extend the suspension of the operations of the Romanian branch of Bank of Cyprus by two more days. Whereas last week the officials of the Romanian branch of the Cypriot lender were saying that it was supposed to resume operations on April 23rd, after they had been halted on April 1st, on Monday night they announced that the suspension would continue until today.

Bank sources told us that the suspension of the activity of BoC Romania would continue at least one week.

Still, Adrian Vasilescu, the advisor to the governor of the NBR, said, in turn that the situation of BoC Romania has been dealt with, but that he can't provide additional details: "I can't tell you what the solution is. (...) what I can say is that the solution has already been found and that these two days are necessary for technical procedures. All the deposits in this branch will fall under the jurisdiction of the Romanian law. (...) I understand full well the concerns and the anxiety of the people that have deposited money with this bank, but I can't say anything more than this".

Gathered two weeks ago in Dublin, the Finance Ministers of the European Union (UE) have discussed the law concerning banking resolution, which is set to come into effect starting in 2015, and which concerns the use of all the assets of troubled banks, except for guaranteed deposits of up to 100,000 Euros, for their recapitalization.