Regulation no. 4/2005 on the exchange rate regime of the National Bank of Romania has been amended by Regulation no. 7/2020, with the latter entering into force on 7 August. The main changes introduced pertain to the following:
1. The ability to carry out certain transactions between residents in foreign currencies, not only in the national currency (RON). These operations include but are not limited to:
– distributions of dividends;
– financial flows generated by the granting of loans;
– the setting up of deposits;
– securities transactions.
2. Categories of resident allowed to carry out operations in foreign currencies. The amendments specify the following categories of resident as being allowed to carry out foreign exchange operations with other residents and the situations in which these operations may take place:
a) natural and legal persons and other entities conducting direct operations arising from external processing contracts under the lohn system on the basis of collaboration agreements concluded between residents and, where resident collaborators are nominated, in the authorization of inward processing;
b) legal persons carrying out payments to suppliers and sub-suppliers relating to goods and services that fall under exported products or contribute to the provision of exported services. This category does not include goods purchased from resident suppliers and sub-suppliers, intended for export trade, in the same form in which they were purchased, without the exporter having added value to those goods.
3. Entities allowed to carry out foreign exchange activities. Regulation no. 7/2020 extends the Foreign Exchange Regulation to include a new section describing the different segments of the foreign exchange market. According to Regulation no. 7/2020, the foreign exchange market is composed of the following segments:
a) the interbank foreign exchange market, on which foreign exchange transactions are carried out by credit institutions as well as the National Bank of Romania
b) the foreign exchange market for entities authorized to carry out foreign exchange activities, namely:
– foreign exchange offices and entities that manage tourist establishments with accommodation facilities and which include in their object of activity currency purchase operations, being authorized to carry out foreign exchange activities for individuals
– entities which carry out foreign exchange activities on the basis of express legal provisions and for which foreign exchange activities is specified in the articles of association that regulate their establishment and operation
Regulation no. 7/2020 states that it is prohibited for foreign exchange activities to be carried out by entities other than those provided for above.
According to the regulation, a foreign exchange activity is defined as the activity carried out by a buyer/seller of quoted and unlisted currencies against the national currency at an exchange rate established between the parties and achieved by means of the collection/payment the exchange value.
Source: Regulation no. 7/2020 on the amendment and supplementation of Regulation of the National Bank of Romania no. 4/2005 on the exchange rate regime, as published in the Official Gazette no. 711 on 07.08.2020.