1. Background

A draft law on measures relating to information and communication infrastructures of national interest and the conditions for the implementation of 5G networks (the "Draft Law") was launched on August 4, 2020 for public consultation by the Ministry of Transportation, Infrastructure and Communications and slightly revised on September 2, 2020.

The Draft Law purports to regulate the authorisation of manufacturers of technologies, equipment and software for 5G networks (collectively the "5G Technology"). To this end, the revised form of the Draft Law1 amongst others:

  • fully reproduces the authorisation criteria set out in the Memorandum of Understanding dated 20 August 2019 between Romania and the United States of America2 (the "US-Romania Memorandum"), namely whether the manufacturer:
  1. is subject, without independent judicial review, to control by a foreign government;
  2. has a transparent ownership structure;
  3. has a history of ethical corporate behaviour;
  4. is subject to a legal regime that enforces transparent corporate practices.
  • contains no reference whatsoever to technical or other criteria than those mentioned above and lacks any explanations as to the actual manner in which the latter would be enforced, although they are wide enough to be construed in various ways;
  • entrusts the decision on the authorisation procedure to the Romanian Prime Minister and the Romanian National Defence Council ("CSAT"), the latter having the power to refuse authorisation only by reference to the vague political criteria mentioned above; these criteria are to be construed based on general definitions of risks, threats and vulnerabilities to national security;
  • provides that only authorised manufacturers may be used for the purpose of 5G networks and communication networks and infrastructure of national interest, whilst at the same time defining 5G networks as including equipment already embedded in 3G and 4G networks; in this way, the Draft Law also requires mobile electronic communication network providers (hereinafter referred to as "mobile operators") to replace already acquired 3G and 4G equipment;
  • the term for the replacement of existing 3G and 4G equipment (which has been purchased in accordance with the legislation in force at the date of their acquisition) has been set to five years; there is no mention about any compensation to be paid to electronic communication network providers for this measure having effects equivalent to an expropriation.

As mentioned in the Explanatory Memorandum of the Draft Law3, the latter is due to have an impact on competition if enforced to the effect of excluding certain technology producers from the market.

Given (a) the various public statements of highly ranked Romanian officials4 and the US-Romania Memorandum and (b) the vary vague and exclusively political nature of the authorisation criteria, it seems that (unlike in other EU States), the full exclusion of certain 5G technology producers based on their country of origin may be imminent in Romania.

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Footnotes

1 The revised form of the Draft Law can be seen at http://www.mt.gov.ro/web14/documente/acte-normative/versiuni_imbunatite/2020/proiect2020-09-02-173747.pdf

2 The criteria set by the Romania-US Memorandum are the following: (1) whether the vendor is subject, without independent review, to control by a foreign government; (2) whether the vendor has a transparent ownership structure, and (3) whether the vendor has a history of ethical corporate behavior and is subject to a legal regime that enforces transparent corporate practices. The Romania-US Memorandum can be consulted here: https://www.comunicatii.gov.ro/wp-content/uploads/2019/11/memorandum-5g.pdf

3 "With regard to the competitive environment, it can be noted that, as a result of the authorization regime established by the draft enactment, there may be a case where, for reasons related to national security and national defense, the options available to suppliers of electronic communications networks and services are limited when deciding on purchasing technologies, equipment and software used in electronic communications networks through which 5G electronic communications services are provided. The effects, in particular, also depend on the number of manufacturers which obtain the authorization provided by the draft law."

4 See for example the declaration of the Romanian President, Mr. Klaus Iohannis, available here https://www.news.ro/economic/iohannis-ne-dorim-retele-controlul-unor-state-interese-cele-declarate-lucreaza-legislatie-speciala-preveni-intrarea-piata-5g-unor-firme-asupra-carora-planeaza-suspiciuni-1922400412272020081919449342, the declaration of the President of National Authority for Administration and Regulation of Communications ("ANCOM"), available here https://economie.hotnews.ro/stiri-telecom-23458806-arbitrul-telecom-anunta-oficial-amanarea-sase-luni-licitatiei-5g-transpunerea-memorandumului-sua-este-benefica-absolut-necesara.htm and the declaration of Mr. Virgil Popescu, the Minister of Economy, available here https://economie.hotnews.ro/stiri-telecom-24193537-video-virgil-popescu-imi-doresc-5g-facem-partener-euro-atlanci-nu-huawei.htm

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