Cash Payments and Receipts, and Modern Payment Systems

Monitorul Oficial al Romaniei, Part I, No 242 of 9 April 2015 has published Law No 70/2015 on strengthening financial discipline concerning cash payments and receipts, amending and supplementing Government Emergency Ordinance No 193/2002, regarding the introduction of modern payment systems (hereinafter the “Law”).

Cash Payments and Receipts
a) Legal entities, certified natural persons, private enterprises, family enterprises, freelancers, selfemployed people, associations and other entities with or without legal personality shall perform cash payments and receipts as follows:
– cash receipts from the above mentioned categories of persons at a daily threshold of RON 5,000 from one person;
– cash receipts performed by cash & carry stores from the aforesaid entities at a daily threshold of RON 10,000 from one entity;
– payments to the categories of persons specified above at a daily threshold of RON 5,000/person, but not above a total threshold of RON 10,000/day;
– payments to cash & carry shops in a daily amount which should not be in excess of RON 10,000;
– payments from cash outflows at a dailythreshold of RON 5,000 established for every person that has received advance payments;
– fragmented receipts for cash in respect to invoices exceeding the abovementioned thresholds shall be forbidden, and so shall be fragmented invoices for the supply of goods / provision of services in excess of the said threshold amounts;
– fragmented payments in cash to suppliers of goods and services for invoices exceeding the abovementioned thresholds shall be forbidden; when invoices are in excess of the aforesaid thresholds, payment shall be performed in cash up to the threshold amounts, while the remaining amount has to be paid by financial instruments;
– for credit notes related to returned goods and/or services which have not been provided the value of which is in excess of the established thresholds, the amounts shall be repaid in cash up to the aforementioned thresholds, while any remaining amount has to be reimbursed only by non-cash payment instruments.

The Law also specifies the operations to which the abovementioned thresholds are not applicable, such as:
– cash deposits in the accounts opened with credit institutions;
– payment of travel expenses for business purposes;
– cash payments for taxes, fees, social contributions, fines and other amounts due to the State Treasury; etc.

b) Cash receipts / payments performed by the entities mentioned at point (a) above with individuals
– cash receipts representing debt assignments, borrowings or other financings, and amounts representing the value of goods / services supplied by the entities mentioned at point (a) hereinabove received from individuals shall not be above a daily threshold of RON 10,000 / individual;

Fragmented cash receipts, i.e. fragmented transactions the value of which is higher than RON 10,000, shall be forbidden. The aforementioned rules shall not apply to supplies of goods and provision of services the price of which is paid by instalments under sale / purchase agreements providing for such payment.
– cash payments representing the value of goods/services, dividends, debt assignments or other entitlements and reimbursements of loans or other financings performed by the entities mentioned at point (a) hereinabove to individuals shall be made in a maximum daily amount of RON 10,000 /individual;
Fragmented payments for transactions the value of which is in excess of RON 10,000 shall be forbidden.
– when goods are returned by individuals and/or when services have not been provided to individuals, the amounts representing the value of such goods and services shall be repaid in cash only in consideration of the threshold mentioned above, while any amount exceeding this threshold has to be reimbursed by non-cash payment instruments; in only one case (when the individual declares, by assuming full responsibility, that s/he no longer has a bank account)full repayment may be made in cash.

c) Cash receipts / payments between individuals other than those performed through the agency of institutions providing payment services
– such operations, performed in consequence of the transfer of the right of ownership over goods or entitlements, the provision of services, the granting or the reimbursement of loans, may be carried out at a daily threshold of RON 50,000 / transaction, while fragmented cash receipts and/or payments and the fragmentation of a transaction are prohibited.

d) Cash releases to the entities mentioned at point (a) hereinabove, as well as to branches and other secondary offices of legal entities by the State Treasury, credit institutions, institutions issuing digital currency, non-bank financial institutions, entities performing currency exchanges, gambling operators
-cash releases to the entities mentioned at point (a) hereinabove may not be in excess of RON 5,000 per entity and transaction, except for the operations specified by the Law to be performed without the application of any threshold.

e) Other provisions
– if the entities mentioned at point (a) have several cashier desks, the cash receipt thresholds shall be applicable for every separate cashier;
– branches and other secondary offices of legal entities having their own cashier desk and/or an account opened with a credit institution shall also apply the rules contained in this Law;
– the Law also provides for the contraventions related to cash payments and receipts and the
penalties applicable thereto;
– the provisions of this Law shall also apply to the foreign currency receipts and payments performed in the territory of Romania in consideration of the thresholds specified therein, at the rate of exchange communicated by the National Bank of Romania at the date on which such operations are carried out. The provisions regarding cash payments and receipts come into full force and effect thirty (30) days after the publication of the Law in Monitorul Oficial al Romaniei. They shall not apply to the contracts concluded before the entry into force of the Law.
After the Law has become effective, the provisions of Government Ordinance 15/1996 on strengthening financial discipline are abrogated.

Modern Payment Systems
The Law defines the “accepting institution” as being a credit institution or a non-bank financial institution which offers services to the accepting traders related to the performance of payments by cards and/or by other payment instruments, such as digital currency, under a contract previously concluded between said institution and the accepting trader, as well as services for cash releases at its counters and through its own network of cardholders’ terminals. In the case of digital payment instruments such as cards, the accepting institution may also be the issuer of such instruments. The “issuing institution” (i.e. the issuer) is defined as a credit institution or a non-bank financial institution which issues a digital payment instrument to users under a relevant contract. As a novelty, the Law stipulates that issuing institutions may not apply interbank commissions for accepting institutions in an amount of more than 0.2% of the value of each operation performed by means of debit cards or of more than 0.3% of such value when credit cards are used. The agreements between accepting institutions and the beneficiaries of payment services shall contain detailed information regarding the interbank commission, the commission for the payment system and processing, the margin of the accepting institution, as well as any additional commission applied subject to the mark and category of the respective cards. The issuing and accepting institutions in Romania have the obligation to provide detailed information in their agreements with the beneficiaries of payment services. Such obligation does not apply in the case of operations performed by means of commercial cards, to cash withdrawals from ATMs or when operations are done by cards issued by a sole financial institution that owns a tripartite system of payment by card, meaning that such institution plays the role of both an issuing and an accepting institution. The provisions referring to modern payment systems will become effective twelve (12) months after the Law has come into force. (The Law enters into full force and effect on 12 April 2015.)

LEGAL ALERT by Duncea, Stefanescu & Associates

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