The implementation norms on the moratorium for loan instalments, adopted by the Romanian Government10 April 2020
The Romanian Government adopted by way of Decision no. 270/2020 (“Norms“) the norms for applying the provisions of the Government Emergency Ordinance no. 37/2020 (“GEO no. 37/2020“) by which the possibility of a temporary moratorium on the payment of instalments arising from loan or leasing agreements granted by banks or non-banking financial institutions was established.
The Norms cast details on the eligibility criteria, the procedure, and the documents required to apply for the moratorium. The framework applicable to the state guarantees that will be issued to guarantee the payment of the deferred interests arising from consumer mortgage loans has also been defined.
Eligibility criteria to be met by the loans
According to the Norms, the loans must meet the following criteria to be eligible to benefit from a payment moratorium:
» the date when they were granted was before March 30, 2020;
» the final maturity date is after March 30, 2020;
» no acceleration has been declared by the lender before March 30, 2020;
» no overdue and unpaid obligations arising out of the loan were recorded before March 16, 2020, or the borrowers have made the payment thereof until the date when the moratorium is requested.
Proof of an impact on the borrower’s incomes
The Norms clarify the provisions of GEO no. 37/2020 that determine that the right to a moratorium applies exclusively to borrowers whose incomes have been directly or indirectly affected by the critical situation generated by the COVID-19 pandemic.
According to the Norms, this criterion is to be fulfilled by the borrower by issuing an affidavit that will refer to the following:
» a statement that their income (and/or the family income, in the case of consumers) has been affected, directly or indirectly, compared to the level recorded before the state of emergency having been declared;
» a statement of the fact that they are unable to fulfil the payment obligations arising out of the loan;
» the cause(s) that have led to the inability to fulfil the payment obligations.
The Norms list several examples of causes that can be mentioned as the reason behind the inability to fulfil the payment obligations:
» in case of consumers – technical unemployment, dismissal or reduction of the borrower’s or his family members’ salary, placement of the borrower in quarantine or isolation at home, illness caused by the SARS-Cov-2 virus;
» in case of other borrowers – the contraction of the relevant market, the reduction of the number of employees, the decrease of the number of suppliers.
It is also provided by the Norms the additional requirement, applicable to borrowers that are legal entities, to hold an Emergency Situation Certificate and to not be in insolvency.
Provisions regarding the procedure
The implementing of the moratorium does not trigger the requirement to conclude addendums to the involved loan agreements.
Within 15 days from the date of receipt of the borrower’s request for a moratorium, the lender shall issue the decision to accept or to deny the request. The request may be denied if the eligibility criteria established by the Norms or by GEO no. 37/2020 for either the loan or the borrower are not fulfilled.
The Norms provide, in the case of loan agreements guaranteed by a third party, the requirement to obtain the guarantor’s prior acceptance for the extending of the guarantee’s duration with a period equal to the one with which the loan is extended as a consequence of the moratorium on payment of the instalments.
Although the norms do not explicitly mention, it may be reasonably interpreted that in the absence of such acceptance from the guarantor, the borrower may not opt for an extension of the final maturity date with a period equal to that for which the moratorium was in effect. In such a scenario, the loan’s initial maturity will remain unchanged, and the outstanding principal amount (including the accrued interest), will be paid in instalments over the remaining maturity period of the loan.
State-granted guarantee for consumer mortgage loans
In what concerns consumer mortgage loans, GEO no. 37/2020 stipulates that the interest due during the moratorium period will not be accrued at the principal amount. The interest shall form a new loan, distinct from the original loan, interest-free, which will be paid by the borrower in a maximum of 60 monthly instalments, and the payment of the new loan will be entirely guaranteed by the Romanian state.
Under the Implementation Norms, the issuance and the payment (enforcing) of the state guarantee will be a process that will exclusively involve the lender, the National Credit Guarantee Fund for SMEs (FNGCIMM) and the Ministry of Public Finances, and will not involve the borrower. The lender will be entitled to enforce the State-issued guarantee only if the borrower fails to pay three consecutive instalments of the new loan.
The amount paid as under the guarantee’s enforcement will represent a tax receivable owed by the borrower to the state budget. In case the borrower fails to voluntarily pay the receivable, together with any accrued interest and penalties, the National Agency for Fiscal Administration (ANAF) will be entitled to proceed with the collecting of the owed amount under the procedure set by the Fiscal Procedure Code.
 Government Decision no. 270/2020 for the approval of the Norms for applying the provisions of the Government Emergency Ordinance no. 37/2020 concerning the granting of facilities for loans granted by credit institutions and non-banking financial institutions to certain categories of borrowers, published in the Official Gazette no. 285 of April 6th, 2020, in force from the same date.
 Government Emergency Ordinance no. 37 as of March 30th, 2020, concerning the granting of facilities for loans granted by credit institutions and non-banking financial institutions to certain categories of borrowers, published in the Official Gazette no. 261 from March 30th, 2020, in force from the same date. For more details regarding the provisions of the Emergency Ordinance, please refer to the material available here.