Preliminary assessment of the first payment request of Romania

. monitoring the achievement of the targets and milestones related to the implementation of the components of the plan, and the state of implementation of each measure. 2. The system shall include, as a minimum, the following functionalities: 27  (…) b) collect, store and ensure access to the data required by Article 22(2)(d)(i) to (iii) of the RRF Regulation. As regards the collection and storage of the data as requested by Art. 22(2)(d) of the RRF Regulation (EU) 2021/241 (hereinafter the RRF Regulation), the audit report confirmed the collection and storage of all required data at the moment of the final report (i.e. 30 May 2022), with the following exceptions:  The collection of the name of the final recipient for contracts other than public procurement (the Romanian authorities had 30 days from the date of the audit to implement this recommendation). However, in the meeting of 9 June 2022 [Ares(2022)4687164], the AA confirmed that this is more an IT functionality (field) issue, and confirmed that these data are currently collected by the implementing bodies;  As regards the capacity of the system to collect and store the information required under Art. 22(2)(d)(iii) of the RRF Regulation, the AA confirmed that the system allows the storage of these data, but such data are not yet inserted into the system because financing contracts and procurement contracts generating these types of data had not been signed at the moment of the report, for the milestones and targets included in the first payment request.  As regards the collection of the information required under Art. 22(2)(d)(iii) of the RRF Regulation, i.e. beneficial owner data, the integrated monitoring and control system used for RRF (e_SMC) will extract these data from the National Trade Registry (hereinafter the ONRC) database based on a Protocol signed on 25 May 2022. Access to data required by Article 22(2)(d) of the RRF Regulation is confirmed for the national coordinator (MIPE), reform and investment coordinators and AA (based on user functions). So far, several institutions have already access and inserted data into the system and requests for access are approved on a continuous basis. The Romanian authorities have also confirmed that the Commission, the European Public Prosecutor Office, the European Court of Auditors and the European Anti-Fraud Office will be granted access to the data, upon request. To verify whether the system is capable of performing the functions as required by the milestone, notably concerning the collection and storage of data as required under Art. 22(2)(d)(iii) of the RRF Regulation, the Commission requested information on 21 contracts (at the moment of the checks Romania confirmed that only these contracts had been concluded). The control carried out by the Commission confirmed that the system is able to collect and store data on contractors, subcontractors and to some extent on beneficial owners based on the Protocol signed on 25 May 2022 with the ONRC. However, Romania was not able to provide (complete) information on beneficial owners for contracts where there are foreign beneficial owners. To improve this system for the future, MIPE adopted instructions to reform/investment coordinators on 30 August 2022 so that before signing the contract they verify the completeness of the data in the e-SMC by interrogating the system using the unique tax registration code (CUI)2. The applicants are under the obligation to declare these data to National Trade Registry (ONRC) in accordance with applicable rules as regulated by Law no. 315/2021 of 28 December 2021 amending Law no. 129/2019 on preventing and combating money laundering and terrorist financing and amending 2 According to art. 8, para. 1 of Law no. 359/2004, with subsequent amendments, upon registration of a company, a registration certificate is issued which entails the order number from the trade register and the unique tax registration code (CUI) assigned by the Ministry of Public Finance. 28  certain legislative acts, published in the Official Gazette no. 1240 of 29 December 2021. For cases involving foreign shareholders, final recipients/contractors are requested to sign a declaration of honour under the penalty of the law that the data is complete and correct. This should apply until the interconnection with the European Central Platform established by Art. 22(1) of the Directive (EU) 2017/1132 of the European Parliament and of the Council will be achieved and data could be retrieved directly from that Platform. Furthermore, reform/investment coordinators will have to insert provisions in future contracts which oblige final recipients/contractors to inform MIPE, in parallel with ONRC, of any change/update in their beneficial owners’ data and to re-interrogate the e_SMC system in view of their collection and storage. All those measures (i.e. legal obligations in force since 1 January 2022, together with self-declaration on honour), besides the instructions adopted on 30 August 2022, provide a sufficient level of assurance that the system will collect and store beneficial owner data in accordance with requirements of Art. 22(2)(d). However, for past contracts, the authorities have put in place a procedure to ensure the collection of the missing data. ONRC has already contacted the Official registers of the States in which foreign companies are residents to collect and ensure reliability of data on beneficial owners, for all contracts signed until 24 August 2022. The European Commission has received copies of all these requests. Furthermore, MIPE adopted final Guidelines to reform/investment coordinators. In order to ensure continuous compliance with the milestone and its obligations under the Financing and Loan Agreements, as attested through the updated summary document justifying how the milestone was satisfactorily fulfilled, Romania has committed to continue to develop its system to improve its functionalities and efficiency by:  Using the European Central Platform for identifying beneficial owners of foreign companies, should it become available.  In the meantime, for collecting data on foreign companies, for all past contracts signed by 24 August 2022 ONRC will forward them to MIPE at the latest by 15.10.2022; MIPE takes the necessary actions to ensure data received from ONRC (in accordance with the answers received from trade registers of the member states where foreign companies are registered) is inserted and collected into the e_SMC system and will inform the European Commission by 31.10.2022. Commission Preliminary Assessment: Satisfactorily fulfilled Number: 451 Related Measure: Monitoring and implementation of the plan Name of the Milestone: Entry into force of a Government Ordinance enacting the legal mandate of the Ministry of Investments and European Project (MIPE), Ministry of Finance (MoF) and the Audit Authority (AA) Qualitative Indicator: Provision in the law indicating the entry into force of the Government Emergency Ordinance on the financial, Time: Q4/2021 implementation, control and audit mechanism, including clear mandate to three institutions Context: This milestone enacts the institutional framework for the national recovery and resilience plan and the activities carried out by the constituent institutions entrusting the Ministry for Investments and European Projects (MIPE) the power and mandate to exercise all the tasks of monitoring, verification, control and recovery, drawing up and signing payment applications submitted to the European Commission, the management declaration and the audit summary. The same framework entrusts as well the Ministry of Finance (MoF) with the duties in relation to the signing of the loan 29 agreement and the financing agreement together with MIPE, and specifies the activities that the audit authority shall perform as part of its mandate for national recovery and resilience plan. Milestone 450 on the establishment of a repository system is also connected to this measure. Evidence Provided: In line with the verification mechanism, the following evidence was provided by the Romanian authorities: 1. Copy of the publication of the Government Emergency Ordinance no. 124 of 13 December 2021, enacting the legal mandate of the Ministry of Investments and European Project (MIPE), the Ministry of Finance (MoF) and the Audit Authority (AA), published in the Official Gazette no. 1178 of 14 December 2021, which according to the Romanian legislation entered into force on the day of its publication in the Official Gazette. 2. Copy of the Law no. 178 of 9 June 2022, published in the Official Gazette no. 576 of 14 June 2022 approving the Government Emergency Ordinance no. 124 of 13 December 2021, enacting the legal mandate of the MIPE, MoF and the Audit Authority (AA), published in the Official Gazette no. 1178 of 14 December 2021. 3. Summary document justifying how the milestone (including all constitutive elements) was satisfactorily fulfilled. The authorities also provided: 4. a notification letter (on 30 May 2022) on the institutional framework (Ares(2022)4418949) outlining certain amendments to the Romanian Recovery and Resilience plan and 5. a copy of the publication of the Government Emergency Ordinance no. 70 of 26 May 2022 on prevention, verification and detection of irregularities/double financing, serious irregularities in obtaining and using the funds allocated under the RRF, published in the Official Gazette no. 526 of 27 May 2022. 6. Protocol concluded between MIPE and the National Agency of Integrity (ANI), with subsequent amendments (Ares(2022)4797267), (2022)5561693) and (2022)5570064). Analysis: The evidence provided by the Romanian authorities addresses the description of the reform in the CID Annex as follows: Entry into force of a Government Ordinance enacting the institutional framework for the national recovery and resilience plan and the activities carried out by the constituent institutions entrusting MIPE the power and mandate to exercise all the tasks of monitoring, verification, control and recovery, drawing up and signing payment applications submitted to the European Commission, the management declaration and the audit summary. The same framework shall also entrust MoF with the duties in relation to the signing of the loan agreement and the financing agreement together with MIPE, and also to specify the activities that the audit authority shall perform as part of its mandate for national recovery and resilience plan. The evidence submitted by Romania demonstrates that the Government Emergency Ordinance no. 124 of 13 December 2021 (hereafter GEO 124/2021) has entered into force on 14 December 2021, the date of its publication in the Official Gazette, in accordance with art. 12(2) of the Law 24 of 27 March 2000 on rules of legislative technique for the preparation of normative acts, version updated, published in the Official Gazette no. 260 of 21 April 2010. GEO 124/2021 together with the provisions of GEO 70/2022 and the special legislation mentioned above suitably establishes the institutional and financial framework for the management of the national recovery and resilience plan, while outlining the control and audit mechanism and defining 30 the clear mandate of the three institutions. Therefore, the GEO 124/2021 allows these institutions to properly monitor and implement the plan and adequately addresses the requirements of the Council Implementing Decision. In line with the description of the milestone and of the measure in the Council Implementing Decision, the following elements included in the Government Emergency Ordinance ensure the achievement of the milestone. The Government Emergency Ordinance no. 124/2021 establishing the institutional and financial framework for the management of the European funds allocated to Romania under the Recovery and Resilience Facility and amending and supplementing Government Emergency Order No 155/2020 on certain measures for drawing up the National Recovery and Resilience Plan necessary for Romania to access repayable and non-refundable external funds under the Recovery and Resilience Facility was adopted by the Government on 13 December 2021, published in the Official Gazette no. 1178 of 14 December 2021 and entered into force on 14 December 2021, in accordance with art. 12(2) of the Law 24 of 27 March 2000, version updated, on rules of legislative technique for the preparation of normative acts, published in the Official Gazette no. 260 of 21 April 2010. This was followed by its approval by the Law no. 178 of 9 June 2022, published in the Official Gazette no. 576 of 14 June 2022, in accordance with the procedure detailed in art. 75, 76(2) and 77 of the Romanian Constitution. The provisions of the GEO 124/2021 are further detailed in secondary legislation, namely methodological norms, adopted through the Government Decision no. 209 of 14 February 2022, published in the Official Gazette no. 154 of 15 February 2022, entered into force on 15 February 2022, in accordance with art. 12(3) of the Law 24 of 27 March 2000, version updated, on rules of legislative technique for the preparation of normative acts, published in the Official Gazette no. 260 of 21 April 2010. In addition, the GEO 70/2022 of 26 May 2022 on prevention, verification and detection of irregularities/double financing, serious irregularities in obtaining and using the funds allocated under the RRF, published in the Official Gazette no. 526 of 27 May 2022, entered into force on 27 May 2022, in accordance with art. 12(2) of the Law 24 of 27 March 2000, version updated, on rules of legislative technique for the preparation of normative acts, published in the Official Gazette no. 260 of 21 April 2010, complements and details the measures stipulated in chapter VIII of the GEO 124/2021. The GEO 124/2021 establishes the institutional and financial framework for the management of the National recovery and resilience plan by:  defining the specific terminology applied in the framework of this new mechanism (art. 2);  appointing the institutions and bodies with responsibilities for the coordination, management and control of funds granted under the Recovery and Resilience Facility (herein after the RRF) (art. 3), and  outlining the general coordination of the implementation of RRF (art. 4). The mandate of the three main institutions are outlined as follows:  Art. 3 lit. a) appoints MIPE as national coordinator while art. 5 entrusts MIPE with the the tasks of monitoring, verification, control and recovery (alin.1 lit. d), e), f) and h; alin. 3, lit g), j), l), m), n), p), v), x), y), z), aa)-hh)), drawing up and signing payment requests submitted to the Commission (alin.3 lit. q), ii), and the relevant management declarations and the audit summaries (alin.1 lit. g, alin.3 lit. r).  Art. 3 lit. f) appoints the MoF as the institution responsible for receiving the RRF funds from the Commission as well as their administration/use in accordance with the GEO 124/2021, as well as for regulating the preventive financial control. Art.5, alin. 5 lit. b) entrusts the MoF with the task of signing the loan agreement while describing its responsibilities in art. 5, lit. 31  a) to g).  The Audit Authority is entrusted with performing the specific audit activities as stipulated in art. 5, alin. 6. The provisions of both GEO 124/2021 and GEO 70/2022 related to the mandates of the institutions involved in the mechanism of implementation and control of the Romanian Recovery and Resilience Plan are complemented by existing legislative provisions (i.e. art. 58 and 62 of the Law no. 98 of 19 May 2016 on Public Procurement, published in the Official Gazette no. 390 of 23 May 2016; Law no. 161/2003 on measures to ensure transparency in the exercise of public dignitaries, public functions and in the business environment, prevention and sanctioning of corruption, published in the Official Gazette no. 279 of 21 April 2003; Law no. 500/2002, version updated, for public finances, published in the Official Gazette no. 597 of 13 August 2002) as well as by a protocol concluded between MIPE and the National Agency of Integrity (ANI) (see Ares(2022)4797267), (2022)5561693) and (2022)5570064) which entrusts ANI with the powers to investigate cases of potential conflicts of interests for all categories of staff involved in the implementation of the Recovery and Resilience Plan. Commission Preliminary Assessment: Satisfactorily fulfilled Number: 462 Related Measure: Reform of the compulsory education system to prevent and reduce early school leaving Name of the Milestone: Entry into force of the Government Decision establishing the implementation of the National Programme to reduce early school leaving Qualitative Indicator: Provision in the Government Decision indicating the Time: Q4 2021 entry into force of the National Programme to reduce early school leaving Context: Milestone 462 is part of the reform of the compulsory education system to reduce