COMMISSION IMPLEMENTING DECISION on the partial suspension of the disbursement of the third instalment of the non-repayable support and the third instalment of the loan support for Romania 

stration board members, monitors, evaluates, controls, and publishes regular reporting of performance indicators and enforces sanctions for state owned enterprises non-compliant with key performance indicators”. (136) It is additionally noted that out of the currently vacant posts, three of the positions concern senior management. On 20 August 2024, Romania indicated that a new selection procedure for the President and two Vice-Presidents of AMEPIP had been initiated, following the resignation of the previous leadership. While the first steps for launching a new selection procedure have been taken, Romania indicated in the above- mentioned documents that the procedure will be completed only by 23 December 2024. To date, the Commission did not receive any additional documents. The absence of such 51 Government Decision No. 617/2023 on the organisation and functioning of the Agency for Monitoring and Evaluation of State-Owned Enterprises Performance, published in the Official Gazette No. 691 of 27 July 2023, which entered into force at the same date, based on Law No 24/2000 on the legislative technique for drafting legislative acts, Art, 12(3). EN 32 EN  senior leadership positions is a further element that indicates that AMEPIP is not operational and currently undertaking its tasks. (137) Furthermore, based on the documents provided on 8 March, 15 April, 19 July, 20 and 26 August 2024, Romania has not demonstrated how AMEPIP was established in compliance with the OECD corporate governance standards, as required by milestone 440. In particular, the following OECD corporate governance standards are relevant and have not been demonstrated to have been complied with: – “Supervisory, regulatory and enforcement authorities should have the authority, integrity and resources to fulfil their duties in a professional and objective manner. […] These bodies should be able to pursue their functions without conflict of interests and their decisions should be subject to judicial or administrative review. […] The ability to attract staff on competitive terms will enhance the quality and independence of supervision and enforcement” 52. – “Establishing well-structured, merit-based and transparent board nomination processes in fully – or majority-owned SOEs, actively participating in the nomination of all SOEs’ boards and contributing to board diversity” 53. (138) In this respect, Romania did not provide evidence on how the selection procedure for the President and two Vice-Presidents of AMEPIP who were appointed on 16 November 2023, after the adoption of Government Decision No. 617/2023, complied with merit- based and transparent nomination criteria. Whilst those appointed have since resigned, the lack of evidence regarding the process for their appointment means that the Commission cannot conclude that the relevant OECD corporate governance standards have been complied with. (139) In its observations of 25 November 2024 , Romania listed the steps taken to operationalise the Agency for Monitoring and Evaluation of State-Owned Enterprises Performance (Agenția pentru Monitorizarea și Evaluarea Performanțelor Întreprinderilor Publice, “AMEPIP”). In particular, Romania informed the Commission that out of the 92 vacancies envisaged in AMEPIP’s organigram, it currently employs 59 persons. Romania also indicated that out of the 59 persons, 36 are seconded from other public authorities on a temporary basis. In its observations, Romania further indicated that AMEPIP has initiated a competition for the filling of two public positions of legal advisor, and other competitions for the recruitment of specialists, including from the private sector. (140) The Commission notes that the observations provided by Romania do not provide any new evidence on how AMEPIP has in the meantime become “operational (i.e. legally mandated and resourced) to ensure the monitoring of the application of corporate governance standards, has the ultimate responsibility of ensuring a transparent and competitive selection procedure for approving the appointment of administration board members, monitors, evaluates, controls, and publishes regular reporting of performance indicators and enforces sanctions for state owned enterprises non- compliant with key performance indicators”. (141) Moreover, Romania has not provided the Commission with any new information or evidence on the selection process for the three positions concerning the President and two Vice-Presidents of AMEPIP which are currently occupied on an interim basis. 52 G20/OECD Principles of Corporate Governance 2023 (oecd-ilibrary.org), page 16. 53 OECD Guidelines on Corporate Governance of State-Owned Enterprises, 2015 Edition | OECD, page 39. EN 33 EN  (142) Furthermore, in the context of the discussions with the Romanian authorities on the amendment of GEO No. 109/2011 referred to above, the Commission expressed concerns that civil servants appointed to the SOEs boards are not selected based on the standard transparent and competitive selection procedure set forth in Law No. 187/2023 and that therefore AMEPIP does not hold ‘the ultimate responsibility of ensuring a transparent and competitive selection procedure for approving the appointment of board members’, as it is not involved in, nor exercises any control over the selection procedure for civil servants. (143) On 26 March 2025, the Commission communicated to Romania that this appears to run counter the requirements of milestone 440. On 9 April 2025, Romania informed the Commission that GEO No. 312/2025 amending GEO No. 109/2011, as subsequently amended and supplemented, had been adopted on 8 April 2025. The Romanian authorities confirmed their intention to address the Commission’s concerns related to the selection of civil servants through secondary legislation (that is, the setting up, functioning and the specific tasks of the selection committees at the level of the ministries would be laid down in future implementing rules through a Government Decision). The Commission takes note of Romania’s intention to ensure AMEPIP’s ultimate responsibility as concerns the transparency and competitiveness of the selection procedure of all board members, including civil servants. (144) On the basis of the information provided, the Commission concludes that milestone 440 cannot be considered satisfactorily fulfilled as AMEPIP cannot be considered “operational (i.e. legally mandated and resourced) to ensure the monitoring of the application of corporate governance standards, has the ultimate responsibility of ensuring a transparent and competitive selection procedure for approving the appointment of administration board members, monitors, evaluates, controls, and publishes regular reporting of performance indicators and enforces sanctions for state owned enterprises non-compliant with key performance indicators”, and Romania has not provided the Commission with evidence on how the selection procedure for the President and two Vice-Presidents of AMEPIP complied with “OECD corporate governance standards”, in particular merit-based and transparent nomination criteria,, as required by the milestone. (145) Therefore, as milestone 72, milestone 79, milestone 86, milestone 121, milestone 215, and milestone 440 constituting part of Romania’s request for payment are not satisfactorily fulfilled, the disbursement of the financial contribution for the third instalment of the non-repayable support and the disbursement of the loan for the third instalment of the loan support should be partially suspended, pursuant to Article 24(6) of Regulation (EU) 2021/241. (146) Pursuant to Article 24(6) of Regulation (EU) 2021/241, the Commission has determined the suspended amount by applying the methodology for the determination of payment suspension under the Recovery and Resilience Facility Regulation explained in its Communication of 21 February 2023.54 (147) Milestone 72: Signature of contracts for 50% of the works related to modernisation, upgrade and renewal of railway infrastructure 54 Communication from the Commission to the European Parliament and the Council of 21 February 2023 ‘Recovery and Resilience Facility: two years on A unique instrument at the heart of the EU’s green and digital transformation’ COM (2023) 99 final EN 34 EN  (a) The unit value for the milestone was derived by dividing the financial contribution made available to Romania in the Council Implementing Decision of EUR 13 566 055 514 by the number of milestones and targets in that Decision related to the financial contribution (308). (b) A coefficient of 2 was applied to the milestone as it concerns a large investment accounting for more than 10% of the non-repayable support with only four milestones and targets. (c) An upward adjustment of the corrected unit value was applied to the milestone (a factor of 3) as the investment is considered by the Commission essential to justify the rating for the contribution to the green transition including biodiversity. The Staff Working Document of 27 September 2021 55 (pages 42, 44 and 55), specifies that given its sizeable contribution which amounts to EUR 2 855 200 000, corresponding to 10% of the plan’s allocation, the measure in question, as part of component 4. Sustainable transport, is of key importance for concluding that “In accordance with Article 19(3), point (e), of and Annex V, criterion 2.5, to Regulation (EU) 2021/241, the RRP contains measures that contribute to a large extent (Rating A) to the green transition, including biodiversity, or to addressing the challenges resulting therefrom” (Recital 24 of the Council Implementing Decision). In addition, the investment is also considered by the Commission of particular importance to justify the rating for addressing all or a significant subset of challenges identified in the relevant country-specific recommendations. Specifically, the component description in the Annex to the Council Implementing Decision specifies that the measures therein contribute to addressing Country Specific Recommendation 2020 CSR 3 on the need to “front-load mature public investment projects and promote private investment to foster the economic recovery” and “focus investment on the green and digital transition, in particular on sustainable transport”. Therefore, based on this measure which constitutes one of the most important measures of Component 4. Sustainable transport, Recital 12 of the Council Implementing Decision, the Commission was able to conclude that the recovery and resilience plan is expected to effectively address “all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations addressed to Romania, including fiscal aspects thereof”. (d) A proportional reduction to the corrected unit value was applied to the milestone (a factor of 0.0941), as it concerns an investment milestone, and it is possible to evaluate the share of what has been achieved. Namely, to have 50% of the contracts of works for the construction and supervision of railways awarded with the winning companies in accordance with Law No. 98/2016 and its subsequent amendments, which transposed the relevant Directive 2014/24/EU, following open and competitive tender and approval of some of the relevant permits, with Environmental Impact Assessment (including assessments necessary under the Water Framework Directive) and Appropriate Assessment opinions (part of the Habitats Directive) issued and incorporated in the design of the investments, and ensure compliance with the Do Not Significant Harm Technical Guidance (2021/C58/01). In considering this proportional reduction, the Commission 55 SWD(2021) 276 final. Commission Staff Working Document. Analysis of the recovery and resilience plan of Romania of 27.09.2021 (source: https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX:52021SC0276). EN 35 EN  assessed the substantive progress in accordance with the Commission methodology for the determination of payment suspension under the Recovery and Resilience Facility Regulation. Having regard that corrigendum EN1024956/14.01.2021 concerns two out of the seven lots reported by the Romanian authorities for the fulfilment of milestone 72, the remaining contracts would correspond to a 90.59% fulfilment of the milestone’s required 50% threshold. (148) On this basis, an amount of EUR 24 868 166 should be suspended for Milestone 72. (149) Milestone 79: Selection and appointment of members of the Board of Directors of C.N.A.I.R., C.N.I.R., C.F.R., Metrorex, C.F.R. Călători (a) the unit value for the milestone was derived by dividing the loan contribution made available to Romania in the Council Implementing Decision of EUR 14 942 153 000 by the number of milestones and targets in that Decision related to the loan contribution (210); (b) a coefficient of 0.5 was applied to the milestone, as it concerns an intermediate step for the implementation of a non-legislative reform. In particular, milestone 79 is followed by milestone 80 on implementation of the recommendations to increase the financial and operational performance of transport SOEs and target 81 on improved railways performance in terms of train punctuality; (c) an upward adjustment of the corrected unit value was applied to the milestone (a factor of 3) as the reform is considered by the Commission of particular importance to justify the rating for addressing all or a significant subset of challenges identified in the relevant country-specific recommendations. Specifically, SOEs rank among Romania’s largest companies and have a potentially critical role to play in economic growth and development, especially in sectors such as energy and transport.57 Against this background, in 2019 the Council recommended Romania to “strengthen the corporate governance of State-owned enterprises” (CSR 2019.5 subpart 2 and Recital 24).58 Recital 15 of the Council Implementing Decision stated that the “reforms concerning the strengthening of the corporate governance of State-owned enterprises […] address long-standing country-specific recommendations”. Therefore, taking into account this measure, Recital 12 of the Council Implementing Decision concludes that the recovery and resilience plan for Romania is expected to effectively address “all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations addressed to Romania, including fiscal aspects thereof”. Moreover, the Staff Working Document of 27 September 2021 (53) (page 40) further specifies that the overall SOEs reform is assessed to improve the procedural framework for the implementation of corporate governance principles in state-owned enterprises and “aims to strengthen