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Gov't writes off RON 1.1 bln worth of tax liabilities of defence contractors

Several defence contractors had tax liabilities amounting to over 1.1 billion lei written off under the Urgency Ordinance on specific measures for the decrease of budget arrears of defence companies passed by the Government on Tuesday.

According to a Wednesday release of the Ministry of Economy, the regulatory act envisages only 100 percent state-owned companies in the defence industry that are of strategic interest to the Romanian state and account for a significant share of the production of weapons, ammunition, armored carriers, and which are basic providers of the National Defense System Forces. Other reorganization and restructuring accompanying measures are necessary to render the said defence contractors viable.

The measures proposed under this Urgency Ordinance do not apply to companies with a majority of state-owned capital or to the companies in the defence industry producing or marketing products that are not intended for military purposes.

The respective Urgency Ordinance was passed under consideration of the provisions of Art. 346 of the Treaty on the European Union, according to which any member state may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes.

The defence contractors targeted by the tax liabilities write-off measures are as follows: Tohan, Carfil, Metrom, the Cugir Mechanical Plant, the Cugir Weapons Plant, the Plopeni Mechanical Plant, the Sadu Mechanical Plant, the Mija Mechanical Plant, the Automecanica Moreni Plant, Arsenal - Resita, the Bucharest Mechanical Plant, Electromecanica Ploiesti, the Dragomiresti Special Products Plant, Pirochim Victoria and the Fagaras Powders Factory.