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Hoyt Yee: Romania adopts series of laws without prior comprehensive impact assessment

U.S. Deputy Assistant Secretary of State for Europe and Eurasia Hoyt Yee told a Monday's debate, at Parliament Palace, that Romania has adopted a series of laws without prior comprehensive impact assessment and gave the example of the Audiovisual Law. Hoyt argued that the said law has a market-distorting effect and that it offers an advantage to large institutions when negotiating with advertisers, whereas small firms are affected.


According to him, the use of the emergency ordinances creates uncertainty, scares the investors and stalls economic growth.A key principle of a transparent and predictable business climate is that when the Government considers new regulations and new rules, it should first evaluate the possible impact on the players, by consulting them included. In business, the same as in governing, surprises can be costly. Sudden changes of the rules of the game may serious damage some businesses, while they may favour others by creating unequal conditions, which serious businesses try to avoid. /.../ The use of the emergency ordinances that avoid public consultation and the evaluation process... They create uncertainty /.../, they scare the foreign investors and stall the economic growth, Yee told a seminar on the Promotion of Strategic Economic and Commercial Partnership.

The seminar was organized by the United States Embassy, the U.S. Chamber of Commerce in Romania and the Romanian-American Business Council in partnership with the Romanian Government.


There is the statement made by Hoyt Yee sent by the US Embassy:


Remarks by Deputy Assistant Secretary Hoyt Yee at Regulatory Impact Assessment Session Strategic Partnership Dialogue Monday, September 8, 2014, 9:00 a.m.

It is an honor to be here on behalf of the U.S. government and a pleasure to join the Prime Minister and Secretary Pritzker. 


Thank you Prime Minister Ponta for your support today and throughout this year-long initiative.  Your support sends a clear signal that your government is committed to strengthening transparency in government and attracting more trade and investment.

I also would like to express my sincere appreciation to all others who have partnered with the U.S. Embassy and the Government of Romania in organizing today’s event – the Parliament, the American Chamber of Commerce in Romania and the American-Romanian Business Council.


All of us share a common goal – to strengthen the relations between our countries and the security and prosperity of our citizens.  Today’s event is part of a broader effort to reach that goal, by focusing on how to implement Romania’s Action Plan for improving the country’s business environment.


Romania’s Action Plan includes a set of measures aimed at creating greater transparency and predictability, which are conditions that American and European businesses look for and expect. 


A key principle of a transparent and predictable business environment is that when the government is considering enacting new regulations and laws, it first assesses their possible impact on stakeholders, including by consulting with these stakeholders. 

In business, as in government, surprises can be costly.  Sudden changes in the rules of the game can seriously harm some businesses while favoring others, thereby creating an unlevel playing field that serious businesses will avoid. 


A case in point is the use of emergency measures that bypass public scrutiny and the assessment process – they create uncertainty, undercut accountability, scare off foreign investment, and hinder economic growth. 


Romania has passed a number of laws without first conducting comprehensive impact assessment, e.g. the audio visual law.  The law has a market distorting effect, giving an upper hand to larger broadcasters in negotiating with advertisers while adversely affecting smaller firms. 


Such discriminatory measures can contribute to the perception of corruption and diminish competitiveness.  


Better consultation and impact assessment could help improve Romania’s anti-corruption credentials, which have declined in such rankings as Transparency International’s Corruption Perceptions Index (#66 to #69 from 2012 to 2013).  Impact assessment might also help Romania continue its rise in competitiveness rankings such as the World Economic Forum’s, which showed a jump from 76 to 59 this year as mentioned by the Prime Minister (although Romania is still behind such countries as Brazil, South Africa and Russia). 


Later in the program, impact assessment experts from the White House and OECD will elaborate on best practices, such as the publishing of draft regulatory impact assessments (RIA’s) for public consultation. 


I am confident today’s discussion can further our joint efforts to create a more investor-friendly business environment in Romania.  There is a lot more at stake than business and investment.  As Vice President Biden noted when he was here in May, countries that promote transparency and the rule of law and build strong institutions thrive, and those who do not do not.

Romania has the ingredients to build a thriving economy and attract investors, including its strategic location, well-educated labor force, competitive wages, and the benefits that come with EU membership.


Working together we can help realize that potential, and in the process strengthen the friendship, commerce and cooperation between our countries.  Thank you.