December is a time to reflect on the outgoing year and make plans for the year ahead. In light of this, we reflect on one of the key achievements of 2024: securing recognition for our financial services in Romania.
For the time being, LeormFinance is proud to offer its financial products, particularly letters of guarantee, to businesses in Romania. However, as one of the first Estonian financial institutions to enter the Romanian market with these services, LeormFinance has faced challenges in ensuring the acceptance of its financial instruments by some beneficiaries within Romania, despite complying with EU regulations.
According to Regulation (EU) No. 575/2013, a financial institution is defined as an enterprise carrying out financial activities, including the issuance of letters of guarantee, and is recognized at the European level. LeormFinance adheres to the principles of the Treaty on the Functioning of the European Union, which allows financial institutions authorized in one EU member state to expand their activities across others. As such, the guarantee instruments issued by LeormFinance are valid and should be recognized in all EU member states, including Romania.
Romanian legislation, through Law No. 98/2016 on public procurement and Law No. 99/2016 on sectorial public procurement, transposes European directives into national law, explicitly confirming that letters of guarantee issued by LeormFinance meet all legal requirements for use in public procurement contracts in Romania. However, despite these clear provisions, LeormFinance encountered initial resistance in the acceptance of its letters of guarantee in public procurement procedures.
This challenge was addressed by the Timisoara Court of Appeal, which, through Civil Decision No. 371, ruled in favour of LeormFinance. The decision, rejected a complaint filed by the Municipality of Arad, which had refused to accept a guarantee issued by LeormFinance for a public procurement procedure. The court affirmed that the letter of guarantee issued by LeormFinance, met all required legal and formal conditions, including being written in Romanian and including the necessary clauses, ensuring its validity under both Romanian and EU law.
This judicial decision reinforces the legitimacy of LeormFinance’s financial products within the EU market, confirming that our letters of guarantee are legally recognized for private and public sector in Romania.
As such, LeormFinance continues to advocate for the proper recognition of its services across the EU, ensuring fair and equal treatment for all economic operators in compliance with both national and EU legislation.