Global law firm Dentons represented several corporate clients in a series of successful administrative court challenges against sanctions imposed by the Romanian Anti-Fraud Directorate (AFD) of the National Tax Authority (ANAF).  The sanctions related to alleged breaches of the RO e-Transport reporting regime under Government Emergency Ordinance No. 41/2022, which entered into force in June 2024.

The disputes centered on one of the most severe monetary sanctions available under Romanian contraventional law - the confiscation of an amount equal to the full value of the transported merchandise.

Numerous companies operating intra-EU supply chains through Romania found themselves unexpectedly exposed to this measure, with significant financial consequences. The legal framework underpinning the sanction rests on an implied presumption of fraud upon each discovered violation, with the burden of rebutting that presumption falling entirely on the sanctioned party, and rebuttal permitted only in narrowly defined circumstances. In practice, the sanctions were applied following a mere failure to report, based on a cursory review of transport documents, without a substantive assessment of the underlying circumstances and possible justifications.

For most businesses affected, the violations arose from brief and isolated coordination failures, typically involving external carrier companies, within large, multi-tiered supply chains - leaving companies scrambling to avoid disproportionate financial exposure.

In addressing the sanctions, Dentons challenged the measures on proportionality grounds rooted in ECHR and CJEU case law.  Subsequently, when the legislature changed the confiscation sanction to apply on a graduated basis, the legal team invoked the lex mitior principle – which requires courts to apply the more lenient law if legislation changes between an offense and final judgment.  This was instrumental in securing the application of the more favorable regime to its clients' cases.

In the most recent case, Dentons successfully defended the principal Romanian affiliate of a major European chemicals group against sanctions imposed by AFD following a large intra-EU, intra-group shipment of fungicides. The Bucharest Tribunal upheld the first court's finding that AFD had acted unlawfully in applying the sanctions (fine and confiscation penalty) to the consignee's fiscal representative designated to perform RO e-Transport reporting obligations. The outcome resulted in the full cancellation of tax liabilities and fines exceeding €300,000, with the ruling now final.

Counsel Andrei Orbesteanu led the tax litigation team with the support of senior associate Andrei Vartires and counsel Argentina Rafail.

Andrei Orbesteanu commented: “These decisions are relevant to businesses operating under the RO e-Transport regime, many of which have faced the swift and near-automatic imposition of substantial tax liabilities with little procedural safeguard. In complex intra-EU supply chains, isolated reporting failures under the RO e-Transport system risk often give rise to financial penalties wholly disproportionate to the nature of the underlying breach. The decisions provide useful clarification both as to the identification of the proper subjects of the contravention and as to the application of the lex mitior principle.”