Romania strengthens legal framework in the defence sector

Romania has enacted two key secondary legislative instruments  that accelerates investments in the national defence industry: (i) Emergency Ordinance No. 73/2025 establishing a fast‑track legal framework for strategic investments in the national defence industry, aiming to modernise, expand and secure critical production and service capabilities in support of national security interests and allied commitments; (ii) Emergency Ordinance No. 62/2025 for the implementation of EU’s new Security Action for Europe (SAFE) instrument, enabling accelerated, coordinated defence procurement and investment with EU financial support.

In this update, we explain:

• what key measures and requirements are introduced by Emergency Ordinance No. 73/2025; and
• the main measures implemented by Emergency Ordinance No. 62/2025 with respect to the EU’s SAFE Instrument.

Emergency Ordinance No. 73/2025 on investments in the defence industry

The ordinance is in force as of 11 December 2025 and reflects Romania’s policy to ensure industrial readiness, supply chain resilience and strategic autonomy consistent with NATO and EU standards.

It sets the legal framework for investments in the national defence industry for the construction, modernisation, conversion and expansion of production and/or defence service capabilities of strategic interest, targeting products and services for defence and other uses linked to national security.

The ordinance relies on Article 346 TFEU, enabling Member States to take measures necessary for the protection of essential security interests relating to arms, munitions and war material, provided such measures do not distort competition for non‑military products on the internal market.

Key institutional stakeholders include operators authorised under Law No. 232/2016 (defence industry law) and the competent ministry responsible for authorisation and oversight of operators and for safeguarding essential security interests during project implementation and negotiation.

Key measures and requirements under the new legal framework:

• Defines investment vehicles: Investments may be made by state‑owned/majority state defence operators or by companies jointly owned with private investors.  The relevant ministry’s mandate and supervision are formalised by Government memorandum.
• Regulates strategic endorsement and screening: Projects require endorsement by the Supreme Council of National Defence (CSAT) and are subject to Romania’s foreign direct investment screening regime to avoid competition distortions.
• Requires alignment with defense strategy and inventory: Production capabilities must align with Law 232/2016, Romania’s National Defence Industry Strategy and be included in the national defence inventory and the mobilisation plan.
• Provides competence and security vetting: Investors must demonstrate relevant experience, operational control where majority owners, technical and financial capacity and undergo national classified information security vetting.
• Regulates reserved matters and control mechanisms: Company constitutive documents may include reserved matters to protect essential security interests without nullifying investor management rights. Annual or ad hoc board reporting is mandated. Statutory audits must comply with EU‑adopted International Standards on Auditing.
• Allows for state co‑investment: State budget funds (including related VAT) can be allocated via the relevant ministry, with the state acquiring a shareholding; funds may be contributed as cash to share capital.
• Enables flexible asset arrangements: Investments may be carried out on owned, leased, concessioned or building lease land. State operators may directly lease necessary assets to the project company at market‑based prices set by ANEVAR valuation. The destination of the investment capacities cannot change during the life of the investment.
• Regulates direct award concessions: Publicly owned real estate (state or local) may be concessioned by direct award specifically for strategic investment projects, derogating from Administrative Code procedures (no opportunity study; streamlined documentation). Concessions are approved by Government decision, capped at 49 years, with royalties set on market value via appraisal. The Government decision sets conditions, investor obligations and termination terms.
• Provides for non‑performance consequences: If the investor fails to comply with contractual obligations, leading to non‑implementation or misuse, the real estate remains public and the grantor is entitled to fair compensation.
• Establishes priority legal statuses: Investments are classified simultaneously as national security, public utility/strategic interest, national public interest (Tax Code), exceptional for environmental impact assessment and projects warranting withdrawal of land from agricultural/forest circuits under applicable laws. This bundle of legal classifications accelerates permitting and land‑use conversions for defence projects.
• Sets-up state step‑in rights: Investments under the ordinance pass to state ownership and ministry administration upon entity termination or decisions leading to cessation/non‑use of capacities for their intended purpose. If an investor exits an investment, the state operator has a pre‑emptive right to purchase shares at ANEVAR‑appraised value.
• Relies upon an investor‑led strategy: The investor sets and is accountable for the project’s management strategy and its effects.

Collectively, the purpose of the ordinance is to create a secure, streamlined pathway to develop domestic defence capabilities with clear state safeguards, mandatory strategic vetting and accelerated access to public property. It also elevates qualifying investments to prioritised legal classifications to reduce procedural delays, while embedding governance controls and state step‑in/pre‑emption rights to protect Romania’s essential security interests.

Emergency Ordinance No. 62/2025 on implementing the EU SAFE Instrument

Earlier this year, the Romanian Government enacted Emergency Ordinance No. 62/2025 to operationalise the EU’s new SAFE instrument, enabling accelerated, coordinated defence procurement and investment with EU financial support, dedicated governance and targeted derogations to speed delivery and strengthen the domestic defence industrial base. The ordinance was approved on 17 December by the Parliament.

The ordinance entered into force on 20 November 2025. It implements Council Regulation (EU) 2025/1.106 establishing the SAFE instrument and sets national measures to access and use SAFE financing, including roles, procedure and cooperation mechanisms.

Who is affected: key central authorities include the Prime Minister’s Chancellery (CPM), Ministry of National Defence (MoD), Ministry of Economy, Digitalisation, Entrepreneurship and Tourism (MEDET) and other public authorities in the National Defence System, with specified roles in planning, supplier engagement, procurement and coordination.

Governance and coordination: The Prime Minister’s Chancellery shall lead SAFE access and implementation, negotiating with the European Commission (via Romania’s Permanent Representation), submitting assistance requests and investment plans, coordinating implementation and proposing the national investment plan to the Supreme Council of National Defence (CSAT) for approval. An inter‑institutional working group chaired by the Head of the Chancellery is established, with permanent members from the Presidency, MoD, MEDET, Interior, Foreign Affairs, Finance and the Romanian Intelligence Service; additional institutions may be invited as needed.

Procurement flexibilities and procedures: To operationalise SAFE in crisis conditions, contracting authorities may use the negotiated procedure without prior publication, provided cooperation requirements aligned with SAFE are embedded in the procurement documents. When multiple potential suppliers exist, authorities may issue information requests covering operational requirements, cooperation terms, delivery timelines and price estimates; responses are analysed and can lead to a ranked shortlist weighted 40% on delivery time and 60% on price.

The MoD and other public authorities are expressly authorised to conduct joint procurements with other states, to sign framework agreements and related instruments with foreign contracting authorities and to make payments according to the terms of the participating states’ agreement.

Adjustments to related legislation: The ordinance amends the framework governing industrial cooperation and procurement oversight to align with SAFE. It raises the value threshold for certain analyses to contracts exceeding the equivalent of €10 million (ex VAT) and exempts contracts run by NATO/EU entities, joint procurements with other states, government‑to‑government transfers and acquisitions under Regulation (EU) 2025/1.106.

The purpose of the ordinance is to give public authorities a faster, coordinated path to procure defence capabilities with EU co‑financing, including the ability to run negotiated procedures without prior publication and to participate in joint procurements. These measures should shorten delivery timelines and support industrial localisation and resilience. The alignment changes reduce duplicative oversight for SAFE‑linked procurements and position the MoD to drive cross‑border programs and integrate domestic industry into European supply chains.