Romania introduced its new Penal Code in 1978. It was somewhat less draconian than the two previous penal codes promulgated during the early period of communist rule, in 1948 and 1968. The new code had a major impact on crime and punishment. It reduced the overall number of indictable offenses, introduced lighter sentences, and established a more flexible approach toward the treatment of offenders, juvenile offenders in particular. It mandated rehabilitation instead of prison sentences in many cases.

The greater emphasis on socialist legality, or the rule of law over adherence to the political dictates of the PCR evident in the 1978 penal code, did little to change the PCR's attitude toward the phenomenon of political crime. Although officials denied it, estimates indicated that as many as thirty prisoners remained incarcerated for political "crimes" after the government's January 1988 amnesty. Human rights groups reported that this estimate represented only a fraction of the total number of cases, as many more prisoners with political motivation had been convicted of common crimes or of attempting to leave the country illegally. Political prisoners were customarily tried and convicted in military courts. Articles 166 and 167 of the Penal Code were used to charge Romanian dissidents as criminals for calling on the regime to respect the civil and human rights outlined in the Constitution or for granting interviews to foreign reporters to discuss the regime's repressive nature (see Dissidence , this ch.). They could receive sentences of from five to fifteen years for disseminating "propaganda against the socialist order," for "any action aimed at changing the socialist order or from which a danger to the security of the state may result," or for "slandering the state."

Under the 1978 Penal Code, a system of release on bail for those accused of minor crimes was established. Previously bail was granted only to foreigners, who were required to post it in hard currency. First offenders were punished by disciplinary or administrative actions and court-ordered fines. Courts could order corrective labor under the supervision of a specific industrial or agricultural enterprise and mandate an automatic 15 to 20 percent reduction in the salary of an offender. For other misdemeanors, the courts could order an offender to be placed on probation under police (militia) supervision for up to five years. Minors between fourteen and twenty-one years of age were tried by a collective comprising the leaders of the school or enterprise where they studied or worked, UTC representatives, and a judge or other representative of the local procuratura. As a rule, convicted juveniles served a term of supervised labor in correctional homes called "special training institutes." Only minors with a prior record of offenses could be sentenced to a prison term, and they were supposed to be segregated from older inmates. The 1978 Penal Code reduced the number of offenses punishable by death from twenty-eight under the 1968 penal code to just a few serious crime6e2 mes including first-degree murder, air piracy, treason, and espionage. It imposed a maximum sentence of twenty years in prison for all offenses. Misdemeanors were expunged from the 1978 Penal Code and formed into a separate Code on Minor Violations of the Law, leaving only felony offenses in the Penal Code.

Beginning in the 1970s, the Council of State announced an amnesty program approximately every other year. Generally, prisoners serving less than three years or with less than three years remaining on longer sentences were freed, and the sentences of prisoners serving more than three years were reduced. The government reportedly released 90 percent of those in prison or awaiting trial through an amnesty announced in January 1988. Amnesties may have been intended to alleviate chronic labor shortages or to clear prisons crowded by strict law enforcement.

Data as of July 1989