Financial Crime World

Romania Faces Financial Inclusion and Crime Challenges: Experts Warn

Romania’s struggle with financial inclusion and crime has reached alarming levels, driven by illegal activities such as drug trade, fraud, tax evasion, smuggling, and human trafficking. Experts warn that the country needs a comprehensive strategy to combat money laundering effectively, involving law enforcement, regulations, international cooperation, and public awareness campaigns.

Regulatory Bodies and Obligations

The Romanian Parliament, National Office for the Prevention and Control of Money Laundering (NOPCML), Romanian National Bank, and other institutions are regulatory bodies tasked with preventing money laundering. They have several obligations:

  • Know Your Customer procedures
  • Obtaining information about actual beneficiaries
  • Appointing an Anti-Money Laundering Officer
  • Reporting suspicious transactions to NOPCML
  • Freezing transactions pending permission

Assessment and Progress

Despite progress made in improving its legal and institutional framework, Romania still has room for improvement. According to MONEYVAL’s assessment, the country has achieved moderate levels of effectiveness in most sectors, except international cooperation, where it has reached a significant degree of effectiveness.

Financial Institutions and Requirements

Financial institutions, including credit institutions, branches of foreign financial institutions, and private pension fund managers, are subject to anti-money laundering requirements. Additionally:

  • Auditors
  • Notaries
  • Lawyers
  • Bailiffs
  • Realtors
  • Other natural or legal persons trading in goods and services with cash transactions above EUR 10,000 must also comply

International Cooperation and Expectations

As a member of the Financial Action Task Force (FATF), Romania is expected to adhere to its recommendations and standards. While the country was found compliant with seven FATF recommendations and mostly compliant with 18, there is still room for improvement in the practical effectiveness of its measures.

US Department of State’s Assessment

The US Department of State’s International Narcotics Control Strategy Report (INCSR) has designated Romania as an Authority of Concern due to its geographical location making it a natural transit country for trafficking in narcotics, weapons, stolen vehicles, and human trafficking. Romanian organized crime groups participate in various European criminal activities, including:

  • Prostitution
  • Cigarette trafficking
  • Extortion
  • Narcotics trafficking

Effective Combating of Financial Crimes

To combat financial crimes effectively, organizations obligated to adhere to regulations can turn to Sanction Scanner for advanced solutions. The company helps these entities meet their obligations and enhances financial integrity, making it a vital tool in the fight against money laundering and financial inclusion.