Financial Crime World

Moneyval Report Reveals Moderate Progress in Romania’s AML/CFT Framework, Calls for Enhanced Strategies and Resources

romania, moneyval, aml, cft, financial_crime

On 18 July 2023, Moneyval, the Council of Europe’s anti-money laundering and counter-terrorism financing (AML/CFT) monitoring body, published its fifth round evaluation report on Romania. The report highlighted several advancements in Romania’s legal and institutional AML/CFT framework since its previous assessment in 2014. However, the overall effectiveness remains moderate.

Key Findings

  • Moderate progress in dealing with ML & TF risks: Romania has made good progress in understanding money laundering (ML) threats but needs to increase awareness of terrorism financing (TF) risks. Limited utilization of financial intelligence within the Financial Intelligence Unit (FIU) due to insufficient technical and human resources leads to suboptimal support for operational and strategic needs.
  • Absence of a cohesive national strategy: Lack of a comprehensive national strategy for addressing AML/CFT issues results in limited communication, cooperation, and systematic coordination between prosecutors’ offices. ML not being a significant priority leads to a focus on predicate crimes instead of laundering aspects.
  • Effective handling of tax predicate and corruption-related laundering: While progress has been made in handling these types of laundering crimes, further specialized resources and training are needed to investigate and prosecute laundering aspects more effectively.
  • Insufficient implementation of confiscation measures: Romania actively confiscates criminal proceeds, but successful confiscation in complex cases or those located abroad is rare. Additional resources and practical guidance for prosecutors and LEAs are necessary to effectively enforce confiscation measures.
  • Limited understanding of targeted financial sanctions: Although banks and financial institutions understand TFS requirements, DNFBPs and VASPs require further education on TFS implementation. Concerns exist regarding the detection of indirect links and associations with sanctioned entities and individuals across sectors.

Weaknesses in addressing TF risks

Romania lacks a national terrorism strategy and does not have a specific policy for addressing TF. The focus of relevant agencies, the Romanian Intelligence Service (RIS) and the Directorate for the Investigation of Organized Crime and Terrorism (DIOCT), is primarily on terrorism prevention rather than TF detection, investigation, and prosecution.

Recommendations

The report encouraged Romania to strengthen its AML/CFT measures through better coordination, resource allocation, and increased emphasis on financial intelligence utilization. The country is expected to submit a progress report back to Moneyval under the enhanced follow-up reporting process in May 2025.