Financial Crime World

Title: MONEYVAL Urges Romania to Enhance Anti-Money Laundering Measures Amid Persisting Risks

Overview

In its latest report, the Council of Europe’s Moneyval organization has called on the Romanian authorities to intensify their efforts in investigating and prosecuting money laundering (ML) and terrorist financing (TF), and to bolster their supervision to mitigate the country’s lingering risks in these areas.

Key Findings

  • Romania has made considerable strides in strengthening its legal and institutional framework against ML/TF since Moneyval’s last assessment in 2014, but more work is needed.
  • The country must address its highest ML and TF risks and improve efforts to investigate and prosecute such cases.
  • There is a need to strengthen the capacity of financial investigators to undertake parallel financial investigations, trace assets, and pursue asset recovery.
  • Romania should create a nationwide terrorist financing countermeasures strategy and action plan.
  • Concerns exist regarding the execution of financial sanctions by the private sector and the adequacy of their supervision.

Moneyval Evaluation and Recommendations

Moneyval’s latest report evaluates Romania’s compliance with the Financial Action Task Force’s (FATF) standards. The organization acknowledges that Romania has made significant progress but highlights areas where more work is needed:

Investigating and Prosecuting ML/TF

The authorities have been less than thorough in prioritizing ML investigations and prosecutions, particularly those related to human trafficking and drug trafficking. While investigations and prosecutions of domestic tax crimes and corruption are effectively carried out, efforts to target the laundering of proceeds from these offenses are lacking.

Seizing and Confiscating Crime Proceeds

Romania has shown improvement in its ability to freeze, seize, and confiscate crime proceeds and instrumentalities. However, while it actively applies measures to confiscate proceeds and instrumentalities linked to common domestic crimes, confiscation is rare in other cases.

Combating Terrorist Financing

Since the 2014 evaluation, Romania has successfully investigated, prosecuted, and secured a conviction for one case of TF. To address TF risks, Moneyval recommends:

  • Creating a nationwide terror financing countermeasures strategy and action plan
  • Offering further relevant training
  • Assessing the risk of exploitation of the non-profit sector for terrorist financing

Targeted Financial Sanctions

Moneyval notes that Romania has a robust legal framework for the implementation of targeted financial sanctions without delay. However, concerns exist regarding the execution of these measures by the private sector and the adequacy of their supervision.

Supervision

While most material financial institutions are subject to risk-based supervision, the authorities need to enhance the calibration of their supervisory actions with risk. Moneyval recommends, as a priority, a more refined calibration of the National Bank’s supervisory actions with risk, a greater focus on ML and TF risks by the Financial Supervisory Authority, and an expansion of resources for the National Office for Preventing and Combating Money Laundering to align with statutory obligations.

Romania has made significant progress in preventing the misuse of legal entities, including the development and utilization of public registers of beneficial ownership and bank accounts. The authorities should improve the accuracy and up-to-date nature of information in these registers.

Upcoming Reporting

Romania is scheduled to report back to Moneyval under an enhanced reporting process in May 2025.

Further Information