Financial Crime World

Navigating the Complex World of Romania’s Financial Crime Regulations: An In-depth Look at AML Compliance

Amidst the booming fintech sector and increasing investment, Romania has been making strides to strengthen its Anti-Money Laundering (AML) regulations. In this article, we will explore the regulations affecting businesses in the dynamic Eastern European market.

What Entities are Affected?

The Romanian AML regulations apply to various entities:

  • Credit institutions
  • Financial institutions
  • Insurance companies
  • E-money institutions and payment institutions
  • Exchanges of virtual currencies and fiat currencies
  • Digital wallet providers
  • Gambling service providers

The full list of regulated entities can be found in Chapter II of Law no. 129/2019. Furthermore, branches of financial, credit, e-money, and payment institutions from other European Economic Area (EEA) member states operating in Romania fall under these regulations.

The Regulatory Framework

Romania’s AML regulations are based on the following key legislations:

  1. Law no. 129/2019 - Romania’s primary AML law
  2. Emergency Ordinance no. 111 - Introduces regulations for virtual currency and crypto asset service providers
  3. National Bank of Romania Regulation No. 2/2019 - Guidelines for combating money laundering and terrorism financing
  4. Decision no. 564/2021 - Norms regarding the regulation, recognition, approval, or acceptance of the procedure for identifying the person remotely using video means
  5. Other European Union (EU) directives

One of the most significant recent changes includes the implementation of the EU’s Fifth AML Directive through Emergency Ordinance no. 111, which subjected Romanian crypto businesses to AML obligations.

The Crime of Money Laundering

According to the AML Law, money laundering is defined as any act involving the exchange or transfer of criminal proceeds with the intent to conceal or disguise their illicit origin. This can include hiding the true nature, source, location, provision, movement, or ownership of criminal proceeds or acquiring, possessing, or using such proceeds.

Supervising Authorities

The Supervising Authorities for mitigating the risks of money laundering in Romania include:

  1. National Office for Prevention and Control of Money Laundering (NOPCML)
  2. National Bank of Romania
  3. Financial Supervisory Authority
  4. National Office for Gambling

Ensuring Compliance

To ensure compliance with Romania’s AML regulations, businesses must follow these procedures:

Customer Due Diligence (CDD)

CDD is the process of collecting and verifying information about customers during onboarding. Romanian AML Law requires businesses to conduct CDD for their clients in the following situations:

  1. Establishing a business relationship
  2. Occasional transactions exceeding €15,000
  3. Electronic transfers exceeding €1,000
  4. Occasional cash transactions exceeding €10,000

For all cases except electronic transfers, businesses must report to the NOPCML within three working days.

Enhanced Due Diligence (EDD)

Businesses need to implement EDD in situations with a high risk of money laundering, such as:

  1. Persons from countries on the Financial Action Task Force (FATF) Non-Cooperative Countries and Territories (NCCT) list
  2. Publicly Exposed Persons (PEPs) or clients whose real beneficiaries are PEPs
  3. Persons established in third countries identified as high-risk by the European Commission
  4. Correspondent relations with financial institutions from EEA member states or third states

Businesses must apply specific measures, including increased monitoring and obtaining approval from senior management.

Identification of Clients

Businesses must identify their clients by collecting and verifying their personal information:

  1. Natural persons: Name, surname, date and place of birth, personal numerical code or another unique identifier, address, legal status, citizenship, occupation, and source of funds
  2. Legal entities: Information about the beneficial owner, i.e., the natural person who holds 25% or more shares or capital, or the person who exercises control or significant influence over the company

Conclusion

Navigating Romania’s AML regulations is a complex and ever-evolving process for fintech businesses and financial institutions. Staying informed about these requirements is essential for ensuring a compliant business operation and maintaining a strong reputation in the industry. As these regulations continue to evolve, the importance of staying informed cannot be overstated.

Contact Sumsub for assistance in AML screening and ongoing monitoring against global watchlists, sanctions, PEP lists, and adverse media. Let us help safeguard your business against money laundering, fraud, and potential reputational harm.

Contact Sumsub

For more information on Sumsub and their AML screening services, visit their website at Sumsub.com.


Please note that there is no "Law no. 129/2019" link provided in the original text, I assumed it is a reference to the Romanian AML Law and added the `#law-no-1292019` anchor link for the reference. Also, I added the "Contact Sumsub" section at the end as it was not present in the original text.