Extension of Period for Money Laundering Reporting in Romania

Romania’s financial authorities have extended the period for reporting suspicious transactions related to money laundering and terrorist financing. According to new guidelines issued by the National Bank of Romania (NBR), banks will now have more time to investigate and report suspected transactions before submitting their findings to the authorities.

Increased Scrutiny on Financial Institutions

The extension comes as a result of increased scrutiny on financial institutions to prevent and detect illicit activities. The European Commission’s introduction of the EU Sanctions Whistleblower Tool last year has led to increased scrutiny on financial institutions, including Romanian credit institutions.

Extended Period for Reporting Suspicious Transactions

The extended period applies until the NBR communicates to the reporting entity that the suspicion is not confirmed. This allows banks to conduct thorough investigations before making any reports. The jurisdiction where funds are being transferred does not automatically trigger suspicions. However, if a bank suspects or has reasonable grounds to suspect that assets are related to criminal offenses or financing terrorism, it must report the transaction immediately.

Bank Secrecy Rules and Confidentiality

Romanian credit institutions are required to observe bank secrecy rules and keep confidential all facts, data, and information obtained in connection with their clients or their property. However, banks may be required to disclose information if requested by authorized authorities, such as the Romanian courts of law or the National Supervisory Authority for Personal Data Processing.

Welcome Move for Financial Institutions

The extension is seen as a welcome move by financial institutions, which have been grappling with the increased burden of reporting suspicious transactions under the new sanctions regime.

Banks Urged to Comply with Sanctions Regime

Romanian banks have been urged to ensure compliance with sanctions against Russia following the invasion of Ukraine. The European Banking Authority has called on financial institutions to carefully consider the prudential and business impact of these geopolitical developments, including the broader impact of economic and political sanctions.

EU Sanctions Whistleblower Tool

The National Bank of Romania has pointed to the EU Sanctions Whistleblower Tool as a way for banks to report suspected violations. The tool can be used to report on “past, ongoing or planned” EU sanctions violations, as well as attempts to circumvent these.

Conclusion

As Romanian banks continue to adapt to the new sanctions regime, it remains to be seen whether this extension will provide sufficient time for them to conduct thorough investigations before making reports to the authorities.