Financial Crime World

Title: Romanian Financial Crimes on the Rise: Expert Insights on Combating Money Laundering and Terrorist Financing

Growing Financial Crimes in Romania – Recent Trends and Challenges

FTI Consulting’s Irina Petrila and Popovici Nițu Stoica & Asociații’s Alexandru Ambrozie discuss the increasing occurrence and complexities of financial crimes in Romania.

  • Financial crimes, including money laundering and terrorist financing, are becoming increasingly sophisticated due to technological advancements.
  • Romania faces challenges related to AML and CTF deficiencies, political instability, and corruption.

Irina Petrila, FTI Consulting: “Financial crime, including money laundering and terrorist financing, is becoming increasingly sophisticated with the advancement of technologies such as FinTech, virtual currencies, and blockchain.”

Alexandru Ambrozie, Popovici Nițu Stoica & Asociații: “There has been a substantial increase in financial crime in Romania. In 2019, the number of money laundering cases brought to court rose by 36 percent to 292 cases compared to the previous year.”

Romania’s response to these challenges includes the implementation of new legal frameworks.

  • Transposition of the European Union’s 4AMLD and focus on implementing 5AMLD.

Irina Petrila, FTI Consulting: “In response to these challenges, Romania has been actively addressing its AML and CTF deficiencies. In 2019, the country transposed the European Union’s Fourth Anti-Money Laundering Directive (4AMLD) into legislation and is now focusing on implementing the Fifth Anti-Money Laundering Directive (5AMLD).”

Alexandru Ambrozie, Popovici Nițu Stoica & Asociații: “The new legal framework includes a broadened scope of reporting entities, mandatory application of risk-based assessment, and the creation of a national UBO register. In addition, penalties for non-compliance have been increased to up to 10 percent of a legal entity’s annual turnover.”

Enhancing AML Monitoring and Enforcement in Romania

Authorities in Romania are increasing their focus on AML/CTF enforcement.

  • Collaboration between authorities and prudential supervisors.
  • Criminal investigations against banks.

Frederica Taccogna, FTI Consulting: “The new legislative measures mean that firms will have to update their AML/CTF frameworks to ensure adherence to the new requirements. Collaboration between authorities and prudential supervisors will also increase, ensuring a robust AML/CTF supervisory approach for Romania.”

Alexandru Ambrozie, Popovici Nițu Stoica & Asociații: “Enforcement agencies and prosecutors in Romania have shown a greater focus on AML/CTF enforcement, investigating 17 banks on suspicion of money laundering and terrorist financing, leading to a criminal investigation.”

Steps Companies Should Take to Enhance Their AML Capabilities

Companies operating in Romania must strengthen their AML capabilities to stay protected.

  • Annual risk assessment and transaction monitoring.
  • Employee training and knowledge of emerging threats.

Irina Petrila, FTI Consulting: “An effective AML programme should be based on an annual risk assessment, implementing robust transaction monitoring systems, and having a defined risk appetite framework.”

Federica Taccogna, FTI Consulting: “Firms should consider implementing technology-based compliance solutions to aggregate data from various sources and assist in identifying high-risk transactions and unusual behaviour.”

Conclusion

With Romania continuing to face challenges in combating financial crimes, it is crucial for companies to remain vigilant and enhanced their AML capabilities. Partnering with leading experts can help firms stay informed of the latest regulatory developments and implement best practices to protect their business and reputation.