Financial Crime World

Moneyval Report: Strengthening Romania’s Defenses Against Money Laundering and Terrorist Financing

Key Findings and Recommendations from MONEYVAL’s Fifth Round Mutual Assessment Report

According to MONEYVAL’s fifth round mutual assessment report, Romania’s anti-money laundering (AML) and counter-terrorist financing (CTF) measures received a thorough evaluation. The key findings and recommendations are outlined below:

AML and CTF Understanding

  • Money laundering risks: Romania shows a fair comprehension of money laundering risks.
  • Terrorist financing risks: Requires improvement in understanding terrorist financing risks.

Domestic Cooperation and Coordination

  • Financing of proliferation risks: Romania has made significant headway in establishing domestic cooperation and coordination to address financing of proliferation risks.
  • Risk mitigation strategies: Ongoing efforts to improve risk mitigation strategies.

Financial Intelligence

  • Use and accessibility: Lack of extensive use and accessibility of financial intelligence.
  • Resources: More resources are required to increase the quantity and quality of financial intelligence.

National Strategy

  • Consistent approach: There is no overarching national strategy addressing AML/CTF matters consistently across all areas.
  • Improvement: Authorities need to intensify cooperation and communication between various agencies, specifically regarding the investigation and prosecution of ML.

Challenges

  • ML case prioritization: Challenges with prioritizing ML cases.
  • Resources dedicated to investigations: Insufficient resources dedicated to investigating predicate offenses like tax evasion, corruption, and drug trafficking.
  • ML convictions: Limited number of ML convictions, particularly for third-party offenses.

Confiscation of Criminal Proceeds and Their Instrumentalities

  • Effectiveness: Effective for domestic predicates but remains challenging for proceeds originating from foreign predicates, located abroad, or in standalone or third-party cases.
  • Recommendations: Additional resources for conducting financial investigations, practical guidance for prosecutors, and enhanced application of confiscation measures.

Counter-Terrorist Financing

  • Strategy: The need for a comprehensive counter-terrorist financing strategy tailored to the country’s specific risks.
  • Resources and training: Appropriate resources and training for terrorism financing investigations.

Targeted Financial Sanctions

  • Understanding: Romania exhibits a fair understanding of targeted financial sanctions requirements.
  • Adherence: More awareness and adherence to these obligations within select sectors, such as designated non-financial businesses and professions (DNFBPs) and virtual asset service providers (VASPs).

Other Areas for Improvement

  • Regulatory oversight: The need for a more comprehensive risk-based regulatory oversight framework for the non-profit sector.
  • Analytical approaches: More sophisticated analytical approaches to identify high-risk customers and transactions.
  • Addressing issues involving legal entities: A work in progress. Substantial progress has already been made.

International Cooperation

  • Progress: Romania has shown significant progress but needs to further address deficiencies.
  • Case management system: The importance of establishing a formalized case management system.
  • Resources: Providing additional resources to follow up and monitor requests for assistance.