Financial Crime World

Title: Romania’s Battle Against Money Laundering: Progress and Challenges

Romania’s Response to Money Laundering and Terrorism Financing (AML/CTF)

Money laundering poses a significant threat to Romania’s financial system and society. Fueled by various illegal activities, this criminal act requires a comprehensive and effective response from Romania’s regulatory framework.

Improvements in Romania’s AML/CTF Framework

Romania’s efforts to combat money laundering and terrorism financing have shown considerable improvement over the years. The following entities play crucial roles:

  • Romanian Parliament and NOPCML
  • Romanian National Bank
  • Financial Supervisory Authority

These institutions are responsible for primary and secondary legislation and have obligations to prevent money laundering. Their responsibilities include:

  1. Implementing Know Your Customer (KYC) procedures
  2. Obtaining information about actual beneficiaries
  3. Appointing Anti-Money Laundering Officers
  4. Reporting suspicious transactions to NOPCML
  5. Freezing transactions and preserving evidence
  6. Maintaining secrecy about AML investigations

Since MONEYVAL’s last rating in 2014, Romania has made significant progress in strengthening its legal and institutional framework. However, there is still room for improvement, as shown in MONEYVAL’s assessment:

Romania has achieved moderate levels of effectiveness in analyzed sectors, except international cooperation, where it has reached a significant degree of effectiveness.

Romania will report to MONEYVAL under the enhanced follow-up reporting process in May 2025.

Adherence to FATF Recommendations and Standards

As a FATF member, Romania is expected to adhere to the organization’s recommendations and standards in its national AML/CTF framework. Although Romania showed commitment in the 2023 Mutual Evaluation Report, practical effectiveness needs improvement:

Romania was found compliant with 7 of the FATF’s 40 recommendations and mostly compliant with 18.

Obligated Institutions and Persons

Institutions and persons subject to AML requirements include:

  • Credit institutions
  • Branches of foreign credit institutions
  • Private pension fund managers
  • Casinos
  • Auditors
  • Tax and accounting consultants
  • Notaries
  • Lawyers
  • Bailiffs
  • Real estate agents
  • And other natural or legal persons involved in transactions exceeding €10,000 in cash transactions in foreign currency.

Continuous Challenges in Romania

Despite these efforts, Romania continues to face challenges:

  1. Designation as an Authority of Concern by the US State Department
  2. Transit country for various criminal activities, including investment by organized crime groups from neighboring countries and Italy
  3. High rates of online credit card fraud and cybercrime

The Future of Compliance Solutions

The fight against money laundering demands continuous efforts and improvements in Romania’s AML/CTF framework to combat financial crime efficiently and in accordance with international standards. Organizations obliged to adhere to regulations can turn to advanced solutions like Sanction Scanner for effective assistance in combating financial crimes.

Sanction Scanner helps entities meet their obligations and enhances financial integrity. Contact us for more information or request a demo to experience the future of compliance solutions today!