Financial Crime World

Romania Cracks Down on Money Laundering: AML Compliance Requirements for Fintech Businesses

The fintech sector in Romania is rapidly growing, accounting for a 31.8% share in overall start-up turnover and attracting significant funding. Amid this thriving industry, the Romanian authorities have been bolstering their Anti-Money Laundering (AML) regulations to keep up with European Union (EU) directives. In this article, Sumsub provides a snapshot of the AML regulations impacting businesses in Romania or seeking to join the market.

Who’s Affected?

Entities subjected to Romanian AML regulations include:

  • 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

Additionally, branches of financial, credit, e-money, and payment institutions from other European Economic Area (EEA) member states operating in Romania are bound by these regulations.

Legislative Landscape

  • Law no. 129/2019: Established to combat money laundering and terrorism financing. Listed regulated entities and their corresponding obligations.
  • Emergency Ordinance no. 111: Implemented amendments from the European Fifth AML Directive, introducing AML measures for Romanian crypto businesses.
  • National Bank of Romania Regulation No. 2/2019: On the prevention and sanctioning of money laundering and terrorism financing.
  • Decision no. 564/2021: For the approval of the norms regarding the regulation, recognition, approval or acceptance of the procedure for identifying the person remotely using video means.

Money Laundering in Romania

According to AML Law, money laundering crimes include:

  • Exchanging or transferring criminal proceeds with the intention to conceal or disguise their illicit origin
  • Hiding the true nature, source, location, ownership, provision, movement, or use of criminal proceeds
  • Acquiring, possessing, or using criminal proceeds

Supervising Authorities

Governance of Romania’s AML regulations is the responsibility of several entities:

  • National Office for Prevention and Control of Money Laundering (NOPCML)
  • National Bank of Romania
  • Financial Supervisory Authority
  • National Office for Gambling

Compliance Strategies

Customer Due Diligence (CDD)

CDD is mandatory in Romania for:

  • Establishing a business relationship
  • Carrying out an occasional transaction equal to or more than €15,000 (or equivalent in RON), performed as one or several connected operations
  • Carrying out occasional cash transactions equal to or more than €10,000 (or equivalent in RON)
  • Receiving remittances or transferring funds equal to or more than €2,000 (or equivalent in RON) through a single operation

Reporting to the NOPCML is required within 3 working days for activities that trigger CDD, excluding electronic transfers.

Enhanced Due Diligence (EDD)

  • Dealing with clients from high-risk countries
  • Clients who are publicly exposed persons (PEPs)
  • Clients with PEPs as their beneficial owners
  • Correspondent relations with other financial institutions in the EEA and third states

Know Your Customer (KYC)

Businesses must obtain various pieces of information, including identity and beneficial ownership details for natural and legal persons.

Ongoing Monitoring

Up-to-date KYC data and accurate records are essential for efficient monitoring.

Consequences of Non-Compliance

  • Fines of up to 150,000 RON (app. €30,000) or imprisonment for 3 to 10 years

Stay Informed

Romania’s AML regulations apply to both traditional and crypto businesses and have far-reaching implications. Stay tuned to Sumsub for regular updates as we continue to track AML changes in Romania.

Contact Sumsub today to help your business navigate the complexities of KYC/AML compliance in Romania.