Financial Crime World

Romania’s Anti-Money Laundering Regime: Key Rules and Enforcement for Financial Institutions and Businesses

Amidst the global crackdown on financial crime, Romania has strengthened its anti-money laundering (AML) framework, setting rigorous reporting requirements for financial institutions and designated businesses. In this article, we delve into the intricacies of Romania’s AML regulatory landscape and the authorities responsible for its enforcement.

Competent Authorities

  • Money laundering cases in Romania are prosecuted by the Public Ministry through various specialized criminal investigation authorities, including:
    • National Anticorruption Directorate (NAD)
    • Directorate for Investigating Organized Crime and Terrorism (DIOCT)

Defining Money Laundering

  • Money laundering is the conversion, transfer, or concealment of property derived from criminal activities to disguise its illegal origin.
  • Common predicate offenses for money laundering include: tax evasion, fraud, embezzlement, and receipt of bribes.
  • Romanian criminal law does not require a prior conviction for a predicate crime, making money laundering an autonomous crime.

Extraterritorial Jurisdiction

  • Romanian criminal law applies to crimes committed outside its territory by a Romanian citizen or legal entity if the act is also illegal in the country where it was committed.
  • Money laundering of foreign crime proceeds is punishable in Romania.

AML Regulatory and Administrative Requirements and Enforcement

Governing Authorities

  • Romanian authorities regulating AML requirements include:
    • Parliament
    • National Bank of Romania (RNB)
    • Financial Supervisory Authority (FSA)
    • National Office for Prevention and Control of Money Laundering (NOPCML), functioning as the Financial Intelligence Unit (FIU)

Self-Regulatory Organizations

  • While these organizations may provide guidelines for AML compliance, the requirements are primarily imposed by law.

Responsibility for Compliance

  • Leading structures of independent legal professions, including auditors and lawyers, must designate AML officers to prevent money laundering and terrorism financing operations within their organizations.

Scope of Requirements

  • The AML requirements are applicable at the national level, with general applicability to reporting entities.

Competent Authorities for Enforcement

  • NOPCML is responsible for receiving, analyzing, and processing information related to suspicious transactions originating from financial institutions and businesses subjected to AML requirements.

Statute of Limitations

  • The authorities have six months to impose a sanction for a contravention or bring criminal charges.
  • The general criminal statute of limitations for money laundering is eight years.

Maximum Penalties

  • Breaches of AML provisions can result in penalties ranging from fines for legal entities (up to RON 5 million or EUR 1 million) to individual sanctions (confiscation, suspending or annulling licenses, freezing bank accounts, or even banishing individuals from practicing their profession).
  • Non-compliance with AML regulations can also lead to closure of units or entities.

Appeal of Administrative Decisions

  • Administrative sanctions can be appealed in court, as with any other administrative sanction in the Romanian legal system.

Anti-Money Laundering Requirements for Financial Institutions and Designated Businesses

Reporting Entities

  • Reporting entities include:
    • Credit institutions
    • Financial institutions
    • Providers of virtual currencies and digital wallets
    • Electronic money institutions
    • Payment institutions
    • Certain legal professionals providing tax, financial, and business advice

Cash Transactions

  • Reporting entities have the responsibility to report transactions in cash, RON or foreign currency, with a minimum limit of RON 10,000 (EUR 2,000 for remittance activity, which will be reported separately).

Cryptocurrencies and NFTs

  • There are no specific AML provisions for Non-Fungible Tokens (NFTs) at the moment.
  • Romanian authorities are waiting for a general EU-level regulation on this matter.
  • Cryptocurrency providers and digital wallets fall under the AML framework, and are subject to certain registration, authorization, and compliance requirements.

Stay tuned for updates on Romania’s anti-money laundering framework, as the landscape continues to evolve and adapt to the ever-changing financial crime landscape.