Financial Crime World

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Romania’s Fight Against Financial Crime: A Mixed Bag of Progress and Challenges

In its latest evaluation report, Moneyval has highlighted both progress and challenges in Romania’s efforts to prevent financial crime. The country has taken steps to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework since 2014, but more work is needed to achieve effective results.

Understanding Money Laundering Risks

One area where Romania has shown improvement is in understanding money laundering (ML) risks. However, its grasp of terrorist financing (TF) risks remains limited. The law enforcement authorities have access to a wide range of financial and administrative information, but lack technical resources and human capital to effectively use it for ML/FT investigations.

Challenges in the Fight Against Financial Crime

  • Lack of an overarching national AML/CFT strategy, which hinders coordination between different prosecutors’ offices and prioritization of ML cases.
  • Investigations and prosecutions often focus on predicate crimes rather than ML itself, with low and non-dissuasive sanctions for those convicted.
  • Romania’s confiscation efforts are hampered by a lack of resources and training for financial investigations, resulting in rare and ineffective confiscations of criminal proceeds.

Terrorism Financing

Romania lacks a specific policy and has no full understanding of the role terrorist financiers play. The country’s agencies focus more on preventing and disrupting terrorism than detecting and prosecuting TF cases.

Concerns about Compliance and Oversight

  • Concerns about banks’ and financial institutions’ compliance with targeted financial sanctions (TFS) requirements.
  • Lack of risk-based regulatory oversight for non-profit organizations.

Progress in Some Sectors

Despite these challenges, Romania has demonstrated a good grasp of ML risks in some sectors, including banking and payment institutions. The National Bank of Romania is praised for its robust AML/CFT risk-based approach, but supervision is largely ad hoc and lacks formalized guidelines for prioritizing incoming requests.

Data and Statistics

Romania’s lack of reliable data and statistics hinders its ability to demonstrate effectiveness in international cooperation, although it has provided constructive assistance to other countries in most cases.

Future Expectations

The country is expected to report back to Moneyval under the enhanced follow-up reporting process in May 2025.