Romania Grapples with Diverse Types of Financial Fraud
Romania has been facing significant challenges related to money laundering, driven by illegal activities such as drug trafficking, financial crimes, fraud, tax evasion, and smuggling. The country’s financial system and society are under threat due to the lack of a comprehensive strategy to combat this issue effectively.
Regulatory Obligations
Romania’s regulatory bodies, including the Romanian Parliament, National Office for the Prevention and Control of Money Laundering (NOPCML), Romanian National Bank, and Financial Supervisory Authority, have several obligations to prevent money laundering. These include:
- Know Your Customer (KYC) procedures
- Obtaining information about actual beneficiaries
- Appointment of an Anti-Money Laundering Officer
- Reporting suspicious transactions
- Freezing transactions pending permission
Progress in Combating Money Laundering
Romania has made significant progress in improving its legal and institutional framework to combat money laundering and terrorism financing since MONEYVAL’s last rating in 2014. However, there is still room for improvement in the practical effectiveness of its measures.
Institutions Subject to AML Requirements
Institutions subject to Anti-Money Laundering (AML) requirements include:
- Credit institutions
- Private pension fund managers
- Casinos
- Auditors
- Notaries
- Lawyers
- Realtors
- Others trading in goods and services with a minimum value of EUR 10,000
FATF Compliance
Romania is a member of the Financial Action Task Force (FATF), an intergovernmental organization established to combat money laundering and terrorist financing on a global scale. The country was found to be compliant with 7 of the FATF’s 40 recommendations and mostly compliant with 18 in its latest Mutual Evaluation Report.
Challenges Ahead
Despite making progress, Romania is still struggling with financial fraud. It was designated as an Authority of Concern by the US State Department in 2016 due to its geographical location making it a natural transit country for trafficking in narcotics, weapons, stolen vehicles, and human trafficking.
Online credit card fraud and cybercrime are also major concerns in Romania, with research revealing that Romanian servers are the second-largest source of cybercrime transactions worldwide. Money laundering poses a serious global challenge, and financial institutions and governments worldwide are concerned about its impact.
Conclusion
In conclusion, Romania needs to continue improving its AML framework to combat financial crime efficiently and in accordance with international standards. Organizations obligated to adhere to regulations can turn to Sanction Scanner for advanced solutions to combat financial crimes effectively.