Romania

1. Does Romania have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes. Law no. 129/2019 (“AML Law”), adopted in the context of transposing the 4th AML EU Directive, sets out the national framework for preventing and combating money laundering and terrorist financing.

2. To whom does the legislation apply?

It applies to any natural person or legal entity who commits the criminal offence of money laundering.

Furthermore, AML law includes specific rules applicable to reporting entities i.e. credit institutions, financial institutions, managers of alternative and/or occupational pension funds, insurance and reinsurance companies, gambling services providers, financial and business advisors, public notaries, lawyers, bailiffs and other individuals practicing legal liberal professions, real estate agents, providers of digital wallets, exchange service providers between virtual currencies and fiat currencies, as well as any other entities/individuals selling goods as professionals or providing services, insofar as they perform cash transactions, the minimum limit of which is EUR 10,000.

3. What does the legislation prohibit?

The AML Law prohibits money laundering (as defined below).

The AML law includes specific prohibitions for reporting entities e.g. to carry out business relationships without applying adequate know-your-client measures (standard, simplified or additional measures chosen on a risk assessment, to obtain relevant information about the ultimate beneficial owner of their clients etc.).

4. How is money laundering defined? Does underlying criminal activity have to be proven?

The AML Law defines money laundering as:

• the conversion or transfer of assets, knowing that such is the result of criminal activities, for the purpose of hiding or concealing the illicit origin of such assets or the assistance of any person involved in those criminal activities to avoid the legal consequences;
• the concealment of the true nature of the origin, location, disposition, movement or ownership of the assets or rights thereon, knowing that such property is the result of criminal activities; and
• the acquisition, possession or use of assets by other person than the active subject of the crime, knowing that such is the result of criminal activities.

According to a preliminary ruling decision of the High Court of Justice of Romania, money laundering is considered an independent crime, a prior or simultaneous conviction for a predicate crime is not required.

5. What level of intent or knowledge is required to establish a violation?

The knowledge on the origin of the assets or the purpose pursued must be established on a case-by-case basis, depending on the objective factual circumstances, in accordance with the Criminal Procedure Code.

6. What are the potential penalties for infringing the legislation?

For individuals, money laundering is punishable by imprisonment for three to ten years. For legal entities, the main penalty is a criminal fine, the amount of which may vary between RON 18,000 (approximately EUR 3,600) to RON 1,500,000 (approximately EUR 300,000). Seizure measures may be taken and additional sanctions may apply e.g., dissolution of the legal entity, suspension of the activity/activities of the legal entity for a period from three months to three years.

7. Does the legislation have extra-territorial reach?

According to the Romanian Criminal Code, in cases involving crimes punishable by imprisonment up to ten years, criminal law (which includes the AML Law) applies also to criminal activities committed outside the national territory by a Romanian citizen/legal entity provided that the respective act is also outlawed by the criminal law of the country where it was committed.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

The reporting entities included in the scope of the AML Law comprise credit institutions, financial institutions, managers of alternative and/or occupational pension funds, insurance and reinsurance companies, gambling services providers, financial and business advisors, public notaries, lawyers, bailiffs and other individuals practicing legal liberal professions, real estate agents, providers of digital wallets, exchange service providers between virtual currencies and fiat currencies, as well as any other entities/individuals selling goods as professionals or providing services, insofar as they perform cash transactions, the minimum limit of which is EUR 10,000.

Additionally, the AML law sets out the obligation for Romanian companies, with few exceptions applicable, to declare the ultimate beneficial owner upon incorporation; exceptionally on a yearly basis, irrespective of any amendments to the UBO declared, for companies having in their shareholding structure and/or companies having the fiscal headquarters in non-cooperative jurisdictions from a fiscal point of view and/or in jurisdictions with a high risk of money laundering and/or in jurisdictions under the supervision of relevant international bodies, for the risk of money laundering/terrorist financing (within 15 days of the approval of the annual financial statements); or whenever an amendment occurs, by way of an affidavit submitted with the Trade Registry.

The main obligations incumbent upon the reporting entities as per the AML law include the obligation to report suspicious transactions to the National Office for Prevention and Control of Money Laundering (“NOPCML”), to implement know-your-client procedures (standard, simplified or additional measures chosen on a risk assessment), to obtain relevant information about the ultimate beneficial owner of their clients, to appoint an AML officer, to not inform their clients of any AML investigations, to suspend reported transactions until NOPCML clearance.

9. What are the potential penalties for failing to comply with these obligations?

Failure to comply with reporting obligations is punishable by a written warning or a fine between RON 10,000 (approx. EUR 2,000) and RON 150,000 (approx. EUR 30,000). The amounts of fines which may be imposed are higher in cases involving entities under the supervision of the Financial Supervisory Authority.

Failure of the legal representatives of the companies to comply with the registration of the ultimate beneficial owner may trigger a fine between RON 5,000 (approx. EUR 1,000) and RON 10,000 (approx. EUR 2,000).

10. Who are the relevant enforcement authorities in Romania and what are their contact details?

The Romanian authorities responsible for supervision of compliance with the AML legal requirements are: