Money laundering is a severe problem in Romania, driven by illegal activities like drug trade, financial crimes, fraud, tax evasion, and smuggling. Additionally, profit-making activities like illegal immigration and human trafficking have recently increased. Romania needs a comprehensive strategy to combat this issue effectively involving law enforcement, regulations, international cooperation, and public awareness campaigns. This approach will help address the root causes of money laundering and protect the country's financial system and society.
Anti-Money Laundering Regulations
Romanian Parliament, regarding primary legislation, National Office for the Prevention and Control of Money Laundering (NOPCML), Romanian National Bank, and other institutions such as the Financial Supervisory Authority for secondary legislation are regulatory bodies in Romania. Regulatory authorities have several obligations to prevent money laundering in Romania.
These obligations are primarily as follows: Know Your Customer (KYC) procedures that must be carried out during the first participation of customers, obtaining information about actual beneficiaries, the appointment of an Anti-Money Laundering Officer, reporting suspicious transactions to NOPCML, freezing transactions pending NOPCML permission; preservation of all relevant evidence of suspicious transactions; and not informing customers of any Anti-Money Laundering (AML) investigation. Romania has made significant progress in improving its legal and institutional framework to combat money laundering and terrorism financing (AML/CTF) since The Council of Europe's anti-money laundering body, MONEYVAL's last rating in 2014. Romania has also begun to implement the elements of a successful AML/CTF system, and they are still trying to improve their legal and institutional framework against AML in 2023. According to MONEYVAL's assessment, Romania has achieved moderate levels of effectiveness in the other analyzed sectors, except international collaboration, where it has reached a significant degree of effectiveness. Romania will report to MONEYVAL under the enhanced follow-up reporting process in May 2025.
Institutions subject to AML requirements
- Credit institutions and branches of foreign credit institutions in Romania
- Romanian branches of foreign financial institutions
- Private pension fund managers and authorized marketing agents for the private pension system
- Auditors and actual and legal persons providing tax and accounting consultancy services
- Notaries, lawyers, bailiffs, and others practicing the independent legal profession, etc.
- Other natural or legal persons trading in goods and services, with a minimum value of EUR 10,000, based on cash transactions in foreign currency, regardless of whether the transaction is carried out over a single network.
Romania FATF Status
The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 to combat money laundering and terrorist financing on a global scale. It was initially created by the Group of Seven (G7) countries and has since expanded its membership to include over 200 jurisdictions, including countries, territories, and international organizations.
Romania is a member of the FATF. As a member, the country is expected to adhere to and implement the FATF's recommendations and standards in its national anti-money laundering (AML) and counter-terrorist financing (CTF) framework. Romania is not on the FATF List of Countries that have been identified as having strategic AML deficiencies.
The most recent Mutual Evaluation Report on Romania's implementation of anti-money laundering and counter-terrorist financing criteria was completed in 2023. Romania was found to be compliant with 7 of the FATF's 40 recommendations and mostly compliant with 18. It received a rating of Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness and Technical Compliance evaluations.
In summary, the 2023 Mutual Evaluation Report on Romania's AML and CTF efforts reveals that, while the country demonstrates commitment by being compliant with 7 of the FATF's 40 recommendations and mostly compliant with 18, there is room for improvement in the practical effectiveness of its measures, as reflected in one of the evaluations' "Substantially Effective" rating. These findings highlight the necessity of continued efforts to improve Romania's AML and CTF framework in order to combat financial crime efficiently and in accordance with international standards.
US Department of State Money Laundering Assessment (INCSR)
Romania was designated as an Authority of Concern in the US State Department's 2016 International Narcotics Control Strategy Report (INCSR). Romania's geographical location makes it a natural transit country for trafficking in narcotics, weapons, stolen vehicles, and human trafficking by transnational organized crime groups. Although Romania is not a significant financial center, there are still indications that organized crime groups from neighboring countries and Italy are investing in Romanian assets. Romanian organized crime groups participate in various European criminal activities, including prostitution, cigarette trafficking, extortion, and narcotics trafficking. In addition, Romania has some of the highest rates of online credit card fraud and cybercrime globally. Research has revealed that Romanian servers are the second-largest source of cybercrime transactions worldwide.
AML Solutions for Romania
Money laundering poses a serious global challenge and concerns financial institutions and governments worldwide. In Romania, organizations obligated to adhere to regulations can turn to Sanction Scanner for advanced solutions to combat financial crimes effectively. Sanction Scanner helps these entities meet their obligations and enhances financial integrity. Choose the Sanction Scanner to stay ahead in compliance efforts and financial security. Feel free to contact us or request a demo to experience the future of compliance solutions today!