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Romania should step up efforts to investigate and prosecute money laundering and strengthen supervision
In a report published Tuesday, the Council of Europe’s anti-money laundering body MONEYVAL calls on the Romanian authorities to further strengthen measures to combat money laundering (ML) and the financing of terrorism (TF) , https://www.europeaninterest.eu/ informs
The report provides a comprehensive assessment of the country’s level of compliance with standards set by the Financial Action Task Force (FATF).
Since 2014, when MONEYVAL last evaluated Romania, the country has taken a number of actions to strengthen its legal and institutional framework to tackle money laundering and the financing of terrorism (AML/CTF) and has started to put in place the elements of an AML/CTF effective system. MONEYVAL notes that Romania has achieved moderate levels of effectiveness in all areas assessed except for international cooperation, where it has achieved a substantial level of effectiveness and has been commended by other countries for its constructive assistance.
MONEYVAL’s mutual evaluation of Romania highlights that the country demonstrates a fair understanding of ML risks and, to a lesser degree, of TF risks. Romania needs to immediately start implementing mitigating actions that target the highest risks to which the country is exposed.
The evaluation found that the authorities have yet to pursue the investigation and prosecution of ML as a priority overall. Additional measures are required to ensure more consistency in investigations and prosecutions. While investigations and prosecutions of the laundering of the proceeds of domestic tax crimes and corruption are effectively conducted, investigations and prosecutions of trafficking of human beings and drugs focus on the predicate offences rather than on the laundering of the proceeds of those crimes.
Romania has improved its ability to freeze, seize and confiscate the proceeds and instrumentalities of domestic crime. It actively applies measures for confiscating the criminal proceeds and instrumentalities located in Romania for the most prevalent predicates committed domestically. Otherwise, confiscation is rare. Romania should also strengthen the capacity of financial investigators to carry out parallel financial investigations, trace assets and pursue asset recovery.
Since the 2014 evaluation, the authorities have successfully detected, investigated, prosecuted, and obtained a conviction for one case of TF. Romania should develop an overarching national strategy and action plan to counter TF and provide further relevant training. There is also a need to assess the risk of abuse of Romania’s non-profit sector for terrorist financing.
MONEYVAL finds that Romania has a sound legal framework in place for implementing targeted financial sanctions without delay. However there are concerns about the implementation of those measures by the private sector and regarding the adequacy of the supervision of compliance with those measures.
Most material financial institutions are subject to risk-based supervision but authorities need to improve the calibration of their supervisory actions with risk. MONEYVAL recommends as a priority that there should be a more sophisticated calibration of the National Bank’s supervisory actions with risk, a greater focus on money laundering and terrorist financing risks by the Financial Supervisory Authority in its oversight and an increase in resourcing of the National Office for Preventing and Combating Money Laundering in order to align with statutory responsibilities, notably regarding the supervision of virtual asset services providers and legal professionals.
Finally, MONEYVAL acknowledges that Romania has taken important steps to prevent the misuse of legal persons, including the development and use of public registers of beneficial ownership and bank accounts. The authorities should develop existing controls to ensure that information held in the registers is accurate and up to date.
Romania is expected to report back to MONEYVAL under the enhanced follow-up reporting process in May 2025.