Romania

Last Updated 18/12/2008

CENTRAL AUTHORITY FOR REPORTING

The National Office for the Prevention and Control of Money Laundering (NOPCML), (Romanian Financial Intelligence Unit) which is a governmental agency.

ANTI-MONEY LAUNDERING REGULATOR(S)

The National Bank of Romania, for the banking sector.
The National Securities Commission, for the securities market.
The National Insurance Commission, for the insurance market.
The NOPCML, for other reporting entities which have no separate supervisory authority.

HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?

The Third EU Directive was fully implemented by the Governmental Emergency Ordinance no. 53/2008, published in the Official Monitor no. 333/30.04.2008) and Government Decision no. 594/2008, published in the Official Monitor no. 444/13.06.2008.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

Law no. 656/2002 on preventing and sanctioning money laundering and instituting measures for preventing and fighting against financing the acts of terrorism effective from December 2002 and subsequently amended by the Governmental Emergency Ordinance no. 135/2005, Law no. 36/2006, Law no. 405 2006, Law no. 306 2007 and Governmental Emergency Ordinance no. 53 2008 (hereinafter “the Law”).

Governmental Decision no. 594/2008 regarding the approval of the Regulation for application of the provisions of Law no. 656/2002 on preventing and sanctioning money laundering and instituting measures for preventing and fighting against financing the acts of terrorism (hereinafter “the Regulation”).

The Law and (the Regulation) apply to (see Article 8):

Credit institutions and branches in Romania of foreign credit institutions;
Financial institutions and branches in Romania of foreign financial institutions;
Managers of private pension funds and foreign private pension funds, marketing agents authorized in the private pension systems;
Casinos;
Auditors, natural and legal persons, providing fiscal or accounting consultancy;
Public notaries, lawyers and legal counsel, when they:
1. Provide assistance in the planning or execution of transactions for a client concerning the:
  - Buying and selling of real property or business entities;
  - Managing of client money, securities or other assets;
  - Opening or management of bank, savings or securities accounts;
  - Organization of contributions necessary for the creation, operation or management of companies;
  - Creation, operation or management of trusts, companies or similar structures;
  - Performing other fiduciary activities, according to the law; and
2. Represent clients in any financial or real estate transaction;

Service providers for companies or other entities, others than those mentioned above in (5) and (6);
Persons with prerogatives in the privatization process;
Real estate agents:
Associations and foundations;
Other natural or legal persons trading in goods and/or services, to the extent that the payments are done in cash (RON or foreign currency) where the minimum amount of RON is equivalent to 15.000 euro, whether or not the transaction is executed in a single operation or in several operations which appear to be linked

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Visiting lawyers must comply with the Law to the same extent as Romanian lawyers do.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

There are no such guidelines in place so far.

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

No.

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Art. 5 (1) of the Regulation:

Client due diligence standard measures are mentioned in the Law and are more detailed in the Regulation. They shall comprise of:

Identifying the client and verifying the client's identity based on documents, data or information obtained from a reliable and independent source;
Identifying, where applicable, the beneficial owner and taking risk-based and adequate measures to verify his identity so that the institution or person subject to the Law is satisfied that it knows who the beneficial owner is and as regards legal persons, trusts and similar legal arrangements, taking risk-based and adequate measures to understand the ownership and control structure of the client;
Obtaining information on the purpose and intended nature of the business relationship;
Conducting ongoing monitoring of the business relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with existing knowledge about the client, the business and risk profile and, where necessary, the source of funds and also, ensuring that the documents, data or information held are kept up-to-date.

Art. 9 of the Law and art. 5 (2) of the Regulation:

Client due diligence standard measures must be applied in the following circumstances:

When establishing a business relationship;
When carrying out occasional transactions amounting to EUR 15000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked;
When there is a suspicion of money laundering or terrorist financing, regardless of any derogation, exemption or threshold; and
When there are doubts about the veracity or adequacy of previously obtained client identification data.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Art. 8¹of the Law:

As a general rule, during the performance of their activities, lawyers are obliged to adopt adequate measures to prevent money laundering and terrorist financing and in this respect, on a risked based approach, to apply standard measures, simplified or additional client due diligence in order to be able to identify the client and also as the case may be the real beneficiary.

Art. 5 (3) of the Regulation:

Persons who are subject to the Law can modify the standard due diligence measures depending on risk, client, business relationship, product or transaction, in which case such persons must be able to demonstrate to the competent authorities that such measures are adequate in connection with the risk of money laundering or terrorist financing.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Art. 12¹ of the Law:

Besides the client due diligence standard measures, enhanced measures must be undertaken in the following cases, as by their nature they can pose an increased risk of money laundering or terrorist financing:

Persons who are not physically present during the transaction;
Correspondent relationships with credit institutions of states which are not members of the European Union or of the European Economic Area;
Transactions or business relationships with politically exposed persons, who are residents of a different member state of the European Union or of the European Economic Area or of a third country.

As a general rule, extended measures must be applied in all cases which, by their nature, present an increased risk of money laundering or terrorist financing.

Art. 12 (4) of the Regulation:

For occasional transactions and for business relationships with politically exposed persons, lawyers must apply the following measures:

Have appropriate risk-based procedures in place to determine whether the client fits into this category;
Have senior management approval for establishing business relationships with such clients;
Take adequate measures to establish the source of incomes and source of funds that are involved in such business relationships or occasional transactions; and
Conduct enhanced ongoing monitoring of the business relationship.

Art. 12 (5) of the Regulation:

Special attention must be paid to occasional transactions and to transactions that might favour anonymity.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Art. 12 of the Law:

Simplified due diligence measures can be applied in the following circumstances:

In the case of life insurance policies where the annual premium is no more than EUR 1000 or the single premium is no more than EUR 2500;
In the case of enrollment in pensions funds;
In the case of electronic money, as defined by the law, where, if the device cannot be recharged and the maximum amount stored in the device is no more than EUR 150, or where, if the device can be recharged, a limit of EUR 2500 is imposed on the total amount transacted in a calendar year, except when an amount of EUR 1000 or more is redeemed in that same calendar year;
Where the client is a credit or financial institution, as defined by the Law, from a Member State or European Economic Area or, as the case may be, a credit or financial institution from a third country that has similar requirements as those provided by the present Law and where such requirements are supervised by the relevant authorities; and
In other cases and conditions where the type of client, operations or products mentioned in the Regulation present a low risk of money laundering and terrorist financing.

Art. 8 of the Regulation:

As an exception from the application of standard measures, simplified measures can be applied for the following clients:

Listed companies whose securities are admitted to trading on a regulated market within the meaning of the applicable law in one or more Member States and listed companies from third countries which are subject to disclosure requirements consistent with Community legislation;
beneficial owners of pooled accounts held by notaries and other independent legal professionals from the Member States, or from third countries provided that they are subject to requirements to combat money laundering or terrorist financing consistent with international standards and are supervised for compliance with those requirements and provided that the information on the identity of the beneficial owner is available, on request, to the institutions that act as depository institutions for the pooled accounts;
Domestic public authorities;
Clients representing a low risk of money laundering or terrorist financing which cumulatively meets the following criteria:
1. They are authorities or public bodies invested with their competences by the Community legislation;
2. Their identity is publicly available, transparent and certain;
3. Their activity and accounting records are transparent;
4. That client has a responsibility to a Community institution or an authority of a Member State or the activity of the client can be controlled through adequate procedures.

Art. 9 of the Regulation:

As an exception to the standard rule, simplified measures can be applied for products and operations that cumulatively meet the following criteria:

The product is offered based on a written contract;
Related product operation is performed through a client’s account opened with a credit institution from Member States which impose similar requirements to those provided by the Law and the Regulation;
The product or related operation is nominative and by its nature allows the application of standard measures if suspicion arises;
The value of the product does not exceed the limits set by the Law for insurance policies and similar saving instruments or 15,000 euro for other products;
The beneficiary of the products or of related operations cannot be a third party, except for cases of death, invalidity, predetermined age or other similar cases;
In case the products or related operations allow investments in financial assets or receivables, including any kind of insurances or other contingent receivables, the following criteria must be cumulatively met:
1. The benefit of the product or related operation are realized only in the long term;
2. The product or related operation cannot be used as collateral;
3. In the course of the contractual relationship, no anticipated payments can be made, there are no clauses for early termination and it is not possible to extinguish in advance the contractual obligations.

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Art.6 of the Regulation:

When carrying out standard client due diligence, lawyers can use information regarding a client obtained from third parties.

In such a situation, responsibility for applying all standard due diligence requirements rests on the person who uses the information obtained from the third party.

The third party from Romania who made the initial contact with the client shall send the person applying the standard client due diligence measures to such client all information obtained in the identification process and copies of the relevant documents.

These rules must be complied with even in case of externalized activities or activities performed thorough agents.

One cannot rely on due diligence performed by a third party from a third country if the European Commission has adopted a decision against that country.

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Art. 3 (6) of the Law:

Any transaction suspected of involving money laundering or terrorist financing must be reported to the NOPCML at once.

Any transactions involving cash and external transfers (trans-frontier and between residents and non-residents) exceeding EUR 15,000 must be reported to the NOPCML within 10 days.

The NOPCML can ask for information regarding the transaction and the client and lawyers must provide it within 30 days. They cannot invoke professional secrecy in this case.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

Art. 3 (8) of the Law:

Lawyers are not obliged to report to the NOPCML information they receive or obtain from their clients in the course of ascertaining the legal position for a client or in the course of defence or representation in judiciary proceedings or in connection with such proceedings, including assistance on launching judiciary proceedings according to the law, whether such information is received or obtained before, during or after such proceedings.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Art. 7 of the Law:

Compliance in good faith by the persons subject to the Law, including lawyers, with the obligations provided by the Law (e.g. reporting suspicious transactions) cannot trigger disciplinary, civil or criminal liability.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Art. 3 (2), (4), (5) and (10) of the Law:

Once the NOPCML is informed about a suspicious transaction, if it considers it appropriate, it can decide to suspend the transaction for 48 hours.

If the NOPCML takes such a decision it must communicate it to the person who informed the NOPCML within 24 hours.

If there is no communication from the NOPCML within this deadline, the transaction may proceed.

Lawyers must report such events to the Bar where they are members which must send it unaltered to the NOPCML within a maximum of 3 days.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Art. 18 (2) and (6) of the Law:

It is forbidden to transmit information regarding money laundering and terrorist financing and also to warn the clients that the NOPCML has been informed in this regard
It is not considered a breach of these obligations if the lawyer tries, according to statutory provisions, to discourage a client from engaging in illegal activities.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Art. 9¹ of the Law:

Client due diligence standard measures must be applied to all new clients and, as soon as possible, depending on the risk involved, for existing clients.

Art. 5 (4) of the Regulation:

If lawyers cannot apply the standard measures, they are obliged:

To refrain from performing the transaction;
To refrain from the new business relationship; or
To terminate the business relationship.

And they should immediately inform the NOPCML in this regard.

Art. 10 of the Law:

Lawyers must request from clients the following identification data:

For natural persons - civil status data contained in the identity card;
For legal persons - data mentioned in the incorporation documents and the power of attorney of the natural person acting on behalf of the legal person in the transaction; and
For foreign legal persons opening a bank account – documents regarding identity of the company, headquarters, type of company, place of registration, special power of attorney of the proxy and a notarized translation in Romanian language of these documents.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

Art. 9¹ of the Law:

Client due diligence standard measures must be applied not only for new clients, but as soon as possible, depending on the risk involved, for existing clients as well.

Art. 5 (1) letter d) of the Regulation:

One of the standard measures consists of conducting ongoing monitoring of the business relationship, including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with existing knowledge of the client, its business and risk profile, including, where necessary, the source of funds and ensuring that the documents, data or information held are kept up-to-date.

Art. 10 of the Regulation:

For the clients to which simplified measures can be applied, lawyers must obtain sufficient information and monitor consistently their activity in order to asses whether they continue to remain in the category for which the Law allows simplified measures.

Art. 13 of the Law:

All relevant identification documents for clients must be kept for 5 years after the professional relationship has ended.
Records of all financial operations covered by the Law must be kept for a period of 5 years so that they can be used as evidence if necessary in a court of law.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

N/A.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

According to publicly available information, one lawyer, who is a member of the Bucharest Bar, was charged last year for money laundering in a corruption case regarding a public acquisition. The court case is pending.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

No.

Romania is not member in FATF, but it is a member of the Moneyval Committee within the Council of Europe, which is a FSRB (FATF Regional Style Body). The report of the 3rd round mutual evaluation was adopted at the Moneyval Plenary, in Strasbourg, July 2008. The summary of the report is available on the Moneyval website and on pdf.

Information provided by:

Manole Ciprian Popa Law Office
46 Carol I Bld., ap. no. 3
020923 Bucharest 2
Romania
Fax: +40 21 313 27 81
email: manole.popa@mcp.ro