Law no. 129/2019 for the prevention and combating of money laundering and terrorist financing, as well as for the amendment and supplementing of some normative acts was published in the Official Gazette of Romania, no. 589 of July 18, 2019 and entered into force on July 21, 2019, by means of which the old

Law no. 656/2002, as well as the Government Decision no. 594/2008 regarding the approval of the Regulation implementing the provisions of Law no. 656/2002 were repealed.

The draft law promoted by the National Office for the Prevention and Control of Money Laundering (ONPCSB) had the objective of ensuring the mandatory transposition into national law of the provisions of:

  • Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing; and of
  • Directive (EU) 2016/2.258 amending Directive 2011/16/EU regarding the access of tax authorities to information on combating money laundering.

At the same time, in the Official Gazette of Romania, no. 736 from September 9, 2019, the NBR Regulation no. 2/2019 on the prevention and combating of money laundering and terrorist financing was published, by means of which the old Applicable Regulation, respectively, the NBR Regulation no. 9/2008 regarding the know-your-customer principle in order to prevent and combat money laundering and terrorist financing was repealed.

The main legislative novelties provided by Law no. 129/2019:

  1. The scope of reporting entities that have the obligation to transmit to the National Office is extended, as we can include the following in this category: gambling service providers, persons providing financial and business consultancy, other entities and natural persons who market, as professionals, goods or services, insofar as they carry out cash transactions the minimum limit of which represents the equivalent in lei of 10,000 euro, whether the transaction is performed by means of a single operation or by several operations that have a connection between them.
  2. The reporting entities that have the obligation to submit reports regarding suspected transactions to the Office for the Prevention and Control of Money Laundering are expressly provided for.
  3. The scope of the notions of “goods“, “customer“, “important public offices” is extended.
  4. Suspicious transactions are defined by identifying certain hypotheses.
  5. The limit for reporting cash transactions is set by Law at 10,000 Euro.
  6. The reporting entities are required to report all transfers of funds the minimum limit of which is of 2,000 Euro.
  7. The regulations regarding the know-your-customer measures are reformulated.
  8. The possibility of reporting entities to apply simplified know-your-customer measures exclusively for clients classified at a low risk level is provided for.
  9. Along with the application of know-your-customer measures, reporting entities will be required to keep all records obtained by applying these measures on hard copy or in electronic format.
  10. All companies registered with the Trade Register have the obligation to submit a statement regarding the identification data of beneficial owners, within 12 months from the entry into force of the law. Failure to submit this statement will be sanctioned by a fine from 5,000 lei to 10,000 lei.
  11. It is forbidden to issue new bearer shares and carry out operations with the existing bearer shares. Also, the bearer shares issued before the entry into force of the law will be turned into registered shares. The holders by any title of bearer shares will deposit them at the headquarters of the issuing company within 18 months from the date of entry into force of the law and the shares not filed within the aforementioned term will be cancelled as of right.
  12. The sanction that occurs in the case of the legal persons that breaches the provisions of the Law is the warning or the fine from 25,000 lei to 150,000 lei, the upper limit being increased by 10% of the total revenues in relation to the tax year before the deed was committed. The sanctions and measures can be applied to the members of the management and to other natural persons who are responsible for breaking the law.

The main legislative novelties provided by the NBR Regulation no. 2/2019:

The new NBR regulation on preventing and combating money laundering and terrorist financing extends the scope of the regulations specific to this field, thus also including payment institutions, institutions issuing electronic currency, as well as non-bank financial institutions registered with the NBR’s Special Register or in the General Register of the NBR that also has the status of payment institution or of institution issuing electronic currency as well as the Romanian legal entities that carry out activities directly in other EU Member States, based on a passport, as credit institutions, payment institutions or institutions that issue electronic money.

At the same time, the new regulation includes more stringent requirements in terms of know-your-customer measures, as the companies which fall within the scope of the Regulation have to implement additional requirements regarding the information requested when opening a business relationship, as well as additional requirements regarding staff and internal organization, the relevant companies having a very short compliance deadline, until January 17, 2020.