Key AML Regulations and Compliance Requirements in Romania
navigating the nuances of Anti-Money Laundering regulations in Romania for Fintech start-ups (essential reading)
Romania's anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations are an integral part of the European Union's (EU) broader framework, tailored to specific business sectors. Here's a breakdown of the key AML regulations and their compliance requirements for various sectors:
1. General AML Requirements
Romania's AML regulations are aligned with the EU's AML Directives, emphasizing a risk-based approach to customer due diligence (CDD) and ongoing monitoring of transactions. Businesses must implement robust AML/CFT controls, including customer identification, transaction monitoring, and reporting suspicious activities to the Financial Intelligence Unit (FIU).
2. Crypto and Financial Services
Under the Markets in Crypto-Assets Regulation (MiCA), crypto firms in Romania must adhere to AML/CFT standards through a compliance-driven approach. This involves demonstrating governance, prudential controls, and AML/CFT measures from the outset. Crypto companies must ensure real-time compliance with governance, prudential, and AML/CFT controls, including maintaining detailed records of transactions and customer information.
3. Gambling Industry
The Romanian National Gambling Office (ONJN) regulates gambling activities, requiring compliance with AML/KYC (Know Your Customer) standards. Businesses must maintain robust AML/KYC policies, including thorough customer verification and reporting suspicious transactions. Documentation and technical requirements must also be met to ensure compliance.
4. E-commerce and Digital Payments
While not explicitly mentioned, e-commerce and digital payment platforms must comply with broader EU financial regulations, including GDPR for data protection and VAT for tax compliance. Platforms must ensure GDPR compliance for data protection and implement anti-money laundering measures through their payment gateways. VAT auto-calculation is also necessary for tax compliance.
5. EU-Wide AML Authority Influence
The EU's Anti-Money Laundering Authority (AMLA) will begin direct supervision of high-risk cross-border financial institutions from 2028, which may indirectly influence Romania's AML landscape by promoting harmonized supervisory methodologies. This could potentially increase the need for robust reporting and compliance systems.
Summary of Compliance Requirements
| Sector | Key Compliance Requirements | |------------------------|--------------------------------------| | Crypto and Financial | Governance, Prudential Controls, AML/CFT | | Gambling | AML/KYC Policies, Technical and IT Requirements | | E-commerce and Digital Payments | GDPR Data Protection, AML, VAT Compliance | | General | Customer Due Diligence, Transaction Monitoring, Reporting Suspicious Activities |
In addition to these sectors, Romania's fintech market has a 31.8% share in overall start-up turnover. The businesses subject to Romanian AML regulations include credit institutions, financial institutions, insurance companies, e-money institutions and payment institutions, exchanges of virtual currencies and fiat currencies, digital wallet providers, and gambling service providers.
Under the AML Law, businesses in Romania are required to conduct Customer Due Diligence (CDD) for their clients when establishing a business relationship, carrying out an occasional transaction, or receiving remittances or transferring funds. The most notable Romanian AML regulations include Law no. 129/2019, its amendments, Emergency Ordinance no. 111, its amendments, National Bank of Romania Regulation No. 2/2019, Decision no. 564/2021, and the Norms for the application of the AML Law.
Romania's AML regulations have broad implications for traditional and crypto businesses, both domestic and foreign. For instance, Enhanced Due Diligence (EDD) is required in situations with a high risk of money laundering, such as business relationships and transactions with persons from countries included in the FATF NCCT list, publicly exposed persons (PEPs), or clients whose real beneficiaries are PEPs, persons established in high-risk third countries, and correspondent relations with financial institutions in other EEA member states or third states.
For the identification of natural persons in Romania, businesses must obtain a wide range of information, including name, date and place of birth, address, citizenship, occupation, source of funds, and more. Similarly, for the identification of legal entities in Romania, businesses must inquire about beneficial owners, who can be direct or indirect. A direct beneficial owner is a natural person who exercises ownership or control over a company by holding 25% + one of shares or participating in more than 25% of a company's capital. An indirect beneficial owner is a natural person who owns or controls a foreign company that holds 25% + one of shares of a Romanian company or participates in more than 25% over a Romanian company's capital. The minimum information obtained about the beneficial owner must include the basis of beneficial ownership, name and surname, date and place of birth, their personal numerical code or another similar unique identifier, the country in which they live, citizenship, and the nature of their activity.
Failure to comply with the obligations prescribed by the AML Law in Romania may result in fines of up to 150,000 RON (approximately €30,000) or imprisonment from 3 to 10 years. It's crucial for businesses to stay informed about these regulations and maintain robust AML/CFT practices to ensure compliance and protect against money laundering activities.
- In the realm of personal-finance and general-news, it's essential for individuals to understand the implications of Romania's AML regulations, especially for those involved in business transactions, as failure to comply can lead to severe penalties.
- For those interested in education-and-self-development, particularly in the field of finance, studying Romania's AML regulations could provide valuable insights into the country's business environment and anti-money laundering best practices.
- Technology plays a crucial role in the implementation of AML/CFT regulations, particularly in the crypto and financial sector, where real-time compliance with governance, prudential, and AML/CFT controls is mandatory.
- Lifestyle choices may be affected by Romania's AML regulations, especially for those participating in gambling activities or engaging in digital transactions, as they are required to comply with AML/KYC policies and technical requirements.
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