On July 18, 2023, the Council of Europe's anti-money laundering body, MONEYVAL, released a new report calling on Romanian authorities to bolster measures aimed at combating money

laundering and terrorism financing.

The report provides a comprehensive assessment of Romania's compliance with the standards set by the Financial Action Task Force (FATF). It acknowledges that since the last evaluation in 2014, Romania has taken several actions to strengthen its legal and institutional framework in combating money laundering and terrorism financing.

MONEYVAL notes that Romania has achieved moderate levels of effectiveness in all assessed areas, except for international cooperation, where it has been praised by other countries for its constructive assistance. Additionally, the country demonstrates a fair understanding of the risks associated with money laundering and, to a lesser extent, those linked to terrorism financing.

However, the report emphasizes the urgency for Romania to implement immediate mitigating actions to address the highest risks the country faces. The evaluation found that authorities have yet to prioritize the investigation and prosecution of money laundering cases overall.

Furthermore, the report calls for additional measures to ensure more consistent investigations and prosecutions. While the laundering of proceeds from domestic tax crimes and corruption is effectively addressed, the focus on trafficking of human beings and drugs tends to prioritize predicate offenses rather than the laundering of the proceeds from these crimes.

On a positive note, Romania has made progress in its ability to freeze, seize, and confiscate proceeds and instrumentalities from domestic crimes. The country actively applies measures to confiscate criminal proceeds and instrumentalities located within its borders, especially in cases involving the most prevalent predicates committed domestically. However, confiscation remains infrequent in other scenarios.

To further enhance financial investigations, MONEYVAL recommends that Romania strengthens the capacity of financial investigators to conduct parallel financial investigations, trace assets, and pursue asset recovery. The report notes that since the 2014 evaluation, Romanian authorities have successfully detected, investigated, prosecuted, and obtained a conviction in only one case involving the financing of terrorism.

Additionally, the report urges Romania to assess the risk of potential abuse of its non-profit sector for terrorist financing. While Romania has a solid legal framework in place for implementing targeted financial sanctions without delay, concerns remain about the implementation of these measures by the private sector and the adequacy of supervision and compliance.

MONEYVAL also commends Romania for taking significant steps to prevent the misuse of legal entities. This includes the development and use of public registers of beneficial ownership and bank accounts. However, the authorities are encouraged to further develop existing controls to ensure the accuracy and timeliness of information held in these registers.

Romania is expected to report back to MONEYVAL as part of the enhanced follow-up reporting process in May 2025. The recommendations presented in the report highlight the importance of sustained efforts and cooperation in combatting money laundering and terrorism financing, essential in aligning Romania with international standards. Photo: Council of Europe, Wikimedia commons.