Additional Obligations Incumbent on Certain Entities for Prevention and Control of Money Laundering
Law no. 129 / 2019, which became effective on July 21, 2019, institutes the national framework for the prevention and control of money laundering and terrorism financing, regulating as incumbent on certain entities specific obligations such as:
- reporting of specific operations and transactions;
- application of KYC measures and
- possession and recording of updated information regarding the real beneficiary of the activity performed by these.
The following categories are part of the reporting entities to which Law no. 129/2019 applies:
- notaries public, attorneys at law, court enforcement officers and other persons exercising legal liberal professions, if they offer assistance for preparation or closing of operations for their clients, such as the ones regarding the purchase or sale of immovables, shares or goodwill elements etc.,
- other entities and natural persons trading, as professionals, assets or providing services, to the extent to which they make cash transactions whose minimum limit is the equivalent in lei of EUR 10,000, regardless of whether the transaction is executed by one operation or several operations.
- credit and financial institutions;
- auditors, chartered accountants and licensed accountants etc.
- Suspect transactions
Any reporting entity must submit exclusively to the National Office for Prevention and Control of Money Laundering (the “Office”), before carrying out any operation, a suspect transaction report, it this is aware or has reasons to suspect that:
- the assets derive from the committing of crimes;
- the person or such person’s attorney in fact /representative/proxy is not who this claims to be;
- the information that the reporting entity possesses may be useful to the Office;
- certain elements could raise questions regarding the character, the economic purpose or the reason for such transaction.
- Transactions that do not present suspicion indicators
The entities identified above also have the obligation to report to the Office situations like:
- transactions in cash, in Lei or foreign currency, whose minimum limit represents the equivalent in Lei of EUR 10,000;
- transfers of funds whose minimum limit represents the equivalent in Lei of EUR 2,000 for the activity of remission of the amounts of money;
- external transfers into and from accounts, in Lei or in foreign currency, whose minimum limit represents the equivalent in Lei of EUR 15,000, in the case of credit institutions.
For the fulfillment of the obligations under Law no. 129/2019, the reporting entities must appoint one or several persons who shall have responsibilities in the application of the legal provisions, whose names shall be communicated to the Office.
KYC MEASURES. REAL BENEFICIARY
The reporting entities must apply, in the terms and conditions set forth by the Law, standard KYC measures, which are meant to allow:
- identification of the client and the checking of the client’s identity i;
- identification of the real beneficiary and the adopting of reasonable measures for checking the real beneficiary’s identity;
- assessment of the purpose and nature of the business relation;
- continuous monitoring of the business relation, including by the examination of the transactions concluded during the entire relation.
Private law legal persons registered in the territory of Romania must obtain and possess adequate, accurate and updated information regarding their real beneficiary, including with regard to the means of materialization of this capacity, and provide the control bodies and the supervisory authorities with such information, at their request.
Pursuant to Law no. 129/2019, real beneficiary means any natural person owning or controlling eventually the client and/or the natural person in whose name a transaction, an operation or an activity is carried out.
The notion of real beneficiary is extensively detailed in Law no. 129/2019 and this is reported distinctively depending on the entity to which it is applicable, and namely company, trust, association etc.
In the case of companies, the notion of real beneficiary includes:
- mainly, a natural person owning or eventually controlling a legal person:
- by the exercise of the ownership right, directly or indirectly, over a number of shares or voting rights sufficiently high as to ensure control,
- by owning equity interests in the own capitals of the legal person or
- by exercise of control by other means.
As regards items a) and b) hereinabove, under Law no. 129/2019, the criteria shall be considered met if: i) there is an equity interest of 25% plus a share or an equity interest in the own capitals higher than 25% and ii) the owned or controlled person is not a legal person registered with the Trade Register and whose shares are traded on a regulated market and that is subject to disclosure requirements pursuant to the EU regulations or international standards.
- Secondly, the person (persons) administering the company if, after exhausting all the possible means and provided that there are no suspicion reasons, no person is identified in accordance with the above paragraph or there are doubts that the identified person is the real beneficiary.
Any reporting entity must comply with the above-mentioned obligations in a term of 180 days as of the date when Law no. 129/2019 becomes effective.
To this end, the Office President has at disposal a term of 90 days as of the effective date of Law no. 129/2019 to issue an order regarding the form, content and methodology of submission of the reports.
Given that at this date the Office President’s order has not been yet issued, the reporting entities shall continue to submit the reports pursuant to the legislation applicable before the effective date of Law no. 129/2019.
Any legal persons subject to the obligation of registration with the Trade Register shall submit upon registration, annually or whenever any amendment occurs, a statement regarding the real beneficiary of the legal person, for registration with the Registry of Real Beneficiaries.
The statement on the real beneficiary shall be submitted as follows:
- The already registered companies shall submit the statement in question in a term of 12 months as of the effective date of Law no. 129/2019;
- The annual statement shall be submitted to the Trade Registry where the legal person is registered in a term of 15 days as of the approval of the annual financial statements, and if there is any change regarding the identification data of the real beneficiary, the statement shall be submitted in a term of 15 days as of the date when the change occurred.
Failure to comply with the obligations presented hereinabove regarding the submission of the statement on the real beneficiary, by the representative of the legal person, shall be a contravention and shall be sanctioned by fine from Lei 5,000 to Lei 10,000.