Romania: The 4th AML Directive finally transposed into domestic legislation
Romania has finally transposed the 4th AML Directive into its domestic legislation and required implementation of a national Beneficial Ownership Registers
Romania: Beneficial Ownership Registers
On 21 July 2019, the new law on the prevention of money laundering and terrorist financing (Law No. 129/2019) entered into force, aligning Romania's national legislation with EU anti-money laundering requirements and establishing the legal framework for national beneficial ownership registers.
All private entities and trusts registered in Romania are required to have adequate, accurate and up-to-date information on their ultimate beneficial owners (UBO), including on the mechanism by means of which such control and capacity is exercised, and to have specific data entered into the registers held by:
the Trade Registry for commercial companies;
the Ministry of Justice for associations and foundations;
the National Agency for Fiscal Administration in the case of trusts (in Romanian: fiducie).
When being incorporated and initially registered with the Trade Registry, or annually, or each time a change occurs, Romanian companies must submit an affidavit executed by their legal representative containing the following information on the UBO: name and surname, date of birth, personal identification number, series and number of identity card, citizenship, domicile or residence, as well as details regarding ways of control exercised over the company.
For companies already incorporated, the affidavit must be submitted to the Trade Registry each year within 15 days of the approval of the annual financial statements, or within 15 days of the occurrence of any change in the UBO data initially declared. The affidavit must be either authenticated, i.e. issued in front of a notary public, or executed in front of a trade register officer.
Breach of this legal provision is punishable by fines of up to RON 10,000 (approx. EUR 2,200), and if the legal representative does not submit the affidavit within 30 days of the date the fine is applied, the Trade Registry may order the dissolution of the company.
Companies have 12 months as of the date on which Law No. 129/2019 enters into force to comply with these requirements.
According to the law, the Beneficial Ownership Register held by the Trade Registry must become operational within the next four months. The authority has not yet issued operating procedures or other guidelines on the functioning of such register, but further instructions are expected soon.
The law mentions that the UBO information may be accessed by:
competent authorities, including the Office for the Prevention of Money Laundering and Terrorism Financing;
reporting entities when applying customer identification measures; and
any person or organisation that can demonstrate a legitimate interest,
as long as data protection regulations are observed. However, no further details are set forth in the law with respect to possibly restricting access to UBO information (e.g. in the event of a juvenile UBO), or whether the exact ownership percentage of an UBO is to be visible, or only a general statement (e.g. ownership above 25%) will suffice.
The affidavit has already been included in the list of mandatory documents for incorporating a company. Moreover, the Trade Registry recently published a standard form affidavit which can be used as a template to fulfil the reporting obligations.