Romania has a new Law on the prevention and combating of money laundering and terrorist financing as well as the amending and supplementing of various normative acts which entered into force on 21 July 2019, thus replacing Law no. 656/2002. There are also changes about the obligation to register with the Register of Real Beneficiaries of Companies by July 2020, as published in the Official Gazette of Romania on July 18, 2019. Legal Advisor Cristina Gheorghita, partner at TPA Romania knows all the details.
Transactions of EUR 10,000 must be reported
According to the new legal provisions, besides the obligation to report suspicious transactions, reporting entities must now also report to the National Office for the Prevention and Control of Money Laundering all cash transactions,
- whether in RON or foreign currency,
- equal to or greater than the RON-equivalent of EUR 10,000
- within 3 working days of the transactions taking place.
This obligation also existed under the previous regulation, but the minimum limit was then set at EUR 15,000.
Who needs to report transactions?
Reporting entities include, among others, credit institutions, financial institutions, private pension fund managers, providers of gambling services, auditors, expert accountants and authorised accountants, censors, tax advisers, financial advisers, business advisers or accounting advisers, public notaries, lawyers, bailiffs and other persons exercising liberal legal professions, service providers for companies or trusts, real estate agents and other entities and individuals who trade professionally in goods or services to the extent to which they perform cash transaction, with the obligation to report applying to transactions equal to or greater than the RON-equivalent of EUR 10,000, regardless of whether the transaction is performed as a single operation or as number of linked transactions.
Obligate Registry of the Real Beneficiaries of Companies
The new law also obliges companies registered with the Trade Register prior to 21 July 2019, with the exception of national companies and companies wholly or majority owned by the state, to submit, through their legal representatives, within 12 months of the entry into force of the new laws, a statement regarding the identification data of the ultimate beneficial owners of the companies with a view to registration with the Registry of the Real Beneficiaries of Companies kept by the National Trade Register Office.
Non-compliance with this obligation by the manager representing the company is a contravention of the law and is punishable by a fine of between RON 5,000 and 10,000. The register of real beneficiaries will become operational within 120 days of the entry into force of the new law.
Changes for bearer shares
In addition, following the entry into force of Law 129/2019, it will be forbidden to issue new bearer shares and carry out operations with existing bearer shares. Bearer shares issued prior to the entry into force of this law will have to be converted into nominative shares and the updated articles of incorporation of the company will need to be filed with the Trade Register Office.
Holders of bearer shares must submit them at the headquarters of the issuing company within 18 months of the date the law came into effect. Upon expiry, any bearer shares not submitted will be cancelled by law, with a consequent reduction to the value of the share capital. Non-fulfilment of the conversion obligation by joint-stock companies and limited partnerships with share capital will result in their dissolution.