The directive concerning money laundering should have been implemented in all member states by 26th June 2017. In July 2018, unjustified delays even led to the European Commission initiating an infringement procedure against Romania. After long discussions about exemption clauses in favour of political dignitaries, the Romanian Parliament finally shaped the implementation law on 24th October 2018; a final version is expected soon after the adoption of an amendment regarding an unconstitutional provision about minority organisations.
The most important news of such piece of legislation refer to the elimination of bearer shares, the creation of special registers for beneficial owners of companies established in Romania, and the related detailed reporting obligations.
In contrast to nominal shares, bearer shares (actiuni la purtator) are anonymous value papers that certify the right to a part of the capital stock held by a stock company. These shares can be owned and transferred anonymously. As soon as the implementation law comes into force, issuing bearer shares will no longer be allowed, in order to ensure complete transparency over shareholders of Romanian stock companies. All bearer shares issued before the law comes into force will turn into nominal shares. Several EU member states (e.g. Austria, Belgium, Czech Republic, Croatia, Denmark, Spain) have already adopted similar solutions.
The beneficial owner
The beneficial owner (beneficiarul real) is the natural person who ultimately owns or runs the company, and/or the natural person who orders a transaction or activity. Usually in the banking sector it is considered that a holding of at least 25% in the capital of a company turns a natural person into the beneficial owner.
Obligations over information and notarised statement; penalty
Companies and other legal persons (e.g. foundations and associations) registered in Romania must obtain and preserve precise and updated information about their beneficial owner, including accurate data about the economic interest. For companies, this information is saved in a register for beneficial owners (Registrul Beneficiarilor Reali ai Societatilor) at the Commercial Register.
All companies must submit a declaration on the beneficial owner at the Commercial Register either annually or, in case a change occurs in this respect, during the year. Such declaration is made in front of a representative of the Commercial Register or in authenticated form by the legal representative of the company. Who may act either in person or through a proxy.
The period of time for submitting the declaration is 15 days following either from the approval of the annual financial statement or the date on which changes to the beneficial owner occur. Failing to observe this time limit leads to a fine of 5,000-10,000 RON. Should the legal representative of the company fail to submit the declaration within the additional period of 30 days following the imposition of the fine, the company may even be subject to judicial liquidation.
For companies established before the law comes into force, there is a transition period of 12 months for the submission of this declaration. The exact procedure will be explained within 180 days following the law’s coming into force.
Conclusion and Outlook
By implementing the directive on the prevention of money laundering, more transparency over the beneficial owners of Romanian Companies should be gained. Besides the reporting obligations imposed on banks and other economic agents, shareholders shall be observed more closely. Failing to fulfill companies’ declaration obligations will lead – in the worst case – to their liquidation.
Implementing the fourth directive on the prevention of money laundering is far from putting an end to this subject. By 10th January 2020 the fifth directive on money laundering will be implemented; this will intensify regulations in the context of the scandal over the Panama Papers and financing of terrorist groups involved in the attacks in Paris and Brussels. A sixth directive, not yet published, will complement the criminal provisions of the fifth directive.