FATF Status

Romania is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Romania was undertaken in 2023. According to that Evaluation, Romania was deemed Compliant for 7 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

MoneyVal Plenary - 1st June 2017: Fourth round follow-up: interim follow-up report by Romania 

Romania’s 4th round MER was adopted in April 2014. Two years later, in April 2016, the country presented a first interim report under the regular follow-up process. The Secretariat noted that, although a number of legislative remedial actions had been prepared, limited concrete progress had been achieved. Romania was asked then to report back at the present Plenary and was encouraged to apply for removal from followup on that occasion. 

At the present Plenary, the Secretariat noted that three key legislative processes were still underway: amendments to the AML/CFT Law aimed at addressing major deficiencies under R.26; a new AML/CFT intended to transpose the 4th EU AML Directive into national legislation; and amendments to the Emergency Ordinance on the implementation of international sanctions. Since none of those draft pieces of legislation were in force by the time it prepared its analysis, the Secretariat was not in a position to conduct a detailed evaluation of progress reported by Romania. However, it noted that the envisaged changes could address a number of significant gaps identified under the core and key Recommendations in the MER. During the Plenary meeting, Romania informed the Secretariat that the amendments to the AML/CFT law had been promulgated by the President of the Republic on 31 May.  

Decision taken:
Considering the expected timeframe for the adoption of the other two pieces of legislation (i.e. by the end July regarding the new AML/CFT law; by end of year regarding the amendments to the Emergency Ordinance), the Plenary asked Romania to report back at the 56th Plenary in April 2018, with a view to applying for exit from follow-up on that occasion. This would be in line with the four-year deadline for exit from follow-up set by the revised Rule 13 of MONEYVAL’s 4th round rules of procedure. 

US Department of State Money Laundering assessment (INCSR)

Romania was deemed a Jurisdiction of Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Romania’s geographical location makes it a natural transit country for trafficking in narcotics, arms, stolen vehicles, and persons by transnational organized criminal groups. As a result, Romania is vulnerable to financial activities associated with such crimes, including money laundering. Romania’s economy remains to a large extent cash-based, and the size of the shadow economy is approximately 22 percent of GDP. Fiscal evasion and proceeds of crime generated in Romania are estimated to be approximately 15 percent of GDP.

Though Romania is not a major financial hub and its exposure to foreign proceeds of crime may be limited, there are nevertheless indicators suggesting that organized criminal groups from the neighboring countries and Italy invest in Romanian assets. Romanian organized criminal groups participate in a wide range of criminal activities in Europe, including prostitution, cigarette smuggling, extortion, and trafficking in narcotics, and have collaborated to establish international criminal networks for internet fraud activities and related money laundering schemes. Romania has some of the highest rates of cybercrime and online credit card fraud in the world. Studies have found Romanian servers to be the second largest source of cybercrime transactions worldwide. Although a majority of their victims reside in the United States, Romanian cybercriminals are increasingly targeting victims elsewhere in Europe as well as in Romania itself.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           46

World Governance Indicator – Control of Corruption             56

Corruption is a serious problem in Romania and raises the risks of doing business in the country. Foreign investors complain of complicated procedures, arbitrary application of rules and requests for bribes when resolving administrative tasks related to business operations. The Romanian Criminal Code and other supporting laws criminalize active and passive bribery, including bribery of foreign officials. A company can be held criminally liable for corruption offenses committed by individuals acting on its behalf. The government, however, does not enforce anti-corruption laws effectively and impunity is widespread. Early 2017 saw large numbers of protesters take to the streets of Bucharest to protest a decree that would have shielded many officials from corruption charges. The decree was ultimately rescinded. Petty corruption is a problem in Romania as irregular payments and bribes are common practice. The law does not distinguish between bribes and facilitation payments, and gifts and hospitality may be considered illegal depending on their intent and the benefit obtained. For further information - GAN Integrity Business Anti-Corruption Portal

Romania welcomes all forms of foreign investment. The government provides national treatment for foreign investors and does not differentiate treatment due to source of capital. Romania’s strategic location, membership in the European Union (EU), relatively well-educated workforce, competitive wages, and abundant natural resources make it a desirable location for firms seeking to access European, Central Asian, and Near East markets. U.S. investors have found opportunities in the information technology, automotive, telecommunications, energy, defense, services, manufacturing, healthcare, consumer products, insurance, and banking sectors.

Since the 1989 revolution, Romania has embarked on an uneven, but ascending, economic growth path. Romania’s economy expressed resilience during the COVID-19 pandemic, declining by only -3.7 percent in 2020 and rebounding to 5.8 percent growth in 2021. On March 9, 2022 Romania lifted all COVID-19 restrictions. Minimal trade and investment ties have limited the direct effects of Russia’s war on Ukraine on the Romanian economy, which grew by an estimated 4.9 percent in 2022. Due to rising regional energy prices exacerbated by Russia’s war, Romania’s annual inflation averaged 13.8 percent in 2022 and rose to 16.4 percent by end-of-year. As of January 2023, Romania had facilitated the export of more than 12.7 million tons of Ukrainian grain.

Romania is eligible to receive up to $81 billion (€77 billion) in EU funding by 2030, including $31 billion (€29 billion) in grants and loans from “Next Generation EU” funding via the National Resilience and Recovery Plan (NRRP) between 2021-2026. NRRP funding aims to support Romania’s green transition, digitalization efforts, and health system resilience. However, a demonstrated lack of administrative capacity to absorb and implement projects using EU funding may impact Romania’s ability to absorb these funds and dampen the NRRP’s impact. The European Commission’s 2022 European Semester Country Report for Romania noted that administrative capacity at all government levels remains a challenge, coordination between institutions was poor, and already weak collaboration between the central government and local administrations was subject to heavy political interference.

In January 2022, the Organization for Economic Cooperation and Development (OECD) opened accession discussions with Romania. The OECD technical review process, a multi-year assessment of Romania’s candidacy against OECD standards and policies in areas such as the investment climate, governance, and environmental protection, began on December 15, 2022.

As an EU member state, Romania’s climate objectives align with EU strategies, including the 2030 Agenda and the European Green Deal. However, legacy environmental issues limit Romania’s ability to deliver on biodiversity and clean air goals. Environmental challenges include poor air quality, inadequate waste management practices, and insufficient protective measures for natural areas. Illegal logging remains a concern despite progress towards improved traceability of extracted wood.

The investment climate in Romania remains a mixed picture, and potential investors should undertake due diligence when considering any investment. The European Commission’s 2022 European Semester Country Report for Romania noted that excessive red tape, inefficient public administration, and an unpredictable legislative framework were detrimental to the business environment and limited investment opportunities.

Government sales of minority stakes in state-owned enterprises (SOEs) in key sectors, such as energy generation and exploitation, have stalled since 2014. Successive governments have weakened enforcement of the SOE corporate governance code by resorting to appointments of short-term interim managers to bypass the leadership requirements outlined in the corporate governance code. Management instability has hindered the abilities of SOEs to plan and invest.

Consultations with stakeholders and impact assessments are required before enacting legislation. However, these requirements have been unevenly followed, and public entities generally do not conduct impact assessments. The government’s shifting priorities often result in rapidly changing policies and legislation, leading to an unpredictable business climate. Romania has made significant strides to combat corruption, but it remains an ongoing challenge.

​Country Links

National Office for Prevention and Control of Money Laundering (ONPCSB)

Romanian Financial Supervisory Authority

National Bank of Romania