Update: Foreign Ministry provides explanations after the EC has sued Romania for not implementing anti-money laundering rules

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The Romanian Foreign Affairs Ministry (MAE) has issued a communiqué on Friday, regarding the European Commission decision to sue Romania for not implementing the anti-money laundering rules. MAE argues this is a ‘standard procedure’ and that a draft bill to implement the directive is under debate by the Senate.

“The European Commission decision (…) is a standard procedure, in the cases in which a Member State does not notify the European institution in due time about the national normative act transposing, in full, the European legislative act. Until now, the European Union Court of Justice has not communicated to the Romanian authorities an introductive request by the European Commission. The filing by the EC of this request to the Court is a different procedure, consequent to the one notifying the European Court,” MAE informs.

The Ministry argues that if Romania assumes a clear schedule to coordinate the national legislation with the EU standards in terms of money laundering, then the EC may decide to postpone the notification to the EUCJ. MAE says there is a draft bill approved by the Government on May 31, on debate by the Senate.

MAE further informs that it has completed the judicial assessment of the normative act in view of compatibility with the EU legal framework, being consulted by the draft initiators during the ministerial approval procedure and contributing, with actual proposals, to the complete legislative harmonization of the analysed draft with the EU directive.

EC sues Romania and Greece

The European Commission on Thursday has referred Romania and Greece to the Court of Justice of the EU for failing to implement the 4th Anti-Money Laundering Directive into their national law. Ireland implemented only a very limited part of the rules and is therefore also referred to the Court of Justice.

The Commission proposed that the Court charges a lump sum and daily penalties until the three countries take the necessary action.“Money laundering and terrorist financing affect the EU as a whole. We cannot afford to let any EU country be the weakest link. Money laundered in one country can and often will support crime in another country. This is why we require that all Member States take the necessary steps to fight money laundering, and thereby also dry up criminal and terrorist funds. We will continue to follow implementation of these EU rules by Member States very closely and as a matter of priority,” said Věra Jourová, Commissioner for Justice, Consumers and Gender Equality.

The Member States had until 26 June 2017 to transpose the 4th Anti-Money Laundering Directive into their national legislation. These rules reinforce the previously existing rules by: strengthening the risk assessment obligation for banks, lawyers, and accountants; setting clear transparency requirements about beneficial ownership for companies; facilitating cooperation and exchange of information between Financial Intelligence Units from different Member States to identify and follow suspicious transfers of money to prevent and detect money laundering or terrorist financing; establishing a coherent policy towards non-EU countries that have deficient anti-money laundering and counter-terrorist financing rules; reinforcing the sanctioning powers of competent authorities.

Meanwhile, in the wake of the Panama Papers revelations and the terrorist attacks in Europe, the Commission proposed a 5th Anti-Money Laundering Directive to further step up the fight against money laundering and terrorist financing.

These new rules aim at ensuring a high level of safeguards for financial flows from high-risk third countries, enhancing the access of Financial Intelligence Units to information, creating centralised bank account registers, and tackling terrorist financing risks linked to virtual currencies and pre-paid cards. These new rules entered into force on 9 July 2018 following its publication in the EU’s Official Journal and Member States will have to transpose the 5th Anti-Money Laundering Directive into national legislation by 10 January 2020.

In July 2017 the Commission opened infringement proceedings for non-communication of the transposition measures and sent a letter of formal notice to sixteen Member States, who had either not notified any measures (Bulgaria, Cyprus, Estonia, Greece, Finland, Hungary, Luxembourg, Latvia, Malta, the Netherlands, Poland, Portugal, Romania) or whose measure were not satisfactory (Ireland, Lithuania, Slovakia).

Last December 2017- 8 Member States (Bulgaria, Cyprus, Greece, Luxembourg, Malta, the Netherlands, Poland and Romania) had not yet notified any transposition measure. The Commission therefore sent them a reasoned opinion.

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