What is a Beneficial Owner and How to Declare It in Romania

A recent study found that many of Romanian companies don’t follow beneficial ownership rules.

Romania is working hard to fight money laundering and terrorist financing.

Knowing who the beneficial owner is and how to declare it is key for businesses there.

The beneficial owner, or ultimate beneficial owner (UBO), is the person who really owns or controls a company.

In Romania, Law No. 129/2019 requires companies to reveal their beneficial owners.

This is to boost corporate transparency and follow anti-money laundering (AML) rules.

If a company doesn’t declare its beneficial owner correctly, it could face big fines or even be shut down.

So, it’s vital for business leaders to grasp the rules about declaring beneficial owners in Romania.

They must follow these steps to stay in line.

Key Takeaways

• Beneficial owner refers to the individual who ultimately owns or controls a company;
• Romanian law requires companies to declare their beneficial owners for transparency;
• Non-compliance with beneficial ownership declaration can lead to hefty fines and company dissolution;
• Understanding the legal framework is key for businesses in Romania;
• Proper declaration of beneficial owners ensures AML compliance and prevents sanctions.

Understanding Beneficial Ownership in Romania

Understanding beneficial ownership is key in fighting financial crimes and boosting corporate transparency.

Romania has joined many countries in making companies reveal who really owns them.

This part will explain what a beneficial owner is and why knowing who they are matters in Romania.

Definition of Beneficial Owner

A beneficial owner is the person who really controls a company, even if they don’t own it directly.

They might have a big share of the company or decide who runs it.

This person can hide behind complex structures like shell companies or trusts.

Importance of Beneficial Ownership Transparency

Knowing who owns a company is vital to stop crimes like money laundering and tax evasion.

By making companies reveal their owners, governments can keep an eye on money flows.

This also makes sure all businesses compete fairly.

Transparency is even more critical for offshore companies, where true owners are often hidden.

Romania’s goal is to create a registry that shows who really owns these companies.

This move aims to cut down on financial crimes and increase economic openness.

Legal Framework for Beneficial Ownership Declaration in Romania

Romania has a strong legal framework to fight money laundering and ensure transparency.

Law No. 129/2019 is the main law for this. It has been updated by Law No. 315/2021.

Law No. 129/2019 on Preventing and Combating Money Laundering

Law No. 129/2019 is key for beneficial ownership in Romania.

It requires all legal entities to tell the Trade Register who owns them.

This includes anyone with more than 25% of the company’s shares or voting rights.

Companies must report their beneficial owners when they start and when ownership changes.

Not doing this can lead to big fines or even closing the company.

Amendments Introduced by Law No. 315/2021

In 2021, Romania updated its laws on beneficial ownership.

Law No. 315/2021 made these changes to meet EU standards.

Now, companies with shareholders from high-risk countries must report their beneficial owners every year.

This helps fight money laundering.

The new law also made it clear what information must be in the beneficial ownership report.

This includes names, dates of birth, and ID details.

These changes help authorities check who really owns a company.

Obligations for Legal Entities Registered with the Trade Register

Legal entities in Romania must follow rules to ensure financial transparency.

They need to declare who really owns them.

This is key for keeping accurate records and following “know your customer” rules.

Submitting the Beneficial Owner Statement upon Incorporation

When a new Romanian legal entity is formed, it must submit a beneficial owner statement.

This statement should have certain details:

• Name, date of birth, and personal identification number of the beneficial owner(s);
• Citizenship and country of residence of the beneficial owner(s);
• Nature and extent of the beneficial interest held.

Or, this info can be in the entity’s founding documents.

Updating the Statement Whenever Changes Occur

Legal entities must update their beneficial owner statement within 15 days of any changes.

This keeps the ownership records up to date.

Changes that need an update include:

• Transfer of shares or ownership interests;
• Appointment or removal of beneficial owners;
• Changes in the personal details of beneficial owners.

Annual Statement Requirements for Entities with Shareholders from Specific Jurisdictions

Entities with shareholders from high-risk areas must report annually.

This is even if there are no changes in the year.

This annual report helps keep things transparent.

It also helps fight financial crimes by tracking entities linked to risky places.

By meeting these requirements, legal entities in Romania help keep the beneficial ownership register strong.

This supports the country’s fight against financial crimes and boosts transparency.

Jurisdictions with Fiscal and Money Laundering Risks

When it comes to setting up a company in Romania, some places are seen as high-risk.

This is because they don’t cooperate well with tax laws or are linked to money laundering.

The Financial Action Task Force (FATF) watches these places closely.

They set rules to fight money laundering worldwide.

Companies with owners from these risky places have to report more under Romanian laws.

This is to make things clearer and stop bad uses of companies.

Trusts and other setups from these places also get checked more often.

This is to make sure they follow rules about who really owns them.

The table below lists some of the jurisdictions that are currently considered high-risk from a fiscal or money laundering perspective:

Companies with owners from these places must follow stricter rules in Romania.

Not following these rules can lead to big fines and harm to their reputation.

Getting help from a lawyer in Romania  is a good idea to understand the rules about who owns a company.

Deadline for Submitting the Annual Beneficial Owner Statement

In Romania, companies must follow strict deadlines for their annual beneficial owner statements.

This is key for keeping corporate information transparent and following know your customer (KYC) rules.

If they miss these deadlines, the company could face big problems.

By law, companies in Romania have to send in their annual beneficial owner statement after they approve their financial statements.

This keeps the transparency register current and shows who really owns the company.

15 Days after Approval of Annual Financial Statements

Companies have 15 days after their financial statements are approved to send in their beneficial owner statement.

This is a tight window, as they have to gather and verify information on who owns the company.

This short time frame highlights the need for accurate records of who owns the company.

This includes details on nominee shareholders and any offshore companies.

Companies need to have systems ready to collect and check this information quickly to avoid missing the deadline.

Consequences of Non-Compliance

If a company doesn’t send in its beneficial owner statement on time, it could face serious penalties.

Not following this rule is a big deal and can lead to big fines and other penalties.

The table shows that not following the rules can lead to big fines, from 5,000 to 50,000 lei.

In the worst cases, not following the rules can even mean the company gets shut down.

To avoid these problems, companies need to make sure they send in their annual statements on time.

They must keep detailed records of who owns the company, including any nominee shareholders or offshore companies.

They also need to keep up with any changes in who owns the company.

Penalties for Failing to Comply with Beneficial Owner Declaration

Not following the beneficial owner declaration rules in Romania can cause big problems for businesses.

Romanian companies that ignore these laws might get fined a lot or even shut down.

It’s very important for companies, including those offshore, to follow tax laws and protect their assets.

They must correctly state who owns them, as the law requires.

The penalties for not following the beneficial owner declaration rules are:

Fines Ranging from 5,000 to 10,000 Lei

Companies that don’t file or update their beneficial owner statement on time face fines.

These fines can be between 5,000 to 10,000 lei.

They are meant to make companies be more open and follow the law about who owns them.

Potential Dissolution of the Company

If a company keeps not following the rules, the Trade Register can shut it down.

This shows how serious it is to follow the beneficial owner declaration rules.

Shutting down a company affects its owners and everyone involved, showing why companies must take these rules seriously.

To avoid these problems and stay in good shape, companies should get help from legal experts.

They should know a lot about Romania’s company laws.

With the right advice, companies can deal with the beneficial owner declaration rules, reduce risks, and run smoothly in Romania.

Beneficial Owner and How to Declare It in Romania

Declaring who really owns a company is key in Romania.

This is to keep things transparent and follow the law.

Companies must give out a beneficial owner statement with certain details and follow specific steps to submit it.

The beneficial owner statement needs to have some important information for each owner:

• Full name;
• Date and place of birth;
• Personal identification number;
• Nationality;
• Residential address.

The statement also has to say how each owner controls the company.

This could be through shares, voting rights, or other ways.

This info helps meet due diligence needs and lets authorities know who really owns the company.

Signing and Submission Options

Companies have a few ways to sign and send in the beneficial owner statement:

The choice of signing and sending method depends on what the company prefers and who can sign.

It’s important to make sure the statement is right, complete, and sent on time.

This avoids fines under Romanian law.

By properly declaring who owns a company and keeping records up to date, businesses show they are serious about being transparent.

This helps avoid money laundering and other financial crimes.

It also builds trust and makes doing business in Romania easier.

Importance of Compliance with Beneficial Ownership Regulations

Following beneficial ownership rules is key for companies in Romania.

It keeps things transparent and avoids penalties.

By following the law on beneficial ownership identification and sharing this info, businesses show they care about being responsible.

This also helps stop bad activities like money laundering.

It’s important for companies to check themselves often to stay in line with reporting obligations.

They need to watch for changes in who owns the company.

Then, they must tell the right people about these changes right away.

Not doing this can lead to big fines and harm to their reputation.

Preventing Sanctions and Ensuring Transparency

Companies in Romania can avoid big problems by following beneficial ownership disclosure rules.

Here are some sanctions they might face if they don’t:

Being open about who really controls a company is not just the law.

It’s also a way to gain trust from everyone involved.

By sharing who benefits from the company, businesses show they are honest and follow ethical rules.

Periodic Verification of Compliance

To keep up with Romanian corporate compliance, companies should check themselves often.

They might need help from experts sometimes.

This makes sure all info about who owns the company is correct and shared as needed.

By focusing on following beneficial ownership rules, companies in Romania can work with confidence.

They know they are doing the right thing and helping make business more open.

Getting help from legal and corporate experts can be very useful in dealing with these rules and staying compliant.

Legal Advisory and Corporate Consultancy Services for Beneficial Owner Declaration

Understanding beneficial owner identification and declaration in Romania can be tough.

Companies want to be clear about who owns them.

Legal advisors and corporate consultants can help a lot.

They make sure companies follow anti-money laundering rules in Romania.

Legal experts in Romania help companies find their ultimate beneficial owners.

This is key to meeting legal needs.

They help gather documents, check information, and make sure the beneficial owner statement is right and on time.

Legal advisors also help with ongoing compliance.

They watch for changes in ownership and update the registry as needed.

They offer advice on keeping company operations transparent.

Working with legal and corporate consultants shows a company’s commitment to transparency.

It helps avoid risks and supports a fair business environment in Romania.

Getting professional help gives companies peace of mind.

It lets them focus on their main work while following legal rules on beneficial ownership.

Conclusion

It’s very important for companies in Romania to follow beneficial ownership reporting rules.

By revealing who really owns them, businesses show they care about being open.

This helps fight money laundering too.

Law No. 129/2019 and its updates set out how to report beneficial owners.

Companies need to know their duties.

This includes filing statements when they start, update them when things change, and report yearly if needed.

If they don’t follow these rules, companies could face big fines or even shut down.

Getting help from legal experts and corporate consultants is a good idea.

They can help understand the rules, make sure statements are right, and keep up with changes.

This way, companies can stay safe, avoid trouble, and help make business more open in Romania.

FAQ

What is a beneficial owner?

Why is it important to declare the beneficial owner in Romania?

What is the primary law governing beneficial ownership declaration in Romania?

When must legal entities submit the beneficial owner statement?

What are the additional requirements for entities with shareholders from specific jurisdictions?

What is the deadline for submitting the annual beneficial owner statement?

What are the penalties for non-compliance with beneficial owner declaration?

What information must be included in the beneficial owner statement?

How can legal entities ensure compliance with beneficial ownership regulations?

What services can assist with beneficial owner declaration?

New Whistleblowing Law in Romania: Protecting Whistleblowers in Public Interest

Have you ever wondered how Romania is boosting corporate transparency and fighting corruption?

The answer is in its new whistleblower law.

This law is a big change for Romania, giving strong protection to those who report wrongdoings.

Law No. 361/2022 started on December 22, 2022.

It sets up a full system to protect whistleblowers in Romania.

It covers both public and private areas, following EU Directive 2019/1937.

It wants to make it safe for people to report wrongdoings at work.

Now, companies with 50 or more workers must have ways for reporting.

Companies in finance and insurance must do this, no matter their size.

The law also says reports must be kept for five years, keeping things honest and open.

Not following the law can cost a lot.

Companies might face fines up to EUR 8,000 for not having the right reporting ways.

The law also protects whistleblowers from being unfairly treated, with fines up to EUR 8,000 for things like unfair firing.

These steps show Romania’s strong push for honesty and openness in all areas.

Key Takeaways

• Law No. 361/2022 applies to both public and private sectors in Romania;
• Companies with 50+ employees must establish internal reporting channels;
• Fines up to EUR 8,000 for non-compliance with reporting obligations;
• Protection against retaliation for whistleblowers;
• Five-year record-keeping requirement for valid reports;
• Specific sectors face obligations regardless of company size.

Understanding the Whistleblower Law Romania Framework

Romania has introduced new laws to boost corporate transparency and ethical governance.

Law No. 361/2022 started on December 22, 2022.

It sets up a detailed system for reporting public interest issues in Romania.

Overview of Law No. 361/2022

This law aims to make Romania’s anti-corruption efforts stronger.

It protects those who report wrongdoing in different fields.

It includes workers, freelancers, shareholders, and more.

The law deals with issues like public contracts, finance, product safety, and the environment.

Implementation Timeline and Scope

Romania is now the tenth EU country to have this law.

The Chamber of Deputies voted 190-0 in favor, showing strong support.

Companies with 50 or more workers must set up reporting systems by December 17, 2023.

Alignment with EU Directive 2019/1937

Law No. 361/2022 follows EU Directive 2019/1937.

It sets up both internal and external reporting paths.

It also explains what retaliation and designated persons mean.

The National Integrity Agency is key in making sure these rules are followed in Romania.

Who Qualifies as a Protected Whistleblower

Romania’s new law, Law No. 361/2022, protects many people.

It makes sure workers and others can speak up without fear.

This law helps keep workplaces honest and fair.

It covers employees, freelancers, and even company owners.

It also protects volunteers, trainees, and those working for contractors.

The goal is to make it safe to report fraud without facing backlash.

Even anonymous tips with solid evidence are okay under this law.

This lets people report wrongdoings without fear of being found out.

It helps create a culture of honesty in Romanian workplaces.

Types of Reportable Violations and Breaches

Romania’s whistleblower protection law covers many types of violations.

It aims to find and fix wrongdoings in different areas.

Let’s look at the main categories of violations under this law.

Public Interest Violations

Public interest disclosures are key in Romania’s whistleblower law. These include:

• Tax fraud and money laundering;
• Public procurement offenses;
• Product and road safety issues;
• Environmental protection breaches;
• Public health concerns;
• Consumer and data protection violations.

Corporate Misconduct Categories

The law also deals with corporate misconduct. It covers:

• Financial irregularities;
• Corruption and bribery;
• Fraud;
• Violations of internal policies;
• Bullying and harassment;
• Threats to health and safety.

Legal Framework Violations

The law in Romania also covers breaches of EU and national laws.

Some key areas include:

• Network security breaches;
• Data protection violations;
• Infringements of financial services regulations;
• Breaches of privacy regulations;
• Violations of labor laws.

Romania offers protection and rewards for whistleblowers.

This helps keep integrity in many sectors.

It also encourages a culture of responsibility.

Internal Reporting Mechanisms and Requirements

Romania’s new law makes it easier to report wrongdoing.

Companies with 50 or more workers must have a whistleblower hotline.

This is to follow Romanian anti-corruption laws.

Mandatory Reporting Channels

Companies must create internal reporting systems.

Those with 250+ employees had to do this by 2023.

Companies with 50-249 employees have until December 17, 2023.

The law requires different ways to report, like writing, talking, or using digital tools.

Documentation Requirements

Keeping detailed records is key under the new law.

Employers must keep all whistleblower reports for at least five years.

This helps with investigations and keeps things transparent.

Confidentiality Measures

The law stresses keeping reports secret to protect whistleblowers.

Companies must protect data well and only use personal info when needed.

While you can report anonymously, it must clearly show wrongdoing.

External Reporting Procedures and Authorities

Romania’s new law protects whistleblowers who report outside their company.

You can tell the National Integrity Agency or other bodies if your company won’t listen.

This is for when your company’s rules don’t work or aren’t there.

The law says when you can share information publicly.

This is when there’s a big risk to the public or serious harm could happen.

Knowing these rules is key for those who want to protect themselves under Romanian law.

Authorities must follow strict rules to handle reports:

• They must say they got your report in 7 days;
• They should tell you what they’re doing about it in 3 months;
• They must keep your identity secret.

Romania also has strong rules to stop companies from punishing whistleblowers.

These rules help keep things honest in both public and private places.

Protection Measures Against Retaliation

Romania’s whistleblower law has strong protections against retaliation.

It aims to keep those who report wrongdoings safe from negative outcomes.

This is key to making sure more people speak up.

Employment Safeguards

The law protects whistleblowers from many workplace issues.

You can’t be unfairly fired, suspended, or have your job changed.

Your pay and job tasks can’t be messed with as punishment.

These rules help keep whistleblower rights safe in Romania.

Legal Remedies

If you face backlash, you have legal ways to fight back.

The law gives you immunity from legal trouble because of your report.

This lets whistleblowers speak out without fear of legal problems.

Compensation Rights

Whistleblowers in Romania can get compensation for harm caused by retaliation.

If you’re wrongly fired, you can ask to be rehired.

These rights show Romania’s dedication to protecting those who report wrongdoings.

Corporate Compliance Obligations

Romanian whistleblower policies are now key to ethical business.

The new law changes how companies handle whistleblowing.

It requires them to improve their integrity.

Implementation Requirements for Companies

Companies with over 249 employees must set up internal reporting channels within 60 days.

Those with 50-249 employees have more time, 1-2 years.

Not following these rules can lead to fines.

The law also points to digital platforms for reporting.

This shows how complex compliance can be.

Record-Keeping Standards

Businesses need to keep records of all valid reports for five years.

This makes things transparent and helps Romanian whistleblower policies work better.

Companies should check their systems or get new ones to meet these standards.

Training and Awareness Programs

Companies must teach employees about their rights and how to report.

These programs help build a culture of ethics.

They encourage reporting of wrongdoings.

Companies can avoid fines by improving their internal procedures.

This not only meets legal requirements but also boosts their integrity.

Penalties and Enforcement Measures

The Romanian whistleblower act has strict penalties to make sure everyone follows the rules.

Companies that don’t set up internal reporting channels can face fines from RON 2,000 to RON 40,000.

This is about EUR 400 to EUR 8,000, showing how important it is to follow corporate governance rules.

Breaking the whistleblower protection rules can lead to big problems.

Trying to stop someone from reporting or sharing confidential information is a serious crime.

The law also has fines for false reporting, from RON 2,500 to RON 30,000 for knowingly lying.

This balance helps protect real whistleblowers and stops others from abusing the system.

Harsh penalties are given to those who retaliate against whistleblowers, up to RON 40,000 (EUR 8,000).

This shows the law’s strong commitment to protecting those who speak out.

Romania’s enforcement measures match EU standards, making a strong system for whistleblower compensation and protection.

With these strict penalties, Romania wants to build a culture of openness and responsibility in both public and private areas.

In conclusion, the implementation of Law No. 361/2022 is a pivotal step for Romania, reinforcing the role of legal professionals in promoting ethical practices within organizations.

Engaging with a knowledgeable lawyer in Romania can empower whistleblowers to take action without fear, ultimately contributing to a more transparent and accountable society.

For individuals seeking legal assistance, a Romanian lawyer can provide invaluable guidance on navigating this new legal landscape. A Romanian law office specializing in whistleblower cases can help clients understand their rights and obligations under this law, ensuring that they are protected when reporting wrongdoing.

The establishment of these legal frameworks not only enhances workplace integrity but also encourages a culture where speaking out against corruption is both safe and supported.