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?

Business Crime Laws and Regulations Report 2024: Romania Insights

If you own a business in Romania, knowing the laws and how they apply to business crimes is key.

Crimes like securities fraud, accounting mistakes, bribery, and breaking competition laws can lead to big problems.

It’s important to understand your legal duties and the risks your business might face.

This knowledge helps with managing risks, preventing fraud, and following the law.

Key Takeaways

• Get to know the laws and rules about business crimes in Romania, like the Romanian Criminal Code and anti-corruption laws.
• Find out who looks into and charges business crimes, such as the National Anticorruption Directorate (DNA) and the Financial Guard.
• Know how the criminal courts in Romania work and how they decide where to handle business crimes.
• Be aware of the laws used to tackle securities fraud, accounting fraud, bribing officials, and other business crimes.
• Use strong controls, whistleblower policies, and anti-corruption steps to lower your legal and reputation risks.

Legal Framework for Business Crimes in Romania

Romania has a strong legal system for business crimes.

The Criminal Code is the main law, along with laws for specific crimes.

The country has signed major anti-corruption treaties, showing its fight against bribery and corruption.

Key Laws and Regulations

The main laws for business crimes in Romania are:

• The Criminal Code, which lists criminal acts in business
• Law No. 78/2000 for preventing, detecting, and punishing corruption
• Sectoral laws for crimes like securities fraud, tax evasion, and competition violations

Definition of Bribery and Corruption

In Romania, bribery means giving or promising money or benefits to someone who can influence official actions.

This can be direct or indirect.

Passive bribery is when a public official asks for or takes these benefits.

Corruption includes crimes like influence peddling and buying influence.

Romania’s laws cover a wide range of illegal acts, from fraud to bribery.

Knowing the laws and what bribery and corruption mean helps business owners follow the rules.

This way, they can avoid criminal charges.

Authorities Prosecuting Business Crimes

In Romania, the main groups that handle business crime cases are the regular Prosecutor’s Offices (POs) and the Judicial Police.

They get help from specialized units like the National Anticorruption Directorate (NAD) and the Directorate for Investigating Organized Crime and Terrorism (DIICOT).

These units have offices in many places.

Who gets to investigate a crime depends on the crime type and the accused’s status.

National and Regional Enforcement Agencies

The Romanian authorities for fighting business crimes include the Romanian Anti-corruption Directorate (DNA), the General Anti-corruption Directorate (DGA), the Directorate for the Fight against Fraud (DLAF), and the National Integrity Agency (ANI).

The DNA looks into big corruption cases, like those involving stolen European Union funds.

The DGA fights corruption across the country and uses judicial police. The DLAF works under the Prime Minister and helps fight fraud in Europe.

The ANI checks the money and interests of public officials to find wrongdoings and conflicts of interest.

Jurisdictional Determinations

Who gets to investigate a crime usually depends on where it happened.

But, the PO and the High Court of Cassation and Justice can take over cases of certain people or complex issues.

This is even if they’re not usually in charge.

Sometimes, different groups can investigate the same case if there’s no single database for all crimes in Romania.

Structure of Criminal Courts in Romania

The Romanian criminal court system is set up with a focus on where cases are heard.

The main courts for criminal cases, like business crimes, are the Ordinary Courts, Tribunals, and Courts of Appeal.

Romania has no special criminal courts, but military courts handle cases for military personnel.

At the start, the Ordinary Courts deal with a wide range of criminal cases.

They handle cases related to businesses too.

Then, the Tribunals take on more serious criminal cases, including business-related ones.

The Courts of Appeal review appeals from the Tribunals.

At the top, the High Court of Cassation and Justice is the highest court.

It makes sure the law is applied the same everywhere in Romania.

Romania’s courts follow a system where professional judges make the decisions.

There are no juries involved.

Understanding the structure and roles of Romania’s criminal courts is key for businesses.

It helps them deal with legal issues and criminal matters that might come up.

Common Statutes for Prosecuting Business Crimes

Securities Fraud and Insider Trading

Romanian law makes it clear that securities fraud and insider trading are serious crimes.

These include lying about a company’s finances and using secret information for personal gain.

Such actions must show a clear intent to break the law and are covered by specific laws.

Accounting Fraud and Embezzlement

Creating false financial records is a crime under Romanian law.

This includes making up fake income, expenses, or assets.

Other crimes include fraudulent management and bankruptcy.

All these crimes need to show a clear intent to commit fraud.

Bribery of Government Officials

Bribing public officials is a big no-no in Romania.

It includes both giving and taking bribes.

Other crimes are trying to influence decisions and buying influence.

The law also covers embezzling EU funds and adds more serious charges for certain crimes.

Business owner guide criminal offenses Romania

If you own a business in Romania, knowing the laws about tax crimes and competition violations is key.

These laws can lead to big fines and long prison times.

Tax Crimes and Evasion

In Romania, tax fraud is covered by Law No. 241/2005.

It includes things like making false income or expense reports, not reporting real business activities, hiding money, or making fake accounting records.

These actions need to be intentional and can lead to up to 15 years in prison if the tax evasion is over €500,000.

Competition Violations and Cartels

Romanian law also tackles unfair business practices.

This includes using fake business names, selling goods with false brand names, or sharing business secrets through spying (Article 5 of Law No. 11/1991).

Cartels that try to stop, limit, or change competition are also illegal under Article 65 of Law No. 21/1996.

Businesses in Romania need to follow these laws closely to avoid legal trouble.

Getting legal advice from a specialized lawyer in Romania can help you understand the rules better and lower the risk of breaking them.

Government Contracting Fraud

In Romania, crimes linked to government contracts and misuse of public funds are handled by the Criminal Code and Law No. 78/2000 on anticorruption.

These crimes include altering public procurement, embezzling EU grants, and using office for personal benefit.

A 2019 study by the National Anticorruption Directorate (DNA) found that most EU fraud in Romania from 2015 to 2018 was about misusing agricultural subsidies.

Criminals used fake lease contracts, forged signatures, and false declarations to get subsidies.

Public procurement makes up a big part of many countries’ economies, around 15% to 30% of GDP.

The United Nations Office on Drugs and Crime says up to 25% of a contract’s value can be lost to corruption.

In Eastern Europe, investigations have shown issues like overcharging, no competition, and contracts going to connected companies.

The Romanian government has started to fight these issues.

It set up the National Anticorruption Directorate (DNA) in 2003 and made laws against EU financial fraud.

But, more efforts are needed to make sure public funds are used fairly and transparently.

Romanian law makes it illegal to steal or misuse important economic secrets.

It also covers various crimes linked to organized crime.

This includes sharing, taking, or using secrets from companies without permission (Article 5 of Law No. 11/1991).

Financial Fraud and Money Laundering

In Romania, financial fraud crimes like taking assets without right, making false accounts, and taking money for oneself are serious.

The country has strong laws against money laundering.

This includes Law No. 129/2019, which follows the EU’s 5th AML Directive.

It’s important for businesses in Romania to follow these money laundering laws.

Anti-Money Laundering Regulations

Romania’s laws aim to stop money laundering and terrorist financing through the financial system.

Banks, financial groups, and some businesses must check who they work with, report strange transactions, and keep records.

Not following these rules can lead to big fines and other punishments.

• The maximum penalty for individuals convicted of money laundering in Romania is 3 to 10 years of imprisonment.
• Legal entities can face fines ranging from RON 18,000 to RON 1,500,000 for money laundering offenses.
• Tax evasion, embezzlement, fraud, and bribery are common predicate crimes for money laundering in Romania.
• The National Agency for the Management of Seized Assets (NAMSA) was established in 2015 to help recover assets and manage seized assets.

To fight financial fraud and money laundering in Romania, we need a strong plan.

This includes enforcing money laundering laws, recovering stolen assets, and working with other countries.

By knowing the laws and the latest trends, Romanian business owners can protect their businesses and follow the law.

IP Infringement and Industrial Property Crimes

Protecting your business in Romania means knowing about IP infringement and industrial property crimes.

The Romanian Criminal Code and other laws make it illegal to make, import, distribute, or sell fake products with someone else’s trademark without permission.

IP infringement and industrial property crimes can lead to financial gain by misusing patents, trademarks, and other industrial property.

Romanian businesses must protect their intellectual assets to avoid counterfeit goods and trademark violations.

Recently, Romania has seen a lot of IP infringement Romania and industrial property crimes Romania.

These crimes have caused big losses, especially in music, movies, and software sectors.

To fight these crimes, Romania has set up agencies and courts to handle IP cases.

Businesses need to keep up with the latest laws and work with these groups to protect their intellectual property.

Knowing the laws and taking steps to protect your IP can help Romanian business owners avoid IP infringement and industrial property crimes Romania.

Being alert and working with authorities can keep your business successful and competitive in Romania.

Conclusion

As a Romanian business owner, knowing the laws about business crimes is key.

You should learn about laws for things like securities fraud, accounting fraud, and bribery.

Also, understand laws on tax evasion, competition violations, and more.

Knowing who enforces these laws and how courts work helps you protect your business.

By having strong rules inside your company, you can deal with legal issues better.

This keeps your business safe from legal trouble.

Always focus on following the law and reducing risks for your business.

By being careful and following Romanian business laws, you can make your company successful and grow.

This is important in the changing Romanian business world.

Understanding Contract Breaches in Romania: What You Need to Know

Contract breaches can be frustrating and lead to potential legal disputes.

In this article, we will dive into the topic of contract breaches in Romania to help you understand your rights and options when dealing with such situations.

What is a Contract Breach?

A contract breach simply means that one party fails to fulfill their obligations as outlined in a legally binding agreement.

It can involve various scenarios, such failing to deliver goods or services, not meeting project deadlines, or violating specific terms and conditions stated in the contract.

When a breach of contract occurs under the stipulations of the Romanian Law, the non-breaching party may seek legal remedies to address the situation appropriately.

Types of Contract Breaches in Romania

In Romania, contract breaches can be classified into two main types: material breaches and minor breaches.

• Material Breaches:

A material breach is a significant violation of the contract that goes to the core of the agreement.

It occurs when the breaching party’s actions or omissions substantially prevent the other party from receiving the benefits they were entitled to under the contract.

Material breaches often give rise to substantial legal remedies for the non-breaching party.

• Minor Breaches:

A minor breach, also known as a partial breach, refers to a lesser violation of the contract’s terms.

While it does not fundamentally undermine the purpose of the agreement, it still represents a failure to perform certain obligations. In such cases, the non-breaching party may be entitled to seek limited remedies, such as damages or specific performance.

Legal Remedies for Contract Breaches in Romania

When a contract breach occurs in Romania, the non-breaching party has several legal remedies available to properly address the situation. Let’s explore some of the common remedies:

• Damages:

The non-breaching party may seek monetary compensation to cover any financial losses incurred due to the breach. The damages aim to put the injured party in the position they would have been in had the breach not occurred.

• Specific Performance:

The non-breaching party may request the court to order the breaching party to fulfill their contractual obligations as originally agreed. This remedy is typically sought when the subject matter of the contract is unique.

• Contract Termination:

In severe cases, the non-breaching party may choose to terminate the contract, releasing both parties from their obligations. However, reviewing the contract terms and consulting legal counsel is crucial before termination.

• Seeking Legal Assistance:

Dealing with contract breaches in Romania can be complex, so seeking legal assistance from an experienced Romanian attorney is advisable to protect your rights and interests.

Minimizing Contract Breaches in Romania

While understanding remedies is essential, it’s equally important to take preventive measures to minimize the chances of a breach occurring in Romania in the first place:

• Draft Clear and Precise Contracts: Ensure contracts clearly define the rights, obligations and expectations of all parties involved to avoid disputes.
• Perform Due Diligence: Research the other party thoroughly before entering into a contract to reduce the risk of unreliable partners.
• Include Dispute Resolution Clauses: Consider including mediation or arbitration clauses to resolve disputes efficiently, without going to court.
• Regularly Review and Update Contracts: Review contracts periodically to ensure they reflect any changes in laws or regulations that may impact the agreement.

In summary, understanding contract breaches in Romania is key to protecting your rights and navigating disputes.

Seeking legal assistance from qualified Romanian attorneys ensures you can address any contract breaches effectively, while preventive measures help minimize breach occurrences.