The National Office for Preventing and Combating Money Laundering (Oficiul Național de Prevenire și Combatere a Spălării Banilor, or ONPCSB) is Romania’s financial intelligence unit. Its mission is to prevent and fight money laundering and the financing of terrorism, and to this end it receives, analyses and processes information. When it finds consistent indications of money laundering or terrorist financing, the ONPCSB reports them to the Prosecutor’s Office of the High Court of Cassation and Justice or the Romanian Intelligence Service, as the case may be.
Under Law No. 656/2002, as early as 1999 the ONPCSB started operating as a specialised incorporated body that reports to the Government and is coordinated by the Prime Minister.
Credit institutions, financial institutions, Romania-based branches of foreign institutions, managers of private pension funds, auditors providing fiscal and accounting advice, associations, foundations and others have certain reporting obligations to the ONPCSB.
By law, they are bound to report operations in cash – RON or foreign currency – or external transfers amounting to the RON equivalent of EUR 15,000 or above, regardless of whether the transaction consists of one or several operations appearing to be related.
The law expressly provides that the ONPCSB processes and uses such information on a confidential basis, and the professional and banking secrecy of individuals with reporting obligations is not enforceable against the Office.
Obligations or possible solutions?
Obviously, monitoring financial operations is only intended to prevent and combat certain illegal acts, so individuals with reporting obligations also have a diligence duty, which translates into business partner screening measures.
Even if its own fiscal behaviour is appropriate, inappropriate fiscal behaviour by business partners or other third parties along the business chain could see any company run the risk of being drawn against its will into a “tax avoidance carousel” or “a complex mechanism of money laundering”; against this backdrop, planning in advance could actually lead to implementing effective preventive measures.
In so doing, any entity acting in good faith should get to know its new business partners, and even long-standing ones.
In this respect, some of the reporting entities’ obligations or the adjustment of such obligations to the business purpose of each separate entity may operate as effective preventive measures in the form of internal procedures for risk management.
Such actions relate to (i) identifying the client and checking its identity against documents; (ii) examining the client’s reputation against information from public sources; (iii) if the case and, where possible, identifying the actual beneficiary and checking the identity thereof, so that the obtained information will enable an understanding of the ownership and control structure of the legal entity client; (iv) examining the reputation of the actual beneficiary or of the components making up the ownership structure of the legal entity client; (v) using public information, examining the source of the income and of funds involved in the business relationship; and (vi) avoiding business relationships that favour anonymity.
The saying “moral ethics should prevail over professional ethics” may be particularly relevant to investigations potentially conducted by judicial bodies, and if professional ethics are doubled by moral ethics, one may say that prevention has achieved its goal and the fighting process has become devoid of purpose.
Mircea TEIS, Senior Associate Specialising in Criminal Law with Țuca Zbârcea & Asociații