IDENTIFICATION OF THE BENEFICIAL OWNER OF THE COMPANY AND/OR NGO

In July, the Romanian Government amended Act No 129/2019 on the prevention and combating of money laundering and terrorist financing in order to integrate Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, Amending Regulation (EU) No 648/2012 of the European Parliament and of the Council and repealing Directives 2005/60/EC of the European Parliament and of the Council and of the Commission 2006/70/EC, published in the Official Journal of the European Union, L series, No 141 of 5 June 2015; And Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU on access to anti-money laundering information by tax authorities, published in the Official Journal of the European Union, L series, No 342 of 16 December 2016.

The most important changes made by this law are:

  1. Identification of the beneficial owner of the company and/or NGO

The identification of the beneficial owner has always been the subject of verification during any tax inspection of the company or in the commercial context with a Romanian or EU bank. Moreover, the concept of the beneficiary is not modified by this new law. What Law No 129/2019 brings is the need for the registration of natural persons who control an entity, in the new Registers, that will keep the real beneficiaries’ records. These new registers with information on foreign beneficiaries will be:

  • A central register organized at the level of the national Office of the Register of Commerce for legal persons who are required to register in the commercial register, with the exception of autonomous regies, companies and national companies;
  • A central register organized at the level of the Ministry of Justice for associations and foundations;
  • A central register organized at the level of the National Agency for Tax Administration in the case of trusts.
  1. The registration terms to be respected for each case are:
  • 12 months after the entry into force of the Act — for existing entities;
  • At the time of registration of the company/NGO – for legal persons who will register after the date of entry into force of the law and the establishment of the above mentioned registers;
  • Annually, within 15 days of the approval of the annual financial statements and the submission of the balance sheet;
  • Within 15 days from the date of the modification of the identification data of the real beneficiary.
  1. Clarification of the concept of real foreign beneficiary in the NGO context

The law distinguishes between associations and foundations and indicates who will be recognized as a real beneficiary in the ‘Register of beneficial owners of associations and foundations’. The reporting obligation in this case will be:

  • On the date of registration in the register of associations and foundations;
  • Annually before 15 January;
  • Within 30 days from the date of any modification to the identification data of the real beneficiary.

The information about the real beneficiary of the associations and foundations will be recorded in a central register maintained by the Ministry of Justice for associations and foundations.

The organization and functioning of the Register must be regulated by the Ministry of Justice within 120 days from the date of entry into force of the law.

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