MONTE CARLO WORLD ECONOMIC SUMMIT Mrs. Irina Georgescu Member of the Board of the National Office for Preventing and Control of Money Laundering Romania

MONTE CARLO WORLD MONTE CARLO WORLD ECONOMIC SUMMITECONOMIC SUMMIT

Mrs. Irina Georgescu

Member of the Board of the National Office for Preventing and Control of Money Laundering Romania

CrimeCrime’s objective’s objective

Obtaining important values and market control

The main objective can be dissimulated by intermediary objectives, can be combined, can get diferent connotations

We can see and understand from the smog of contradictory interests and misleading traces, the real economic purpose of the criminal chain

Economic crime’s impact on the Economic crime’s impact on the economyeconomy

Organized crime and money laundering atteined globalization long before the countries’ economies and finances did

It has done so efficiently, making use of big financial, human and tehnological resources

It managed to erase borders and destroy ethical and moral barriers

Affecting economy’s health, infiltrating public and private institutions

Conspiring against countrie’s security and dignity

CorruptionCorruption

The institutional attributes encouraging corruption include among others a wide authority of the state, low accountability and minimum transparency

Oraganized crime, money laundering and corruption undetermines democracy and economic development

Corruption often facilitates criminal activities, such as drug trafficking, tax evasion on big scale, prostitution, money laundering

Money launderingMoney laundering

The fight to reduce the possibility of disguising the illicit money gained by criminal activities

Dirty money can be easily hidden in accounts offshore and this money will constitute very often the capital for illegal business

The efforts to combat the money laundering are a mean to increase the costs of organized crime and to discourage their criminal activity

The fight against money laundering is needed, because it has a devastating effect on the economic and social environment and it may become a threat to the national security by attracting organized crime and corruption.

International AML reglementationsInternational AML reglementations

The UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (“the Vienna Convention”)

Council of Europe Convention, from 1990, on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (Strassbourg Convention)

The Council of Europe adopted in 1991 the Directive no. 308 on prevention the use of the financial system for the purpose of money laundering, and Directive 2001/97 on the amendment of the first Directive

The 40 FATF recomandations

EGMONT GroupEGMONT Group

The effort to increase communication among the specialized governmental agencies (Financial Intelligence Units), has been fulfilled by creating the “Egmont Group”

International professional organization with more than 84 FIU members

The goal of the Egmont Group has been to seek ways to develop a more effective and practical cooperation, especially in the areas of information exchange and sharing of expertise.

IMOLINIMOLIN

International Money Laundering Information Network

IMOLIN is an Internet-based information network, which offers a secure news forum to states and institutions, as well as an electronic library, a database on laws and regulations and a calendar of events in the anti-money laundering area

ROMANIAROMANIA

Romania has taken important steps to enhance compliance with the major European and international standards that requires an appropriate legal framework by criminalizing corruption and money laundering, ensuring appropriate measures against organized crime and effective enforcement.

By the adoption of the Law no. 21 on the Prevention and Sanctioning of Money Laundering it was realized the transposition in the Romanian legislation of the international legislation

ROMANIAROMANIA

Through the Law no. 21, the National Office for the Prevention and Control of Money Laundering (Romanian FIU) has been established

In 2002, a new Law on the prevention and sanctioning of money laundering has been adopted, namely the Law no. 656 on the Prevention and Sanctioning of Money Laundering

ROMANIAROMANIA

The main legislative amendments, which the new Law 656/2002 has brought to the Law 21/1999 are as follows – the limitative list of predicate offences has been removed and

replaced by the “all crimes approach”– the coverage area of the reporting entities has been enlarged,

including art objects dealers, the personnel with responsibilities in the privatization process, postal offices, money remittance services, real estate agents and State treasury

– it has been incriminated the deed committed by the persons covered by the Law and their employees, in case of transmitting information regarding money laundering and warning the clients about the notification to the Office

ROMANIAROMANIA

The main legislative amendments, which the new Law 656/2002 has brought to the Law 21/1999 are as follows– the obligation for all the reporting entities to report any cross-border

transactions of an amount higher than the equivalent of 10,000 EUR has been introduced;

– verification and control obligation on the enforcement of money laundering provisions, has been also established for the financial control and prudential supervision authorities

– it has been provided for the Office the possibility to perform joint controls and verifications together with financial control authorities or prudential supervision bodies

National Office for Preventing and Control National Office for Preventing and Control of Money Laundering Romaniaof Money Laundering Romania

NOPCML has been established as a specialized administrative body under the Government subordination, which receives, analysis and process the information

In case solid grounds are identified referring to money laundering, informs the General Prosecutor’s Office by the Supreme Court of Justice

In accordance with the law, the decisional body of the NOPCML is the Board


In the Board are representatives from: – Ministry of Justice– Ministry of Public Finances– Ministry of Administration and Interior– General Prosecutor’s Office– National Bank of Romania– Romanian Banking Association – The Court of Accounts

Board structure assures a multidisciplinary analysis of the files on suspicious transactions, the decisions being taken by majority of votes


In the fight against money NOPCML undertook right from the beginning the role of liaison between the Romanian institutions involved in the activity of preventing and combating of money laundering

The Office is not a prosecution body: it does not make on-site investigations, these being exclusively done by the prosecuting bodies, provided by the Law


In accordance with the Law, the Office carries out financial analysis on specific cases, based on the information received

In the case of sufficient grounds have been found, leading to the conclusion that the elements of money laundering offence have been gathered, informs the Prosecutor’s Office by the Supreme Court of Justice, which can take the measures he decides to be applied, including starting the penal action


Types of reports received by the Office:– Suspicious Transactions Reports

– Cash Transactions Reports for the amounts exceeding EUR 10,000, irrespective whether the transaction is carried out in a single operation or in several linked operations

– Reports on Cross – Border Transfers in/from accounts for the amounts exceeding EUR 10,000

- Banks

-Credit institutions

-Post offices

-Investments companies

-Insurance and reinsurance

-Agents performing gambling and pawning activities

-Traders of work of art

-Persons providing notarial accounting and financial advice

-Persons with atributions in the privatisation process

Reporting entitiesReporting entities

Cash operations over 10.000 euro

Cross border transfers over

10.000euro

Financial control and Financial control and prudential supervision prudential supervision

institutionsinstitutions

- National Bank- National Authority for Control- Public Finance Ministry- The Court of Accounts-Inssurances and Securities Suppervision Comities

InternetEGMONT

NOPCML

On the case informations

Suspicious transactions

-Ministry of Justice -Ministry of Interior and Administration-Secret Services


Inter-institutional cooperation :– Institutions having policy making and/or law enforcement

attributions in the field of prevention and combating money laundering

– Institutions having financial control and prudential supervision attributions and professional associations


The internal cooperation focuses on the following activities carried out together with the above mentioned institutions – money laundering and terrorism financing law amendment

proposals

– drawing up secondary legislation for each category of institutions (banking and financial) for the purpose of preventing, detecting and reporting the suspicious transactions

– supervision and control of the law enforcement in the field


International cooperation In the area of money laundering that many times

involves cross-border partners and flows, international cooperation is one of the major tasks of our FIU – The Office became a member of the Egmont Group beginning

with May 2000 – NOPCML concluded 14 Memoranda of Understanding with

similar bodies in Austria, Belgium, Bulgaria, Croatia, Greece, Israel, Italia, Poland, Slovenia, Spain, Thailand, Turkey, Serbia and South Coreea

AUSTRIA

BELGIA

BULGARIA

GRECIA

CROAŢIA

ISRAEL

ITALIA

POLONIA

SLOVENIASERBIA

THAILANDA

SPANIATURCIA

COREEA


The activity of prevention and fight against organized crime and money laundering involves an ongoing improvement based on acquiring practical experience, on the cooperation between the law enforcement institutions and on international cooperation

The state institutions, as well as the financial and banking institutions understood the long-term advantages offered by a sound economic and financial system based on real economy

They understood the necessity of joining efforts for fighting against these dangerous phenomena


Money laundering controls are only negative sanctions, Such activities are unlikely to be an effective way to increase investment in capital-poor countries

The existence of numerous “financial paradises” where black money can come to rest makes domestic criminal activity less risky since money can be easily hidden abroad

Limiting money laundering and controlling illegal businesses clearly require international cooperation between all the players in the fight against this dangerous activities

Loopholes of the legislative system and lack of a unique “legal framework” in the field

Time factor that adversely affects the measures Allowing the functioning of tax havens Existence in the political arena of some „mafia” – type groups Central and Eastern Europe economical crisis that asks for liquid

capitals Extension of computerized inter-banking communications

systems Financial capabilities of organized crime groups to bear

considerable losses The lack of specialised personnel in the economical and financial

area employed in the judiciary system, namely: Justice, Prosecutor’s Offices and Police

Obstacles in preventing and combating Obstacles in preventing and combating economical and money launderingeconomical and money laundering

Thank You for your attention!Thank You for your attention!

Irina Georgescu

Documents

MONTE CARLO WORLD ECONOMIC SUMMIT Mrs. Irina Georgescu Member of the Board of the National Office for Preventing and Control of Money Laundering Romania