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Money Laundry Law updated as of April 30, 2021

Ana Petrescu_ONV LAW_Associate

The companies with natural persons as shareholders must declare their ultimate beneficial owner. The annual declaration is back

More beaurocracy for entrepreneurs. The law does not totally resolve the problem of identifying the ultimate beneficial owner of the economic activity of a company.

Starting April 30, 2021, the Law no. 101/2021 entered in force for the approval of the Government Emergency Ordinance no. 111/2020 regarding the amendment and completion of Law no. 129/2019 for preventing and combating money laundering and terrorist financing, as well as for amending and supplementing some normative acts, ONV LAW announces.

The main amendment of the legislation is that the companies incorporated exclusively by natural persons, as shareholders, which were exempted until now, must declare the ultimate beneficial owner of their economic activity to the Romanian Trade Registry.

„Another amendment is that the companies incorporated by legal entities must submit annualy the statement regarding the identity of the ultimate beneficial owner. This is supplementary beaurocracy which will create many missunderstandings for entrerpeneurs regarding the moment when they should submit the statement,” Ana Petrescu, Associate – Commercial Law specialist at ONV LAW states. Before these amendments, the statement had only to be submitted at the moment of the incorporation and whenever a change regarding the identity of the beneficial owner occurs. These obligations remain valid, toghether with the new obligations.

Under the new amendments, the obligation to submit the annually statement has been reinstated. This statement shall be submitted to the Trade Registry in which the company is registered, within 15 days from the approval of the annual financial statements and if a change regarding the identity of the beneficial owner occurs, the statement shall be submitted within 15 as of the date when the change occured.

Although the law provides that the term for the annual submission of the statement regarding the ultimate beneficial owner is 15 days from the approval of the annual financial statements, the antrepreneurs who have not yet submitted this statement and who were incorporated with the Trade Registry before the entry into force of Law no. 129/2019, are required to submit such statement within 90 days from the date of termination of the state of alert.

The legal representative of the company (the director) must prepare and submit a statement on own liability which must contain the identification data of the beneficial owners of the company, as well as the ways in which the control over the company is exercised, according to the criteria established by law.

In accordance with the legal provisions, the beneficial owner of a company is the natural person who directly or indirectly owns 25% + one of the number of shares or who participates in the share capital of a company in a percentage of over 25% or the one who directly or through other means controls the activity of the respective company.
The Law does not yet provide concrete definitions regarding the direct control or control by other means of a company`s activity and for complete transparency and identification of the beneficial owners, the legislation should be improved, ONV LAW specialists comment.

 

ONV LAW is one of the most dynamic independent companies on the local market. Founded in 2000, ONV LAW provides consultancy to private clients and institutions in areas such as Public Procurement and Concessions, Market Entry, Aviation Law and Airport infrastructure, Corporate Law, Labor Law, Competition Law, Environmental Law and Digital Law. Website: www.onvlaw.ro.