Money laundering - what you need to know?

Money laundering is one of the most serious economic offences, as it allows money or assets derived from criminal activities to be introduced into the legal economy. In practice, this offence frequently arises in connection with tax evasion, corruption, fraud, drug trafficking, delapidarea, computer fraud, smuggling or other acts generating illicit income.

Combating money laundering is no longer just a concern for banks. Legea nr. 129/2019 (Law no. 129/2019) establishes a broad framework for prevention and combating, involving financial institutions, lawyers, notaries, accountants, tax consultants, real estate agents, real estate developers, gambling service providers, traders of goods, persons trading in works of art and, under certain conditions, crypto-asset service providers.

For companies and entrepreneurs, the risk does not arise only when they intentionally take part in an unlawful operation. Sometimes problems arise from a lack of clear procedures, from accepting suspicious payments, from not knowing the beneficial owner, or from using commercial structures that are difficult to justify economically.

At Buju, Stanciu & Asociații, we provide legal assistance in money laundering cases, business criminal law, financial investigations, AML compliance, digital asset transactions, and cases where money laundering is associated with tax evasion, embezzlement, corruption or fraud.

What is money laundering?

Money laundering is the process by which a person attempts to conceal the illicit origin of money, goods or assets, so that they appear to have been obtained lawfully.

Art. 49 - Legea nr. 129/2019 (Law no. 129/2019)

The legal definition and the notion of "goods"

Under Legea nr. 129/2019 (Law no. 129/2019), money laundering is the offence set out in art. 49 and is punishable by imprisonment from 3 to 10 years. For the purposes of this law, goods do not mean only cash or sums held in bank accounts - they can be assets of any kind: movable or immovable, corporeal or incorporeal, tangible or intangible, as well as documents or instruments, including in electronic or digital form, evidencing a right over such assets.

This means that money laundering can involve:

Money and accounts

Cash, bank accounts, transfers and financial instruments of any kind.

Physical assets

Land, real estate, cars, jewellery, luxury goods, works of art.

Corporate and digital assets

Shares, equity interests, contracts, rights and crypto-assets.

What matters is that the goods in question derive from the commission of an offence and that operations are used through which their illicit origin is concealed, disguised or integrated into the lawful circuit.

When is it considered money laundering?

The law criminalises, mainly, three types of conduct:

1. Exchange or transfer of goods
   Knowing that they derive from the commission of offences, for the purpose of concealing or disguising their illicit origin or of helping the person who committed the principal offence to evade prosecution, trial or the enforcement of the sentence.
2. Concealment or disguise
   Of the true nature, origin, location, disposition, movement or ownership of goods or rights over them, knowing that the goods derive from offences.
3. Acquisition, possession or use
   Of goods by a person other than the perpetrator of the offence from which they derive, knowing that they derive from the commission of offences.

In other words, money laundering does not only involve moving money through accounts. It can also mean purchasing goods, using intermediary companies, transferring funds through other persons' accounts, real estate investments, repeated asset exchanges, using cryptocurrencies, or artificially justifying income.

The three stages of money laundering

Placement → Layering → Integration

Illicit funds
tax evasion, corruption, fraud, trafficking, embezzlement

1. Placement
   Introduction of money into the financial system: cash deposits, purchase of goods, initial transfers, apparently normal investments
2. Layering
   Successive layers of transactions: intermediary companies, multiple accounts, fictitious contracts, international transfers, crypto-assets
3. Integration
   The funds return to the economy with an appearance of legality: profit from a business, sale of a property, dividends, "repaid" loans

Each stage leaves traces: documents, banking flows, contracts, blockchain addresses

Not every complex transaction is money laundering - but complexity without real economic justification increases the criminal risk

The penalty for money laundering

Under art. 49 of Legea nr. 129/2019 (Law no. 129/2019), the offence of money laundering is punishable by imprisonment from 3 to 10 years. The attempt is punishable. Commission of the offence by one of the reporting entities, in the course of its professional activity, constitutes a aggravating circumstance.

If the act is committed by a legal person, the court may apply, in addition to the fine, the complementary penalties provided for by the Codul penal (Criminal Code) - restrictions on certain activities, closure of business premises or other measures that may seriously affect a company's activity.

Precautionary measures are mandatory

In cases of money laundering or terrorist financing offences, taking precautionary measures is mandatory: seizures may be ordered to guarantee confiscation or recovery of damages - frozen accounts and seized assets, even from the investigation stage.

Confiscation of assets

In money laundering cases, confiscation is one of the most important consequences:

Confiscation by equivalent

If the assets that are the subject of the offence can no longer be found, their monetary equivalent or assets acquired in their place may be confiscated.

Derived income

Income or material benefits obtained from those assets may also be confiscated - the rent from a property purchased with illicit money, for example.

Mixed assets

If illicit assets cannot be separated from those lawfully acquired, assets may be confiscated up to the value of the assets subject to confiscation.

In practice, in a money laundering case, the discussion is not only about imprisonment. It is also about seizure, confiscation, frozen accounts, disruption of business activity and the loss of important assets.

The difference between money laundering and tax evasion

Tax evasion and money laundering are different offences, but they frequently appear together in economic cases. If money obtained through tax evasion is subsequently transferred, invested, concealed or introduced into the legal circuit through seemingly legitimate operations, a money laundering charge may also arise.

Examples of money laundering

1. Investment in real estate An individual involved in drug trafficking has accumulated a significant amount of illegal money. Rather than keeping this money in cash, he decides to invest in several real estate properties. His intention is to conceal the illegal origins of the money by acquiring assets with real and legal value, then to rent or sell these properties in order to justify the origin of the funds.
2. Money laundering through businesses A corrupt businessman regularly receives bribes in exchange for government contracts. To conceal these illegal payments, he sets up several shell companies and invoices fictitious "services" to these companies. The money from the bribes is thus "laundered" through seemingly legal transactions.
3. Use of cryptocurrencies A criminal organisation obtains money from a cyberattack on a financial institution. To conceal its illegal origins, this money is converted into cryptocurrencies, which can make it harder to trace financial flows if multiple wallets, unregulated platforms or successive transfers are used. Subsequently, the digital assets may be exchanged, transferred or used for purchases, with the aim of creating the appearance of legitimate funds.

Money laundering and crypto-assets

Technology has changed the way illicit funds can be concealed or transferred. Legea nr. 129/2019 (Law no. 129/2019), as amended, defines crypto-assets and includes crypto-asset service providers in the category of financial institutions relevant for the application of AML obligations.

For crypto-asset service providers, the law imposes customer due diligence measures and risk assessment obligations, including in relation to transfers to or from unhosted addresses - these may pose higher risks because they are not managed by a centralised platform applying KYC procedures.

In practice, cases involving digital assets may concern: transfers between digital wallets, repeated conversions between crypto-assets, the use of exchanges from jurisdictions with weak regulation, offshore structures, payments to addresses difficult to associate with a person, or funds derived from online fraud, phishing or cyberattacks.

In such cases, the defence or legal analysis must combine criminal law, financial analysis and an understanding of blockchain technical mechanisms.

Quick test: is it money laundering?

Four practical scenarios. Check whether you recognise the elements of the offence:

Scenario 1: A person buys three apartments with money from fictitious invoices, rents them out, and the rental income appears in declarations as legal income from real estate investments.

May constitute money laundering - the complete scheme: placement (purchase of the properties), integration (the "legal" rent). In addition to tax evasion as a predicate offence, a separate charge of money laundering arises, with a separate penalty of 3-10 years.

Scenario 2: A firm receives a large payment from a new client. It has verified the client's identity, the beneficial owner and the economic justification for the transaction, all documented in accordance with KYC procedures.

This is not money laundering from the firm's perspective - it did not know and had no grounds to suspect an unlawful origin, and the checks are documented. This is precisely why AML procedures matter: not only to verify, but to be able to show demonstra that you have verified.

Scenario 3: A friend asks you to receive €40,000 "from a business of his" into your account, withdraw it and give it back to him in cash, in exchange for a commission. You suspect the money is not clean, but you agree.

This may constitute money laundering. Acquiring, possessing or using goods derived from offences, by a person other than the perpetrator, is the third form of the offence. A "money mule" is not a favour between friends - it is participation in laundering, and your account becomes evidence.

Scenario 4: An investor moves savings that have been declared and taxed from bank deposits into crypto-assets, through a regulated exchange, with documented transactions.

This is not money laundering. Crypto-assets are not illegal in themselves - the problem arises only when the assets derive from offences and are used to disguise their origin. Lawful funds, documented source, regulated platform: investment, not an offence.

Who has reporting obligations?

Legea nr. 129/2019 (Law no. 129/2019) establishes several categories of reporting entities: credit institutions, financial institutions, gambling providers, auditors, chartered accountants, authorised accountants, tax consultants, lawyers and notaries in certain operations, providers of services to companies or trusts, real estate agents and developers, traders of goods in certain cash transactions, persons trading in works of art and providers of crypto-asset services.

These entities have obligations regarding: customer due diligence, identification of the beneficial owner, transaction monitoring, reporting of suspicious transactions, record-keeping, internal AML policies, staff training and risk assessment. Failure to comply with these obligations may attract serious sanctions, and in certain situations may also entail criminal consequences.

Reporting of suspicious transactions

Reporting entities must submit a suspicious transaction report to the Oficiul Național de Prevenire și Combatere a Spălării Banilor (ONPCSB) (National Office for the Prevention and Control of Money Laundering) when they know, suspect or have reasonable grounds to suspect that assets derive from the commission of offences or are connected with the financing of terrorism. Reporting is not limited to large transactions - suspicion may arise regardless of value.

Separately, the law provides for reporting of certain transactions that do not necessarily display indicators of suspicion:

≥ €10,000 cash

Cash transactions of at least €10,000 are subject to specific reporting obligations.

≥ €10,000 external transfers

External transfers into and out of accounts, of at least €10,000, under the conditions laid down by law.

≥ €2,000 money remittances

Fund transfers by money remittance of at least €2,000.

Customer due diligence measures and the beneficial owner

Customer due diligence (KYC) is one of the principal AML obligations. Reporting entities must identify the client, verify their identity, identify the beneficial owner, understand the purpose and nature of the business relationship and monitor the relationship on an ongoing basis.

These measures apply when establishing a business relationship, in certain occasional transactions, where there is suspicion of money laundering or terrorist financing, or where there are doubts about information already held about the client. In certain situations additional measures: apply: high-risk clients, politically exposed persons, complex transactions, unusually large amounts, transactions with no apparent economic purpose, or relationships with high-risk countries.

The beneficial owner - why the 25% threshold matters

The beneficial owner is the natural person who ultimately owns or controls the client, or the person on whose behalf a transaction is carried out. For companies, direct or indirect ownership of more than 25% of shares, membership interests or voting rights is an important indicator. Many laundering schemes use intermediary companies, nominee associates, offshore structures or chains of companies to conceal the person who actually controls the funds. If the beneficial owner is not clear, or the ownership structure is unusually complex, the AML risk increases.

How is money laundering identified? An AML checklist for your firm

Identifying money laundering involves a combination of legal, financial and operational analysis. For companies, these checks must documentate: it is not enough to say that you have verified the client - you must be able to demonstrate what checks you carried out, what documents you requested, and why you considered the transaction acceptable.

Tick the checks your firm already carries out systematically:

Checklist: how robust is your firm's AML compliance?

• Monitoring of financial transactions and verification of the source of funds
• Identification of the beneficial owner and analysis of clients' ownership structure
• Verification of cash transactions and cross-border transactions
• Screening against sanctions lists and verification of politically exposed persons (PEPs)
• Analysis of contracts and invoices for genuine economic justification
• Detection of transactions with no clear economic purpose
• Monitoring of relationships with high-risk countries or entities
• Written internal AML policies and periodic staff training
• Documenting each check (proof, not merely the check itself)

Low score = high exposure

For reporting entities, every missing check is a vulnerability to sanctions - and for any company, it is the risk of being drawn into a criminal case for transactions it cannot justify. We can quickly audit and build your firm's AML procedures: schedule a discussion.

What should you do if you are accused of money laundering?

If you are being investigated or accused of money laundering, the first step is to not give statements without a lawyer. Cases of this type are technical and rely on documents, financial flows, expert reports, correspondence, contracts and economic interpretations. To understand what follows at each stage of the case, see our guide on the stages of the criminal process in Romania.

It is important to establish:

1. What is the predicate offence from which the money would originate
   And what assets are considered unlawful - without a proven predicate offence, the money laundering accusation falters.
2. What you actually knew about the origin of the funds
   The subjective element is central: money laundering requires knowledge of the unlawful origin, not mere participation in a transaction.
3. Whether there are genuine economic justifications
   Which transactions are considered suspicious and whether they have documentable commercial substance.
4. Whether the client's reporting and verification were carried out correctly
   And whether the precautionary measures ordered are proportionate - seizures can be challenged.

A good defence is not built on general denials. The trail of the money, the supporting documents, each person's role and the connection between the funds and the alleged predicate offence must all be analysed.

How can a specialist criminal lawyer help you?

A lawyer specialising in money laundering can intervene both preventively and during the investigation or trial stage.

Preventively

Building AML policies, reviewing internal procedures, drafting contracts, analysing client risks and avoiding transactions with criminal potential.

During the criminal phase

Assistance at hearings, formulating defences, challenging precautionary measures, requesting evidence, analysing financial expert reports and building a strategy based on the person's concrete role in the transactions under investigation.

At Buju, Stanciu & Asociații, experience in business criminal law, tax evasion, crypto assets, financial investigations and commercial litigation allows for a comprehensive approach.

"In money laundering cases, the analysis must be technical, fast and adapted to economic reality. The trail of money always tells a story - the question is who reconstructs it first: the prosecution or the defence."

- Marius Stanciu, Partner, Buju, Stanciu & Asociații

Frequently asked questions about money laundering

Conclusion

Money laundering is a complex offence with serious consequences for the individuals and companies involved. It is not limited to cash and does not only appear in organised crime cases. It can involve commercial, real estate, tax, banking or digital transactions.

Legea nr. 129/2019 (Law no. 129/2019) places emphasis both on punishing the offence and on prevention: customer due diligence, reporting of suspicious transactions, identification of the beneficial owner and risk assessment.

If you are being investigated, accused, or need assistance with AML compliance, it is important to act quickly. At Buju, Stanciu & Asociații, we provide legal assistance in cases of money laundering, tax evasion, financial investigations and digital asset transactions, with a clear, technical approach focused on protecting our clients' interests.

Money laundering case or need for AML compliance?

Account seizure, a summons for questioning, or simply transactions you want to structure correctly before they become a problem - send us the details and receive a confidential assessment.

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