For starters, the 5th European Union Anti-Money Laundering Directive (5AMLD) went into effect on January 10. As is known, the regulation in Romania was introduced as a law, on July 9, 2018. In order to make an effort to bring greater transparency to financial transactions.
The scope of this Law are:
- Increase transparency on who are the true owners of legal entities.
- Give European financial regulators better access to information.
- Address terrorism financing risks related to the anonymous use of virtual currencies.
The first regulation in Romania
Certainly, the European Union and the European Central Bank wanted to create a unitary legal framework. As a consequence, it would limit the anonymity of cryptocurrency transactions.
The truth is that, since there is no legal framework in the EU to provide a definition and regulation on digital currencies, digital currency exchange services and custody wallet providers, this has materialized with the adoption of the 5th Directive against Money Laundering and Terrorism Financing (5AMLD).
Measures implemented by Romania
Regarding the measures implemented by Romania, on July 18, 2019, Part I, Law No. 129/2019, was published in the Official Gazette to prevent and combat money laundering and terrorist financing.
However, it omitted categories of reporting entities, such as those in the field of cryptocurrencies. The truth is that the non-transposition of 5AMLD brought Romania to the Court of Justice of the European Union, currently in case C-549/18.
Meanwhile, on July 1, 2020, the Government of Romania adopted an Emergency Ordinance, which complements Law No. 129/2019, called GEO. Similarly, it also transposes the rest of 5AMLD into Romanian law.
Obviously, following the adoption of GEO, providers who oversee the purchase of digital currency with fiat currency and vice versa, must now be licensed if they operate in Romania.
Then, the Emergency Ordinance adds new definitions to Article 2 of the Law, indicating:
- Electronic money, represents the electronic money defined in Article 4 paragraph (1), literal f) of Law No. 210/2019. On the activity of issuing electronic money, less the monetary value provided for in article 3 of Law No. 210/2019.
- Virtual currency, means a digital representation of the security that is not issued or guaranteed by a central bank or a public authority. In addition, it does not have the legal status of currency, but it is accepted by natural or legal persons.
- Digital wallet provider, means an entity that provides services for the secure storage of services of a private crypto key, on behalf of its clients.
It should be emphasized that, according to the Emergency Ordinance adopted by the government, those that provide exchange services, between virtual currencies and fiat currencies. Likewise, digital wallet providers must register with the commission for the authorization of foreign exchange activity.
In this way, the new Article 301, added by the normative act, regulates and details the way in which a legal person can register for this purpose and the conditions it must meet.
Authorized suppliers in other EU countries
Until now, authorized providers in other EU countries can provide such services in Romania. Unquestionably, if they are registered / authorized on the basis of the notification sent to the commission, by the competent authority of the state of origin and the response received.
In addition, these European exchange services will be required to have an authorized representative. Most importantly, you must be domiciled in Romania.
Next, you must be authorized to sign contracts on behalf of the foreign person. Also, to represent the client before the state authorities and the courts in Romania.
Therefore, these European suppliers must comply with the double registration / authorization criteria, in accordance with Romanian law. This to verify if they comply with the regulations of the country of origin, as well as that of the country where they provide their services.
With this in mind, the Emergency Ordinance explicitly highlighted:
“Unauthorized or unregistered activities are clearly prohibited.”
It is important to clarify that the current service providers in Romania are obliged to comply with the new legal provisions of the Emergency Ordinance and authorization. For which they have a term of twelve months, from when the Government publishes the authorization guidelines.
In conclusion, the success of Blockchain development, including the adoption of new business models, will depend on how the authorities will implement the regulation in Romania.
Do you think the first regulation in Romania will be successful? Let us know your opinion in the comment box.