Romanian AML Rules Behind Gambling Banking Difficulties

August 8, 2023
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Operators in Romania struggling to get much-needed bank guarantees could be missing out due to the risks associated with gambling and the additional work required from credit institutions that come with it, a legal expert has warned.

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Operators in Romania struggling to get much-needed bank guarantees could be missing out due to the risks associated with gambling and the additional work required from credit institutions that come with it, a legal expert has warned.

Over the past few years, it has become “almost impossible” for gambling companies to open a bank account in Romania, trade group Rombet recently told VIXIO GamblingCompliance, adding that if the situation continues some operators might turn to the black market.

Cristina Popescu, a partner at CMS, explained that although she doesn't have information about banks refusing to open accounts, instead, banks are becoming “more and more reluctant to provide bank guarantees for gambling operators”.

A bank guarantee is required under Romanian law to secure tax payments, according to the lawyer.

“This approach has been particularly intensified in respect of land-based gambling operators which [are] more cash-intensive and therefore more prone to money laundering risks, but online gambling operators have not escaped unscathed either, as they’ve been subject to more detailed due diligence and more onerous terms,” Popescu said.

The lawyer says this is likely a result of gambling being an industry at risk of money laundering and changes to Romania’s anti-money laundering (AML) law introduced in 2019 (Law No. 129/2019).

“There have been some relatively recent legislation in Romania (implementing the 4th and 5th AML Directives), which has meant that screening by banks has intensified. Some just don’t want to be bothered with the additional processes, to be honest,” Popescu said.

The National Bank of Romania (NBR), which is the supervisory authority when it comes to preventing and combating money laundering and terrorist financing, told VIXIO it “does not have powers in the matter of contractual relations between credit institutions and their clients”.

The NBR said credit institutions create their mechanisms for developing a contractual relation, according to the requirements in the country's AML law “as well as in accordance with their own business and risk strategy.”

Operators are still entering the Romanian market, proving that it is possible to open an account and get a bank guarantee, however, it is clear that gambling firms have faced an increasingly challenging environment in the past few years.

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