International Sanctions in Romania: Obligations, Screening and Asset Freezing

Screening business partners and reviewing alerts are important components of sanctions risk management.

International sanctions may restrict making funds or economic resources available to certain individuals, entities, or bodies. Businesses operating in Romania need to understand which legal regimes apply, how to screen business partners, and how to handle a potential match against sanctions lists.

Screening involves more than searching for a name on a list. An appropriate process includes identifying the individual or entity, checking available information, assessing potential matches, and documenting the decision. The measures required depend on the applicable sanctions regime and the circumstances of the case.

What Are International Sanctions?

International sanctions are restrictive measures adopted by authorities or international organisations to pursue foreign policy or security objectives, or to protect fundamental rights.

They may include the freezing of funds and economic resources, travel bans, trade or financial restrictions, and other measures set out in the relevant legal instrument.

In practice, obligations are not identical for every individual or business. The applicable legal instruments, jurisdiction, type of transaction, and role of the entity involved must be assessed.

International Sanctions in Romania: Applicable Legal Framework

In Romania, the relevant framework includes national legislation on the implementation of international sanctions, including Emergency Ordinance No. 202/2008, as well as directly applicable European Union regulations. Depending on the circumstances, measures adopted by the United Nations Security Council and implemented through the applicable legal instruments may also be relevant.

A third country's sanctions list or regime does not automatically become binding in Romania in every circumstance. Applicability must be assessed based on the legal basis, jurisdiction, and specific connections of the transaction. Before making a decision, check the legislation currently in force and any amendments.

AML and Sanctions: What Is the Difference?

AML (anti-money laundering) focuses on identifying and managing money laundering and terrorist financing risks. Sanctions screening focuses on identifying designated individuals and entities and complying with applicable restrictive measures.

The processes may use similar data and tools, but they have different objectives and legal consequences.

• AML: customer risk assessment, customer due diligence, ongoing relationship monitoring, and reporting where required by law.

• Sanctions: screening designated individuals and entities, assessing potential matches, and applying the restrictive measures required by the relevant regime.

• A screening alert does not automatically confirm a breach; the identity and circumstances must be assessed.

• An AML suspicion and a sanctions match may require separate workflows, even when they arise within the same business relationship.

When to Screen Individuals and Entities

The frequency and scope of screening depend on applicable legal obligations, the sector, the type of relationship, and identified risks. Depending on the applicable framework, relevant parties may include the customer, representatives, beneficial owner, shareholders or persons exercising control, as well as transaction counterparties where screening is required or justified.

Where necessary, initial screening should be followed by data updates and rescreening of business partners. Lists may change, and an entity's ownership or control structure may also change.

How to Assess a Potential Match

A name match is a signal for further assessment, not an automatic conclusion.

To reduce the risk of misidentification, compare the available information and document your reasoning.

• Compare the full name, transliteration variants, and aliases.

• For individuals, check the date and place of birth, nationality, address, and other available identifiers.

• For legal entities, compare the name, jurisdiction, registration number, and ownership or control information.

• Review the alert source, screening date, and information that supports or rules out the match.

• Escalate unclear cases to the responsible person and keep a record of the decision.

If the assessment indicates a possible or confirmed match, do not treat it as a routine screening result. Follow internal procedures and applicable legal requirements before proceeding with the transaction.

What Does Freezing Funds Mean?

Freezing funds and economic resources is a restrictive measure provided for under certain sanctions regimes. Depending on the applicable legal instrument, it may involve preventing the use, transfer, or access to funds, or prohibiting economic resources from being made available, directly or indirectly, for the benefit of a designated individual or entity.

Not every alert automatically warrants freezing. It must be established whether the individual or entity is designated under the applicable regime and what specific obligations apply to the business. Where there is a credible match, act promptly in accordance with the legal framework, internal procedures, and instructions from competent authorities, where applicable. Do not transfer, release, or make funds available if doing so would breach an applicable measure.

Business Compliance Checklist

• Identify the sanctions regimes applicable to your activities and relevant jurisdictions.

• Determine which individuals, entities, and transactions must be screened under applicable obligations.

• Use up-to-date sources and record the date and source of each check.

• Define procedures for positive matches, false positives, and inconclusive cases.

• Define who may escalate cases, make decisions, and approve the continuation of a relationship or transaction.

• Document the assessment, decision, actions taken, and relevant communications.

• Rescreen business partners when necessary and monitor changes to sanctions lists.

• Train relevant staff and test the procedure periodically.

Common Mistakes

• Confusing sanctions screening with general AML checks.

• Treating every name match as confirmation of identity.

• Using outdated lists or failing to record the screening date.

• Automatically applying third-country lists without assessing the relevant legal basis.

• Lacking a clear escalation procedure and process for decisions involving funds.

• Keeping insufficient evidence of the screening and the reasoning behind the decision.

Integrating Sanctions into an AML Programme

Sanctions screening should be integrated into a business's compliance framework while remaining distinct in its objectives and decision-making workflow. Roles, sources, screening frequency, escalation criteria, and recordkeeping should be defined according to legal obligations and the risk profile.

For broader guidance, see our article on implementing an AML programme in a business: AML Programme

To document relevant risks, also see our AML risk assessment article: AML Risk Assessment

For support in organising compliance processes, see our AML services page: AML Services

Frequently Asked Questions

1. What are international sanctions?

They are restrictive measures adopted through relevant legal instruments and may include freezing funds, trade restrictions, or other prohibitions. The specific measures depend on the applicable regime.

2. Which legislation is relevant in Romania?

Emergency Ordinance No. 202/2008 is one relevant national instrument, alongside EU regulations and other instruments applicable to the circumstances. The current version and legislation specific to the measure should be checked.

3. Are sanctions the same as AML?

No. AML addresses money laundering and terrorist financing risks; sanctions screening focuses on compliance with restrictive measures applicable to designated individuals and entities.

4. Is screening the customer alone sufficient?

There is no universal answer. Required checks depend on applicable obligations, the relationship, and the risks. The beneficial owner, persons controlling the entity, or transaction counterparties may also be relevant.

5. Does a name match mean the person is sanctioned?

No. An alert must be assessed using additional identifiers and contextual information. The conclusion and reasoning should be documented.

6. Must funds be frozen for every alert?

Not automatically. Identity and the applicability of the relevant regime must be established. If there is a credible match, the case should be handled promptly in accordance with applicable law and procedures.

7. Do all international lists automatically apply in Romania?

No. Applicability depends on the legal instrument, jurisdiction, and specific circumstances. Third-country lists should not be treated as automatically binding in every situation.

8. How often should screening be repeated?

Frequency depends on the sector, legal requirements, risk profile, and relevant changes. Ongoing or periodic rescreening may be necessary in certain contexts.

9. What records should be retained?

To the extent required by law and applicable procedures, retain the screening source and date, information compared, alert assessment, decision, approvals, and actions taken.

10. How should screening be integrated into an AML programme?

By defining responsibilities, sources, assessment steps, escalation criteria, applicable measures, and records. The process should be tailored to the business and its obligations.

Conclusion

An effective international sanctions process combines up-to-date sources, careful match assessment, documented decisions, and implementation of measures required by the relevant legal regime. Before publishing or adopting a procedure, check the legislation currently in force and sector-specific requirements.

This material is for informational purposes only and does not replace legal analysis of a specific case.