CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Romania

In Romania, certain criminal offences are required to be promptly reported. The law imposes the obligation to report crimes against life or that resulted in the death of a person and crimes involving the trafficking and exploitation of vulnerable persons or against the freedom and sexual integrity of a minor.

The law also imposes the obligation for public servants (in the criminal law meaning) to report any criminal offence of which they became aware, and which were committed in connection with their work (e.g. embezzlement, abuse in office, negligence in office, bribery, money laundering, sexual harassment, forgery etc.).

There are also certain laws, such as Law No. 78/2000, Law 129/2019 (money laundering and terrorist financing), and Law No. 535/2004 (terrorism) which impose obligations to notify the authorities and safeguard evidence.

Failure to comply can result in significant legal and reputational risks for companies.

In Romania, some offences, such as crimes against life (e.g. murder or involuntary manslaughter) or offences resulting in the death of a person or crimes involving the trafficking and exploitation of vulnerable persons or against the freedom and sexual integrity of a minor, must be reported to the authorities by any person becoming aware of them, including companies.

Public servants under the meaning of criminal law (which may include even bank clerks, doctors working in public hospitals) are legally required to report to the criminal investigation bodies any criminal offence of which they became aware and which were committed in connection with their work (e.g. embezzlement, abuse in office, negligence in office, bribery, money laundering, sexual harassment, forgery etc.).

The law also states that individuals with control related responsibilities who became aware of the commission of a criminal offence must report the offence of which they became aware immediately and take the necessary measures for safeguarding the evidence.

Money laundering and terrorist financing suspicions must be reported by designated institutions and professionals to the National Office for the Prevention and Fighting of Money Laundering (ONPCSB); and for other offences, individuals in control or oversight roles within a company are generally responsible for reporting to the police or competent prosecutor’s office, with specialized bodies (DNA or DIICOT) handling cases depending on the nature and seriousness of the offence.

Under the Romanian Criminal Code, an individual failing to report offences resulting in the death of a person or crimes involving the trafficking and exploitation of vulnerable persons or against the freedom and sexual integrity of a minor, can face imprisonment ranging from six months to three years.

A similar provision applies to crimes against national security, where failure to report can result in imprisonment from two to seven years.

The duty to report does not extend to family members. Furthermore, no penalty applies if the individual reports the offence before criminal proceedings are initiated, or if they assist in identifying or prosecuting the perpetrator or other involved parties after proceedings have begun.

In cases of money laundering or terrorist financing, non-compliance with the reporting obligations can result in severe penalties, including administrative fines, suspension or revocation of licences, and even criminal charges. Specifically, entities and individuals may face fines up to 10% of their annual turnover or up to RON 23 million, and responsible individuals may be subject to imprisonment for up to three years. Additionally, the failure to report can lead to reputational damage, loss of business, and increased scrutiny from regulatory authorities. The law also stipulates that entities must implement robust internal controls and procedures to ensure compliance, and failure to do so can exacerbate the penalties and sanctions imposed.

Non-compliance with reporting obligations may also cause damage to the company’s reputation, especially in cases related to corruption, financial fraud, or money laundering. This could result in loss of business opportunities, damage to relationships with regulators, and a loss of trust from clients and stakeholders.

In some cases, failure to report criminal activity may expose the company to civil liability, where it could be required to pay compensation to victims or to rectify the damage caused.

While reporting a criminal offence may be a legal obligation in certain cases, it can also expose the company and individuals involved to certain risks. One primary risk is retaliation or harm to the whistleblower, particularly if the perpetrator holds a position of power within the company. Romanian law offers protections for whistleblowers, including confidentiality and safeguards against unfair dismissal or discrimination.

Another risk is potential reputational damage to the company, as reporting a criminal offence could lead to public scrutiny and negative media attention. However, the long-term benefits of maintaining legal compliance and upholding ethical standards typically outweigh these risks. Companies should ensure clear policies and procedures are in place to support and protect employees who report criminal activities.

Additionally, knowingly filing to authorities a false criminal complaint against an individual can lead to criminal charges, punishable by imprisonment for six months to three years or a fine.

Loss of business relationships is another potential risk. If the criminal activity reported involves business partners, suppliers, or customers, it could damage the company's commercial relationships. For example, reporting corruption could strain ties with clients or partners implicated in the offence.

Failure to comply with the obligation to report criminal offences as mentioned above presents a risk of accessory criminal liability for both the company and individuals within the company if they are found to have facilitated or been complicit in the criminal activity.

Additionally, the Criminal Code incriminates assisting an offender where it is done to hinder or obstruct investigations, identify criminal responsibility, or avoiding serving a sentence. Those who engage in such acts can face imprisonment from one to five years or a fine. However, the penalty for the accessory cannot exceed the punishment prescribed for the predicate crime committed. Again, family members of the offender are not subject to this duty.

Companies can also face liability under Law 129/2019 if they fail to implement adequate measures to prevent money laundering and terrorist financing. This includes ensuring employees are trained to recognise and report suspicious activities, with significant fines and penalties for non-compliance. To minimise the risk of accessory liability, it is crucial for companies to establish comprehensive compliance programs, conduct regular audits, and ensure internal controls are in place.

Accessory liability may also arise from failing to prevent crimes. For instance, companies with inadequate compliance programs or internal controls (e.g. weak anti-money laundering policies or ineffective internal reporting systems that fail to prevent financial crimes) that allow criminal offences to occur may be held liable, under certain conditions.