SIFMANet Bucharest Report

Introduction

In March 2025, the Sanctions and Illicit Finance Monitoring and Analysis Network (SIFMANet), led by RUSI’s Centre for Finance and Security (CFS) and supported by the National Endowment for Democracy, held a roundtable workshop in Bucharest, Romania. The event explored the evolving challenges posed by sanctions implementation, economic security and state-driven threats. Hosted by Her Majesty Margareta, Custodian of the Romanian Crown, the event was organised in partnership with 45 North.

This meeting formed part of a wider series of country-specific engagements that SIFMANet has conducted since early 2022. The workshop brought together a diverse and highly engaged group of public and private sector stakeholders, academics, and financial specialists, including participants from the Romanian Financial Supervisory Authority, the National Authority for Management and Regulation in Communications of Romania (commonly known as ANCOM), and the Romanian National Agency for Public Procurement. The workshop also brought together Romanian banks, such as Banca Transilvania and UniCredit Bank, along with VISTA Bank (a Texas-based bank), and GARANTI BBVA (a Turkish bank). Financial agencies and academic institutions, such as the National Agency for Fiscal Administration (ANAF), Romania’s Financial Intelligence Unit (FIU), the Romanian Customs Authority, and the Bucharest University of Economic Studies (ASE), also attended, among others.

This report presents insights and reflections from the Bucharest workshop, as well as side meetings, including a discussion with a group of members of the Romanian parliament. The report offers a grounded overview of Romania’s progress and challenges in navigating sanctions, illicit finance and economic security. While none of the discussions at the event are attributable, the lessons drawn from them contribute to a growing body of knowledge on how smaller EU economies can respond effectively to the threats posed by hostile state actors and financial exploitation, and respond to the changing European sanctions landscape.

Sanctions

Background: Romania’s Evolving Sanctions Framework

Over the past year, Romania has undergone a significant legislative overhaul to modernise its sanctions framework. The reforms aimed to address enforcement challenges and align the legal system with the operational needs of both regulators and the private sector. A key milestone was the adoption of a revised legal package in December 2024, which introduced clearer mandates, more structured coordination and improved enforcement mechanisms. According to a representative of the Romanian Ministry of Foreign Affairs (MFA), additional amendments are underway to transpose the EU Directive on the criminalisation of sanctions evasion into national law by the May 2025 deadline.

The need for reform became particularly urgent after 2022, when the complexity and volume of sanctions outpaced Romania’s existing institutional capacity. Previously, implementation responsibilities were distributed based on authorities’ broader legal mandates. As noted by a representative of a Romanian public authority, this decentralised and implicit approach became increasingly untenable, as sanctions enforcement required cross-sectoral coordination and timely decision-making.

In response, the Romanian government formally designated 18 competent authorities across different sectors, each with clearly defined responsibilities for sanctions implementation and enforcement. Particular attention was given to the management of derogations, one of the most technically and legally challenging areas of sanctions enforcement. In situations where jurisdictional overlap or disputes arise, the MFA can notify the Interinstitutional Council, a forum that reunites all implementing authorities as well as a series of other institutions providing support in their area of competence. Upon said notification, the interinstitutional council will designate the competent authority to issue an authorisation through a vote.

This restructuring marks a shift towards a more rules-based and proactive enforcement model, aimed at enhancing Romania’s ability to meet EU standards and respond to emerging geopolitical threats with greater institutional clarity and coherence.

At the workshop, a representative from the MFA highlighted the continued relevance of sanctions as a critical policy instrument in the country’s response to Russian aggression. Instead of introducing an independent national sanctions regime, Romania chose to promote its sanctions demarches at EU level by playing an active role in shaping EU restrictive measures. The MFA has seen notable changes in its responsibilities, reflecting the growing complexity of sanctions enforcement.

The Ministry’s current mandate spans three primary functions:

• Policy leadership: The MFA acts as Romania’s representative at EU-level negotiations on restrictive measures. In this capacity, it promotes Romania’s interests and proposals directly in Brussels, shaping the design of the EU sanctions framework, given the absence of a domestic sanctions regime. Romania’s experience with the sanctions regime in the Republic of Moldova illustrates this approach: Romania has actively supported and helped operationalise EU measures targeting Russian influence in the Republic of Moldova, an area of strategic importance given the cross-border security implications.

• Secretariat of the Interinstitutional Council: A representative of the MFA confirmed that, until December 2024, the MFA served as the national coordinator for sanctions implementation, overseeing Romania’s network of national competent authorities. This coordination role is now led by a representative of the Chancellery of the Prime Minister, signifying a strategic effort to centralise and strengthen national-level oversight, while the MFA kept the role of the interinstitutional council’s secretariat.

• Implementation authority: The MFA is still responsible for managing export controls of dual-use and military products and the enforcement of visa bans associated with EU sanctions.

Private Sector Reflections on Sanctions Enforcement and Due Diligence Challenges

Sanctions Enforcement

Representatives from Romania’s financial sector, including the Romanian Banking Association (RBA) and representatives from individual banks, shared the considerable impact that sanctions enforcement has had on their operations. These effects extend beyond the Romanian context to include affiliated entities in Moldova. Since the introduction of EU sanctions in 2022, Romania’s banking system has faced intense pressure, particularly in relation to transaction screening and compliance processes.

While direct transactions with Russian entities have significantly decreased, the more complex challenge lies in monitoring indirect transactions. In particular, it is difficult to monitor transactions routed through intermediaries, or involving entities in jurisdictions such as the UAE and certain EU member states. These indirect links often trigger scrutiny by sanctions authorities, significantly increasing compliance workloads and stretching institutional resources.

Private sector representatives noted that customer dissatisfaction has become a growing issue. Clients are often unaware of the complexity and time required for comprehensive due diligence processes, which can extend over several days. As a result, there is a noticeable decline in patience among clients whose expectations for rapid processing clash with regulatory obligations. From the financial sector’s perspective, economic interests tend to take precedence over geopolitical concerns for many clients, further complicating efforts to build understanding of and support for sanctions compliance.

Participants agreed that adapting to the new compliance environment requires sustained investment in technology and training. A representative from UniCredit underlined that implementing robust technological systems typically takes a minimum of three years. Although the regulatory landscape has improved – particularly through clearer designation of competent authorities – challenges remain. Banks emphasised the need for greater information sharing and guidance from public institutions, especially to support smaller actors within the private sector.

Another persistent issue relates to the unrealistic expectation that banks can implement sanctions immediately upon publication in the Official Journal of the European Union, the bloc’s primary mechanism for publishing sanctions. Participants argued that these lists are often unstructured and difficult to operationalise without delay. This challenge is compounded by the fact that political announcements often precede official listings, creating ambiguity and leaving institutions underprepared. Some participants noted that the departure of the UK from the EU removed a previously relied-upon source of clarity and best practices, which has left a noticeable gap in guidance.

Significant concerns were also raised about the current state of EU-level data infrastructure. Participants specifically highlighted that the Official Journal of the European Union is poorly structured and not easily machine-readable, delaying sanctions implementation. Often, more usable documentation emerges only 20 days after initial listings.

A particular concern is the trend towards reduced transparency in beneficial ownership data across the EU. Romania’s own beneficial ownership register was described by workshop participants as underdeveloped and unreliable. Without rigorous validation and monitoring, the register fails to serve its intended purpose as a cornerstone of sanctions enforcement. It was noted that other countries, such as Latvia, are considerably ahead of Romania in this regard.

Data Transparency and Due Diligence

In discussions on data transparency and enforcement tools, participants underscored the importance of integrating official business registries with investigative journalism resources and third-party data platforms, such as the Organized Crime and Corruption Reporting Project (OCCRP). Integration between business registries, investigative journalism resources and third-party platforms can aid in improving the identification of beneficial owners, particularly in high-risk or opaque corporate structures.

A representative from 45 North emphasised that effective sanctions implementation fundamentally depends on the ability to ascertain who ultimately owns and controls a company. In many cases, ownership structures are deliberately obscured, often masking connections to Russian oligarchs or other sanctioned actors. To address this, the speaker advocated for the development of a robust, transparent and accessible ultimate beneficial ownership (UBO) register that enables both public authorities and private entities to carry out comprehensive due diligence.

As a practical example, the representative explained that many companies routinely incorporate investigative journalism sources – such as OCCRP resources – into its client onboarding processes. These platforms offer critical insights that go beyond what is available in official registries, illustrating the value of open source intelligence and the importance of public–private cooperation in uncovering hidden ownership networks.

The Romanian FIU noted its dual role in both enforcing sanctions and training reporting entities. Institutions are provided with legal provisions and digital tools to identify potential sanctions breaches. While these systems support compliance, FIU officials acknowledged the need for stronger international information-sharing mechanisms, which are essential given the cross-border nature of illicit finance.

At the onset of the sanctions regime, financial institutions in Romania reported a significant decline in transactions involving Russian clients. During the workshop, representatives from the banking sector noted that the risk appetite for engaging with Russian-linked entities had dramatically decreased. This shift, driven by a strong disincentive to risk exposure, led to a high degree of self-regulation within the sector. Perhaps as a result of this, participants reported that there were very few – if any – sanctions violations or penalties issued in Romania during this initial phase.

However, as sanctions evasion tactics evolved and became more sophisticated, new challenges emerged. A former prosecutor and former FIU official highlighted that Romanian authorities have struggled to keep pace with enforcement demands. Concerns were raised about delays in asset freezes and the lack of timely suspicious transaction reports (STRs), which are critical for detecting and investigating potential violations. The absence of STRs has left authorities effectively blind to illicit financial flows.

Compounding these concerns, one of the participants pointed to the 45 North publication which reported that from the total number of Russian-linked companies registered in Romania from 1990 to 2023, 57% were registered in the 10 years between 2013 to 2023, after the Crimean annexation, with Russia ranking as the country’s eighth import source in 2022. Without systematic efforts to verify beneficial ownership, many of these connections remain obscured, hampering effective enforcement.

The speaker advocated for urgent reforms to Romania’s company registry and enforcement mechanisms, warning that superficial legislative improvements without enforcement would render the system ineffective. By comparison, the speaker attributed Latvia’s success in sanctions enforcement in part to the centrality of its beneficial ownership registry, offering a model for Romania to consider.

Academics from the ASE argued that Romania must shift from a checklist-based approach to a more strategic, risk-based sanctions model. While the private sector has increased its resource allocation towards compliance, the state has not kept pace. Public institutions remain under-resourced, lacking the agility to match the growing sophistication of money laundering networks, including alternative payment systems and non-bank financial channels.

The Decentralised Sanctions System and Risks to Unity

Representatives from the MFA acknowledged that while Romania’s sanctions system remains decentralised, efforts have been made to improve coordination through the Chancellery of the Prime Minister, which now oversees interagency cooperation. However, information-sharing forums and coordination mechanisms still face capacity limitations.

Private sector representatives raised concerns about broader EU-level cohesion. They emphasised that sanctions enforcement is not only a question of capacity but also political will. If one member state fails to implement EU sanctions consistently, it creates a systemic vulnerability. As one participant put it, “the chain is only as strong as its weakest link”.

The lack of a national sanctions regime in Romania – contrasted with other EU countries that have adopted one – has led to greater implementation complexity for private actors and has limited Romania’s ability to highlight domestic sanctions evasion concerns to its private sector. Participants also raised the spectre of further political fragmentation, particularly if member states such as Hungary choose to block new EU sanctions packages. In such cases, as a participant representing the private sector noted, the emergence of a “coalition of the willing” might become necessary to sustain meaningful enforcement.

That said, European cooperation also strengthens sanctions implementation in Romania. A representative from Romania’s ANAF reported that asset freezes have increased significantly. The agency collaborates with counterparts in other EU member states to trace and verify beneficial ownership data, sometimes uncovering information absent from Romania’s own registry but available in jurisdictions like Cyprus. The upcoming EU Anti-Money Laundering (AML) package is expected to improve data accessibility across borders.

Moving Beyond A Merge Pe Burtă

The Romanian expression a merge pe burtă (literally, “to go on one’s belly”) is often used to describe a strategy of survival through discretion – keeping a low profile, avoiding visibility, and not drawing attention to oneself during uncertain or high-risk situations. In the context of sanctions enforcement, it was used during the workshop and sideline conversations to characterise how some actors or institutions may choose to quietly comply or minimally engage, prioritising self-preservation over proactive enforcement or transparency. The phrase suggests a cautious, even evasive, posture in the face of complex regulatory or geopolitical pressures. Participants at the workshop consistently highlighted the absence of a whole-of-society approach to sanctions enforcement in Romania. While government institutions and the banking sector have made measurable efforts to strengthen compliance, small and medium-sized enterprises (SMEs) often remain underinformed or structurally unprepared to meet the same standards. As one participant noted, “even if the state does its job and banks fulfil their obligations, SMEs may still choose to engage with sanctioned entities due to a lack of awareness or incentives”. The current system lacks the capacity to conduct granular, transaction-level checks across these smaller market actors.

One potential solution identified was the expansion of data-collection capabilities to increase visibility into financial flows and identify high-risk actors. However, participants also cautioned against overreach: enhanced surveillance mechanisms – if poorly communicated or lacking oversight – could face public resistance or even be misused in ways that undermine democratic accountability. For example, concerns were raised about how enforcement mechanisms might operate under political pressure, particularly if the EU were to impose sanctions on countries such as China, where identifying beneficial ownership is especially opaque.

These technical and governance challenges are further compounded by weak public communication. Despite generally pro-European and pro-Ukrainian public sentiment, Romania’s government has maintained a low profile on the issue of sanctions. Workshop participants noted that public messaging remains limited and often reactive, making it easier for populist or anti-European political actors to exploit the narrative and question the relevance or legitimacy of sanctions. Some warned that without effective communication strategies, sanctions risk being perceived not as protective tools of economic and national security, but as externally imposed burdens that harm domestic interests.

There was broad consensus that Romania must engage a wider array of societal stakeholders – including SMEs, journalists, academia and civil society – in building public understanding of sanctions and their objectives, and Romania’s role in supporting EU policy and regional security. This effort should not only inform, but actively involve these actors in implementation and oversight, reinforcing both the transparency and credibility of sanctions policy.

Insights from Parliament: Political Ambiguity and Public Disengagement

The workshop discussions were complemented by a meeting with members of the Romanian parliament, which provided additional context on the political and public dimensions of sanctions policy. Several MPs acknowledged that sanctions are rarely a topic of active debate within the legislature. While some Russian-owned companies have drawn scrutiny – particularly in sectors such as aluminium – there has been little sustained pressure for robust national enforcement. Early resistance to sanctions was driven largely by concerns about job losses and economic fallout. Over time, however, discussion around these issues has diminished, and political messaging remains cautious.

Notably, anti-European rhetoric has emerged only recently within certain political factions. Before 2022, pro-Russian narratives were largely absent from mainstream politics, and there were no parties openly opposed to sanctions. Today, however, as noted by one member of the parliament, some political actors argue that the economic consequences of supporting Ukraine are too high, reflecting a gradual shift in the public discourse. Romania’s official position on the European stage has also remained relatively muted. As one MP noted, a general stance has been to “quietly support Ukraine” without overt political campaigning or bold public positioning.

This reluctance is mirrored in the general public’s limited awareness of Romania’s sanctions obligations. As one participant noted, this might be due to a significant institutional confusion and a lack of clear responsibility for sanctions implementation. The participant added that, before December 2024, authorities routinely passed responsibilities from one institution to another, creating a perception that the government was more concerned with appearing compliant than with delivering substantive enforcement. Transparency remained minimal, leaving both the public and private sectors unsure of the actual measures being applied.

A recurring theme in the parliamentary discussion was the underutilisation of Romania’s beneficial ownership register, which was – reflecting the earlier workshop – described as unreliable and lacking proper oversight. While banks are conducting Know Your Customer checks and screening politically exposed persons (PEPs), the central company registry functions primarily as a procedural database for incorporation, not as a strategic enforcement tool. MPs acknowledged that no agency systematically verifies beneficial ownership data, undermining the register’s role as a pillar of financial transparency.

Despite these gaps, there is strong societal resistance to Russia’s influence, and Romania’s population remains broadly pro-European and pro-American. However, concerns are growing about external interference, including credible reports of Russian meddling in domestic elections. Participants pointed to the Călin Georgescu campaign as a case study in long-term strategic influence operations, underscoring the vulnerability of Romanian democratic processes.

Looking ahead, questions remain about the sustainability of EU sanctions consensus, especially if member states like Hungary block new measures. As one MP warned, “if unity breaks down, every country will begin negotiating on its own terms”. The prospect of a return to transactional politics – exemplified by speculation that the current US administration could use troop deployments as leverage against European sanctions – was viewed with unease.

Some participants concluded that the EU itself requires structural reform to preserve unity and coherence. Without it, the risk remains that adversaries like Russia will exploit fragmentation and weaken collective responses. Romania, given its strategic position and vulnerability to influence, may increasingly serve as a testing ground for these dynamics.

Finance as a Vector of National Security and Electoral Integrity

Participants across both public and private sectors agreed that finance is now inextricably linked to national security. The role of financial systems has expanded beyond traditional concerns of AML and counterterrorism financing, encompassing hybrid threats such as foreign interference, sanctions circumvention and electoral manipulation.

Representatives from the private sector emphasised that the starting point for effective financial resilience must be local collaboration. Enhanced public–private partnerships, improved UBO transparency, and deeper international cooperation were identified as key pillars. Both organisations stressed the urgency of reinforcing cross-border information sharing, especially in regions vulnerable to illicit finance and influence operations.

A think tank representative noted the case of Moldova, where hybrid warfare is increasingly underpinned by illicit finance. According to this analysis, Russian influence in Moldova is largely orchestrated through a financial ecosystem centred around a single oligarch. Following Romania’s successful advocacy for an EU–Moldova sanctions regime, new circumvention patterns emerged. Russian actors began shifting funds through non-traditional channels – notably via cyber networks and through Transnistria, a breakaway region where transactions are processed exclusively through Russia’s Mir payment system. Because these transactions never enter the conventional banking sector, they become untraceable. Funds are withdrawn in cash within Transnistria and are then redirected to fuel destabilising activities on the ground. This phenomenon illustrates a broader pattern: while formal financial systems implement sanctions, a parallel creative infrastructure has emerged to circumvent them.

The conversation then turned to electoral integrity, with multiple speakers highlighting the financial dimensions of political interference. One participant argued that while legal safeguards against electoral meddling are essential, threats constantly evolve, requiring proactive and adaptive strategies. The EU, it was noted, has not responded with the necessary speed and flexibility in this domain. The MFA shared that it had recently launched a forum on public–private collaboration, which had proven valuable in surfacing such threats. The MFA noted that this forum would be repeated.

The RBA provided concrete evidence of electoral risk exposure, noting that some attempts to redirect funds for the purpose of electoral influence had already been detected. Although banks are mandated to report only suspicious transactions, their internal systems allow them to discern broader patterns in financial flows that may be politically relevant. However, banks face increasing burdens in compliance and monitoring; these burdens can cost millions of euros. Despite this, the responsibility remains largely on the private sector, with insufficient state support for expanding financial monitoring infrastructure.

Building on this point, several participants noted a surge in alternative financial channels, particularly through China, alternative payment systems and high-risk jurisdictions such as Venezuela. These platforms, often involving state-linked entities or petrodollar revenues, are significantly more difficult to monitor and regulate. Without enhanced detection mechanisms, these flows represent a growing blind spot in the sanctions and AML architecture.

A RUSI representative argued that mindsets must evolve. Whereas AML efforts were once focused narrowly on criminality, they now sit at the intersection of financial integrity and national security. Accordingly, both private institutions and governments must invest in long-term capability building. “This is not just compliance – it’s strategy”, he observed.

Workshop participants also highlighted blurred lines between financial and political risks. Not all PEPs are laundering money, but many are entangled in corruption cases or reputational controversies that create institutional risk. Screening clients against sanctions lists is no longer sufficient; onboarding procedures must now incorporate anti-bribery and corruption frameworks alongside traditional AML measures. The EU’s Whistleblower Directive, although adopted with difficulty in Romania, was cited as a positive development. Participants called for stronger implementation: not only within private firms, but also within public institutions.

The MFA concluded this segment by noting that recent legislative reforms in Romania provide a foundation for improved implementation and enforcement in the coming year. If effectively operationalised, these changes could enhance resilience across the financial sector and bolster defences against both domestic and transnational threats.

Conclusions

The Bucharest workshop highlighted Romania’s adaptation to the evolving European sanctions landscape and in responding to the broader nexus of finance, security and geopolitical threats. As discussions revealed, recent reforms to Romania’s sanctions framework mark a significant step forward by introducing a decentralised model with clearer coordination, spearheaded by the Chancellery of the Prime Minister. However, implementation challenges persist, particularly around inter-agency accountability, resource constraints and the capacity to detect complex patterns of sanctions evasion.

Participants noted that Romania’s capacity to track UBO remains limited by persistent data gaps. Strengthening the reliability and use of the national UBO register will be crucial for both enforcement and private sector compliance. Although public–private collaboration is improving, collaboration must be expanded to include SMEs and civil society actors who are not yet fully engaged in the sanctions enforcement ecosystem.

A recurring theme throughout the workshop was the need for a whole-of-society approach. While Romania’s financial institutions are adapting to a more complex risk environment, public communication on sanctions remains underdeveloped. Without a coherent narrative around Romania’s role in supporting EU sanctions and protecting regional security, the risk of public disengagement and populist exploitation increases.

Romania’s strategic engagement in promoting the EU–Moldova sanctions regime was cited by participants as constituting a notable success. However, the response from adversarial actors has been equally adaptive, with illicit financial flows increasingly routed through informal networks – including cyber platforms and regional grey zones such as Transnistria – thereby evading formal banking oversight. These developments reinforce the need for vigilance and improved cross-border monitoring.

Finally, discussions underscored that Romania must deepen its cooperation with European partners, particularly in addressing regional maritime threats such as Russia’s shadow fleet activity in the Black Sea. Multilateral frameworks like the Joint Expeditionary Force offer a pathway to enhance port security and infrastructure protection.

Agility, coordination, and international partnership will be essential as geopolitical risks continue to evolve. The Bucharest workshop reaffirmed that sanctions policy is not only a matter of compliance; it is a matter of resilience and strategic foresight. Romania’s trajectory, while still unfolding, offers valuable insights into how mid-sized EU states can navigate the complexities of modern financial security while contributing meaningfully to European unity and collective defence.

Kinga Redlowska is the Head of CFS Europe. She leads the Centre for Finance and Security’s activities in Brussels that centre around the intersection of illicit finance and security, and are focused on the EU and its neighbourhood.