The Romanian government issued a new law under which associations, foundations and federations are obliged to declare data about their beneficiaries.

This will mean, for example, that NGOs will have to provide to authorities data of journalists and children involved in any of their activities.

The Romanian government is including this requirement within a new law it must pass in order to transpose an EU directive against terrorism financing.

Strong protest from civil society

Almost 80 non-governmental organizations from the country have signed a protest letter addressed to the government, and they intend to refer the matter to the European Commission, alleging that the new law is an abusive transposition of EU Directive 2015/849, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

Under the law, civil society is placed, unjustifiably, in the same category of financial risk as providers of gambling services and banking institutions.

Without having published a risk analysis to explain their decision, as recommended by international standards, authorities decided that NGOs will be subject to reporting obligations that even large banks and gambling companies would be hard pressed to comply with.

The transparency of the internal structure of any NGO – its status, address, composition of the Board, etc. – is already guaranteed in Romania through the National NGO Register, which is managed by the Ministry of Justice.

Background

On 31 May 2018, the Romanian government approved the Draft Law on the Prevention and Control of Money Laundering and Terrorist Financing, and on amending and completing some normative acts.

In trying to transpose the fourth EU Money Laundering Directive, the government’s law proposal has already given rise to strong criticism from the NGO sector, as it will seriously and negatively impact the work of civil society by introducing the obligation to communicate to the government identification data of all the beneficiaries of non-governmental organizations. Non-compliant organizations will face an extreme sanction: dissolution.

Specifically, the project will lead to:

• the complete closure of organizations working for the most vulnerable groups: abused individuals, people whose human rights have been violated, people affected by extreme poverty;
• a drastic decrease in the number of citizens turning to non-governmental organizations;
• NGOs no longer being able to enter into partnerships without sharing complete lists of data on their beneficiaries, including individuals, with names, surnames and all data included in their identity cards.

No risk assessment

On 7 May, the NGOs explained their position the law's creators, to the Ministry of Justice and to the National Office for the Prevention and Combating of Money Laundering.

Their efforts were in vain. The law is evidently obnoxious, as it contradicts one of the main sources used by the government to justify its decision: Financial Action Task Force’s recommendations.

FATF is an intergovernmental organization working to reduce money laundering and terrorism financing. FATF’s Recommendation no. 8 refers specifically to nonprofit organizations and requires something the Romanian government chose not to do: a risk analysis and the adoption of measures proportionate to the identified risk.

As no assessment of the terrorist risk existing in the NGO sector has ever been published in Romania, it is hard to justify that the above-mentioned measures are proportionate to any alleged risk.

It remains to be seen how authorities will handle the avalanche of personal data of NGO beneficiaries that it will have to deal with.

The quantity of data will be huge, considering, for example, that the non-governmental organizations providing social assistance services alone have, annually, more than 350,000 beneficiaries. It is therefore important that the government’s Ordinance be amended by the Parliament.