According to Alina Radu, Partner NNDKP – speaker at our event “Sensitive Compliance and AML Issues and Solutions” on 27 February 2020 – “the principle to be followed when determining the UBO of a Romanian company is that the UBO is the natural person who ultimately owns or controls the Romanian company (art. 4 para.1 of Law 129/2019). An assessment shall be done on a case by case basis to determine the UBO.

In light of the above principle, based on the current wording of Law 129/2019, in case of a Romanian company which has the last entity in the controlling chain a company listed on a regulated market, it needs to be determined, on a case by case basis, whether there is a natural person/natural persons acting in concert who “actually” own or control such entity. Companies listed on a regulated market are subject to clear transparency and corporate governance rules, which makes the verification easier.

According to the current wording of Law 129/2019 (art. 4 para. 2 (a) (1) in correlation with art. 19 which makes no exception for listed companies or companies owned by listed companies), if a natural person indirectly owns more than 25% of the shares of the Romanian company, it could be considered that at least such person needs to be disclosed as UBO.

If no such natural person holds indirectly more than 25% of the shares/voting rights, and there is no other person ultimately exercising control over the Romanian entity, then according to the current wording of art. 4 para. 2 (a) (2) of Law 129/2019), the management of the Romanian entity is to be declared as UBO. The key question here is whether it can be considered that the natural persons acting as representatives of the direct or indirect shareholder(s) of the Romanian entity (including those of the listed company) which take shareholders’ decisions to be implemented by the Romanian entity should or not be declared as UBO for the purpose of Law 129/2019. This requires assessment by each company to determine whether they fulfill the “control” criteria to declare an UBO under para. 4 (1) correlated with para. 4 (2) (a) (1) – para. (2) sets examples and it is not exhaustive (it says “at least”) !

When talking about listed companies, attention should be paid as Law 129/2019 refers in art. 4 para. 2 (a) (1) to companies whose shares are traded on regulated markets and not to a more general concept of “listed” companies. In Romania, for example, companies whose shares are traded on Aero – the alternative trading system – would not fall within the concept of companies whose shares are traded on regulated markets (only those traded on the main market of BVB would qualify if we are talking about the Romanian market).

The clarification of the treatment of listed companies, as well as guidelines from the relevant authorities on these aspects will be welcome.”