Is Capital Laundering Possible Through Fraudulent Use Of Fiduciary Agreement By Trust/Fiduciary Companies?

Romanian jurists described the fiduciary agreement either by rendering texts of the Civil Code, or by taking over all or part of the definitions, opinions, interpretations and even some examples given by various authors, jurists, economists and financial experts in the bank field. However, after three years from its adoption, there is uncertainty about the legal regime applicable to the fiduciary agreement, created by the ambiguity and contradictions of the texts of the Civil Code. So, as a first step, the Civil Code defines fiduciary agreement as a transfer of/and over certain rights composing the fiduciary assets (art. 773) and over these rights the trustee undertakes the exercise of the full, holder specific powers (art. 784 para. 1), but subsequently it states that the fiduciary assets consists of goods (art. 786). Secondly, the Civil Code suggests that the fiduciary agreement is a contract establishing first degree movable securities (art. 781) or a contract of mandate (art. 783) and, regarding the trustee’s remuneration, a contract of managing another person’s properties (art. 784 par. 2), being uncertain whether the administration is simple (art. 795 - art. 799) or full (art. 800 to art. 801). Also, although the Civil Code limits the fiduciary capacity exclusively to lawyers, public notaries and credit institutions, investment companies and investment management firms, financial investment services companies, legally established insurance and reinsurance companies (art. 776 par. 2 and para. 3), it does not describe the rationality of this option. These reasons make necessary the analysis of the legal status and professional duties of the fiduciary trustees, to understand the relevance of their specialized activity, in order to answer the question whether together with the specific risks of the transactions imposed by the fiduciary contract there is also a possible the risk of capital laundering. The answer to this question requires a holistic approach based on risk and identifying mechanisms, situations, facts related to money laundering in order to obtain legal arguments to determine in the future the adoption of an effective national legislation, corresponding to the requirements of the European Union law and in particular to those set out in the (EU) Directive 2015/849 and to those that ensure the international cooperation instruments in the protection of the capital market.