The offence of embezzlement under Romanian law: explanation and consequences for directors, accountants and employees handling money or assets

1. Why embezzlement matters for people who handle money or assets

In most organisations, whether public authorities, private companies, NGOs or associations of owners, there are one or more people who are formally responsible for the management of money and other assets. In practice this category includes directors, chief financial officers, accountants, cashiers, warehouse managers, shop managers, heads of service and many others. Often they are precisely the people who enjoy the highest level of trust within the organisation.

At the same time, these roles are exposed to a significant criminal law risk. Situations that some people perceive as mere internal irregularities – using company money to pay a personal bill “just for a few days”, taking cash from the till and replacing it later, using company property for exclusively personal purposes – can be considered criminal offences if the conditions laid down by the Criminal Code are met.

Under Romanian law, embezzlement is regulated by Article 295 of the Criminal Code – Embezzlement. The text punishes a public official who, for himself or for another, appropriates, uses or traffics money, valuables or other assets which he manages or administers, with imprisonment from 2 to 7 years and a ban on holding public office. Attempt is also punishable.^[1]

For directors, accountants and any employee who handles money or assets, this means that the line between a disciplinary problem and a criminal case can be crossed much more easily than many imagine. Understanding where embezzlement begins, who can be held criminally liable and what the concrete consequences are is therefore essential for anyone in a position of financial responsibility.

2. Legal framework: where embezzlement is regulated in the Criminal Code

Embezzlement is regulated by Article 295 of the Criminal Code, in Title V (“Offences of corruption and service-related offences”), Chapter II on service-related offences. The marginal title is “Embezzlement”. The legal wording of paragraph (1) can be summarised as follows: appropriation, use or trafficking by a public official, for himself or for another, of money, valuables or other assets that he manages or administers, is punishable by imprisonment from 2 to 7 years and a ban on holding public office. Paragraph (2) states that the attempt is also punishable.^[1][2][3]

In addition to the basic regulation, two other provisions are crucial for practice:

• Article 308 Criminal Code – “Offences of corruption and service-related offences committed by other persons”, which extends the application of Article 295 to people who are not public officials in the classical sense, but who perform a task within any legal person or in the service of a natural person providing a public service.^[4][5][6]
• Article 309 Criminal Code – “Acts which have caused particularly serious consequences”, which provides that if embezzlement (and other service-related offences) causes particularly serious consequences, the special limits of the penalty are increased by half.^[7][8]

Article 308 paragraph (1) provides that the rules on embezzlement and other corruption and service-related offences, which refer to public officials, apply accordingly to acts committed by or in connection with persons who perform, permanently or temporarily, for or without remuneration, a task of any kind in the service of a natural person referred to in Article 175 paragraph (2) or within any legal person. Paragraph (2) states that in this case the special limits of the penalty are reduced by one third.^[4][5][6]

Article 309 provides that if the acts provided for in Article 295 (embezzlement) and other enumerated articles have caused particularly serious consequences, the special limits of the penalty provided for by law shall be increased by half.^[7][8]

The concept of “public official” is defined in Article 175 Criminal Code. According to paragraph (1), public officials are persons who, on a permanent or temporary basis, with or without remuneration, exercise prerogatives of public authority, are employed in public authorities or institutions or perform duties related to the implementation of public services. Paragraph (2) extends the concept to persons working for legal entities which, even if privately owned, perform a public utility service and are subject to the control of a public authority (for example, certain banking institutions supervised by the National Bank of Romania). The High Court has used this text to qualify bank employees as public officials in criminal law, in decisions such as Decision no. 18/2017 of the High Court of Cassation and Justice (HCCJ).^[9]

Through Decision no. 1/2015, the HCCJ clarified that the provisions of Article 308 Criminal Code represent a mitigated form of the offences to which they refer, including embezzlement, and not a distinct offence. As a result, the penalty limits are effectively reduced by one third when the author is a person from the private environment who falls under Article 308.^[10][11]

3. Embezzlement in simple terms and the difference from theft and abuse of office

3.1. What embezzlement means in practice

Beyond legal wording, embezzlement can be described as the abuse of trust by a person who legitimately manages someone else’s assets. The key element is that the money or assets come into the person’s control lawfully, on the basis of a position or a mandate (for example, as director, cashier, accountant, warehouse manager), and only later are they used or appropriated contrary to the interests of the owner.

For example, a cashier receives money from customers on behalf of the company and has the duty to register and hand over that money or to deposit it into the company’s bank account. If the cashier keeps part of the amounts for personal use, we are not dealing with simple theft, but with a typical case of embezzlement, because the sums were initially entrusted to the cashier lawfully and within a management relationship.

3.2. Embezzlement versus theft

Theft presupposes that the author has no right whatsoever to hold the asset: he takes it from the possession or detention of another person without that person’s consent. A classic example is the client who steals cash from the till when the cashier is not paying attention. In this scenario, the client never had the right or duty to handle the money; he simply removes it from the sphere of control of the lawful holder.^[12]

In embezzlement, by contrast, the assets are already entrusted to the person in a lawful way: the cashier, director or accountant manages or administers them on the basis of a job description, mandate or management contract. The offence consists in how he subsequently uses or appropriates those assets for his own benefit or for the benefit of another person.

3.3. Embezzlement versus abuse of office and fraudulent management

Abuse of office (Article 297 Criminal Code) consists in the action or inaction of the public official who, in performing his duties, fails to carry out an act or performs it defectively, thereby causing damage or seriously infringing a person’s rights. In abuse of office it is not necessary for the author to appropriate assets; very often it is about illegally issuing decisions, signing unlawful contracts or unlawfully favouring a third party.

Fraudulent management (Article 242 Criminal Code, a patrimonial offence) is closer to embezzlement, but can be committed by any person who administers someone else’s assets on the basis of a civil or commercial relationship, without necessarily being in an employment or service relationship. Typical examples are the guardian who mismanages the assets of a minor or a person appointed by power of attorney to manage the property of a relative.^[13]

In practice, the distinction between embezzlement and fraudulent management is primarily based on the quality of the author (public or assimilated official or person falling under Article 308 versus any person as administrator) and the nature of the underlying legal relationship (employment or service-related relationship versus purely civil or commercial management).

4. Constituent elements of the offence of embezzlement

4.1. Protected social values

Embezzlement protects two categories of social values at the same time. First, it protects the proper functioning of public or private services, namely the trust that persons entrusted with managing assets will perform their duties correctly and loyally. Secondly, it protects the patrimony of the injured party, whether this is a public authority, a company, an association or a private individual.^[12][14]

4.2. Material object: what assets can be embezzled

The material object of embezzlement consists, in practice, of:

• cash (amounts from the till, receipts, advances, deposits);
• valuables (securities, payment instruments, vouchers, meal tickets, gift cards and similar assets with economic value);
• other movable assets with economic value (merchandise, fuel, equipment, office supplies, raw materials, etc.) belonging to the patrimony of the injured person.

Case law has held that assets which are not yet formally recorded in the accounting records can also be the object of embezzlement if, in fact, they are under the management or administration of the author (for example, goods held in custody or surpluses artificially created by manipulating stock records).^[12][14]

If the asset unlawfully taken is not among those which the author manages or administers, but is, for example, in the custody of a different employee with whom he has no management relationship, the act will normally be classified as theft, not embezzlement.

4.3. Active subject: who can commit embezzlement

Embezzlement is an offence with a special active subject. The author must have the status of public official in the sense of Article 175 Criminal Code or fall under the category of persons referred to in Article 308. In most practical cases this includes:

• civil servants and employees of public authorities and institutions;
• employees of public enterprises or entities with majority state capital;
• persons working for private companies or NGOs who perform a task within that legal person and handle money or goods (for example, directors, managers, accountants, cashiers, warehouse managers, administrators of associations of owners);
• certain categories of bank employees who, although employed by private institutions, are treated as public officials in criminal law, under Article 175 paragraph (2), because they work for entities providing a public service and supervised by a public authority such as the National Bank of Romania.^[9][15]

If the person who appropriates or uses the assets does not have management or administration duties in relation to those assets, the act will not amount to embezzlement but may be classified as theft, fraudulent management or abuse of office, depending on the circumstances.

4.4. Passive subject

The passive subject is usually the legal person whose assets have been embezzled: a public institution, a municipality, a private company, a bank, an NGO or an association of owners. In some cases the injured party may be a natural person (for example, a professional whose funds are managed by an employee or a private individual who entrusts assets to another person for management).^[12][14]

4.5. Objective element: appropriation, use or trafficking of assets

The material element of the offence is carried out by one of the following actions:

• appropriation – treating the entrusted asset as if it were one’s own, with the intention of keeping it permanently (for example, receiving an amount of money on behalf of the company, failing to record it and using it for personal purposes);
• use – temporary use of the entrusted money or assets for personal purposes or for the benefit of another person, with the intention of returning them later (for example, paying a personal debt with cash from the till, hoping to replace the money on payday);
• trafficking – making the entrusted asset available to another person in order to obtain a benefit, such as renting or lending company assets without any legal basis and keeping the proceeds.^[1][12]

The immediate result is the production of a patrimonial loss for the injured party or at least the unlawful removal of the asset from its patrimonial sphere, even if the loss is later remedied. The causal link between the action and the loss generally follows naturally from the manner in which the act was committed.

4.6. Subjective element: intent

Embezzlement can only be committed with intent, either direct or indirect. The author knows that the assets belong to another person, understands that he is under a duty to manage or administer them in that person’s interest and nevertheless decides to appropriate, use or traffic them, accepting the risk of causing damage to the rightful owner.^[12][16]

By contrast, a mere accounting mistake, miscalculation or negligent interpretation of internal procedures, without the intention to obtain an unjust benefit and without the awareness that the conduct is contrary to the owner’s interests, does not normally satisfy the requirements for embezzlement, although it may lead to disciplinary or civil liability.

5. Forms, penalties and limitation periods

5.1. Basic form – Article 295 Criminal Code

In its basic form, embezzlement is punishable by imprisonment from 2 to 7 years and a ban on holding public office. Attempt is also punishable, which means that even if the author is interrupted or fails to obtain the full benefit sought, he can still be criminally liable.^[1][2][3]

5.2. Mitigated form – Article 295 in conjunction with Article 308 Criminal Code

For persons falling under Article 308 (those who perform a task within any legal person, including private companies and NGOs), the special limits of the penalty are reduced by one third. Starting from the basic range of 2–7 years, the calculation is as follows:

• minimum: 2 years multiplied by two-thirds (because one third is deducted) equals 1 year and 4 months;
• maximum: 7 years multiplied by two-thirds equals 4 years and 8 months.

This interpretation has been expressly confirmed by the HCCJ in Decision no. 1/2015 and in other case law, which qualify Article 308 as a mitigated variant of the offences to which it refers, not as a simple cause of reduction of the penalty limits.^[10][11][15]

5.3. Aggravated form – particularly serious consequences (Article 309 Criminal Code)

When the embezzlement causes particularly serious consequences, Article 309 Criminal Code applies. In such a case, the special limits of the penalty provided by law are increased by half. Starting from the 2–7 year range of the basic form, the limits become in principle 3 to 10 years and 6 months. For the form under Article 308, the same rule applies proportionally.^[7][8]

The Constitutional Court has examined Article 309 in several decisions and has held that it operates as an aggravated variant of the basic offences, including embezzlement, without creating a separate offence. The seriousness threshold is assessed in the light of the size of the prejudice and the gravity of the disruption caused to the activity of the injured person.^[7][17]

5.4. Limitation periods of criminal liability

General limitation periods are laid down in Article 154 Criminal Code. The duration depends on the maximum of the penalty provided by law for the consummated offence:^[18][19]

The High Court has underlined in its case law that, when Article 308 applies, the limitation period must be calculated by reference to the reduced penalty limits, not to the basic ones. Moreover, limitation periods may be interrupted or suspended by various procedural acts (for example, the initiation of criminal proceedings, the indictment), so the actual calculation in a specific case can be complex and must be done by reference to the legislation and constitutional case law in force at the material time.^[15][20]

6. Practical examples for directors, accountants and other employees

6.1. Administrator of an association of owners

The administrator of an association of owners collects monthly service charges, repair funds and other contributions. In practice, there have been numerous cases where the administrator:

• collected sums from owners without registering them in the association’s records;
• used the money for personal purposes (loans, holidays, payment of private debts), intending to replace it later;
• issued fictitious invoices or receipts in order to cover up the missing amounts.

Romanian courts have repeatedly held that the administrator of an association of owners may be the active subject of embezzlement in the mitigated form (Article 295 in conjunction with Article 308), if it is proved that he managed the association’s funds and appropriated or used them for his own benefit.^[12][14]

6.2. Accountant or cashier in a private company

An accountant or cashier can find himself in a situation of embezzlement when he:

• collects cash from clients and records a lower amount in the management software, keeping the difference;
• generates fictitious “advances for settlement”, justifying cash withdrawals that in reality are used for personal purposes;
• manipulates stock records to create fictitious surpluses which are then removed from the warehouse and sold on his own account.

Case law also shows situations where waiters or shop assistants were convicted not of theft but of embezzlement, when the courts found that they actually had the status of persons managing the sums received on behalf of the employer and were bound by a specific management relationship.^[12][21]

6.3. Company director or manager

Directors and managers usually have extensive powers over company assets, including the right to sign on bank accounts and to conclude contracts. The risk of embezzlement arises when such powers are used to:

• transfer company money, without legal basis, to personal bank accounts or to accounts of family members or controlled entities;
• use company assets (cars, equipment, leased premises) solely for personal benefit, without authorisation and without paying any consideration;
• mask personal loans as company expenses, for example by creating artificial consultancy contracts or false invoices.

Even where the director is the sole shareholder, Romanian doctrine and case law have held that he can commit embezzlement to the detriment of “his own” company. From a legal perspective the company is a separate legal person, and the director, as an individual, has a management relationship with this legal person and acts as an administrator of another person’s assets.^[12][14]

6.4. Bank or financial institution employee

After Decision no. 18/2017 of the HCCJ, employees of certain privately owned banks, authorised and supervised by the National Bank of Romania, may be treated as public officials under Article 175 paragraph (2). This means that, in some situations, embezzlement committed by bank employees can fall under the basic form of Article 295, not only under the mitigated form of Article 308, with higher penalty limits.^[9][15]

6.5. Situations that, although serious, are not necessarily embezzlement

Not every shortage in stock or breach of accounting procedures automatically constitutes embezzlement. For example:

• errors in recording transactions that are promptly corrected;
• payments made on the basis of documents that appear valid at the time, but later turn out to be forged, where the employee had no knowledge of the fraud and did not obtain any personal benefit;
• failure to follow internal approval procedures for certain expenses, without any appropriation or use of company assets for personal benefit.

In such cases, prosecutors and courts will examine whether there was an actual intention to obtain an unjust benefit and whether a real patrimonial loss was caused. If these elements are absent, the conduct may be classified as disciplinary misconduct or negligence, but not as embezzlement.

7. Concrete consequences for individuals accused of embezzlement

7.1. Criminal liability

The most serious consequence is clearly criminal liability, with penalties that, depending on the form of the offence, may reach up to 10 years and 6 months in the aggravated variant, and between 1 year and 4 months and 4 years and 8 months in the mitigated form for private sector employees. In practice, where the accused has no prior criminal record and the prejudice is repaid, courts may opt for suspended sentences or postponement of the application of the penalty, but a conviction for embezzlement remains extremely serious for the person’s career and personal life.^{[1][7][10][15]}

7.2. Complementary penalties and professional bans

In addition to the main penalty, courts may impose complementary penalties under Article 66 Criminal Code, such as:

• a ban on holding certain offices or exercising certain functions;
• a ban on carrying out the profession or activity used in committing the offence (for example, accountant, cashier, financial director, member of a management board);
• a ban on holding managerial positions in public institutions or certain categories of private entities.

These bans may be imposed for a period of 1 to 5 years, depending on the seriousness of the offence and the profile of the offender.^[22]

7.3. Civil liability (damages)

In almost every embezzlement case, the injured person – the institution, company or association – files a civil claim within the criminal proceedings, asking for:

• full reparation of the prejudice (missing sums, value of the misappropriated assets);
• interest, penalties or other accessories, where provided for by law or contract;
• reimbursement of costs for accounting or forensic audits and of other investigation expenses.

Even if the criminal court opts for a relatively lenient solution (for example, suspended sentence), the defendant can still be ordered to pay the entire prejudice and the related civil accessories.

7.4. Professional and reputational impact

A conviction for embezzlement can make it extremely difficult to obtain further employment in positions involving the management of money or assets. It may lead to the termination of existing employment contracts or management mandates and, depending on the sector, to exclusion from regulated professions (for example, statutory auditors or chartered accountants). Professional bodies and regulatory authorities often require a clean criminal record for accreditation or membership.

Beyond formal bans, criminal proceedings for embezzlement can have a long-lasting reputational impact. Media coverage, internal communication within the professional community and the stigma associated with offences against property and service-related offences can affect personal and professional relationships for many years.

8. Embezzlement in the private sector and the effect of Article 308 Criminal Code

For the private sector (limited liability companies, joint stock companies, NGOs, associations, professional offices), Article 308 Criminal Code is the key provision. It extends embezzlement and other service-related offences to persons who, although not public officials in the administrative sense, perform tasks within a legal person and manage its assets.

After intense doctrinal debate, the HCCJ has clarified in Decision no. 1/2015 that Article 308 is a mitigated form of the offences concerned. As a result:

• the constituent elements of embezzlement remain the same (management relationship, appropriation/use/trafficking, intent, prejudice);
• the quality of the author is broadened to include persons who perform a task of any nature within a legal person, even a purely private one;
• penalty limits are reduced by one third compared to the basic form.^[10][11][15]

In 2024, a recourse in the interest of the law led the HCCJ to adopt a decision (widely reported in the press) holding that embezzlement in the mitigated variant of Article 295 paragraph (1) in conjunction with Article 308 paragraph (1) cannot be classified as an “offence against patrimony” within the meaning of the Code of Criminal Procedure, but remains an offence of service.^[23] This has practical consequences mainly in relation to certain technical surveillance measures (interception of communications, access to traffic data), which are authorised under special conditions for some categories of offences.

For private sector directors and employees the essential message is that embezzlement applies to them too, with only a reduction in the penalty limits. The fact that the injured party is a private company and that there is a close relationship between the director and the company (for example, sole shareholder) does not automatically exclude criminal liability.

9. How organisations can prevent embezzlement

From the perspective of directors, managers and accountants, prevention is as important as defence in a criminal case. Some practical measures that can reduce the risk of embezzlement allegations include:

• Segregation of duties: wherever possible, separate the person who decides on payments from the person who executes them. Dual signatures on payment orders and key financial documents can significantly reduce the risk of abuse.
• Clear written procedures: adopt internal regulations and procedures for the management of cash, use of company cards, company advances and reimbursement of expenses. These should be explained to all staff handling money or assets.
• Traceability of operations: use software and record-keeping systems that ensure complete traceability of each financial transaction, stock movement or asset transfer, with time stamps and identification of the user who performed the operation.
• Independent checks and audits: carry out periodic, and occasionally unannounced, inventory checks, internal audits and external reviews. Rotation of staff in key management positions can also be an effective safeguard.
• Training and awareness: train employees on the prohibition of using company money or assets for personal purposes, even temporarily. Many criminal cases start from the belief that a short-term “loan” from the company can always be fixed later.
• Compliance mechanisms: introduce reporting channels (including anonymous whistleblowing mechanisms), clear procedures for documenting suspicions and escalation, and a culture that encourages the reporting of irregularities without fear of retaliation.

Employees who handle money or goods should, in turn, avoid any mixing of personal funds with company funds, ensure they obtain written approval for any exceptional use of company assets and promptly report any irregularities or system weaknesses that may expose them to unjustified suspicion.

10. Final remarks

Embezzlement, as regulated by Article 295 of the Romanian Criminal Code and extended by Article 308 to a wide range of private sector roles, is one of the main criminal law risks for anyone who manages other people’s money or assets. Wherever there is a management relationship, a deliberate appropriation or use of assets for personal purposes and a resulting prejudice, the risk of criminal prosecution is very real.^[1][4][10]

For companies and institutions, the most effective strategy consists in robust internal controls, clear procedures and a culture of integrity. For individuals, the essential protection is to understand that any “temporary loan” from the employer’s funds or informal use of corporate assets may be interpreted as embezzlement once discovered.

In the event of an investigation or criminal charges, anyone in the position of director, accountant, cashier, administrator of an association of owners or bank employee should seek specialised legal assistance as early as possible. The analysis of the author’s legal status (public official or person covered by Article 308), the existence and extent of the prejudice, the manner in which the criminal investigation was conducted and the applicable limitation period often make the difference between conviction, a mitigated solution or even acquittal.