Financial Crime World

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Bulgaria Cracks Down on Fraudulent Transactions: How Businesses Can Comply with AML/CTF Regulations

In an effort to combat money laundering and terrorist financing, Bulgaria’s authorities have taken steps to identify and prevent fraudulent transactions. The State Agency for National Security (SANS) is the primary regulator of anti-money laundering (AML)/counter-terrorism financing (CTF) regulations in the country.

Understanding AML/CTF Regulations in Bulgaria

Under the provisions of the AML Act and CTF Act, the Financial Intelligence Directorate of SANS can collect, preserve, examine, analyze, and disclose financial intelligence. Other authorities that monitor compliance with AML requirements include:

  • Bulgarian National Bank
  • State Commission on Gambling
  • National Customs Agency
  • Financial Supervision Commission

Compliance Obligations for Businesses

To comply with AML/CTF regulations in Bulgaria, businesses must take specific steps. Reporting entities, including:

  • Banks
  • Financial institutions
  • Payment service providers
  • Insurance and reinsurance companies
  • Life risk insurance intermediaries

must:

  • Perform customer due diligence (CDD)
  • Gather and store information
  • Assess the risk of money laundering and terrorism financing
  • Disclose suspicious transactions
  • Establish an AML program
  • Perform know-your-customer (KYC) and enhanced due diligence (EDD)
  • Maintain records
  • Assess the level of risk
  • Report suspicious activities
  • Provide training for employees
  • Ensure contact and information exchange at national and international levels

Importance of Record Keeping

Records must be preserved for at least five years.

Bulgaria’s Progress in Implementing AML/CTF Regulations

Bulgaria has made significant progress in implementing AML/CTF regulations, complying with 17 out of 40 recommendations by the Financial Action Task Force (FATF). However:

  • Businesses are still required to notify the Financial Intelligence Unit (FIU) before carrying out a procedure or transaction if there are indications of money laundering and/or proceeds of criminal activity.
  • Failure to do so can result in severe consequences.

Conclusion

Businesses must be aware of their AML/CTF reporting obligations to avoid potential legal repercussions. By understanding these regulations, businesses can ensure compliance and help prevent fraudulent transactions in Bulgaria.