Financial Crime World

Bulgaria Cracks Down on Financial Fraud with Tough AML Measures

Bulgaria has taken a bold step towards combating financial fraud and money laundering by implementing strict anti-money laundering (AML) measures. The country’s AML Act imposes various obligations on almost 40 categories of reporting entities, including banks, financial institutions, payment services providers, insurance and reinsurance companies, and intermediaries distributing life risk insurance.

Key Obligations

The AML Act requires reporting entities to:

  • Have an anti-money laundering program in place
  • Conduct comprehensive customer verification
  • Collect information and documents from customers
  • Assess the risk of money laundering, terrorist financing, and disclose suspicious transactions and customers
  • Maintain accurate records for at least five years
  • Collect necessary due diligence data from third-party service providers without undue delay
  • Train staff on AML regulations

Implementation Measures

To meet these stringent requirements, reporting entities must implement a range of measures, including:

  • Customer Due Diligence (CDD): Verify the identity and background of customers
  • Enhanced Due Diligence (EDD): Conduct thorough due diligence on high-risk customers or transactions
  • Recordkeeping: Maintain accurate records for at least five years
  • Money Laundering Risk Valuation: Assess the risk of money laundering in each transaction
  • Transaction Monitoring: Monitor transactions for suspicious activity
  • Information Exchange: Share information with national authorities and other countries

Consequences of Non-Compliance

The Bulgarian government has made it clear that AML compliance is a top priority. Reporting entities that fail to meet these obligations may face severe consequences, including fines, penalties, and even criminal prosecution.

Goals of the AML Act

The country’s AML Act aims to create a safe and secure financial environment by identifying and disrupting illegal activities. By implementing robust measures to prevent financial fraud, Bulgaria hopes to attract foreign investment and maintain its reputation as a reliable and stable financial hub in the region.