Financial Crime World

Bulgaria’s Financial Institutions Face Scrutiny as Compliance Audits Intensify

In a bid to combat financial crimes, Bulgaria’s anti-money laundering (AML) and counter-terrorism financing (CTF) supervisors are stepping up their efforts. The State Agency for National Security (SANS), the country’s primary AML/CTF regulatory body, is working closely with other authorities to ensure that financial institutions comply with stringent regulations.

Empowering Compliance

The SANS has been empowered by law to gather, preserve, examine, analyze, and disclose financial intelligence in order to combat money laundering and terrorist financing. The agency’s Financial Intelligence Directorate plays a crucial role in this effort, working with other authorities such as the Bulgarian National Bank, State Commission on Gambling, National Customs Agency, and Financial Supervision Commission to monitor compliance.

Compliance Requirements for Financial Institutions

For Bulgaria’s financial institutions, AML/CTF compliance is not just a regulatory requirement but a matter of national security. With over 40 types of reporting entities under the AML Act, including:

  • Banks
  • Payment service providers
  • Insurance companies
  • Intermediaries

the stakes are high. Failure to comply can result in severe penalties and reputational damage.

Compliance Obligations

To comply with Bulgaria’s AML/CTF regulations, reporting entities must:

  • Establish an AML program
  • Perform comprehensive customer verification
  • Maintain accurate records
  • Assess the risk of money laundering
  • Disclose suspicious transactions
  • Provide employee training
  • Ensure seamless communication at national and international levels

Notifying the Financial Intelligence Unit (FIU)

If a transaction or procedure raises suspicions, institutions must notify the FIU before proceeding.

Progress in Implementing AML/CTF Regulations

Bulgaria has made significant progress in implementing AML/CTF regulations, with:

  • Two of the 40 Recommendations from the Financial Action Task Force (FATF) fully complied with
  • 15 more largely compliant

However, there is still much work to be done to ensure that Bulgaria’s financial institutions are equipped to combat money laundering and terrorist financing.

Vigilance Required

As the authorities continue to intensify their efforts to monitor compliance, Bulgaria’s financial institutions must remain vigilant in their AML/CTF reporting obligations. Failure to do so can have serious consequences, not just for the institution itself but for the country as a whole.