Bulgarian Regulators Crack Down on Unlicensed Payment Service Providers
In an effort to curb illegal financial activities, Bulgarian authorities are increasing their efforts to identify and sanction unlicensed payment service providers.
Investigation and Sanctions
The Bulgarian National Bank (BNB) is empowered to investigate entities suspected of providing payment services without a licence. The BNB can:
- Access premises
- Compel the production of information and records
- Impose fines ranging from BGN 5,000 to BGN 80,000 (approximately EUR 2,500 to EUR 40,000)
In addition to administrative penalties, unlicensed payment service providers may face criminal charges, including:
- Custodial sentences of up to five years
- Confiscation of property
- Fines
Identification of Unlicensed Providers
The BNB identifies unlicensed providers through:
- Complaints received at the bank
- Warnings from authorities
- Publicly available information
- Reports from competent authorities of other EU Member States
Regulation of Postal Money Order Service Providers
The Communications Regulation Commission (CRC) is responsible for regulating postal money order service providers, which offer money value transfer services. The CRC:
- Grants individual licences to entities that meet specific criteria, including being a legal person or sole trader registered under Bulgarian law or another EU Member State
- Imposes fines of up to BGN 20,000 (approximately EUR 10,000) and proprietary sanctions of up to BGN 25,000 (approximately EUR 12,500) on unlicensed providers
Commitment to Ensuring Financial Stability
The regulators’ efforts are aimed at ensuring the stability and integrity of Bulgaria’s financial system. The authorities are committed to identifying and punishing illegal activities, and individuals found guilty of providing unlicensed payment services may face severe penalties.
In a statement, the BNB emphasized that its measures are designed to:
- Protect consumers
- Prevent illegal financial activities from undermining trust in the financial sector
The CRC also reiterated its commitment to enforcing licensing requirements for postal money order service providers.
Praise from Experts
The Bulgarian government’s efforts have been praised by experts, who note that the sanctions imposed on unlicensed payment service providers are proportionate and dissuasive.