Financial Crime World

Title: Bulgaria’s Political Investment: A New Form of Money Laundering Threatening Democracy

Bulgaria’s Thriving Underground Economy and Organized Crime

  • The Center for the Study of Democracy (CSD) recent report reveals annual revenue of organized crime and corruption in Bulgaria reaches over BGN 4-5 billion 1.
  • Estimate considers drug trafficking, distribution, cigarette smuggling, prostitution, public procurement corruption, and tax & VAT fraud.
  • Other illicit activities like financial fraud, trafficking in cultural goods, and Bulgaria’s grey economy not included.
  • Growing real estate market makes Bulgaria attractive destination for laundering ill-gotten gains 2.

Organized Crime Adapts: From Complex Operations to ‘Political Investments’

  • Organized crime, criminal oligarchs in Bulgaria quick to adopt new methods for money laundering 3.
  • Shift from complex financial transactions to political investments, gaining access to public contracts or protection 3.
  • Despite not strictly money laundering, it corrupts democracy by infiltrating political system 3.

Alarming Signals: Criminal Influence on Bulgarian Politics

  • 2007 and 2009 local and parliamentary elections showed criminal structures gaining influence in Bulgarian politics by financing politicians and parties 3.
  • Trends have continued, raising concerns about democratic institutions 3.

Combating Money Laundering: Challenges and Institutional Measures

Challenges

  • Limited capacity, non-implementation of anti-money laundering (AML) laws
  • Corruption in the private sector significant challenges 4.

Institutional Measures

  • Mainstreaming AML investigation: require corruption and organized crime probes to include money laundering aspects 5.
  • Center for the Study of Democracy formed an inter-agency task force to develop a Manual for the Investigation of Money Laundering 5.

Institutional Measures to Combat Money Laundering: A Manual for Prosecutors and Police Investigators

  • Primary purpose to assist prosecutors and police without specialized AML training 6.
  • Explanation of various techniques and methods for money laundering investigations 6.
  • Targets simple money laundering schemes in construction, real estate, agriculture, trade, and tourism industries 6.

[1]: “Bulgaria in Figures 2007” - Eurostat. [2]: “Bulgaria: Country Intelligence Report” - European Police Office. [3]: “Organized Crime in Bulgaria” - Center for the Study of Democracy. [4]: “Money Laundering in Bulgaria: An Overview” - Various Sources. [5]: “Mainstreaming Anti-Money Laundering in Bulgaria: Progress and Challenges” - Europol & Eurojust. [6]: “Manual for the Investigation of Money Laundering: Guidelines for Law Enforcement” - Center for the Study of Democracy.