Bulgaria Under Fire for Fraudulent Activities in Finance
The Council of Europe’s anti-money laundering body, MONEYVAL, has released a report criticizing Bulgaria’s inadequate efforts to combat money laundering and terrorist financing. The report highlights several key issues that Bulgaria must address to improve its regulatory framework and strengthen practical measures to prevent fraud.
Limited Understanding of Terrorism Financing Risks
According to the report, Bulgaria’s understanding of money laundering risks is reasonable, but its understanding of terrorism financing risks is limited due to a lack of comprehensive statistics. This limited understanding hinders Bulgaria’s ability to effectively combat terrorist financing.
Key Issues Identified by MONEYVAL
The report identifies several key issues that Bulgaria must address:
- Low Number of Money-Laundering Investigations: The number of money-laundering investigations, prosecutions, and convictions is low.
- Severity of Criminal Sanctions: The severity of criminal sanctions for money laundering is inadequate.
- Financial Intelligence: Bulgaria’s use of financial intelligence, investigation, and prosecution of money laundering cases is hindered by technical and procedural constraints.
Recommendations for Improvement
To address these issues, MONEYVAL recommends that Bulgaria:
- Improve National Mechanism: Improve the national mechanism for implementing targeted financial sanctions.
- Conduct Comprehensive Analysis: Conduct more comprehensive analysis of terrorism financing vulnerabilities in non-profit sectors.
- Enhance Risk-Based Supervision: Enhance risk-based supervision or monitoring of non-profit organizations at risk of being misused for terrorism financing.
- Improve Knowledge of Obliged Entities: Improve the knowledge of anti-money laundering and combating of financing of terrorism obligations by obliged entities.
- Risk-Based Supervision of Financial Institutions: Enhance risk-based supervision of financial institutions and non-financial professions.
Concerns over Beneficial Ownership Regime
The report also expresses concerns regarding the accuracy of beneficial ownership information held in registers and by obliged entities. MONEYVAL urges an urgent review and action to address these concerns.
Positive Note: International Cooperation
Despite Bulgaria’s shortcomings, the report praises the country for providing timely and constructive assistance in international cooperation, including mutual legal assistance.
In conclusion, while Bulgaria has made some progress in combating money laundering and terrorist financing, it still falls short in several areas. MONEYVAL’s report serves as a wake-up call for Bulgaria to improve its regulatory framework and strengthen practical measures to prevent fraud.