Financial Crime World

Bulgarian Financial Institutions Must Comply with AML/CTF Regulations

The State Agency for National Security (SANS) is responsible for monitoring compliance with anti-money laundering and combating the financing of terrorism (AML/CTF) regulations in Bulgaria. In addition to SANS, other authorities also play a crucial role in ensuring compliance with AML requirements in specific industries.

Key Responsibilities

To comply with AML/CTF regulations, reporting entities such as:

  • Banks
  • Financial institutions
  • Payment service providers
  • Insurance companies
  • Intermediaries

must fulfill several key duties, including:

  • Conducting customer due diligence (CDD)
  • Gathering and storing information and documents
  • Assessing the risk of money laundering and terrorism financing
  • Disclosing information on suspicious transactions and customers

Compliance Obligations

To meet their AML compliance obligations, reporting entities must take several steps, including:

  • Establishing an anti-money laundering program
  • Performing know-your-customer (KYC) and customer due diligence (CDD)
  • Maintaining records
  • Assessing the level of risk of money laundering
  • Revealing questionable activities and clients
  • Providing AML training for employees
  • Ensuring contact and information exchange at national and international levels

Record Keeping

Reporting entities must also preserve records for a minimum of five years. If third-party processors gather or manage this information, reporting entities are responsible for obtaining essential due diligence data from these parties in a timely manner.

Progress and Enforcement

Bulgaria has made significant progress in implementing AML/CTF regulations, complying with two of the Financial Action Task Force’s (FATF) 40 Recommendations and largely meeting the requirements of the remaining fifteen. Reporting obligations under Bulgarian AML law are also strictly enforced. If there is evidence of money laundering or proceeds of criminal activity, reporting entities must notify the Financial Intelligence Unit (FIU) before proceeding with a transaction and may be required to postpone its execution.

Conclusion

As Bulgaria continues to work towards meeting international AML/CTF standards, financial institutions operating in the country must remain vigilant in their compliance efforts to avoid penalties and reputational damage.