Financial Crime World

Bulgaria’s Anti-Money Laundering Efforts Face Challenges

SOFIA, Bulgaria - Despite making progress in combating money laundering, Bulgaria still faces significant challenges in its anti-money laundering (AML) efforts.

Challenges in AML Implementation

  • The country’s Transaction Reports (STRs) issued by the Financial Intelligence and Security Agency (FID-SANS) need improvement to be more actionable for other participants in the system.
  • Clearer leadership from the prosecution is needed to prioritize and lead AML cases.
  • Procedural deadlocks and formalism within the criminal proceedings process can be tackled by amending the Criminal Procedure Code.

Institutional and Legislative Development

Bulgaria has largely complied with international standards in terms of institutional and legislative development, according to MONEYVAL, a committee that evaluates countries’ anti-money laundering efforts. However, interviews with various stakeholders reveal significant problems arising from:

  • Fragmented responsibilities for cases related to financial crime and money laundering
  • Resources being spread among involved agencies

National Coordination Mechanism

The lack of a national coordination mechanism is another major challenge, leading to:

  • Duplication of functions that decreases the efficiency and effectiveness of the entire system

Human Resource Capacity

Capacity is also an issue, with evident lack of human resources sustainability in AML institutions. The failure of plans to enhance SANS’ powers by adding police authority left the AML system paralyzed for over a year, while the relocation of the General Directorate Combating Organized Crime (GDCOC) to SANS in 2013 also caused harm to existing human resources capacity.

International Cooperation

International cooperation is crucial in combating money laundering, which is characterized by its transnational nature. Bulgaria has made progress in this area, with international cooperation assessed as effective and efficient during MONEYVAL’s fourth evaluation round. However, the practical implementation of information exchange with foreign counterparts remains poorly assessed.

The Bulgarian legal framework establishes the Ministry of Justice and the Supreme Prosecutor’s Office of Cassation as central institutions responsible for international mutual legal assistance. The “International Legal Cooperation” department within the Supreme Prosecutor’s Office of Cassation has authority to manage and exercise control over:

  • European Arrest Warrant instrument
  • Extraditions
  • Requests for legal assistance

Conclusion

The challenges faced by Bulgaria in combating money laundering highlight the need for continued efforts to strengthen its AML regime and improve cooperation with international partners.