Financial Crime World

Bulgaria Urged to Improve Financial Intelligence and Investigations to Combat Money Laundering and Terrorism Financing

The Council of Europe’s anti-money laundering body, MONEYVAL, has published a report assessing Bulgaria’s level of compliance with the Financial Action Task Force (FATF) recommendations as of September 2021. The report highlights areas where Bulgaria needs to improve its efforts to combat money laundering and terrorism financing.

Assessment Findings

Bulgaria achieved a moderate level of effectiveness in several areas, including:

  • Assessing money laundering and terrorism financing risks
  • Domestic coordination
  • Investigation and prosecution of terrorism financing
  • Targeted financial sanctions related to terrorism financing
  • International cooperation

However, the country’s performance was deemed low in areas such as:

  • Use of financial intelligence
  • Investigations and prosecutions of money laundering
  • Confiscation of proceeds of crime or property of equivalent value
  • Targeted financial sanctions related to proliferation financing

Recommendations

MONEYVAL recommends that Bulgaria improve its use of financial intelligence, investigate and prosecute money laundering cases, and enhance the confiscation regime. Additionally, the report suggests that Bulgaria should:

  • Take a more systematic approach to investigating terrorism financing vulnerabilities in non-profit sectors
  • Improve national mechanisms for implementing targeted financial sanctions
  • Enhance risk-based supervision or monitoring of high-risk non-profit organizations

Obligated Entities’ Understanding

While obligated entities generally have a high understanding of anti-money laundering and combating terrorism financing obligations, there is room for improvement in:

  • Understanding business-related risks
  • Application of preventative measures

Supervision Challenges

Supervisors apply a risk-based approach to the financial sector, but other sectors require better supervision due to resource limitations.

Concerns Over Sectors

The report expresses concern over the lack of measures to prevent criminals from entering certain sectors, including:

  • Real estate brokers
  • Trusts
  • Company service providers
  • Accountants
  • Virtual asset service providers

There are also concerns over the accuracy of beneficial ownership information held in registers and by obliged entities.

International Cooperation

Bulgaria provides generally timely and constructive assistance across international cooperation requests, but technical and procedural constraints hinder progress. MONEYVAL urges Bulgaria to address these shortcomings to effectively combat money laundering and terrorism financing.

Overall, the report concludes that while Bulgaria has made some progress in combating money laundering and terrorism financing, there is still much work to be done to strengthen its financial intelligence, investigations, and prosecutions, as well as to improve its supervision and regulation of certain sectors.