Bulgaria Grapples with Growing Problem of Financial Crimes
Financial crimes are a significant concern in Bulgaria, with a large proportion related to tax evasion, money laundering, and fraud. Despite efforts by authorities to combat these offenses, the problem persists.
Tax Evasion and Money Laundering: A Serious Concern
Tax avoidance, as defined by Article 259 of the Criminal Code, involves using legal loopholes or creative accounting methods to reduce one’s tax burden. Tax evasion, on the other hand, is illegal and involves concealing income from detection and collection.
Money laundering is a serious offense that involves processing the proceeds of crime to conceal their illegal origin and reintroduce them into the legitimate economy.
Definitions and Sanctions
Article 255 of the Criminal Code defines fraudulent tax evasion as an act that avoids the assessment or payment of large-scale tax obligations by failing to file a tax return, providing false information, or destroying accounting documents. Article 255a of the same code criminalizes similar acts committed through business transactions involving related parties.
Sanctions for tax-related crimes in Bulgaria vary depending on the specific offense and its severity. For example, fines can range from 3,000 to 20,000 BGN, while imprisonment can last up to six years. Deprivation of rights is also a possible sanction.
Other Financial Crimes
In addition to tax evasion and money laundering, other financial crimes in Bulgaria include:
- Obstruction of revenue authorities
- Fraudulent creation of non-profit organizations for tax purposes
- Providing untrue appraisals or certification of incorrect annual financial statements
State Agency for National Security (SANS)
The SANS houses the administrative Financial Intelligence Unit (FIU), which:
- Analyzes notifications of money laundering and financing terrorism
- Stops suspicious transactions and operations
- Trains obliged persons
- Conducts audits
Statistics
According to statistical data, there were:
- 65 pretrial proceedings initiated in 2019
- 20 new court cases started
- 16 convictions recorded
- 2,811 cases investigated by the Commission for withdrawal of criminal assets
- 1,777 convictions and 212 fines imposed
Conclusion
Despite efforts to address tax evasion and money laundering, financial crimes remain a significant problem in Bulgaria. The authorities continue to work tirelessly to combat these offenses, but vigilance and effective law enforcement strategies are essential to addressing this issue.