Bulgaria Struggles to Counter Financial Fraud, Experts Warn

Despite significant progress in anti-money laundering efforts, Bulgaria still faces major challenges in tackling financial fraud, particularly at the highest levels of power and among politically exposed individuals.

Challenges Remain

• The country’s economy remains vulnerable to the influence of organized crime.
• A significant share of criminal activity distorts market competition and threatens democratic institutions.

Corruption Remains a Major Challenge

• Tackling corruption at all levels is crucial, including administrative corruption, tax and customs offenses, fraud, electronic crimes, and smuggling.
• The cash-based grey economy and high levels of corruption provide fertile ground for money laundering in Bulgaria.

Anti-Money Laundering Framework Progresses, but Challenges Remain

• While Bulgaria has made progress in developing its anti-money laundering legislative framework, challenges remain, particularly with regard to:
  • Beneficial ownership
  • Customer due diligence
• The level and quality of cooperation between institutions is underdeveloped, with:
  • Fragmented responsibilities
  • Inadequate resources
  • Lack of national coordination mechanism

Experts’ Recommendations

• A holistic approach is needed to counter money laundering, including:
  • Enhanced national investigative capacity
  • Improved inter-agency collaboration
  • Systematic implementation and enforcement of anti-money laundering rules
• Additional measures include:
  • Risk assessments
  • Evidence-based measures
  • National registry of bank accounts

Study Emphasizes Importance of Addressing Corruption

The study was conducted with financial support from the Bulgarian-Swiss Cooperation Programme and emphasizes the importance of addressing corruption at all levels to effectively combat financial fraud in Bulgaria.