Financial Crime World

Bulgaria’s Money Laundering Regulations: An Overview of the Measures Against Money Laundering Act

Bulgaria’s Measures Against Money Laundering Act was first introduced in 2018 and has undergone several amendments since. This regulation outlines the measures aimed at preventing Bulgaria’s financial system from being used for money laundering activities. Let’s examine the key aspects of this legislation.

Overview of the Act

  • Article 1: Sets out the measures for the prevention of money laundering and organizes and controls their implementation.
  • Article 2: Specifies the conduct that constitutes money laundering.
  • Article 3: Binding measures for obliged entities.

Obligations for Obliged Entities

Obliged entities include banking institutions, financial intermediaries, currency exchange offices, insurance companies, leasing companies, postal operators, investment firms, collective investment schemes, management companies, retirement funds, auditors, accounting services providers, tax consultants, notaries, real estate intermediaries, legal advisors, and others. These entities must comply with the following measures:

  1. Customer Due Diligence
  2. Retention of Documents and Information
  3. Risk Assessments
  4. Information Disclosure

Specific Responsibilities of Obliged Entities

  • Article 4: Outlines the responsibilities of obliged entities and their continued obligation to comply with regulations even if they have been adjudicated bankrupt or put into liquidation.

Digital Assets

  • Article 5: Application of the regulations to digital assets. Central contact points are required for electronic money issuers and payment service providers based on the results of the national risk assessment and delegated acts of the EU’s Fifth Anti-Money Laundering Directive.

Customer Due Diligence

Components

  • Article 10: Identification and verification of customers and beneficial owners.
  • Collection of information regarding the nature and purpose of the business relationship.
  • Ongoing transaction monitoring for consistency with the risk profile and collected information.

Circumstances

  • Article 11: Application of customer due diligence measures:
    • Opening a new business relationship.
    • Carrying out transactions exceeding €15,000.
    • Certain cash transactions.
    • Fund transfers amounting to €1,000 or more.

Other Provisions

  • Reporting obligations.
  • Interaction and exchange of information between various authorities.
  • Penalties for non-compliance.

Emphasis on Transparency, Risk Assessment, and Documentation

This legislation emphasizes transparency, risk assessment, and documentation in order to prevent the use of Bulgaria’s financial system for money laundering and terrorist financing activities.