Bulgaria’s Battle Against Money Laundering: An Overview of the Measures Against Money Laundering Act
The Bulgarian government has taken significant legislative steps to combat money laundering through the Measures Against Money Laundering Act. The following provides an overview of the main provisions of this Act.
General Provisions (Chapter One)
- Objective (Article 1): The primary goal is to regulate preventive measures against money laundering and the use of financial systems for illicit activities.
- Definition of Money Laundering (Article 2): Activities include concealing the origin of criminal proceeds, possession of unlawfully acquired property, and involvement in money laundering schemes.
- Preventive Measures (Article 3): These include client identification, ongoing monitoring, and disclosure of suspicious transactions.
Scope of the Act
This Act applies to various financial institutions, such as:
- Bulgarian National Bank
- Credit institutions
- Financial houses
- Exchange bureaus
- Insurers
- Mutual investment schemes
- Retirement security companies
- Privatization authorities
Client Identification
Under Article 4, these entities are required to identify their clients:
- When establishing a business relationship
- Opening an account or executing transactions exceeding BGN 30,000 or equivalent foreign currency
- Cash transactions exceeding BGN 10,000 for certain entities
Identification may also be extended to:
- Individuals with high government positions and their relatives (Article 5a)
Client Identification Process
This process involves verifying the client’s identity documents and information, and for legal entities, official statements certifying their current status (Article 6).
Record Keeping and Reporting Suspicious Transactions
Entities are required to set up specialized offices to collect, process, store, and disclose information about transactions, as well as maintain accurate documentation (Article 7). In cases of suspicion for money laundering, entities are obliged to collect related information and report it to the Financial Intelligence Agency (Article 7, Paragraph 1).
The Role of the Financial Intelligence Agency
An agency (Article 10) known as the Financial Intelligence Agency plays a crucial role in the legislative framework by receiving, storing, analyzing, and disclosing information in accordance with the specified terms and procedures.