Bulgaria’s Crackdown on Financial Crimes: Money Laundering Prosecutions and Penalties

Money laundering, the process of disguising illegitimate funds as legitimate, is an increasingly prevalent issue in Bulgaria. In this article, we examine the entities enforcing Bulgaria’s money laundering laws, the legal framework for prosecutions, and the consequences for offenders.

Enforcing Money Laundering Laws in Bulgaria

In Bulgaria, a unitary state with the Criminal Procedural Code at its core, enforcing money laundering laws is taken seriously at the national level. The enforcement process consists of two primary phases: the pretrial phase, where investigations occur, and the trial phase, which determines the verdict in a court proceeding.

Pretrial Phase

During the pretrial phase, a prosecutor leads investigations and decides whether to press charges upon completion. Typically, investigations involve government agencies, with roles for police officers from the Ministry of Interior and the State Agency for National Security in high-profile cases. Once investigations are complete and pretrial proceedings conclude, the prosecutor may submit charges to district courts like the Sofia City Court and their regional counterparts.

Trial Phase and Penalties

Following a trial in court, convictions, and subsequent penalties, are determined.

Who Can Be Prosecuted

Under Bulgarian law, only natural persons can be prosecuted for money laundering offenses. Legal entities such as financial institutions can only face administrative penalties for non-compliance with anti-money laundering rules under the Prevention of Money Laundering Act 2018 (PMLA).

Definition and Elements of Money Laundering

Money laundering involves intentionally:

Converting or transferring property derived from criminal activity.
Concealing or disguising the illicit origin of property - or assisting an involved person.
Not reporting the true nature, source, location, disposal, movement, rights over, or ownership of property when knowing it derives from a crime.
Acquiring, possessing, holding, or using property with knowledge that it was acquired through criminal activity.

Intent is crucial for criminal liability to arise, with conspiracy to launder money also being a punishable offense.

Assets and Transactions

There are no restrictions on the types of assets or transactions that can form the basis of a money laundering offense. However, charges are not pursued if the offense is manifestly insignificant.

Predicate Offenses

Any offense can serve as a predicate offense, with criminal infringements of other jurisdictions’ laws also applicable.

Defenses and Sanctions

As a civil law jurisdiction, Bulgaria does not recognize common law defenses to money laundering charges. Although no codified defenses are specific to money laundering charges, general defenses like mental incapacity, duress, and the absence of an actus reus apply.

Convictions for money laundering result in penalties, including:

Imprisonment for 1-6 years, or 8 years with aggravating circumstances
Fines of 3,000-5,000 lev

These penalties increase for more serious offenses. Additionally, perpetrators may face disgorgement, license revocation, and disqualification from certain professions or public office.

Bulgarian law includes provisions for:

Disgorgement: seizure and confiscation of criminal proceeds.
Asset freezing: to secure the disgorgement.
Victim compensation: for tangible and intangible losses.

Limitation Periods

Money laundering prosecutions in Bulgaria have a limitation period of 5 years from the date of the offense. Instituted criminal prosecutions expire in 7 years and 6 months.

Extraterritorial Reach

Bulgaria’s money laundering laws have extraterritorial reach, applying to offenses committed within the country as well as Bulgarian citizens laundering money outside Bulgaria. Additionally, foreign citizens harming Bulgarian interests or Bulgarian citizens can fall under the Criminal Code’s jurisdiction.