Financial Fraud Statistics in Bulgaria Pose Serious Threat to Legitimate Business

Bulgaria has made significant strides in combating money laundering, but tackling corruption at higher echelons of power and among politically exposed persons remains a major challenge.

The Problem: Corruption and Criminal Markets

• Corruption at higher levels of power and among politically exposed persons hinders Bulgaria’s progress in countering money laundering.
• Criminal markets such as drug trafficking, prostitution, and smuggling have a substantial influence on the economy, distorting market competition and threatening democratic institutions.
• A cash-based grey economy, administrative corruption, tax and customs offenses, fraud, electronic crimes, and smuggling of contraband goods have created a fertile ground for money laundering.

Legislative Framework

• Despite its late start, Bulgaria has gradually improved its legislative framework to provide a solid anti-money laundering foundation.
• The development of relevant legislation remains influenced by international and European standards.
• While progress has been made in areas such as customer due diligence, challenges persist regarding beneficial ownership.

Institutional Cooperation and Coordination

• The level and quality of cooperation between institutions involved in combating money laundering remain underdeveloped.
• International assessments have found Bulgaria to be largely compliant with international anti-money laundering standards, but institutional representatives point out significant problems arising from:
  • Fragmented responsibilities
  • Resource allocation issues
  • Lack of a national coordination mechanism

Recommendations for Effective Combat Against Money Laundering

• A holistic approach is required that involves:
  • Enhanced investigative capacity
  • Improved coordination
  • Systematic implementation of anti-money laundering rules
• Risk assessments, evidence-based measures, and an effective national registry of bank accounts could further enhance the efficiency of the system.

Conclusion

While Bulgaria has made progress in combating money laundering, it remains a significant threat to legitimate business due to its close ties with criminal markets and corruption at higher echelons of power. To effectively combat this problem, the country must address corruption and improve institutional cooperation and coordination. A comprehensive approach that tackles not only organized crime but also high-level corruption and administrative malpractice is essential for success.