Financial Crime World

Bulgaria’s Weaknesses in Combating Money Laundering Exposed

A recent report by a leading financial watchdog has highlighted Bulgaria’s shortcomings in combating money laundering (ML) and terrorist financing (TF). The country’s authorities have been criticized for their lack of understanding of the main ML risks, inadequate coordination, and limited use of financial intelligence.

Key Findings

  • Limited Understanding of ML Risks: Bulgaria’s National Risk Assessment (NRA) identifies several key ML risks, but these risks have not been comprehensively assessed.
  • Poor Coordination: The country’s authorities lack suitable technology systems and meaningful statistics in certain areas, hindering efforts to combat ML/TF.
  • Inadequate Use of Financial Intelligence: Technical and procedural limitations, including a lack of human and technical resources, limit the effectiveness of Bulgaria’s Financial Intelligence Directorate (FID)-SANS.

Recommendations

To address these weaknesses, Bulgaria’s authorities should:

  • Prioritize Coordination, Risk Assessment, and Financial Intelligence: Improve coordination between authorities, develop a comprehensive National Strategy for Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT), and allocate sufficient resources to support effective implementation.
  • Develop a Deeper Understanding of ML Risks: Focus on developing a more detailed understanding of ML risks and TF risks, including the potential abuse of investment-related residence and citizenship programs.

Conclusion

Bulgaria’s authorities must take immediate action to address these weaknesses and improve their coordination, risk assessment, and use of financial intelligence. Without effective implementation of AML/CFT measures, Bulgaria risks becoming a haven for criminal activity.

Key Takeaways

  • Bulgaria’s authorities have limited understanding of ML risks and TF risks.
  • Coordination between authorities is poor, which has hindered efforts to combat ML/TF.
  • The country lacks suitable technology systems and meaningful statistics in certain areas.
  • Financial intelligence is not being used effectively due to technical and procedural limitations.
  • Confiscation of criminals’ proceeds of crime or property of equivalent value is limited.
  • Efforts to prevent the misuse of legal persons and arrangements are inadequate.