Financial Crime World

Bulgaria Makes Progress in Fight Against Financial Crime, But Remains on EU’s “Grey List”

Despite significant strides in combating money laundering and terrorist financing, Bulgaria remains one of only two European Union member states to be placed on the Council of Europe’s anti-money laundering body MONEYVAL’s “grey list”.

Progress Made

According to MONEYVAL, Bulgaria has taken numerous steps since the adoption of its mutual evaluation report in May 2022 to strengthen its anti-money laundering and combating terrorist financing systems. The country has made significant progress in areas such as:

  • Political Accountability: Bulgaria has demonstrated increased political accountability in its efforts against financial crime.
  • Banking Services: The country has strengthened control over banking services for money transactions, ensuring that these services are subject to effective supervision and regulation.
  • Supervision of Foreign Companies: Bulgaria has improved supervision of branches and subsidiaries of foreign companies operating within its territory.
  • Beneficial Ownership Transparency: Assurance of transparency of beneficial ownership of companies has been enhanced in Bulgaria.
  • Financial Institution Supervision: The country has strengthened supervision of financial institutions, including banks and other financial entities.

History of Deficiencies

Bulgaria was initially placed on the Financial Action Task Force’s (FATF) “grey list” of money laundering jurisdictions in October 2002 due to a few serious deficiencies in its mechanisms for combating money laundering, terrorist financing, and arms proliferation. At the time, Bulgaria made a high-level political commitment to work on strengthening the effectiveness of anti-money laundering measures.

Uncertainty Surrounds Removal

Despite progress, Bulgaria’s removal from the “grey list” is still uncertain. The country must continue to demonstrate its commitment to combating financial crime in order to potentially facilitate:

  • Easier Financial Transactions: Removal from the “grey list” could lead to easier financial transactions in foreign currencies.
  • Lower Interbank Fees: The country may experience lower interbank fees as a result of improved anti-money laundering measures.
  • Increased Trade and Investment: Bulgaria’s removal from the “grey list” could increase trade and investment opportunities.

Comparison with Other Countries

In contrast, countries on the FATF’s “blacklist” of countries at particularly high risk of money laundering and terrorist financing include:

  • North Korea: Deemed to have inadequate financial integrity and a lack of response to the risks and crimes related to money laundering that generate financial assets such as corruption.
  • Iran: Similar deficiencies in its mechanisms for combating money laundering, terrorist financing, and arms proliferation.
  • Myanmar: The country is considered to have inadequate financial integrity and a lack of response to the risks and crimes related to money laundering that generate financial assets such as corruption.

Bulgaria’s continued presence on the “grey list” serves as a reminder of the importance of sustained efforts in combating financial crime.