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Bulgarian Financial Watchdog Intensifies Monitoring of High-Risk Jurisdictions

SOFIA, Bulgaria - The Bulgarian National Bank (BNB) and the Ministry of Finance have announced a new strategy to intensify monitoring of high-risk jurisdictions, following an increase in financial transactions with these countries.

Background

According to the latest report from the Financial Action Task Force (FATF), several jurisdictions have been identified as high-risk and are subject to increased monitoring. The BNB and the Ministry of Finance have taken steps to enhance their supervision and monitoring of financial institutions operating in these jurisdictions.

New Strategy

The new strategy aims to prevent money laundering, terrorist financing, and other financial crimes by strengthening due diligence measures and enhancing cooperation with international partners.

Key Measures

  • Non-profit organizations (NPOs) will be exempt from applying due diligence measures, but will still need to take appropriate measures to monitor their operations and transactions.
  • The definition of high-risk jurisdictions has been formulated by the Bulgarian Standards Association (SANS) based on Section 1, Item 9 of the Model Internal Rules.
  • Electronic identification and certification services may also be used for customer identification and verification.

Obligations

  • Legal persons and other legal entities established on Bulgarian territory will be obliged to keep data and information for five years after dissolution, under Article 67(8) of the Model Internal Rules.
  • Identification of legal persons and other legal entities will be carried out through a reference in the relevant register, requesting and keeping a copy of the memorandum of association, deed or other documents necessary for verification of data referred to in paragraph 4.

International Cooperation

The BNB and the Ministry of Finance have also emphasized the importance of cooperation with international partners in combating financial crimes. The FATF has identified several jurisdictions as high-risk and subject to increased monitoring.

Resources

For more information on the new strategy and measures, please see the following reports and publications:

  • BCNL’s opinion on the MIPA Bill
  • BCNL’s publication: “Materiali za chetvarta chast sostavna otsenka na riska i vatreshni pravila”
  • FID’s methodology for assessing risk factors
  • Summary matrix of intrinsic risk factor assessment

Source: [1] Bulgarian National Bank, Ministry of Finance, Financial Action Task Force (FATF)