Financial Crime World

Bulgaria Tightens Financial Sanctions Enforcement with New UBO Disclosure Requirements

Strengthening Anti-Money Laundering Regime

In a bid to enhance its anti-money laundering (AML) regime, Bulgaria has introduced new regulations requiring corporate and non-governmental organizations to disclose their ultimate beneficial owners (UBOs) by June 2019. The new Act on the Measures against Money Laundering aims to prevent the use of the financial system for money laundering or terrorist financing.

Definition of Ultimate Beneficial Owners

According to the legislation, UBOs are natural persons who ultimately own or control a corporate or legal entity, directly or indirectly. This includes:

  • Full names
  • Citizenship
  • Personal identification number
  • Date of birth
  • Country of residence

If UBOs exercise control through other legal entities, additional information must also be disclosed.

Disclosure Obligation

The disclosure obligation applies to all Bulgarian-based entities, including:

  • Corporate and non-profit organizations
  • Economic enterprises such as trusts and foundations

Publicly listed companies are exempt from the requirement.

Access to Registers

Law enforcement agencies, including:

  • Financial Supervision Commission
  • Bulgarian National Bank
  • Financial Investigations Department of the State Agency for National Security

will have direct access to the registers containing UBO information.

Timeline

The Registry Agency must guarantee technical capabilities for disclosing UBO information by January 31, 2019. Entities must register their UBOs within four months after this date, i.e., by June 1, 2019.

Consequences of Non-Compliance

Failure to comply with the disclosure obligation may result in fines ranging from:

  • BGN 500 to BGN 20,000 for individuals
  • BGN 1,000 to BGN 100,000 for legal entities

Systematic violations can lead to even harsher penalties.

Conclusion

The new regulations aim to enhance Bulgaria’s financial sanctions enforcement regime and bring it in line with international standards. For assistance with compliance matters, companies and organizations are advised to consult with experts.