Bulgaria Adopts Know Your Customer (KYC) Requirements to Strengthen Anti-Money Laundering Framework

The European Union’s efforts to strengthen its anti-money laundering (AML) framework have led to the development of efficient and robust customer due diligence (CDD) and KYC processes. As part of this effort, Bulgaria has adopted measures to enhance the CDD and KYC framework, aiming to curtail money laundering, drug trafficking-related proceeds, tax evasion, terrorist financing, human trafficking, and state-sponsored and corporate bribery.

Focus on Electronic Identification and Remote KYC Processes

Bulgaria’s measures focus on electronic identification and remote KYC processes, as well as portable CDD solutions for the banking sector. The country aims to reduce the fragmentation of its KYC landscape, ensure a level playing field for cross-border services, and eliminate regulatory arbitrage opportunities.

Improved Data Sharing and Centralized Platform

The EU member states recognize that technology has aided money launderers and criminals, necessitating continual adaptation of the AML/KYC regulatory framework. To achieve this goal, Bulgaria’s authorities have established a uniform template for suspicious transaction reports (STRs) to be integrated into a centralized platform, improving data sharing between enforcement bodies.

EU-Wide AML Supervisory Agency

Furthermore, Bulgaria is working towards creating an EU-wide AML supervisory agency to reduce coordination and cooperation issues in the process of AML enforcement. This move aims to promote effective anti-money laundering policies, as well as enhance the cooperation of multiple supervisory entities, financial and non-financial supervisors, FIUs, and law enforcement officials.

Principles of Proportionality

The EU’s principles of proportionality will guide the way towards a more measured and effective AML/KYC approach, ensuring that costs are balanced with benefits. With Bulgaria’s adoption of KYC requirements, the country is taking significant steps towards strengthening its AML framework and promoting financial stability in the region.

Key Takeaways:

• Bulgaria has adopted measures to enhance its CDD and KYC framework
• Focus on electronic identification and remote KYC processes
• Improved data sharing through a centralized platform
• Creation of an EU-wide AML supervisory agency
• Principles of proportionality guide the approach
• Strengthening of AML framework promotes financial stability in the region