Financial Crime and Terrorism Financing Under Scrutiny in Bulgaria
Bulgaria Added to Grey List of Countries by Financial Action Task Force (FATF)
Bulgaria has been added to the grey list of countries under increased monitoring by the Financial Action Task Force (FATF), a global body responsible for combating money laundering and terrorist financing. This decision comes after Bulgaria committed to work with FATF and the Council of Europe’s anti-money laundering body, Moneyval, to improve its framework for preventing financial crimes.
Increased Monitoring and Compliance Requirements
Countries placed under increased monitoring by FATF actively work with the organization to correct strategic deficiencies in their anti-money laundering, terrorist financing, and proliferation financing regimes within agreed timeframes. While FATF does not formally suggest stricter controls for grey-listed countries, they often face stricter regulations in practice due to heightened scrutiny from foreign financial institutions.
Bulgaria’s Action Plan
Bulgaria will focus on implementing its FATF action plan by:
- Addressing compliance deficiencies
- Improving supervision of financial sectors such as:
- Postal money operators
- Currency exchange providers
- Enhancing the accuracy of beneficial ownership data
The country will also work on strengthening investigations and prosecutions of money laundering cases, including those related to corruption and organized crime.
Progress Made in International Cooperation
Bulgaria has made progress in implementing recommended actions to improve its international cooperation since its mutual evaluation report prepared by Moneyval in May 2022, FATF noted. This move is expected to potentially cause challenges for financial flows as foreign institutions may scrutinize transactions involving Bulgaria more closely.
Conclusion
The addition of Bulgaria to the grey list by FATF highlights the importance of combating financial crime and terrorism financing. The country’s focus on implementing its action plan and improving its anti-money laundering framework will help to strengthen its international reputation and reduce the risk of financial flows being disrupted.