Financial Crime World

Bulgaria Under Increased Surveillance: New Obligations for NGOs

SOFIA, Bulgaria - The Financial Action Task Force (FATF) has placed Bulgaria under enhanced surveillance as part of efforts to combat money laundering and terrorist financing. This move comes in response to Bulgaria’s failure to comply with international standards on anti-money laundering (AML) and combating the financing of terrorism (CFT).

FATF’s Plan

The FATF’s plan includes a specific measure targeting non-profit organizations (NGOs), which will require a review of the approach adopted in Bulgarian legislation to counter money laundering and terrorist financing. The goal is to identify the subset of NGOs most vulnerable to terrorist financing abuse and implement risk-based monitoring to prevent such activities.

New Obligations for NPOs

As part of this measure, non-profit legal entities (NPOs) registered under the Non-Profit Legal Entities Act (NPOA) will be required to:

  • Obtain, maintain, and provide accurate and up-to-date information on their beneficial owners
  • Keep detailed information on the rights held by these individuals
  • Maintain this information for 5 years after dissolution

Concerns Raised by BCNL

The Bulgarian Centre for Non-Profit Law (BCNL) has expressed concerns over the approach adopted in the Money Laundering and Terrorist Financing Prevention Act (MLIPA) amendments, which do not follow a risk-based approach. The organization will continue its advocacy work to ensure that only NPOs identified as most vulnerable to terrorist financing abuse are subject to enhanced monitoring and reporting requirements.

Key Takeaways

  • Bulgaria is placed under increased surveillance by the FATF to combat money laundering and terrorist financing
  • NPOs registered under the Non-Profit Legal Entities Act (NPOA) must comply with new regulations to avoid penalties and reputational damage
  • The amendments to the Money Laundering and Terrorist Financing Prevention Act (MLIPA) introduce an obligation for NPOs to keep information on beneficial owners for 5 years after dissolution
  • BCNL will continue its advocacy work to ensure a risk-based approach is adopted in Bulgarian legislation