Financial Crime World

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Bulgaria Cracks Down on Financial Crime: Detection Methods Revealed

In a bid to strengthen its fight against financial crime, Bulgaria has implemented a robust system of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.

The State Agency for National Security (SANS)

At the forefront of this effort is the State Agency for National Security (SANS), which serves as the primary AML/CTF regulatory body in the country. Under the provisions of the AML Act and CTF Act, SANS’ Financial Intelligence Directorate has the authority to:

  • Gather, preserve, examine, analyze, and disclose financial intelligence related to suspected money laundering and terrorism financing activities.
  • Monitor compliance with AML Act requirements in specific industries.

Compliance Obligations for Businesses

For businesses operating in Bulgaria, understanding how to comply with AML/CTF regulations is crucial. As per the law, over 40 types of entities, including:

  • Banks
  • Financial institutions
  • Payment service providers
  • Insurance companies
  • Intermediaries

are required to report suspicious transactions and activities.

Compliance Requirements for Reporting Entities

To fulfill their AML compliance obligations, reporting entities must:

  • Perform customer due diligence (CDD)
  • Gather and store information and documents
  • Assess the risk of money laundering and terrorism financing
  • Disclose suspicious operations and customers
  • Establish an AML program
  • Conduct know-your-customer checks
  • Maintain records
  • Assess the level of risk
  • Reveal questionable activities and clients
  • Provide training for employees
  • Ensure contact and information exchange at national and international levels

Record Keeping and Notification Obligations

Reporting entities are required to:

  • Preserve records for at least five years
  • Obtain essential data from third-party processors, if necessary
  • Notify the Financial Intelligence Unit (FIU) before carrying out a procedure or transaction if there are indications of money laundering and/or proceeds of criminal activity
  • Determine whether it is necessary to notify the FIU if unable to identify a client after forming commercial or professional relations

Conclusion

As Bulgaria continues to strengthen its AML/CTF regime, businesses operating in the country would do well to familiarize themselves with these regulations to avoid potential legal and reputational consequences.