Financial Crime World

Bulgaria Faces EU Infringement Proceedings for Financial Fraud Prevention Failures

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The European Commission has launched two infringement proceedings against Bulgaria, citing failures in preventing financial fraud and money laundering. The country’s incorrect transposition of EU rules on money laundering and combating fraud to EU financial interests has raised concerns among Brussels officials.

Concerns Over Financial Fraud Prevention Measures

  • Bulgaria has failed to register, license, or regulate services providers.
  • The country has also failed to establish a mechanism for resolving discrepancies in its national beneficial ownership register.
  • There are issues with the application of concepts such as “establishment” and “residence” regarding who is required to provide information on beneficial ownership.

Issues with Combating Fraud

  • Bulgaria has failed to correctly transpose EU rules on combating fraud, citing conformity issues with the definition of some criminal offenses and related penalties.
  • The country’s liability for legal persons committing crimes for their benefit has been called into question.

Consequences if Bulgaria Fails to Comply

  • The country now has two months to respond to the Commission’s formal notice, or risk further escalation of the case.
  • If Bulgaria fails to address the concerns raised by the EC, it may be sent a reasoned opinion, followed by potential referral to the Court of Justice of the European Union.

Ongoing Proceedings Against Bulgaria

  • The EC’s latest infringements package includes ongoing proceedings against Bulgaria for failing to remove barriers to access to justice in relation to air quality plans.
  • The country has also been accused of non-compliance with EU rules on marine equipment.

Importance of Effective Financial Fraud Prevention Measures

The EC’s move highlights the importance of effective financial fraud prevention measures in the region, and raises questions about Bulgaria’s ability to comply with EU standards.