Financial Crime World

Laundering Arraignment Rocks Financial Sector

A new law aimed at combating money laundering has been introduced in Bulgaria, placing stringent requirements on financial institutions to monitor transactions and collect information about clients.

Stringent Requirements for Financial Institutions

According to Article 3 of the Act, individuals and companies involved in financial transactions must collect data on:

  • Material components
  • Transaction size
  • Identification documents

This information must be stored in a way that allows access to relevant authorities, auditors, and the Financial Intelligence Agency (FIA).

FIA: The New Administration for Combating Money Laundering

The FIA will serve as an administration responsible for:

  • Obtaining information related to suspicious transactions
  • Storing and analyzing data
  • Investigating and disclosing information upon request

The agency will be headed by a director appointed by the Minister of Finance, subject to approval from the Prime Minister.

New Measures to Fight Money Laundering

The Act introduces several measures aimed at preventing money laundering, including:

  • Enhanced monitoring of transactions involving individuals and companies from countries with inadequate anti-money laundering regulations
  • Collection of additional information on suspicious transactions
  • Storage of information for a minimum period of 5 years
  • Disclosure of information to the Financial Intelligence Agency upon request

FIA to Enforce New Regulations

The Financial Intelligence Agency will be responsible for enforcing the new regulations and will have access to information collected by financial institutions. The agency will also investigate suspicious transactions and analyze data to identify patterns and trends.

Key Provisions

  • Financial institutions must collect and store information on material components, transaction size, and identification documents
  • Institutions must monitor transactions involving individuals and companies from countries with inadequate anti-money laundering regulations
  • The FIA will be responsible for obtaining, storing, investigating, analyzing, and disclosing information related to suspicious transactions
  • The agency’s director will be appointed by the Minister of Finance, subject to approval from the Prime Minister

Expected Impact

The new law is expected to significantly strengthen Bulgaria’s efforts to combat money laundering and terrorist financing, bringing the country in line with international standards.

Timeline

The new law is expected to come into effect on October 5, 2006.