Bulgarian Non-Profit Organizations Exempt from Anti-Money Laundering Requirements

Statement by Bulgarian Council for Non-Profit Organizations (BCNL)

SOFIA, Bulgaria - The Bulgarian Council for Non-Profit Organizations (BCNL) has issued a statement on the Money Laundering and Financing of Terrorism Prevention Act (MLIPA), clarifying that non-profit organizations (NPOs) are exempt from applying due diligence measures under Article 11(4) of the act.

Exemption from Due Diligence Measures

According to BCNL, NPOs are not required to conduct customer identification or verify the accuracy of client information, as they are considered low-risk entities. This exemption is based on Article 11(4) of the MLIPA, which states that certain persons, including those referred to in Article 4(28), shall not be subject to due diligence measures.

Monitoring and Compliance Obligations

However, BCNL notes that NPOs must still take appropriate measures to monitor their operations and transactions to comply with their obligations under various laws, including the Terrorist Financing Measures Act. The council emphasizes the importance of transparency and accountability for NPOs, citing the need to ensure that these organizations are not used for illegal activities.

Definition of a Non-Profit Organization

The definition of an NPO is formulated in the Model Internal Rules published by the State Agency for National Security (SANS), which lists hypotheses as exceptions to this definition. BCNL stresses that NPOs must still comply with anti-money laundering and combating the financing of terrorism requirements, even if they are exempt from due diligence measures.

Global Scrutiny on Non-Profit Organizations

The council’s statement comes amid increased global scrutiny on non-profit organizations and their role in preventing money laundering and terrorist financing. In October 2023, the Financial Action Task Force (FATF) published a report highlighting Bulgaria as a jurisdiction with increased monitoring due to concerns over the country’s anti-money laundering and combating the financing of terrorism framework.

Strengthening Anti-Money Laundering Regulations

In related news, the Bulgarian Ministry of Finance has announced plans to strengthen its anti-money laundering regulations, including the introduction of new requirements for customer identification and verification. The move aims to improve transparency and prevent illegal activities in the financial sector.

Additional Resources

For more information on this topic, please visit BCNL’s website at [8] to read their full statement and analysis of the MLIPA bill. For additional information on the FATF’s increased monitoring of Bulgaria, please see [20].