AML in Bulgaria

Bulgarian criminals commonly exploit sectors such as retail, gaming, tourism, construction, and energy for money laundering purposes. Frequently targeted businesses include casinos, hotels, nightclubs, car dealerships, shopping centers, and pawnshops.

To counter such money laundering activities, Bulgaria introduced and put into effect the Anti-Money Laundering Act (MLD4) in March 2018. This regulation aligns with the Fourth EU Anti-Money Laundering Directive, aiming to thwart these illicit financial activities. Noteworthy advancements introduced by MLD4 and the Bulgarian AML Act encompass the mandate to gather and report data regarding the ultimate beneficial owners (UBOs) of legal entities and other entities exerting direct or indirect control over companies and organizations. Additionally, all EU Member States are required to establish centralized databases containing information about their companies’ UBOs. Furthermore, the Bulgaria Anti-Money Laundering Act (MAMLA) prescribes appropriate penalties for cases where money laundering offenses transpire across borders or within any EU member state.

In order to adhere to regulations, businesses must thoroughly assess their obligation to adhere to recently implemented mandates. For this purpose, Ultimate Beneficial Owners (UBOs) are required to disclose their identity and assign a designated contact person who holds Bulgarian citizenship.

Key areas of focus include:

1. AML Program
2. Familiarity with Your Customer
3. Undertaking Customer Due Diligence
4. Employing Enhanced Due Diligence
5. Maintenance of Records
6. Process of Monitoring Transactions
7. Reporting of Suspicious Transactions
8. Provision of AML Training

Bulgaria is not included in the list of countries highlighted by the Financial Action Task Force (FATF) due to strategic Anti-Money Laundering (AML) shortcomings, and there are presently no international sanctions imposed on the nation. The Bulgarian economy underwent a contraction of 5.5% in 2009, and the recovery has been gradual since then; despite a favorable investment framework, substantial challenges persist. The investment climate and economic prospects continue to be hindered by issues such as corruption in public administration, a weakened judicial system, and the presence of organized crime.

The FATF conducted a final assessment of Bulgaria’s adherence to money laundering and counter-terrorism financing standards in 2008. As per this evaluation, Bulgaria has primarily been deemed to be in alignment with these standards.