site.btaBulgaria Must Apply Anti-money Laundering Measures - Council of Europe

In a report published here on Monday, the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) draws up a comprehensive assessment of Bulgaria's level of compliance with the recommendations by the Financial Action Task Force (FATF) whose representatives visited the country in September 2021. The report calls on Bulgaria’s authorities to improve the regulatory framework and to strengthen the practical application of measures to combat money laundering and financing of terrorism.

According to MONEYVAL, Bulgaria achieved a moderate level of effectiveness regarding the assessment of money laundering and terrorism financing risks, and domestic coordination, investigation and prosecution of terrorism financing, targeted financial sanctions related to terrorism financing, the implementation of preventive measures by and supervision of financial institutions and non-financial professions (accountants, lawyers, notaries, trusts and company service providers, casinos and real estate agents), as well as in international cooperation. Bulgaria's low level of effectiveness is apparent in areas related to the use of financial intelligence, investigations and prosecutions of money laundering, confiscation of proceeds of crime or property of equivalent value, targeted financial sanctions related to proliferation financing and the prevention of misuse of legal persons and arrangements.

MONEYVAL commends Bulgaria for conducting a comprehensive national risk assessment and notes that Bulgaria has, in general, a reasonable understanding of the main money laundering risks. On the other hand, Bulgaria's understanding of the terrorism financing risks is limited. The lack of comprehensive statistics limits the authorities' understanding and their abilities to react to risks.

The number of money-laundering investigations, prosecutions, and convictions, as well as the severity of the criminal sanctions for money laundering is generally low and is not commensurate with the identified money laundering risks. Bulgaria should improve the use of financial intelligence, the investigation and prosecution of the money laundering and confiscation regime, which are currently hampered by technical and procedural constraints. This country should also take a more systematic approach to investigate the financing aspects of the terrorism-related offences, improve the national mechanism for implementing targeted financial sanctions and conduct more comprehensive analysis of terrorism financing vulnerabilities in the non-profit sectors.

Supervisory bodies are applying the risk-based approach for the financial sector to a large extent, while for other sectors the supervisory activities are still neither risk-based nor effective, which can be attributed to a significant lack of resources.

The absence of measures to prevent criminals from entering the market for certain sectors (such as real estate brokers, trusts and company service providers, accountants, virtual asset service providers) is of concern. The report also notes that there are no criminality or other fit and proper tests performed regarding postal money operators or shareholders of currency exchange offices, and the ownership threshold for casinos that triggers fit and proper checks is higher than permitted by the FATF.

Despite Bulgaria’s efforts to increase the transparency of the beneficial ownership regime, there are significant concerns in relation to accuracy of the ownership information held in the registers and by the obliged entities. MONEYVAL recommends reviewing the country's policies and taking urgent actions in this area.

The report concludes that despite certain technical and procedural constraints, generally Bulgaria provides timely assistance across the range of requests for international cooperation, including mutual legal assistance.