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In March 2018, Bulgaria adopted a new anti money-laundering law (Закон за мерки срещу изпиране на пари / Anti Money Laundering Act).

The new law transposes the Fourth European Union Money Laundering Directive (MLD4) adopted on the 20th May 2015.

More about the new Anti Money Laundering Act you can find in our previous article on this topic.

With the adoption of the Regulation for the Application of the Anti Money Laundering Act (RAAMLA) of 08.01.2019, the Council of Ministers develops the rules on the implementation of measures to prevent the use of the financial system for money laundering purposes.

Who are the persons subject to the new provisions?

Art. 4 of the Act provides a proper resolution to this question – that, in short, in addition to the Bulgarian National Bank, the payment service providers and the financial institutions are the commercial traders, NGOs, notaries and the persons providing legal or accounting services.

The abovementioned entities are required to adopt internal rules for control and prevention of money laundering, which in accordance with the newly adopted regulations, are also effectively applied to their subsidiaries and branches abroad.

What should the rules contain?

  • clear criteria for identifying suspicious bargains, transactions or customers;
  • a straightforward method for money laundering prevention and disclosure;
  • a transparent system for risk assessment and client risk profile;
  • the terms and conditions for collecting, storing and disclosing information;
  • term and time intervals for reviewing and updating company-maintained databases of client records and business relationships;

What is the term for the internal rules to be adopted?

The companies and legal entities obliged to adopt internal rules have a 4-month term from registration for this, by writing to the manager of the company.

Declarations of the actual owners

The new Rules of Procedure also regulates the form and procedure for submitting the declarations, in respect of which the business has to state its actual owner. Тhe final provisions of the legal act contain the new samples of the declarations. For clarification, an actual owner of the firm is the person who owns or controls the company or the legal entity.

The financial liability for failure to lodge the statement in question, as we mentioned in our previous publication, could reach up to 10 000 leva. Commercial companies such as banks, insuring or leasing companies are threatened by а sanction in the double amount, which could be imposed monthly until the company declares its actual owner.

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This publication is written in the context of EU legislation, effective on September 12, 2018. Please note that future amendments in the relevant legislative acts, court decisions or opinions of official authorities or other sources of legal obligations, which became effective after the quoted date, may affect the accuracy of the information above. This is one-time publication and Prosperamo is not responsible to keep it up-to-date. For more information – please read the following disclaimer.

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