Measures against money laundering - relevant topic for the business in Bulgaria
As of March 31st 2018, the new law on Measures Against Money Laundering /MAML/ entered into force, which implements the requirements of Directive (EU) 2015/849 of the European Parliament and Council from May 20th 2015 into the national legislation. A number of unfamiliar business obligations have been introduced and research has been increased on the risk of money laundering and terrorism financing when working with clients. The law and its subsequent amendments created more obligations for the Bulgarian business, which require additional time and resources.
For the first time in Bulgaria the companies were obliged to declare their real owners in the Commercial register and register of NPLE, if they are not listed as partners or sole owners of the capital in the company profile, the same applies to newly registered companies. There is also an obligation to register a contact person of the companies, in the profile of which there is no data about a legal representative who is a permanent resident on the territory of the Republic of Bulgaria.
Anti-money laundering and terrorist financing regulations cover most of Bulgarian business, including, but not limited to: investment intermediaries; wholesale merchants; leasing companies; the registered auditors; persons who provide by occupation accounting services and/or consultancy in the field of taxation; persons engaged in real estate brokerage by occupation, with the forthcoming changes including brokerage in the rental of real estate where the monthly rent amounts to or exceeds EUR 10,000 or their equivalent in another currency.
There is an obligation for companies to provide introductory and continuing training to their employees, in order to familiarize them with the requirements of the Law on MAML, the Law on Measures Against the Financing of Terrorism /MAFT/ and their implementing acts, conducting ongoing training programs aimed at identifying suspicious operations, transactions, sources and clients and taking the necessary actions in cases of suspected money laundering or terrorist financing. It is imperative to adopt internal rules for the control and prevention of money laundering and terrorist financing that are effectively applied to their branches and subsidiaries.
There was an explicit obligation for certain companies to carry out risk assessments in order to identify, understand and evaluate the risks of money laundering and terrorist financing. When preparing them, it is imperative to take into account the results of the national risk assessment, as well as the results of the supranational risk assessment and the recommendations of the European Commission. On the basis of the prepared risk assessments, the companies determine the client's risk profile and what measures of the Law on MAML to apply to it.
The companies are faced with the imperative requirements to apply to their customers adequate measures for complex verification according to the established level of risk, to identify the client and its real owner, to identify the source and origin of the funds they receive, to notify Directorate „Financial Intelligence“ of State Agency „National Security“ of suspicious transactions and operations and strictly apply a number of other rules.
Currently, new amendments are being made to the Law on MAML, adopted at first reading by the National Assembly, which widen the range of obliged persons to implement measures against money laundering and terrorist financing, increase the obligations and widen the scope of the applied measures, especially with regards to clients, subsidiaries, branches or agencies established in countries that do not or do not fully apply international standards in combating money laundering and terrorist financing. The number of cases, when it is mandatory to notify Directorate „Financial Intelligence“ of State Agency „National Security“ also increases.
With every subsequent change, the Law on MAML becomes more restrictive, including providing for fines of up to BGN 10 million or up to 10 percent of the annual turnover of the debtor. The consequences and penalties for any failure to comply with legal rules in the field are significant and require serious and timely preparation by all obliged companies.
The team of „LTA CONSULTING“ EOOD has a qualified team, knowledge, skills and experience, and can assist in the complex matter of implementing anti-money laundering and terrorist financing measures.
