As of 24.07.2019

23 July 2019

Up to BGN 10 million fine for failing to comply with the new Measures Against Money Laundering Act

It is expected that by the end of this month the Draft Amendments to the Measures Against Money Laundering Act will have passed first session, which will introduce further new regulations to the Bulgarian legislative framework.

The foreseen amendments are bound, once again, to expand the categories of affected entities, adding up to the current ones, also persons trading or acting as intermediaries in the trade of works of art, providers engaged in exchange services related to virtual currencies, as well as wallet providers, trustee service providers etc.

With the adoption of the law, a ban shall be introduced on the opening and keeping of anonymous safe-deposit boxes or safe-deposit boxes in a fictitious name. Lower thresholds are envisaged when it comes to applying customer due diligence measures by the e-money issuers and their agents.

The regulation in the field of measures against money laundering and countering the financing of terrorism shall reach out to most of the Bulgarian businesses. The organizations will face the imperative requirements of the law and apply adequate customer due diligence measures in accordance with the relevant risk level, establish the source of the assets and source of funds, notify the State Agency for National Security in case of suspicious transactions and operations and strictly apply a number of other rules.

Despite the publicity of the abovementioned legislative amendments, still a large part of the organizations have not undertaken the necessary actions for bringing their businesses and activities in compliance with the law, which is becoming more and more restrictive with each subsequent amendment, including the introduction of fines amounting to BGN 10 million or 10 % of the annual turnover of the responsible legal entity.

The consequences and sanctions envisaged for failing to comply with the legal regulations in this field are significant and require duly and timely organized preparation by all obliged entities.