Money-Laundering Legislation in Bulgaria

Sofia, Bulgaria, 7 August 2018

Bulgaria has adopted a new anti-money laundering statute (Zakon za Merkite sreshtu Izpiraneto na Pari, Закон за мерките срещу изпирането на пари or Prevention of Money Laundering Act (“PMLA”)), implementing the Fourth EU Money Laundering Directive.

The most relevant applicable rules are:

• the obligation to collect and file information to central registry run by the public authorities on what are referred to as ultimate beneficial owners (“UBOs”) of companies and other entities by the financial institutions;
• UBOs definition is broaden to include a large control powers over a specific entity;
• Disclosure about UBOs is likely to be required by financial institutions, pension funds, investment brokers, accountants, auditors, notaries, lawyers, certain government bodies and other “obliged entities” as defined under PMLA;
• As a novelty, if, after having exhausted all possible means, no person is identified, or if there is doubt that the person identified is a UBO, the natural person(s) who hold(s) the position(s) of senior manager(s) must be deemed to be UBO(s) of the Regulated Entity and then must be listed as if they are UBOs;
• Businesses operating in Bulgaria need to identify and disclose such information about themselves while international businesses must appoint local nominated contacts;

Breaches on the obligation to maintain and file information can result in sanctions to the obliged entities which are considerable in quantum. The financial penalties may go up to EUR 25,000 with further ramp-up for repeated or systematic violations to the range of millions of euros.