MONEYVAL urges Bulgaria to strengthen its regulatory framework

In a recent report, MONEYVAL, the Council of Europe's anti-money laundering organization, urged Bulgaria to strengthen its regulatory framework and its actual implementation of anti-money laundering measures.

MONEYVAL concluded that Bulgaria had "moderate level of effectiveness" in assessing the risks of money laundering and terrorist financing following an on-site visit in September 2021.


However, it demonstrated a "low level of effectiveness" when it came to using financial intelligence, investigating and prosecuting cases of money laundering, and seizing criminal proceeds.


The least developed country in the EU also demonstrated a low level of effectiveness with regard to targeted financial sanctions pertaining to the prevention of financing for proliferation and the abuse of legal entities and arrangements.

Bulgaria has a "reasonable understanding" of the main risks associated with money laundering, but its knowledge of the risks associated with financing terrorism is "limited." The lack of thorough statistics, according to MONEYVAL, "limits the authorities’ understanding and their abilities to react to risks."


The body also discovered that the number of money laundering investigations, prosecutions, and convictions as well as the severity of criminal sanctions for money laundering were "not commensurate" with the risks of money laundering that had been identified.


MONEYVAL has also advised Bulgaria to improve its risk-based supervision of non-profit organizations at risk of being used for terrorism financing and to take a more "systematic approach" to investigating the financing aspects of offenses related to terrorism.


According to MONEYVAL, "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."


MONEYVAL has stated that there are "significant concerns" relating to the accuracy of the beneficial ownership information held in the registers and by required entities, despite Bulgaria's efforts to increase the transparency of beneficial ownership regimes.


Bulgaria should "urgently" review these policies and take "urgent action" in this regard, according to MONEYVAL.

By fLEXI tEAM