In June 2026, Bulgaria received high marks for the progress it has made in the area of financial transparency and the quality of its regulatory framework for the prevention of money laundering. The Council of Europe’s MONEYVAL Committee announced the successful completion of the Fifth Evaluation Round for the country after Bulgaria achieved full or substantial compliance with all 40 recommendations of the Financial Action Task Force (FATF) - the global body that sets international standards for combating money laundering and terrorist financing.

This positive assessment represents an important step toward Bulgaria’s final removal from the FATF’s so-called “grey list,” on which the country was placed in October 2023. At the end of June 2026, the FATF confirmed that Bulgaria had substantially implemented its Action Plan and scheduled a final on-site review to verify the effective and sustainable implementation of the reforms.

This development is the result of consistent legislative, institutional, and practical measures implemented over the past three years. The changes covered both the Anti-Money Laundering Act and a number of other legislative acts aimed at increasing transparency, the effectiveness of oversight and the ability of state authorities to investigate and sanction financial crimes.

Particular attention was paid to identifying the beneficial owners of legal entities, improving the accuracy of information in the Commercial Register, strengthening oversight of certain non-financial sectors and introducing more effective mechanisms for monitoring high-risk financial transactions. At the same time, procedures for investigating and prosecuting money laundering cases - including those linked to organized crime, corruption and cross-border financial crimes - were improved.

The significance of these reforms goes far beyond the implementation of international recommendations. In practice, the assessments by the FATF and MONEYVAL are viewed by international investors, financial institutions and business partners as an indicator of the reliability of a country’s legal and regulatory environment. Placing a country on the “grey list” leads to heightened scrutiny by banks, investment funds and international counterparties, which often results in more thorough checks, delays in transactions and increased administrative costs.

This is precisely why Bulgaria’s potential removal from the list has significant economic implications. Reducing regulatory risk creates the conditions for Bulgarian companies to gain easier access to international financing, execute cross-border payments more quickly and interact more effectively with foreign banks and investors. This is particularly important for companies that operate in international markets or are part of global corporate groups.

This positive signal is also significant for the country’s investment climate. International investors are increasingly evaluating not only economic indicators but also the quality of the institutional environment, the level of legal certainty and the state’s ability to combat financial misconduct. The successful implementation of the FATF’s recommendations demonstrates that Bulgaria has taken concrete steps to strengthen its control and transparency mechanisms, which boosts confidence in the Bulgarian jurisdiction.

From a business perspective, the reforms also create a more predictable regulatory environment. Although the requirements for comprehensive customer due diligence, identification of beneficial owners and risk assessment are becoming increasingly detailed, they provide a higher degree of legal certainty and limit opportunities for abuse. This is of essential importance both for the financial sector and for a wide range of obligated entities - including companies in the real estate, accounting and legal services sectors, as well as other participants in economic activity.

Last but not least, MONEYVAL’s positive assessment and the FATF’s preliminary decision represent recognition of the ability of Bulgarian institutions to implement reforms in accordance with the highest international standards. The full or substantial compliance achieved across all 40 FATF recommendations is the result not only of legislative changes but also of a proven commitment to their effective implementation.

The upcoming final on-site review remains the last step before the final decision to remove Bulgaria from the “grey list”. Regardless of the formal conclusion of the procedure, the progress made is already sending a strong signal to international investors. It demonstrates that Bulgaria continues to strengthen its legal and institutional environment and is establishing itself as a predictable, transparent and reliable jurisdiction for investment and international business.

This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.