Some of the substantive changes concern entirely new legal mechanisms for controlling the activities of the obliged entities under the AML Act, such as amendments to the regime for declaring beneficial owners of legal entities registered in Bulgaria.
For example, amendments have been introduced to the regime for declaring ultimate beneficial owners of legal entities registered in Bulgaria, with some departure from the previous purely declaratory approach. In this regard, all legal entities that declare their ultimate beneficial owners in the commercial or other register will have to provide additional documents certifying the declared data and the fact that the persons indicated as ultimate beneficial owners fall within the definitions under the AML Act. Until now, the regime has been purely declaratory, with the law providing no obligation for such “proof” of the circumstances declared.
Under the new provisions, an entirely new procedure is also provided under which the persons obliged under the AML Act (banks, financial institutions, insurers, notaries, etc.) have an obligation to notify the Registry Agency in the event of a discrepancy between the ultimate beneficial owner officially declared in the relevant register and the ultimate beneficial owner identified during their client due diligence process. In the event that such notification of a discrepancy in the declared data concerning the ultimate beneficial ownership is submitted together with the information and documents proving these allegations, the Registry Agency will send a written notification to the registered address of the relevant entity regarding its obligation to submit for registration a change in the declared circumstances concerning its ultimate beneficial owner or to submit documents proving the existence of the registered circumstances. In turn, the entity will have a 7-day period in which to apply to the commercial or other register for a change in the registered circumstances of its ultimate beneficial owner or an application for the deletion of the registered notification of non-compliance. Failure to file such documents will subject the entity to appropriate penalties ranging between BGN 500 and BGN 20,000 (depending on whether the entity is a natural person or a legal entity, its nature of business activities, etc.). Penalties may be imposed on a monthly basis in the event that the obliged entity fails to comply with its obligations in due time, having already been sanctioned. The described procedure will enter into force on 16.07.2024, as currently a new model of declaration for ultimate beneficial owner is expected to be published.
Separately from the above, the amendments to the AML Act lay down that all persons who provide a registered/correspondence address, as well as services for the establishment, registration, organization and/or management of legal entities (including, for example, lawyers providing such services), should register themselves in a special register with the Minister of Justice.
Additional qualification and factual requirements are also introduced for persons falling within the scope of Article 4, para. 15, para. 16 and para. 18 of the AML Act (i.e. those who provide legal advice, registered and correspondence address, provide real estate intermediary services, etc.). Such persons should not have been convicted of any criminal offences prosecuted by the state, unless they have been rehabilitated, should not have been disqualified from holding a position of material responsibility, should not give rise to any doubt as to their reliability and suitability, etc.
In view of the above and other amendments to the AML Act, businesses and other obliged persons under the law shall analyze to what extent their entries of ultimate beneficial owners in the relevant registers comply with the new requirements (and possibly correct the same if necessary), and whether they should undertake additional measures to comply with the new regulatory framework.
