The changes are related to the adopted on 18.05.2022 report on Bulgaria from the Fifth Evaluation Round of the MONEYVAL Committee, identifying a number of gaps in Bulgaria's technical (legislative) compliance in the sector, as well as inefficiencies in the AML/CFT systems.
Among the more substantial amendments could be outlined the following:
1. The identification of a "prominent political figure" and a related person in the context of customer due diligence will no longer be able to be done solely on the basis of a declaration by the relevant client/beneficial owner. The obliged persons will be obliged to apply a second means of establishing this quality, namely by checking internal or external databases or by applying enhanced due diligence measures.
2. The amendments to the law definitively reinforce the position that the origin of funds should be established in all cases of customer due diligence and not only in the cases explicitly provided for in the law so far (in the presence of prominent political figures, relations with persons from high-risk third countries, etc.). A definition of "origin of funds" concept is also laid down for the first time, namely the source of funds used in the framework of an established business relationship or a specific operation or transaction.
3. It is envisaged that the concept of "high-risk third countries" will now include not only the previously relevant countries listed by the European Commission but also those identified in the FATF lists. Clients from these countries must be subject to appropriate enhanced due diligence measures, as the blacklists themselves are published on the websites of the supervisory authorities - SANS, BNB, FSC, etc.
4. The law fixes the penalty for failure to register a beneficial owner in the relevant public register (commercial register, BULSTAT register, etc.) at BGN 5,000 (approx. EUR 2,500).
5. In the case of a wide range of violations of MAMLA, the application of Article 28 of the Law on Administrative Offences and Penalties is excluded by default, which means that when supervisory authorities establish violations of MAMLA, the obliged persons will not be able to invoke the existence of the so-called "minor case". When the latter exists, as a general rule, the sanctioning authority does not impose a penalty on the offender, but warns him in writing that if he commits another administrative offence of the same type constituting a minor case within one year from the entry into force of the warning, an administrative penalty will be imposed for that other offence.
6. Under certain conditions specified in the law, certain categories of non-profit legal entities (“NGOs”), such as - creative unions, professional and branch organisations, employers' and trade union organisations, chambers of commerce and other associations in particular business sectors may be excluded as obliged persons under MAMLA. For NGOs that remain obliged under the law, the turnover criterion is increased from BGN 20,000 (approx. EUR 10,000) to BGN 50,000 (approx. EUR 25,000), i.e. associations and foundations with an annual turnover below BGN 50,000 (approx. EUR 25,000) may be excluded from the scope of the law under certain conditions.
