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Combating Money Laundering: obligations and deadlines

31 January 2020

The State Agency for National Security (SANS) has recently published the results of the National Risk Assessment (NRA).

These are aimed to help both authorities and private entities in assessing the risks of money laundering and to undertake adequate and efficient measures in this respect. SANS outlines several widespread schemes of money laundering to which obliged entities should be particularly vigilant (for example large cash payments, illogical payments by third parties not related to the payer, etc.).

The obliged entities according to the Measures Against Money Laundering Act (MAMLA) include various categories such as financial institutions, insurers, wholesalers, investment intermediaries, auditors, accountants, lawyers, real estate brokers, some non-profit legal entities, etc.

The obliged entities must align their internal rules with the NRA by 09 July 2020. This means that the internal rules must reflect the risks identified by SANS and referred to in the NRA. The obliged entities must also have their own internal risk assessment identifying the specific risks related to the activities of the entity and its customers.

SANS is expected to publish sample internal rules to be used as a guideline by the obliged entities. However, it is not clear when this will happen. The lack of such sample internal rules would not release the entities from their obligation to align their internal rules with the NRA.

With а view to the above, to be compliant with the Bulgarian AML legislation, every obliged entity should:

  1. Have internal rules against money-laundering aligned with the NRA;
  2. Have its own risk assessment based on the NRA;
  3. Apply AML measures to its customers in the way specified in the internal rules and in accordance with the risk assessment.

The obliged entities could wait for SANS to publish the sample internal rules, but the above obligations are in force irrespective of such publishing.

If by any chance SANS investigates an obliged entity and finds out that its internal rules are not aligned with the NRA or the sample internal rules, SANS should give instructions to the company (and not directly sanction the company). However, if SANS finds that the company is among the obliged entities (for example in its capacity as a wholesaler) and does not have internal rules or internal risk assessment, or does not apply AML measures to its customers, a sanction could be imposed. Its amount is between BGN 1,000 and 10,000 (EUR 500 and 5,000). The sanction may also be imposed when SANS provides instructions on the content of the internal rules, but these instructions are not fulfilled within the specified term.

If you need any assistance with drafting the respective internal documents or implementing the AML measures, DPC’ experts would be glad to help.

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