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Bulgaria: New AML Measures & Key Deadlines

28 March 2019

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At the end of March 2018, the new Measures Against Money Laundering Act (“MAMLA”) was adopted by the Bulgarian Parliament to implement requirements of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing. Many of the specific obligations were further developed in the MAMLA Implementation Act, which was adopted in January 2019.

Who will monitor for the compliance?
The control over compliance with the new rules for measures against money laundering will be carried out by State Agency for National Security (“SANS”).

What if you do not comply with MAMLA?
MAMLA provides different sanctions depending on the severity of the violation. The fines for natural persons start from EUR500 and could reach EUR1,000,000, while for legal entities they are from EUR1,000 to EUR5,000,000. Certain violations are to be sanctioned monthly until the respective obligation under MAMLA is fully complied with.

How to prepare?

  • Preparing and periodically updating the risk assessment for money laundering;
  • Preparing and updating the internal rules for control and prevention of money laundering;
  • Determining and declaring the actual owner of the company;
  • Determining the senior management position responsible for measures against money laundering;
  • Introducing and on-going employee training for the control and prevention of money laundering;
  • Clarify the new rules for transactions with politically exposed persons;
  • Preparing and maintaining of documents, data and information required by MAMLA;
  • Disclosing information before SANS in case of suspicion of money laundering.

What is the deadline?
All documents related to measures against money laundering must be submitted to SANS no later than 12 May 2019.

How can Milanova&Partners help you to operate in accordance with MAMLA? Milanova&Partners can support you through the entire process, from analysis and specific recommendations for necessary measures to preparing and filing the respective legal documentation with the authorities in Bulgaria. In case of cross border issues, Milanova&Partners can further assist together with our colleagues from European Law Firm www.european-law-firm.com.

Milanova&Partners will:

1. Conduct a legal analysis of:

- Whether your scope of business falls under MAMLA reporting requirements;
- Risks associated with different groups of costumers/clients/business partners;
- Which mandatory obligations under MAMLA apply to you.

2. List of AML measures which shall be implemented in your company.

3. Determine (with you) the beneficial owner of the company and register them with the Commercial Register by 31.05.2019 as required by MAMLA;

4. Register a “local point of contact” for your company by 31.05.2019.

5. Draft new internal documents for implementing MAMLA such as:

- Risk assessment rules;
- Internal rules for control and prevention of money laundering;
- Various declarations to be signed by concerned parties for prevention of money laundering;
- Procedure for dealing with suspicious transactions.

6. Update your current internal documents to new MAMLA requirements.

7. Train your staff on their duty to counter money laundering.

8. If a problem arises, Milanova&Partners will represent you before the supervisory authority and the courts.

For more information or advice, please contact Hristo Mashkov, LL.M., Partner at Milanova&Partners e: hristo.mashkov@milanova-law-firm.com | t: +359 2 952 25 16 | www.milanova-law-firm.com

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