Moneyval said it recommended to Bulgarian authorities to do more about money-laundering

Moneyval said it recommended to Bulgarian authorities to do more about money-laundering

The Council of Europe’s anti-money laundering body Moneyval on Monday said it recommended to Bulgarian authorities to do more about the domestic regulatory framework and the implementation of measures to prevent money-laundering and the financing of terrorism.

The country's use of measures such as financial intelligence, investigation and prosecution, confiscations of crime proceeds or property, targeted financial sanctions and the prevention of misuse of legal persons and arrangements must be improved given the low effectiveness shown in this area, Moneyval said in a summary of a report prepared last month.

Bulgaria's assessment of money laundering and terrorism financing risks as well as domestic coordination, investigation and prosecution of terrorism financing were found to be moderately effective, similarly to its approach on preventive measures by and supervision of financial institutions and non-financial professions such as accountants, lawyers, notaries, trusts and company service providers, casinos and real estate agents.

While there is reasonable understanding of main money laundering risks in Bulgaria, that of the terrorism financing risks is limited, Moneyval noted.

The monitoring body added that the number of money-laundering investigations, prosecutions and convictions, as well as the severity of sentencing for money laundering is generally low and does not correspond in significance to the identified money laundering risks. In addition, there is not enough inter-agency co-operation between law enforcement agencies, with matters worsened by technical and procedural limitations.

"Bulgaria should take a more systematic approach to investigate the financing aspects of the terrorism-related offences, improve the national mechanism for implementing targeted financial sanctions and conduct more comprehensive analysis of terrorism financing vulnerabilities in the non-profit sectors. Bulgaria should also enhance risk-based supervision or monitoring of those non-profit organisations that are at risk of being misused for terrorism financing," Moneyval said.

The report found concerns on the lack of measures to prevent criminals from entering the market in certain sectors such as real estate brokers, trusts and company service providers, accountants or virtual asset service providers. Establishing such market entry measures and moving to prevent unlicensed businesses were among the priority actions recommended by Moneyval.

"Despite Bulgaria’s efforts to increase the transparency of the beneficial ownership regime, there are significant concerns in relation to accuracy of the beneficial ownership information held in the registers and by the obliged entities. Moneyval recommends urgently reviewing policies and taking urgent actions in this sphere," the Council of Europe body said.

On the positive side, Bulgaria was found to provide timely and constructive assistance across the range of international co-operation requests, including mutual legal assistance.

Moneyval prepared the first of its mutual evaluation reports on Bulgaria in 2013, placing the country on a regular follow-up schedule until 2017, with its first compliance report adopted in 2018. The most recent findings and recommendations are based on information provided by authorities as well as on a Moneyval mission to Bulgaria in September 2021.

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