Date: 29.05.2024

by Adam Dworak

Bulgaria’s Progress in AML and CTF Measures Praised by Moneyval

A Moneyval follow-up report has found that Bulgaria has significantly improved its measures for tackling money laundering and combatting the financing of terrorism since a critical mutual evaluation report was published in 2022. Two years ago, the Moneyval committee placed Bulgaria under its compliance enhancing procedures, which involves the Council of Europe working with individual countries to rectify AML failings.

Compliance with FATF Recommendations

Moneyval found that out of 40 applicable Financial Action Task Force (FATF) recommendations, Bulgaria is now fully or largely compliant with 13. The nation is at least partially compliant with the remaining 27 recommendations. Among the areas now fully compliant are designated non-professional business and professions (DNFBPs) customer due diligence. This includes the gambling and casino sector, as well as real estate and legal services.

“Since the adoption of its mutual evaluation report in May 2022, Bulgaria has taken numerous steps to strengthen its anti-money laundering and combatting terrorist financing systems,” Moneyval said in a statement.

New AML Monitoring Unit in Bulgaria

Last year, Bulgaria’s National Revenue Agency (NRA) ramped up its oversight of gambling with the creation of a new AML unit. The AML unit is tasked with enforcing requirements such as customer verification, collecting documents, and creating money laundering and terrorist financing risk assessments. It will also monitor operations, transactions, and customers flagged as suspicious, sharing information with authorities in other countries.

The unit sits within the NRA, which assumed control of gambling regulation in 2020 after Bulgaria disbanded the State Commission on Gambling. The launch of the AML unit follows Bulgaria’s national money laundering risk assessment, which identified deficiencies across a number of sectors.

Bulgarian Market Continues to Grow

At the start of this year, the Bulgarian gambling industry was predicted to generate BGN 200 million (£88 million/€102.3 million/$111.7 million) for the country’s budget in 2024. With gambling adding over BGN 300 million in taxes and fees to the state budget over the last two years, changes to Bulgaria’s tax structure could help boost its financial contribution even further.

However, the fee for obtaining a license has increased significantly, up 300% from previous levels. Tax on income has also jumped from 15% to 20%.

Enhancing AML and CTF Compliance

Bulgaria’s recent strides in improving its anti-money laundering (AML) and counter-terrorist financing (CTF) measures are noteworthy. The country has made significant progress since being placed under Moneyval’s compliance enhancing procedures. These efforts are part of a broader initiative to align Bulgaria with international standards and enhance its reputation in the global financial community.

The introduction of the new AML unit within the NRA marks a critical step in this journey. By focusing on stringent customer verification processes and thorough risk assessments, Bulgaria aims to mitigate the risks associated with money laundering and terrorist financing.