Bulgaria has completed its first National Risk Assessment (NRA) under the new anti-money laundering rules (AML) routed in the EU legislation, aiming to provide a broad assessment of the country’s Money Laundering/Terrorist Financing risks.
On January 9, the State Agency for National Security (SANS) published a summary of the NRA on its website. As of the publication, the obliged entities, including credit institutions, banks, life insurance companies, investment firms, FinTech companies, wholesalers and other entities1, have 6 months to update their internal AML policies, procedures and controls to comply with the requirements of the Measures Against Anti-Money Laundering Act (MAMLA), which implemented the 4th and 5th AML Directives.
The results of the NRA were long-awaited by the obliged entities because, on one hand, they are meant to serve as a basis of the individual risk assessments which the obliged entities are required to perform. On the other hand, the adoption of the NRA prompts the obliged entities that have not yet updated their new internal AML policies, procedures and controls and individual risk assessments to act because the 6-month term, is everything but sufficient to get in line with the new rules, particularly given the complexities of preparing individual risk assessments and methodologies for assessment of the client risk profile.
The good news is that part of the administrative burden of the obliged entities is reduced, as they are no longer required to submit their internal rules to SANS, nor are they required to submit their annul training plans.
However, in case of failure to update/ adopt their AML internal policies, procedures and controls within this tight deadline, the obliged entities may be subject to material sanctions, including for repeated offences, which depending on the sector and type of the obliged entity could reach even 10% of the turnover.
The measures to fight money laundering at EU level are even further strengthened by the recent adoption of the 6th AML Directive which is expected to pose new compliance challenges for the business. Member States are required to transpose the Directive into national law by December 2020. The new directive complements the AML regulations by extending the scope of liability of legal persons. In this sense, Money Laundering offences could lead to bans from conducting business or forced wind-up of businesses.