Nina Boteva Law Newsletter March 2021
On 12 March 2021, the amendments to the Measures against Money Laundering Act (MMLA) were published in the State Gazette. Legislative changes have amended the scope of the obligated subjects (legal entities and natural persons) that should implement measures against money laundering and terrorist financing.
The above-pointed out obligated subjects under the MMLA are specified in Art. 4 of the Law. The removal of the respective subjects from the scope of art. 4 of the MMLA can be divided into three groups. The first group includes persons who are not related to identified risk events in regard to the National Risk Assessment report, such as trade unions, professional organizations, legal entities with mutual funds, central securities depositories, market operators and/or regulated markets, and reinsurers.
The second group includes the persons in respect of whom other mechanisms have been introduced according to the legislation about providing information under the terms and conditions of the MMLA, such as the bodies of the National Revenue Agency and the customs authorities.
The third group includes persons whose activity is related to identified risk events in connection to the report of the National Risk Assessment, but for whom it is considered appropriate not to apply the terms and conditions in the MMLA, but another appropriate and effective way. This group includes wholesalers, privatization bodies, public procurement officers, ministers, and mayors of municipalities in case of concluding concession contracts.
With regard to professional sports clubs, it should be noted that in the supranational risk assessment of money laundering, professional football has been identified as a new sector exposed to money laundering risks.
In summary, it should be outlined that the following categories of entities fall outside the scope of the MMLA, namely:
– privatization bodies; the persons organizing tenders; contracting authorities and assignors in case of concluding concession contracts; legal entities to which there are mutual funds, as well as trade unions and professional organizations;
– market operators and/or regulated markets; central securities depositories; the bodies of the National Revenue Agency and the customs authorities; – The Bulgarian National Bank is obliged to apply the respective legal measures in the cases when it performs operations and transactions with an unlimited number of persons;
– Of all professional sports clubs, only football clubs remain obligated entities.
The legislative changes in the MMLA will lead to a reduction of the administrative burden for the above-mentioned categories of entities. With the adopted amendments to the MMLA were changed other provisions as well, which aim to specify contentious issues, and in that way, the effectiveness of the control over the implementation of the preventive legislation against money laundering and terrorist financing is increased.