This May Bulgaria is in a final push to fully implement Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC.
Until 31 May 2019, many entities shall submit information for their “beneficial owners.” This mandatory requirement refers to limited liability companies with foreign participation and joint stock companies; it also may have an impact on registered joint-venture agreements with international involvement and some non-government organizations. The state requires one or more natural persons who ultimately owns or controls such entities to be recorded as “beneficial owners” in the relevant public register at the Registry Agency (www.registryagency.bg).
In the last few months the state adopted several significant amendments of Bulgarian Law on Prevention of Money Laundering. Previous week changes enlarged the scope of entities and organization obliged to submit the requested information. The Law on Prevention of Money Laundering also requires that if the “beneficial owner” does not reside permanently in Bulgaria, the entities should appoint a contact person with the permanent address on the territory of Bulgaria.
The failure to meet the final terms prescribed by the Law on Prevention of Money Laundering will be sanctioned with administrative fines of BGN 1,000 to BGN 10,000 (approximately EUR 500 to 5,000). The fines may be imposed each month consecutively until the entity complies with the regulation.
Short terms combined with heavy formalities eventually may expose many entities on failure to meet the final term.