Bulgaria’s reinforced anti-money laundering (AML) regulations, particularly the stringent supervision of the gambling industry, have achieved full compliance with international standards as confirmed by a Council of Europe monitoring body. The recent Moneyval follow-up report highlights Bulgaria’s significant progress in combating money laundering and the financing of terrorism since a critical evaluation in 2022.
Two years ago, Bulgaria faced intense scrutiny when the Moneyval committee, an entity of the Council of Europe, placed the country under compliance enhancing procedures due to various AML deficiencies. The Council of Europe collaborates with nations under these procedures to address and rectify such shortcomings.
The Moneyval report reveals that Bulgaria is now fully or largely compliant with 13 out of 40 recommendations set by the Financial Action Task Force (FATF). For the remaining 27 recommendations, Bulgaria is at least partially compliant, demonstrating substantial improvement across multiple areas.
One of the key areas where Bulgaria now meets full compliance is in customer due diligence for Designated Non-Financial Businesses and Professions (DNFBPs). This category includes the gambling and casino sectors, along with real estate and legal services. Enhanced oversight in these areas is a significant milestone for Bulgaria’s AML framework.
“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,” stated Moneyval. The body, a permanent monitoring group within the Council of Europe, is responsible for assessing adherence to international standards aimed at preventing money laundering and the financing of terrorism.
In 2023, Bulgaria’s National Revenue Agency (NRA) took a pivotal step in enhancing AML oversight within the gambling sector by establishing a dedicated AML unit. This new unit is tasked with enforcing stringent requirements, including customer verification processes, document collection, and conducting risk assessments related to money laundering and terrorist financing. Additionally, the unit monitors suspicious transactions and customers, collaborating with international authorities to ensure robust enforcement.
The NRA’s role has expanded significantly since assuming control of gambling regulation in 2020, following the disbandment of Bulgaria’s State Commission on Gambling. The creation of the AML unit was a direct response to the national money laundering risk assessment, which identified significant deficiencies across several sectors.
Despite these regulatory changes, the Bulgarian gambling market continues to flourish. At the beginning of 2024, the industry was projected to contribute BGN200 million (£88 million/€102.3 million/$111.7 million) to the national budget. Over the past two years, gambling activities have generated more than BGN300 million in taxes and fees, suggesting that recent reforms to Bulgaria’s tax structure could further enhance this financial contribution.
The strengthened AML measures are expected to provide long-term benefits not only by ensuring compliance with international standards but also by fostering a more secure and transparent financial environment. As Bulgaria continues to enhance its regulatory frameworks, the country’s commitment to fighting financial crimes sets a positive example for other nations striving to improve their AML systems.
