Bulgaria has taken significant steps to fortify its anti-money laundering (AML) measures, particularly within the gambling sector. According to a follow-up report by Moneyval, a Council of Europe oversight body, these improvements now align Bulgaria’s AML regulations with international standards. This progress is a marked shift from the previous findings, highlighting the country’s commitment to combating financial crimes effectively.
In 2022, a critical evaluation by Moneyval placed Bulgaria under compliance enhancing procedures due to deficiencies in its AML framework. Over the past two years, Bulgaria has made notable advancements in addressing these issues. The latest Moneyval report indicates that Bulgaria is now fully or largely compliant with 13 out of the 40 applicable Financial Action Task Force (FATF) recommendations. The remaining 27 recommendations are at least partially compliant, reflecting substantial progress.
One of the key areas of improvement is the implementation of customer due diligence measures for designated non-professional businesses and professions (DNFBPs). This category includes the gambling and casino sectors, alongside real estate and legal services. The enhanced oversight ensures that these industries adhere to strict AML protocols, mitigating risks associated with money laundering and terrorism financing.
“Since the adoption of its mutual evaluation report in May 2022, Bulgaria has taken numerous steps to strengthen its anti-money laundering and combating terrorist financing systems,” Moneyval stated. This statement underscores the proactive measures taken by Bulgaria to align with international standards and enhance its financial security.
A pivotal development in Bulgaria’s AML efforts is the establishment of a new unit within the National Revenue Agency (NRA). This unit, dedicated to AML oversight, significantly bolsters the country’s regulatory framework. The unit’s responsibilities include customer verification, document collection, and conducting risk assessments for money laundering and terrorist financing. By monitoring operations, transactions, and suspicious customers, the unit ensures comprehensive oversight and facilitates information sharing with international authorities.
The creation of this AML unit follows Bulgaria’s national money laundering risk assessment, which identified several sectoral deficiencies. Addressing these gaps, the unit operates under the NRA, the body that took over gambling regulation in 2020 after the dissolution of the State Commission on Gambling. This structural change has enabled more focused and effective regulation of the gambling sector.
Despite these regulatory enhancements, Bulgaria’s gambling market continues to thrive. At the beginning of 2024, the industry is projected to contribute BGN200 million (approximately £88 million/€102.3 million/$111.7 million) to the national budget. Over the past two years, the gambling sector has added over BGN300 million in taxes and fees, demonstrating its significant economic impact.
However, the cost of obtaining a gambling licence in Bulgaria has increased substantially, with fees rising by 300%. Additionally, the tax on income has been elevated from 15% to 20%. These changes reflect the government’s strategy to increase revenue from the gambling sector while ensuring robust regulatory oversight.
In conclusion, Bulgaria’s strengthened AML measures and enhanced regulatory oversight within the gambling sector represent a critical advancement in aligning with international standards. The establishment of a dedicated AML unit within the NRA, combined with rigorous customer due diligence and comprehensive risk assessments, underscores Bulgaria’s commitment to combating financial crimes. As the gambling industry continues to grow, these measures will play a crucial role in ensuring sustainable and secure economic contributions to the national budget.
