What are the new obligations for the citizens and the business under the latest amendments in the Anti-Money Laundering Act (“AMLA”) from July 2023?

What are the new obligations for the citizens and the business under the latest amendments in the Anti-Money Laundering Act (“AMLA”) from July 2023?

On 14.07.2023 certain amendments to the AMLA were promulgated in the State Gazette, which are transposing the requirements of the Fifth Anti-Money Laundering Directive (Directive (EU) 2018/843) and introducing additional measures to improve the anti-money laundering and anti-terrorist financing mechanisms.

The amendments to the AMLA introduce significant changes to the way beneficial owners are disclosed with the Commercial Register, which increase the volume of documents to be submitted in the procedure and create a mechanism for tracking the irregular updating of the information regarding the beneficial owners.

  • As of 14.07.2023, when registering circumstances concerning beneficial owners in the Commercial Register, in addition to the standard form declaration under Art. 63, para. 4 of the AMLA, evidence should be provided that the natural persons referred to as beneficial owners fall within the scope of the relevant definition under § 2 of the AMLA, according to which they are determined as such. The law does not set out the requirements for the type and form of such evidence and the Implementing Rules for the AMLA have not yet been amended to reflect the latest changes in the law.
  • As of 16.07.2024, the obliged persons under the AMLA, as well as certain authorities (including: the State Agency for National Security, the Ministry of Interior, the National Revenue Agency, the Registry Agency) will have the obligation to notify the Registry Agency within 14 days in case of any discrepancy between the data collected by them and the data recorded with the Commercial Register about the beneficial owners of the legal entities. Consequently, the Registry Agency will make an entry regarding the existence of a notification of a discrepancy in the file of the Company with the Commercial Register and will send a written notification to the relevant legal entity of its obligation to declare up-to-date data within 7 days. Monetary penalties can be imposed for failure to notify the Registry Agency of the non-compliance, and for failure to fulfil the notification of the Registry Agency, as described above in a timely manner. Such penalties may be imposed for each month until the obligation is fulfilled. Furthermore, the disclosure of information regarding established discrepancies in the information regarding the beneficial owners is exempted from liability for breach of confidentiality obligations, including those agreed in a contract.

New requirements are also envisaged for certain categories of persons who are obliged to apply the measures under the AMLA, including accounting and legal services providers, as well as real estate agents:

  • As of 16.01.2024, the persons under Article 4, point 16 of the AMLA (who provide a registered office address, correspondence address, office and / or other similar services for the purposes of registration and / or functioning of a legal entity and other related services listed in the AMLA) shall perform these activities after registration in a special register with the Minister of Justice. It is expected that the conditions and procedure for registration will be explicitly regulated in an additional regulation, issued by the Minister.
  • Persons carrying out any of the activities under Article 4, para. 15 (provision of legal advice on a professional basis), para. 16 (provision of a registered office and correspondence address on a professional basis) or para. 18 (carrying out intermediation services in real estate transactions) of the AMLA shall comply with special requirements provided under law, which shall be evidenced by certain documents in case of inspection by the State Agency for National Security.

The amendments to the AMLA set out a 5-years period for the storage of data and documents regarding the beneficial owners after the dissolution of the legal entities established in Bulgaria. The representatives of the companies, their liquidators, the contact persons under Article 63, para. 4, point 3 of the AMLA, as well as the persons carrying out other actions in connection with the dissolution of the relevant legal entity are responsible for the storage of the data within this period.

For further information contact:

Iva Georgieva, Senior Associate

Boryana Dzhupanova, Associate