Who Adopts Internal Rules
LMML requires that 30 categories of persons should develop policies, rules, procedures and practices, not only in order to prevent the possible laundering of illegally acquired assets by some people, using the services provided by them but also to track and disclose cases connected with money laundering.
Professional organizations and associations of the persons under Art. 3, Para 2 and 3, with the approval of the State Agency for National Security (SANS), may accept common internal rules for control and prevention of money laundering. The members of these organizations can adopt them in a 4-month term from their registration with a declaration. The common internal rules are sent to SANS in a 14-day term from their adoption. After the approval of the common internal rules of the branch organization, their members can adopt these rules with a declaration, which is sent to SANS.
LIST OF THE OBLIGED PERSONS
under Art. 3, Para 2 of LMML
1. The Bulgarian National Bank, credit institutions carrying on activity within the territory of the Republic of Bulgaria, financial institutions, exchange bureaus and the other payment service providers;
2. Insurers, re-insurers, and insurance agents, headquartered in the Republic of Bulgaria; insurers, re-insurers, and insurance agents from an European Union Member State or a state - party to the Agreement on Establishment of the European Economic Area, which engage in operations on the territory of the Republic of Bulgaria; insurers and re-insurers, headquartered in states, other than those indicated, licensed by the Commission for Financial Supervision, to conduct operations in the Republic of Bulgaria through a branch; insurance agents, headquartered in states, other than those indicated, listed in a Commission for Financial Supervision registry;
3. Mutual investment schemes, investment intermediaries and management companies;
4. Pension funds and health insurance companies;
5. Privatisation authorities;
6. Persons who organise the awarding of public procurement orders;
7. Persons who organise and conduct gambling games;
8. Legal persons which have employee mutual aid funds;
9. Persons lending cash against a pledge of chattels;
10. Postal operators licenced to perform postal money orders under the Law on Postal Services;
11. Notaries public;
12. Market operator and/or regulated market;
13. Leasing entities;
14. State and municipal authorities executing concession agreements;
15. Political parties;
16. Trade unions and professional organisations;
17. Non-for-profit legal entities;
18. Registered auditors;
19. National Revenue Agency authorities;
20. Customs authorities;
21. (repealed, SG No. 16/2011);
22. Sports organisations;
23. The Central Depository;
24. (repealed, SG No. 16/2011);
25. Merchants dealing in arms, petrol and petrochemical products;
26. Persons providing, by occupation, advice in taxation matters;
27. Wholesale traders.
28. Persons providing, by occupation, advice in legal matters, where they:
a) Participate in the planning or performance of a client deal or transaction concerning:
aa) Purchase or sale of a real property or transfer of a merchant's business;
bb) Management of cash, securities, or other financial assets;
cc) Opening or operating a bank account or a securities account;
dd) Raising funds to incorporate a merchant, increase the capital of a company, extend a loan or for any form of raising funds for the business operations of such merchant;
ee) Incorporate, organise operations or management of a company or another legal person, an off-shore company, a company managed under a trust arrangement or any other such entity;
ff) Fiduciary property management;
b) Act for the account or on behalf of their client in any financial or real property transaction;
29. Persons providing real property intermediation by occupation;
30. Persons, whose occupation is to provide:
a) management address, correspondence address, or office for the purpose of legal person registration;
b) legal person, off-shore company, fiduciary management company or similar entity registration services;
c) fiduciary management services for property or person under letter b);
31. (New, SG No. 57/2011) Persons whose occupation is to provide accounting services;
32. (New, SG No. 57/2011) Private enforcement agents.
Measures for Prevention of the Use of the Financial System for Money Laundering Purposes
Measures for preventing and disclosing money laundering activities which the obliged under LMML persons should apply, are specified in Art. 3, Para 1 of LMML and include:
1. identification of clients and its verification;
2. identification of the beneficial owner of a client – legal person, and taking relevant actions for verifying its identification in a way that gives sufficient reasons to the financial institution to take the beneficial owner for confirmed;
3. collecting information from the client about the purpose and character of the relation that is established or is to be established with him;
4. current monitoring of the established commercial or professional relations and check of the operations and deals performed in the framework of those relations, the extent in which they correspond to the available information about the client, about his trade activities and risk profile, including clarification on the origin of the assets in the cases specified by the law;
5. disclosing information about suspicious operations, deals or clients.
The order and procedure in which the mentioned measures are taken are specified in the Law on Measures against Money Laundering (LMML) and the Rules for Implementation of LMML.
The measures are obligatory for the persons also when they are declared insolvent or liquidated.
Content of the Internal Rules
With the Internal rules under Art. 16, Para 1 of LMML are defined:
1) clear criteria for detecting suspicious operations or deals and clients consistent with the company’s activity.
2) conditions and order for collecting, analyzing, storing and disclosing information about operations or deals;
3) rules for the organization and work of the specialized service under Art. 6, Para 5 of LMML;
4) allocation of responsibilities for the implementation of measures against money laundering among the person’s branches under Art.3, Para 2 and 3 of LMML as well as measures that include procedures for risk assessment among branches and daughter companies under the terms specified in Art.3c, Para 2 of LMML, if any;
5) using technical means for money laundering prevention;
6) internal control system for fulfilling obligations specified in LMML and in the acts for its implementation;
7) rules for training of specialized services staff;
8) rules for training of the rest of the staff;
9) other requirements, consistent with the peculiarities of the persons under Art.3, Para 2 and 3 of LMML;
Art. 9, Para 5 of the Law on Measures against Financing of Terrorism (LMFT) requires that the persons obliged under the LMML shall include in their internal rules under Art. 16, Para 1 of the LMML also criteria for detecting suspicious operations, deals and clients aimed for financing of terrorism.
Terms for Adoption and Presentation of Internal Rules (IRs)
Art. 16, Para 1 of LMML envisages that all persons obliged under Art.3, Para 2 of LMML have a 4-month term from their registration to adopt IRs for control and prevention of money laundering which should clearly show the policy and procedures of the company aimed for this activity and which should be approved by the Chairperson of SANS.
In a 14-day term from their adoption they should be sent or submitted for approval to the Chairperson of SANS.
Required Documents When Submitting IRs
After the adoption of the IR, one copy should be sent to the Financial Intelligence Directorate (FID) of SANS by post with advice of delivery. The address of FID of SANS is:
1407 Sofia, 45 Cherni Vrah Blvd.
The other required documents are:
- An accompanying letter where the person points the category of obliged person under LMML as well as identification data:
For legal persons, sole traders and self-insured natural person – Unified Identification Code/number in the commercial register;
For natural persons – name, address, unified personal identity number.
- A document certifying the adoption of IRs by a competent authority;
All non-original documents must have a text "True Copy" (i.e. verified with the original), the corresponding signature of the representative as well as a seal of the obliged person.
Approval of the IRs
When the submitted IRs meet the legal requirements the Chairperson of SANS approves them with an Order. The obliged persons receive a notification letter.
In the cases when it is found out that the corresponding IRs need to be supplemented, corrected or changed, an official letter is written which has instructions for eliminating the established discrepancies in the submitted project of IRCPMLFT of an obliged person under Art.3, Para 2 of LMML, and the corresponding corrections required by FID of SANS should be accepted. According to Art. 19, Para 3 of the Rules of Implementation of LMML, in one-month term from receiving the instructions, the obliged persons have to correct the discrepancies and to submit again their IRs to the Chairperson of SANS for approval. The obliged persons should specially note that the IRs have been complemented in accordance with the given recommendations and the number of the letter with the recommendations shall be quoted.