Who is obligated under the AML Law?
Under the new AML Law, legal persons and other legal entities established on the territory of the Republic of Bulgaria are obligated to receive, dispose of and provide appropriate, accurate and up-to-date information about the natural persons, who are their beneficial owners, including details about the rights they hold. This information must be registered in the respective files of the entities in the Commercial Register and the BULSTAT Register. Further, natural and legal persons and other legal entities acting on the territory of Bulgaria in their capacity as trustees of trusts, trust funds and other similar foreign legal entities established and existing in accordance with jurisdictions that allow such forms of trusts are obligated to receive and dispose of appropriate, accurate and up-to-date information on the beneficial owner. This information must be registered in the BULSTAT Register.
What kind of information needs to be registered?
The new AML Law and Ordinance No 1 for the Administration, Maintenance and Access to the Commercial Register, which was also recently amended (23 October 2018) in order to reflect and effectuate the legislative changes, specify the data that needs to be entered in the Commercial Register. Subject to registration are circumstances regarding the legal entities that directly or indirectly exercise control, personal data of the physical persons that are beneficial owner(s), personal data of the contact person(s) permanently residing in Bulgaria (if the legal entity does not have a legal representative permanently residing in Bulgaria).
The beneficial owner definition
The beneficial owner definition under the new AML Law pretty much coincides with the definition under Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015, which the new AML Law implements. A beneficial owner is a natural person(s) who ultimately owns or controls a legal person or other legal entity and/or a natural person(s) in whose name and/or on whose account an operation, transaction or activity, is carried out and who meet(s) certain criteria that vary depending on if a corporate legal persons/other legal entity, or a fund, or a foundation or legal form similar to a fund, is concerned. Further, the definition in the AML Law foresees that where all possible means have been exhausted and the beneficial owner cannot be established or where doubts exist that the established beneficial owner is not the real beneficial owner, the natural person acting as senior management shall be deemed the beneficial owner.
Registration Term and Fines
The Bulgarian Registry Agency, the administration responsible for organizing the keeping, maintenance and access to the Commercial Register in Bulgaria, had until 31 January 2019 to enable the registration of circumstances regarding the beneficial owner in the database. Companies have four months as of that date (i.e. until 31 May 2019) to enter the required data in the respective register. The fines in case of non-compliance are from BGN 1,000 to BGN 10,000. Subject to higher fines, namely BGN 2,000 to BGN 20,000, are entities like banks, payment service providers, financial institutions, insurers, leasing undertakings, investment intermediaries. Furthermore, entities that have been fined and have not fulfilled their registration obligation, will be fined every month until they enter the required data in the Commercial Register.
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