Bulgaria 'Dirty' Money Reaches BGN 5 B Annually

Crime | February 17, 2010, Wednesday // 09:42|  views

A research of the Center for the Study of Democracy reveals huge amount of profits is generated each year in Bulgaria through illegal activities. File Photo

The annual revenues from illegal activities in Bulgaria amount to at least BGN 4 to 5 B, according to the latest research of the Center for the Study of Democracy.

The staggering amount comes from illegal drug trafficking, illegal cigarette import and import of other excise goods, prostitution, corruption mostly related to public tenders and Value Added Tax (VAT) fraud.

The Center’s experts further note that money from financial schemes, illegal traffic of valuable historic objects, and money generated from the gray economy, estimated at 30% from Bulgaria’s Gross Domestic Product (GDP), is not included in the above amount.

In addition, the fast development of the real estate marker in Bulgaria in the last decade turned the country into an attractive international money laundering destination, the study shows.

The Center’s experts warn that Bulgaria’s specific way of laundering money, which they call “political investment”, threatens the very basis of democracy. This criminal activity differs from the money laundering in developed democracies where it is done mostly through complex financial operations.

Local elections in 2007 revealed that different criminal organizations have access to political influence through their financing of politicians and political parties, the researchers point out, adding just 0,1% of all money laundering cases are being probed in Bulgaria.

In 2007 – 2008 only one shady real estate deal has been reported by a broker while people from the business say that about half of the value of the properties sold and purchased is not officially listed. Corruption in the private sector – banks, currency exchange bureaus, notary public offices, car dealerships and others is still a huge problem since businessmen face the choice of either attracting honest customers or working with those who secure faster and more profitable deals through money laundering.

The Center has developed a handbook for investigating money laundering, based on the so-called “mass persecution” method, proposing techniques to counter the criminal activities.

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Tags: Center for the Study of Democracy, money laundering, VAT fraud, illegal drug trafficking, gray economy


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