Bulgaria Stays on FATF's Grey List for Money Laundering Oversight

Bulgaria continues to be listed among countries under enhanced scrutiny by the Financial Action Task Force (FATF). This information was released following the conclusion of the organization’s plenary session held this week in Paris.

Countries on the FATF's "grey" list face increased monitoring due to inadequate measures in combating money laundering and terrorist financing. Currently, there are 24 nations on this list, with Bulgaria being added on October 27, 2023.

In addition to Bulgaria, countries such as Croatia, Monaco, the Philippines, Haiti, Syria, Venezuela, Vietnam, Yemen, and several African nations are also included. To be removed from the list, these countries must enhance their financial systems.

This group consists of nations that are actively collaborating with the FATF to rectify significant deficiencies in their measures against money laundering, terrorism financing, and arms proliferation. Being placed under enhanced surveillance signifies that a country has committed to addressing the identified issues within a specified timeframe and will be closely monitored.

A report titled "Jurisdictions under Increased Monitoring," available on the FATF's website, indicates that Bulgaria has taken steps to bolster its anti-money laundering and counter-terrorism financing frameworks. The report notes that Bulgaria has shown "initial implementation of its national action plan" designed to combat these issues.

Furthermore, Bulgaria has made "initial application of risk-based supervision" for postal money transfer operators, currency exchange businesses, and real estate firms, according to the FATF report.

The organization has outlined specific recommendations for Bulgaria, including the need to close remaining legislative compliance gaps and ensure that the information regarding beneficial owners in registers is accurate and current. Additionally, the country is urged to enhance its investigation and prosecution processes for various forms of money laundering, particularly concerning high-level corruption and organized crime.

Bulgaria is also advised to enable parallel financial investigations in all counter-terrorism operations and to address gaps in implementing targeted financial sanctions related to the financing of weapons proliferation. Authorities are expected to identify non-profit organizations that could be susceptible to abuses tied to terrorism financing and to implement monitoring to prevent such abuses.

In contrast, the FATF's "black" list currently includes only three countries: North Korea, Iran, and Myanmar. Notably, Russia is absent from both the "grey" and "black" lists, despite having been a member of the FATF until its military aggression in Ukraine, which led to the suspension of its membership.