Regarding the trending topic of declaring a Beneficial Owner in accordance with the requirements of Art. 63, paras. 1 and 4 of the Measures Against Money Laundering Act (“MAMLA”), it should be noted that the practice of providing Good Standing Certificates of the companies in the corporate structure of the applicant Bulgarian company is wrong.
Only the notarized declaration under Art. 63, para. 4 of the MAMLA, in accordance with the approved blank in the Rules for Implementation of the MAMLA, as well as the notarized consent of the individual for contact in the cases under Art. 63, para. 4 of the MAMLA.
Registration officials enact mass instructions first, and subsequently refusals on these applications, on the grounds that under Art. 50a, para. 2 of Ordinance No 1/14.02.2007 on keeping, storing and accessing the commercial and the non-profit legal entities register (“Ordinance No 1”), documents establishing the existence of legal entities or other legal entities through which control is exercised, directly or indirectly, and certifying the persons who represent them under their national law, if they are not established under Bulgarian law or are not registered in the Bulgarian register must be attached to the application for entry of Beneficial Owners.
In accordance with the provisions of Art. 63, para 3 of the MAMLA the Commercial Register and the Register of Non-Profit Legal Entities Act (“CRRNPLEA”) and the BULSTAT Register Act shall apply to the procedure for declaring a beneficial owner.
Indeed, under Ordinance No. 1, documents establishing the existence of legal persons or other legal entities through which direct or indirect control is exercised, and certifying the persons representing them under their national law, shall be attached to the application for registration of beneficial owners, if they are not incorporated under Bulgarian law or are not registered with the Bulgarian register. However, this requirement was introduced by the ordinance, without taking into account that the MAMLA only stipulates that the declaring of beneficial owners is made on the basis of a notarized declaration.
When analyzing this case, the Statutory Instruments Act should also be taken into account. An ordinance is a normative act that is issued to apply individual provisions or subdivisions of a higher-level normative act. Тhe ordinance can only further develop legal provisions for which it is issued, meaning it may not create new rules that are not foreseen by an act. The aforementioned Ordinance No. 1 was issued for the implementation of CRRNPLEA. In this case, Ordinance No. 1 should be analysed together with CRRNPLEA and with the relevant provisions of the MAMLA, which concern the declaring of beneficial owners. According to the MAMLA, the relevant data are entered through submission of a declaration, the form and content of which are determined by the rules for the implementation of the act. The special act stipulates that the applicant’s declaration is sufficient to verify the existence of the entered circumstances and does not introduce a requirement to verify the truthfulness of the declared circumstances, nor does it require the submission of other documents with it. Given its function as an enforcement act, an ordinance cannot create a requirement to submit other documents.
