Legal changes to the Anti-Money Laundering Measures Act (AMLA) introduce stricter obligations and penalties regarding the declaration of beneficial owners.
Non-compliance notification
Recent legal amendments have introduced new rules for notifying the Registry Agency about discrepancies in beneficial owner data.
According to the latest legal changes, individuals and entities mentioned in Art. 4 Measures Against Money Laundering Act (AMLA), as well as the bodies and administrations under Art. 63, para. 11 of the AMLA, are now required to notify the Registry Agency if they discover inconsistencies between the data they have collected about the beneficial owners of a given entity and the data entered in the relevant register (e.g., Commercial Register or BULSTAT Register). This notification must be sent to the Registry Agency within 14 days of discovering the non-compliance.
Upon receiving the notification, the Registry Agency will make an entry regarding the discrepancy on the account of the legal entity or other formation. However, no entry will be made if the necessary documents proving the discrepancy are not attached to the notification.
Subsequently, the Registry Agency will send a written notification to the address of the legal entity or other formation registered in the commercial register, register of non-profit legal entities, or the BULSTAT register. If this notification is not received by the legal representative or proxy of the entity, it will be considered delivered after one month from the registration of the notification.
The relevant entity must then submit an application to change the registered circumstances or to delete the registered notification of discrepancy within 7 days of receiving or being served the notification. The application must be accompanied by the necessary documents.
These new procedures and measures impose significant obligations and responsibilities on entities to ensure transparency and compliance with anti-money laundering regulations.
Stricter Sanctions
The changes will take effect from July 16, 2024. It is advisable for individuals and entities to review their registered beneficial owner data in the registers kept at the Registry Agency to ensure accuracy. Additionally, new declaration template under Art. 63, para. 4 of AMLA was introduced at the end of 2023. Pursuant to the rules for implementation under the AMLA, individuals must consider what supporting documents to submit in order to prove the declared circumstances.
Failure to declare the beneficial owner will result in increased sanctions starting from July 16, 2024. Individuals will be fined BGN 5,000, while legal entities will face a property sanction of the same amount. Repeat offenses will incur additional fines or sanctions every month until compliance is achieved. This implies that failing to register a beneficial owner within a 6-month period could result in a cumulative fine of BGN 30,000 for that timeframe.
These measures underscore the importance of timely fulfilment of administrative obligations and highlight the need for legal entities to consult experts to ensure compliance with the law and avoid penalties.
Currently, officials in the Commercial Register scrutinize a trader’s records for a properly declared beneficial owner during the assessment of any application for registration or announcement, irrespective of their nature. This raises the likelihood of detecting non-compliance with AMLA and imposing penalties. In the event of a confirmed violation, seeking advice from an expert is advisable. They can assess whether the action was taken within the prescribed deadlines outlined in the relevant legislation and ascertain if all legal requirements were met during the determination of the violation and subsequent actions taken.
