According to the current Measures Against Money Laundering Act (MAMLA), non-profit legal entities (NGOs) are obliged to comply with certain measures in order to reduce the risk of their activity being used for money laundering or financing of terrorism.

There are two types of measures:

• Applicable to all NGOs
• Applicable to the NGOs under a specific criteria

 

I. Obligations for all NGOs

1. All NGOs are obliged to identify their beneficial owners and to announce them in the Public Register (in case that they are not already announced based on different obligation – e.g. members of the managing body). FID-SANS published instructions for NGOs on how to define their beneficial owners according to the legal definition[1]

2. Notifying The State Agency for National Security

All NGOs need to notify The State Agency for National Security in the following cases:

• Cash payments over 30,000 thousand (from or to a client of a non-profit organization within the established relations between them) - to notify The State Agency for National Security by the 15th day of the month following the month in which the payment was made.
• Suspicion of money laundering - to notify The State Agency for National Security before the transaction or at the earliest possible moment. At the same time, NGOs must keep a register with signals from employees for such suspicions.

3. Other Measures

NGOs are also obliged to store any documents in connection to the measures against money laundering for a period of 5 years.

 

II. Obligations for specific groups NGOs

 

1. Risk Assessment And Adoption Of Internal Rules For The Control And Prevention Of Money Laundering And Financing Of Terrorism.

This measure is applied only to

• NGOs with an annual turnover exceeding BGN 20, 000 – each year until 31^st of July (for 2020 the deadline is until 13.09.2020)
• any NGO which determines that there is a risk of the activity of the organization being used for money laundering or financing of terrorism – for the 2020 the deadline is until 21.09.2020

Firstly, the obliged NGOs need to carry out a risk assessment. Risk assessment is a tool which helps non-profit legal entities (NGOs) identify, understand and assess the risk of their activity being used for the purpose of money laundering or financing of terrorism. The risk assessment is done by following a methodology provided by the State Agency for National Security. When carrying out the risk assessment keep in mind the following:

• Use the criterions in the provided methodology;
• The risk assessment is done by the managing body of the organization or by appointed by it person with managing functions;
• The National Risk Assessment (published 2019), the Supranational Risk Assessment (published 2019) and Sectoral Risk Assessments (if applicable) and their updates.
• The results of the risk assessment need to be included in the Internal Rules;
• The risk assessment is kept for 5 years, together with the protocol for its adoption, the protocol for notification of the employees about its results;
• The risk assessment is reviewed each 2 years. In certain cases, for instance the adoption of new National, Supranational or Sectoral Risk Assessments, one might need to review the risk assessment earlier.

After that the NGO adopts Internal Rules For The Control And Prevention Of Money Laundering And Financing Of Terrorism. Those Rules are based on the INDICATIVE INTERNAL RULES FOR THE CONTROL AND PREVENTION OF MONEY LAUNDERING AND FINANCING OF TERRORISM published by the FID-SANS. Each NGOs is adapting them by adding to them information about:

• the organization
• the competent body in the organization which has adopted the Rules
• the person who is responsible for the internal control over the fulfilment of obligations under the MAMLA
• the results of the risk assessment (any additional measures the NGO would apply to its activity in order to mitigate the assessed risk).

Neither the risk assessment nor the Internal Rules need to be sent to any authority. Failing to comply with the deadlines for adoptions Internal Rules does not lead immediately to sanctions. Firstly, the State Agency for National Security will issue instructions to the organization which hasn’t complied with the deadlines.

2. Appointment of a Person Responsible for The Internal Control Over The Fulfilment Of Obligations Under The MAMLA

The NGO needs to appoint a person who is responsible for the internal control over the fulfilment of obligations under the MAMLA. This person can be the manager, the representative or any other person with managing functions in the organization. In 7 days after the representative appoints the responsible person (the representative could appoint oneself) the contacts of this person need to be send to the State Agency for National Security by filling up a form and send it to vatreshni_pravilaFID@dans.bg.

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