Foreward by Andrew Chilvers
When the 5th Anti-Money Laundering Directive was introduced into law by the UK and EU in January 2020, for many professionals it was a much needed addition to legislation that would significantly help business transparency and combat money laundering. In essence, it was good for business and for public and professional confidence.
All jurisdictions signing up to the 5th Directive will build and maintain UBO registries that will be publicly available at any time. UBO registries will also be set up for bank accounts and trusts, although these latter two will not be publicly available but be accessed by the relevant authority such as financial intelligence units and legal advisors looking into money laundering. Investigative journalists who can show a legitimate interest in the case can also have access, which is vital if another Panama Papers (see below) is to be uncovered. Across the UK and EU national UBO registers will be set to connect through a central European platform by April 2021.
Please provide a brief overview of the UBO Register in your jurisdiction and its history?
In Bulgaria the data related to UBOs is registered in the general registers – the Commercial Register, Register of Non-profit Legal Entities or Bulstat Register (the register in which the data shall be entered depends on the nature of the legal entity/ legal arrangement). In the files of the particular legal entities/ legal arrangements in those registers there is a special chapter named “Beneficial Owners” that includes the following sections:
• Legal entities/legal arrangements through which direct control is exercised (including data for their legal representatives);
• Legal entities/legal arrangements through which indirect control is exercised (including data for their legal representatives)
• Beneficial owners;
• Contact person.
A contact or natural person who is permanently resident on the territory of Bulgaria will be entered in the register. In cases when there is no registration of a natural person – it will apply to the representative of the legal entity/legal arrangement who is permanently resident on the territory of Bulgaria.
In some very limited cases beneficial owners were subject to registration under the Act on the Economic and Financial Relations with the Companies Registered in Preferential Tax Regime Jurisdictions, the Parties Controlled by Them and Their Beneficial Owners (former title: Act on Economic and Financial Relations with the Companies Registered in Preferential Tax Regime Jurisdictions, the Parties Related to Them and Their Beneficial Owners) in 2014. But the registration of beneficial owners with a broad range of legal entities/legal arrangements started in 2019, according to the Measures Against Money Laundering Act, promulgated in State Gazette issue 27/27.03.2018 (MAMLA).
That range of legal entities/legal arrangements includes (i) the legal entities and other legal arrangements incorporated on the territory of Bulgaria and (ii) the natural persons and legal entities and other legal arrangements which act on the territory of Bulgaria in their capacity of trustees of trusts, custodian funds and other similar foreign legal arrangements established and existing under the law of jurisdictions, allowing such forms of trust property. But the Measures Against Money Laundering Act (MAMLA) provides certain exceptions of the obligation for registration. The obligation for registration, respectively the exceptions of it, were amended over time.
Currently (January 2021), there are certain exceptions of the obligation for registration of beneficial owners and the other related information (e.g. such registration is not required for sole traders and for limited liability companies the beneficial owners of which are registered as their sole owners or associates).
How can your firm ensure your clients are fully compliant with the new / existing requirements?
Our law firm provides assistance in the processing of identifying the beneficial owners and controlling legal entities, advises on the documents and data needed, as well as on all other relevant requirements (needed certifications/legalizations of foreign documents, etc.). We prepare the special declaration form to be submitted to the register and complete and submit the application (supported with the necessary documents) to the register on behalf of the client. Our law firm has a broad experience with that registration procedure and is aware of the practices of the officials in the registers.
Upon work regarding registration of a new company or other legal entity/arrangement or changes in such registration, we inform the clients in advance of the obligation for registration of the beneficial owners and other related data (if applicable). Apart from the assistance in the registration procedure, we can also assist in the post-implementation period to ensure compliance (e.g. if some changes occur in the corporate structure of the client, etc.).
What changes can we expect to see emerging, are any new proposals expected?
Currently (January 2021), no changes are expected regarding the registration of beneficial owners and the other related data.
What other information might be relevant?
It is important to note that since there is no special deadline for registering the data under the MAMLA, the general term for registration under Bulgarian law shall apply – 7 days as from occurrence of the respective circumstance/change. This short deadline shall be taken into account in view of the fact that the submission of the application to the register is related to providing certain documents and certifications.