The new Regulations on the implementation of the Measures Against Money Laundering Act (RIMMLA) were published in the Bulgarian State Gazette on 08.01.2019. These regulations elaborated the matter in regard to the establishment of the actual owners of companies and other legal entities. The identification of the natural person who is the actual owner of a legal entity requires the following actions:
1. An audit shall be carried out whether the client acts in his own name and for his own account or on behalf of a third party. The second scenario requires a special power of attorney. In case of doubt that the person performing the operation or transaction does not act on his own behalf and for his own account, the Financial Intelligence Directorate of the State Agency for National Security shall be notified;
2. Verification of the client in the relevant Bulgarian state public registers (trade register, register of non-profit legal entities, register BULSTAT)(1);
3. The client should provide an official document (certificate, contract or other documents), which should state the actual owners (in case of nominee directors, secretaries and owners). This document must be issued by the relevant central registry of the country where the legal person is registered;
4. For the purposes of identification of the legal entity an actual legal status certificate for that entity issued by the respective register of the foreign country should be presented. In addition, a certified copy of its articles of association or other document pointing out the required circumstances should be made available. The documents referred to in this point shall not need to be presented if there is full access to the relevant public register allowing the verification of the client;
(1) If the actual owners are not registered, it is necessary to do that. The legal entities and other legal entities established in the territory of the Republic of Bulgaria, the natural and legal persons and other legal entities acting on the territory of the Republic of Bulgaria in their capacity as trustees of trusts, trusteeships and other similar foreign legal entities established and existing under the jurisdiction of the jurisdictions allowing such forms of trust, for the purposes of registration of the actual owners in the Commercial Register and the Register of Non-Profit Legal Entities and in the BULSTAT Register shall submit a declaration with notary certification of the signature, which contains the requisites according to appendix 3 to the RIMMLA. The deadline for registration of the actual owners in the Bulgarian Commercial Register is until the end of May 2019.
5. A declaration shall be given by the legal representative or by the proxy of the legal entity stating the actual owner (Annex 2 of the RIMMLA);
6. The following data are collected about the physical person - actual owner: names; date and place of birth; the official identification number of a document in which the person has a photo; citizenship; country of residence and address.
The above-mentioned actions are only part of the overall customer due diligence (complex customer review). The ultimate goal of these actions is to establish the actual owner. Notwithstanding this, the complex due diligence includes other actions such as:
- identification of customers and their verification on the basis of documents, data or information obtained from reliable and independent sources;
- collecting information and assessing the purpose and nature of business relationships that have been or are to be established with the client;
- clarifying the origin of the funds;
- ongoing monitoring of established business relationships and verification of transactions throughout the duration of such relationships, taking into account: the client's risk profile; the information collected so far about the client and/or his business activity; and timely updating of the collected documents, data and information.
The actions that take place during the complex due diligence are applicable in the following cases:
- Establishing business relationships, including opening a bank account (when business relationships are established with the opening of the bank account);
- carrying out an occasional transaction or concluding an occasional deal of an amount equal to or above the BGN equivalent of EUR 15,000 or their equivalent in another currency, whether the operation or transaction is executed through one operation or through several related operations;
- carrying out an occasional transaction or concluding an occasional deal of a value equal to or above the BGN equivalent of EUR 5,000 or its equivalent in another currency when the payment is made in cash, whether the transaction or the deals are made through one operation or through several related operations;
- carrying out an occasional transaction or concluding an occasional deal that represents a transfer of funds under Art. (3) (9) of Regulation (EC) 2015/847 of the European Parliament and of the Council of 20 May 2015 on the information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006 (OB, L 141 / 1 of June 5, 2015) at a value equal to or above the equivalent of BGN 1,000 or their equivalent in another currency.
Depending on the types of persons performing the complex due diligence, it is also possible that additional actions other than those mentioned above may be applied.