money laundering best practices, lessons to be learnt and steps

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Bulgaria's attractiveness to traffickers; the Kapitan Andreevo border control post alone nowprocesses up to 1,000 vehicles daily, according to Bulgarian officials.Bulgaria’s geographical position means that it is vulnerable to the traffic of drugs from outsideEurope, and a convenient transit point for traffic in human beings. Bulgarian authorities advisedthat the most serious money laundering problems currently involve the proceeds of drugtrafficking and proceeds obtained from financial/economic crime. The banking sector is primarilyconsidered to be vulnerable at the placement stage (exchange offices and casinos).Bulgaria began to engage with the money laundering issue in 1996, but the first law was neverimplemented. In 1997 a separate money laundering offence was established by the introduction ofArticle 253 of the Penal Code. In 1998 a new Law on Measures against Money Laundering wasadopted, providing a coherent framework for fighting money laundering but criticized for failingto prosecute unlawful money transactions. It established a specialized unit responsible forimplementing the law, the Bureau of Financial Intelligence (BFI), which has the status of aGeneral Directorate in the Ministry of Finance. It is an Administrative Unit responsible forcollecting, processing, disclosing, keeping and analyzing information on STRs from obligatedentities. An extensive range of undertakings which are potentially vulnerable to moneylaundering are covered, including banks and non-banking financial institutions, insurers,investment companies and intermediaries, persons organizing games of chance, notaries, stockexchanges and stockbrokers, auditors and chartered accountants. 38In 2003 the amendments to the Measures against Money Laundering Act, aimed at bringing thelaw into compliance with the Revised 40 Recommendations of the FATF, entered into force.According to the amendments, legal advice remains subject to the obligation of professionalsecrecy, unless the legal counselor is taking part in money laundering activities, legal advice isprovided for money laundering purposes, or the lawyer knows that the client is seeking legaladvice for money laundering purposes. The amendments establish requirements for theidentification of the real owner of clients - legal persons, for the collection of information aboutthe purpose and nature of relations with the client. 39The most often used method of money laundering according to the FIA in Bulgaria begins withdepositing a sum in cash in the banking system. The second step is an order to transfer the money38 Moneyval First Mutual Evaluation Report on Bulgaria39 Art 28 of Law on Maesures against Money LaunderingMoney Laundering Best Practices,Lessons to be Learnt in the Balkan RegionWritten by Tamara BrneticPage 43 of 58
abroad to the account of an offshore company. A transfer to another off-shore company's accountfollows, and the money returns to Bulgaria in the form of a credit to the amount of the exportedsum, which the off-shore company grants to a legal entity that has a legal business.On June 21, 2006, the Parliament tightened up Bulgaria’s anti-money-laundering law as aprerequisite to intensifying the fight against organized crime and to complying with EuropeanUnion requirements. Amendments to the Measures against Money Laundering Act oblige banksto ask for information concerning the individuals behind company accounts, on the origin offunds, and on the reason for spending. In the case of individual accounts, bank officials have torequest more detailed information about the account holder. Financial institutions must alsoinform authorities of suspicious activity by their clients. 40For one or more related transactions in an amount greater than BGL 30,000 or its equivalent inforeign currency, the client is obliged to declare the origin. Wherever suspicion of moneylaundering arises, the obligor is under an obligation to collect information about the essentialelements and other identifying data.According to the Law, it is not a requirement that the predicate offence needs to be committed inBulgaria. Subject to judicial ruling, a person can be convicted for both the predicate offence and amoney laundering offence. The Law uses an “all crimes” approach to predicate offences. Themental element of the offence of money laundering covers both knowledge and strong suspicionthat proceeds have been acquired by crime. Confiscation is mandatory, ordered by the court andfollows conviction. 41According to the data that the Financial Intelligence Agency (FIA) director Vassil Kirovpresented, from 1999 until 2003 FIA investigated 530 reports. By December 31, 2003, FIA hadcompleted 281 of these investigations, referring 238 cases to law enforcement authorities and 11cases to supervisory bodies and stopping proceedings in 32 cases for lack of evidence. In 2003investigators worked on 45 cases, including 16 reported by FIA. The investigative proceedingswere completed on 22 cases and recommendations were made to either institute lawsuits (four),dismiss the cases (seven), or suspend them (eleven).40 Chapter 2 of Law on Maesures against Money Laundering41Moneyval First Mutual Evaluation Report on BulgariaMoney Laundering Best Practices,Lessons to be Learnt in the Balkan RegionWritten by Tamara BrneticPage 44 of 58
Page 1 and 2: Money Laundering Best Practices, Le
Page 3 and 4: INTRODUCTIONThere is a saying that
Page 5 and 6: Historically, money laundering beca
Page 7 and 8: promotion of the rule of law has to
Page 9 and 10: MONEYVALMoneyval was formerly known
Page 11 and 12: purchases. There were import/export
Page 13 and 14: Croatia has a preventive system est
Page 15 and 16: In a well known case which took pla
Page 17 and 18: Proceedings and Law on Office for P
Page 19 and 20: However, the Law does not provide f
Page 21 and 22: The last amendments of the Law on P
Page 23 and 24: Croatian Law on Prevention of Money
Page 25 and 26: duties they suspect that transactio
Page 27 and 28: Pursuant to Recommendation No 27, C
Page 29 and 30: the condition of reciprocity. Croat
Page 31 and 32: Croatia is in full compliance with
Page 33 and 34: there is no information on independ
Page 35 and 36: overwhelming model of creation of o
Page 37 and 38: Bosnia also has a wide spread probl
Page 39 and 40: On 19 November 2003, the Macedonian
Page 41 and 42: antiquities, theft of cargo of a ve
Page 43: about unusual transactions from a v
Page 47 and 48: prostitution, trafficking in weapon
Page 49 and 50: PONZI’S SCHEMESOne of the very co
Page 51 and 52: foreign currency debt amounts to DM
Page 53 and 54: POSSIBILITIES FOR MONEY LAUNDERERS
Page 55 and 56: to launder monthly, so he starts to
Page 57 and 58: work abroad bring the money into th
Page 59: 24. http://www.vreme.com/cms/view.p

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