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Round Table: Anti-Money Laundering in Bulgaria: Key Policy Issues and Impact Instruments

The Center for the Study of Democracy organized on 16 February 2010 a round table discussion “Combating Money Laundering in Bulgaria: Key Policy Issues and Impact Instruments.” The roundtable served to launch a newly developed instrument to assist anti-money laundering efforts in the country: a Money Laundering Investigation Manual. The Manual has been developed by experts from the Supreme Prosecution Office of Cassation, National Investigation Service, Ministry of Interior, the State Agency National Security and the Commission for Establishment of Proceeds Acquired from Criminal Activities.

Dr. Ognian Shentov, Chairman, Center for the Study of Democracy opened the event by underlining that money laundering is a threat to national security. Dr. Shentov explained that large shares of the profits from money laundering are reinvested in political campaigns instead of entering the formal economy.

The Ambassador of the Kingdom of the Netherlands, Mr. Karel van Kesteren noted that the Money Laundering Investigation Manual is a result of long-term cooperation between the Netherlands and Bulgaria. The round table and the publication of the manual were supported by the MATRA-KAP Program of the Embassy of the Kingdom of the Netherlands in Bulgaria. The Ambassador emphasized that although the Manual relied on Dutch support, it was a homegrown tool - only Bulgarian experts participated in its development. Mr. van Kesteren commended the Bulgarian government’s efforts in the field of combating corruption and organized crime.

Ms Vania Nestorova, Prosecutor at the Supreme Prosecutor’s Office of Cassation and team leader of the development of the manual, stated that money-laundering is a dangerous phenomenon, which leaves a sense of impunity and sends signals that breaking laws pays off. This in turn allows for to the perpetuation of criminal activities and threatens the entire financial system of the country. Money-laundering needs to be tackled by an inter-institutional approach at all levels. Ms Nestorova said that the Money Laundering Investigation Manual is a unique effort and contribution towards the combating of this type of crime. What makes it unique is that all relevant institutions as well as practitioners familiar with operational activities participated in the development of the Manual. Ms Nestorova presented briefly the Manual, outlining the role played by each institution and summarized its main objective – to encourage all the relevant institutions to work actively together to prove the crime beyond doubt. She underscored the importance of international legal aid for the collection of evidence.

Mr. Tihomir Bezlov, Senior Analyst at the Center for the Study of Democracy acknowledged that the number of money laundering charges brought to court have increased over the past few years. In 2002 - 2004 there were one or two such charges per year, whereas in 2009 the charges were 24. He estimated the revenues from money laundering at BGN 4 - 5 bln per year, which means that relatively insignificant number of the crimes is investigated. The drafting of the Money Laundering Investigation Manual is an attempt to systematically summarize the Bulgarian experience in this field. According to Mr. Belzlov, many money laundering crimes are committed in a “primitive way” in Bulgaria, which makes them relatively easy to investigate. A key challenge for investigators is the vast “grey area” in the field of money laundering - the passivity of the institutions from the public and the private sector who by law are entitled to report on this crime but do not. Reports on this type of crime on behalf of businessmen, real estate agents and notaries are missing or are extremely rare. Mr. Bezlov stated that there is a tendency to investigate predicate crimes, while complex financial schemes do not receive enough attention.

Mr. Tzvetan Tzvetanov, Deputy Prime Minister and Minister of Interior emphasized that attempts over the past 20 years to clamp down on organized crime have been unsuccessful due to lack of political will. Moreover, according to Mr. Tzvetanov, the state has been captured by former Secret Services agents who operate in conjunction with organized crime networks, which in turn leads to corruption at the highest level of government. Representatives of criminal networks from the past are now legitimatized businessmen, Mr. Tzvetanov said. The Deputy Prime-Minister stated that all state institutions and civil society organizations need to unite their efforts to trace the flow of laundered proceeds of crime. Joint activities with the Commission for Establishment of Proceeds Acquired from Criminal Activities are planned to support the recent Ministry of Interior operations in this field.

Mr. Stoyan Kushlev, Chairman of the Commission for Establishment of Proceeds Acquired from Criminal Activities emphasized the encouraging results achieved by the collaboration between the Commission and the Ministry of Interior. He added that criminals have adopted new ways to launder money and hide proceeds and therefore state institutions need to always update their counteraction approach.

In response to a journalist question regarding the heavy workload of police officers Mr. Vesselin Vuchkov, Deputy Minister of Interior acknowledged the problem, explaining that changes in the Criminal Procedure Code are underway to deal with this challenge.


Agenda (Adobe PDF, 22 KB)
CSD Brief No 21: Investigation of Money Laundering: An Institutional Approach
Media Coverage (in Bulgarian)
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