With the new Measures Against Money Laundering Act (“MAMLA”) promulgated in State Gazette, issue 27 dated March 27, 2018, the requirement of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC were introduced.
MAMLA introduced the obligation to register the information and the data in regard to the beneficial owner of the capital of the legal persons and other legal formations established on the territory of the Republic of Bulgaria, on the account with the respective register.
In view of the new MAMLA, amendments in the Commercial Act (“CA”), Commercial Register and the Non-Profit Legal Persons Register Act (“CRNPPEA”) and in the Ordinance No. 1 dated 14/02/2007 on the maintenance, storage and access to the Commercial Register and Non-Profit Legal Persons Register (“the Ordinance”) were adopted.
According to the new Para. 6 of Art. 40 of the CPNPPEA, promulgated in State Gazette, issue 27 dated March 27, 2018, in case of non-applying of the data in regard to the beneficial owner, the following sanction under the MAMLA shall be imposed:
1. a fine of BGN 500 up to BGN 5,000, where the offender is a natural person;
2. a pecuniary penalty of BGN 1,000 up to BGN 10,000, where the offender is a legal person or sole trader;
3. a pecuniary penalty of BGN 2,000 up to BGN 20,000, where the offender is a person referred to in Items 1 to 6 and 8 to 11 of Art. 4 of the MAMLA.
Upon a repeated violation, the sanction shall be:
1. under Item 1: a fine of BGN 1,000 up to BGN 10,000;
2. under Item 2: a pecuniary penalty of BGN 2,000 up to BGN 20,000;
3. under Item 3: a pecuniary penalty of BGN 5,000 up to BGN 50,000.
The sanction for systematic violations, unless the act constitutes a criminal offence, shall be:
1. under Item 1: a fine of BGN 2,000 up to BGN 20,000;
2. under Item 2: a pecuniary penalty of BGN 5,000 up to BGN 50,000;
3. under Item 3: a pecuniary penalty of BGN 10 000 up to BGN 100,000.
With State Gazette, issue 88 dated October 23, 2018 amendments in Art. 50a of the Ordinance were promulgated, as the following documents to the application for registration of the beneficial owner shall be attached:
- declaration under Art. 63, Para. 4 of the MAMLA, as the form and content of the declaration shall be determined by the Regulation for implementation of the MAMLA;
- document evidencing the existence of the company registered in a jurisdiction with preferential tax regime and certifying the persons which represents the latter under its national legislation;
- documents evidencing the existence of the legal persons or other legal formations through which direct or indirect control has been exercised, and certifying the persons which represents the latter under its national legislation, if the latter are not establish under the Bulgarian legislation or are not registered with the Commercial Register and the Non-Profit Legal Persons Register;
- certified consent of the natural person for contact under Art. 63, Para. 4, Item 3 of the MAMLA;
- other documents according to the requirements of the law.
Pursuant to § 9 of the Additional Provision of the MAMLA, amended with State Gazette, issue 94 dated November 13, 2018 the Registry Agency shall ensure the possibility for registration of the data under Art. 63, para. 4 of the MAMLA with the respective register until January 31, 2019. Within 4-month term as of the said date, the persons to whom/which this obligation applies shall declare the data for registration.
With § 2 of the Additional Provision of the MAMLA the legal definition of the term “beneficial owner” was introduced, as with State Gazette, issue 27 dated March 27, 2018 the definition was introduced in § 1e of the Additional Provision of the CA. Beneficial owner shall be deemed the person who directly or indirectly possesses sufficient percent of the shares or the rights to vote in the said legal persons or other legal formation, including through possession of bearer shares or through control by other means, excluding the cases of a company the shares of which are trade on the regular market in compliance with the requirements for announcement according to the European Union or of the equivalent international standards ensuring adequate level of transparency regarding the ownership.
Indication for direct possession shall be in case the natural person/persons possesses shares at least 25% of the legal person or other legal formation.
Identification for indirect possession shall be in case at least 25% of the shares of a legal person or other legal formation are possessed by a legal person or other legal formation which is under the control of the same natural person or persons or under the control of many legal persons and/or other legal formations, which eventually are under the control of the same natural person/persons.
With § 2, Para. 3 of the Additional Provision of the MAMLA the legal definition of the term “Control” was introduced, as control shall be the control within the meaning given by § 1c of the Additional Provisions of the CA, as well as any opportunity which, without being an indication of direct or indirect ownership, confers the possibility of exercising decisive influence on a legal a person or other legal person in the decision-making process for determining the composition of the bodies responsible for the management and supervision, the transformation of the legal person, the cessation of the activity thereof and other matters essential for the activity thereof.
In case after all possible means have been exhausted, the beneficial owner cannot be ascertained or any doubts have arisen that the ascertained person or persons are not the beneficial owner, for “beneficial owner” shall be deemed the natural person holding the position of a senior officer.
Up to the present moment, the Regulation for implementation of the MAMLA was not adopted, by which the form and content of the declaration under Art. 63, Para. 4 of the MAMLA shall be determined.