Bulgaria Country Summary

FATF Status

Bulgaria is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 February 2025

Since October 2023, when Bulgaria made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Bulgaria has taken steps towards improving its AML/CFT regime, including by ensuring that the beneficial ownership information held in its Register is accurate and up-to-date and by identifying the subset of non-profit organisations (NPOs) most vulnerable to TF abuse. Bulgaria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) addressing the remaining technical compliance deficiencies; (2) improving investigations and prosecutions of different types of money laundering in line with risks, including high-scale corruption and organised crime; (3) ensuring the ability to conduct parallel financial investigations in all terrorism investigations; (4) addressing gaps in the PF TFS frameworks; and (5) demonstrating initial implementation of risk-based monitoring of NPOs to prevent abuse for TF purposes.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bulgaria was undertaken in 2024. According to that Evaluation, Bulgaria was deemed Compliant for 5 and Largely Compliant for 22 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption remains a significant challenge in Bulgaria, ranking 67th out of 180 countries in Transparency International's Corruption Perception Index for 2023. Recent legislative changes aimed at reforming the Anti-Corruption Commission have faced criticism for their rushed implementation and lack of thorough analysis of past efforts. Despite some advancements in public administration technology, high-level corruption, particularly in public procurement, persists, with few serious sanctions against officials, leading to public calls for further reforms in the criminal justice sector.

Bulgaria is a low-cost investment destination with government incentives to attract new investments, characterized by inexpensive labor and low corporate taxes. However, the country faces challenges such as low labor productivity, rising wages, and inflation, which threaten economic growth and productivity in the medium term. Despite these issues, Bulgaria is working towards Eurozone accession by 2025 and has received significant EU recovery funds aimed at enhancing its economic landscape.

Bulgaria presents a low-cost investment climate bolstered by government incentives aimed at attracting foreign investment, despite facing challenges such as labor shortages and inflation. The country has a favorable tax regime with low corporate and income taxes, but concerns about the rule of law and regulatory unpredictability persist, impacting investor confidence. Additionally, Bulgaria is actively working on reforms to improve its investment landscape, including plans to enhance renewable energy capacity and digitalization through EU recovery funds.