If you have a large company that is an obligated person under the Anti-Money Laundering Act (AMLA), you are probably involved in implementing numerous whistleblowing rules, anti-corruption practices, policies for storing and handling personal data, etc.

Anti-money laundering regulation imposes new obligations on companies, with one of the latest amendments to the AMLA introducing policies and procedures to verify the professional competence and reliability of employees implementing anti-money laundering measures. Employees are also subject to specific ongoing training.

The obligated person has to include in their internal rules under the AMLA the policies and procedures relevant to the verification of employees. If the State Agency for National Security (SANS) finds that their content does not comply with the law, the company will receive mandatory prescriptions from the examining authority to correct them.

Even before an employee is hired, the company has to ensure that the individual has the necessary qualities to assess money laundering risks and respond appropriately to prevent them. Exactly how this assessment will be carried out is not specified in the law. An appropriate way would be to test the individual‘s knowledge of the legal framework, combined with a personality test of their moral character and integrity. Presenting a criminal record is also provided for in the AMLA.

That is, the regulatory requirements have two dimensions - documentary and factual.

The practice of implementing the AMLA so far shows that it is not so important what rules and procedures the obligated persons have on paper, but whether they actually apply them in their relationships with clients - in the right place and at the right time. The texts in the internal documents may well sound in full harmony with the applicable law, directives, guidelines, and clarifications of the regulatory authorities. However, if specific employees ignore the risks involved and allow money of criminal origin or intended for terrorist financing to pass through, then all efforts to write down procedures will have been in vain. The company and some of its employees will be sanctioned and Bulgaria will solidify its name as a jurisdiction on the grey list of FATF (Financial Action Task Force).

Copying someone else‘s or general texts in the internal rules may also formally give an acceptable appearance to the company's documents. However, it is only the real knowledge and adequate response to money laundering risks in day-to-day activities with customers that will give added value to the business.

Not only managers and employees themselves, but also HR professionals are facing this new regulatory challenge. They have to figure out how to test the competence and loyalty of their colleagues and how to select employees who will not put the operations and reputation of the entire company at risk.

Given the fact that Bulgaria's main shortcoming, according to the reports of international monitoring organisations, is the lack of statistics on the activities of the SANS and the obligated subjects, it is very likely that on-site inspections will become more frequent, and sanctions will increase in number. For this reason, it will be increasingly important for companies to implement the relevant rules - either through their trained employees or with the assistance of professional experts.

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