CC BY
26
UDC 336.71
T. Dimitrova,
PhD, professor,
Academy of economics "D. A. Tsenov", Svishtov, Bulgaria COMMERCIAL BANKS IN CRIMINAL MONEY LAUNDERING SCHEMES
Finance
In today's world, globalization provides an opportunity for economic agents to carry out free cross-border movement of financial resources, and through the banking system, without any particular obstacles and in search of a favorable location for high returns. This, however, is a potential opportunity and the money obtained from criminal activity to obtain legal origin through established money laundering schemes implemented through commercial banks. The purpose of this study is to outline the role of commercial banks as a money laundering mechanism by presenting their inherent characteristics within the scope of the Special Money Laundering Act1 (LMML) and to assess their importance as a permanent monitoring and control of compliance with the applicable standards against the above crimes.
I
Pursuant to the Law on Credit Institutions2, the Bank makes public borrowing or other repayable funds and provides loans or other funding at its own expense and at its own risk, which is sufficient to justify the suitability of an adequate risk management in the security sphere of the credit institution itself; the interests of its clients. In this respect, commercial banks can be defined as institutions with a significant role in the socio-economic life of each country, their financial stability and effective management are among the main prerequisites for competitiveness and market growth, and their absence leads to a number of risks3, including legal, operational and reputational ones.
In view of the issue under consideration, the activities of credit institutions, the implementation of related legislation, internal policies and procedures are subject to constant monitoring due to the potential for them to be used for the purpose of classifying as a crime against the financial system in the Penal Code - money laundering, which could also be a prerequisite for the possible occurrence of risk situations. In addition, it is precisely the specific activity of credit institutions that the special legislation - the Law on Measures against Money Laundering (MIMA) - also obliges them to regulate the measures for the prevention of these crimes.
Money laundering in the Criminal Code4 is defined as a deliberate crime where financial transactions or other property transactions are carried out or the origin, location, movement or actual property rights known to or allegedly acquired through crime or other publicly dangerous act. The norm also provides for complicated factual chapters, which imply heavier punishments, in cases where the offense was committed by a pre-consensus, by a criminal organization, by an official, one or more times. Money laundering itself is carried out through a series or scheme of financial transactions predominantly through the use of commercial banks that seek to conceal the proceeds of, or the financing of, criminal activities, or the illicit origin of the property. For the purposes of the Measures against Money Laundering Act, money laundering is associated with the following activities5:
• the conversion or transfer of property acquired from a criminal activity or from an act of participation in such an activity in order to conceal or conceal the illegal origin of the property or to assist a person involved in such an act in order to avoid the legal consequences of its act;
• the concealment or concealment of the nature, source, location, location, movement or rights in respect of property acquired from a criminal activity or from an act of participation in such an activity;
• the acquisition, possession, possession or use of property knowing at the time of receipt that it has been acquired from a criminal activity or an act of participation in such an activity;
• participating in any of the above-mentioned actions, association for the purpose of doing so, attempting to do so, and assisting, instigating, facilitating the execution of such an act or disguising it.
The theoretical and practical-applied analysis of the issue in question provides information that "dirty" money usually refers to crimes and illegal activities, and laundering itself is a subsequent planned crime based on imperfections in financial and legal national systems. In this line of thought, it is appropriate to point out that the planning and organization of criminal schemes is within the scope of intelligent and motivated expertise, bearing
1 See Law on Measures Against Money Laundering (last amended 01.01.2017).
2 See Art. 2, para. 1 of the Credit Institutions Act (last amended SG No. 63 of 04.08.2017).
3 See more Bojinov, B. Bank risk management, "Tsenov" Pubishing house, 2016.
4 See Art. 253 of the Penal Code (last amended SG No. 54 of 05.07.2017).
5 See Article 2 of the Measures against Money Laundering Act (last amended 01.01.2017).
in mind that for the technical implementation itself, persons with or without a low degree of education and without competences in the role of account holders, owners of legal entities, cash mugs, recipients and senders of funds through the systems of money transfers, etc.
The above is enough to "shake" the stability of credit institutions as a result of successfully implemented money laundering operations, which in turn requires the development and implementation of money laundering prevention tools, part of which is also the regulatory framework. For the purpose of this paper, investigating the place and importance of commercial banks in anti-money laundering processes by presenting their specific features within the scope of the Special Law (MIPA), and following a comprehensive theoretical and practical-applied analysis, it is logical that money laundering is presented as a process with conditionally defined phases:
• Phase 1: Introduction of criminal assets (incorporation) into the financial system;
• Phase 2: Performing complex financial transactions to cover the operations of the previous phase (stratification);
• Phase 3: Implementation of complex integration schemes to transform "laundered" funds into legally integrated (integration).
The very process of money laundering, as a crime against the financial system, starts with the introduction of property acquired from criminal activity in the financial system, directly or through the use of retail. This can happen both through cash payments of large sums and through consecutive contributions of lesser value. For example, for the sake of higher liquidity, the initial proceeds from drug trafficking or from spreading to the street are always in cash, but when deposited on a bank account they become indistinguishable from legitimate earnings from a legitimate business. Consequently, this phase is associated with the transformation of the illicitly acquired property in order to make it more difficult to identify, but it is also at the highest risk of detecting the criminal act due to the contact between the illegally acquired money and the financial system.
The second phase is used to conceal the nature of operations from the first phase by performing complex financial transactions (without any particular economic logic) that seek to erase as soon as possible all links to illicitly acquired assets. Shares, bonds, and other highly liquid assets are often purchased through funds, or they are transferred to bank accounts in other jurisdictions. Bank transfers, online and e-banking, bank loans, fictitious transactions, foreign exchange, offshore companies and bills, etc., are often particularly applicable, which are often executed simultaneously to remove the link between "dirty money" and criminal sources. It should be borne in mind, however, that, unlike financial
transactions carried out with legally acquired funds seeking economic gains and / or minimizing costs, it is not necessary to deal with money acquired illegally not necessarily a profit or a minimization of costs, and the sole aim is to acquire the same legal origin. Thus, money laundering is actually implemented within this phase.
The next phase relates to the return of legalized cash back to the economy in such a way that at the entrance of the financial system they seem like ordinary legitimate business assets. For this purpose, complex integration schemes are realized - for example purchase of real estate, business assets, securities, provision of collateral, etc. property is invested in the legal economy, which presumably defines the financial resource as legally acquired. There are also many techniques inherent in legitimate business, with the goal of increasing revenue and reducing tax liabilities. Therefore, this phase is the most complicated of Ch. disclosure of the illicit origin of capital, but at the same time it is also taken as a culmination in any successful money laundering operation.
In the context of the issue under discussion, in order to counteract the money laundering offense at each of the above phases, the legislature approves in the special rule (LMML), and the obligated persons, incl. and commercial banks apply as measures to prevent the use of the financial system for the purposes of money laundering the following1 :
• identify customers and verify their identification;
• identifying the actual owner of the client - a legal entity, and undertaking appropriate actions to verify its identification;
• collecting information from the client about the purpose and nature of the relationship that has been or is to be established with it;
• ongoing monitoring of established business or professional relationships, and verification of transactions and transactions performed within these relationships, the extent to which they correspond to available customer information, business and risk profile, including clarification of the origin of funds in cases referred to by law;
• disclosure of suspicious transactions, transactions, and customers.
The abovementioned essential characteristics and normative justification of the money laundering processes are sufficient grounds for each commercial bank to set up a specialized money laundering and anti-money laundering agency in its structure to organize and monitor the implementation of the legal measures2.
In summary, each commercial bank should carry out controls and prevent money laundering in accordance with the provisions of national laws and relevant international regulations and best practices by developing its own policy. The main purpose of the abovemen-
1 See Art. 3, para. 1 of the Law on Measures against Money Laundering (last amended 01.01.2017).
2 See Art. 1 of the Law on Measures against Money Laundering (last amended 01.01.2017).
tioned anti-money laundering measures is to "block" the relationship between credit institutions and criminals.
II
In order to have an anti-money laundering effect, it is necessary to develop and strictly implement policies both nationally and internationally. At supranational level, anti-money laundering policy is determined by the activity of a number of institutions, including the Financial Action Task Force on Money Laundering (FATF -Financial Action Task Force on Money Laundering1), Committee of Experts on Measures against Money Laundering at the Council of Europe (MONEYVAL Committee2), Union to enhance the interaction between financial intelligence units around the world (EGMONT GROUP3), The Basel Committee on Banking Supervision (Basel Committee of Banking Supervision4), The World Bank, the International Monetary Fund and others. For the implementation of the international and national regulations regarding the prevention of money laundering, a number of law enforcement, control and supervisory state institutions are operating in Bulgaria - Specialized Administrative Directorate "Financial Intelligence" of the State Agency for National Security (SAD FR - SANS), Ministry of the Interior, the Prosecutor's Office of the Republic of Bulgaria, the Bulgarian National Bank (BNB), the Controlling Agencies at the Ministry of Finance, etc.
The following report analyzes the SANS 'control activity with regard to credit institutions in the area of "money laundering" on the basis of historical data publicly disclosed through annual reporting documents5. Realizing its core business, incl. falling under the scope of the Law on Measures Against Financing of Terrorism, the Commercial Banks are subject to constant monitoring and control by the specialized administrative directorate "Financial Intelligence" of SANS, which has neither operational functions nor disclosure functions criminal activity but has a legal basis for collecting information without limitation from banking, official, professional or other secrecy as a mediating unit to speed up and facilitate information exchange between financial welfare and law enforcement systems.
Based on the applicable legal norms, among the main functions (the results from which will be analyzed below) implemented by the Directorate, incl. and in respect of commercial banks, the following are men-tioned6: organizing and conducting trainings related to
the implementation of the LMML and the LMFTS; ongoing and incidental control of the banking activity for the fulfillment of the obligations under the LMML and LMFT; drafting of acts of con vention, acts for establishing administrative violations; developing reports of violations committed by credit institutions; performing joint inspections with the supervisory authorities (Bulgarian National Bank); keeping registers of information received from commercial banks and others.
As stated above, the Directorate's function of organizing and conducting trainings on the implementation of the LMMI is a priority, as the educational attainment and the competencies acquired are a factor in increasing effectiveness in the fight against money laundering. Summing up the information published in the annual reports of the FAS - SANS, for the period 20122016, the Directorate carried out a total of 73 trainings, resulting in the training of 2454 persons in the capacity of representatives of the Institute of Certified Public Accountants (ICPA), Commercial Banks, Non-Profit Legal Entities (NGOs), the National Revenue Agency (NRA), real estate agents and others. As illustrated in Fig. 1, the number of trainings of commercial banks represented 22% in the structure of the trainings, which gives them a second position after the trainings of representatives of the ICPA (26%).
Similarly, commercial banks also occupy 14% of the number of trained persons, compared to 33% for the leader - ICPM. Considering that the number of banks (including their employees) operating on the Bulgarian market is considerably smaller than that of the certified accountants, it can be assumed that for the FAS - SANS the commercial banks are priority institutions with regard to the prevention of money laundering, mainly because of their specific activity - operating not only on their own, but also on attracted money, which poses a serious risk to their real origin. For the next 10% comparison, the number of trainings conducted by representatives of NGOs and NRA, followed by 7% by the real estate agents. The remaining 25% are outside the reach of the positioning, as they include all training with a share of less than 5% in the total number of courses, incl. investment intermediaries, management companies, insurers, insurance intermediaries, financial institutions, pension insurance companies, Financial Supervision Commission (FSC), leasing companies, lawyers, postal operators, private enforcement agents, traders, notaries, state and local bodies.
1 The organization that sets standards in countering money laundering and terrorist financing.
2 An organization responsible for Europe for the prevention of money laundering.
3 See https://www.egmontgroup.org/.
4 See http://www.bis.org/bcbs/charter.htm#classification.
5 The analytical part of the present report (including the figures and the tables) is summarized and processed by the author on the basis of published annual reports of the SAD FR - SANS (http://www.dans.bg/bg/msip-091209-menu-bul/fidannualreports30052012-mitem-bul).
6 See more art. 32e of the Regulations for Implementation of the State Agency for National Security Act (adopted with Decree of the Council of Ministers No 23 of 11.02.2008, promulgated in State Gazette, issue 17 of February 19, 2008, amended and supplemented SG .63 of 12 August 2016, SG No. 66 of 23 August 2016.
30% 25% 20% 15% 10% 5% 0%
Institute of Commercial Non-profit National Real estate Other certified public banks legal entities Revenue agents accountants Agency
Fig. 1. Structure of the trainings conducted by SAD FR-SANS in connection with the implementation of the LMML and the LMFT (2012-2016)
Following the above considerations, the factual data showing the persistence in the training of two categories of institutions throughout the analyzed period, including the commercial banks with two trainings and 50 trained persons in the first year - 2012 (the lowest values for the period) and five training sessions with 150 trained persons in 2015 (the highest values for the period). Concerning the others presented, trainings were carried out once (NRA - 2012) or a maximum of twice (NGOs and real estate agents - 2012 and 2014) throughout the time slice.
The performance of checks on commercial banks' activities on the implementation of anti-money laundering measures and suspicions of money laundering is also among the main activities of FAS SAD. For the period 2011-2016, the Directorate exercised control over the activities of credit institutions through a total of 44 inspections, of which 20 thematic and 20 planned (missing information on the nature of the inspections in 2011). As can be seen from the information published in the reporting documents, the highest concentration is observed in 2015 (12), and the main reason is the reported increased risk of money laundering through commercial banks, established in monitoring their operations by regularly reporting information and suspicious payment information to the relevant authorities.
For comparison, the verified commercial banks occupy the fourth position (7%) in the structure of the FAD - SANS (see Fig. 2), performed by the exchange offices (13%), notaries (12%) and accountants 8%), which is another proof that commercial banks, as the
only credit institution among the listed ones, are a potential "money laundering" incubator, and the fifth position with almost 7% is for insurers1. The category "others" is again aggregated and covers audited entities with a share of 5% and less than 5% of all registered, including auditors, lawyers, pension insurance companies, health insurance companies, NGOs, organizers and gambling companies, wholesalers, real estate, pawnshops, and more.
The control over the commercial banks is an activity in which the SAD FR - SANS interacts with other state bodies, performs joint inspections with the supervisory body - Bulgarian National Bank. Officially released information points to persistence throughout the analyzed period, with joint inspections reaching three in 2014 and 2015, two in two and one in 2012.
For comparison, the work of FAS - SANS with other supervisors significantly exceeds that of the BNB (11%), but here again the number of credit institutions operating on the market and that of the FSC and the State Commission gambling (DHS) economic agents. The joint inspections with the FSC and DCH authorities have a relative value of 19.5% over the whole timeframe (see Fig. 3). The reason for the NRA's competencies and the maximum values for interaction with the FAS -SANS (50%) is obvious - the nature of the work and the scope of the revenue administration, the implementation of anti-money laundering measures and measures against terrorist financing and suspicion of money laundering and terrorist financing.
1 See Dochev, H., Challenges of the New Legal Entities on the European Internal Market, in Izas Economics and Practice in the Process of the Supplementation of the European Union, Nis, 2007, pp. 319-330. Dochev, X., Supranational economic entities in the economy of the European Union, National Economic Archives, 2007/3, pp. 18-26.
Others
Investment intermediaries / management companies
Insurers Commercial banks Accountants Notaries Exchange bureaus
0% 10% 20% 30% 40% 50%
Fig. 2. Structure of on-the-spot inspections carried out by SAD FR-SANS in connection with the implementation of the LMML (2011-2016)
National Revenue Agency
State Gambling Commission
Financial Supervision Commission
Bulgarian National Bank
0% 10% 20% 30% 40% 50% 60%
Fig. 3. Structure of the joint inspections carried out by SAD FR-SANS with other supervisors (2012-2016)
The logical conclusion of the control activities of the FD - SANS in respect of the commercial banks for the fulfillment of their obligations under the LMML, as well as the acts for their implementation, is the drawing up of the findings of acts, the establishment of administrative violations (AEAV) under the LMML and the preparation draft criminal drafts. The reporting of violations by commercial banks has focused on analyzing the violations and proposing the measures to be taken to eradicate the consequences of and to prevent future violations.
For the period 2012-2016, the specialized financial intelligence directorate compiled and handed out to the credit institutions a total of 74 acts for the establishment of administrative violations, incl. non-declaration of
origin of funds by the client, non-declaration of the origin of the funds by a client in the case of a transfer order, failure to submit the required documents, failure to identify the client, failure to report the suspicion, no notifications for cash payments over BGN 30000 and others. (see Table 1). The leading position among commercial banks violations is the failure to report suspicion (according to Article 11 (2) of the LMML) - Acts (AEAV) have a relative share of 20% of the total, followed by the non-identification of persons who are actual owners of a client - 18%, no request for a declaration of origin - 11% and no notification for cash payments of more than BGN 30000, performed by a client (under Article 16, paragraph 1 of the MIPD) - 11%.
Table 1
Acts for establishing administrative violations (AEAV/pcs) of commercial banks (2012-2016) _drawn up and served by SAD Financial Intelligence - SANS1_
Types of acts for establishing administrative violations 2012-2016
1 Acts for not requiring a declaration of origin of the funds (Article 4, paragraph 7 of the LMML) 8
2 Acts for non-identification of the persons who are actual owners of a client - legal entity (Article 6, paragraph 2 of the LMML) 13
3 Acts for non-declaration of origin of funds by a client upon ordering a translation, in the part of the declaration under Art. 4, para. 7 of the LMML, equivalent to an unrepresented declaration, on the grounds of Art. 4, para. 4 of the LMML should have refused the operation. (Article 4 (4) of the LMML) 5
4 Acts for non-submission of documents under Art. 8 of the LMML (Article 9 of the LMML) and Art. 17, para. 8 of the LMML 7
5 Acts of incomplete customer identification (Article 4, paragraph 1, paragraph 2, paragraph 3 of the LMML) 5
6 Acts for failure to notify cash payment of more than BGN 30,000 or their equivalent in foreign currency, made by or to a client of the liable person (Article 11a of the LMML) 7
7 Acts for non-notification within the term under Art.16, para.1 of the MIPD for payment in cash amounting to more than BGN 30 000 per client 8
8 Acts for non-fulfillment of the provision of Art. 4, para. 4 of the LMML 1
9 Acts for non-reporting of doubt (Article 11, paragraph 2 of the LMML) 15
10 Acts for unresolved inconsistencies in the VPPIPPFT draft and re-submitting them to the Chairman of the State Agency for National Security for approval (Article 19, paragraph 3 of the MIPD) 1
11 Acts for failing to carry out an expanded verification of customer identification information (Article 8 (7) of the MIPD) 2
12 Acts for failing to notify the SAD FR-SANS about the replacement of the head of the SSCI-PHIP (Article 21, paragraph 2 of the MIPD) 1
13 Acts for not observing all complex or abnormally large transactions or transactions, as well as any transactions and operations that do not have a clear economic or legal purpose (Article 7b of the LMML) 1
TOTAL: 74
For comparison, the established AEAV of the commercial banks accounted for 15% of all drawn up and handed over by the FAS - SANS during the analyzed period - 507 (see Fig. 4) as a result of the sanctions imposed on all AAVs, amounting to almost BGN 839 thousand, with a clear upward trend from the beginning to the end of the analyzed period - 2012-2016.
According to the applicable regulations, commercial banks are obliged to report to the FAD - SANS the so-called dubious operations. As such, financial operations are classified and, after further studies by bank employees, it is not possible to clarify their nature, which is sufficient reason to be assigned a higher risk and to report them to the Financial Intelligence Agency. The official information sources indicate that 10930 suspicious transactions were reported for the period 20112016, 76% of which were commercial banks and the other from other institutions (see Fig. 5).
1 The information is summarized and processed by the author on the basis of published annual reports of FAS - SANS (http://www.dans.bg/bg/msip-091209-menu-bul/fidannualreports30052012-mitem-bul).
Fig. 4. Structure of the Documents Established and Delivered by SAD Financial Intelligence - SANS Documents for Establishing Administrative Offenses under the LMML (2012-2016)
Suspicious transaction reports (commercial banks) Suspicious transaction reports (other institutions)
Fig. 5. Sources of suspicious transaction reports (CSD) for 2011-2016
The analyzed reports show that the number of reports of suspicious transactions under the LMML and LMFT from the commercial banks to the FAS - SANS WADA has an upward trend, in 2011 it is 1035 and in 2016 it is 2390, ie. there is over 130% growth within the observed time span. It should be borne in mind that in the structure of generally reported suspicious transactions by year, commercial banks' DSBs take values of 69% in 2012 (minimum) to 82% in 2015 (maximum), regardless of the above-mentioned upward trend the analyzed period, due to the fluctuations in the value of DSOs by other institutions.
In view of the above analysis and the stability of commercial banks, and in order to prevent the use of the money laundering system, in line with the principles of the Basel Committee on Banking Supervision, the first and most important defense against money laundering is the ambition of bank management to protect its credit institution from dealing with criminal persons or engaging in criminal schemes by strictly enforcing customer identification and identifying the actual owner of the accounts. As a consequence, banks should not maintain relationships, enter into transactions, or execute transactions and order clients who can not provide evidence of the legitimate origin of the funds they hold.
In the process of globalization, the prevention of money laundering also requires effective permanent communication and active interaction both between the state institutions and between them and the persons obliged by the law, and credit institutions. In addition, the obligated persons should also observe the legal provisions, as well as write internal policy, incl. rules and procedures to prevent their use for the purposes of criminal schemes. As the processes of identification and assessment of bank customers, as well as those related to the monitoring of banking operations and the definition of some of them as suspect by Chief Operating Officer, of the existing risk, are complex, credit institutions should meet their needs from an adequate material base, incl. specialized software applications, time resource,
expert potential. At the same time, the improvement and modernization of the national and supranational regulatory framework is a sine qua non for realistic countering of the latest criminal practices for which credit institutions are also a priority.
In summary, the main statement in this paper provides the basis for the following conclusions:
First. The legalization of criminal assets is based on existing imperfections in the current system of prevention and counteraction of these processes, with credit institutions ranked among the main money laundering mechanisms, which is a prerequisite for the eventual occurrence of risk situations for itself bank and for its clients.
Second. On a national scale, commercial banks have been constituted as a priority subject of continuous monitoring and control by the specialized administrative directorate "Financial intelligence" of SANS in connection with the application of numerous regulations and institutions concerning the role of banks in complying with the legal norms against laundering money, as well as for the purpose of exploring, analyzing and disclosing information received under the terms and conditions of the LMML.
Third. In order to have anti-money laundering effects, it is necessary to develop and strictly implement policies both nationally and internationally, to be implemented in close cooperation and constant communication between the responsible institutions. At the same time, each commercial bank should develop its own anti-money laundering policy that contains adequate measures to counteract these crimes and their application to "block" the relationship between credit institutions and criminals.
Fourth. Measures to prevent money laundering should be aimed at: identifying customers and actual owners and taking appropriate action to verify their identification; customer assessment by Ch. the risk of money laundering; monitoring customer operations; disclosure of information (reporting) about suspicious transactions and transactions.
Fifth. For the period 2012 - 2016, SAD FR-SANS conducted a total of 73 trainings on the implementation of the LMML and LMFT with trained 2454 persons, including commercial banks with 22% of the total trainings and 14% of the total trainees. identifies them as priority institutions for the prevention of money laundering, mainly because of their specific activities - operating not only on their own, but also on attracted money, posing a serious risk to their real origin.
Sixth. In the structure of inspections carried out for the period 2011-2016 by the SAD FR-SANS (611), the commercial banks checked (according to the LMML) occupy the fourth position (7%) after the verified exchange bureaus (13%), notaries (12%). and accountants (8%), which is another proof that commercial banks, as
the only credit institution among the listed ones, are a potential "money laundering" incubator.
Seven. The established and served by the State Agency for Refugees State Agency for Administrative Discrimination (AAVS) under the LMML of commercial banks make up 15% of all prepared in the period 2012-2016 - 507. The top position among the commercial bank violations is the failure to report a doubt1 -20%, followed by the non-identification of the persons who are the actual owners of the client (YU) - 18%, the non-application of a declaration of origin - 11% and the failure to notify cash payments of value over BGN 30000, performed by a client2 - 11%.
Eighth. During the period 2011-2016, 10930 suspicious transactions under the LMML and LMFT were reported to the SAD FR - SANS, of which 76% of the commercial banks (with over 130% growth within the observed time interval) and the rest from the other institutions. For the same period, notifications of payment transactions in cash over BGN 30000, 99% (251600) were reported by the commercial banks, and their relative share varied between 98% and 99% during the same period, which is sufficient grounds for taking the necessary legal measures to prevent money laundering.
***
Global policy on combating money laundering places the activities of credit institutions within the scope of the legal norms and focus, in order to prevent their use for the implementation of criminal schemes. The present study is sufficient grounds, on a national scale, for commercial banks to be constituted as a priority subject of continuous monitoring and control by the specialized administrative directorate "Financial Intelligence" of SANS in order to investigate, analyze and disclose information obtained by the order and at the terms of the LMML, as they are obviously among the main options used for money laundering purposes. This is a good reason for credit institutions to create strict and transparent internal bank rules and procedures to be respected when selecting clients and executing financial operations and to prioritize their prevention against money laundering and financing of terrorism.
Reference
1. Bojinov, B. (2016). Risk Management at Commercial Bank, Tsenov AI.
2. Vladimirova, A., Money laundering as a crime against the financial system, NBU.
3. Dochev, X., Supranational economic entities in the economy of the European Union, National Economic Archives, 2007/3.
4. Petrunov, G. Countering Money Laundering in Bulgaria: Status and Perspectives. Sofia: RiskMonitor, 2008.
5. Pushkarova, I. Money laundering. Distinction from offenses related to him. Teza, issue 8 and 9/2014.
6. Dochev, H., Challenges of the new legal entities on the European internal market, b Izazovi ekonomske nauke i prakse u procesu pridruzivanja Evropskoj uniji, Nis, 2007, c. 319-330.
7. FATF, Money Laundering Using New Payment Methods, 2010, p. 36.
8. Savona, E. and M., De Feo. 1997. International Money Laundering Trends and Prevention/Control Policies. In: Savona, E. (ed.) Responding to Money Laundering. Amsterdam: Harwood Academic Publishers.
9. Council Directive 91/308 / EEC on the prevention of the use of the financial system for the purpose of money laundering.
10. Money Laundering Directive (2001/97 / EC).
11. Directive 2005/60 / EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.
12. Directive 2008/20 / EC amending Directive 2005/60 / EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.
13. State Agency for National Security Act.
14. Law on Credit Institutions (last amended SG No. 63 of 04.08.2017).
15. Law on Measures Against Money Laundering (last amended 01.01.2017).
16. Law on Measures Against Financing of Terrorism (last amended 01.01.2017).
17. Penal Code (last amended SG No. 54 of 05.07.2017).
18. Rules for Implementation of the State Agency for National Security Act (last amended and supplemented, SG No. 63 of August 12, 2016, SG No. 66 of August 23, 2016).
19. Rules for Implementation of the Measures Against Money Laundering Act (Supplement, No. 101 of 9.12.2014, in force as of 9.12.2014).
20. URL: http://ads.standartnews.com/www/deliv-ery/ck.php?n=a4d1a62e&cb=%n.
21. URL: http://www.bis.org/bcbs/charter.htm# classification.
22. URL: http://www.dans.bg/bg/msip-091209-menu-bul/fidannualreports.
23. URL: https://www.egmontgroup.org/.
24. URL: http://www.nbu.bg/PUBLIC/IMAGES/ File/departamenti/pravo/llaw_journal/0ct_2011/11_ anelia% 20vladimirova_.pdf.
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1 See Art. 11, para. 2 of the Measures against Money Laundering Act (last amended 01.01.2017).
2 See Art. 16, para. 1 of the Law on Measures against Money Laundering (last amended 01.01.2017).
У сучасному свiтi глобалiзацiя дае можливiсть економiчним агентам здшснювати вiльне транскор-донне перемiщення фшансових ресурсiв i через баншв-ську систему без будь-яких особливих перешкод i в по-шуках сприятливого мюця для високо! вiддачi. Це, од-нак, потенцiйна можливiсть легалiзацil як грошей, отриманих вiд злочинно! дiяльностi, так i в результат схем ввдмивання грошей, здiйснюваних через комер-цiйнi банки. Метою даного дослщження е визначення рол1 комерцшних банков як механiзму ввдмивання грошей шляхом подання !х неввд'емних характеристик в рамках Спецiального закону про боротьбу з ввдмиван-ням грошей i оцiнки !х важливосп в якостi постiйного контролю та контролю за дотриманням застосовних стандартiв проти вищевказаних злочинiв.
Ключовi слова: комерцшш банки, ввдмивання грошей, кримiнальнi схеми.
Димитрова Т. Коммерческие банки в схемах уголовных денег
В современном мире глобализация дает возможность экономическим агентам осуществлять свободное трансграничное перемещение финансовых ресурсов и через банковскую систему без каких-либо особых препятствий и в поисках благоприятного места для высокой отдачи. Это, однако, потенциальная возможность легализации как денег, полученных от преступной деятельности, так и в результате схем отмывания денег, осуществляемых через коммерческие банки.
Целью данного исследования является определение роли коммерческих банков в качестве механизма отмывания денег путем представления их неотъемлемых характеристик в рамках Специального закона о борьбе с отмыванием денег и оценки их важности в качестве постоянного контроля и контроля за соблюдением применимых стандартов против вышеуказанных преступлений.
Ключевые слова: коммерческие банки, отмывание денег, уголовные схемы.
Dimitrova Т. Commercial banks in criminal money laundering schemes
In today's world, globalization provides an opportunity for economic agents to carry out free cross-border movement of financial resources, and through the banking system, without any particular obstacles and in search of a favorable location for high returns. This, however, is a potential opportunity and the money obtained from criminal activity to obtain legal origin through established money laundering schemes implemented through commercial banks. The purpose of this study is to outline the role of commercial banks as a money laundering mechanism by presenting their inherent characteristics within the scope of the Special Money Laundering Act1 (LMML) and to assess their importance as a permanent monitoring and control of compliance with the applicable standards against the above crimes.
Keywords: commercial banks, money laundering, criminal schemes.
Received by the editors: 21.11.2018
and final form 14.12.2018
1 See Law on Measures Against Money Laundering (last amended 01.01.2017)
