The Banks in Bulgaria refuse to open bank accounts of Bulgarian companies, owned by foreigners and citizens of other states, members of EU

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The Banks in Bulgaria refuse to open bank accounts of Bulgarian companies, owned by foreigners and citizens of other states, members of EU

Bulgaria, as a member of the European Union /EU/, adopts and transposes in its national legislation the European Directives related Anti-money laundering measures, which changes the legal requirements to the Banks.

Just the compliance of the Banks with the new legal requirements, which come into force with the new Law on Anti-Money Laundering Measures in March 2018, makes practically impossible to open bank accounts of Bulgarian companies with foreign owners from the EU, as well as individuals, citizens of the states not members of the EU.

According to the Guidelines issued by the Bulgarian National Bank, each Bank develops and adopts its own system for control and prevention of money laundering and terrorist financing in the work process with clients, as well as each bank adopts its own policy for approval of its clients.

Thus, all Banks in Bulgaria change their conditions for opening recruitment accounts of newly established legal entities and paying accounts of existing ones owned by foreigners or foreign companies.

To date all Banks implement practically  special conditions for opening recruitment accounts of newly established legal entities and paying accounts of existing ones, which owners are foreigners or foreign companies.

Some of the Banks have implemented fees in amount of hundreds of euros just for examining the documents, without commitment of opening the required bank account.

Or else they accept documents for review, but refuse subsequently to open a bank account, or do not express an option on the request at all.

The Banks are not obliged to motivate their refusal, nor to declare the applied criteria in the classification a „good“ customer.

There are also Banks’ branches where is directly denied the opening of an account of foreigners and EU citizens.

    In view of local conditions, the Bulgarian legislator applies a strictly conservative approach in transposing European Directives into National law.

Bulgarian commercial Banks, in compliance with the new legal requirements of the Law on Anti-Money Laundering Measures, introduce the rigorous possible restrictions in their work with clients and risk assessment.

In order to avoid the high sanctions imposed in case of possible violations of anti-money laundering measures, the Banks are starting to treat foreign and EU investors differently from locals ones.

If a Bulgarian citizen can easily register a company and open a paying account in Romania, then a Romanian citizen cannot register a company and open a paying account in Bulgaria.

It is indisputable that there is a certain percentage of „irregular“ companies.

It is normal for the banking security services to stop them, but the percentage of these companies is not more than 10-15%.

Nevertheless the Banks, „for safety“, refuse to open recruitment and paying accounts of all Bulgarian companies with foreign ownership.

Such logic should prohibit the movement of all cars on roads and highways in order to avoid road traffic accidents and heavy car crashes.

With these acts, the Banks violate the normal development of the investment process, as it is impossible to make any investment in Bulgaria if the investor doesn`t have a bank account in a Bulgarian bank.

In practice, potential foreign investors cannot register a company in Bulgaria, because it is impossible without a bank account.

Exigency in the next months, the Banks, acting in Bulgaria, have to give a new meaning of their internal policies regarding banking control by ceasing their reinsurance actions regarding Anti-money laundering measures as well as their illegal discriminatory policy towards foreigners and EU citizens.

The acts on the prevention of money laundering must comply with the law with the main goal of the normal development of business and the entire National and European economy.

Otherwise,law should regulate this problem explicitly.

By Daniela Golemanova

Attorney-at-Law

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