Банкеръ Weekly

Briefs

MONEY LAUNDERING STARTLES THE EU

Bulgaria pointed among the greatest fake currency producersThe European Union is disturbed by the absence of a guilty verdict for money laundering in Bulgaria. Brussels shared its worries in the final report on the first partners inspection of how the country implements its commitments under the Justice and Internal Order chapter. The inspection took place in early June and the statements of the member countries representatives were prepared a month later. The document, stubbornly hidden by the authorities, includes recommendations for reforms in the judicial system as well as a whole section dedicated to the fight against financial frauds, money laundering, and euro forgery. This part of the analysis has been prepared by Rupert Vining from Great Britain, with support by experts from the European Commission Delegation to Sofia. Observers underline as disturbing the fact that courts in Bulgaria have passed no judgements for money laundering so far. The punishments imposed for such a crime are stipulated in three articles of the Criminal Code. The Bulgarian legislation considers criminal also the preparation, instigation, and attempt for money laundering.The European inspectors consider quite few the 275 signals for suspicious transactions received by the the Financial Investigation Agency (FIA) in the whole 2003. In the spring of last year, the Parliament adopted amendments to the Law on Measures Against Money Laundering which expanded the circle of people obliged to give information to the financial investigation. High opinion was expressed of the Agency's inspections in the Sofia-based branch of the Turkish ZIRAAT BANK, First Investment Bank, Jupiter insurance company, and the Sofia Stock Exchange.The tightening of the regime began to bring results in 2004. According to information by the FIA, the financial investigators have prepared 208 reports on suspicious transactions totalling BGN30MN for the first half of the year. More than a half of the signals (53%) came from commercial banks. In 14% of the cases the information was provided by the Financial Supervision Commission, and in 12% - by the Customs Agency. However, these figures have not been included in the report on the partners inspection.On the other hand, the report criticizes Bulgaria for failing to keep its commitment to build a suspicious transactions and e-payments chasing system. The experts consider good the partnership between the FIA and the services of the Ministry of Interior, but discovered some differences in the statistics of the two departments.The other troubling moment in the document refers to Bulgaria's ability to cope with the euro forgery. The inspectors checked the activity of the National Analyses Centre at the Bulgarian National Bank (BNB). However, they remained surprised with the fact that the unit making examination of the captured fake money works in a small room and has no access to the Internet. The report cites that the authorities have seized 1,097 fake EUR50 banknotes, 104 notes of USD50 face value, 747 of BGN20, and 486 of BGN50. These are quite modest figures, the experts comment. They say that reality is much more disturbing. The authors of the document base their argument on an INTERPOL report from last spring. The text cited reads: France, Spain, and Italy are the EU member countries mostly damaged by the euro forgery. After 2002, there has been an increase in the traffic of fake money from East and Central Europe to the European Union. Organized crime groups from Bulgaria and Lithuania hide behind the sale of huge amounts of fake notes that are distinguished by a very good quality. Additionally, the experts rely on a report by the US services that was brought for discussion in the Congress on April 28, 2004. The part of it chosen reads: In the period 1996-2004, more than 1.4 million fake US dollars produced in Bulgaria have been smuggled around the world. As a result, more than 100 arrests have been made. During the past eight years the US secret services, in joint operations with their Bulgarian colleagues, have captured over 5.6 million fake US dollars and defeated several operations at their beginning. The contribution of the Bulgarian policemen was also noted by mentioning a June 1, 2004 campaign that resulted in the seizing of 95,000 counterfeit euros and the arresting of 15 people who were later accused of printing fake money.

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