US embassy cable - 05SOFIA2036

UNCLAS SECTION 01 OF 08 SOFIA 002036 
 
SIPDIS 
 
DEPT FOR EUR/NCE AND INL 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: SNAR, KCRM, EFIN, KTFN, PTER, KSEP, BU 
SUBJECT:  BULGARIA:  2005-2006 INTERNATIONAL NARCOTICS 
CONTROL STRATEGY REPORT (INCSR) 
 
REF: (A) STATE 209561, (B) STATE 210351 
 
1. Per reftels, Post provides its submission for the 2005- 
2006 International Narcotics Control Strategy Report for 
Bulgaria. 
 
Begin text of 2005-2006 INCSR for Bulgaria: 
 
Part I - DRUGS AND CHEMICAL CONTROL 
 
I.   Summary 
 
Bulgaria is a major transit country, as well as a producer 
of illicit narcotics.  Strategically situated on Balkan 
transit routes, Bulgaria is vulnerable to illegal flows of 
drugs, people, contraband, and money.  Heroin moves through 
Bulgaria from Southwest Asia, while chemicals used for 
making heroin move from the former Yugoslavia to Turkey and 
beyond.  It is thought that much of the heroin distributed 
in Europe is transported through Bulgaria.  Marijuana and 
cocaine are also transported through Bulgaria. 
 
The Government of Bulgaria has continued to make progress in 
improving its law enforcement capabilities and customs 
services, closure of some illegal drug-producing 
laboratories and a notable increase in seizures.  However, 
while major legal and structural reforms have been enacted, 
effective implementation remains a challenge.  The Bulgarian 
government has proven cooperative, working with many U.S. 
agencies, and has reached out to neighboring states to 
cooperate in interdicting illegal flow of drugs and persons. 
Nevertheless, Bulgarian law enforcement agencies, 
investigators, prosecutors and judges require further 
assistance to develop the capacity to investigate, prosecute 
and adjudicate illicit narcotics trafficking and other 
serious crimes effectively.  Bulgaria is a party to the 1988 
UN Drugs Convention. 
 
II.  Status of Country 
 
In the past year, Bulgaria has continued to move from 
primarily a drug transit country to an important producer of 
narcotics.  According to the Bulgarian Government, Bulgaria 
has surpassed Turkey as a center of synthetic drug 
production, and synthetic drugs have overtaken heroin as the 
most widely used drugs in Bulgaria.  Amphetamines are 
produced in Bulgaria for the domestic market as well as for 
export to Turkey and the Middle East. 
 
The Government of Bulgaria has emphasized its commitment to 
combat serious crime including drug trafficking.  Despite 
some progress towards this goal, there were no major 
convictions for drug trafficking, or other serious related 
crimes, including organized criminal activity, corruption or 
money laundering during 2005.  Among the problems hampering 
counter-narcotics efforts are poor inter-agency cooperation, 
inadequate equipment to facilitate narcotics searches, 
widespread corruption, and an often ineffective judicial 
system. 
 
III. Country Action against Drugs 
 
Policy Initiatives 
 
The Bulgarian government has continued to implement the 
National Strategy for Drugs Control adopted by the Council 
of Ministers in 2003.  In 2004, amendments to the Criminal 
Code abolished a provision which had decriminalized 
possession of one-time doses of illegal drugs for personal 
use.  The effect of this policy has been to extend harsh 
penalties for drug possession to users as well as producers 
and distributors.  NGOs, government bodies, and European 
institutions have disputed the effectiveness of this 
legislation, with some studies claiming that drug use has 
actually increased since its adoption. 
 
Additional measures started in 2002 and continuing through 
2005 included engaging NGOs in counter-narcotics 
partnerships and the establishment of 16 provincial 
prevention and education centers throughout the country. 
Unfortunately, national programs for drug treatment and 
prevention, including the National Center for Addictions, 
have been consistently under-funded. 
 
Accomplishments 
 
The National Drugs Intelligence Unit, founded in October 
2004, has improved coordination between law enforcement 
agencies by gathering and analyzing information relating to 
illegal drugs production and distribution.  To date, the 
center has compiled data on over 300 suspected drug 
traffickers. 
Law Enforcement Efforts 
From January to November 2005, Bulgarian law enforcement 
agencies closed three illegal drug-producing laboratories 
and seized 2240 kg of drugs, including 395 kg of heroin, 61 
kg of marijuana, 142 kg of cocaine, 1327 kg of synthetic 
drugs and 2000 vials and 27598 tablets of other psychotropic 
substances.  Also seized were 192 kg of dry and 157 liters 
of fluid precursor chemicals.  Bulgarian services report 
that the 12.5% increase in seizures of synthetic drugs over 
the same period in 2004 is due to increased demand for 
Bulgarian-produced synthetic drugs in Southwest Asia. 
 
Corruption 
 
In 2002, the government unveiled an "action plan" to 
implement its 2001 anti-corruption strategy.  Despite some 
progress, corruption in various forms remains a serious 
problem.  The Customs Service is widely considered the most 
corrupt government agency.  In November 2005, 24 Customs 
officers, including the Deputy Chief of the Customs Service, 
resigned over allegations of corruption.  Despite this, 
there was no evidence that senior government officials 
engaged in, encouraged or facilitated the production, 
processing, shipment or distribution of illegal narcotics, 
or laundered the proceeds of illegal drug transactions. 
 
Agreements and Treaties 
 
Bulgaria is a party to the 1988 UN Drug Convention, the 1961 
Single Convention and its 1972 Protocol, the 1971 Convention 
on Psychotropic Substances and the 1990 Convention on 
Laundering, Search, Seizure and Confiscation of Proceeds 
from Crime.  Bulgaria has also ratified the UN Convention 
Against Transnational Organized Crime and its Protocols. 
 
Bulgaria is also party to the 1957 Council of Europe 
Convention on Extradition, the 1959 European Mutual Legal 
Assistance Treaty on Penal Measures and the 1983 Council of 
Europe Convention on Transfer of Sentenced Persons.  The 
Bulgarian Customs Agency has signed memoranda of 
understanding on mutual assistance and cooperation with 
several European counterparts and is negotiating or updating 
others.  Bulgaria coordinates with INTERPOL and EUROPOL. 
 
The 1924 U.S.-Bulgarian Extradition Treaty and a 1934 
supplementary treaty are in force although the agreement is 
generally agreed by both sides to be outdated and 
ineffective.  It covers a limited list of enumerated 
offenses which do not include drug-related crimes.  Some 
bilateral extradition issues have been addressed following 
the United States' ratification of the UN Convention against 
Transnational Organized Crime.  This agreement provides for 
extradition for many previously non-extraditable offenses, 
including narcotics violations involving organized crime; 
however, this new legal basis for extradition has yet to be 
tested.   In an effort to resolve remaining issues 
surrounding extradition, the Bulgarian Government in October 
2005 submitted a formal request to enter into negotiations 
with the U.S. on an updated bilateral extradition treaty. 
 
Cultivation and Production 
 
The only illicit drug crop known to be cultivated in 
Bulgaria is cannabis, but the extent of cultivation is not 
known.  It is certainly not very extensive, and is not a 
significant factor in abuse beyond Bulgaria's own borders. 
There has been a steady increase in the indigenous 
manufacture of synthetic stimulant products such as captagon 
(fenetylline). 
 
Drug Flow/Transit 
 
Synthetic drugs and heroin are the main drugs transported 
through Bulgaria.  Heroin from the Golden Crescent and 
Southwest Asia (primarily Afghanistan) has traditionally 
been trafficked to Western Europe through the Northern 
Balkan route from Turkey through Bulgaria to Romania. 
However, Bulgarian authorities have noticed a recent shift 
in heroin trafficking to more circuitous routes through the 
Caucasus and Russia to the north and through the 
Mediterranean to the south.  Other trafficking routes 
crossing Bulgaria pass through Serbia and Montenegro and the 
Republic of Macedonia.  In addition to heroin and synthetic 
drugs, smaller amounts of marijuana and cocaine also transit 
through Bulgaria.  Precursor chemicals for the production of 
heroin pass from the Western Balkans through Bulgaria to 
Turkey and the Middle East.  Synthetic drugs produced in 
Bulgaria are also trafficked through Turkey to markets in 
Southwest Asia.  Principal methods of transport for heroin 
and synthetics include buses, vans, and cars, with smaller 
amounts sent by air.  Cocaine is primarily trafficked into 
Bulgaria by air in small quantities. 
 
Domestic Programs 
 
Demand reduction has received government attention for 
several years.  The Ministry of Education requires that 
schools nationwide teach health promotion modules on 
substance abuse.  The Bulgarian National Center for 
Addictions (NCA) provides training seminars on drug abuse 
for schoolteachers nationwide.  The NCA is in the process of 
opening prevention and education centers in each of 
Bulgaria's 28 administrative districts, 16 of which are 
currently operational.  Three universities provide 
professional training in drug prevention.  For drug 
treatment, there are 35 outpatient units, including 5 
specialized methadone clinics which provide treatment to 770 
patients.  Twelve inpatient facilities nationwide offer 209 
beds for more intensive addiction-related treatment. 
Specialized professional training in drug treatment and 
demand reduction has been provided through programs 
sponsored by UNODC, EU/PHARE and the Council of Europe's 
Pompidou Group. 
 
IV.  U.S. Policy Initiatives and Programs 
 
DEA operations are managed from the U.S. Consulate General 
in Istanbul.  The United States also supports various 
programs through the State Department, USAID, the Department 
of Justice (DOJ) and the Treasury Department to support the 
anti-narcotics efforts of the Bulgarian legal system.  These 
initiatives address a lack of adequate equipment (e.g., in 
the Customs Service), the need for improved administration 
of justice at all levels and insufficient cooperation among 
Bulgarian agencies.  A 
DOJ resident legal advisor works with the Bulgarian 
Government on law enforcement issues, including trafficking 
in drugs and persons.  An American Bar Association/Central 
and East European Law Initiative criminal law liaison 
advises Bulgarian prosecutors and investigators on cyber- 
crime and other issues.  A Treasury Department 
representative supports Bulgarian efforts to investigate and 
prosecute financial crimes, including money laundering. 
USAID provides assistance to strengthen Bulgaria's 
constitutional legal framework, enhance the capacity of 
magistrates and promote anti-corruption efforts.  An FBI 
Legal Attache Office, opened in 2005, works closely with 
Bulgarian law enforcement on high-profile investigations and 
prosecutions, including those involving illegal narcotics. 
 
V.   Statistical Tables 
 
Crop Cultivation 
(1) Coca: N/A 
(2) Potential Coca leaf: N/A 
(3) Opium: N/A 
(4) Potential Opium Gum: N/A 
(5) Cannabis: (need Washington data) 
(6) Potential Cannabis: (need Washington data) 
(7) Drug Seizures: (awaiting end-of-year GOB data) 
(8) Illicit labs destroyed by type: 3, all producing 
amphetamines. 
(9) Domestic consumption of illicit drugs: (awaiting 
GOB data) 
(10) Arrests: (awaiting end-of-year GOB data) 
(11) Users: See text under Domestic Programs 
 
 
 
 
PART II - FINANCIAL CRIMES AND MONEY LAUNDERING 
 
Bulgaria is not recognized as "an important regional 
financial center," nor has it been identified by the 
Financial Action Task Force or other such authorities as 
having specific money laundering issues requiring critically- 
needed reform.  Its significance in terms of money 
laundering arises from its geopolitical position; well- 
developed financial sector relative to other Balkan 
countries; and lax regulatory controls and law enforcement. 
 
There are few indicators of terrorist financing connected 
with Bulgaria.  It is unknown whether drug trafficking 
constitutes "the" primary generator of criminal proceeds and 
subsequent money laundering in Bulgaria, but it is certainly 
a contributing factor.  Financial crimes, including fraud 
schemes of all types; smuggling of persons and commodities; 
and other organized crime offenses also generate significant 
proceeds susceptible to money laundering.   The sources for 
money laundered in Bulgaria likely derive from both wholly 
domestic as well as international criminal activity. 
Financial crimes -- including significant tax fraud, credit 
card fraud, and counterfeiting of currency and negotiable 
instruments -- are prevalent. 
 
Smuggling remains a problem in Bulgaria and is undoubtedly 
sustained by ties with the financial system.  There is 
significant demand for black market goods smuggled both 
within and through Bulgaria.  Excise goods -- to include 
fuel and cigarettes -- are transported from Asia to Western 
Europe and elsewhere.  Ties between the smuggling of both 
goods and contraband such as narcotics likely exist, 
particularly where they rely on the same channels. 
 
All financial sectors are susceptible to money laundering. 
There are 29 categories of reporting entities under the 
Bulgarian Law on Measures Against Money Laundering ("LMML"). 
Each category represents possible facilitators of the 
illicit movement of funds.  To date, only the banking sector 
has substantially complied with the law's requirement to 
file Suspicious Transaction Reports ("STRs") in cases of 
suspected money laundering.  Lower rates of reporting 
compliance by exchange bureaus, casinos, and other non-bank 
financial institutions can be attributed to a number of 
factors, including a lack of understanding of or respect for 
legal requirements, lack of inspection resources, and the 
general absence of effective regulatory control over the non- 
bank financial sector.  While counterfeiting has 
historically been a serious problem in Bulgaria, joint 
activities of the Bulgarian Government and the U.S. Secret 
Service have contributed to a decline in counterfeiting in 
recent years.  Bank and credit card fraud remains a serious 
problem.  Post has no information to indicate that Bulgarian 
financial institutions engage in narcotics-related currency 
transactions involving significant amounts of U.S. currency 
or otherwise affecting the United States. 
 
Since the end of 2003 the Financial Intelligence Agency 
(FIA) has completed a comprehensive assessment of the Anti 
Money-Laundering and Counter-Financing of Terrorism 
(AML/CFT) compliance in the Bulgarian financial and non- 
financial sectors.  While the assessment showed a 
satisfactory level of AML/CFT compliance in general and 
particularly in the banking and the non-banking financial 
sectors, it also noted a lower level of compliance by 
casinos and designated non-financial businesses and 
professions (particularly notaries, lawyers and 
accountants).  Following up on these findings the FIA took 
some awareness raising measures and organized joint on-site 
inspection and trainings with the State Gambling Commission 
(SGC).  Based on the experience gathered the FIA and the SGC 
published in August 2005 a Handbook on Joint AML/CFT On-site 
Inspections of Casinos.  In September 2005 the Minister of 
Finance adopted additional measures for improving AML/CFT 
awareness and reporting of suspicious transactions by 
casinos.  Also in September 2005 similar measures, 
concerning lawyers, notaries and accountants, were approved. 
 
There are no indicators that government policy or practice 
encourages, facilitates or engages in money laundering or 
terrorist financing.  It is entirely possible that money 
derived from predicate criminal activity (including 
international drug trafficking) makes its way through the 
Bulgarian financial system into the international financial 
system.  The U.S. dollar has historically been a favored 
currency in Bulgaria, but has recently been replaced by the 
Euro as a favored currency for financial transactions. 
 
OFFSHORE FINANCIAL CENTERS 
 
Bulgaria is not considered an offshore financial center, 
though offshore zones are likely used by Bulgarian-based 
money launderers.  The FIA has negotiated Memoranda of 
Understanding with offshore jurisdictions (such as Cyprus) 
and taken other steps to permit more effective information 
sharing and analysis with counterpart financial intelligence 
units.  There are few if any indications of terrorist 
financing through Bulgaria. 
 
FREE TRADE ZONES 
 
Since 2003, the operation of duty free shops has been 
targeted by the MOF as part of its efforts to address the 
gray economy and the smuggling of excise goods.  Duty free 
shops play a main role in cigarette smuggling in Bulgaria, 
as well as smuggling of alcohol, and to a lesser extent 
perfume and other luxury goods.  Attempts by the MOF to 
close down shops operating in Bulgaria have been 
unsuccessful, in part due to political opposition within the 
ruling coalition. 
 
The focus of the Bulgarian government has been on the use of 
the duty free shops to violate customs and tax regimes.  It 
is wholly possible that the shops are used to facilitate 
other crimes, including financial crimes.  Credible 
allegations have linked many duty free shops in Bulgaria to 
organized crime interests involved in forced prostitution, 
the drugs trade, and human trafficking.  There is no 
indication, however, of links between duty free shops or 
free trade areas and terrorist financing. 
 
MOF customs and tax authorities have supervisory authority 
over the duty free shops.  According to these authorities, 
reported revenues and expenses by the shops have very 
clearly included activities other than duty free trade. 
Identification procedures are also lacking.   MOF 
inspections have revealed that it is practically impossible 
to monitor whether customers at the numerous duty free shops 
have actually crossed an international border. 
 
LAWS AND REGULATIONS 
 
Article 253 of the Bulgarian Penal Code criminalizes money 
laundering.  The article was adopted in 1997 and amended in 
1998 and 2004.  The most recent amendments, among other 
things, broaden the list of activities giving rise to a 
money laundering charge; increase penalties, including in 
cases of conspiracy and abuse of office; and clarify that 
predicate crimes committed outside Bulgaria can support a 
money laundering charge brought in Bulgaria.  Article 253 is 
an "all offense" money laundering provision; drug 
trafficking thus is a recognized predicate offense. 
 
The Financial Intelligence Agency (mentioned above) is an 
independent unit of the Ministry of Finance that serves as 
Bulgaria's financial intelligence unit (FIU). 
 
Banks and 28 other reporting entities are required to apply 
"know your customer" standards and to identify "transactions 
suspected of money laundering."  The LMML was amended in 
2003 to include provisions to require listed reporting 
entities to demand an explanation of the source of funds for 
"operations or transactions in an amount greater than 30,000 
BGL (approximately USD 18,072) or its equivalent in foreign 
currency; or exchange of cash currency in an amount of 
10,000 BGL (approximately USD 6,024) or its equivalent in 
foreign currency."  Reporting entities are also required to 
notify the FIA "of each payment made in cash, in an amount 
greater than 30,000 BGL or its equivalent in foreign 
currency, conducted by or for their client." 
 
The LMML requires reporting entities -- including banks and 
other financial institutions - to maintain records on 
clients and their transactions for five years.  Those 
institutions may also be subject to internally-established 
recordkeeping requirements.  The degree to which such 
information can be provided expediently to law enforcement 
is impacted by bank secrecy provisions that limit 
dissemination, absent a court order based on evidence of a 
committed crime.  FIA is exempted from this requirement, 
however, which facilitates FIU-to-FIU information sharing. 
The LMML provides that disclosure of information by 
reporting entities "shall not give rise to liability for 
breach of other laws." 
 
Financial institutions and others entities (e.g., notaries, 
privatization bodies, political parties, tax and customs 
authorities, certain merchants) are among the listed 
reporting entities in the LMML.  They are obligated to 
report upon the occurrence of any "suspicious transaction of 
money laundering" and certain currency transactions (see 
response to item 28).  Compliance by banks has been 
exemplary.  Compliance by non-bank financial institutions 
continues to improve.  From January to November 2005, the 
FIA received 662 STRs and 130,631 currency transaction 
reports (CTRs).  The STRs had a total combined value of 
approximately USD 280 million.  On the basis of the 
forwarded reports, 646 cases were opened.  During the same 
period, the FIA referred 74 cases to the Supreme 
Prosecutor's Office of Cassation and 265 cases to the 
Ministry of Interior.  FIA also forwarded 33 reports to 
supervisory authorities for administrative action. 
Bulgaria has strict and broad bank secrecy laws.  While the 
FIA is exempt from these provisions, they otherwise apply to 
all government institutions and are sometimes cited as an 
impediment to the performance of legitimate law enforcement 
functions.  For example, a court order upon the request of a 
prosecutor, and based on evidence of a committed crime, is 
required to lift bank secrecy.  It is not uncommon, however, 
to have a situation where the very information sought by law 
enforcement and deemed secret is required as a basis for 
issuance of an order to lift secrecy.  Moreover, courts have 
inconsistently applied standards for issuing the court 
order.  There is a strong lobby that has prevented amendment 
of bank secrecy provisions by Parliament. 
 
Customs rules require the declaration of all Bulgarian and 
foreign currency in cash in excess of 5000 BGL 
(approximately USD 3125).  Due to inefficiency and 
corruption, enforcement of this requirement is questionable. 
Customs officials have acknowledged that cross-border 
currency transfers of significant amounts are common.  To 
comply with recent Financial Action Task Force 
recommendations regarding cross-border currency transfer, 
Bulgaria will need to improve bilateral information sharing 
with neighboring countries.  Although there have been 
information-exchanges of customs data with Greece, Serbia 
and Romania, those exchanges have not been regularized. 
 
There also is a significant counterfeiting problem in 
Bulgaria of currency (USD, EUR, BGL), negotiable 
instruments, and identity documents.  The U.S. Secret 
Service maintains a full-time presence in Bulgaria, and 
through joint efforts with Bulgarian officials, has 
contributed to a continued decrease in this activity in 
2005. 
 
Penal Code Article 253b was enacted in 2004 to establish 
criminal liability for officials who violate, or through non- 
action fail to comply with, LMML requirements. 
 
Until 2004, there had been few investigations and 
indictments for money laundering and no convictions under 
the money laundering provisions of Penal Code Article 253. 
That negative trend appears to be changing, however.  In 
2005, the prosecution service has reported indictments of 
organized crime figures for money laundering.  These figures 
are expected to increase in 2006 following a recent 
directive by the Prosecutor General instructing Bulgarian 
prosecutors to use multiple count indictments, including 
indictments that charge money laundering in addition to 
predicate offenses.  This directive purports to change the 
current practice of charging only the predicate offenses. 
To date there have been no convictions for money laundering. 
 
TERRORIST FINANCING 
 
Bulgaria enacted the Law on Measures Against Terrorist 
Financing ("LMATF") on February 5, 2003, and also amended 
its Penal Code at Article 108a to criminalize terrorism and 
terrorist financing.  Terrorist acts and financing qualify 
as predicate crimes under Bulgaria's "all crimes" approach 
in Penal Code Article 253, which criminalizes money 
laundering. 
 
The LMATF and Penal Code provide for identification, 
freezing and seizing terrorist finance-related assets.  The 
precise mechanisms for doing so have not been tested. 
 
The various lists generated by the UN, EU, and U.S. of 
individuals and entities associated with terrorism have been 
circulated by the FIA in cooperation with the Bulgarian 
National Bank to the commercial banking sector and 
elsewhere.  To date, no suspected terrorist assets have been 
identified, frozen or seized by Bulgarian authorities. 
 
Bulgarian officials have not acknowledged existence or use 
of alternative remittance systems, such as hawala.  As a 
general matter, however, regulatory controls over non-bank 
financial institutions remain lacking, with some of those 
institutions (e.g., pawnshops) engaging in banking 
activities (e.g., loan making with real estate as 
collateral) absent any regulatory oversight.  Similarly, 
exchange bureaus, though ubiquitous, are subject to minimal 
regulatory oversight.  The Bulgarian government - with 
assistance and support from U.S. and European technical 
assistance providers -- committed itself in 2005 to 
addressing these deficiencies as part of its ongoing effort 
to strengthen its anti- money laundering and counter 
terrorist financing measures, however results have been 
mixed.  In early 2005 FIA began using Dunn and Bradstreet 
databases in its analysis.  FIA completed the development of 
its electronic reporting system, managing both STRs and 
CTRs, and successfully linked its database to its Analyst's 
Notebook software platform. 
 
In late 2002, the Bulgarian press reported on efforts by the 
Ministry of Finance ("MOF") to oversee and control the 
transfer of funds to Muslim charities in Bulgaria.  In 
subsequent years, the issue did not receive sustained 
attention, and in practice little governmental oversight was 
exercised over the activities of Islamic charities. 
Anecdotal evidence indicates that charitable and non-profit 
legal status is frequently abused.  In 2005 a joint task 
force between the FIA and the National Security Service was 
established to identify possible terrorist financing 
activities and terrorist supporters.  Bulgaria ratified the 
1999 UN International Convention for the Suppression of the 
Financing of Terrorism on January 31, 2002. 
 
ASSET FORFEITURE AND SEIZURE LEGISLATION 
 
A new Criminal Assets Forfeiture law, targeted at 
confiscation of illegally-acquired property, came into 
effect in March 2005.  The law permits forfeiture 
proceedings to be initiated against property valued in 
excess of 60,000 BGN (approximately USD 36,145), if the 
owner of the property is the subject of criminal prosecution 
for enumerated crimes and a reasonable assumption can be 
made that the property was acquired through criminal 
activity.  The enumerated crimes include, among others, 
terrorism, drug trafficking, human trafficking, money 
laundering, bribery, major tax fraud, and organizing, 
leading or participating in a criminal group.  The law 
requires the establishment of a Criminal Assets 
Identification Commission, which has authority to institute 
criminal asset identification procedures, as well as request 
from the court both preliminary injunctions and ultimately 
forfeiture.  Although the Commission has been appointed it 
had not started actual work by year's end because of 
logistical problems. 
 
Other key players in the process of asset freezing and 
seizing, as prescribed in existing law include the Ministry 
of Interior ("MOI"); MOF, including FIA; Council of 
Ministers; Supreme Administrative Court; Sofia City Court; 
and the Prosecutor General. 
 
INTERNATIONAL COOPERATION 
 
The European Convention on Laundering, Tracing, Seizure and 
Confiscation of the Proceeds of Crime (the "Strasbourg 
Convention") was ratified by Bulgaria in April 1993.  The UN 
Convention Against Illicit Trafficking of narcotic Drugs and 
Psychotropic Substances (the "Vienna Convention") was 
ratified by Bulgarian in July 1992.  The UN Convention 
Against Transnational Organized Crime was ratified by 
Bulgaria in April 2001.  Bulgaria ratified the 1999 UN 
International Convention for the Suppression of the 
Financing of Terrorism on January 31, 2002.  In addition, 
Bulgaria's FIU is a member of the Egmont Group and its 
director is a deputy chair of the Council of Europe's Select 
Committee of Experts for the Evaluation of Anti- Money 
Laundering Measures ("MONEYVAL").  For purposes of EU 
accession, Bulgaria has been deemed in full compliance with 
anti-money laundering requirements, although the development 
of case law remains weak. 
 
Bulgaria is a party to the 1988 UN Drug Convention and the 
Council of Europe Convention on Laundering, Search, Seizure, 
and Confiscation of the Proceeds from Crime.  Bulgaria is a 
party to the UN Convention against Transnational Organized 
Crime and the UN International Convention for the 
Suppression of the Financing of Terrorism.  In December 
2003, the GOB signed the UN Convention against Corruption 
but has yet to ratify it.  Bulgaria is currently analyzing 
its domestic legislation and the legal implications linked 
to the ratification of this Convention. 
 
Bulgaria withdrew on February 4, 2004, the reservations made 
in 2001 at the ratification of the Criminal Law Convention 
on Corruption.  On the same day, Bulgaria ratified the 
Additional Protocol to the Council of Europe Criminal Law 
Convention on Corruption, which was signed on May 15, 2003. 
Thus, Bulgaria became the second state to ratify the 
Additional Protocol.  The OECD Anti-bribery Convention 
entered into force in Bulgaria on February 15, 1999, 
following its ratification by Parliament on June 3, 1998. 
Instruments of ratification were deposited with the OECD 
Secretary-General on December 22, 1998. 
 
SIPDIS 
 
The U.S. does not have a bilateral mutual legal assistance 
treaty (MLAT) with Bulgaria.  Information has to date been 
exchanged formally through the letter rogatory process, 
which can be inexpedient and inefficient.  However, the 
United States' December 3, 2005, ratification of the UN 
Convention against Transnational Organized Crime (TOC 
Convention) establishes an MLAT-like relationship between 
the United States and Bulgaria for most criminal activity 
involving three or more people.  Given the presence of 
operational U.S. law enforcement officers, there is also 
opportunity for informal information exchange with 
counterparts.  Additionally, the LMML provides for 
information exchange between FIA and other FIUs including 
FinCEN.  Currently, Bulgaria has bilateral memoranda of 
understanding (MOU) regarding information exchange relating 
to money laundering with 27 countries.  Negotiations with 5 
more states are currently in progress.  FIA is authorized by 
law to exchange financial intelligence on the basis of 
reciprocity without the need of a MOU.  Between January and 
December 2005, the FIA sent 332 requests for information to 
foreign FIUs and received 83 requests for assistance from 
foreign FIUs (the FIA has replied to 87% of the requests so 
far).  Bulgaria has also entered into an intergovernmental 
agreement with Russia that promotes anti-money laundering 
cooperation. 
 
Bulgarian authorities have a good record of cooperation with 
USG counterparts.  In 2005, Bulgarian law enforcement and 
prosecutors, joined by international counterparts, took part 
in international operations that have resulted in arrests 
and prosecutions in both Bulgaria and the United States for 
significant financial crimes, including money laundering, 
credit card fraud, and counterfeiting.  With support from 
the US Treasury Department and USAID, a joint Task Force was 
established to allow representatives of FIA, the Financial 
Supervision Commission, and the Bulgarian National Bank to 
coordinate regulatory and supervisory AML/CFT activities. 
BEYRLE