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Bulgaria to yank cash out of property deals

Thursday, Aug 20, 2009

A new public institution will be set up in Bulgaria to manage and control amounts from all real estate transactions in an effort to bring them into the light and crack down on money laundering in the industry.
The new Deposit and Consignation Fund will be inaugurated by special legislation hammered out by the Justice Ministry and the Notary Chamber.
The institution will be a state-owned enterprise and not a bank and will be modeled on a system already operational in France, said Notary Chamber head Dimitar Tanev. Under the scheme, the sellers will receive their money with a short delay but it will ensure transparency and security to all loyal parties as well as central and local authorities.
The system will see buyers transfer the money into the fund where it will spent two or three weeks before it is passed on the seller. The period will be used to check up the resources’ origin and charge all dues of the government and municipalities. It is expected to put an end to sham transactions and block cash payment as money will have to be put into the fund by a bank transfer, Tanev explained.
Market values in the different regions will be determined by experts and updated every three or four months. The price will serve as a reference point for actual property transactions to make sure money laundering and tax evasion is prevented. A difference within 10-15% could be assumed thanks to property improvements but current differences topping out at between 300% and 1000% will be impossible, Tanev said.
The Notary Chamber discussed the proposal with representatives of the European anti-fraud office Olaf, who said the project will indicate the country’s commitment to combat abuse and money laundering.

Source: Dnevnik a.m.