Since the beginning of the year the Register of bank accounts and safes at the Bulgarian National Bank (BNB) is operating – it is an electronic information system which contains centralized data about bank accounts and bank safes of natural persons and legal entities in Bulgarian banks.
Expanding the obligations of banks to provide information to state authorities is a worldwide tendency which aims to help in the fight against money laundering and terrorism financing. However, this brings a series of questions about the banking secrecy, the security of information and unauthorized access to it.
What information does the Register of bank accounts and safes contain?
The Register is a centralized electronic system which summarizes the information about the bank account numbers, their holders and authorized to dispose of them persons, as well as the bank safe holders and their representatives.
The banks and branches of foreign banks are obliged to maintain the Register up to date. Every week they submit information about opening and closing bank accounts and changes in the circumstances of already existing accounts, accordingly about establishing a new contract for renting a safe and suspending such a contract.
The submitted information contains the name and the personal identification number (PIN) of the account holder; the name and the PIN of the authorized with the injunction of the account; the number, type and currency of the account; the date of its opening and its closing, and other data. It is still not clear what data will the banks submit in the column “other information“. The availability and operations on the accounts should not be exposed since this information is a banking confidentiality. There is a special order for uncovering such information provided for in the Credit Institutions Act.
Who has the right to obtain information from the Register?
Foremost, this prerogative belongs to the account or safe holder. Against a service fee they can request a reference about the contained information concerning them or about their company.
The court, the public prosecutor, the judicial inquiry, the National Revenue Agency, the Ministry of Internal Affairs, the State Agency of National Security, the Commission for the Removal of Unlawfully Acquired Property, the banks etc. also have access to the information.
It is important to be noted that the mentioned institutions have the right to information from the Register but only in relation to certain verifications.
For instance, if the National Revenue Agency forms a checkup against the company X, the verifiers will have access to the register information about the bank accounts and safes of the company. A private enforcement agent can require data from the Register about the formation of an enforcement case against a certain individual or legal entity. A bank also has the right to gain information if, for example, someone applies for a credit.
How will the regulated access to the Register be guaranteed and controlled?т access to the registry?
You are probably asking yourself how we will know whether someone embezzles and improperly uses data from the Register about our bank accounts and safes. The answer to this question is that we can never be completely sure.
The Bulgarian National Bank monitors the compliance of the rules for submitting and acquiring data from the Register. According to the Deputy Director’s instruction, since 14 February 2017 the authorities and institutions which can access the data from the Register will have to submit an application for their inclusion in the information system. Along with this they will apply set out in detail internal rules containing information about the authorized officials, who will be registered as users with the right of access to the Register, what arrangements will be enforced concerning the storage, protection and control of the acquisition and usage of data from the system, and the prevention of unregulated access to the data.
The law obligates the authorities and institutions to inscribe the data about references from BNB’s system in a special register. For example, if a private enforcement agent receives information from a reference about you or your company, they will have to inscribe it in their special register and indicate the number of the enforcement case.
As of now only the sanctions on banks that do not fulfill the obligation to timely and accurately submit information in the Register are imposed. However there are no sanctions on unlawful access to data.
What are the advantages and disadvantages of the new regulations?
The heirs of a deceased can request a reference from the Register for bank accounts and safes on the name of their legator. This information will spare them a significant amount of time and effort in determining in which banks their predecessor had accounts.
The centralized system will be of use in enforcement cases against your debtor. The bailiff will be able to estimate in which banks does the debtor have accounts and safes. This will spare taxes on garnishing in all banks.
The National Revenue Agency, the prosecution service and other law enforcement agencies could use the register in the progress of making references. It is not rare that persons who gained funds in an unregulated activity hide these funds through relatives and acquaintances. Though the latter are formally the holders of the accounts, the actual owners are entitled to dispose of the accounts on behalf of the holders. As it was mentioned previously, the Register will provide the name and PIN of the proxy holders. Thus the connection between them and the accounts will be determined.
A disadvantage is the lack of guarantee that unregulated access to personal information (which is a banking secrecy) will not be allowed. At this stage there are no sanctions in case that BNB estimates unregulated data obtaining from the Register. The information system is still in a process of development. Let us hope that new measures for the increasing of its security will be developed.
This article is published in Economic.bg
Author: Teodor Todorov, Attorney-at-law