INTERNAL RULES

for Control and Prevention of Money Laundering and Terrorism Financing

of HELP KARMA FOUNDATION, BULSTAT 177198040,

a liable person pursuant to art. 3, para. 2, item 17 of the Measures against Money Laundering Act

CHAPTER ONE

GENERAL PROVISIONS

Art. 1. The Internal Rules for control and Prevention of Money Laundering and Terrorism Financing (hereinafter referred to as “the Internal Rules”) have been adopted on the grounds of art. 16 (1) of the Measures against Money Laundering Act (hereinafter referred to as “MMLA”) related to art. 9 (5) of the Measures against Terrorism Financing Act (hereinafter referred to as MTFA) and set out the criteria for detection of suspicious operations, transactions and donors related to money laundering and/ or terrorism financing, measures for prevention of the use of the financial system for the purpose of money laundering and the terrorism financing as well as the organization and control of their performance at HELP KARMA FOUNDATION.

Art. 2. These Rules shall be applied by the employees of HELP KARMA FOUNDATION in all cases when the latter carries out its business as a liable person in the meaning of art. 3, para. 2, item 17 of the Measures against Money Laundering Act.

Art. 3. HELP KARMA FOUNDATION shall:

(1) take measures for prevention of the use of the financial system for the purpose of money laundering as follows:

1. identification of donors and verification of their identity;

2. identification of the beneficial owner of the donor - legal entity pursuant tp art. 6 (2) of the Measures against Money Laundering Act and taking appropriate measures to verify its identification in a manner providing sufficient grounds to HELP KARMA FOUNDATION to consider it verified beneficial owner;

3. Implementation of extended measures with regard to donors, which occupy or have occupied senior state position in the Republic of Bulgaria or another country as well as with regard to donors, which are related parties to them.

4. Collection of data from the donor concerning the purpose and the nature of the relation, which is established or is to be established with him;

5. ongoing monitoring on the established commercial or professional relations and inspection of the transactions and operations performed within these relations to the extent they correspond to the available information about the donor, its business and risk profile, including clarification of the origin of funds in the cases provided by the law;

6. Disclosure and submission of information concerning suspicious operations, transactions and donors of the Financial Intelligence Directorate of the National Security State Agency.

(2) measures against terrorism financing:

1. Blocking cash;

2. Refusal to provide goods and services to individuals.

Art. 4. The Internal Rules establish clear criteria for efficient detection of suspicious operations, transactions and donors directed to money laundering and terrorism financing.

Art. 5. The Internal Rules ensure and govern the mandatory order for training of the employees of HELP KARMA FOUNDATION.

Art. 6. The Internal Rules govern the collection, storing and processing information about donors and transactions/ operations carried out by them.

CHAPTER TWO

CRITERIA FOR DETECTION OF SUSPICIOUS OPERATIONS, TRANSACTIONS AND DONORS CONNECTED WITH MONEY LAUNDERING AND TERRORISM FINANCING

Art. 7. HELP KARMA FOUNDATION applies the following criteria for detection of suspicious, operations, transactions and donors connected with money laundering and terrorism financing:

(1) Criteria for detection of suspicious operations or transactions for money laundering and terrorism financing:

1.The nature of the donation does not correspond to the purpose of the organization; 

2. The volume of the donation does not correspond to the real needs of the organization;

3.Donation is made by natural persons or legal entities for which it is known or is assumed that have acquired their resources by criminal activity; 

4. The will of the donor includes transformation of the donation by which are possible legal breaches and misuses;

5. The donation is brought to its immediate beneficiaries by means of a person or organization for which it is assumed that they will not deliver it to the recipient; 

6.The donation has purpose, group or organization, included in the list under art. 5, para. 1 of the Measures against Terrorism Financing Act;

7.The donation, operation or transaction is realized by a person, group or organization for which it may be reasonably assumed that they are connected with individuals included in the list under art. 5, para. 1 of the Measures against Terrorism Financing Act; 

8. Donation in cash, which seems structured to avoid the requirements for 

automatic reporting of the cash operations (a few successive donations in cash, which size is below the threshold for reporting); 

9.Donations in big size, which seem incompatible with the activity of the donor (For example if the type of business does not presume big cash receipts); 

10.One donor performs a few operations within days, for amounts close to but not exceeding the threshold for identification; 

11.The donor carries our donations for which it uses a big number of notes with small denominations and the value of the operations is close to the detection threshold;

12. When more than one donations in a single day is carried out, for amounts close to the detection threshold by different persons for whom union/ the organization knows that they are related to each other; 

13. The nature of the activity of the donor does not correspond to the nature of the donation;

14. The donation is from a country in which the relevant goods are not manufactured; 

15. The donor is from a country which economic situation does not presume making big donations;

16. Donations from countries entered in the list of FATF or other countries considered high-risk („tax heavens”/, offshore jurisdictions or countries supporting terrorism); 

17. Anonymous donations; 

18. Donations made under condition - the whole donation or a part of it will be used in a manner specified by the donor;

19.Donation made by duty-free imports of a big quantity of excise goods or goods with high duty tax; 

20.Donations discharged from import duties for which it may be assumed that they will be realized through the commercial network;

(2) Criteria for detection of suspicious donors:

1.  Representatives or attorneys of natural persons or legal entities that present identity documents and licenses, which authenticity is doubtful;

2.All natural persons and legal entities, groups and organizations included in the list under art. 5 of the Measures against Terrorism Financing Act, which is adopted, added and amended by the Council of Ministers and which are subject to measures against terrorism financing.

3.Individuals included in the list of persons under art. 3 of the Data Concerning Non-performing Loans Act; 

4.Persons for whom there is public information that they have criminal dossier;

5. Donors who refuse to present identity documents; 

6. The personal documents presented by the donor do not contain main requisites for complete identification;

7. A donor who present foreign identity document, which authenticity is difficult to verify; 

8. A donor fails to submit or tries to postpone the submission of specific declarations and good standing:

9. A donor gives contradicting grounds for the purpose of the donation; 

10. A donor with unusually good knowledge about the measures against money laundering and terrorism financing;

11. The donor is accompanied and monitored and the donation is made in the presence of third persons; 

12. The donor proposes that untrue documents are drawn up upon making the donation;

13. The donor proposes that the donation is officially formed in a manner other than the actual relations between the parties; 

14. The address given by the donor is the address of a third person or mailing address, which is a post box;

15. The signature on the identity document does not correspond to the signature subscribed by the donor in connection with the donation. 

16. Donors related to:

16.1. Countries, which do not implement the recommendations of FATF /Financial Action Task Force/ - International organization that determines the standards in counteracting the money laundering and terrorism financing;

Information about countries with  deficiencies identified by FATF upon implementing the international standards against money laundering and  terrorism financing (not adhering to the recommendations of FATF), as well as about countries bearing higher risk, may be found on the FATF website: http://www.fatf-gafi.org, in section High-risk and non-cooperative jurisdictions.

16.2. countries that have the status of offshore zones or are identified as tax havens; Information about the offshore financial centres is available on the website of the International Monetary Fund: http://www.imf.org/external/NP/ofca/OFCA.aspx

CHAPTER THREE

DONOR IDENTIFICATION

Art. 8. Identification of donors means establishment of the data required and admissible by the law for complete identification of the participants in the operation, the donation and the natural person(s) - beneficial owners of the donor - legal entity.

Art. 9. (1). In compliance with the requirements of art. 4, para. 1 of the Measures against Money Laundering Act, the donors of HELP KARMA FOUNDATION shall be identified upon establishment of professional relations as well as upon carrying out operation and donation at the amount exceeding BGN 30,000.

(2) Donors must be identified also in case of performance of more than one operation or donation, which individually do not exceed BGN 30,000 but there are data that the operations or the transactions are related.

Art. 10. Despite of the above, the donors of HELP KARMA FOUNDATION must be identified in all cases when there is any doubt for money laundering or terrorism financing regardless of the value of the operations or donations.

Art. 11. (1) If the employee of HELP KARMA FOUNDATION may not identify the donor in compliance with the requirements of the Measures against Money Laundering Act and its implementing regulations, it shall refuse to conclude contract or to carry out operation or to establish commercial or professional relations.

(2) If the employee of HELP KARMA FOUNDATION may not identify the donor in compliance with the requirements of the Measures against Money Laundering Act and its implementing regulations in case of already established commercial or professional relations, he/ she must terminate these relations on the grounds of art. 4, para. 4 of the Measures against Money Laundering Act. In such case the chairperson of HELP KARMA FOUNDATION shall decided whether to notify the Financial Intelligence Directorate of the State Agency for National Security pursuant to art. 11 of the Measures against Money Laundering Act.

Art. 12. Upon establishment of relations or conducting an operation or donation via digital statement, digital document or digital signature, or any other form without the presence of the donor, the employees shall undertake appropriate measures for certifying the authenticity of the donor’s identification data:

Art. 13. (1) In compliance with art. 4, para. 7 of the Measures against Money Laundering Act, HELP KARMA FOUNDATION in the capacity of a liable person in the meaning of art. 3, para. 2, item 17 of this law, and particularly all its employees, shall request from the donor to declare the origin of the funds:

1. Before receiving donation at an amount exceeding BGN 30,000 or their equivalence in foreign currency with regard to which the donor has to fill in the presence of a representative of HELP KARMA FOUNDATION a declaration on a form - Annex No. 1 to the Implementing Regulations of the Measures against Money Laundering Act.

2. Before conducting an operation or receiving a donation at an amount exceeding BGN 10,000 or their equivalence in foreign currency when the donation is made in cash, in connection with which the donor should fill in the presence of a representative of HELP KARMA FOUNDATION a declaration on a form - Annex No. 1 to the Implementing Regulations of the Measures against Money Laundering Act.

(2) In case of failure to submit declaration pursuant to art. 4, para. 7 of the Measures Against Money Laundering Act, the employees of HELP KARMA FOUNDATION shall refuse conducting the operation of receiving the donation. In such case the chairperson of HELP KARMA FOUNDATION shall decided whether to notify the Financial Intelligence Directorate of the State Agency for National Security pursuant to art. 11 of the Measures against Money Laundering Act.

Art. 14. (1) Identification of donors shall not be carried out and declaration under art. 4, para. 7 of the Measures Against Money Laundering Act shall not be submitted if the donor is a Bulgarian bank or a foreign bank licensed by the Bulgarian National Bank to carry out business in Bulgarian through a branch office, bank from EU Member State  as well as bank from a country included in a list (promulgated in State Gazette), approved by joint order of the Minister of Finance and the chairperson and the Bulgarian National Bank as well as when the donor is a state authority of Republic of Bulgaria.

Art. 15. (1) Should the operation or donation is effected by a representative, the employees of HELP KARMA FOUNDATION should request proofs of the representative authority and the representative and the represented person shall be identified.

(2) If the operation or the donation is carried out on behalf of and on the account of a third person, the person performing the operation/ the donation and the person on whose behalf is carried out the operation/ donation.

(3) In case of performance of operation through a third person - bearer of documents for performance of the operation/ the donation, the employees of HELP KARMA FOUNDATION shall identify the third person - bearer of the documents.

(4) In case of doubt that the person carrying out operation or donation does not act on his/ her name and on his/ her account, the employees shall notify the chairperson of HELP KARMA FOUNDATION and shall take appropriate measures as determined by the Implementing Regulations of the Measures against Money Laundering Act to collect information about identification of the person in whose favour is actually carried out the operation or the donation.

Art. 16. The verification of the identification data of the donors and the natural persons - beneficial owners shall be carried out before establishment of business or professional relations or performance of transactions and operations between HELP KARMA FOUNDATION and the donor.

Art. 17. Identification and verification of identity of legal entities aims to establish the ownership, the management and the control of the donor - legal entity.

Identification of a donor - legal entity is carried out according to the requirements of art. 6. para. 1, item 1 of the Measures against Money Laundering Act.

Art. 18. Donors - legal entities with nominal directors, secretaries or owners of the capital shall present a certificate or another valid document according to the law of the jurisdiction in which they are registered issued by a central register or by a registration agent showing the donor’r beneficial owners.

Art. 19. (1) Beneficial owner of a donor - legal entity is:

1. any natural person(s) that directly or indirectly hold(s) more than 25% of the shares or the capital of a donor - legal entity or other similar structure or directly or indirectly control such legal entity;

2. any natural person(s) in favour of whom is managed or distributed 25% or more of the property if the donor is a foundation, a non-profit organization or another person that carries out trust management of any property;

3. A group of natural persons in whose favour is created or operates a foundation, a non-profit organization or another person, which carries out trust management of any property.

(2) The employees of HELP KARMA FOUNDATION identify natural persons whic are the beneficial owners of a donor - legal entity, the attorneys and other natural persons who are subject to identification in connection with the identification of a donor - legal entity according to the rules for identification of natural persons identified in art. 6, para. 1, item 2 of the Measures against Money Laundering Act.

(3) Where no other possibility exists, the identification may be conducted by a declaration on a form, signed by the legal representative or the proxy of the legal entity. The declaration contains the requisites according to Annex No. 1 of the Implementing Regulations of the Measures against Money Laundering Act.

(4) The declaration for identification of natural persons who are beneficial owners of a donor - legal entity (under art. 6, para. 2 of Measures Against Money Laundering Act) shall be submitted to an employee of HELP KARMA FOUNDATION before carrying out the operation or the transaction.

Art. 20. (1) Identification and verification of the identity of the natural persons is carried out by submission of a formal identity document and registration of its type, number, issuer as well as the name, the address and the personal number.

(2) The natural persons - sole traders also present the documents, which  are necessary for identification of legal entities.

Art. 21. (1) Upon identification of natural persons shall be collected data about:

1. names;

2. Date and place of birth;

3. formal personal identification number (personal number, foreigner’s personal number, etc.) or other unique element for personal identification (number, date and place of issue of the identity document), contained in a formal document, which period of validity has not expired and which includes a photo of the donor;

4. nationality;

5. state of permanent residence and address (post box number only is not acceptable).

(3) The employees of HELP KARMA FOUNDATION may also collect other data, after risk assessment, such as: mailing address; telephone, fax and email; occupation; position held, employer.

(4) If the formal identity document does not contain the data under the previous paragraphs, they shall be collected by submission of other formal documents.

Art. 22. (1) Following assessment of the potential risk, the chairperson of/ the designated employee responsible for implementing the measures against money laundering at the non-profit organisation, shall apply extended measures for identification and verification of the donors identity.

The extended measures for identification and verification of identity of donors may include:

1. requesting additional documents and information by the donor;

2. collecting data about the donor from another donor;

3. Checks in the legal information systems, commercial registers and other available sources of information about the donor;

4. Check for availability of information about the donor on Internet;

5. Check of the activity of the donor, including through: Visit of the address specified by the latter; visit of its administrative or production premises; carrying out contacts at the address or telephone, specified in the official documents; collecting data from counter-agents of the donor;

6. checks at the employer of a donor - natural person;

7. Measures contained in statutory instruments, in instructions given by the Minister of Finance or the Chairperson of the State Agency for National Security and the Director of Financial Intelligence Directorate;

Art. 23. (1) The employees shall apply extended measures for identification and verification of the identity of donors, who occupy or have occupied senior state position in the Republic of Bulgaria or another country as well as with regard to donors, who are related parties to them.

(2) The employees shall put under special supervision all complex or unusually big donations or operations, as well as all transactions and operations, which have no clear economic or legal purpose, which may be established with a view to the information available for HELP KARMA FOUNDATION or do not comply with the available information about the donor.

(3) Upon identification of donations or operations under para. 2, the employees of HELP KARMA FOUNDATION shall collect information about the material elements and dimensions of the operation or the transaction, the relevant documents and other identification data. The collected information shall be documented and stored so that it is available at the Financial Intelligence Directorate of the State Agency for National Security of the relevant supervisory authorities and of the auditors.

Art. 24. HELP KARMA FOUNDATION designates Anna Kirilova for a person responsible for applying the measures against money laundering.

Art. 25. The person responsible for the measures against money laundering/ the chairperson of the non-profit organization shall carry out the following activities:

1. Collect, process, store and disclose information to the Financial Intelligence Directorate of the State Agency for National Security for the specific operations or donations;

2. Request data about the origin of the cash subject to the operations or the donations and ascertainment by declaration of the origin of these funds;

3. Collect information about donors and maintain accurate and detailed documentation for their cash operations.

4. In case of doubts for money laundering he/ she sjall provide the information collected under item 1, 2 and 3 to the Financial Intelligence Directorate of the State Agency for National Security pursuant to art. 11 of the Measures against Money Laundering Act;

5. Follow for the observance of the internal rules and the correct performance of the instructions in the cases connected with money laundering.

Art. 26. In case of any doubts for money laundering, every employee at HELP KARMA FOUNDATION shall immediately notify the chairperson.

CHAPTER FOUR

DATA COLLECTION AND STORAGE

Art. 27. HELP KARMA FOUNDATION collects, processes and stores for a period of 5 years, according to art. 8 of the Measures against Money Laundering Act, data and documents connected with donors and donations as well as for carried out operations and donations, which give rise to doubts according to the adopted criteria for detection of suspicious operations, donations and donors in these internal rules.

Art. 28. The person responsible for application of the measures against money laundering in case of doubts for money laundering and/ or terrorism financing shall immediately notify the chairperson and fill in the information in a special bound and paginated journal certified by the signature of the chairperson and stamped with the stamp of HELP KARM FOUNDATION.

Art. 29. When the form is entered in the journal, for each case, donation or donor is opened a file where all documents are ranked in the order in which they are received.

Art. 30. The received information doubtful for money laundering shall be stored in the form of original hardcopies for a term determined by the law.

Art. 31. All data shall be stored in the archives of HELP KARMA FOUNDATION.

CHAPTER FIVE

DISCLOSURE OF INFORMATION AND INTERACTION WITH THE FINANCIAL INTELLIGENCE DIRECTORATE OF THE STATE AGENCY FOR NATIONAL SECURITY

Art. 32. In case of doubts for money laundering and/ or terrorism financing, the chairperson of HELP KARMA FOUNDATION shall immediately notify the Financial Intelligence Directorate of the State Agency for National Security and shall submit the collected information about the participants and the operation or the transaction, possibly before its completion.

Art. 33. The obligation under art. 32 shall occur also in the cases when the operation or the donation have not been accomplished.

Art. 34. The chairperson shall delay the completion of the operation or the donation that have given rise to doubts for money laundering and/ or terrorism financing if the practice allows so for which the Financial Intelligence Directorate of the State Agency for National Security shall be notified. In the cases when the delay of the operation or transaction is impossible or may prevent the disclosure of money laundering, the chairperson shall notify the Financial Intelligence Directorate of the State Agency for National Security immediately after completion of the operation or the donation.

Art. 35. The notification to the Financial Intelligence Directorate of the State Agency for National Security under the previous articles shall be carried out in writing on a form approved by the director of the directorate. The notification shall be accompanied by ex officio verified copies of all collected documents about the operation or the transaction and about identification of the donors.

Art. 36. In urgent cases the notification may be also and made orally with subsequent confirmation in writing as provided in the above articles within 24 hours.

Art. 37. In compliance with art. 11A of the Measures against Money Laundering Act, HELP KARMA FOUNDATION shall notify the Financial Intelligence Directorate of the State Agency for National Security for each payment in cash exceeding BGN 30,000 or their equivalence in foreign currency made by or to its donor in the terms and according to the procedure determined by the Implementing Regulations of the Measures against Money Laundering Act. The information under para. 1 shall be prepared and sent to the Financial Intelligence Directorate of the State Agency for National Security on a monthly basis until the 15th day of the month following the month to which the information refers on a hardcopy on a form according to Annex No. 3 to art. 16, para. 1 of the Implementing Regulations of the Measures against Money Laundering Act.

Art. 39. In case of any doubts dor terrorism financing, the chairperson of the non-profit legal organization shall notify the Financial Intelligence Directorate.

Art. 40. Despite of the measures taken, the employees of HELP KARMA FOUNDATION shall not notify in any case the donor or third persons about the measures taken with regard to any doubts for money laundering and/ or terrorism financing.

CHAPTER SIX

STAFF TRAINING

Art. 41. HELP KARMA FOUNDATION shall organize training of its employees who have duties related to identification of donors and collection, storage and disclosuer of information for prevention of cases of money laundering and terrorism financing.

Art. 42. The chairperson/ the person responsible for application of the measures against money laundering shall carry out at least once a year a training for the employees of HELP KARMA FOUNDATION to make them acquainted with the provisions of the Measures against Money Laundering Act, its Implementing Regulations, the Measures against Terrorism Financing Act as well as the requirements of these Rules.

Art. 43. The duties under the previous articles shall apply with regard to all new employees after adoption of these rules. The employees shall fill in declarations in writing that they are aware of the Measures against Money Laundering Act, the Implementing Regulations of the Measures against Money Laundering Act, the Measures against Terrorism Financing Act and the Internal Rules for control and prevention of money laundering and terrorism financing and undertake to comply with them upon performance of its duties.

These Internal Rules for control and prevention of money laundering and terrorism financing have been adopted by THE GENERAL MANAGER of HELP KARMA FOUNDATION by Decision of 18.08.2017.

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