site.btaContinue the Change Questions Central Banks’ Powers against Sanctioned Individuals

The Bulgarian National Bank (BNB) cannot shield Bulgaria’s banking system from individuals sanctioned under the Magnitsky Act, citing the absence of specific provisions in national legislation, Continue the Change said on Wednesday.

“After the Bulgarian National Bank’s evasive response, Continue the Change is committed to safeguarding the security of Bulgaria’s banking system. Since the country’s Central Bank is refusing to take action, we will refer the case to the European Central Bank.”

The party noted that the matter came to light in a response by the Bulgarian National Bank to an official request for information from Continue the Change leader Assen Vassilev about how the central bank monitors compliance with restrictive measures against individuals included in the Office of Foreign Assets Control (OFAC) sanctions list of the US Department of the Treasury, among whom is Movement for Rights and Freedoms (MRF) – New Beginning Floor Leader Delyan Peevski. Attached to their media release, Continue the Change provided Vassilev’s letter to BNB, BNB's reply, and a BNB press release from June 11, 2021.

In Vassilev’s letter, he recalls a press release from the central bank dated June 11, 2021, which said the bank applies restrictive measures on transactions and operations under the Money Laundering Act Counter Measures Act. According to BNB, all banks in Bulgaria that maintain accounts or business relationships with these individuals have taken measures such as freezing accounts and cards, enforcing attachments, and closing accounts.

In its response to Vassilev’s letter, the Bulgarian National Bank explains that the referenced press release outlines the existing legal framework governing how the central bank and domestic banks recognize the effects of restrictive measures imposed by third countries. The bank notes the necessity for a national legislative solution due to the absence of explicit legal provisions.

BNB also said that banks independently make decisions regarding their contractual relationships with clients and assess risk in accordance with the Measures against Money Laundering Act. The central bank is not a party to these relationships and has no powers to order the opening or closing of accounts. Regarding data on balances and account operations, the Bulgarian National Bank pointed out that such information constitutes banking secrecy and is only accessible according to the Credit Institutions Act.

According to CC, BNB has sufficient powers within its supervisory functions as regulator of the banking sector to issue guidance to banks to take actions that reduce risk to depositors’ money. By refusing to exercise these powers, BNB effectively enables individuals like Delyan Peevski, included in the Magnitsky sanctions list for corruption, to carry out any operations in the country, thereby exposing affected banks to the risk of becoming involved in sanctions and possible insolvency, the party said.

Additionally, CC notes that on May 22, 2025, Continue the Change-Democratic Bulgaria submitted proposals for legislative amendments to allow the application of Magnitsky Act sanctions in Bulgaria.

At the beginning of August, Vassilev reported that he had submitted a letter to the Bulgarian National Bank with questions regarding Municipal Bank. In it, he referred to the central bank’s 2021 instructions that Bulgarian banks must not work with individuals sanctioned under the Magnitsky Act, while according to data from the Central Election Commission, Movement for Rights and Freedoms – New Beginning works with Municipal Bank.

In 2021, Peevski was designated by the US under the Global Magnitsky Act as an oligarch who "has regularly engaged in corruption, using influence peddling and bribes to protect himself from public scrutiny and exert control over key institutions and sectors in Bulgarian society". Peevski is challenging the designation in a US court. His lawyers argue that there is no evidence of any wrongdoing by their client. In 2023, the UK sanctioned Peevski for his involvement "in attempts to exert control over key institutions and sectors in Bulgarian society through bribery and use of his media empire".