The Bulgarian State Agency for National Security (DANS) has launched an investigation into a local bank after receiving information from the US about a large sum transferred from the Venezuelan state-owned oil and natural gas company Petróleos de Venezuela, S.A. (PDVSA) to the account of an unnamed lawyer with Bulgarian citizenship at the bank. That was the official version the Bulgarian authorities reported to journalists on February 13, following a meeting between Prime Minister Boyko Borissov and DANS head Dimitar Georgiev with the US ambassador in Sofia, Eric Rubin.
Through sources, Capital has found that the bank in question is private domestic lender Investbank, led by Petya Slavova, and that the transfers had been made months earlier. The amounts vary, depending on the source, from $80 million to $140 million. According to information published by Bulgarian investigative journalism website Bivol and confirmed by Capital, the account holder is local lawyer Tsvetan Tsanev, whom a prior investigation by Bivol in 2015 links to Investbank's Dimitriyka Andreeva - a member of the bank's Supervisory Council and representative of minority shareholder Adil Said Ahmed Al Shanfari, an Omani businessman.
The case could yet derail Bulgaria's goal of joining the EU Banking Union which is a pre-requisite for accession to ERM II - the preparatory mechanism for adopting the euro. Investbank is one of six Bulgarian banks currently subject to an asset quality review and stress tests by the European Central Bank (ECB), which will evaluate Bulgaria's readiness to join the Banking Union and the exchange-rate mechanism.
In the midst of the current political turmoil in Venezuela, the United States imposed sanctions on PDVSA in late January in order to prevent withdrawal of funds by President Nicolas Maduro, after Washington decided to back his opponent, the self-proclaimed interim president Juan Guaido.
Currently, DANS is investigating only Investbank but the security agency will conduct a massive inspection of the entire banking system in Bulgaria in order to establish if similar transactions have been made elsewhere, Tsatsarov said.
A series of unlikely events
According to Mr Tsatsarov, Investbank itself is under no suspicion of wrongdoing. However, considering that Investbank has total assets of little over 2 billion levs, it is unlikely that a transfer amounting to $80-140 million has passed unnoticed.
A question mark remains, however, over whether the bank has made sufficient efforts to comply with domestic money laundering rules which require banks to report suspicious transactions to DANS. And why have the Bulgarian authorities taken action only after they were tipped off by the US?
According to Mr Tsatsarov, the account in Investbank has been opened in line with the rules and the bank itself is not under scrutiny. Investbank issued a statement saying that the transfers from Venezuela into the escrow account have met all necessary requirements but there were no transactions linked to the Venezuelan oil company.
Investbank also said that it has no direct links to Venezuelan banks.
"Before the funds arrived at Investbank, they had been processed by at least two correspondent banks, because we have no direct correspondent banking relations with Venezuelan banks," Investbank said in a statement.
"Incoming and outgoing transfers through the escrow account have been handled by various EU and US banks with no difficulties on the way. Correspondent banks also carry out a mandatory check on anti-money laundering measures and compliance with international sanctions, with regard to both countries and individuals," Investbank said.
There has been no word yet whether the DANS investigation has spread to other institutions. But the claim that funds have passed through American banks is an interesting development. It is also unclear whether the US ambassador Eric Rubin's information, which sparked the investigation, is based precisely on intelligence from US banks.