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Bulgaria: Asylum seekers and refugees face numerous issues with using financial services

The report "Access to financial services of asylum seekers and beneficiaries of international protection in Bulgaria" has been commissioned by UNHCR to address the numerous reported issues with these services in the country. Financial services are essential in the 21st century, however, asylum seekers and beneficiaries of international protection in Bulgaria have been facing an increasing number of challenges in that respect in recent years. 

During the asylum procedure, which may last several years, asylum seekers do not have an official identity document issued by the Bulgarian state. Following the initiation of legislative decisions in the field of prevention of money laundering and terrorist financing, a number of measures and conditions were introduced. Fully in accordance with the law, financial service providers refuse to open bank accounts to asylum seekers due to the lack of an identity document, as the law explicitly states that the registration card is not an identity document.

Once the persons receive international protection, they should overcome the problems of asylum seekers with access to financial services, but in practice, this is not the case. Despite the existence of an official identity document, which is required by law, it turns out that financial service providers refuse to enter into business relations with beneficiaries of international protection. This practice was formed after the adoption of the Law on Measures against Money Laundering in 2018. Initially, it was expressed in the refusal to open a bank account, and subsequently, in the unilateral closure of bank accounts by the bank. These practices are not based on legal provisions, but on the bank's policy or on a purely subjective judgment of a bank employee. It was repeatedly pointed out by various participants in the study that payment service providers do not manage risk in their dealings with high-risk third-country nationals, but generally avoid it by refusing to open and manage the respective bank accounts. 

The lack of a bank account puts asylum seekers and beneficiaries of international protection in a vulnerable position, although the law explicitly states that persons with international protection have the rights and obligations of a Bulgarian citizen. Difficult access to financial services hinders the very integration of beneficiaries. During the survey, they stated that this demotivated them to stay in Bulgaria and they felt unwanted.

•    The study confirms that potential employers can refuse to hire such a person due to the inability to pay his / her salary by bank transfer.
•    Persons who work according to all the rules of the Bulgarian legislation are entitled to compensation in case of unemployment, but the compensation is only paid by a bank transfer according to the Social security code. 
•    The lack of a bank account makes it impossible for individuals to save money in a safe place in a bank and forces them to keep cash at home. In this way, they can become subject to theft or robbery.
•    Asylum seekers may be forced to pay someone who has an identity document to send or receive money abroad. 

Access to financial services is guaranteed by law, but reasons such as lack of information and increased risk profile lead to the fact that asylum seekers and beneficiaries of international protection are not able to use legally guaranteed financial services. 

Link to the report [in Bulgarian]