Order — ECLI:EU:C:2026:169
Date: 2026-03-05
Language of the case: Bulgarian
Court formation: Eighth Chamber
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

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Translation C-561/25 – 1 
Case C-561/25 
Request for a preliminary ruling 
Date lodged: 
21 August 2025 
Referring court: 
Sofiyski gradski sad (Bulgaria) 
Date of the decision to refer: 
19 August 2025 
Applicant 
BF 
Defendant: 
ZAD ‘ALLIANZ Bulgaria Zhivot’ 
  
ORDER 
Sofia, 19 August 2025 
The Sofiyski gradski sad (Sofia City Court, Bulgaria) […] [court formation 
consisting of a single judge] 
has examined Civil Case No. 11 440/2023 […] and, in order to give a ruling, has 
taken the following into consideration: 
[1.] By order of 21 February 2025, the referring court concluded the preliminary 
stage of proceedings, opened the oral procedure and declared that the case should 
proceed to deliberation. In the preparation for judgment, the court considered that 
it was necessary to interpret European Union (EU) law on the non-application to 
nationals of EU Member States of sanctions imposed on them by third countries. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 19. 8. 2025 – CASE C-561/25 
 
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[2.] More specifically, in order to give a correct ruling in the case, it is necessary 
to interpret whether the US Magnitsky Act falls within the scope of Council 
Regulation (EC) No 2271/96 of 22 November 1996 or of a principle confirmed 
therein. The referring court therefore annuls its order closing the preliminary stage 
of the proceedings, opening the oral part of the procedure and declaring that the 
case should proceed to deliberation. The referring court hereby makes a reference 
for a preliminary ruling to the Court of Justice of the European Union (CJEU), the 
content of which is set out in paragraphs 8 to 28 of this order, and stays the 
proceedings in the case pending the decision of the Court. The referring court 
therefore 
ORDERS: 
[3] […] [procedural question] 
[4.] REFERS to the Court of Justice of the European Union a request for a 
preliminary ruling set out in paragraphs 8 to 28 inclusive of this order. 
[5] […] [stay of proceedings] 
[6.] The order is not open to appeal. 
[7] […] 
I. THE RELEVANT FACTS 
[1.] THE FACTS ALLEGED BY THE PARTIES AND THE PARTIES’ 
SUBMISSIONS TO THE COURT 
1. 1. The applicant 
[8.] By his application of 12 October 2023, BF claims that on 28 May 2005 he 
entered into a mixed life insurance contract (Tariff 17) with the defendant ZAD 
‘ALLIANZ BULGARIA ZHIVOT’ (‘ALLIANZ’) with cover from 1 May 2005 to 
1 May 2025. He paid the premium instalments regularly, but on 2 March 2023 he 
received a notice from ALLIANZ unilaterally terminating the contract as from 
28 February 2023. 
[9.] On 24 April 2023, BF requested that ALLIANZ pay him EUR 27 540.00, 
the sum of which amounts to 18 annual premium instalments of EUR 1 530.00 
each, which he had paid up to 28 February 2023. ALLIANZ refused, citing the 
fact that BF had been placed on the US sanctions list under the Magnitsky Act. 
According to BF, that refusal was unlawful since it was contrary to Bulgarian 
national law. 
[10.] On 16 August 2023. ALLIANZ paid BF BGN 46 884.12, which was 
BGN 6 979.00 less than the sum of the insurance premium contributions paid by 
BF to ALLIANZ, and thus ALLIANZ was unjustly enriched in the amount of 
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BGN 6 979.00. As a result of the unlawful termination by ALLIANZ of the 
insurance contract, BF sought BGN 25 100.00 in respect of non-material harm. 
BF therefore asks the court to order ALLIANZ to pay him: 
(a) BGN 6 979.00, that is to say the amount by which ALLIANZ was enriched 
and which represents the difference between the insurance premium payments of 
BGN 53 863.00 and the BGN 46 884.12 returned; 
(b) BGN 1 695.27 by way of compensation for late payment in respect of 
BGN 46 884.12 from 2 May 2023 to 16 August 2023; 
(c) BGN 25 100.00 by way of compensation for non-material harm resulting 
from the unlawful termination of the insurance contract by ALLIANZ 
(application, case file pp. 2-8; supplementary application, case file pp. 74-75; the 
supplementary statement of the lawyer Tronchev, the legal representative of BF at 
the hearing on 21 February 2025, pp. 1-2 of the minutes of the hearing, case file 
pp. 86-90). 
1.2 The defendant 
[11.] The defendant ALLIANZ has disputed the claims made. It contended that: 
[1.] BF was named on the Magnitsky Act sanctions list, which prohibited 
ALLIANZ from providing insurance services to BF, and in providing such 
services, there was a risk that the entire ALLIANZ group would be sanctioned or 
even placed on a sanctions list. Consequently, ALLIANZ terminated the insurance 
contract with BF, and only after the Financial Supervision Commission (FSC) 
imposed a financial penalty on ALLIANZ did it pay BF the surrender value of the 
insurance contract; 
[2.] ALLIANZ does not owe BF BGN 6 979.00 by way of compensation for 
material harm or BGN 25 100.00 by way of compensation for non-material harm 
since BF has not suffered such harm. ALLIANZ therefore asks the court to 
dismiss the claims (defence, case file pp. 42-45; supplementary submission, case 
file pp. 81-82). 
[2.] THE CIRCUMSTANCES WHICH THE COURT FINDS, HAVING 
CONSIDERED THE PARTIES’ FACTUAL SUBMISSIONS AND THE 
EVIDENCE IN THE CASE 
[12.] On 1 May 2005, BF entered into a life insurance policy with ALLIANZ, 
Tariff 17. The contract provided for: 
- a period of cover from 26 May 2005 until 1 May 2025; 
- an insured sum of EUR 28 143.00; 
- an annual premium of EUR 1 530,00; 
REQUEST FOR A PRELIMINARY RULING OF 19. 8. 2025 – CASE C-561/25 
 
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- a surrender value as at 1 May 2022 of EUR 22 035,97 and as at 1 May 2023 
of EUR 23 972.21 (contract and table in annex,  case file pp. 10-13). 
[13.] It is not disputed that on 10 February 2023 BF was included on the sanctions 
list under the Magnitsky Act. It is not disputed that the reason for the inclusion of 
BF’s name on the sanctions list, as announced by the US Government, was his 
involvement in corrupt dealings in his capacity as Director and Deputy Director of 
the Kozloduy Nuclear Power Plant (Kozloduy NPP), Bulgaria’s only nuclear 
power plant. 
[14.] The US Government’s communication on the inclusion of BF’s name on the 
sanctions list included several examples of BF’s involvement in corrupt dealings. 
One such transaction was the assistance given by BG to AB, a former member of 
the Bulgarian Socialist Party, in purchasing electricity from Kozloduy NPP to 
resell later, even though Kozloduy NPP had a contract with the Natsionalna 
elektricheska kompania (National Electricity Company) to sell electricity directly. 
Thus, AB profited at the expense of the Bulgarian Government and citizens. 
[15.] Another example cited was that BF, AB and CD, a former executive director 
of Kozloduy NPP and a former MP belonging to the Bulgarian Socialist Party, 
acted in concert to receive commissions by diverting service agreements made 
with Kozloduy NPP to their own commercial interests, using offshore 
management to prevent the authorities from tracking this. A third example cited in 
the U.S. Government’s communication was BF and CD’s agreement to take a 
bribe in the amount of BGN 5 000 000.00 from executives of a foreign 
undertaking in the nuclear power sector (pp. 54-57). 
[16.] It is not disputed that the ALLIANZ group includes nine other companies 
besides ALLIANZ which operate in the US market. On 1 March 2023. ALLIANZ 
sent a letter to BF informing him that it was terminating the insurance contract as 
of 28 February 2023 (letter, case file p. 14). The parties do not dispute that BF 
received the letter on 2 March 2023. 
[17.] On 19 April 2023. ALLIANZ asked lawyers at the law firm Baker & 
McKenzie what the risks were to ALLIANZ and the ALLIANZ group of 
sanctions under the Magnitsky act if ALLIANZ were to make a payment to BF 
(email, case file p. 50). The lawyers’ response was that if ALLIANZ had paid BF, 
ALLIANZ, and the ALLIANZ group, could have been included on the Magnitsky 
Act sanctions list and accordingly suffered the consequences of that inclusion. 
Those effects could have included the following: (i) freezing of their assets in US 
dollars and in the US and (ii) the inability to carry out transactions with US 
nationals or with third parties that have a connection to the US (email, case file 
pp. 48-49). 
[18.] On 24 April 2023, BF requested that ALLIANZ pay him EUR 27 540.00, 
that is to say the amount he had paid as an insurance premium (letter, case file 
pp. 15-16). On 4 May 2023. ALLIANZ replied to BF that it could not pay him this 
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amount because BF’s name was included on the Magnitsky Act sanctions list 
(letter, case file p. 17). 
[19.] On 9 June 2023, BF filed a complaint with the Komisia za finansov nadzor 
(Financial Supervision Commission; ‘the KFN’) (complaint, case file pp. 18-20). 
It is common ground that after being penalised by the KFN, on 16 August 2023. 
ALLIANZ paid BF BGN 46 884.12 (EUR 23 971.47), that is to say the surrender 
value of the life insurance contract. 
[20.] On 7 September 2023, the KFN sent a letter to BF, informing him that the 
Magnitsky Act is not directly applicable in Bulgaria and does not form part of the 
domestic law of Bulgaria; it referred to decisions of the Varhoven administrativen 
sad (Supreme Administrative Court, Bulgaria; ‘the VAS’): 7 655/2022 in 
Administrative Case 6 770/2021; 5 293/2022 in Administrative Case 2 849/2022; 
6 5 87/2022 in Administrative Case 6 775/2021; 5 292/2022, in Administrative 
Case 2 168/2022. Consequently, according to the KFN, it was unlawful for 
ALLIANZ to refuse to return the insurance premium to BF (letter, case file 
pp. 21-27). 
[21.] The parties agree that at the time of the conclusion of the preliminary 
procedure: 
- the United States had not imposed any sanctions on ALLIANZ on account 
of its payment to BF; 
- the sanctions imposed on BF had not been recognised or accepted by the 
European Union. 
II. PROVISIONS OF NATIONAL LAW RELIED ON 
[22.] Bulgaria has not enacted legislation on rules for the application of the 
Magnitsky Act in its territory. The referring court is aware of decisions of the 
VAS delivered in respect of other facts in which that court held, with respect to 
the Magnitsky Act, that the refusal of its extraterritorial application and the 
measures adopted in order to implement it is a general rule, which Regulation 
(EC) No 2271/96 only confirms. The VAS ruled in this way in the following 
decisions: 10 661-2022, 5-member panel in Administrative case 7 715/2022; 
5 293-2022-, 5-member panel in Administrative Case 2 849/2022; 5 292-2022, 5-
member panel in Administrative Case 2 168/2022; 9 261-2022, Section III, in 
Administrative Case 6760/2021; 7 655-2022, Section III, in Administrative Case 
6770/2021; 7 646-2022, Section III, in Administrative Case 6,772/2021; 7 645-
2022, Section III, in Administrative Case 6 771/2021; 1 008-2022, Section VIII, in 
Administrative Case 6 774/2021; 1 007-2022, Section IV, in Administrative Case 
8 112/2021. 
[23.] The following provisions are not relevant to the application of the 
Magnitsky Act in Bulgaria, but are relevant to ALLIANZ’s potential ability to 
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terminate the insurance contract and refuse to pay BF if it is not contrary to EU 
law: 
- Articles 352 and 353 of the Kodeks za zastrahovane (Insurance Code); 
- Article 307 of the Targovski zakon (Commercial Code); 
- Article 20 of the Zakon za zadalzheniyata i dogovorite (Law on obligations 
and contracts); 
- Article 26(1) of the Zakon za zadalzheniyata i dogovorite (Law on 
obligations and contracts). 
III. PROVISIONS OF EUROPEAN UNION LAW THE 
INTERPRETATION OF WHICH IS THE SUBJECT OF THE REQUEST 
FOR A PRELIMINARY RULING 
[24.] This includes the following provisions: 
- Article 4(2) of the Treaty on European Union (TEU); 
- Council Regulation (EC) No 2271/96 of 22 November 1996 protecting 
against the effects of the extra-territorial application of legislation adopted by a 
third country, and actions based thereon or resulting therefrom. 
IV. THE REASONS WHY THE REFERRING COURT CONSIDERS 
THAT THE REQUEST FOR A PRELIMINARY RULING IS RELEVANT 
IN ORDER TO GIVE A CORRECT RULING IN THE PRESENT CASE 
[25.] There are essentially two potential outcomes of the case. If EU law prohibits 
ALLIANZ from complying with the sanctions imposed on BF under the 
Magnitsky act, the first outcome may be that the referring court upholds the 
claims in whole or in part. This is because the referring court could find that 
ALLIANZ’s termination of the insurance contract was not lawful and that 
ALLIANZ owes BF the sum of all annual premium payments plus compensation 
for late payment. The referring court may also uphold in whole or in part the claim 
for compensation in respect of non-material harm if: it considers that BF is 
entitled to compensation for non-material harm resulting from unlawful 
termination and finds that BF has suffered such harm. 
[26.] If EU law does not prohibit ALLIANZ in this particular situation from 
complying with the sanctions imposed on BF under the Magnitsky Act, it is 
possible that the referring court could reach a second outcome, different from the 
first, by dismissing the claims. This is because it is possible that the referring court 
would find that ALLIANZ’s performance of the insurance contract would have 
presented unjustified risks for ALLIANZ. Those risks would arise from the 
sanctions imposed on BF under the Magnitsky Act. The contract would become 
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entirely economically unfavourable to ALLIANZ for a reason attributable not to 
ALLIANZ but to BF – since the US Government considered that BF was involved 
in corrupt dealings. 
[27.] Even if the referring court were to find that ALLIANZ wrongfully 
terminated the insurance contract for a reason other than a breach of EU law, the 
referring court would have to consider whether to order ALLIANZ to pay BF the 
sums sought. In the context of that assessment, the referring court will have to 
answer the question whether it is necessary to expose ALLIANZ, through the 
effect of its judgment, to the risk of incurring very serious sanctions on account of 
alleged unlawful conduct on the part of BF. The referring court therefore 
considers that the question referred for a preliminary ruling is essential in order to 
give a correct ruling in the case. 
V. REQUEST FOR A PRELIMINARY RULING 
[28.] In the light of the foregoing, the referring court submits the following 
question to the Court of Justice of the European Union: 
‘Must the principle of the autonomy of EU law, enshrined in Article 4(2) TEU and 
reflected in Regulation (EC) No 2271/96 be interpreted as meaning that persons 
established in the European Union cannot comply with measures of a punitive 
nature imposed under the Magnitsky Act on a national or a legal person of an EU 
Member State where those measures have not been adopted or recognised by the 
European Union?’ 
[…] [signature]