WRITTEN QUESTION E-3144/02 by Herbert Bösch (PSE) to the Commission. Privatisations in Bulgaria.
Date: 2002-11-04
Institutions: European Parliament, Provisional data
Subjects: Bulgaria, accession criteria, accession to the European Union, administrative procedure, award of contract, fraud, privatisation, tobacco industry

C 137 E/164

Official Journal of the European Union

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important class of bio-active compounds, on human health; integrated strategies to prevent obesity and
associated diseases; dietary fatty acids: optimised supply and response; environmental health risks,
particularly in relation to sensitive groups, that are linked to the food chain.

(2003/C 137 E/188)

WRITTEN QUESTION E-3144/02

by Herbert Bösch (PSE) to the Commission

(4 November 2002)

Subject: Privatisations in Bulgaria

As part of the Bulgarian Government’s privatisation programme, Bulgartabac, one of the largest tobacco
companies in eastern Europe, is being privatised. However, it is alleged that several of the tendering and
privatisation conditions were breached during the procedure for the sale of the undertaking.

The company was sold to Tobacco Capital Partners (TCP), although serious doubts exist as to whether that
company’s bid was the most advantageous. Amongst other things, the company was unable to submit
‘proof of funds’ to guarantee the funding of the purchase, and its financial offer was well below the tenders
submitted by other bidders. What is more, it is alleged that the founder members of TCP are the lawyers
who had previously drawn up the legal privatisation analysis for the government.

What information does the Commission have about this matter?

What value does the European Commission ascribe to transparent privatisation programmes in the
applicant countries?

Have any similar problems recently occurred in privatisation proceedings in applicant countries?

What measures will the Commission take if it is proved that tendering and privatisation conditions were
breached?

Can the Commission guarantee that similar problems will not arise when projects funded from EU pre-
accession aid schemes such as Sapard, ISPA or PHARE are selected?

Answer given by Mr Verheugen on behalf of the Commission

(9 January 2003)

There have been several allegations related to the privatisation procedure of Bulgartabac from the three
rejected bidders who subsequently appealed before the Court on the Bulgarian privatisation agency
decision. The litigation procedure was initiated on 5 September 2002. On 29 October 2002, the Supreme
Administrative Court rendered a decision rejecting the appeals made by the rejected bidders on the overall
procedure. However, the Court also overruled the decision of the Bulgarian privatisation agency naming
the winning bidder. The privatisation agency, according to the Court, did not fully comply with all
procedures. An appeal was made against the decision of the Court, which was rejected on 16 December
2002.

The Treaty of Rome does not affect the rules in Member States governing the system of property
ownership (Article 295). Notwithstanding this, the sale of publicly owned companies may in certain
circumstances contain an element of State Aid.

When the privatisation is effected by way of the sale of shares on the stock exchange,
assumed to be on market conditions and not to involve aid.

it is generally

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If the company is privatised not by stock-exchange flotation but by a trade sale, the following conditions
must be observed if it is to be assumed, without further examination, that no aid is involved:

(cid:1) a competitive tender must be held that is open to all comers, transparent and not conditional on the
performance of other acts such as the acquisition of assets other than those bid for or the continued
operation of certain businesses;

(cid:1) the company must be sold to the highest bidder; and

(cid:1) bidders must be given enough time and information to carry out a proper valuation of the assets as

the basis for their bid.

In all cases, there must be no discrimination based on the nationality of prospective buyers of the shares or
assets concerned.

Some candidate countries have experienced important difficulties linked to the transparency of
the
privatisation processes. The Commission has underlined them in its Regular Reports on the progress made
by the candidate countries on their way towards accession.

Clearly, there can be no guarantees that problems will not arise with the implementation of pre-accession
tools. But in case of fraud, signs of irregularity or non-respect of the processes and rules, the Commission
asserts that adequate actions will be undertaken, including, if necessary, the total refund of the Community
funding.

(2003/C 137 E/189)

WRITTEN QUESTION E-3157/02

by Yasmine Boudjenah (GUE/NGL) to the Commission

(5 November 2002)

Subject: The effects of Agent Orange on health and the environment in Vietnam

Between 1962 and 1970 the American army sprayed thousands of litres of a defoliant known as Agent
Orange, containing dioxin in particular. Apart from major environmental damage, thousands of people are
still affected by serious health problems such as lymphomas, cancers, Hodgkin’s disease and diabetes as a
result of their exposure to dioxin.

In March 2002 a conference in Hanoi brought together epidemiologists, toxicologists and environmental
specialists. At the end of the conference the USA and Vietnam signed an agreement to set up a joint
research programme on the effects of Agent Orange on health and the environment.

Does the Commission not think that the European Union could participate in this research programme
and help to improve patient care?

Answer given by Mr Patten on behalf of the Commission

(25 November 2002)

The Commission welcomes the agreement between Vietnam and the United States to establish a joint
research programme on the effects of Agent Orange on health and environment in Vietnam.

As already indicated in the Commission’s reply to written question E-2421/01 by Ms. Ludford (1),
assistance to persons affected by Agent Orange in Vietnam is mainly provided by the International
Federation of the Red Cross, working in partnership with the Vietnam Red Cross, through a designated
fund: ‘The Agent Orange Fund: Assistance and rehabilitation for disabled people’. This is a nation-wide
programme, aimed at providing community-based services. The programme is supported by the American,
German and Swiss national Red Cross societies. No request for assistance has been received by the
Commission.