Supporting document accompanying the report from the Commission to the European Parliament and the Council on Progress in Bulgaria under the Co-operation and Verification Mechanism - Bulgaria : technical update {COM(2009) 402 final}
Date: 2009-07-22
Institutions: European Commission
Subjects: Bulgaria, EU control, cooperation policy, corruption, exchange of information, judicial reform, rule of law

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.07.2009 
SEC(2009) 1074 

SUPPORTING DOCUMENT 

Accompanying the 

REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

On Progress in Bulgaria under the Co-operation and Verification Mechanism 

BULGARIA: Technical Update  

{COM(2009) 402 final} 

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1. 

2. 

3. 

4. 

TABLE OF CONTENTS 

Benchmark 1: Adopt Constitutional amendments removing any ambiguity regarding 
the independence and accountability of the judicial system ........................................ 4 

•  The National Assembly to adopt amendments to the Bulgarian Constitution 
•  The National Assembly to make necessary changes to the Judicial System Act 
•  The Inspectorate to be set up and functioning, first results to be published and evaluated 
Benchmark 2: Ensure a more transparent and efficient judicial process by adopting 
and implementing a new judicial system act and the new civil procedure code. 
Report on the impact of these new laws and of the penal and administrative 
procedure codes, notably on the pre-trial phase........................................................... 5 

•  Adopt the new Civil Procedure Code 
•  Adopt 

the  new  Judicial  System  Act  reflecting 

and the recommendations of the peer review experts 

the  amendments 

to 

the  Constitution  

•  Establish a monitoring system for all new codes 
•  Report at regular intervals on the findings of this monitoring process, notably as regards the pre-

trial phase, the execution of judgements and sentences 
•  Amend the relevant codes and legislation if necessary 
Benchmark 3: Continue the reform of the judiciary in order to enhance 
professionalism, accountability and efficiency. Evaluate the impact of this reform 
and publish the results annually ................................................................................... 8 

•  Establish  a  transparent  and  fully  functioning  decision  making  process  on  disciplinary 

investigations by the future Inspectorate with the Supreme Judicial Council (SJC) 

•  Ensure  complete  and  overarching  application  of  the  Code  of  Ethics  for  magistrates,  especially 

procedures for review, investigation and dismissal/prosecution for violations 

•  Monitor the application of the system of competitive examination for recruitment and performance 

evaluation of magistrates 

•  Annually publish findings of the evaluation of the reform of the judicial system, in particular on 
how  specific  problems  related  to  professionalism;  accountability  and  efficiency  have  been 
addressed 
Introduce random case handling software in the Prosecution services 

• 
•  Enhance the training on the implication of these new laws 
Benchmark 4: Conduct and report on professional, non-partisan investigations b into 
allegations of high-level corruption. Report on internal inspections of public 
institutions and on the publication of assets of high-level officials ........................... 10 

•  Associate  Member  States'  experts  to  provide  assistance  and  guidance  as  regards  improving  the 

quality of investigations and reporting on this 

•  Streamline and coordinate the institutional set-up of bodies empowered to fight corruption 
•  Establish administrative arrangements to safeguard whistle-blowers  
• 

Implement  fully  the  legislation  on  the  independence  of  the  inspectorates  in  the  public 
administration and ensure more pro-activeness in their investigative role 

•  Report on the implementation of measures taken to prevent and fight influence in the investigation 
and prosecuting entities, in particular sustain cases of suspension/dismissal/initiation of criminal 
proceedings against alleged corrupt law enforcement bodies 

•  Ensure  the  establishment  of  a  credible  checking  mechanism  for  asset  declarations  as  well  as 

effective sanctions in case of false or inaccurate declarations 

5. 

Benchmark 5: Take further measures to prevent and fight corruption, in particular at 
the borders and within local government ................................................................... 12 

• 

Implement  disciplinary  sanctions  and  a  policy  of  zero-tolerance,  particularly  in  the  Veterinary 
Service, customs, the Road Executive Agency and other relevant services 

•  Establish electronic payment systems and a system of shifts at random for officers employed at the 

borders 

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6. 

•  Conduct at regular intervals audits and checks, publish the findings and ensure their follow-up 
•  Report on investigations into inexplicable wealth 
Benchmark 6: Implement a strategy to fight organised crime, focussing on serious 
crime, money laundering as well as on the systematic confiscation of assets of 
criminals. Report on new and ongoing investigations, indictments and convictions in 
these areas .................................................................................................................. 13 

•  Associate  Member  States'  experts  to  provide  guidance  and  assistance  as  regards  improving  the 

quality of investigations and reporting on this 

•  Hand over an action plan to implement the strategy to fight organised crime and implement it with 

reports at regular intervals 

•  Fully implement relevant legislation on confiscation of assets of criminals 
•  Report  regularly  and  audit  internally  the  new  and  on-going  investigations,  indictments  and 

convictions 
Implement the new legislation to combat money laundering 

• 

Note: 

Under  each  of  the  six  benchmarks,  several  issues  of  particular  concern  were  mutually  agreed  when  the 
Cooperation  and  Verification  Mechanism  was  created  in  December  2006.  These  issues  are  listed  above  under 
each benchmark and have been addressed as far as progress has been reported. You may consult previous reports 
at: http://ec.europa.eu/dgs/secretariat_general/cvm/index_en.htm 

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1. 

BENCHMARK  1:  ADOPT  CONSTITUTIONAL  AMENDMENTS  REMOVING  ANY 
AMBIGUITY  REGARDING  THE  INDEPENDENCE  AND  ACCOUNTABILITY  OF  THE 
JUDICIAL SYSTEM 

In  2007,  Bulgaria  has  created  the  basis  for  an  independent  and  accountable  judicial  system 
with amendments to the Constitution and with the adoption of a new Judicial Systems Act.1 
As a result, a reformed Supreme Judicial Council was constituted and an independent Judicial 
Inspectorate  was  created.  In  the  last  12  months,  the  Inspectorate  to  the  Supreme  Judicial 
Council  has  become  fully  operational  and  has  achieved  an  encouraging  track  record  in  the 
investigation  of  individual  disciplinary  violations  and  of  systematic  weaknesses  of  judicial 
practice.  Some  of  its  findings  have  lead  to  improved  judicial  practice  or  have  provoked 
interpretative decisions by the Supreme Court of Cassation. The institutional position of the 
inspectorate was strengthened by amendments to the Judicial Systems Act at the end of April 
which  recognised  a  right  of  appeal  for  the  inspectorate  to  disciplinary  decisions  of  the 
Supreme Judicial Council.  

Since becoming fully operational at the end of May 2008, the inspectorate has continued to 
fulfil  its  plan  of  scheduled  inspections  with  the  judicial  district  of  Veliko  Turnovo  and  the 
judicial district of Varna. Together with the first scheduled inspection of the Bourgas district, 
the  inspectorate  has  now  inspected  3  out  of  5  judicial  districts  in  Bulgaria.  The  scheduled 
inspections  have  resulted  in  the  opening  of  several  individual  disciplinary  cases  since  June 
2008  and  in  a  large  number  of  specific  and  general  recommendations  in  order  to  improve 
judicial practice. At the same time, the inspectorate suggested the initiation of interpretative 
judgements  by  the  Supreme  Court  of  Cassation  in  two  cases  and  by  the  Supreme 
Administrative Court in two cases, as a reaction to contradictory jurisprudence by courts. 

Between August 2008 and May 2009, the inspectorate performed 126 inspections on the basis 
of individual signals2 and 9 ex-officio inspections following media publications. On the basis 
of initial findings, the inspectorate has in several cases decided to extend the initial scope of 
inspections to cover additional aspects. 

The inspectorate also continued to perform thematic inspections, e.g. into the reasons for the 
delays of high-level cases that generate particular public interest. As a follow-up to the first 
thematic  inspection  into  the  reasons  for  the  frequent  restitutions  of  cases  by  courts  to  the 
prosecution in the first half of 2008, the Supreme Cassation Court organised several regional 
conferences  to  discuss  the  findings  and  recommendations  of  the  inspectorate.  Comparative 
data of 2007 and 2008 suggest a decline in the number of restitutions. 

The Supreme Judicial Council acts as the sanctioning body for disciplinary violations. Cases 
of such violations are submitted to the Council by the inspectorate and by the administrative 
heads  of  courts.  In  both  cases,  an  analysis  of  the  facts  is  accompanied  by  a  proposal  for  a 
sanction.  If  cases  are  submitted  by  administrative  heads  of  courts,  additional  checks  are 
performed.  An  analysis  of  the  disciplinary  case  law  of  the  Supreme  Judicial  Council  shows 
that sanctions proposed by the inspectorate are mostly confirmed by the SJC. In the majority 
of cases, the Inspectorate to the SJC initiates the proceedings. In some cases, disagreements 

1 

2 

Bulgaria passed the necessary amendments to the Constitution on 2 February 2007. The new Judicial 
System  Act  was  adopted  by  the  National  Assembly  on  24  July  2007  and  entered  into  force  on  10 
August 2007. 
A total of 1642 signals were addressed to the inspectorate during the same period of time. 

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between the two bodies have emerged; in other cases inconsistencies of disciplinary case law 
between different disciplinary panels of the SJC have been identified.3  

As  a  result  of  the  inspections  since  July  2008,  44  disciplinary  proceedings  were  launched 
including 4 requests for dismissal.4  By  mid-June,  the  Supreme Judicial Council had taken a 
decision  on  19  cases.  In  10  cases,  the  proposal  of  the  inspectorate  was  followed,  in  three 
cases, lower sanctions were imposed and 6 cases were dismissed by the Council. Overall, the 
Supreme Judicial Council should assure the systematic follow-up to the general and thematic 
inspections of the inspectorate and of weaknesses in the equal application of the law. 

2. 

BENCHMARK  2:  ENSURE  A  MORE  TRANSPARENT  AND  EFFICIENT  JUDICIAL 
PROCESS  BY  ADOPTING  AND  IMPLEMENTING  A  NEW  JUDICIAL  SYSTEM  ACT  AND 
THE NEW CIVIL PROCEDURE CODE. REPORT ON THE IMPACT OF THESE NEW LAWS 
AND  OF  THE PENAL  AND ADMINISTRATIVE PROCEDURE CODES, NOTABLY  ON  THE 
PRE- TRIAL PHASE 

Criminal justice continues to suffer from an outdated Penal Code and from an over-formalistic 
Penal Procedure Code. Whereas Bulgaria has reacted to the shortcomings of the Penal Code 
with a strategy for a new penal policy, recent amendments to the Penal Procedure Code do not 
address  systematic  procedural  weaknesses  such  as  excessive  formalisation.  The  Penal 
Procedure  Code  has  been  subject  to  some  technical  amendments  in  December  2008.  These 
amendments i.e. require first instance courts to apply a shortened trial phase in the case of an 
admission  of  the  defendant  of  facts  stated  in  the  factual  part  of  the  indictment  in  order  to 
reduce  the  important  time  delays  in  serious  criminal  cases  (for  more  detail  on  these 
procedures  see  under  benchmark  6).  However,  these  amendments  do  not  address  the 
systematic  flaws  of  the  Bulgarian  criminal  procedures  which  have  lead  to  excessive  delays 
and inconclusive trials, in particular in serious cases. The introduction of plea-bargaining and 
the  possibility  for  a  shortened  trial  in  case  of  confession  ("expedited  procedure")  cannot 
replace  a  thorough  revision  of  penal  procedures.  Bulgaria's  criminal  procedures  suffer  from 
excessive formalism, do not encourage the taking of responsibility by judges and lead to an 
extremely  restrictive  administration  of  evidence  during  the  pre-trial  and  trial  phase.5  Since 
mid  2008,  members  of  the  prosecution  have  made  detailed  suggestions  for  a  reform  of  the 
Penal Procedure Code to the government. However, these were not taken up by the legislator. 
Bulgaria should develop and implement a convincing monitoring system to assess the impact 
of the Penal Procedure Code on judicial efficiency. 

The Ministry of Justice continued the development of a strategy paper for a new penal policy 
and  a  new  Penal  Code.  A  first  draft  of  the  strategy  has  been  circulated  within  the 
administration and will have to be considered by the incoming government. External experts 
assisted in evaluating the strategy and  provided recommendations for a new Penal Code. In 
parallel with the elaboration of a new penal policy strategy, only relatively minor amendments 
have been made to the Penal Code in the last 12 months: the criminal liability of legal persons 

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5 

An important part of violations concern the delays in the hearing of cases in court. The Council tends to 
consider workload by magistrates as a reason for the exemption from disciplinary liability whereas the 
inspectorate,  supported  by  case-law  of  the  ECHR,  considers  this  only  a  mitigating  factor  in  the 
qualification of the disciplinary violation. 
29 cases concern judges, 3 cases concern prosecutors, 3 cases concern investigating magistrates and 9 
cases concern administrative court heads. 
Convictions in serious criminal cases appear to be achieved mostly on the basis of confessions together 
with in flagranti evidence (e.g. records of phone tapping, video surveillance). 

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in fraud-cases has been introduced; the penalty for fraud with EU funds has been increased. 
As  reported  by  the  Commission  earlier,  the  efficiency  of  the  judicial  system  is  still 
constrained by a structurally outdated Penal Code which suffers from an inadequate level of 
differentiation between various crime-levels which require the same legal and administrative 
procedures. 

With a Law on Amnesty entering into force on 22 April 2009, Bulgaria intends to reduce the 
workload of the justice system by terminating pending cases and releasing convicts for a large 
variety  of  offences  for  which  the  maximum  sentence  is  up  to  5  years  of  imprisonment  and 
which were committed by act of negligence before 1 July 2008. Although a trail of concrete 
cases which would have been terminated in application of the amnesty law is not yet available 
for  evaluation,  abuse  of  public  office,  if  committed  by  negligence,  is  not  excluded  from 
amnesty. At a time where systematic fraud with EU funds is under investigation, an amnesty 
act  that  may  exempt  public  officials  with  financial  control  functions  from  criminal  liability 
sends contradictory political messages. 

Although  the  competences  in  the  pre-trial  phase  between  the  different  law  enforcement 
authorities, in particular police and the State Agency for National Security (SANS) have been 
legally  clarified,  overlaps  of  competences  continue  de  facto.  Although  SANS  has  no 
investigative role, evidence collected by SANS can formally be used in court if collected upon 
the request of a prosecutor and confirmed by a judge. In legal practice, courts however often 
do not recognize such evidence. In addition, any information collected before the opening of 
an  official  investigation  cannot  be  used  in  court,  even  if  it  is  compelling.  Parliamentary 
control  over  SANS  has  not  yet  been  effectively  established.  Recent  legislative  amendments 
restricting the access to telephone connection data has been reported as serious set-back to the 
efficiency  of  criminal  investigations.  The  creation  of  joint  teams  under  the  guidance  of  the 
prosecution  has  seen  first  successes,  in  particular  concerning  the  legal  persecution  of  EU 
fraud (see benchmarks 4 and 6). Police reform, launched in the first part of 2008, continues. 
The merger of different police forces into a unified criminal police force, the recruitment of 
staff  with  diverse  professional  backgrounds,  such  as  IT  or  finance  and  the  reform  of  the 
investigative police is as such a positive development; substantial efficiency gains for the pre-
trial process are however not yet visible. Staff numbers, training and equipment are not yet at 
optimal  level.  Lower  salaries  in  police  as  compared  to  SANS  have  resulted  in  a  move  of 
qualified  staff.  The  integration  of  the  staff  of  the  National  Investigation  Office  into  the 
prosecution services can be considered a step to improve the efficiency in the deployment of 
resources in the pre-trial phase. It has been confirmed by the Constitutional Court. 6 

There is still a considerable divergence in the application of the law between courts although 
progress has been made on legal unification with nine interpretative decisions by the Supreme 
Cassation  Court  (SCC),  some  of  them  on  the  initiative  of  the  inspectorate  of  the  Supreme 
Judicial  Council.  The  number  of  interpretative  decisions  by  the  SCC  has  increased 
substantially compared to previous years. In addition to interpretative decisions by the SCC, 
the equal application of the law should be further promoted through a systematic follow-up of 
inconsistencies in the application of the law by the Supreme Judicial Council and the Supreme 
Cassation Court in the way of e.g. joint meetings with judges on district level.7 

6 
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Ruling no. 5 of 9 July 2009. 
Joint  meetings  on  district  level  were  organised  by  the  Supreme  Cassation  Court  as  a  reaction  to  the 
thematic  investigation  of  the  inspectorate  into  referrals  of  cases  from  court  to  prosecution  on  formal 
grounds. A substantial decrease of referrals is reported as a result. 

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Despite a legal  requirement, judgements are still not generally published on the websites of 
courts.8  The  lack  of  enforcement  of  this  requirement  impedes  transparency  and  contradicts 
efforts for legal unification. The Supreme Judicial Council should issue guidelines to courts, 
provide  technical  assistance  (e.g.  standard  software)  and  monitor  the  publication  of 
judgements. 

Bulgaria  provides  detailed  and  analytical  data  on  the  monitoring  of  the  Administrative 
Procedure  Code  (APC).  Between  August  2008  and  May  2009,  three  monitoring  exercises 
were  carried  out  covering  in  each  case  the  jurisprudence  of  several  months  of  a  number  of 
administrative  courts.9  Some  monitoring  was  targeted  according  to  risk  criteria  or  past 
performance.  Overall,  the  implementation  of  the  law  by  courts  is  considered  relatively 
satisfactory.  Several  delayed  proceedings  due  to  incomplete  case  files  have  also  been 
detected. As a corrective measure, additional training needs have been identified. Overall, the 
monitoring  system  set  up  by  Bulgaria  in  March  2007  for  the  implementation  of  the 
Administrative Procedure Code can be considered mature. The frequency of inspections has 
increased in the last 12 months compared to the previous period. As a result of the monitoring 
exercise during 2008 and following consultation of courts, legislative changes to the APC and 
secondary legislation on court fees are being prepared. 

Monitoring of the new Civil Procedure Code (CPC) is carried out on the basis of new criteria 
since August 2008.10 Since then, the Inspectorate to the Minister of Justice has carried out 19 
inspections; its main findings included incoherence in procedural standards. Bulgaria reports 
that corrective action has been applied at the level of courts. Two interpretative decisions by 
the Supreme Court of Cassation in the area of Civil Law have been requested. For the time 
being,  the  new  CPC  has  not  yet  achieved  the  expected  substantial  gains  in  efficiency  and 
speed of court procedures. The slow and ineffective enforcement of court orders, in particular 
payment orders, appears as a main weakness. A law to amend the Civil Procedure Code has 
been  adopted  in  May  2009.  The  amendments  intend  to  improve  the  enforcement  of  court 
decisions  and  will  also  allow  the  re-opening  of  civil  cases  following  decisions  of  the 
European Court for Human Rights. Close monitoring of the impact of these amendments on 
transparency,  speed  and  efficiency  of  court  procedures  are  necessary.  In  addition,  Bulgaria 
should  urgently  assure  the  electronic  publication  of  all  verdicts  with  due  respect  to  data 
protection  and  privacy  rules  (see  above).  As  the  publication  of  verdicts  by  courts  remains 
patchy and incoherent, it is still difficult to identify inconsistent jurisprudence with a view to 
lodge  a  cassation  appeal  in  civil  law.  The  value  of  cassation  as  a  means  of  stimulating 
coherent jurisprudence in case of conflicting case law remains therefore limited. 

The new draft Statutory Instruments Act, once adopted, should improve the general quality of 
lawmaking through a single codification of the different stages of the legislative process and 
through clear rules for transparency and public debate. The introduction of an ex-ante and ex-
post impact assessment of legislation can be considered a positive step for the predictability of 

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10 

A  random  check  of  the  websites  of  several  courts  on  24  June  2009  showed  inconsistency  in  the 
application  of  the  requirement  to  publish  verdicts.  Information  on  sites  varies  and  is  not  easily 
accessible. In most cases, only a single case record can be displayed at a time upon the introduction of 
the full name together with the case number. Out of five court websites, one court did not publish any 
cases, one court published short summaries without motivations, the remaining three courts published a 
selection of cases whereas the criteria for selection were inconsistent. 
A first off-site monitoring covered jurisprudence of the first half of 2008 of 25 courts, a second exercise 
covered jurisprudence  of  the whole of  2008  of  another  27  courts, other monitoring  exercises  targeted 
specific districts and courts following risk criteria. 
The new Civil Procedure Code entered into force in March 2008. 

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laws  and  the  quality  of  public  debate.  The  impact  of  this  law  must  be  assessed  upon  its 
implementation. 

3. 

BENCHMARK 3: CONTINUE THE REFORM OF THE JUDICIARY IN ORDER TO ENHANCE 
PROFESSIONALISM, ACCOUNTABILITY AND EFFICIENCY. EVALUATE THE IMPACT OF 
THIS REFORM AND PUBLISH THE RESULTS ANNUALLY 

Over  the  last  12  months,  the  Supreme  Judicial  Council  (SJC)  has  adopted  an  increasingly 
constructive  role  in  accepting  the  Commission's  analysis  of  the  main  weaknesses  of  the 
Bulgarian  judicial  process  and  demonstrated  a  pro-active  and  constructive  attitude  in 
following  up  to  delays  in  high-profile  cases.  The  SJC  has  established  a  list  of 
recommendations  to  improve  the  celerity  of  cases  of  high  public  interest.  These 
recommendations  are  based  on  an  analysis  of  about  50  high-level  cases  which  have  been 
delayed  to  achieve  prescription  and  avoid  judgement.  The  analysis  of  the  council  identified 
considerable  procedural  delays  and  suggests  extensive 
the 
introduction of residence registration) as well as substantial organisational and administrative 
changes. Recommendations of the SJC on specific cases are reported to have already resulted 
in  the  completion  of  7  cases.  The  SJC  has  set-up  a  reporting  mechanism  with  the 
administrative  heads  of  court  in  respect  of  the  particular  cases  under  review.  The  legislator 
should follow-up quickly on the legal recommendations of the SJC and evaluate the general 
impact of its organisational and administrative recommendations on the celerity of the judicial 
treatment of cases.  

legal  amendments  (e.g. 

At  the  same  time,  the  Council  has  not  yet  adopted  an  unequivocal  pro-reform  agenda;  it 
should  use  its  powers  more  pro-actively  in  all  areas  where  urgent  action  is  needed.  This 
concerns in particular the appointment of senior magistrates and the review of the appraisal 
system  for  magistrates  which  both  still  show  weaknesses.  Until  the  middle  of  June,  the 
Supreme  Judicial  Council  had  carried  out  48  selection  procedures  for  senior  appointments 
among the Bulgarian magistracy out of a total number of 150 vacancies for senior positions 
available  this  year.  Four  appointment  decisions  have  provoked  public  criticism.  In  all  four 
cases  press  and  civil  society  suggested  that  the  professional  track  record  of  the  successful 
candidates  was  characterised  by  partisan  decisions  and  influence  and  that  the  Supreme 
Judicial  Council  had  not  sufficiently  taken  these  elements  into  account  and  had  not 
sufficiently  justified  its  appointment  decision.  Partisanship  and  a  lack  of  objectivity  and 
transparency were reported in these cases. For the progress of judicial reform in Bulgaria as 
for  the  establishment  of  public  trust  into  the  judiciary,  the  appointment  of  highly  qualified 
court  heads  with  an  undisputed  reputation  in  a  non-partisan  and  objective  manner  is 
important. The standards of transparency and professionalism applied by the Supreme Judicial 
Council should be reviewed. In particular the opinion of the inspectorate to the SJC and the 
result  of  its  inspections  should  be  taken  into  consideration  and  the  personal  file  of  the 
candidates should be available for consultation to the SJC in preparation and at the day of the 
appointment  decision.11  In  addition,  the  appointment  decisions  should  in  all  cases  be 

11 

Currently, the reports of the inspectorate are not systematically - positively or negatively - considered in 
appointment decisions by the SJC. This is justified by equal treatment as not all Bulgarian courts have 
been  inspected  (3  out  of  Bulgaria's  5  appellate  regions).  The  personal  file  of  the  applicant  is  not 
physically available to the JSC when an appointment decision is taken. This decision is mainly taken on 
the basis of the performance assessment drafted by a local appraisal commission. 

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objectively motivated according to the methodology set out 12 and the Council should adhere 
to its high standards of transparency and public information.13  

The system of annual appraisal of magistrates is currently under revision. For this purpose, a 
working  group  to  amend  the  respective  implementing  legislation  has  been  established.  The 
impending revision of appraisal procedures should ensure a more objective and fair evaluation 
of  magistrates  on  the  basis  of  actual  performance  than  previously.14  The  findings  of 
inspections  carried  out  by  the  inspectorate  to  the  SJC  should  be  properly  taken  into 
consideration in the revision of the appraisal procedures.15  

A unified code of ethics for all magistrates was adopted on 20 May. The code was adopted on 
the  basis  of  a  proposal  presented  by  a  working  group  that  included  representatives  of 
professional associations. The code of ethics covers the discharge of professional duties and 
the  behaviour  in  private  life;  it  will  be  used  as  a  basis  for  disciplinary  investigations  and 
sanctions. 

Bulgaria has not yet presented an impact analysis of judicial reform. The measures taken so 
far to reform the judiciary have not yet changed the critical perception of the judiciary among 
citizens, as reported by a recent study by civil society.16  

With  amendments  to  the  Judicial  Systems  Act,  Bulgaria  reports  the  adoption  of  different 
conceptual approach with respect to setting up a unified IT System for combating crime. The 
SJC has been assigned with the overall  coordination of this system within the judiciary and 
with  the  integration  of  the  databases  hosted  by  the  different  institutions  which  are  to  be 
interconnected.  The  Supreme  Judicial  Council  should  assure  the  respect  of  the  legal 
requirement  to  publish  all  judgements  of  courts  in  a  user-friendly  manner  and  establish  an 
implementation  plan  with  precise  benchmarks  and  deadlines  for  the  IT  development  of  the 
judiciary, in particular for the setting-up of a unified system for combating crime which the 
SJC coordinates. 

12 

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14 

15 

16 

The methodology approved by the SJC sets out 10 selection criteria for candidates in three main areas 
of qualification: professional, business and moral. 
The SJC has established high standards of transparency for this appointment process: all meetings can 
be observed in full via video in a separate room and the candidate's files should be publicly accessible 
on  the  web-site  of  the  SJC.  However,  at  an  on-the-spot  check,  no  information  on  the  selection 
procedures could be found published as indicated on the council's web-site. 
Two  specific  cases  have  been  reported  to  the  Commission  as  examples  of  considerable  discrepancies 
between  the  annual  appraisal  reports  and  the  professional  track  record  of  magistrates.  In  one  case 
evidence of serious mismanagement was not taken into account for an annual appraisal (acquittal due to 
loss of material evidence and of case file in a homicide case), in a second case, serious miscarriage of 
justice did not influence the annual appraisal report.  
The  findings  of  the  inspectorate  are  currently  entered  to  only  5%  into  the  annual  performance 
evaluation of magistrates.  The findings of the  inspectorate  are not  yet  generally  entered  into personal 
files. 
On the request of the ministry of justice, an NGO presented an analysis of the government's programme 
for the implementation of judiciary reform which will provide input for a new strategy for the judiciary 
for the period 2009-2013. The analysis concludes that the measures taken so far to reform the judiciary 
have not yet changed the main shortcomings of the system felt by the citizens, such as difficult access 
and  slow procedures.  The  analysis  also  concluded  that justice  reform  and  the fight  against  corruption 
are closely linked in issues such as judicial efficiency, transparency and control mechanisms: both could 
only advance together.  

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4. 

BENCHMARK 4: CONDUCT AND REPORT ON PROFESSIONAL, NON-PARTISAN 
INVESTIGATIONS INTO ALLEGATIONS OF HIGH-LEVEL CORRUPTION. 
REPORT ON INTERNAL INSPECTIONS OF PUBLIC INSTITUTIONS AND ON THE 
PUBLICATION OF ASSETS OF HIGH-LEVEL OFFICIALS 

Although  the  successful  reorganisation  of  the  prosecution  services  for  fraud  with  EU  funds 
demonstrates  that  progress  can  be  made  where  political  will  is  present,  the  capacity  of  law 
enforcement authorities to deal with high-level corruption has not increased on a general scale 
over the last 12 months. The Penal Code and Penal Procedure Code continue to show serious 
deficiencies  and  only  few  court  cases  have  demonstrated  substantial  progress.  In  August 
2008,  Bulgaria  has  reorganised  the  prosecution  of  EU  fraud  cases:  Supervised  by  a  central 
monitoring team at the Supreme Cassation Prosecution Office (SCPO), five joint teams have 
been created in Sofia and countrywide which each link up to a specially designated prosecutor 
in  each  district.  The  most  important  team  has  been  created  at  Sofia  city  prosecution  office. 
The  team  in  Sofia  regroups  6  prosecutors,  10  police  investigators  and  10  investigating 
magistrates  which  share  common  office  space,  common  filing  and  a  common  IT  system. 
Liaison persons have been identified in SANS and the State Fund for Agriculture. In addition 
there are operative policemen to assist police investigators. At the end of May, 516 case files 
on fraud with EU funds had been created, 86 pre-investigations (proverka) had been launched 
and  136  pre-trials  had  been  officially  initiated.  A  case  may  be  started  at  any  level  by  the 
SCPO  or  by  a  local  joint  team.  Local  prosecutors  report  on  cases  to  the  SCPO  which  has 
monitoring and coordinating functions, whereas local prosecution takes full responsibility for 
operational decisions. In Sofia, 60 cases are registered and pre-trial investigations have been 
opened for 30 cases.  

Seven pre-trial proceedings were launched by Sofia city prosecution ex-officio on the basis of 
media reports. Most cases had been opened on the basis of information provided by OLAF. 
The discussion revealed that the prosecution acts mostly reactive and does not e.g. probe the 
involvement  of  public  officials  in  fraud  schemes,  despite  clear  indications  transmitted  by 
OLAF.  

According  to  prosecutors,  effective  controls  at  the  administrative  level  that  could  prevent 
fraud are generally not performed and the  quality of signals  from  the administration is low. 
The absence of proper administrative control procedures contributes to an overloading of the 
judiciary system.  

Overall,  the  reorganisation  of  the  prosecution  office  regarding  the  prosecution  of  EU  fraud 
seems to have resulted in an efficient organisation with a central joint team and local teams in 
each  region.  The  number  of  investigated  cases  and  of  registered  indictments  has  increased 
considerably since autumn 2008. One emblematic case of corruption was decided by court at 
the end of June. Other important cases continue to suffer from procedural delays and advance 
only slowly.17 At the same time, the reorganisation of the prosecution of fraud with EU fund 
has not been extended to other areas dealing with corruption and fraud. It is not supported by 
the general reform process of law enforcement in Bulgaria, launched in early 2008 with the 

17 

The  former  director  of  the  Sofia  heating  utility  Toplofikatsiya,  Valentin  Dimitrov  was  sentenced  in 
June; the fraud cases against the former head of the State Agriculture Fund Asen Drumev and against 
the former head of the National Road Authority Veselin Georgiev suffer from various procedural delays 
and progress only slowly. The SAPARD fraud case against Mario Nikolov was suspended and travel 
restrictions  against  all  defendants  were  lifted  after  the  one  lawyer  registered  his  candidacy  for 
Parliament. 

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creation  of  the  State  Agency  of  National  Security  and  with  police  reform  as  this  reform 
process is still ongoing and has not yet consolidated.  

The  specific  legal  environment  for  the  fight  against  fraud  and  high-level  corruption  has 
improved in the last 12 months. This relates to the prohibition of land swaps, the increase of 
the penalty for fraud with EU funds, the introduction of a criminal liability for legal persons in 
fraud cases18, the new regulation of political party financing19 and in particular to the adoption 
of the new law on the prevention and detection of conflicts of interest. It is however too early 
to assess the impact of the newly adopted legislation.  

The  Commission  considers  the  prevention  of  conflicts  of  interest  a  key  requirement  for  the 
protection  of  the  financial  interests  of  the  EU  and  an  important  preventive  element  against 
fraud and corruption. The Bulgarian government has approached the Commission for advice 
on the conflict of interest law at the end of March. In this context the Commission considered 
that  the  definition  of  conflict  of  interest  in  the  law  required  broadening  to  cover  political, 
economic or any other shared interest20. In addition, the Commission raised concerns as to the 
effective implementation of the law which required an appropriate standardised methodology 
for  the  risk  assessment  and  control  of  the  conflict  of  interest  statements  that  are  to  be 
submitted  under  the  law.  Some  of  the  points  raised  by  the  Commission  were  taken  into 
consideration  in  the  revision  of  the  law;  however  provisions  to  assure  an  effective  an  equal 
application  of  the  law  are  missing.  The  decentralised  implementation  of  the  law  requires 
sufficient capacity and functional independence on the side of the control bodies. To assure 
the effective implementation of the conflict of interest law and to evaluate its impact, Bulgaria 
should develop implementation guidelines and design an appropriate central reporting system. 

An  effective  protection  against  fraud  and  corruption  requires  a  horizontal  screening  of 
legislation  with  a  view  to  improve  the  enforcement  capacity  of  the  authorities,  but  also  in 
order  to  reduce  opportunities  for  fraud  and  corruption.  A  first  series  of  useful  legal 
amendments have been discussed in a public meeting in the beginning of February. Bulgaria 
should provide follow-up to these suggestions and continue involving public authorities and 
civil  society  in  a  public  advisory  process  to  improve  prevention  of  corruption  and  law 
enforcement.21 In particular a prohibition of cash payments in some areas such as real estate 
and  the  introduction  of  loan  contracts  in  tax  declarations  should  be  considered.  As  reported 
earlier, legislative changes have effectively reduced transparency regarding the ownership of 
company  assets  as  the  Commercial  Registry  Code  no  longer  requires  the  registration  of 
subsequent  changes  in  the  acquisition  and  transfer  of  shares  after  a  first  registration.  This 
decrease in transparency has a negative effect on financial investigations. The recent adoption 

18 

19 

20 
21 

With the introduction of a criminal liability for legal persons in fraud cases, Bulgaria complies with the 
European convention of the protection of EU's financial interests. 
The  revision  of  the  Political  Parties'  Act  on  13  January  2009  doubled  the  state  subsidy  for  political 
parties;  they  can  no  longer  accept  anonymous  donations.  Donations  from  legal  entities  and  natural 
persons are limited to 10.000 BGN/year. 
This definition of conflict of interest is based on article 52/2 of the Financial Regulation of the EC. 
Changes  in  13  legal  acts  were  proposed  for  discussion  during  the  meeting  of  the  Public  Advisory 
Council  to  deputy  PM  Plugchieva  in  the  beginning  of  February.  The  changes  aim  to  improve  the 
measure  for  curbing  and  fighting  corruption  and  organised  crime.  Part  of  them  were  prepared  by 
representatives  of  executive,  legislative  and  judicial  braches.  The  changes  concern  namely:  Penal 
Procedure  Code,  Penal  Code,  Trade  Act,  Law  on  Public  Procurement,  Tax  and  Insurance  Procedure 
Code, Law on Obligations and Contracts, Private Person Income Tax Law, Labour Code, Law on Fiscal 
Appliances, VAT Law, Corporate Tax Law, Law on Credit Institutions and the Law on Concessions. 

EN 

11 

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of  an  Amnesty  Act  covering  i.e.  the  abuse  of  public  office  sends  contradictory  political 
signals. 

The  enforcement  of  the  law  cannot  be  left  to  the  judicial  authorities  alone.  To  achieve 
substantial  progress  in  both  law  enforcement  but  also  in  the  prevention  of  fraud  and 
corruption, it is important for Bulgaria to improve the capacity of the various administrative 
control  bodies  and  to  insist  that  these  bodies  start  acting  in  a  pro-active  way.  This  must  be 
assured for control bodies that manage of EU funds such as the State Fund of Agriculture or 
the  National  Road  Authority  but  also  for  all  other  public  bodies  with  important  control 
functions  such  as  the  National  Audit  Office,  the  National  Revenue  Office  or  the  Customs 
Board.  As  reported  earlier  by  the  Commission,  insufficient  capacity  at  the  National  Audit 
Office for instance continues to inhibit effective checks on asset declarations and an effective 
control of political party finances.22 The National Revenue Agency is not prepared to evaluate 
the market value of real-estate as part of an investigation into money laundering through real-
estate  transfers  with  inflated  prices;  as  a  matter  of  fact  such  checks  are  not  systematically 
performed following an analysis of risks. Strengthening of the law, a pro-active mandate and 
sufficient resources for key administrative authorities such as the National Audit Office and 
the  National  Revenue  Agency  together  with  rigorous  follow-up  by  the  political  level  are 
necessary to achieve sustainable progress in the prevention of corruption. 

5. 

BENCHMARK 5: TAKE FURTHER MEASURES  TO PREVENT AND FIGHT CORRUPTION, 
IN PARTICULAR AT THE BORDERS AND WITHIN LOCAL GOVERNMENT 

During the last 12 months, Bulgaria has implemented a number of preventive measures. These 
include an  upgrade of  the IT equipment by the National Revenue Agency at its 28 regional 
offices to allow more complex and efficient checks, a revision of the education act reducing 
corruption  opportunities  at  schools  and  universities,  the  creation  of  a  medical  inspectorate 
under  the  ministry  of  health  and  the  introduction  of  a  "single  fiche"  system  at  10  out  of  11 
land border points leading to a substantial increase in the report of collected fees.23 The results 
of these measures must be evaluated in future. 

At the same time, Bulgaria has taken steps to strengthen the anti-corruption committee at the 
Council of Ministers. The deputy Prime Minister now chairs the committee which coordinates 
anti-corruption efforts on a central level. The committee has also been engaged in preparatory 
work for a new anti-corruption strategy based on analysis of a review of the existing strategy 
and a consultation of stakeholders, including NGOs. The general inspectorate attached to the 
anti-corruption committee at the Council of Ministers coordinates, provides technical support 
and supervises the work of the inspectorates at line ministries. In addition, a central website to 
signal  corruption  offences  has  been  set  up  with  EU  assistance.  This  site  allows  to  lodge 
complaints  against  all  public  institutions  and  to  later  verify  the  status  of  the  complaint. 
Qualitative data to evaluate the follow-up to signals received was not available. It should be 
noted that anonymous signals are not given follow-up. 

22 

23 

In addition, the rules governing asset declarations show several deficiencies, e.g. artwork or jewellery 
does  not  need  to  be  declared;  only  total  amounts  of  bank  assets  must  be  provided,  details  on  the 
amounts  and  accounts  are  not  required.  At  the  same  time,  fines  for  the  failure  to  comply  with  the 
obligation to submit asset declarations are not sufficiently deterrent. 
The  Bulgarian  authorities  announced  in  July  that  the  use  of  the  single  fiche  system  would  be 
discontinued for EU registered cars as of 1 July at Kalotina border crossing and as of 15 July at Kapitan 
Andreevo border crossing in order to reduce delays at the border. 

EN 

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However, effective prevention activities in vulnerable sectors such as the health and education 
sector and on local level have not yet been launched. In order to achieve systematic progress 
in curbing corruption opportunities in vulnerable sectors such as health and education and on 
the  level  of  local  government,  an  increase  in  staff  of  the  general  inspectorate  and  of  the 
various  inspectorates  at  ministries  and  agencies  and  a  more  pro-active  approach  is 
necessary.24  Consequently,  the  political  level  should  consider  strengthening  the  capacity  of 
inspectorates  and  mandate  them  legally  and  politically  to  take  a  more  pro-active  position 
towards the identification and mitigation of risk areas. Following-up to the recommendations 
of  October  2008  of  an  EU-funded  anti-corruption  project,  the  general  inspectorate  should 
systematically advise the inspectorates of different government departments and the 28 local 
offices  of  the  central  inspectorate  on  the  basis  of  risk  assessments  on  the  identification  of 
vulnerable  spots  and  in  the  design  of  remedial  measures  and  control  their  implementation. 
The  28  regional  anti-corruption  public  councils  formed  on  a  local  level  should  be 
strengthened in cooperation with civil society. A strengthening of the legal mandate and of the 
administrative capacity of the General Inspectorate should be considered and accompanied by 
rigorous monitoring and, in cooperation with civil society, an evaluation of the impact of the 
measures taken by the Council of Ministers. 

International  evaluations  by  the  World  Bank  and  Transparency  International  show  little 
progress with the perception of corruption in Bulgaria.25 Several reports on vote buying have 
been  recorded  at  the  occasion  of  the  European  elections  and  the  national  elections  in  July, 
however, civil society engaged in a prevention campaign; the prosecution launched a number 
of ex-officio investigations.26 

The  Bulgarian  Parliament  passed  a  law  in  January  2009  prohibiting  land  swaps.  However, 
land swaps continued and even accelerated until the day of the entry into force of the law.  

6. 

BENCHMARK 6: IMPLEMENT A STRATEGY TO FIGHT ORGANISED CRIME, FOCUSSING 
ON  SERIOUS  CRIME,  MONEY  LAUNDERING  AS  WELL  AS  ON  THE  SYSTEMATIC 
CONFISCATION  OF  ASSETS  OF  CRIMINALS.  REPORT  ON  NEW  AND  ONGOING 
INVESTIGATIONS, INDICTMENTS AND CONVICTIONS IN THESE AREAS 

Following to the Commission's report of July 2008, Bulgaria reorganised the prosecution of 
organised  crime  and  changed  its  methodological  approach  in  targeting  organised  crime.  In 
contrast to the re-organisation for the prosecution of fraud with EU funds, no permanent joint 
teams  have  been  created  on  organised  crime.  Next  to  a  standing  team  which  is  used  for 
coordination  purposes  between  the  different  authorities  involved,  individual  cases  are  still 
prosecuted by teams assembled on an ad-hoc basis. The non-permanent character of the joint 
teams on organised crime is explained by Bulgaria by the complex and changing requirements 
of  the  investigations,  the  need  to  test  the  trustworthiness  of  staff  and  possible  security 
concerns for staff. Operational information is shared at a central, not at a local level to respect 
confidentiality. However, it was also indicated that this set-up would have to be replaced by a 

24 

25 

26 

The  General  Inspectorate  at  the  Council  of  Ministers  has  a  total  staff  of  5,  the  inspectorates  of  line 
ministries typically count a staff of 1 or 2 persons. 
TI  reports  that  76%  of  the  Bulgarians  questioned  consider  the  measures  taken  by  government  as 
ineffective. 
A  coalition  between  several  NGOs  was  formed;  the  employers'  association  offered  a  reward  for  the 
detection of vote-buying. 

EN 

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permanent  structure  in  the  coming  months  to  keep  the  current  operational  momentum.  In 
future, proper security and protection for staff would also have to be introduced. 

The  structural  re-organisation  is  coupled  with  an  adaptation  of  the  methodology  by  the 
prosecution  in  targeting  organised  crime.  In  a  change  to  previous  practice,  the  prosecution 
targets  pro-actively  since  September  2008  a  limited  number  of  high-profile  cases  which  are 
already  known  to  law  enforcement.  Members  of  these  groups  are  investigated  for  recent 
offences  for  which  unspoiled  evidence  is  available.  This  procedure  promises  achieving 
effective  convictions  by  plea-bargaining  and  by  applying  the  expedited  procedure  after 
confession  by  the  defendant,  thus  avoiding  a  long  and  possibly  inconclusive  trial.27  Once  a 
first  sentence  is  enforced,  the  prosecution  of  other  offences  such  as  money  laundering  and 
second  convictions  would  be  facilitated.  Bulgaria  reports 
the  structural  and 
methodological  changes  at  the  prosecution  had  increased  the  dynamics  of  investigations, 
created  mutual  trust  between  institutions  and  achieved  first  results.  As  a  result  of  the 
application of the expedited procedure and of plea-bargaining, Bulgaria reports that until now, 
36  members  of  organised  crime  groups  had  been  convicted  in  connection  with  the  cases 
against  Veselin  and  Hristo  Danov  and  against  Dimitar  Zhelazhkov  ("Mityo  Ochite").28  The 
first results of this pragmatic strategy are encouraging. However, its success will depend on 
whether first convictions on relatively minor offences can be followed up with convictions on 
more  serious  offences  where  plea  bargaining  would  be  excluded  by  law  (as  in  the  case  of 
murder) or more difficult to accept for the public. In addition, this methodology is currently 
only  applied  to  a  small  number  of  cases.  Moreover,  the  prosecutor's  decision  to  use  plea-
bargaining should be based on an in-depth analysis of cases and not be prompted by the state 
of  the  legal  system.  Eventually,  the  judicial  authorities  must  address  all  cases  of  organised 
crime in Bulgaria in an efficient manner, including older and pending cases.  

that 

Judicial practice in organised crime cases needs to be strengthened. An important element in 
the judicial follow-up to organised crime is the systematic prosecution of money laundering. 
Bulgaria  does  not  yet  generally  prosecute  money  laundering  independently  of  the  main  (or 
predicate) offence despite a decision by the Supreme Court of Cassation29 which is favourable 
to  this  practice.  It  was  reported  that  courts  generally  require  both  evidence  on  money 
laundering  and  on  a  predicate  crime  as  well  as  a  proof  of  a  direct  link  which  is  difficult  to 
demonstrate  in  practice.  For  this  reason,  the  prosecution  often  decides  to  prosecute  for  tax-

27 

28 

29 

The  expedited  procedure  requires  a  sentence  below  the  minimum  fixed  by  law  for  the  offence  in 
question. It can be applied if all defendants in a case confess and agree to renounce certain rights, e.g. 
for a hearing of witnesses. The application of the expedited procedure allows reducing the trial period to 
a minimum against a negotiated and therefore relatively low sentence. 
The following convictions are reported by Bulgaria: In the case against Veselin and Hristo Danov 19 
convictions had been obtained. Veselin Danov had been convicted to 3 years in prison, Hristo Danov 
had  been  convicted  to  1  year  in  prison,  both  following  plea-bargaining  with  the  Prosecution,  13 
members of this criminal group had been convicted to sentences between 1 and 3 years. In addition, the 
leader of the group, Ivan Slavkov and 4 other members were indicted. Altogether, 12 sentences were 
below  the  legal  minimum  (expedited  procedure)  and  7  above  the  legal  minimum.  In  the  case  against 
Dimitar  Jhelyazkov  ("Mityo  Ochite")  convictions  had  been  achieved  against  17  persons,  whereas 
Dimitar Jhelyazkov had been sentenced to 4 years and 6 months, 16 other group members to sentences 
between 1 and 5 years. In this case, altogether 12 sentences were below the legal minimum (expedited 
procedure) and 5 above the legal minimum. General data provided for the whole of Bulgaria suggests 
an overall three-fold increase in convictions since 2006. In 2008, 183 convictions for membership in an 
organised crime group and 345 indictments had been registered. Up to 2006 there were no convictions, 
in 2006, there were 28 convictions, in 2007 52 prison sentences and 11 acquittals. A qualitative analysis 
of the general data provided was not possible. 
Decision 34 of 10 March 2009. 

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evasion  or  other  crimes  which  are  easier  to  prove  than  money  laundering.  The  systematic 
prosecution of money laundering, independent of the predicate crime should be promoted as 
best practice in Bulgaria as it is supported by jurisprudence of the Supreme Court. 

Progress  achieved  by  the  Commission  for  the  forfeiture  of  criminal  assets  (CEPACA) 
improved  significantly  since  mid  2008.  Over  130  requests  of  CEPACA  for  freezing  assets 
have been followed by courts and 75 motivated proposals of CEPACA for seizing assets were 
sent to courts between 1 April 2008 and 7 May 2009. However, only three cases of forfeiture 
have been decided by courts in last instance.30 At the same time, the legal framework for asset 
forfeiture  and  for  financial  investigation  remains  inadequate:  a  timely  freezing  of  assets  in 
organised crime cases has an important deterrent effect. To achieve this effect, the freezing of 
assets  must  be  practiced  as  early  as  possible  and  as  complete  as  possible.  The  current  legal 
framework and judicial practice in Bulgaria satisfies neither: too few assets are frozen and too 
late.  Although,  the  applicable  legal  framework  seems  to  allow  the  freezing  of  assets  at  the 
time when an official investigation e.g. into money laundering is opened, freezing seems to be 
practiced only several months into the pre-trial phase or at the time of indictment. As a result, 
it looses most of its operational effect. In addition, legal restrictions do not allow the freezing 
of  assets  of  legally  not  related  persons  (e.g.  employees,  friends,  business  partners)  and  of 
family members if the latter can proof that they have purchased the assets. At the same time, 
criminals channel funds preferably through such channels. Legal amendments to improve the 
efficiency of freezing and confiscation of assets, tabled in November 2008, were rejected by a 
wide majority across all parties.31  

Well targeted ex-officio investigations into unexplained wealth can be a starting point for tax-
fraud, money laundering and other offences that are connected to organised crime. However, 
too few such investigations are carried out in Bulgaria. Generally, the prosecution only acts 
upon specific signals from administrative control authorities. However, few such signals are 
received as the administrative control authorities are not sufficiently pro-active or do not have 
enough capacity such as the National Audit Office.32 Bulgaria should facilitate investigations 

30 

31 

32 

Between  1  April  2008  and  7  May  2009,  CEPACA  opened  178  proceedings  for  identifying  property 
acquired  by  criminal  activity,  which  is  a  net  increase  of  83%  compared  to  97  cases  opened  between 
May  2007  and  May  2008.  During  the  same  period,  CEPACA  brought  130  reasoned  opinions  to  the 
court for freezing of assets of a total value of BGN 97.9 million, this represented an increase of 53% in 
value and 47% in numbers of cases. Concerning the confiscation of assets, 75 cases for BGN 62 million 
were opened since 1 April 2008 until 7 May 2009, which represented a 102% increase in numbers of 
cases  and  a  419%  increase  in  value  compared  to  the previous 12  months.  Courts  had decided  in first 
instance two confiscation cases in June 2008, in May 2009, 18 such cases had been decided, to date 3 
cases had become effective and assets of BGN 700.000 had been confiscated. In the two latest cases, a 
last instance court decision had established that confiscation could be carried out independently of the 
predicate offence. 
The main concerns of the Commission include the lack of own investigative powers and therefore the 
impossibility to open a case ex-officio, the restrictive definition of art. 4 ("related persons") where only 
assets transferred to spouses, relatives in ascending line and underage children can be seized, not those 
purchased by them (often with the money of the person under review). The Commission cannot freeze 
in  case  assets  have  been  transferred  to  not  legally  related  or  dependent  persons  (e.g.  friends, 
employees). Such restrictive regulation seriously undermines the efficiency of CEPACA and allows a 
person under review to relatively easily avoid forfeiture of assets. The minimum value of the property 
to open a case by CEPACA (around EUR 30 000) is very high for Bulgarian circumstances and does 
not correspond to the economic reality. The threshold should be lowered. In addition there are no clear 
legal guidelines as to the method which should be used to value the assets. Therefore, the defendants 
often challenge the value of assets, forcing CEPACA to request for costly external expertise. 
In  one  particular  case  (“Tycoon”),  the  prosecution  had  however  launched  investigations  into 
unexplained  wealth  on  the  basis  of  a  newspaper  report  of  110  Bentley  cars  registered  in  BG.  On  the 

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into unexplained wealth by a legal requirement to register active or passive loans in the tax 
declaration. 

The  reporting  of  suspicious  financial  transactions  by  the  Financial  Intelligence  Department 
(FID)  of  SANS,  the  former  independent  Financial  Intelligence  Unit  under  the  Ministry  of 
Finance, has established a satisfactory track record. Most banks and non-banking institutions 
comply with the reporting requirement. Cash transactions are still considered as carrying the 
highest  risk  of  money  laundering  and  organised  crime,  in  particular  in  real-estate  transfers. 
With  the  merger  into  SANS,  the  FID  has  lost  its  capacity  for  on  the  spot  checks.  This 
important legal loophole should be closed urgently. 

On  a  general  level,  the  weaknesses  in  judicial  practice  both  on  pre-trial  and  on  trial  stage 
continue  and  important  cases  remain  delayed  or  are  suspended.  Weaknesses  with  particular 
relevance  for  the  prosecution  of  organised  crime  cases  at  pre-trial  stage  relate  to  the 
admissibility  of  evidence,  the  effective  protection  of  witnesses  and  the  need  for  more 
specialised equipment and skills. On trial stage, the weaknesses of judicial practice relate to 
long delays of cases on formal grounds, the reasons invoked by defendants are clearly abusive 
but still justifiable within the Penal Procedure Code.33 

The reform of law enforcement authorities for serious crime has not yet been consolidated. As 
discussed under benchmark 4, the full capacity of the newly formed criminal police and of the 
new police investigation service has not yet been reached. Legal contradictions in the mandate 
of  SANS  persist  and  overlaps  in  the  division  of  competence  between  SANS  and  police 
remain. Member States report continuous weaknesses in the cooperation with Bulgarian law 
enforcement authorities such as e.g. on confidentiality of investigations and on assistance in 
cases  involving  influential  persons.  To  date,  the  reform  of  law  enforcement  is  ongoing  and 
has not yet lead to higher efficiency of the investigative and pre-trial phase. 

33 

basis of registration data provided by the road authority, raids had been carried out in a suburb of Sofia 
and as a result 10 cases on money laundering had been started. 
Several important cases were suspended and defendants were released as they signed up as candidates 
for the parliamentary elections of 5 July and remained in freedom also after they had been unsuccessful 
in the elections. 

EN 

16 

   EN