INTERIM REPORT FROM THE EUROPEAN COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL On Progress in Bulgaria under the Co-operation and Verification Mechanism
Date: 2011-02-18
Institutions: European Commission
Subjects: Bulgaria, EU control, cooperation policy, corruption, exchange of information, judicial reform, rule of law

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EUROPEAN COMMISSION 

Brussels, 18.2.2011 
COM(2011) 81 final 

INTERIM REPORT FROM THE EUROPEAN COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

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

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INTERIM REPORT FROM THE EUROPEAN COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

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

1. 

INTRODUCTION 

When Bulgaria entered the EU on 1 January 2007, a Co-operation and Verification 
Mechanism  (hereafter  CVM)1  was  set  up  to  help  Bulgaria  remedy  shortcomings  in 
the areas of judicial reform, the fight against corruption and organised crime and to 
monitor progress in these areas through periodical reports. 

The  present  report  is  an  interim  report  providing  a  technical  update  on  significant 
developments  having  occurred  during  the  last  six  months  in  Bulgaria  under  the 
CVM. It focuses on Bulgaria's response to the Commission's recommendations and 
does  not  contain  a  full  assessment  on  progress  achieved.  The  update  is  limited  to 
measures that have either been completed or where their finalisation can be expected 
shortly. 

The  last  progress  report  adopted  by  the  Commission  on  20  July  2010  and  its 
recommendations  remain  the  point  of  reference  for  the  assessment  of  progress 
achieved against the benchmarks and the identification of the remaining challenges. 
The Commission will provide its next assessment in summer 2011. 

2. 

JUDICIAL  REFORM  AND  THE  FIGHT  AGAINST  CORRUPTION  AND  ORGANISED 
CRIME: SUMMARY OF DEVELOPMENTS  

Since  the  Commission's  last  report,  Bulgaria  continued  legal  reform  and  adopted 
important amendments to the Judicial Systems Act. These amendments provide the 
legal  basis  to  further  implement  the  judicial  reform  strategy,  to  strengthen  the 
accountability  and  management  powers  of  the  Supreme  Judicial  Council  and  to 
improve the system of appointments, professional training, appraisal and promotions 
in  the  judiciary.  During  this  period,  the  Supreme  Judicial  Council  has  developed  a 
better disciplinary track record. In one important appointment decision however, the 
Council  did  not  demonstrate  the  necessary  commitment  to  accountability  and 
transparency. 

In the last six months, Bulgaria decided to create a specialised court for cases related 
to  organised  crime.  The  structural  reform  of  the  customs  agency  continued  and  an 
ambitious  anti-corruption  project  started.  Bulgaria  also  adopted  amendments  to 
strengthen the law on Conflict of Interest which establishes an independent body to 
identify and sanction conflict of interest in a pro-active manner. 

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Commission  Decision  2006/929/EC  of  13  December  2006  establishing  a  mechanism  for  cooperation 
and verification of progress in Bulgaria to address specific benchmarks in the areas of judicial reform 
and the fight against corruption and organised crime (OJ L 354, 14.12.2006, p. 58). 

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During this period, courts registered an increased number of indictments and verdicts 
in high-level corruption cases.  

3. 

OUTLOOK 

Since the Commission's last assessment, Bulgaria has maintained its commitment to 
continue to implement its judicial reform strategy through a detailed action plan. 

In order to maintain its momentum of reform, Bulgaria should continue to focus on 
the  national  judicial  reform  strategy  and  pursue  a  thorough  reform  of  the  judicial 
system and of the police. This requires steps to further improve judicial practice and 
a  continued  improvement  of  the  way  the  judiciary,  police  and  other  investigative 
bodies are structured, managed and cooperate. 

Until the Commission's next assessment in summer 2011, Bulgaria should also focus 
on  the  adoption  of  an  effective  law  on  asset  forfeiture,  the  establishment  of  an 
authority  to  identify  and  sanction  conflicts  of  interest  and  on  the  track  record  in 
corruption cases and organised crime. 

The Commission will continue to support Bulgaria in this endeavour and provide its 
next in-depth assessment of progress by summer this year. 

4. 

UPDATE ON THE STATE OF PLAY 

Reform of the Judiciary 

On  22  December  2010,  in  response  to  recommendations  by  the  Commission,  the 
Bulgarian  Parliament  adopted  amendments  to  the  Judicial  System  Act  (JSA)  which 
improve  internal  management  within  the  judiciary  and  strengthen  the  role  of  the 
Supreme  Judicial  Council  (SJC).2  The  amendments  propose  new  procedures  for 
appointments and appraisals, strengthen training and integrity and create new rights 
and obligations for the Superior Judicial Council to appraise workload and reallocate 
staff.  The  amendments  introduce  a  functional  separation  between  appraisals  of 
prosecutors  and  judges  and  a  decentralised  appraisal  system.  Integrity  will  be 
considered in appraisals throughout the magistrates' career. Oversight and guidelines 
by the Supreme Judicial Council as well as an active role of the administrative heads 
will play an important role to achieve a uniform application of appraisal criteria. The 
SJC  received  supplementary  powers  in  evaluating  the  workload  of  courts,  deciding 
on  personnel  schemes  of  courts,  on  closing  down  and  opening  new  courts  and 
adjusting areas of jurisdiction. Specific provisions aim to enhance transparency and 
protect  against  conflict  of  interest  in  the  SJC's  decision-making  process.  The 
National  Institute  of  Justice  adopted  a  two-year  programme  for  training  of 
magistrates which is based on the priorities and the aims of Bulgaria's judicial reform 
strategy. 

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The amendments to the Judicial System Act entered into force on 4 January 2011.  

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Work on a new Penal Code, which is considered necessary for a thorough reform of 
penal  policy,  continued  with  a  consultation  of  stakeholders  on  the  draft  core 
provisions. The final draft of the new Penal Code is expected by end 2011.  

Further disciplinary sanctions were taken in the last six months against magistrates 
involved in important cases of trade in influence and corruption within the judiciary. 
In follow-up to a case regarding trade in influence within the judiciary, the Supreme 
Judicial Council decided to exclude from the judiciary another former member of the 
SJC. In a follow-up to another case regarding trade in influence in the acquisition of 
real-estate,  the  Supreme  Judicial  Council  decided  to  dismiss  the  chair  of  one 
Appellate  Court  for  'damaging  the  image  of  the  judiciary',  four  other  disciplinary 
cases  are  pending.  The  Prosecution  has  not  pursued  criminal  investigations  against 
any magistrate involved in these cases.  

As to the nomination of the Chair of the Supreme Administrative Court in November, 
public concerns were raised regarding the accountability and transparency of senior 
judicial appointments. The reform of appointments within the judiciary laid down in 
the  recent  amendments  to  the  Judicial  Systems  Act  requires  an  unequivocal 
commitment  by  the  Supreme  Judicial  Council  to  guarantee  the  independence  and 
quality of appointments. 

A systematic publication of court decisions has not yet been achieved. In some cases, 
the  delivery  of  motivations  for  court  decisions  has  seen  considerable  delays;  this 
applies in particular to important cases. 

A  provisional  version  of  the  Unified  Crime  Information  System  has  been 
implemented at the Supreme Cassation Prosecution Office. EU funds will be used to 
extend the system to cover all prosecutors’ offices, courts and police. 

The  Inspectorate  to  the  Supreme  Judicial  Council  continued  to  carry  out  thematic 
and scheduled inspections with a view to completing the review of the judicial bodies 
in  all  the  five  appellate  regions.  A  system  of  inspections,  recommendations  and 
follow-up  checks  has  been  set-up  and  close  coordination  between  the  inspectorate 
and  the  Supreme  Judicial  Council  in  disciplinary  matters  is  established.  An  overall 
disciplinary  effect  of  inspections  regarding  celerity,  transparency  and  alignment  of 
practice  is  reported.  A  more  targeted  contribution  of  the  inspectorate  to  address 
systematic  shortcomings  in  judicial  practice  in  particular  in  high-level  cases  and  to 
inform a structural reform of the judicial system remains to be implemented. 

Bulgaria took steps to address the Commission's recommendations regarding judicial 
practice,  such  as  training  and  the  publication  of  guidelines  and  best  practices.  In 
November,  an  NGO  presented  recommendations  following  an  analysis  of 
shortcomings in judicial practice in eighteen important cases. The Supreme Judicial 
Council introduced a requirement for heads of appeal courts to report on progress in 
cases  of  high  public  interest.  This  had  reportedly  led  to  improvements  in  the 
scheduling  of  court  hearings  and  in  the  summoning  of  witnesses.  In  addition,  the 
introduction of a new standard for medical certificates and the creation of a Medical 
Executive  Agency  have  reportedly  reduced  abuse  regarding  medical  certificates  in 
court. During 2011, the Supreme Cassation Prosecution Office intends to introduce a 
specific supervision scheme for cases of high public interest.  

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Fight against Organised Crime 

In the last six months, Bulgaria continued an active policy to tackle organised crime 
through police raids and arrests. These activities have lead as yet to few indictments.  

In December 2010 and January 2011, the Bulgarian Parliament adopted legislation to 
establish  a  specialised  criminal  court  and  a  special  prosecutor's  office  attached  in 
charge of organised crime cases, which is expected to be operational by August this 
year.3 These structures are designed to improve the celerity and consistency of cases 
related  to  organised  crime,  which  pose  particular  challenges  to  the  judicial  system. 
However, efforts need to be made across the judiciary to introduce specialisation and 
an  improvement  of  professional  practices,  in  particular  regarding  economic  and 
financial crime. The Commission has recommended in this area a closer cooperation 
between  the  judiciary,  administrative  bodies  and  police  and  to  strengthen  the 
capacity of joint teams.  

Bulgaria took steps to improve the efficiency of police investigation by merging the 
department of pre-trial proceedings with the criminal police department. During the 
last  six  months,  police  received  a  number  of  training  sessions  on  the  recent 
amendments to the Penal Procedure Code and the specific responsibilities of police 
at  pre-trial  stage.  However,  the  collection  and  administration  of  evidence  by  police 
requires further improvement. 

Since  the  Commission's  last  report,  Bulgaria  pursued  the  strengthening  of  the  legal 
framework  on  asset  forfeiture.  The  Draft  of  the  Illegal  Assets  Forfeiture  Act  was 
coordinated with the Venice Commission (the Council of Europe's advisory body on 
constitutional  matters).  It  is  important  that  the  final  version  of  the  new  law  while 
respecting  fundamental  rights,  allows  for  the  possibility  to  include  the  principle  of 
"non-conviction  based  confiscation"  as  well  as  for  the  follow-up  of  anonymous 
signals. The law should also transpose in an effective way the applicable EU acquis 
regarding  extended  confiscation.4  The  law  will  require  a  close  and  effective 
cooperation between the commission in charge of applying the law on forfeiture and 
other authorities, in particular the prosecution.  

Fight against Corruption 

In  the  past  six  months,  two  important  verdicts  and  several  indictments  have  been 
pronounced  in  cases  related  to  high-level  corruption.5  During  the  same  period, 
Bulgaria registered a number of acquittals regarding some emblematic cases of high 
level corruption, conflict of interest, fraud and organised crime which have all been 
appealed by the prosecution in the public interest.6

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Amendments were made to the Judicial System Act and to the Penal Procedure Code. 
Council Framework Decision 2005/212/JHA. 
Verdicts  in  first  instance  were  passed  against  a  former  director  at  the  National  Revenue  Agency  for 
malfeasance in office and against a businessman for embezzlement. A former Minister of Social Affairs 
and a former Minister of Health have been indicted respectively for embezzlement and prejudice to the 
state budget. 
In high-level cases involving fraud, corruption or conflict of interest were acquitted: a previous Minister 
of  Defence,  a  previous  Deputy  Minister  of  the  Interior,  a  previous  director  of  the  State  Fund  for 
Agriculture,  the  chairman  of  a  political  party  represented  in  Parliament.  One  acquittal  in  a  case 
involving conflict of interest has been confirmed in appeal by the Supreme Administrative Court. 

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The  recommendations  of  the  Commission  regarding  the  need  to  improve  judicial 
practice  remain  valid.  The  Commission  recommends  in  particular  to  apply  a 
comprehensive  and  pro-active  investigative  strategy  which  systematically  explores 
possible links between related cases, aspects of organised crime and possible links to 
administrative  authorities.  Given  the  importance  of  professional  economic  and 
financial  investigation  for  all  cases  related  to  high-level  corruption,  fraud  and 
organised  crime,  networks  of  specialised  prosecutors  and  judges  trained  in 
international  best  practices  should  be  created  in  cooperation  with  international 
experts.  

In response to a recommendation by the Commission, Bulgaria strengthened its law 
on  prevention  and  sanctioning  of  conflict  of  interest.  The  amendments  adopted  by 
Parliament in November foresee the creation of a body with a pro-active mandate to 
identify and sanction conflicts of interest at all levels of the administration. The law 
includes safeguards to ensure the independence of the new body, notably through a 
balanced  appointment  procedure.  The  legal  exclusion  to  follow-up  anonymous 
signals may weaken the new set-up. In this context it is important that the identity of 
whistle-blowers is protected in a credible way.  

The Bulgarian Customs Agency continued a comprehensive structural reform which 
had also involved a general assessment of staff following criteria of competence and 
integrity. There have been an important number of redundancies in this service. To 
fight  internal  corruption,  a  joint  inspectorate  with  the  Ministry  of  Finance  and  the 
National  Revenue  Agency  has  been  set  up.  Information  systems  and  intelligence 
between the National Revenue Agency and the Customs Agency are exchanged and 
joint  teams  continue  to  carry-out  checks.  It  is  important  that  the  reform  of  the 
customs  agency  continues  to  strengthen  the  independence  and  efficiency  of  its 
investigations.  Cooperation  with  police  services  and  the  prosecution  should  be 
further  strengthened.  In  this  context,  a  stronger  investigative  role  for  customs 
officials has been discussed. 

As part of the Strategy against Corruption and Organised Crime, Bulgaria started to 
implement  a  large  scale  anti-corruption  project  (BORKOR)  in  December.  With 
considerable investment in financial and human resources7, a new central unit will be 
set-up  by  mid  2011  with  the  task  of  increasing  transparency  and  addressing 
corruption  within  the  public  administration  at  all  levels.  The  new  body  will  not 
replace  existing  structures  set-up  to  prevent  and  sanction  corruption,  but  assess  the 
current  legal  and  institutional  environment  for  its  effectiveness  and  suggest 
improvements where necessary.  

In  response  to  the  Commission's  recommendations  regarding  improvements  to  the 
public  procurement  system,  Bulgaria  set  up  a  working  group  which  proposed 
amendments to the public procurement legislation to government in December. The 
concept  paper  presented  by  the  working  group  offers  a  number  of  proposals  to 
simplify  the  legal  and  procedural  framework  as  well  as  to  improve  the  remedies 
mechanisms.  

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In 2011, Bulgaria has made available EUR 4 million for this project. The central unit in charge of the 
Borkor project will employ 40 permanent staff.  

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investigative  means.  The  competent  authorities  have 

Following  the  publication  of  wiretapped  recordings  in  the  beginning  of  the  year, 
some public concerns were raised regarding the application and control of the use of 
special 
launched  an 
investigation, currently under way. Under Bulgarian law, special investigative means 
are an important investigative tool and may only be used in connection with serious 
crime and upon the authorisation of a judge. The rules provide for close cooperation 
between  services  to  ensure  that  the  results  of  wiretaps  are  immediately  reported  to 
the  prosecution  and  that  their  confidentiality  is  protected.  The  procedure  is 
furthermore supervised by a special Parliamentary sub-committee. It is important that 
Bulgaria ensures strict respect of the rule of law regarding the application of special 
investigative means. 

The  recommendations  of  reports  on  Bulgaria  adopted  by  GRECO  in  October 
regarding  the  criminalisation  of  corruption  and  regarding  the  financing  of  political 
parties and election campaigns should receive follow-up by Bulgaria. As regards the 
criminalisation  of  corruption,  the  report  recommends  strengthening  the  Bulgarian 
Penal Code in a number of areas. These include the criminalisation of corruption in 
the case of benefit for a third party or the acquiring of either material or non-material 
advantages  linked  to  corruption  and  the  reconsideration  of  the  exemption  from 
punishment in cases of active regret. 

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