Bulgaria: New Confiscation Law Sparks Mixed Reactions

By Svetla Dimitrova

Despite its declared commitment to combating organised crime and corruption, Bulgaria has often been criticised by its European peers over the past five years for its failure to achieve tangible results in either field.

The country’s progress in dealing with shortcomings in the areas of justice and home affairs continues to be monitored by Brussels under the so-called Co-operation and Verification Mechanism (CVM) set up specifically for Bulgaria and Romania on their EU entry in 2007.

In its interim report under that mechanism, the European Commission (EC) noted in February that Sofia had made some positive steps since the middle of 2011, but that it still needs to address a number of lingering issues.

One specific measure it recommended was for Bulgaria to adopt a comprehensive law on the forfeiture of illegally obtained assets, backed up with strong institutions.

Ahead of the EC’s annual CVM report this summer, the Bulgarian parliament passed new, tougher legislation on May 3rd, introducing a regime of non-conviction based confiscation of property acquired through illegal activities.

Тhe law is expected to enter into force in November. A new panel is then to be appointed within the following two months, which will replace the current Commission for the Identification and Forfeiture of Criminal Assets (CEPACA).

According to the Serious and Organised Crime Threat Assessment (SOCTA) issued by the Centre for the Study of Democracy (CSD), the turnover of illegal markets in Bulgaria in 2010 was more than 200 times higher.

“The 12 most significant organised criminal activities generated around 1.8 billion euros in annual turnover, which is equivalent to 4.7% of the country’s GDP,” the report, conducted in co-operation with the interior ministry, the National Revenue Agency and a number of Western experts, said.

According to CEPACA’s annual reports for 2010 and 2011, the amount of assets seized under the effective law during that two-year period totalled less than 8.3m euros.

Neighbouring Serbia has shown much more impressive results in this field. In the three years since its Law on Seizure and Confiscation of the Proceeds from Crime entered into force, the country has confiscated assets worth 350m euros, Slobodan Homen, state secretary with the Serbian Justice Ministry, said in mid-March. According to him, the amount was set to reach 500m euros soon.

A few days earlier, the EC proposed new tougher legislative rules, providing for non-conviction based confiscation of criminal assets.

Speaking ahead of the final adoption of Bulgaria’s new legislation, the country’s justice minister, Diana Kovaceva, said that EU and US diplomats in Sofia had expressed their full support for the measure.

“The new law will sever the possibility for organised crime to finance itself from its own illegal activity,” she told lawmakers during the heated debate on the bill.

The legislation will allow the new commission to investigate people charged with participation in organised crime, involvement in terrorism, human trafficking, abduction, pimping, extortion, and a host of other offences, including money laundering and tax evasion.

The commission must complete the probe within a year and a half. If a discrepancy of more than 125,000 euros is found between an individual’s declared income and wealth acquired over the previous 15 years, the panel can ask the court to confiscate all property above that threshold.

The adoption of the law sparked mixed reactions among Bulgarians, however.

“I hope that all those crooks that have amassed wealth through corruption and stealing in the past 20 years will finally be made to pay for this. Justice must be restored,” Sofia resident Plamen Yordanov, 60, told SETimes.

The opposition Bulgarian Socialist Party and the Movement for Rights and Freedoms claimed that the law could be used as a tool against political opponents by those in power and have indicated that they may challenge it before the Constitutional Court. Some lawyers and NGOs viewed certain provisions of the law as setting the stage for possible violations of people’s rights.

Borislav Tsekov, World Jurist Association’s Bulgarian president, said he had no doubts that the goal of the law was just and legitimate. But he had concerns about some of its provisions.

“What is disturbing is this extremely long period given for the investigation,” Tsekov, also the head of the Sofia-based Institute of Modern Politics think tank, told SETimes.

“While the commission will have a year and a half to conduct the probe, the person under investigation will then be given just a month to respond. Secondly, the envisioned 15-year retroactive application of the law could open the door for arbitrary decisions on the part of the commission, given that Bulgarians are not legally obliged to keep any documental evidence of property deals, including receipts, invoices and the like.”

Tihomir Bezlov, senior analyst at the CSD and one of the authors of the SOCTA report, said that while it may not be perfect, Bulgaria needed a new confiscation law and the adopted legislation contains some modern elements.

According to him, there were two groups of critics.

“On the one hand are the lawyers defending human rights, and I agree with them that such laws may pose some risks,” Bezlov told SETimes.

The other group, he said, included some of the lawyers usually associated with Bulgaria’s biggest oligarchs.

“They’re whining that the 125,000 euros threshold poses a huge threat for people in Bulgaria,” so that any ordinary Bulgarian could be hit by the law. “Sounds more than ironic to me,” Bezlov said.