2 January 2018 | 16:04

MOTIVES For returning for reconsideration to the National Assembly of the Anti-Corruption and Forfeiture of Illegally Acquired Assets Act passed by the 44th National Assembly on 20 December 2017

Esteemed Assembly Deputies,

Corruption is a negative phenomenon which has multilateral dimensions.

In its manifest forms, corruption helps individual agents promote their private interests and gain control over the basic levers of state governance in the legislative, executive and judicial branches of power. They thus gain considerable impact on decision making to their own benefit by resorting to illegal and often covert means of exerting pressure and influence. Corruption restricts fundamental human rights and freedoms, erodes public trust in the state, hinders economic development and investments and depletes national wealth.  Due to the complex character of corruption as a social phenomenon, the preamble of the UN Convention Against Corruption explicitly states that, in order to ensure an efficient prevention of and fight against corruption, it is mandatory that a comprehensive and multidisciplinary approach be adopted. Therefore I have more than once called for taking comprehensive measures pertaining to uncovering, breaking up and investigating corruption schemes.

By passing each and every law, the Assembly deputies adopt a regulation to address the problems existing in society. The same holds true for the Anti-corruption and Forfeiture of Illegally Acquired Assets Act (ACFIAAA) adopted on 20 December 2017, which is expected to be an appropriate legal tool to more effectively counteract corruption.  I positively assess the fact that when this law was drafted, the procedures for holding a public debate on the bill in compliance with the Law on Regulatory Acts were followed.   Yet I think that the adopted law fails to establish an adequate regulatory framework to fight corruption, but instead aggravates the fight against corruption. My reasons for thinking so are the following:

The legal provisions fail to fulfill the ambition to create a legal code for counteracting corruption or identify “the measures for counteracting corruption” in article 1, item 1. As it becomes evident in article 3, paragraph 2, counteracting corruption is restricted to the legal measures that can be implemented only by the Commission for counteracting corruption and forfeiture of illegally acquired assets (the Commission).  A lot of bodies and units that perform functions in the sphere of counteracting corruption remain outside the scope of the law. Such authorities are the inspectorates under the Law on Administration, which under § 1, item 6 of the supplementary provisions perform administrative control with the aim to prevent corruption, the inspectorate at the Supreme Judicial Council, the body in charge of conducting checks for decency and conflict of interest (article 132a, paragraph 6 of the Constitution), the Public Procurement Agency, the Agency for State Financial Inspection. The same approach of limiting the scope and restricting the committed authorities and units has been applied with respect to prevention as well (art. 30-33).  Thus the law increases the fragmentation and vagueness regarding the overall institutional framework and renders unattainable the goal of efficiently counteracting corruption, declared in article 2, item 1.   

I deem it appropriate to unite the functions of the Commission for Prevention and Ascertainment of Conflict of Interest, the Center for Prevention and Counteracting Corruption and Organized Crime at the Council of Ministers (BORKOR) and the unit at the National Audit Office, in charge of the repealed law on making public the property of individuals holding top positions in government.  The merger of these institutions within in a newly established independent anti-corruption body has been envisaged in the National Strategy for Prevention and Counteracting Corruption in the Republic of Bulgaria 2015-2020.

Another controversial legal provision pertains to the commission performing the functions related to the forfeiture of the illegally acquired assets, considering that social relations in the establishment of conflict of interest and civil confiscation are different in nature. This difference finds expression in the different scope with regard to the persons – the provisions under chapters five, eight and nine apply to those holding senior positions, while the provisions for forfeiture of illegally acquired assets apply to a far wider range of individuals, including those charged with committing crimes under article 108, paragraph1. The legal proceedings pertaining to the conflict of interest and the forfeiture of illegally acquired assets have very little in common in terms of their subject matter, the grounds for their institution, evidence gathering, time limits, the content of the final administrative acts and the consequences of their enforcement. Their principally different nature is clear from the rules regulating the legal proceedings – the Administrative-procedural Code applies to the cases of conflict of interest whereas the Civil Procedure Code is applied to the cases involving the forfeiture of illegally acquired assets.

The case for uniting the two matters, given that the emphasis is on the forfeiture of corruption-based illegally acquired assets, is not substantiated in article 108, paragraph 1. This article addresses crimes related to organized crime, murders, kidnappings, human trafficking, prostitution and drugs and only a small portion addresses corruption-related crimes. This means that with regard to other corruption crimes that are not covered by article 108, paragraph 1, the legal proceedings related to the forfeiture of illegally acquired assets will not apply. For instance, under this law assets will not be confiscated for essential corruption crimes  - for a person who receives a gift or other material benefit in order to give information from which considerable damage has ensued or may ensue for the economy  (article 224 of the Criminal Code), for a person who for work done or service rendered receives an undue material benefit (article 225b of the CC), also for people who have a possible corruption incentive – for an official who makes use of budgetary funds or funds with special allocation for purposes other than the ones for which the funds had been allocated (article 254a of the CC),  for bodies of state authority who frustrate proceedings (article 288 of the CC), a body of authority who fails to enforce an effective conviction (art. 295 of the CC). It is inexplicable why the crimes listed under in article 108, paragraph 1 exclude the cases of receiving articles subject to special regime (article 215, paragraph 2, item 2 of the CC), theft, if the theft has been perpetrated by an official involved in abuse of office (article 195, paragraph 1, item 6 of the CC), and above all for grave embezzlement under art. 195, par. 2 of the Criminal Code. Hence the conclusion should be drawn that the corpus delicti under article 108, paragraph 1 of the ACFIAAA has been based on a lot of eclectically applied criteria that do not meet the goals of the adopted law and fail to take into account the connection between the peculiarities of the individual corpus delicti and the cases addressed by this legal act. All this comes to show that the mechanistic uniting of different in nature matters is ill-grounded and may thwart the efficient fight against corruption.

The law rests on the assumption that the problem of the inefficient counteraction of corruption may be resolved by taking institutional measures by establishing “a single anti-corruption body.”  In principle, this task cannot possibly be performed given the powers of the Inspectorate at the Supreme Judicial Council by virtue of article 132a, paragraph 6 of the Constitution, but also considering the large number of bodies with the powers to identify the cases of conflict of interest, which are established by virtue of § 2, paragraph 8 of the adopted law. I do not call into question the constitutionally-grounded powers of the National Assembly to set up state bodies by virtue of law. However, I think that the law makers' decision to set up a single body has not been made on the basis of legal logic – in line with the matter subject to regulation. Moreover, the merger of such a large number of different functions and the time-consuming organizational restructuring and adoption of  secondary legislation, create the risk of achieving worse results than those produced so far by the activity of the “merged” authorities and units.

The approach adopted by the law makers to establish a public procedure related to specifying the Chair, deputy-Chair and members of the Commission, should be given a positive assessment. Nevertheless I think that some of the provisions in Chapter Two of ACFIAAA are controversial.

Article 8, paragraphs 3 and 4 do not contain a sufficient number of guarantees about the professional competence of the deputy-chair and members of the Commission.  The required five-year length of service is smaller than the length of service required for the chief secretary and directors of directorates in the administration of the hitherto existing Commission for the Forfeiture of Illegally Acquired Assets. Moreover, the commission members are not required to have a university degree in the respective professional field, and this would in turn create the risk of electing members that have no knowledge of the Commission’s range of competences. Justifiably this raises doubts that the election will be based on political affiliation rather than on the “high professional qualities”. The precise regulatory framework is extremely important given the different nature of the cases on which the Commission will issue a ruling  and the fact that, under article 13, paragraph 2, the voting majority in decision making will be formed namely by these members. What is perplexing is that the law does not envisage checking the Commission members’ decency, even though there is such a check of its officials. Furthermore, the law does not stipulate that if a member fails to meet the criteria under such a check, they will be relieved of their duties. Thus the high moral qualities, required under article 8, paragraphs 2-4, remain in the realm of wishful thinking, considering that there is no mechanism to test them.  

I deem it inappropriate that the commission deputy-chair and members should be elected upon the Chair's proposal, considering that the membership will thus be dominated by the majority in Parliament, not by all Assembly deputies. Moreover, the absence of specific details in article 17, paragraph 2 pertaining to the precise information that commission members should provide when they appear before the National Assembly poses the danger of Assembly deputies’ interference in current checks conducted by the Commission. This creates the risk of exerting political influence on the Commission’s activities, an option which has not been ruled out in the law.

Under article 13, paragraph 5 some of the Commission’s decisions cannot be appealed. I deem as unjustified the lack of judicial control over decisions in case the Commission refuses to institute proceedings for forfeiture of illegally acquired assets. The lack of a legal option to appeal against wrongful decisions trims the powers of the Prosecutor’s Office, granted under article 127, item 5 of the Constitution, to ensure that legality is observed by acting for the rescission of illegal actions. In this respect the regulatory framework fails to provide the necessary guarantees for ensuring legality of the Commission’s actions and for defending the public interest, which is undoubtedly a legitimate goal.

Given the nature of the legal proceedings for the forfeiture of illegally acquired assets, it is reasonable to expect that the affected persons will refer the cases to the European Court of Human Rights. This brings forth the issue of libel in the cases when Bulgaria has been sued and should pay for the damage incurred by illegal acts, actions or lack of actions of bodies or officials. By virtue of article 20, the liability of the commission members and bodies under article 16, paragraph 1 and 2 is reduced and covers only the damage that has been caused by committing a crime of general nature.  In comparison, the Commission is fully liable, and this remains unchanged, for actions and lack of actions, recognized as crimes by a court ruling under article 9, paragraph 2 of the Law on the Liability for Damage Incurred by the State and Municipalities. It is my opinion that the law makers’willingness to reduce the Commission’s liability is inadmissible. It is unacceptable that the offences made when the authorities under ACFIAAA abuse their powers should be paid by the Bulgarian taxpayers, and not by the alleged officials.

Therefore I think that the legal framework regulating the setting up of the Commission and the status of its members does not provide convincing guarantees of independence, impartiality and responsibility. So far such a guarantee has been the balance between the authorities envisaged by the Constitution that determine its membership.

Corruption cannot be successfully counteracted without the participation of civil society, which includes alerting for cases of corruption. According to the provisions of Chapter 6, alerts for corruption or conflict of interest regarding a person holding a senior public position should be submitted to the Commission. Yet the Law on Administration has not been amended, and article 46a, paragraph 2, item 5 in this law states that the Chief Inspectorate of the Council of Ministers is entitled to consider the alerts submitted for the cases of corruption of the authorities in the executive branch of government. The latter are undoubtedly persons who hold senior public positions under article 6, paragraph 1 of ACFIAAA.  Hence it remains unclear which authority is competent to consider the alerts for corruption and conflict of interest. Submitting alerts always poses risks of a repressive reaction and therefore protecting whistleblowers is particularly important.  The adopted law does not rule out the possibility for taking adverse actions against the whistleblower. Article 51 envisages the whistleblower's right to claim compensation for the damage they have suffered in the event of dismissal, prosecution or psychic or physical harassment after submitting alerts. Thus Bulgaria distances itself from the commitments the country has taken on as a side to the Civil Law Convention on Corruption (the Council of Europe).  Under article 9 of this Convention, national legislation should provide for the “appropriate protection against any unjustified sanction for employees who have reasonable grounds to suspect corruption and who report in good faith their suspicion to responsible persons or authorities.”

A step in the right direction in the cases of conflict of interest is the unified procedure for ascertainment and sanctioning, stipulated in article 74, paragraph 2 of the adopted law. Nevertheless a major drawback of the regulatory framework is the decentralized ascertainment of conflict of interest. Under § 2, paragraph 8 of the supplemental provisions, instead of entrusting the Commission as a single body with the ascertainment of conflict of interest, a numerous group of bodies are entrusted with these tasks. As a result, bodies set up solely on the basis of a political affiliation, such as the municipal councils and ministers, will ascertain conflict of interest for persons under § 2, paragraph 1. This creates the risks of exposing them to political pressure or to the option for political protection. The decentralized model for the ascertainment of conflict of interest does not guarantee political neutrality and impartiality of the persons involved and clearly runs counter to the principles under article 4, paragraph 1, item 1 and 9 of ACFIAAA. The need for special training envisaged in § 2, paragraph 5 that officials should undergo to perform their functions of ascertaining conflict of interest will inevitably lead to a continuous “zero” period in the implementation of this extremely important tool for counteracting corruption. It should be recalled that the decentralized ascertainment of conflict of interest was already “tested” and for a period of a mere two years – from 1 January 2009 to 1 January 2011 – it proved to be inefficient, which required that the Commission for prevention and ascertainment of conflict of interest be set up as a centralized body. The inefficiency of this refuted legal approach stems from the connections between the persons who ascertain conflict of interest and the persons who are in a situation of conflict of interest, and from the fact that court proceedings cannot be instituted in a competent and lawful manner in all administrations, and that there are different practices related to identical cases both in administrative and court proceedings. All of the abovementioned drawbacks will be repeated when the provisions for conflict of interest included in ACFIAAA come into effect.

The approach adopted in § 2, paragraph 1 regarding the regulatory framework  for declaring conflict of interest and the administrative-criminal liability which should be “applied respectively” also for the persons who do not hold senior public positions, creates serious problems.  The definition of conflict of interest under article 52 of ACFIAAA creates the impression that the case where a person does not hold a senior public position, but has a private interest that may impact the impartiality and objectivity of the performance of their professional duties, does not comprise a conflict of interest. I think that given the rampant cases of conflict of interest, the envisaged in article 67 of ACFIAAA restriction whereby persons for whom a conflict of interest has been ascertained cannot hold senior public positions for a period of merely one year will not produce a restraining effect.  The same holds for the one-year period under article 38, paragraph 1, item 4 regarding the filing of a property and interests declaration after dismissal from a senior public position. Given the abovementioned, I think that the regulation will not improve, but will rather further hamper the ascertainment of conflict of interest.

Chapter 9 “Counteracting corruption by uncovering acts of persons holding senior public positions” is one of the examples of the conceptual drawbacks of the adopted law.  Even though the chapter's name suggests something else, most of its provisions are dedicated to the status of the authorities, and not to their activities. According to article 15, paragraph 3, their status is specified in this law, yet essential aspects are regulated by secondary legislation, moreover not in one, but in two of the Commission’s rules and regulations - by article 23 and the ordinance under article 85, paragraph 2. What also creates a problem is the way in which the bodies under article 16, paragraph 2 are defined as security service within the meaning of § 1, item 1 of the Supplemental provisions to the Law for the Protection of Classified Information. The director and inspectors in the directorate, not the directorate as a structure, are declared to be such. This means that the addressee of the powers under article 11, paragraph 1, item 1 of the Law on Protection of Classified Information are the director and the inspectors, that is, they will act as the examining body for themselves. This imprecision has been transferred also to the regulation of the activity under chapter 9. The regulations are full of concepts with unclear meaning – “corruption acts” (article 82, paragraph. 1), “offences and crimes related to corruption acts” (article 102, paragraph 1, item 1), “actions or lack of actions which uncover corruption acts” (article 102, paragraph 1, item 2), “threat of corruption” (article 103, item 2). Undoubtedly the law-governed state principle envisaged in article 4, par. 1 of the Constitution includes the requirement that the legal concepts should be well defined in terms of content, so that the powers of the competent bodies are fixed in law. The lack of clarity about the content of the concepts employed in Chapter 9 provides for multiple interpretations and possible repressive measures and creates the risk of using them to exert pressure on a large number of people, including those who hold key positions in government.  

The option for the use special surveillance means, provided in article 104, paragraph 3, without specifying in what cases they will be applied, raises the question of the proportionality of their use. The possibility is not explicitly ruled out whereby special surveillance means may be used in cases that do not comprise serious crimes. What should be taken into account is the fact that the use of special surveillance suggests temporary restriction of personal privacy and property, and also of the secrecy of correspondence and other messages. These are fundamental rights, guaranteed under article 32, 33 and 34 of Bulgaria’s Constitution and under article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms.  To ensure that the interference in these rights is proportional, in compliance with article 8, paragraph 2 of the Convention, the concrete restrictions should be guaranteed within a coordinated and predictable legislative framework.  What raises concern with respect to the security and the legal protection of the rights of people who are neither defendants nor face charges, is that essential issues pertaining to the methods, means and tools for carrying out search operations are not the subject of primary but of secondary legislation – they are regulated in decrees and instructions adopted by the Commission (article 102, paragraph 2 and article 104, paragraph 2).

I do not call into question the goal defined in article 2, item 3 of the adopted law, namely to protect the public interests by ruling out the possibilities to illegally acquire assets, considering that the latter is particularly detrimental to democratic societies, national economies and law and order.  At the same time, some of the provisions of ACFIAAA do not contain sufficient guarantees for their objective and impartial enforcement, which is very important in the proceedings related to the forfeiture of illegally acquired assets since a constitutionally protected right, such as the right to ownership, is seriously infringed. One of the two prerequisites for instituting court proceedings on imposing securitization measures and forfeiting illegally acquired assets involves establishing substantial discrepancy in the assets. Given that the property includes different components (§ 1, item 4) and that correctly defining its price determines whether the forfeiture proceedings will be instituted or not, the legal framework should clearly specify the methods used to define the market price of the assets, examples of which exist in legislation. This will be a sufficient guarantee that in all cases the Commission will apply the same methods to define the market price of assets, adopting the approach used in other laws.

A form of restoring the violated social justice is to use the forfeited illegally acquired assets in the public interest or to achieve social goals. To this end, the assets should be adequately managed so that they do not lose their economic price. There are no essential amendments in the adopted law compared to the currently existing model of handling forfeited assets. The management of the forfeited assets is within the powers of an interdepartmental council, which as a collective body will find it difficult to act in a prompt and operational manner. A considerable omission is the lack of a provision regulating the management of forfeited assets in some some specific cases, such as in the case of a business enterprise the price of which can be considerably reduced if badly managed, also if securities are forfeited. It should be noted that the rule whereby at least 30 percent of the price of the forfeited assets should be used to achieve social goals existed since 2016 in the regulatory framework so far before it was revoked by virtue of the last amendments of the Law on Public Finances (SG, No. 91, 2017). Currently an analogical rule is included in article168, paragraph 5, which indicates the unstable legislative approach to that matter.

Counteracting corruption cannot be restricted only to activities related to filing a property and interest declaration, to checking the property status, ascertainment of conflict of interest and forfeiting assets. Although these measures are important and have been applied so far, they are not sufficient. Moreover, the majority of the provisions in the new law repeats the existing rules, while § 7, par. 4 and 5 provides for previous members of the Commission for Forfeiture of Illegally Acquired Assets and the Commission for Prevention and Ascertainment of Conflict of Interest to be on the new Commission.   Public expectations in Bulgaria are that the anti-corruption fight will yield prompt and efficient results. The most convincing proof of the successful efforts to fight corruption will be increased crime solvency and the timely launch of efficient criminal proceedings against perpetrators.

Esteemed Assembly deputies,

Guided by the above-stated motives, which expose a considerable discrepancy between the declared goal of the law - to efficiently counteract corruption - and the fundamental principles enshrined in the Constitution and international treaties, to which the Republic of Bulgaria is a party, on the grounds of article 101, paragraph 1 of the Bulgarian Constitution, I return for reconsideration to parliament the Anti-Corruption and Forfeiture of Illegally Acquired Assets Act passed by the 44th National Assembly on 20 December 2017 and I contest it on merit and in its entirety.

Rumen Radev

President of the Republic of Bulgaria