NEWS

President Rumen Radev Imposes a Veto on the Amendments to the Act on the Administrative Regulation of Economic Activities Related to Oil and Petroleum Products

The Head of State, President Rumen Radev, has returned to the National Assembly for further deliberation provisions of the Act Amending and Supplementing the Act on the Administrative Regulation of Economic Activities Related to Oil and Petroleum Products, adopted on 7 November of this year. The President considers that the amendments undermine the rule of law in the Republic of Bulgaria, are in contradiction with fundamental European legal norms, and generate a significant risk to public finances.

The President recalls that the institution of the Special Commercial Administrator (SCA) was introduced by an Act adopted in 2023, which also established a number of safeguards against potential abuse and arbitrariness — safeguards of the kind already adopted in other European states faced with similar circumstances, with the objective of minimising the risk of subsequent financial claims against the State.

With the amendments adopted on 7 November of this year, these safeguards are repealed without any stated justification. Furthermore, the Act introduces a number of new provisions: the SCA is granted unlimited powers to dispose of shares and equity interests in the capital of affected enterprises, to sell their property, while the contracts concluded by the SCA and the acts of the state authorities under Chapter Four “a” of the Act are placed beyond the scope of administrative and judicial review.

The scope of application of the Act is unjustifiably and perilously broadened, as following the amendments, an SCA may be appointed in an arbitrary number of enterprises outside the country’s critical infrastructure. Considered in their entirety, the amendments to the Act of 7 November of this year in effect provide for an indirect nationalisation of the assets of the affected enterprises and for the possibility of their subsequent transfer to an indeterminate circle of third parties.

In this way, the National Assembly opens wide the door to arbitrariness and abuse. Fundamental constitutional principles are infringed, including the right to defence, the principle of judicial control over administrative acts, the inviolability of private property, the freedom of economic initiative, and the protection of investments — which encompasses the economic activity of both Bulgarian and foreign natural and legal persons. Moreover, the Act introduces provisions that are incompatible with established international and European legal norms.

Should the Parliament consider it expedient, in certain circumstances, that enterprises managed by an SCA be nationalised, such a process must take place only on the basis of grounds expressly provided for in law and with mechanisms ensuring the protection of the public interest.

These legislative amendments undermine the rule of law, inflict reputational damage upon the State, and deteriorate the investment climate. They also create a high risk to public finances, as legal actions may be brought against the State with claims for substantial pecuniary compensation.