site.btaBill Concerning Special Commercial Administrator's Activity Adopted by National Assembly at First Reading

The National Assembly passed at first reading on Wednesday amendments to the Act on Administrative Regulation of Economic Activities Associated with Oil and Petroleum Products, concerning the activities of the special commercial administrator of critical infrastructure facilities.

The amendments were proposed by Progressive Bulgaria MP Stefan Svilenov and a group of MPs on May 18 and were approved with 157 votes in favour, 1 against, and 21 abstentions. 

The amendments aim to ensure the effective exercise of the supervisory powers assigned by law to the Minister of Economy, Investment, and Industry over critical infrastructure facilities, in particular the preliminary administrative control over the actions of the special commercial administrator (SCA), as well as the regulation of judicial oversight over transactions with the most significant impact carried out by the SCA, namely transactions involving the disposal of shares or equity interests, or transactions involving the disposal of the company’s assets, which most significantly affect the property rights of the shareholders, partners, and sole proprietors of the affected entities, operating with critical infrastructure and engaged in the storage, transportation, or wholesale and retail trade of petroleum and petroleum products.

The amendments to the bill were supported by Progressive Bulgaria (PB), the Movement for Rights and Freedoms (MRF), Democratic Bulgaria (DB), and Continue the Change (CC). One DB MP voted against the amendments. GERB-UDF abstained, as did one MP each from DB and CC. Vazrazhdane did not take part in the voting procedure. 

The deadline for proposals between first and second readings was shortened to five days.

At the start of the debate, PB MP Stefan Belchev presented the new proposal in the bill, the introduction of monthly reporting, requiring the special commercial administrator to submit a report to the Economy Minister on the activities of each company within one week after the end of each month. "The most important transactions, those involving the disposal of a company’s shares, equity interests, or assets will be subject to judicial oversight," he added. There is also protection against void transactions, as the bill refines the rules governing the validity of transactions and establishes procedures for challenging void disposition transactions in court, Belchev said. According to him, the expected outcomes are budget protection, transparency, and legal certainty, while limiting the risks of claims for damages due to potential misconduct of the SCA.

DB MP Martin Dimitrov noted that there is indeed a need for greater accountability on the part of the special commercial administrator, and in this regard, they support the proposed changes. He drew attention to the timing of this proposal, given that there is public information regarding potential arbitration claims against Bulgaria, asking for the opinion of the Finance Ministry on the bill. "It is not normal to have not heard from the Finance Ministry, where the responsibility for legal defence in international cases lies," Dimitrov said.

Vazrazhdane MP Dimo Drenchev noted that in February, a letter was sent to the National Assembly stating that Geneva-based Litasco would file an arbitration case against Bulgaria worth EUR 3 billion. "We need to know what the Finance Ministry thinks, so that it doesn’t turn out that by passing this law, Bulgaria is actually admitting that the previous one was unconstitutional, making it easier for Litasco to sue the country," he said. Vazrazhdane will not participate in the vote unless the Finance Ministry sends this report, Drenchev said. 

CC MP Radoslav Ribarski said that this bill was advertised as a solution to limit the powers of the special commercial administrator. "However, we see nothing of the sort in your proposals," he said. According to him, accountability is merely supplemented by yet another report. To date, the SCA’s management has been largely unaccountable. The reports must have a public section so that the public can learn what the SCA has accomplished, Ribarski said, noting that between first and second readings, CC will propose what this report should contain and a mechanism for making the reports public.

Vazrazhdane MP Tsoncho Ganev said that the previous government voted to nationalize a foreign company, and at the time, Vazrazhdane warned that this would cost billions. "But [Prime Minister] Radev’s party [Progressive Bulgaria] is not changing a single thing. It did not go along with what we, from Vazrazhdane, are proposing, to hold talks on purchasing the refinery [Lukoil Neftochim]. To make it Bulgarian and to seek a waiver from the US," he said.

PB Deputy Floor Leader Slavi Vassilev said that the appointment of a special commercial administrator had reassured Bulgaria's partners, but "the amendments to the Act on Administrative Regulation [of Economic Activities Associated with Oil and Petroleum Products] adopted in November has effectively left the special commercial administrator without any institutional oversight". He said that the majority and the Council of Ministers would take the matter seriously and address both theoretical claims and respond to actual claims in arbitration court. "We must show that we are taking care of assets as a good steward," Vassilev added. 

"Who pressured you not to replace [special commercial administrator Rumen] Spetsov? Who? He usually sits right here next to you. The very same one," Tsoncho Ganev told Slavi Vassilev [in the National Assembly Progressive Bulgaria MPs sit between Vazrazhdane and Movement for Rights and Freedoms MPs]. "You have not changed a single thing. The same schemers as GERB, MRF, CC, and DB," he said.

"You believe the SCA won’t be replaced, but I assure you that the Council of Ministers is looking into the matter," Vassilev replied. "I cannot say what the decision of the Prime Minister or the Economy Minister will be, but I can make an educated guess that you will be wrong once again. I would be very pleased, when there is news on the topic, to hear your opinion on whether someone is giving orders to me or to any of my colleagues," he said, addressing Ganev.