site.btaParliament Passes Final Amendments to Penal Code Allowing Seizure of Criminal Assets from Third Parties Acting in Bad Faith

On Wednesday, the Bulgarian Parliament passed the final amendments to the Penal Code that create a legal mechanism for seizing assets acquired through criminal activity, even if held by third parties acting in bad faith. The amendments were adopted with the second reading of the bill for amending and supplementing the Penal Code, submitted by the Council of Ministers. The bill was approved at first reading on July 18.

Under the newly adopted provisions, property obtained by a third party in bad faith will be confiscated in favor of the state, even if the third party’s act does not constitute a crime and the property is not subject to return or restitution. Confiscation will also apply in cases of legal succession of a legal entity, according to the adopted texts.

The law defines "property acquired by a third party acting in bad faith" as property received gratuitously by a third party who, at the time of acquisition, knew or should have known that the property was an object or instrument of a crime, the possession of which is prohibited.

The amendments address several scenarios: property received gratuitously by a third party who knew or should have known it originated from criminal activity; property acquired for consideration by a third party under the same conditions, if its price is significantly above or below market value, or if the asset was exchanged under similar irregular terms.