Controversial changes to the Penal Code proposed by the government could lead to a serious negative impact on the Bulgarian business, which is still recovering from the crisis, writes Krassen Nikolov.
Krassen Nikolov is a journalist specialised in judiciary affairs. He works for Mediapool and will be a regular contributor for BulgarianPresidency.eu for the six months of the Bulgarian Presidency of the Council of the EU.
Yesterday (14 March) the ruling coalition passed at first reading through the legal affairs parliamentary committee a draft that would give the prosecution a huge power to interfere in the corporate sector.
The effect is achieved with the proposal to align the status of officials on leading positions in the public and private sectors. The promoted goal is for the state to take action against business corruption, but the law has a destructive potential due to badly written texts. If the draft is accepted as such, any delayed payment on a commercial transaction may prompt the prosecution to initiate a criminal case. At present, these relations in Bulgaria are resolved, as in all market economies – with penalties, interest, civil and commercial lawsuits, arbitration.
The bill does not distinguish between the completely different public roles in the public and private sectors. One of these fundamental differences is that the bosses of private companies do not have state authority and are completely free to negotiate with other private entities in order to obtain profits. In the public sector they have powers and in order not to abuse it, they are obliged to spend the public funds under strictly defined rules, for example public procurement.
Applying the same standard to the private sector entails a significant risk of criminalising the profits of a commercial operation.
The project is met with sharp criticisms from all major business organizations in the country, the Supreme Court of Cassation, the Bar and the academics. Only the prosecutor’s office to a certain extent expressed solidarity with the project. The Justice Ministry says the project is written in this form because of the recommendations of the European Commission, but there are no requests in the Brussels reports to criminalise purely civil relations.
During the debate in the National Assembly lawyer Valya Gigova warned that for 30 years Bulgaria has been trying to become a normal functioning market economy, while now she saw this process is under serious risk. The law firm says the project is totally unnecessary. Gigova adds that the alignment of the status of individuals in the public and private sectors is absurd.
“With this legal definition, each mother turns out to be an official because he is raising children who are citizens of the Republic of Bulgaria, and that is of public importance. Every doctor, journalist, architect and lawyer becomes an official”, she commented.
Sociologist Kancho Stoychev (Gallup International) also participated in the debate in another capacity of his, as a representative of an employers’ organization.
“We live in a country that is absent where it should be present, but is present where it should not be. Government rules are not applicable to the private sector. I’ll give you an example – every ad on TV is a trade in influence. Every such benefit for me is harm to my competitor, but this cannot be a crime”, Stoychev said.
The chairman of the legal commission, Danail Kirilov, who is from the ruling GERB party, said he agrees with most of the criticisms of the project but has supported it. He said the ruling coalition would do whatever it takes to improve the project before its final adoption. Shortly before the vote, however, he confessed with the microphones turned off: “There is no way we can improve the situation”. However, he voted in favor of the project.
The ruling force argument is that the government is committed to expanding its efforts to fight corruption and make it more effective.
“If the colleagues from the Ministry of Justice have gone beyond the limits of reason, it was because of this striving (to fight corruption) , Kirilov said. The opposition to the project responded that criticism of Bulgaria is about the lack of convictions for high-level corruption, and not about the continuous writing of laws.
Corruption in Bulgaria has a huge impact on foreign investment and standards of living, but so far the government was refraining from such a direct interference in the private sector. The Bar openly warned that such a law could lead to the withdrawal of foreign investors because few would agree to be left in the hands of the unreformed Bulgarian prosecutor’s office.
At the end of last year, the government also adopted a controversial anti-corruption law that concentrated huge power in the hands of one institution. The new body has the right to wiretap politicians and citizens without enough evidence of a crime and storing such information for an unclear purpose. The former Prosecutor Plamen Georgiev, who was close to GERB, was appointed as the head of the anti-corruption commission.
With the ruling force recent initiatives the Bulgarian judicial reform takes a direction that is very different from the recommendations of the EU and the Council of Europe. For many years, the European institutions have been pushing for reform of the prosecution and reducing the uncontrolled power of the Prosecutor General, while the Bulgarian authorities continue to concentrate power in the hands of the unreformed prosecutor’s office. At the same time, there are no results whatsovever from the fight against high-level corruption.