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A Dangerous Attack Against Independent Civil Society in Bulgaria

3 July 2020

On July 1, 2020 a group of MPs from the parliamentary group “United Patriots” (a partner in the ruling coalition) has proposed a package of amendments to the CSO law and to several other laws. The amendments contain the following main proposals:

  • Proposals related to art. 4 (The Civil Society Development Council) – these proposals eliminate the obligation of the state to provide state funding for projects of public benefit CSOs. They also eliminate all the powers of the Civil Society Development Council related to determining the priorities which should be funded, the procedure through which the projects will be selected, etc.
  • Obligation to report all income from foreign sources (foreign states, individuals or companies) above 1000 BGN (500 EUR) – This obligation applies to public benefit CSOs (art. 40a) who have to submit a declaration with proof for the funding received up to 7 days after the receipt of the funds. The only exception provided is for funds from the European Union. In case this obligation is violated, there will be financial sanctions.
  • Creation of a register of nonprofit legal entities financed from abroad – the Minister of Finance will issue a decree on how this register will be established. It is unclear from the draft proposals if the Register would be public or not.
  • The Agency for State Financial Inspection will be able to conduct financial audit of CSOs – currently their mandate is limited to expenditure of state, municipal or EU funds or in companies controlled by the State or CSOs but only in the case when the state or municipalities participate directly or indirectly in their property.[1] There is no specific circumstance or reason that may trigger such inspections other than the decision of the Minister or a person authorized by the Minister and the fact that a CSO has received more than 500 EUR from a foreign person or state.
  • Possibility to terminate the CSOs or temporarily take away its public benefit status - for one violation of the obligation to declare, in addition to the financial sanction, the Minister of Finance may ask the Registration Agency to add “temporarily taken away public benefit status”. A second violation may lead to termination of the CSO.
  • Obligation for reporting to the Commission for Combatting Corruption and Confiscation of Illegally Acquired Property - The Chairpersons and members of Management Boards of CSOs that have received foreign funding are obliged to declare their assets and interests to this Commission. There is no limitation in the amount of the foreign funding received that may subject CSOs to this obligation - so even the receipt of 1 EUR would be sufficient. Currently, such requirement is applicable for people having high government positions e.g. Ministers, MPs and some other related individuals (mayors, managers of state-owned enterprises, etc.). The declarations of these people are public and if the Commission finds a difference between the declared property and the actual assets, this may trigger a procedure against the individuals that may lead to confiscation of property.[2]

 

If adopted, these proposals would:
  • Lead to official labelling of organizations as foreign agents;
  • Give the executive broad powers to subject CSOs to financial inspections without any specific violation of the law, simply for the fact that the organization has received foreign funding. In addition, they give the executive the possibility to impose 2 sanctions for one and the same violation (not submitting a declaration for receipt of foreign funding) – both a financial sanction and the removal of the public benefit status.
  • Give the possibility to terminate CSOs for a minor breach of the law (not declaring foreign funding);
  • Subject chairpersons and Board members of CSOs to the obligation to submit declarations of their income and property that will be made public. Such a requirement may affect any Board members of any CSOs (currently around 50 000 CSOs) that receives any amount of foreign funding (not only the ones receiving more than 500 EUR from a single foreign source).
  • Open the possibility for the executive branch to impose additional burdens as the regulation related to declaring foreign funding is left to the Ministry of Finance and the law does not define what is considered a foreign individual or a foreign company.

 

These proposals happen at a time when numerous representatives of this political coalition (United Patriots) have launched verbal attacks against CSOs e.g. the former Minister of Environment and Waters declared that “natural disasters have caused less damage than environmental activists” while the Minster of Defence has criticized the fact that institutions take into consideration CSO opinions and has called them “structures that call themselves civil society who noone has elected for anything”. In 2019 representatives of the Coalition requested the termination of one of the biggest and oldest human rights organizations - the Bulgarian Helsinki Committee - for being unconstitutional.

There were also a series of previous attempts to limit foreign funding or impose heavier obligations to CSOs. The obligation for CSOs to be equated with officials in high government positions and to publicly declare their income and property was proposed in 2013 but was withdrawn after serious criticism. In 2017, a proposal to limit foreign funding for magistrates associations was introduced in the Judicial Systems Act but was again withdrawn after criticism and pressure from international partners. Another attempt to limit funding for magistrates associations was made in 2019 but was voted down.

 

With regard to the Civil Society Development Council, after more than 2 years delay, the procedure for its establishment was finally started in February 2020. In May 2020 the results were publicly announced and 14 CSOs were elected as members of the Council after an electronic vote from all public benefit CSOs that have expressed interest to vote. Even prior to the introduction of the proposed amendments, there have been attempts to stop the establishment of the Council by attacking its elected members.

On June 10, 2020 after the results from the voting for Council members were announced, the Commission for Combatting Corruption and Confiscation of Illegally Acquired Property decided to exercise for the first time its power to analyse areas with potential for corruption and propose legislative changes. It issued a statement that the Regulation of the Civil Society Development Council needs to be changed because it does not follow the principles of publicity and transparency and prevention of conflict of interests. This happens at a time when a number of political scandals about high-level corruption take place while the Council, after being established, will decide on the priorities for spending just 1 million BGN (500 000 EUR) planned in the state budget for 2020. Below are several articles that provide more details about the situation:

Photo credit: @indianexpress


[1] Financial inspections shall be conducted by the financial inspectors of the Agency based on an order issued by the Director of the Agency or by authorised by him/her officials. The order cannot be subject to appeal. Depending on the results of the inspection activities performed the Director of the Agency or authorised by him/her officials shall:

  1. provide written instructions to the manager of the organization or entity inspected to discontinue perpetrating irregularities and/or to remove the harmful consequences thereof;
  2. make proposals to the competent authorities to stop the actions leading to irregularities and to causing damages to the organisations and entities inspected;
  3. make proposals to the competent authorities to repeal any illegal administrative instruments of the managers of the organisations and entities inspected;
  4. propose to the competent authorities to seek property and/or disciplinary liability under the relevant procedures;
  5. propose to the Minister of Finance to discontinue the transfer of the subsidies provided for in the State Budget of the Republic of Bulgaria Act for the relevant year or to freeze the accounts of budget organisations until the elimination of the irregularities.

 

 [2] The Commission for Combatting Corruption and Illegally Acquired Assets shall verify and analyse the information in the declarations of assets and interests as to the veracity of the facts declared. The verification shall be concluded by a report on correspondence, where no difference has been established between the facts declared and the information obtained. Where a difference is established, the Commission shall notify the person concerned and shall allow the said person a 14-day time limit to rectify the deficiencies and errors in the circumstances declared. The deficiencies and errors shall be rectified according to the procedure established for the submission of a declaration. Where a difference is established upon verification of the declarations, the Commission shall publish on the Internet site thereof the conclusions about the persons in respect of whom a lack of correspondence in the declarations has been established and where any such lack of correspondence has not been rectified within the time limit under Paragraph. Where a lack of correspondence amounting to more than BGN 5,000 is established after the expiry of the above-mentioned 14-day time limit, the Commission shall adopt a decision on the transmittal of the verification file to the National Revenue Agency for taking steps according to the procedure established by the Tax and Social-Insurance Code. Where a lack of correspondence amounting to more than BGN 20,000 is established after the expiry of the above-mentioned 14-day time limit, the Commission shall adopt a decision on a check of the assets status of the senior public office holder according to the unlawfully acquired assets forfeiture proceeding.

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