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Varadinov & Co.
Legal Bulletin

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The Public Procurement Act
The Public Procurement Act underwent, yet another, series of legislative amendments (OG 79/13.10.2015). Funds, received from the European Union, funds from international programs or contracts as well as any funds with a foreign origin were explicitly added in the range of the, regulated by this act, spending of the government’s financial resources. The Council of Ministers is given the authority to establish, with a decree, central government bodies for public procurements or to delegate these functions to an executive body of the state. The government’s policy making authority, concerning public procurements, will be transferred from the ministry of economics to the ministry of finance. The minister of finance will be aided by the Agency of Public Procurements, which will run under his authority, in the policy making process.

In order to neutralize all types of abuse, the privileged regime, concerning the assignation of public procurements to specialized enterprises and to cooperatives of people with disabilities, was revised. The new legislative amendments convey that when a part of the public procurement’s object is contained in the, sanctioned by the Council of Ministers, list of products with predominant assignation to the mentioned above enterprises and cooperatives, the contracting authority is obligated to set this part in one or more differentiated positions that are reserved for involvement of specialized enterprises or cooperatives of people with disabilities.

Applications and tenders can now be submitted by other interested persons, outside of those for whom the procurement was reserved. The candidate or participant that possesses the quality special enterprise or cooperative of people with disabilities states in his application or offer, and authenticates with a document, the number under which he was enrolled in the registry of specialized enterprises and cooperatives of people with disabilities, maintained by the Registry Agency, or includes information about registration in a similar registry of a state – member of the European Union. Applications or tenders of a candidate or a participant that is a specialized enterprise or a cooperative of people with disabilities are only going to be considered if there are not any candidates or participants that meet the selection criteria and for whom the procurement was reserved or a participant for whom the procurement was reserved and whose offer meets the contracting authority’s requirements. A candidate or a participant who is a specialized enterprise or a cooperative of people with disabilities will be able to participate in a public procurement, including for a differentiated position, provided that eighty percent of the procurement’s object can be completed by using their own production or resources. If there is impossibility for self-execution in the specified volume, the candidate or participant can hire a sub-agent or to rely upon third parties’ resources, provided that they are also specialized enterprises or cooperatives of people with disabilities.

The Law on Administrative Violations and Penalties

The recent amendments in the Law on Administrative Violations and Penalties provide for an increase of penalties’ rates and refinement of the procedure on engaging pecuniary liability in respect to juridical persons (OG 81/20.10.2015). New punitive factual elements were added whose implementation will lead to administrative-retributive liability should the juridical person become enriched or may become enriched from a felony, carried out by members of its governing, supervisory or inspectorial bodies or its representatives, workers or employees. Should the felony be committed by a worker or an employee during or in relation to the work, assigned by the juridical person, a property sanction, up to one million leva, would be imposed upon the same juridical person but no less than the equivalent of the benefit when it is pecuniary. A penalty up to one million leva will also be imposed when the benefit is not pecuniary. A financial penalty will also be imposed upon a juridical person whose residence in not located in the Republic of Bulgaria’s territory, should the offence be committed in the territory of the Republic of Bulgaria.

Any direct or indirect benefit from the felony will be divested from the juridical person, in favor of the state, if this benefit is not a subject to return or refund or to divestiture under the Criminal Code. The equivalent of the property, subject of the felony, is adjudged in leva when it is missing or has been alienated. There is also a change in jurisdiction – the proceedings will be formed after a motivated proposal, not from the prosecutor at the administrative court, sent to the administrative court, but from the prosecutor who is competent to examine the case or the transcript, concerning the felony, sent to the district court. It is specifically provided, in the law, that the examination of the case must be held before the Sofia City Court when the juridical person’s residence is located outside of the country. A decree with a proposition for a release of the perpetrator from criminal liability, with imposition of administrative penalty, or an agreement to resolve the matter in court are pinpointed as additional grounds for initiating a proceeding: if there has not been a complaint from the victim to the prosecutor when the case is from a private nature; if the perpetrator is vindicated from criminal liability with application of educational measures; if a transfer of the criminal proceeding is allowed in another country; when the criminal proceeding has been stopped on ground that, after committing the felony, the defendant has fallen into a temporary mental disorder that excludes sanity or another severe illness that interferes with the conduct of the proceeding; when examining the case, in absence of the defendant, would impede the discovery of the objective truth, if the perpetrator has immunity; after coming into force of a decision under Article 124, paragraph 5 of the Civil Procedure Code.

The Court issues an order, in a closed session, with which the proposal of the prosecutor is returned when it is not motivated or does not meet the requirements of the law or dismisses the case when the juridical person has been stricken off from the Commercial Register due to liquidation or bankruptcy. The court considers the proposal in an open session, in a panel of one judge, with the participation of a prosecutor and summoning of the juridical person. The absence of the juridical person’s representative, when summoned regularly, does not obstruct the examination of the case. The court collects evidence “ex officio” or at the request of the parties. In order for the administrative-punitive liability to be realized a cumulative presence of evidence is needed for the received by the juridical person unlawful benefit, a connection between the perpetrator of the felony and the juridical person, a connection between the criminal act and the benefit for the juridical person as well as the type and size of the benefit if it is pecuniary. With its decision the court imposes a pecuniary sanction or refuses to. In cases that are considered to be of factual or legal complexity, the reasoning may be worked out after the ruling, but not later than 30 days.
The decision of the district court is subject to an appeal or a protest before the appellate court in 14 days after the notification of the parties. The case is examined in an open session with the participation of a prosecutor. The juridical person is summoned for the session. Only written evidence is allowed during the proceeding before the appellate court. The appellate court comes out with a ruling that can annul the decision of the district court and return the case for a new consideration due to significant errors of the first instance, to annul the decision of the district court and to impose pecuniary penalty, to annul the decision of the district court and to refuse to impose a pecuniary penalty, to alter the decision of the district court or to confirm it. The ruling of the appellate court is decisive.

The proceeding, under which the perpetual decision of the district or appellate courts was issued, is subject to renewal when:
1.with a decisive sentence or decision it is found that the written evidence, a ground for issuing the document, were falsified or incorrect;
2.with a decisive sentence or a decision it is found that a judge, a prosecutor, a party or a participant in the proceeding has committed a felony in connection to his involvement in the procedure;
3.after coming into force of the decision for imposition of pecuniary liability of a juridical person the perpetrator is acquitted with a decisive judicial act or the stopped pre-trial proceeding is terminated by the prosecutor in the hypotheses of article 24, paragraph 1 point 1 from the Criminal Procedure Code;
4.new evidence that was not known to the party or the court is revealed after the coming into force of the decision and it is essential to the proceeding;
5.with a decision of the European Court of the Human Rights it is found that there is a violation of the European Convention for the Protection of Human Rights and Fundamental Freedoms with a significant importance to the case;
6.during the proceeding there was a substantial breach of the procedural rules.

The request for renewal can be made six months after acquiring information about the rise of the grounds or after coming into power of the above mentioned decisions. The request for renewal does not suspend the execution of the decisive ruling, except when the court determines otherwise. A request for renewal of the proceeding can be made by the district attorney and the juridical person to whom a pecuniary penalty is imposed. The request for renewal is considered by the appellative court in the judicial region in which resides the authority that has issued the decision that has come into force. The appellative court examines the request in a panel of three judges. When the renewal of the proceeding is requested due to a decision of the appellative court, the request is examined by another panel of the same appellative court. The case is examined in an open session with the participation of a prosecutor. The juridical person is summoned for the hearing. When the appellative court finds the request for renewal lawful it annuls the act and returns the case for a new consideration and points the procedural action from which the new examination must begin. The Criminal Procedure Code is applied for matters that are not regulated.