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Varadinov & Co.
Legal Bulletin

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State Gazette, issue 96 /December 1st, 2017
A new Concessions Act introduces the requirements of Directive 2014/23 / EC of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (Concessions Directive).The Concessions Directive is part of the European Union legislative package to reform Community law on public procurement and concessions (together with Directive 2014/24 / EC on public procurement and Directive 2014/24 on procurement by sectoral contracting authorities).
The Concessions Directive has adopted a new regulation of concession contracts, which was first regulated in a stand-alone act.
The leading change is to distinguish the different forms of partnership between the public and the private sector, leading to the assumption by the concessionaire of the operational risk. The scope of the Concessions Directive includes activities whose legislation in Bulgarian law has so far contained two separate laws: the Concessions Act and the Public-Private Partnership Act. The analysis of the legislation shows that the concession institute has not been used efficiently for its main purpose - granting concessions for construction with subsequent provision and management of services of public interest through the object of the concession, when the concessionaire takes over the construction and operational risks. Instead, either natural resources (beaches, mineral waters, underground resources) or existing infrastructure facilities are granted on concession without any concession for construction being made of a major infrastructure site.

The new Concessions Act regulates their strategic development and planning, monitoring, management and control, assignment, execution, financing, appeal, claims for the nullity of a concession contract and award of damages, alternative sanctions, and the National Concession Register. For the sake of the continuity of legislation and the facilitation of law enforcement, the structure of the law as a whole follows the structure of the existing IC and PPPs that are similar. In accordance with Art. 31 of the Decree No. 883 on the Application of the Law on the Laws in 8 Annexes are exported in the form of lists of activities which are included or excluded from the scope of the bill, international conventions in the social and environmental field, which should be and the minimum content of the notices announcing the opening of a procedure for the designation of a concessionaire (notice of concession, prior information notice and national notices).

Due to the exhaustiveness of the law, it is judged that there is no need to issue regulations for its implementation. A legal delegation is foreseen for the Council of Ministers to issue an ordinance detailing the financial and economic elements of the concession, including the related payments. In order to preserve the security of the civilian turnover, the concession contracts concluded before the entry into force of this law shall remain in force, as the rules of the draft law on the implementation, amendment and termination of concession contracts shall apply to them insofar as they do not contradict the contract.

State Gazette, issue 97 /December 5th, 2017

Increased transparency and control in the banking sector foresee amendments to the Credit Institutions Act. For the issuance of a banking license, data will already be required about the actual owner of the persons who hold a direct or indirect qualifying holding in the applicant. The formation of exposures to related parties can be done only with unanimous decision of the collective and management body and after prior approval of the supervisory board, respectively of the members of the board of directors who are not executive members. The circle of related parties has been extended to those who have a direct or indirect qualifying holding in the Bank’s capital; the persons who are in fact cohabiting with administrators, members of management bodies and shareholders; which the latter or the bank control directly or indirectly, including jointly with others;
commercial companies and other enterprises within the meaning of Art. 2 of the Law of
accountancy in which the bank, administrators, board members or shareholders have a direct or indirect qualifying holding; persons exercising, directly or indirectly, control of the bank or of any of the shareholders with a qualifying holding in it. These restrictions also apply when changing the terms of exposures such as renegotiating interest and providing a grace period. Exceptions to these limitations include the hypothesis where the amount of exposure to related parties does not exceed their annual remuneration.

Exposures covered by these restrictions include any asset or off-balance sheet item, including derivative contracts, receivables arising from the provision of services, acquisition and sale of assets and leases. Banks are required to adopt and apply internal rules and procedures for establishing, monitoring and reporting
of exposures, with the rules and procedures in this regard including a tracking mechanism for the control line or qualified shareholding to the actual owner of the related parties. Banks shall prepare and submit to the BNB a quarterly report on the exposures to such persons in the form and content specified in an ordinance of the Central Bank. The principle is that the individual administrative acts under the Credit Institutions Act are to be issued by the Governing Council of the BNB upon proposal of the Deputy Governor in charge of the Banking Department
supervision, with exceptions being limited.

Final provisions clarify the supervision of the central bank in the restructuring of credit institutions and investment firms, in which case the measures prescribed by the latter are applied by the Financial Supervision Commission. A record has been introduced in the BNB Law on the meetings of its board to be signed by the members of the board of directors and by the drafting party who attended the meeting. Information on the Board’s decisions is published on the Bank’s website, except where the decisions contain professional, banking, commercial or other legal secrecy.

State Gazette, issue 101 /December 19th, 2017

Amendments to the Penal Code introduce the requirements of the European Parliament and Council Directive 2013/40 / EU of 12 August 2013 on attacks against information systems, Directive 2014/62 / EU of the European Parliament and of the Council of 15 May 2014 on the Eurovignette and the other currency counterfeiting protection, Directive 2014/57 / EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse. The legal definitions of “information system” and “computer data” have been further developed. Terrorism is criminalized through threats and coercion by a body of authority, a public representative, or a representative of a foreign state or an international organization to create confusion and fear in the population. Penal legal protection against violation of correspondence and dissemination of computer data sent within one or more information systems, including electromagnetic emissions from an information system, has been further developed.

It is punishable to acquire or disposing of financial instruments on their own account or on behalf of a third party, directly or indirectly, with the use of inside information relating to them, and consequently of significant adverse consequences. The cumulative compositional requirement for a perpetrator is to be a person who possesses inside information because he is a member of the issuer’s administrative, management or supervisory body or emission allowance market participant; has a stake in the capital of an issuer or participant in the emission allowance market; has access to information through the performance of an activity, profession or duties. Similarly, the protection against unauthorized disclosure of another person’s inside information available to a perpetrator is similar to a financial instrument, except when the disclosure is made in the ordinary course of business, profession or service;
is a market study, and this has had a significant adverse effect. Criteria are also the conclusion of transactions or
ordering, giving false or misleading signals about the supply, demand or cost of
an instrument or a related spot commodity contract, or this price is determined at an unusual or fictitious level and there are significant adverse consequences.
Hacking is also included in a composition for improperly adding, copying, using, modifying, transmitting, deleting, damaging,
worsening, concealment, destruction of computer data in an information system, or disabling access to such data. Creating, getting, importing, or otherwise is punishable the dissemination of computer programs, passwords, codes or other similar data for access to an information system or part thereof in order to commit a crime.