Europaudvalget 2005-06
L 103 Bilag 5
Offentligt
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COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels,
SEC (2006) XXX
COMMISSION STAFF WORKING DOCUMENT
BULGARIA
May 2006 Monitoring Report
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{ COM (2006) XXX final}
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BULGARIA
May 2006 Monitoring Report
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TABLE OF CONTENTS
1.
2.
2.1.
3.
3.1.
4.
4.1.
4.1.1.
4.1.2.
4.1.3.
4.1.4.
4.1.5.
4.1.6.
4.1.7.
4.1.8.
4.1.9.
INTRODUCTION........................................................................................................ 4
POLITICAL CRITERIA.............................................................................................. 4
General evaluation ..................................................................................................... 10
ECONOMIC CRITERIA ........................................................................................... 11
General evaluation ..................................................................................................... 14
COMMITMENTS AND REQUIREMENTS ARISING FROM THE ACCESSION
NEGOTIATIONS ...................................................................................................... 15
Chapters of the
acquis
................................................................................................ 15
Chapter 1: Free movement of goods .......................................................................... 15
Chapter 2: Free movement of persons ....................................................................... 16
Chapter 3: Freedom to provide services..................................................................... 16
Chapter 4: Freedom movement of capital .................................................................. 17
Chapter 5: Company law............................................................................................ 18
Chapter 7: Agriculture................................................................................................ 18
Chapter 8: Fisheries.................................................................................................... 21
Chapter 9: Transport policy ....................................................................................... 22
Chapter 10: Taxation.................................................................................................. 22
4.1.10. Chapter 13: Social policy and employment ............................................................... 23
4.1.11. Chapter 14: Energy .................................................................................................... 25
4.1.12. Chapter 15: Industrial policy...................................................................................... 25
4.1.13. Chapter 19: Telecommunications and information technologies............................... 26
4.1.14. Chapter 21: Regional policy and coordination of structural instruments .................. 26
4.1.15. Chapter 22: Environment ........................................................................................... 28
4.1.16. Chapter 23: Consumer and health protection............................................................. 29
4.1.17. Chapter 24: Cooperation in the field of justice and home affairs .............................. 29
4.1.18. Chapter 25: Customs union........................................................................................ 33
4.1.19. Chapter 28: Financial control..................................................................................... 33
4.2.
4.3.
Translation of the
acquis
into Bulgarian .................................................................... 34
General evaluation ..................................................................................................... 34
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1.
INTRODUCTION
The accession negotiations with Bulgaria were successfully concluded in December 2004.
The Accession Treaty was signed in April 2005. Bulgaria and 14 Member States have already
ratified it. The Treaty envisages accession on 1 January 2007 unless the Council decides,
upon a Commission recommendation, to postpone it until 1 January 2008.
Following the conclusion of the negotiations, the European Union decided that it would
continue closely to monitor Bulgaria's preparations and achievements and that, to this end, the
Commission would continue to submit annual reports on Bulgaria's progress towards
accession, together with recommendations, if appropriate.
The Commission presented its first such report in October 2005. This report showed that
Bulgaria was already well advanced in preparing for accession. It also identified a number of
areas where further efforts were needed to complete preparations. The Commission decided to
step up its monitoring activities and report again in spring 2006.
This report reviews Bulgaria's preparations for membership, focusing on the areas in need of
further improvement in the light of the three Copenhagen accession criteria. Accordingly, the
report contains three main parts:
The
first part
assesses political issues which were identified as in need of further
improvement.
The
second part
assesses economic issues which were identified as in need of further
improvement.
The
third part
assesses where Bulgaria stands in implementing commitments and
requirements arising from the accession negotiations.
The report identifies the progress made since October 2005 and the gaps in policies,
legislation and implementation which remain to be addressed. On this basis the Commission
examines, in a separate Communication presented together with this report, whether or not it
needs to recommend postponement of the accession date.
This report reflects the situation at the end of April 2006. It is based on a wide array of
sources. Bulgaria was invited to provide information on its state of preparedness. The report
also draws on information provided within the framework of the Association Agreement and
on peer reviews
1
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Council deliberations and European Parliament reports and resolutions have been taken into
account. Where relevant, the Commission has also drawn on assessments made by various
international organisations, international financial institutions and non-governmental
organisations.
2.
POLITICAL CRITERIA
Introduction
The Commission considers that Bulgaria fulfils the political criteria for EU membership and
has done so continuously since 1997.
The aim of this report is to provide an assessment of certain areas that were considered to
need further improvement in the 2005 October monitoring report. Eight such areas were
1
2
Peer reviews are assessments made by experts of Member States on the state of preparedness of the
candidate countries in specific sectors. These experts are responsible for the content of their reports.
The rapporteur is Mr van Orden.
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identified: public administration reform; the justice system; the fight against corruption; the
fight against trafficking in human beings; ill-treatment in custody and prison conditions;
children protection; the disabled and mental healthcare system, and the protection and
integration of the minorities.
This section assesses, in each of these outstanding areas, the developments that have occurred
since the October 2005 report and Bulgaria's preparedness for membership.
Public administration
Since the October 2005 report, there has been progress in the following areas.
The Law on Administration was amended in March 2006. It introduces a clear distinction
between the political and administrative levels in the state administration. The aim of this law
is to clarify roles and responsibilities. The law also regulates involvement of public officials
in the management of private companies and strengthens the role of the inspectorates.
Amendments to the Civil Servant Act were also passed in March 2006. This Act provides for
a competitive recruitment procedure, introduces the mobility principle in the state
administration and promotes trainings for civil servants. The Code of Administrative
Procedure was adopted in March 2006. Following this code, administrative Courts will be
established and judges appointed by December 2006.
An updated strategy for the training of civil servants and a relevant action plan was adopted in
March 2006. The strategy focuses on strengthening the Bulgarian administrative capacity in
implementing the
acquis,
involving all stakeholders in the administrative reform process and
enhancing professional capacity and qualification.
However, certain outstanding issues remain to be addressed.
The decentralisation strategy aiming at further decentralising powers and financial resources
from the central to regional and municipal level has not been adopted.
Overall, Bulgaria has made good progress in the field of public administration and is on the
way to have an efficient state administration provided that the current path of reform is
maintained.
Justice system
Since the October 2005 report, there has been progress in the following areas.
In December 2005, the Minister of Justice developed an action plan for implementing the
reform strategy for the period 2006-2007. In March 2006, the government approved a report
on the implementation of the strategy for the reform of the judiciary. As regards the pre-trial
phase, in January 2006 a mechanism to monitor the adequacy of the new penal procedure
code which entered into force in April 2006 was established. An action plan for the training of
magistrates on the implementation of the new Penal Procedure Code is being implemented.
The law on legal aid and its implementing legislation, including on legal aid fees, entered into
force in January 2006. A national bureau for legal aid was set up with a budget of over EUR 3
million. Implementing legislation on the Law on Private Enforcement Agents was adopted in
February 2006. The budget for the judiciary has increased with 18% in 2006 to over EUR 136
million. The budget of the Supreme Judicial Council almost tripled and is now close to EU 4
million. In April 2006 the Supreme Judicial Council decided to increase by ten the number of
judges at the Supreme Court of Cassation and by eight the number of prosecutors at the
Supreme Administrative Prosecution Office. Amendments to the Law on the Judiciary, which
were adopted in April 2006, foresee the application of the principle of competition for the
recruitment of magistrates. The responsibilities of the Investigation Service decreased.
Around 700 investigators of this service are being redeployed as prosecutors.
The newly adopted amendments to the Law on the Judiciary introduce in the legislation the
random allocation of cases in courts, prosecution offices and investigation services. The new
judiciary IT system for random allocation of cases has been tested in January 2006 and the
software to operate the system is available in 90% of the courts.
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The budget of the National Institute for Justice increased with nearly 80% in 2006 to over
EUR 1.15 million, allowing it to further focus on building up sufficient capacity for
specialised training, including for clerks. In 2005, the number of persons trained increased by
around 50 % to just over 2000. In February 2006, the newly elected prosecutor general
withdrew the request of the Constitutional Court to check the legality of the Law on Forfeiture
of Criminal Assets to the Exchequer, so that the latter could enter into force.
Amendments to the Constitution were adopted in March 2006. They establish the Prosecution
Service as being responsible for leading investigations and provide for a reference in the
Constitution to the Ombudsman. In March 2006 the new Administrative Procedural Code was
adopted. It foresees the establishment of 29 new administrative courts.
However, certain outstanding issues remain to be addressed.
The newly adopted constitutional amendments allow the Minister of Justice to play a role in
the establishment of the budget, the training of magistrates, the promotion and dismissal and
other human resource decisions, the management of the court infrastructure and the judicial
processing of cases. While the Supreme Judicial Council (SJC) continues to have a final say
on all these important issues, its role is weakened by the fact that it is not a permanent body.
Its members are full time magistrates, often heading courts, prosecution or investigation
offices entailing a considerable amount of responsibilities. In view of this and of the fact that
the Supreme Judicial Council has only 65 staff members, it will remain a considerable
challenge for it to act in practice as a counterbalance to the Minister of Justice and to
contribute substantially to the policy formulation in the further reform of the justice system.
Against this background, the constitutional amendments leave some ambiguities regarding the
guarantees of the independence of the judiciary. Any ambiguity must be removed.
The pre-trial phase continued to be a serious bottleneck for organised and economic crime as
well as for corruption cases to find a final settlement within a reasonable delay due to the
formalistic character of the Penal Procedure Code which was in force until the end of April.
The impact of the new Penal Procedure Code will need to be carefully monitored. The
accountability, transparency and internal management of the prosecution service needs to be
further addressed. The announced audit will be a useful first step in the reform of the
prosecution service.
The adoption of a new Civil Procedural Code has not taken place yet. Implementation of
legislation adopted in 2005 goes in some cases slowly as delays occur between the entry into
force of the primary legislation and its implementation.
The random allocation of cases and the installation of the relevant IT system need to become
effective nation-wide. As regards the functioning of the court system, no final decisions were
taken on the establishment of specialised courts or on the reduction of the number of courts.
The new provisions on competitive recruitment procedures for magistrates now need to be
implemented. A uniform mechanism with well defined criteria for assessing the quality of the
work of magistrates is not in place yet. The Supreme Judicial Council has no specialised
department responsible for this task. Corruption within the judiciary remains a serious
challenge.
Overall, limited progress has been made both in terms of quality and accountability of justice
as well as regarding the institutional relations between the executive and the justice system.
Bulgaria needs to complete the reform of the judiciary, ensure tangible results, and take the
additional steps to guarantee its independence.
Anti-corruption measures
Since the October 2005 report, there has been progress in the following areas.
In December 2005, the Council of Ministers adopted a Code of Ethics regulating the work of
the members of government and other politically appointed officials of the executive.
According to this code, the officials concerned must declare and register their financial
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interests, they are prohibited from participating as partners in companies and are not allowed
to work as freelancers, they are accountable for the management of the resources entrusted to
them and they must take the necessary measures to prevent corrupt practices in the bodies for
which they are responsible.
In December 2005 a report was published on the results of the implementation of the Anti-
Corruption Action Plan for 2004-2005. The report lists actions that have been taken to prevent
corruption in the state administration. In January 2006, following consultation with NGOs, the
Anti-Corruption Strategy covering the period 2006-2008 and an accompanying Action Plan
were adopted. The strategy and action plan provide a comprehensive framework for
combating corruption and focuses extensively on fighting high level corruption. Following
amendments in April 2006 to the Law on publicity of the property owned by persons
occupying high state positions, the National Audit Office will be obliged to publish annually a
list of people who did not comply with the obligation to declare their property. The fines for
non-compliance were increased.
In January 2006, a Council to improve coordination between the anti-corruption committees
of the National Assembly, the Council of Ministers and the Supreme Judicial Council was
established. The Ministry of Health has taken additional measures to monitor and control
health care institutions with regard to the risk of petty corruption. An ethics committee was
established in the Parliament.
In March 2006 constitutional amendments were adopted making members of Parliament
liable for all types of crimes and allowing for lifting the immunity if a Member of Parliament
gives his consent in writing for the court case to be initiated. The Prosecutor General retains
his monopoly to request the lifting of immunity of Member of Parliaments. Since February
2006 ten requests for lifting the immunity of Members of Parliament were tabled. Five
Members of Parliament have voluntarily abstained from their immunity and the immunity of a
sixth one was lifted by vote of the Parliament, thus allowing the court to formally pursue
allegations of corruption. In March 2006 one, and in April 2006 eight other requests to lift the
immunity were tabled by the Prosecutor General. Five of the individuals concerned have in
the meantime given their written consent for lifting their immunity.
At the end of March 2006 a specialised department was established at the General
Prosecutor's Office with as main task to lead and supervise the pre-trial procedure in cases
related to organised crime and corruption.
35 indictments were filed between 1999 and end 2005 against high-level politicians. Since
October 2005, convictions subject to further appeals have occurred against former members
of government, five magistrates and a bailiff. In the same period, three final convictions can
be reported as regards medium level corruption, involving civil servants.
However, certain outstanding issues remain to be addressed.
Overall the administrative capacity and, more specifically, the coordination capacity of the
Commission on Preventing and Counteracting Corruption, now headed by the Minister of
Interior and placed in the Council of Ministers, needs to be further enhanced. So far, the track
record of measures put in place to fight against high level corruption remains poor and the
implementation of the new strategy and action plan needs therefore to be monitored closely.
The implementation of the Law for Publicity of the Property of Persons Occupying High State
Positions requires the National Audit Office to enhance its capacity to verify asset
declarations. The recent amendments to the law require prior permission for publication of
asset and income declarations in the media. The Law on Political Parties does not cover
donations in kind. Donations from political foundations to parties are not subject to scrutiny
by the national audit office. Political parties are not obliged to make public their donors.
Indictments, prosecutions, trials, convictions and dissuasive sentences for high-level
corruption remain rare. Petty corruption is still a concern in sectors such as health and
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education. The Commission for the Prevention and Counteracting of Corruption needs to
increase its capacity if it is to perform its role effectively.
Overall, certain progress has been made in fighting corruption. Bulgaria needs to present clear
evidence of results in its fight against corruption, in particular high-level corruption.
Trafficking in human beings
Since the October 2005 report, there has been progress in the following areas.
The National Anti-Trafficking Commission has recently been installed and has published its
policy. The law on Bulgarian identification documents was amended in order to prevent
children travelling abroad unaccompanied for criminal purposes and to prevent trafficking of
children. Increased cooperation with Member States to fight trafficking of human beings has
led to the dismantling of networks trafficking in women. Cooperation agreements were signed
with several Member States. Bulgaria has started its witness protection programme. Four
persons were granted such protection.
However, certain outstanding issues remain to be addressed.
Bulgaria remains a country of transit and to a lesser extent a country of origin for the
trafficking of human beings. An increasing problem is the trafficking of new born babies
involving pregnant women giving birth abroad. Absence of reliable registration mechanisms
leads to lack of clear information on trafficked persons and the number of missing people.
The implementation of the Law on Bulgarian identification documents remains incomplete.
The implementation of the witness protection programme has been limited.
Overall, limited progress has been made with regard to trafficking in human beings.
Ill-treatment in custody and prison conditions
Since the October 2005 report, there has been progress in the following areas.
In some localities the number of incidents of ill-treatment by law enforcement officials has
been successfully reduced. There has been some improvement in living conditions of
prisoners in certain detention centres. There are probation councils in each probation service
and training continued.
However, certain outstanding issues remain to be addressed.
There continue to be cases of ill-treatment of detainees by law enforcement staff, including
excessive use of force and firearms. Torture under the meaning of the UN Convention against
Torture and Inhuman or Degrading Treatment or Punishment is not evenly defined. There are
still cases where the appropriate post-mortem and inquest procedures have not been fully
respected. The rules and procedures for the functioning of the probation councils are not
developed yet.
Overall, some progress was made in addressing ill-treatment in custody and with regard to
prison conditions.
Child protection
Since the October 2005 report, there has been progress in the following areas.
Early 2006, Bulgaria ratified the Hague Convention for the protection of children.
Amendments to the Law of Child Family Allowances and The National Child Protection
Programme 2006 have been adopted. It aims at providing alternatives to institutionalised
children, improving conditions in child care institutions. The programme addresses the issues
of street children, and child abuse and exploitation and it ensures equal access to education
and establishing a national information system for child protection. Amendments to the law
on child protection have been adopted in April 2006, which introduce a legal basis for
professional foster care in Bulgaria and aims at enhancing de-institutionalisation as well as the
provision of alternative social services. In addition, it establishes legal basis for enhancing
control and sanction mechanisms.
Furthermore, the government adopted in April 2006 a concept for de-institutionalisation of
specialised institutions for children and social institutions for elderly with disabilities. The
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concept defines the objectives of the process of deinstitutionalisation and basic guidelines for
its implementation. Living conditions in institutions for children have improved in some cases
and apart from the institutions under the responsibility of the Ministry of Health there is a
slight decrease in the numbers of people in institutions in 2005. The development of
alternative care continues to be mainly organised by NGOs. Two institutions have been closed
and the restructuring of some is on-going. International adoption has decreased from 217 in
2004 to 101 in 2005. The number of national adoptions has increased. A register of missing
persons is in place in line with the Schengen Agreement.
However, certain outstanding issues remain to be addressed.
In many institutions, living and sanitary conditions are of a very low level. The Agencies for
Child Protection and for Social Assistance still have no reliable monitoring and supervision
system which verifies the implementation of their recommendations. The number of children
in institutions remains high. A central database for national adoptions has not been
established. There remains a lack of transparency of procedures, particularly regarding
international adoptions.
Limited progress was made in the area of child protection. The creation of alternative
childcare systems is a priority. The monitoring capacity of the responsible agencies needs to
be improved.
The disabled and mental health care system
Since the October 2005 report, there has been progress in the following areas.
In December 2005, the government adopted an action plan on equal opportunities for people
with disabilities for 2006-2007. It envisages improving the quality of life and combating the
social exclusion of disabled people. A plan for improving the situation of elderly people with
mental disabilities in institutions for 2006 to 2008 was approved. These plans are in line with
the overall policy framework of the government. In February 2006, the Law on Integration of
People with Disabilities was amended, aiming at entitling people with disabilities to a
monthly allowance for social integration. The number of people with disabilities benefiting
from monthly supplements for social integration increased significantly between August 2005
(180 000 persons) and December 2005 (430 000 persons). In addition, the National
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assistants to people who have recently been integrated into families.
A framework agreement between the Ministries of Health and the Ministry of Labour and
Social Policy has been signed with the aim of coordinating mental health issues.
However, certain outstanding issues remain to be addressed.
Appropriate medical and legal procedures need to be applied systematically in cases of
institutionalisation. Community services continue to be underdeveloped. The school
integration of children with disabilities is lagging behind. Many institutions for people with
mental handicaps are overcrowded, provide poor living conditions and lack adequate services.
The system of reintegrating people with disabilities is not yet effective. De-institutionalisation
and the combat against prejudices needs to be pursued more vigorously . Community-based
care structures for the mentally disabled are being developed slowly. The system of
reintegrating people with disabilities or mental disorders is not yet effective. Implementation
of the legislation on mental health care needs to be monitored and encouraged.
Overall, some progress was made in this area. However, there is still a need to improve living
conditions in institutions and the situation of people with special needs and mental illness.
There is a need to increase efforts to support the development of alternative services and to
improve monitoring.
Protection and integration of minorities
Since the October 2005 report, there has been progress in the following areas.
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The National Action Plan for the Decade of Roma Inclusion 2005-2015 has been drawn up.
Since the establishment of the Commission for Protection against Discrimination in
November 2005, the majority of an increasing amount of cases the Commission handled were
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Ministry of Labour and Social Policy in January 2006. In March 2006 the government
adopted a National Programme for Improvement of the Living Conditions of Roma for the
period 2005-2015. The allocated budget for the ten years period is around million 630 Euro,
out of which 40% are coming from the national budget. Initiatives aimed at attracting and
keeping young Roma children in school continue to be largely successful. National
employment programmes aimed inter alia at addressing in particular long-term unemployed
and unskilled people have continued and mostly involved Roma.
Amendments to the regulation on the structure and activity of the National Council for
Cooperation on Ethnic and Demographic Issues have enabled a small increase in the
administrative capacity of the State structures dealing with minority issues. The vast majority
of the Regional Councils for 'Ethnic and Demographic Issues' have been established. There
are a number of cases in which NGOs are successfully addressing the issue of de facto
segregated schools in Bulgaria.
However, certain outstanding issues remain to be addressed.
Additional measures are needed to enhance implementation of the Action Plan for the Decade
of Roma Inclusion 2005-2015. The Commission for Protection against Discrimination is still
not adequately resourced and not fully operational. It needs to develop a strategic approach to
litigation and to become more pro-.active in terms of prevention, training and awareness-
raising activities
(see also chapter 13: Social Policy and Employment).
The job profiles and the budgets for the assistant teachers are not defined yet. Measures to
integrate Roma children in schools do not concern pupils in higher grades. These measures
often remain limited due to limited funding. Many Roma still do not have adequate access to
healthcare services. Incentives for the social inclusion of the Roma remain limited. Efforts to
include vulnerable groups, in particular Roma, in the labour market, need to be enhanced by
fostering access to vocational training measures. Ill-treatment of persons in custody still
appears to disproportionately affect Roma
The administrative capacity of the National Council for Cooperation on Ethnic and
Demographic Issues remains incomplete. Regional Councils for Ethnic and Demographic
Issues lack human resources and adequate infrastructure especially to enhance their
communication with the central and local substructures.
Overall, some progress was made in the area of the protection and integration of the Roma
minority. However, substantial efforts are still needed to promote the social inclusion and
integration of Roma into the Bulgarian society. Living conditions need to be improved.
Further efforts are needed to combat all forms of intolerance, particularly by fully applying
existing legislation on broadcasting and other activities aiming to combat any form of racism,
discrimination or xenophobia.
2.1.
General evaluation
Bulgaria fulfils the political criteria for EU membership.
Since the October 2005 report, there has been progress in a number of areas, including the
reform of the judiciary. As regards the justice system, the new penal procedure code and a
legal framework for legal aid entered into force. Constitutional amendments have entrusted
the prosecution service with the responsibility for leading investigations. Amendments to the
Law on the Judiciary have been adopted.
Bulgaria has taken a number of measures to fight corruption. A code of ethics was adopted for
the executive branch. An anti-corruption strategy for 2006-2008 was adopted. Constitutional
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amendments have reduced the scope of immunity of Members of Parliament. The prosecutor
general presented requests for lifting the immunity of ten Members of Parliament. Five
voluntarily abstained from their immunity and the immunity was lifted for a sixth one by a
vote in Parliament; the other cases are still being examined. This allowed investigations into
high-level corruption cases to be launched.
Bulgaria has made progress in the field of public administration, in particular with the
adoption of amendments to the laws on administration and on civil servants, and a new Code
of Administrative Procedure. As regards ill-treatment in custody, there has been some
reduction of incidents, while conditions have improved in certain detention centres. Policy
initiatives were taken for the disabled and for the mental health care system. Social support
for the disabled has been increased.
However, certain outstanding issues remain to be addressed. The accountability, transparency
and efficiency of the justice system need further strengthening. Further efforts are needed to
consolidate implementation of the random allocation of cases throughout the country. More
objective and transparent mechanisms are needed for assessing the quality of magistrates'
work. Any ambiguities regarding the independence of the judiciary need to be removed. There
were bottlenecks in the pre-trial process due to procedural rules and insufficient investigators.
There have been few tangible results in combating organised crime.
The structures to coordinate and implement the anti-corruption policy need strengthening in
order to perform their roles effectively. Indictments, prosecutions, trials, convictions and
dissuasive sentences remain rare in the fight against high-level corruption. Bulgaria needs to
present clear evidence of results in this area.
The strategy to decentralise the administration has not been adopted yet. Bulgaria remains a
country of transit and to a lesser extent a country of origin and destination for trafficking in
human beings. There continue to be cases of ill-treatment of detainees. Living conditions in
many child welfare and mental health care institutions need to be improved by implementing
policy initiatives, and alternative care systems created. Social inclusion of the Roma minority
still requires substantial efforts. Further efforts are needed to combat all forms of intolerance,
particularly by fully applying existing legislation on broadcasting and other activities aiming
to combat any form of racism, discrimination or xenophobia.
3.
ECONOMIC CRITERIA
Introduction
In its 2005 Report, the Commission concluded that Bulgaria continues to be a functioning
market economy. It concluded that the continuation of the current pace of its reform path
should enable Bulgaria to cope with competitive pressure and market forces within the Union.
Bulgaria had broadly maintained macroeconomic stability, even if external deficits had
further risen. It had continued implementing its structural reform programme, albeit not
equally vigorously in all fields.
Following a very strong expansion by 6.2% in the first half of 2005, real GDP growth slowed
down in the third quarter mainly as a result of the heavy floods during the summer months
and reached 5.5% for the whole year. Gross fixed capital formation grew particularly strongly
at a rate of 19.0%; final consumption also continued to expand at a rate of 6.8%. Both the
trade deficit and the current account deficit increased further from 15.1% of GDP in 2004 to
20.4% of GDP in 2005 and from 5.8% to 11.8% of GDP. Consumer price inflation (interim
HICP) accelerated towards the end of the year due to increases in oil and food prices. While
average inflation dropped from 6.1% in 2004 to 5.0% in 2005, end-of-year inflation thus rose
from 4.0% to 6.5%.
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This section assesses, in each of the outstanding areas, the developments that occurred since
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Macroeconomic stability and current account deficit
The 2005 Report concluded that the continuation of prudent fiscal policy and moderate wage
increases remained critical to containing potential risks for the external balance. Since then,
there has been progress in the following areas.
Tight fiscal policies and relatively moderate wage increases continued and additional
measures to curb credit growth were taken. Still, the current account deficit increased further
in the second half of 2005 and reached 11.8% of GDP for 2005. This increase has been mostly
triggered by negative exogenous shocks, while macroeconomic policies remained overall very
prudent. The general government balance ended with a surplus of 3.1% of GDP (ESA 95)
compared to 1.9% in 2004. Minimum wages increased by 25% in January 2005, but average
wage increases remained more moderate. Real annual average wages grew by around 4.1%,
and thus largely in line with productivity gains.
Additional measures to curb bank credit growth entered into force in April 2005 and were
relatively effective in bringing down the annual growth rate from close to 50% in 2004 to
below 30% by March 2006. As from January 2006, measures have been tightened further,
aiming at bringing down the annual growth rate to below 20% in 2006. Further measures have
also been taken to target more specifically household and mortgage lending. Some further
fiscal tightening is foreseen in 2006 with a revised fiscal target of a 3% of GDP surplus (cash
basis). Public sector wages are scheduled to increase by 6% in June 2006 which together with
a more moderate minimum wage increase should help to maintain stability-oriented wage
developments.
However, certain outstanding issues remain to be addressed.
The widening of the current account deficit in 2005 was almost exclusively due to a higher
trade deficit and a lower surplus in the service balance. Higher oil prices and particularly
strong imports of investment goods led to an acceleration of import growth to over 26%. At
the same time, export growth slowed down during the year to 18.4% largely because of flood-
related disruptions. Consequently, the trade deficit increased to 20.4% of GDP in 2005. High
import growth also implied an increase in the transport expenditures, which together with a
slowdown of growth in the tourist industry reduced the surplus in the services balance. While
the restrictions on credit growth were effective in bringing down credit expansion, their
impact on containing the external deficit was more limited, because enterprises are
increasingly relying on other sources of financing, including leasing and direct foreign
borrowing. In view of the very high trade and current account deficits, the continuation of
tight fiscal policies and measures to contain credit growth as well as moderate wage increases
remain crucial.
Overall, appropriate steps have been taken to contain the external deficit, but could not
prevent a further widening. The continuation of prudent macroeconomic policies together
with a further deepening of structural reforms will therefore be critical to achieve a sustained
reduction of the current account deficit.
Privatisation and industrial restructuring
The 2005 Report concluded that the momentum in completing the privatisation programme
should be maintained. Since then, there has been progress in the following areas.
Out of a total of more than 5800 enterprises with state ownership foreseen for privatisation,
the state still holds majority or minority stakes in 520 enterprises. Stakes in 74 enterprises
were sold since September 2005, mostly involving minority shareholdings, but the share of
privatised assets increased only slightly and remained just below 90% of all assets foreseen
for privatisation. Of the larger privatisation deals mentioned in the 2005 report, only three
(Boyana film studios, Varna thermal power plant and the river shipping company) were close
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to finalisation in April 2006. Revised privatisation strategies for the Maritime Fleet and
Bulgaria Air were adopted by the Council of Ministers in October 2005 and February 2006.
The strategy for Bulgaria Air was approved by Parliament in March 2006. In February 2006,
the Bulgartabac Holding adopted a strategy for the restructuring and sale of several individual
units.
Some further progress has been made in the liberalisation and restructuring of network
industries. The opening up of the gas and electricity markets continued in line with the
existing timetable. Plans for the unbundling of the National Electricity Company and
Bulgargas have been elaborated. The railways liberalisation is well advanced. Concessions for
the operation and upgrading of ports and airports are being granted to private operators,
although the granting of the concession for the airports in Varna and Bourgas has been
delayed due to court appeals. In the telecommunications sector, the conditions for effective
competition have improved, partly due to a third mobile phone operator starting services in
November 2005.
However, certain outstanding issues remain to be addressed.
The privatisation process is well advanced, but remains to be completed. Further efforts will
be required to successfully conclude the privatisation process in the energy and transport
sectors. In the energy sector, the sale of the thermal power plants in Rousse and Bobov Dol
has not been completed. The privatisation strategy for the Maritime Shipping Company has
not yet been adopted by Parliament and is currently being revised.
The unbundling of the National Electricity Company and Bulgargas as well as the
liberalisation of the gas and electricity markets remains to be completed until accession.
Regarding rail transport, the rail operator and the infrastructure company continue to make
losses and to accumulate arrears. Further progress in the restructuring of the railway sector,
including through cost-cutting measures, will be essential to improve the financial situation.
Strengthening the capacity of regulatory bodies will be important to further improve the
conditions for competition in the network industries.
Overall, while being at an advanced stage, limited further progress was made on privatisation.
The liberalisation and restructuring of the gas and electricity sectors remain to be completed.
Further efforts are required on the restructuring of the railways sector.
Business environment
The 2005 Report concluded that further reforms were needed to improve the business
environment, in particular the functioning of the administrative and judicial systems. Since
then, there has been progress in the following areas.
The business registration reform has continued and a new Commercial Register Law was
adopted in March 2006. The law foresees that business registration will be taken out of the
courts and be turned into a purely administrative procedure. The National Revenue Agency
became operational in January 2006 and has the sole responsibility for the collection of
central government taxes and social security contributions. Amendments to the insolvency
legislation to improve the efficiency, transparency and speed of insolvency procedures were
submitted to Parliament in November 2005. The review of regulatory regimes has continued,
but with limited progress. The newly established Ministry for State Administration and
Administrative Reform is in charge of co-ordinating the review and optimisation of existing
regulatory regimes and of giving guidance on improving the methodology for impact
assessments. Measures to optimise the size and structure of public administration, to improve
training and to promote the provision of e-government services have been proposed. The new
Administrative Procedure Code has been adopted in March 2006. Following the adoption of
the Law on Arbitration, three arbitration centres have been opened.
However, certain outstanding issues remain to be addressed.
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Major challenges remain for improving the conditions for market entry and exit and for
contract enforcement, for increasing the efficiency of the administrative and legal system, and
for reducing the regulatory burden on business. The new Commercial Register Law still needs
to be fully implemented to simplify and speed up business registration. The proposed
amendments to the insolvency legislation have not yet been adopted by Parliament. Renewed
efforts will be required to achieve further, tangible progress in facilitating the regulatory
framework, including through more systematic impact assessments and further simplification.
The functioning of the administration needs to be further improved. The Administrative
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challenges remain to increase the efficiency of court procedures. The new draft Civil
Procedure Code has not yet been submitted to Parliament. Mediation as an out-of-court
settlement procedure is still not widely used. Private bailiffs still need to become operational.
Overall, limited progress has been made in this area. Efforts to improve the functioning of the
administrative and in particular the judicial system and to further ease the regulatory burden
on businesses should be intensified further.
Labour market flexibility
The 2005 Report concluded that little progress had been made in improving labour market
flexibility which, together with a comprehensive reform of the education system, would be
crucial for dealing with skills mismatches. Since then, there has been progress in the
following areas.
In line with the strong economic growth, employment grew by 2.0% in 2005 and the average
unemployment rate fell from 12% in 2004 to 10.1% in 2005. Limited steps were taken to
improve the functioning of the labour market. As from January 2006, pension contributions
were reduced by 6 percentage points and the share paid by the employer was reduced from
70% to 65%, thus reducing non-wage labour costs and providing incentives for job creation
and moving jobs out of the informal sector. The Employment Promotion Law was amended in
February 2006, providing for certain financial incentives to regional mobility and for actively
searching employment. Preparations for an evaluation of the effectiveness of active labour
market programmes have started. A programme for the reform of secondary education was
adopted by the Council of Ministers in February 2006. It envisages a re-organisation of the
secondary education system, the introduction of short-term vocational training modules, and
standardised national examinations.
However, certain outstanding issues remain to be addressed.
Hardly any progress has been made on removing labour market rigidities and modernising the
regulatory framework, in particular as regards working time or the use of fixed-term contracts.
The integration of seniority bonuses into the regular pay scale has been delayed. A Strategy
for Higher Education Development is not yet adopted. The planned reforms of the education
system still need to be fully implemented to improve the quality of education and better align
educational outcomes with labour market needs.
Overall, only little progress has been made on increasing labour market flexibility. Increased
efforts to reform the education system will be important to reduce skills mismatches.
3.1.
General evaluation
Bulgaria is a functioning market economy. The continuation of the current reforms should
enable it to cope with competitive pressure and market forces within the Union in the near
term. Bulgaria has broadly maintained macroeconomic stability and advanced structural
reforms.
Progress has continued since the October 2005 report. Useful steps were taken to contain the
external deficit. The privatisation process and the liberalisation and restructuring of utilities
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are well advanced. Some additional progress has been made in improving the business
environment and in reducing non-wage labour costs.
However, the current account deficit widened and warrants continued prudent fiscal and wage
policies. Deepening of structural reforms requires improving the functioning of the judicial
system and further easing the regulatory burden on businesses. The regulatory framework for
the labour market needs to be made more flexible.
4.
COMMITMENTS AND REQUIREMENTS
ACCESSION NEGOTIATIONS
ARISING
FROM
THE
Introduction
In the October 2005 reports the Commission concluded that Bulgaria had already achieved a
considerable degree of compliance with the
acquis.
In most chapters of the
acquis
either Bulgaria was ready or preparations were being made to
resolve the last outstanding issues by accession. This was the case with the following
chapters: capital movements, competition policy, statistics, economic and monetary union,
industrial policy small and medium-sized enterprises, science and research, education and
training, telecommunication and audio-visual policy, external relations, common foreign and
security policy, EU budgetary provisions and competition. For all these chapters, Bulgaria
was considered to be sufficiently prepared for a smooth integration into the EU. This
conclusion remains valid. Moreover, further progress has been made, for instance on
competition, where the Commission for Protection of Competition has continued to build up a
positive track record of anti-trust decisions. These chapters are therefore not examined below.
The remaining chapters included issues which required increased efforts from Bulgaria and, in
a limited number of cases, immediate and decisive action in order to be ready by accession.
These issues are re-examined in the relevant chapters below.
This section therefore gives an overview of all the remaining issues which Bulgaria needs to
address in order to be prepared for implementing the
acquis
by accession.
4.1.
4.1.1.
Chapters of the
acquis
Chapter 1: Free movement of goods
In the
non-harmonised area,
Bulgaria has screened its legislation to identify provisions that
could be in breach of Articles 28 to 30 of the EC Treaty. Only two measures have so far been
found by Bulgaria to be inconsistent with the requirements of Articles 28 to 30. The new Law
on Consumer Protection adopted in December 2005 and amendments being prepared to the
Law on Accountancy aim at addressing this issue. Amendments to the Law on Cultural
Monuments and Museums were adopted in February 2006. The Law on Control of Explosive
Substances, Firearms and Ammunition was amended in April 2006. The process of internal
screening is to be repeated continuously. Measures remain to be adopted to enable the import
of used cars.
The legislative shortcomings in the field of
public procurement
are being solved. The new
Law on Concessions and amendments to the Law on Public Procurement were adopted in
April 2006. Both laws include a remedies mechanism in line with EU requirements.
Some improvement of administrative capacity and development of professional skills can be
reported. As regards remedies, the Commission for the Protection of Competition (CPC) is
now in charge of processing pending complaints lodged from all over the country.
Amendments have to be made to the implementing legislation on public procurement as a
consequence of the new laws, and a whole set of implementing legislation on concessions is
being drafted to enter into force in June 2006. Various national provisions that are
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incompatible with the new provisions in the Laws on Concessions and on Public Procurement
have been identified and removed.
On the institutional side, the Public Procurement Agency and the Economic and Social Policy
Directorate of the Council of Ministers have been continuously improving their administrative
capacity. Staff increases are foreseen in order to enable to cope with the added remedies
workload. Overall, preparations are now on track in this area.
Conclusion
Bulgaria is now generally meeting the commitments and requirements arising from the
accession negotiations in the
non-harmonised
and
public procurement
areas, as a result of
significant progress. Continued efforts are nonetheless needed in the non-harmonised area.
Efforts are also needed to transpose and implement the
acquis
on foodstuffs entry points and
medical devices. Preparations in the field of public procurement need to be completed as
regards implementing rules.
4.1.2.
Chapter 2: Free movement of persons
Legislation has been developed in the field of
mutual recognition of professional
qualifications.
The Law on Higher Education and the Law on Health were amended and the
new Law on Veterinary Activities was adopted in October 2005. Much work has been done
on adoption of the implementing legislation for the health professions
–medicine,
veterinary
medicine, dentistry, pharmacy, general care nursery and midwifery.
However, that legislation remains to be completed, in particular on the automatic and
unconditional recognition and on cross-border provision of services. The Law on the Bar was
amended in January 2006 to bring it generally into line with the
acquis.
Strengthening of the
administrative capacity continued, in terms of both training and further development of
appropriate administrative structures, but must be reinforced. Preparations need to be stepped
up.
Conclusion
Some progress has been made on
mutual recognition of professional qualifications.
Preparations are continuing, but there are concerns that Bulgaria would not be in a position to
fully implement the
acquis
from the time of accession if the current pace of progress is not
raised. Swift action is needed in this area.
4.1.3.
Chapter 3: Freedom to provide services
The process of removing restrictions to the
right of establishment and freedom to provide
non-financial services
is close to completion. A new Law on Veterinary Activities was
adopted in October 2005. The Laws on Tourism and on Protection and Development of
Culture were amended in November 2005. The Laws on Employment Promotion and on
Social Promotion were amended in February 2006. The Law on Child Protection was
amended in April 2006.
In the field of tourism, despite legislative changes, reports about irregularities and different
prices, mainly at tourist facilities, continue. Non-EU nationals are also being forced to buy
health insurance at the border. The Bulgarian authorities have to find ways of enforcing the
new non-discriminatory provisions in the Law on Tourism and other legislation. Preparations
are well on track as regards the right of establishment and freedom to provide non financial
services, excepted in the field of tourism.
Bulgaria has made efforts to align its
banking
legislation, but the secondary legislation needs
to be completed. Increased efforts are required for the transposition and implementation of the
new, more stringent, capital requirements directive in order to provide sufficient time to the
banks and the investment firms to make the necessary adaptations. Consistency remains to be
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ensured in order to enable coherent supervision of banks and investment firms. Preparations
need to be accelerated.
The new Code on
insurance
was adopted in December 2005. Bulgaria has also drawn up an
action plan to combat uninsured driving, which contains substantial measures (amendments to
legislation, a national campaign on the importance of motor third party liability insurance,
increased police checks, etc.). Work is in progress to clean up the registration database and
de-register unusable vehicles, which are estimated at 26% of the vehicle fleet.
However, the impact of these measures taken against uninsured vehicles needs to be
materialised and the financial capacity of the Bulgarian Guarantee Fund needs still to be
strengthened to enable Bulgaria to sign the multilateral agreement and the Commission to take
its decision concerning the removal of border checks for insurance certificates. Preparations
need to be accelerated in the field of insurance as a matter of urgency.
In the case of
investment services
and the
securities market,
Bulgaria is continuing its
preparations for transposition of the outstanding directives. The timetable aiming for final
adoption of the relevant acts in autumn 2006 seems reasonable, but needs to be duly
respected. Preparations need to be stepped up on investment services and the securities
market.
Transposition of the
acquis
on the
information society
has to be completed. Preparations
need to be speeded up in this area.
As regards the
protection of personal data,
Bulgaria's legislation is not yet aligned with the
acquis,
despite amendments introduced in December 2005. Shortcomings still affect a number
of significant issues such as the scope of legislation, applicability of national law, principle of
data quality, legal basis for processing, data on criminal convictions, information to the data
subject, scope of derogations, system for notification and prior checking by the authority,
transfers of data to third countries. Despite steps taken in the right direction, the
administrative capacity of the Data Protection Commission is still weak. Its budgetary
independence is not guaranteed, cuts in the 2006 budget have taken place, and it does not
have sufficient staff. The functioning of the registration and notification scheme is still
unsatisfactory. Its level of activity is quite low, with the handling of complaints remaining
insufficient, as is the enforcement record in general. Legislative preparations need to be
accelerated considerably in this field.
Bulgaria is not yet in a position to ensure full implementation of the
acquis
in the area of
protection of personal data.
(see also Chapter 24
–
Justice and home affairs).
Conclusion
Significant progress has been made on the
right of establishment and freedom to provide
non-financial services.
Bulgaria is now generally meeting the commitments and
requirements arising from the accession negotiations. Preparations are continuing and
Bulgaria is expected to be in a position to implement the
acquis
from the time of accession if
the current pace of progress is maintained.
Progress has been made in the area of financial services, notably on
banking
and
insurance,
but increased efforts are still needed in order to complete the preparations for accession in the
fields of
banking
(Directive on capital requirements for investment firms),
investment
services and the securities market
and
protection of personal data.
In addition, increased
efforts are required on motor vehicle
insurance
and on the
information society.
Increased
efforts are required in these areas.
4.1.4.
Chapter 4: Freedom movement of capital
The Bulgarian legislation on
money laundering
is generally in line with the
acquis.
Positive
developments can be reported on responses to international requests for cooperation and on
operations targeting suspected money laundering activities by foreign nationals. The Financial
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Intelligence Agency is functioning in an adequate and professional way as the administrative
body analysing suspicious transaction reports (STRs).
Gaps remain in the Law on Measures against Money Laundering, which do not yet fully
reflect the requirements of the second EU Anti-Money Laundering Directive. Furthermore,
legislation needs to align with the revised recommendations of the Financial Action Task
Force on money laundering and terrorist financing. Effective implementation of legislation
remains very limited. Awareness of reporting obligations amongst reporting entities,
suspicious transaction reporting (STRs) and supervision of reporting entities need to be
improved, particularly outside the financial sector.
The essential shortcoming in this area remains mainly the absence of tangible results in terms
of enforcement and prosecution of cases of money laundering (see
Chapter 24
–Justice
and
home affairs).
Preparations in this area need to be stepped up.
Conclusion
Progress in the field of
money laundering
has remained limited in terms of effective
implementation and enforcement. Increased efforts and swift action are now needed in the
field of the prevention of money laundering in order to overcome the shortcomings by
accession. This concerns in particular the areas of awareness and suspicious transaction
reporting by reporting entities, and the supervision of reporting entities.
4.1.5.
Chapter 5: Company law
As regards
protection of intellectual and industrial property rights,
there have been
positive developments, particularly in inter-institutional cooperation, in coordinated
enforcement and in the legislative framework. These improvements are the result of a national
action plan for 2005-2006 in the field of intellectual and industrial property rights (IPR).
The Law on Optical Carriers was adopted in September 2005 as one weapon in the fight
against piracy. The action plan aims at improving administrative structures and IPR
enforcement. Better cooperation between IPR agencies and law enforcement authorities,
awareness and training are recognised as key factors and efforts have been made to improve
communication between institutions.
Legislation on patents and other outstanding measures (amendments to the Law on Trade
Marks and Geographical Indications and the Law on Industrial Design) have yet to be further
aligned with the
acquis
in the field of industrial property.
Further improvements are required as regards enforcement of IPR. IPR-related crime remains
a continuing threat and poses a real challenge. Bulgaria should now convert plans into further
action and produce more concrete and tangible results. Closer cooperation, awareness raising,
additional staffing at critical location in the country and more training are required.
Communication between institutions and between institutions and right-holders’
organisations
must be further developed.
Preparations need to be stepped up on protection of intellectual and industrial property rights.
Conclusion
Significant progress has been made on
protection of intellectual and industrial property
rights,
but further steps are still needed in order to complete the preparations for accession.
Increased efforts and swift action are now needed in this area in order to solve the
shortcomings in time, before accession.
4.1.6.
Chapter 7: Agriculture
Horizontal issues
Legislation to set up a
Paying Agency
(PA) for the administration of national and EU support
to agriculture and rural areas, forestry and fisheries and on the strategic decisions was adopted
by Parliament in February 2006, in the form of the amendment to the Law on Farmers’
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Support. Critical issues have been formalised, such as the option to apply the Single Area
Payment Scheme (SAPS), to decide on the minimum size of eligible agricultural holdings, the
complementary national direct payments and the appropriate budget.
Development of the IT system for operation of the PA and the training and recruitment of
staff are still incomplete. Preparations need to be stepped up.
The original master plan for setting up the
Integrated Administration and Control System
(IACS)
has been updated to reflect the delays in its implementation. To set up the land parcel
identification system (LPIS), Bulgaria decided to use archived satellite images in addition to
aerial ortho-photos; contracts for the provision of all data have been concluded but the time
schedule is very tight. Digital ortho-photos and usable satellite images exist for around 25%
of the territory. The digitisation of the LPIS blocks has been done so far for around 17% of
the area. Work has just started for the establishment of the link between the farmers and the
LPIS blocks, needed to supply the farmers with graphical material indicating boundaries of
the reference parcels, their single identification number and their area. Much work has been
done in relation to adopting and installing of new software but it has not been subject to final
testing. Other basic tasks, such as pre-registration of farmers, on-the-spot controls and training
of staff, have also been accelerated. Urgent action is still needed.
Concerning
trade mechanisms,
formal coordination has been established between all bodies
involved (State Fund for Agriculture, Customs Service, National Veterinary Service and
Phyto-Sanitary Service). In general, preparations are on track but efforts are still needed as
operational and detailed knowledge on trade mechanisms is still generally missing.
Common market organisations (CMOs)
In general an effective administrative structure is being set up for enforcement of all these
market organisations, in the form of recruitment of additional staff, appropriate training and
clear definition of procedures.
In the case of
wine,
the setting up of Bulgaria's vineyard register has not been completed.
Additional implementing legislation has not been adopted for certain market mechanisms, in
particular controls and certification. Preparations need to be stepped up in this sector.
Legislation has been adopted to enforce the CMO for
milk
and measures have been taken to
put in place the milk quota as well as most of the mechanisms for the common market
organisation for milk and milk products. The database including the basic quota register has
been finalised, covering all producers and direct sellers; allocation of the indicative individual
quota is under preparation. The process of approval of purchasers is on good track.
Detailed rules for management of milk quotas and of the national reserve have yet to be
adopted. The national and regional milk boards are not fully operational nor are the
independent laboratories for the analysis of fat content at all individual milk factories. The
laboratories are neither installed nor accredited yet. Preparations need to be accelerated.
In the area of
fruit and vegetables,
progress has been achieved for the implementation of the
quality control of fresh products and marketing standards. Progress has also been made with
regard to the administrative structure for the recognition of producers.
With regard to
beef
carcass classification, the Bulgarian legislation has been fully
harmonised, but it is not in force at present. In order to implement the classification properly
by accession, training of the classifiers in the abattoirs needs to be accelerated.
Veterinary and phytosanitary issues, including food safety
By adopting the Veterinary Framework Law (VFL) Bulgaria has established the basis for
transposing into its national legislation the
acquis
concerning animal health, animal welfare,
veterinary public health and the horizontal veterinary control instruments. The VFL entered
into force on 1 May 2006.
Some parts of secondary legislation or amendments to existing legislation to ensure full
compliance with the
acquis
in the veterinary sector following the necessary corresponding
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checks have not been adopted yet. Likewise, final parliamentary adoption of the Plant
Protection Act is outstanding. Preparations need to be stepped up.
The legislation on
transmissible spongiform encephalopathy
(TSE)
and animal by-
products
has been transposed. The ban on feeding certain processed animal proteins to farm
animals has been in place since early January 2006.
Concerning TSE surveillance, in particular the collection, treatment and testing of fallen
stock, Bulgaria has presented a national collection plan. This plan needs further improvement.
Compliance with the EU requirements as regards one of the two rendering plants, located in
Varna, has not been demonstrated yet. The
acquis-compliant
destruction of the rendering
product (meat and bone meal) by incineration in a cement plant has also been shown. The
destruction of meat and bone meal in particular stocks, which is ongoing in that cement plant
must be guaranteed. Urgent action is also needed as regards the construction of a new
rendering part in the south of Bulgaria.
Transposition of the principles of the legislation on the
veterinary control system in the
internal market
is covered by the VFL.
Secondary legislation with a view to joining the TRACES network linking EU veterinary
authorities (the successor to ANIMO) has not yet been adopted and enforced. Preparations
need to be stepped up.
Legislation transposing the
acquis
on the
identification and registration of animals
is now
in place for all relevant species as well as for sanctions and control issues. A bovine
identification and registration database has been set up. The system is being updated and
upgraded to include other species.
Online operation of the database for all species has yet to be demonstrated. Preparations need
to be stepped up.
The
acquis
on the
financing of veterinary inspections and controls
has been transposed.
Preparations are well on track.
The legislation on veterinary checks on third-country imports and rules on imports has been
transposed. One of the eight long-term veterinary border inspection posts (Kapitan Andreeovo
on the land border with Turkey) is operational, but few adaptations are still required. Works
have started and equipment for setting up the others has been contracted.
The necessary infrastructure for the seven long-term veterinary border inspection posts on the
E ’
future external borders in Bulgaria has not been established nor have the EU inspection
Us
procedures and import conditions yet been enforced. Preparations need to be stepped up
considerably.
The Veterinary Framework Law provides the legal basis for establishment of an animal health
fund for
expenditure in the veterinary field.
General measures on
animal disease control
(vaccination ban and certain eradication
measures) have been transposed
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As regards disease control, an animal health emergency fund has yet to be established. In the
case of control of classical swine fever, the transition from a vaccinating to a non–
vaccinating
country has not yet been managed completely. The practice is now focusing on detection of
potentially circulating field viruses since the vaccination of the domestic pig population
ceased in 2005. Before Bulgaria can be treated as a truly non-vaccinating country as regards
the domestic pig population, preparations need to be stepped up.
Legislation on
trade in live animals and animal products
has been transposed. Preparations
are well on track in this area.
In addition, the Veterinary Framework Law provides the legal basis for enforcing legislation
on veterinary
public health
in establishments. Alignment with the new EU hygiene package
and upgrading of establishments are continuing. As regards the quality of raw milk and its
control systems, a clear strategy for management of the transition period has been adopted.
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However, it has not yet been demonstrated that the upgrading process concerning the
establishments has been completed. Preparations need to be stepped up.
As regards enforcement of the
acquis
concerning
common measures
(including
zoonoses),
Bulgaria has identified its upgrading needs and is working on eliminating the deficiencies.
As for veterinary public health, enforcement of controls on residues, veterinary medicinal
products, contaminants and zoonoses has not been verified, in particular with regard to the
diagnostic methods and standards applied in laboratories. Preparations need to be furthered.
Implementation and enforcement of the
animal welfare
rules at farm level during transport
and slaughter have started, accompanied by training on application of the new legislation.
The EU norms and standards on animal welfare are not yet fully enforced. Preparations need
to be stepped up.
Conclusion
Progress has been made on some
CMOs.
Bulgaria is now generally meeting the commitments
and requirements arising from the accession negotiations in this area.
Good progress has also been made on the
Paying Agency
but further steps are still needed in
order to complete the preparations for accession. This area requires increased efforts and swift
action now in order to solve the shortcomings in time before accession. Some progress has
also been noticed for the area of trade mechanisms and the
CMOs
for
wine and alcohol,
and
for
milk and beef meat.
Progress has also been registered as regards the full transposition of
the
acquis
in the
veterinary sector,
completion of the work on
animal disease control
(classical swine fever and the animal health emergency fund),
veterinary control systems in
the internal market (establishment
of all of the long-term border inspection posts)
trade in
live animals and animal products, trade mechanisms
and
animal welfare,
and completion
of the work on
veterinary public health
by upgrading the establishments. Progress has also
been made with the sampling and testing capacity for enforcing the
common measures
(including
zoonoses)
in the veterinary field. Increased efforts and swift action are now needed
in these areas in order to solve shortcomings in time, before accession.
Limited progress has been made on
IACS,
especially with regards to the Land Parcel
Identification system (LPIS), and on
TSEs and animal by-products,
including with regard to
the upgrading of the rendering plants. These areas are still of serious concern. Bulgaria should
take immediate and decisive action now in order to be ready by the date of accession.
4.1.7.
Chapter 8: Fisheries
In the field of
resource and fleet management, inspection and control,
the Bulgarian
Fisheries and Aquaculture Act of 2001 was amended in November 2005 to provide the legal
basis for granting fishing licences, structural action and market organisation also, including
the vessel monitoring system and the recognition of producer groups. The National Agency
for Fisheries and Aquaculture (NAFA) is in charge of keeping and reporting on the Fishing
Fleet Register.
Test data have not yet been transmitted to the EU Fishing Fleet Register in the appropriate
format. Installation of the Fishing Vessel Monitoring System has yet to be completed,
specifically with a view to upgrading to a satellite-based system. Likewise, reporting on catch
registration data from logbooks, landing declarations and sales notes and availability of those
data have not improved significantly. Preparations need to be accelerated.
In the area of
structural action,
rules and procedures for use and implementation of structural
measures are being drafted, in line with the establishment of the Paying Agency for
agriculture (see
Chapter 7 - Agriculture).
Preparations need to be speeded up.
Regarding
market policy,
a market organisation unit was established in NAFA at the end of
2005.
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No further implementing legislation to establish
w o sl m re i r t c r (rdcr
hl a a tn a r t e poue ’
e e k f su u
s
organisations, intervention agency and information system) has been adopted. No system for
collecting catch registration data has been established and consequently cross-checks are not
yet possible. Preparations need to be stepped up.
Conclusion
Progress has been made on
resource and fleet management, inspection and control,
structural action
and
market policy.
However, the results remain limited. Bulgaria needs to
make increased efforts and take swift action with a view to preparing for management of the
structural fund for the fisheries sector, completing the Fishing Vessel Monitoring System,
adopting legislation and establishing a system for collecting catch registration data.
4.1.8.
Chapter 9: Transport policy
In the field of
air transport,
significant efforts have been made and most of the relevant
legislation has been transposed and is generally in line with the
acquis.
Bulgaria has initialled
the general air transport agreement and the European Common Aviation Area Agreement, and
provisional application of both agreements is envisaged as of the day of signature.
The relevant policies, notably on airport security and safety, must still be fully implemented
by accession. Preparations are generally on track in this area.
The framework legislation on
maritime transport
has been transposed in line with the
acquis.
The situation regarding port state control functions is improving, notably in terms of
the decrease in the detention rate.
The independence of the Bulgarian Maritime Administration for flag state control is still not
fully ensured since Navybulgar, as a controlled entity, remains a state-owned company.
Preparations need to be stepped up in this area.
Conclusion
Significant progress has been made in the area of
air transport
legislation, where Bulgaria is
now generally meeting the commitments and requirements arising from the accession
negotiations in these areas. The legislation is being implemented and the requirements should
be met by accession if the current pace of preparations is maintained.
Progress has been made in the area of
maritime transport.
However, the standards are still
lagging behind the European Union average. Increased efforts and swift action are now
needed in order to solve the shortcomings in time, before accession, in particular by ensuring
the full independence of the Bulgarian Maritime Administration as the inspection body.
4.1.9.
Chapter 10: Taxation
The Law on
Excise Duties
and Tax Warehouses was adopted in November 2005. In
particular, it provides for transferring responsibility for administering excise duties from the
tax to the customs administration. The same law also contains provisions on the system of
bonded warehouses, and on holding, moving and monitoring excisable products under duty
suspension arrangements. The Law on Excise Duties was amended in December 2005, with a
view to increasing excise duty rates in accordance with the agreed calendar of approximation.
Preparations are well on track in the field of excise duties.
In the area of
VAT,
legislation which was planned for the end of 2005 has not yet been
adopted. In the area of
direct taxation,
the draft Corporate and Income Tax Act has not been
adopted either. Preparations need to be stepped up.
In the area of
administrative cooperation and mutual assistance,
good progress has been
made. The National Revenue Agency (NRA) became operational in January 2006 upon the
entry into force of the new Code on tax and social security procedures. The NRA brought
together the collection and servicing of both central government taxes (such as VAT and
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corporate taxes) and compulsory social security contributions (such as health insurance). The
ongoing reform of the sector, in particular the successful transformation of the tax
administration into the NRA, has improved the collection and control capacity, as shown by
the increase in total tax collection.
The tax collection requires continued efforts at management level to ensure that the newly
established institution functions smoothly. Implementation of the new laws will require
coordination between all stakeholders. Administrative capacity should be further enhanced by
developing the professional skills of the staff and continuous training. Preparations for IT
interconnectivity have continued at good pace and, if no delays occur, Bulgaria should meet
its obligations upon accession. Overall, preparations are on track.
Conclusion
Significant progress has been made on
excise duties
and on
administrative cooperation and
mutual assistance.
Bulgaria is now generally meeting the commitments and requirements
arising from the accession negotiations in these areas. Bulgaria is expected to be in a position
to implement the
acquis
as from of accession if the current pace of progress is maintained.
In the areas of
VAT
and
direct taxation,
little progress was made. These areas require
increased efforts in terms of legislation and implementation of the new laws.
4.1.10. Chapter 13: Social policy and employment
As regards
labour law,
the Bulgarian Labour Code was amended in October 2005. The
Labour Inspectorate has increased its number of staff.
Transposition of the
acquis
is still incomplete, in particular regarding the directives
supplementing the European Company and European Cooperative Society Statutes, the
directive on information and consultation and the European Works Councils directive.
Furthermore, a number of issues to ensure the correct and full transposition need to be
addressed, particularly as regards the directives on posting of workers, employer insolvency,
health and safety of workers, collective redundancies, part-time work, fixed-term work,
working time, and protection of young people at work. In addition, the administrative capacity
and internal control mechanisms of the Labour Inspectorate are insufficient to guarantee
effective, even-handed application of the
acquis
in this area. Preparations need to be stepped
up.
With regard to
social dialogue,
the bipartite dialogue needs to be further strengthened in order
to prepare the social partners for their future role in the formulation and implementation of
EU social policy. The representativeness criteria have to be applied in an impartial way for all
social partner organisations. Participation in the tripartite dialogue needs to be restricted to
social partner organisations with a social mandate. Preparations need to be stepped up.
Some progress can be reported on operational implementation of the regulatory provisions in
the field of
public health.
In particular, progress has been made to bring the legislative
system for communicable diseases into line with the
acquis.
Significant progress has been
made to transpose the
acquis
on the manufacture, presentation and sale of tobacco products.
The Framework Convention for Tobacco Control was ratified in November 2005. The
Directive on Tobacco Advertising has been fully transposed. Changes have been made to
funding of the hospital sector and greater attention has been given to preventive health
measures.
The
acquis
on blood and blood components and tissues and cells has yet to be fully
transposed, in particular concerning the quality and safety standards for human blood and
blood components, traceability requirements and notification of serious reactions and events
and the Community standards and specifications relating to a quality system for blood
establishments. Further alignment of the law on transplantation of organs, tissues and cells is
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also awaited. The surveillance system for communicable diseases needs further enhancement
and continued investment in laboratory capacity and IT equipment.
Further efforts continue to be necessary to improve the health status of the population and to
enhance access to health and health care, especially at regional level and among poorer socio-
economic groups and minorities. As regards access to healthcare, the conditions applicable to
the population as a whole have not improved. Basic conditions in institutions caring for the
elderly, the physically and mentally handicapped and children are appalling. The legal basis
for their institutionalisation, along with the slow and sometimes badly planned process
towards real de-institutionalisation are unsatisfactory and still give cause for considerable
concern. Continued increased efforts are still needed.
Progress has been made on the preparations for managing the
European Social Fund (ESF),
particularly in terms of recruiting staff, continuing training for civil servants and designating
the managing authority for the Human Resources Development Operational Programme and
the Operational Programme for Administrative Capacity.
The building-up of the administrative capacity, particularly regarding the Operational
Programme for Administrative Capacity and staffing and training in the Ministry of Education
and Science and the Social Assistance Agency, is incomplete
(see also Chapter 21
–
Regional
policy and coordination of structural instruments).
Preparations need to be stepped up.
In the area of
social inclusion,
amendments to the Law on Social Assistance which, in
particular, open up the market for provision of social services, were adopted in February
2006. In April 2006, the government approved an updated national plan for fight against
poverty and social exclusion 2005-2006 which foresees support to activities in education, re-
qualification, employment and assistance to vulnerable groups. Analytical work and
development of social statistics on poverty and social exclusion have to continue in line with
the EU indicators on social inclusion. Efforts need to continue to improve the situation of
vulnerable groups, including Roma, and to promote their full integration into society. In some
municipalities the desegregation and integration in the standard school system of Roma pupils
and pupils with special needs have led to positive results.
Access to quality health care services has not been broadened, as a significant number of the
population, particularly amongst the Roma community, still lack access to care services. The
processes of desegregation and integration in the standard school system of Roma pupils and
pupils with special needs need to be accelerated. Nor has any continuous strengthening of
coordination of child welfare policies and of the administrative capacity of the Child
Protection Agency, including at municipal level, been noted. The process of de-
institutionalisation and development of community-based services have not been stepped up.
There is still a need to implement specific social, educational and medical services addressing
the issues of social exclusion. Further efforts have to be made to include vulnerable groups,
particularly from the Roma community, in the labour market by further promoting quality
education and vocational training. Access of persons with disabilities to public areas,
buildings, transport, education and the labour market has yet to be improved. Preparations
need to be stepped up.
Concerning
anti-discrimination,
the Commission for Protection against Discrimination was
finally established in November 2005 and has started to deal with its first cases.
Due to administrative and staff constraints, this Commission is under-performing and no
urgent efforts have been made to ensure that it will soon become fully operational. The
situation of the Roma minority still requires fundamental improvements. Efforts to ensure
effective implementation of the Framework Programme for Equal Integration of Roma in
Bulgarian Society have been insufficient. Preparations need to be stepped up.
Conclusion
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Progress was made in the preparations for the
European Social Fund
(ESF), but this area
still requires increased efforts to address remaining challenges. Only limited progress has
been made in five other areas of this chapter, which were identified in October 2005 as
requiring increased efforts. These still requires increased efforts and swift action now in order
to solve the outstanding issues in time before accession. Legal alignment needs to be
completed and enforced in the areas of
labour law
and
public health.
Bipartite
social
dialogue
needs to be further strengthened and the correct participation of social partners in
tripartite structures must be ensured. On
social inclusion,
access to quality health care
services and education, de-institutionalisation, child welfare and integration of vulnerable
groups into the labour market should be significantly improved. The situation of the Roma
minority continues to call for structural improvements. As regards
anti-discrimination,
the
administrative capacity of the Commission for Protection Against Discrimination needs to be
increased. In general, increased efforts are needed to strengthen the administrative capacity to
ensure due implementation of the social policy
acquis.
4.1.11. Chapter 14: Energy
Framework and implementing legislation has been adopted in the field of
competitiveness
and the internal energy market.
The electricity and gas market has yet to be fully opened in line with the
acquis.
The
implementation of the elaborated plans should lead to the unbundling of Bulgargas before
accession.
In addition, in the solid fuel sector Bulgaria has to ensure that state intervention is in line with
the
acquis.
Preparations in this area need to be stepped up.
In the field of
nuclear energy and nuclear safety,
the legal framework is in place and the
implementing legislation has been adopted.
R gri B l r ’ cm i ett er c sr o ui 1t 4o t K z dync a
ea n u a a o m t n o a y l ue f n s o fh ol u ul r
d g g is
m s
l o
t
e
o
e
power plant, as enshrined in the Act of Accession, Bulgaria has not yet taken the necessary
steps to ensure irreversible dismantling of units 1 and 2, which were shut down in 2002. It has
also not yet taken tangible operational and administrative action to secure the definitive
closure of units 3 and 4 in 2006 and to guarantee their subsequent decommissioning, thereby
allowing appropriate use of the available EU funds. There is no full compliance yet with the
Euratom Treaty requirements and procedures. Preparations in this area need to be
significantly improved.
Conclusion
Limited progress has been made on
competitiveness and the internal energy market.
Increased efforts and swift action are now needed in order to complete the opening of the
electricity and gas markets before accession. In the area of
nuclear energy and nuclear
safety,
the situation has deteriorated with regard to the decommissioning process. Increased
efforts and swift action are now needed to guarantee the irreversible closure of units 1 to 4 of
the Kozloduy nuclear power plant.
4.1.12. Chapter 15: Industrial policy
The
privatisation and restructuring
process has continued in Bulgaria, albeit at a slower
pace than planned. Privatisation is almost complete but the process has slowed down
significantly recently with few privatisation measures actually terminated. The restructuring
of network industries has continued.
The privatisation process is still not sufficiently transparent, and problems with post-
privatisation control persist.
Restructuring of the steel industry has been seriously delayed and it will not be possible to
restore the main steel producer, which is subject to an individual viability plan, to viability by
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the end of the agreed restructuring period. Bulgaria has formally notified the Commission of
planned changes to its National Restructuring Plan for the steel industry and to the relevant
business plan. The Commission will analyse these changes carefully, in particular from the
angle of their compatibility with the state aid rules. Preparations need to be stepped up in the
area of privatisation and restructuring.
Conclusion
Some progress has been made on
privatisation and restructuring.
However, the results are
limited, notably in terms of restructuring of the steel industry. Increased efforts and swift
action are now needed in this area in order to solve the shortcomings before accession.
4.1.13. Chapter 19: Telecommunications and information technologies
No significant developments can be reported in the area of
electronic communications and
information technologies.
Little progress has been made on addressing outstanding issues regarding transposition of the
1998
acquis.
A number of basic competitive safeguards imposed on the incumbent operator in
the fixed telephony market have yet to be implemented. On the mobile market, the present
Telecommunication Act does not define a market for interconnection and consequently
imposes no cost orientation in wholesale call termination rates on the operator with significant
market power (SMP). Preparations for mobile number portability are limited. Preparation for
the 2002
acquis
is in its early phase. National regulatory authorities are not properly resourced
for their tasks related to implementation of the new Electronic Communications Law, in
particular on market analysis, assessment of SMPs and imposition of remedies. Coordination
between the regulatory authorities remains to be improved. Preparations in this area need to
be enhanced.
In the area of
postal services,
amendments to the Postal Services Law have been adopted in
April 2006. They aim at completing the transposition of the second Postal Services Directive.
Strengthening of the administrative capacity for quality measurement, cost accounting and
accounting mechanisms of the regulator in this area, the Communications Regulation
Commission, is not yet completed. In general, preparations in this area are generally on track.
Conclusion
Significant progress has been made on
postal services.
The strengthening of the
administrative capacity of the regulator needs to be completed. Bulgaria is now generally
meeting the commitments and requirements arising from the accession negotiations in this
area if the current pace of progress is maintained.
Little progress has been made on
electronic communications and information technologies,
including addressing outstanding issues related to the 1998
acquis.
Alignment with the 2002
acquis
remains to be achieved. The legislative timetable needs to be reviewed and new plans
activated in order to comply with accession deadlines. Increased efforts and swift action are
now needed in this area.
4.1.14. : Regional policy and coordination of structural instruments
The
legislative framework
necessary to ensure full compatibility of operations financed by
the Structural Funds with EU policies and legislation is now in place. Bulgaria has adopted
the necessary amendments to its Public Procurement Law and passed a new Concessions Law
in line with the
acquis.
Bulgaria has adopted the Organic Budget Law, which introduces
multi-annual budget programming and has already started with programme budgeting in
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several line Ministries. Implementation of the new legislation on public procurement needs
attention. In general, preparations are well underway in this area.
The principal
institutional structures
for preparation and implementation of the Structural
Funds have been established. Decisions have been taken on the distribution of tasks between
the different bodies within each Operational Programme and delivery structures are being
established. Inter-ministerial coordination has been improved.
A major challenge for a number of bodies will be to achieve the ambitious recruitment plans,
with a high number of experienced staff still being sought and with many bodies potentially
competing for a limited number of adequately qualified people. Most intermediate bodies and
final beneficiaries as well as some managing authorities still need considerable capacity-
building in particular on public procurement. Preparations for inter-ministerial and cross-
sectoral coordination on planning and subsequent implementation of operations at regional
level as well as guidance on implementing procedures need to be completed. Preparations in
this area need to be enhanced.
Bulgaria is on track with
programming.
It has prepared drafts of all the required
programming documents.
Some programming documents, including the National Strategic Reference Framework, lack
focus and strategic vision, which makes it more difficult to coordinate implementation. The
ex-ante
evaluations have started with a considerable delay. Concerns remain about
establishment of a pipeline of projects ready to be implemented under the Structural Funds
and the Cohesion Fund. Preparations in the area of programming need to be enhanced.
In relation to
monitoring and evaluation,
monitoring systems have been established in a
number of managing authorities and intermediate bodies. Bulgaria has ordered a single
management information system covering all operational programmes and is in the process of
building it up.
The interconnection of certain subsystems of the single management information system and
the readiness and preparation of final users at national, regional and local level to operate the
systems needs to be ensured. Staff recruitment and training in this context need to be
completed. Evaluation units have yet to be established and staffed in a number of managing
authorities. Preparations for monitoring and evaluation need to be stepped up.
With regard to
financial management and control,
a new legislative framework has been
adopted and institutional structures are largely in place. A central Audit Authority and internal
audit units in the managing authorities have been created.
Ambitious recruitment plans and potential competition for the few available specialists
between the different bodies involved in this area are causing concern. Most of the training in
this area still needs to be carried out. Relevant inter-body agreements and procedure manuals
are not yet available. Strong, efficient coordination of preparation and implementation of
financial management and control systems is lacking. Implementation of the control system
for public procurement still needs further strengthening in the light of the implementation of
ISPA and PHARE cohesion projects. Preparations in this area need to be stepped up.
Conclusion
Bulgaria has made sufficient progress on the
legislative framework
and is now generally
meeting the commitments and requirements arising from the accession negotiations in this
area.
Progress has been made on
programming
and on
monitoring and evaluation
but Bulgaria
still requires increased efforts to prepare an efficient project pipeline and establish a
functional management information system in time for accession. Bulgaria has made progress
on
institutional structures
and in the area of
financial management and control.
These
areas still require increased efforts and swift action now in order to solve all shortcomings in
time, before accession. Attention has to be paid, in particular, to rapid establishment of an
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audit and control system enabling sound and efficient implementation of the Structural Funds
and to substantially strengthening the administrative capacity. Efforts are also needed to
ensure full operation at all levels of an
ex-ante
control system with regard to public
procurement.
4.1.15. Chapter 22: Environment
Concerning
horizontal legislation
the relevant administrative capacity is being strengthened.
Coordination, integration, public awareness and public involvement need further
strengthening for areas such as Integrated Pollution Prevention and Control (IPPC) and the
NATURA 2000 programme. Further efforts are needed with regard to the implementation of
legislation transposing the Environmental Impact Assessment and the Strategic
Environmental Assessment directives both at national and regional levels. Preparations need
to be stepped up.
Waste management
legislation is in line with the
acquis.
Inadequate attention is paid to recruiting additional specially trained staff for implementation
of the waste management legislation, particularly at regional and local levels. Further
implementing steps are required regarding the Waste Framework and Hazardous Waste
Directives. Preparations need to be stepped up, in particular for the development of an
integrated network of disposal installations.
Legislation on
water management
is largely in place and in line with the
acquis.
Legislation implementing the Water Framework Directive is pending final parliamentary
approval. Further strengthening of the administrative capacity is needed, in particular at
regional level and in terms of human resources, laboratories and equipment. Cooperation and
coordination between the different institutions and administrations involved is lagging behind.
As regards the Nitrates Directive, the Drinking Water Directive and the Surface Water
Directive implementation is lagging behind. Preparations need to be stepped up.
As regards
industrial pollution
progress has been noted with the view to issuing the permits
for industrial plants. Resources at the central competent authority seem to be adequate and the
procedures for the issuing of permits are clearly defined and established. Cooperation between
central and regional level is functioning well and marked by a clear division of tasks and
responsibilities.
Some additional capacity is required at regional level. The total number of integrated permits
issued so far is around 80 out of the 230 sites which need to be assessed. In addition, another
14 permits are under review. Preparations need to be stepped up.
The legislation on
chemicals and genetically modified organisms
has been transposed and
is in line with the
acquis,
including on the contained use of genetically modified micro-
organisms and on the deliberate release into the environment of genetically modified
organisms (GMOs). Preparations are generally on track, but the administrative capacity on
chemicals and genetically modified organisms needs further strengthening.
As for
noise,
action plans and strategic noise maps have not yet been completed, but in
general preparations are on track.
Concerning
nuclear safety and radiation protection,
legislation has been adopted on the
shipment of radioactive waste and medical exposure. Administrative capacity is largely in
place, except for the enforcement of the aspects relating to medical exposure. Preparations in
this area need to be stepped up.
Conclusion
Bulgaria is now generally meeting the commitments and requirements arising from the
accession negotiations in the area of
noise and chemicals
and
genetically modified
organisms.
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Progress has been made on
horizontal legislation, waste management, water management,
industrial pollution and risk management
and
nuclear safety and radiation protection.
Increased efforts and swift action are now needed by Bulgaria to finalise the transposition
process and to implement and enforce the legislation. Administrative capacity still needs to be
further increased in these areas, with particular attention to the regional and local
environmental authorities and the inspectorates.
4.1.16. Chapter 23: Consumer and health protection
Bulgaria has now achieved a reasonable degree of alignment with the
acquis
in the area of
safety-related measures,
including liability for defective products, general product safety
and dangerous imitations. Preparations are on track.
The
market surveillance
system in this area has been improved. However, coordination
between the bodies and institutions involved still has not been strengthened. Preparations need
to be stepped up.
As regards the
non-safety-related measures,
the adoption of the new Consumer Protection
Law represented an important step forward in the transposition of several directives. Bulgaria
has not transposed parts of the
acquis
on consumer credit, distance marketing of consumer
financial services and injunctions and has not strengthened the institutional framework. Both
staffing and technical facilities of the newly established Consumer Protection Directorate as
well as of the Commission of trade and Consumer Protection, in particular for the latter to
perform additional functions and tasks deriving from the new Consumer Protection Law are
limited. Furthermore, few efforts have been made to develop a strong independent,
representative and effective consumer movement, which would help consumers and play an
effective role in consumer policy-making and market surveillance. Preparations need to be
stepped up.
Conclusion
Progress has been made on
consumer and health protection.
However, increased efforts and
swift action are still needed in this area in order to solve the shortcomings before accession.
Alignment of the legislation needs to be completed, notably on non-safety-related measures.
Market surveillance activities, and the administrative capacity and structures need further
improvement, as well as promoting the involvement of consumer organisations in the
development and implementation of consumer policy.
4.1.17. Chapter 24: Cooperation in the field of justice and home affairs
As regards preparations for applying the
Schengen
acquis
and the management of the
future EU external border,
an updated Schengen Action Plan for the period 2006-07 and an
implementation report for 2005 were adopted in January 2006. An integrated border
management strategy was approved by the Council of Ministers in January 2006 and an
Action Plan in April 2006. The strategy outlines 11 sets of actions to be accomplished before
accession and 13 sets of actions to be accomplished between accession and the integration in
Schengen. In February 2006, a pilot project on introducing the one-stop principle was
introduced in a few places for private cars. This now needs to be introduced in all border
crossing points, including for the truck lanes. Bulgaria and Romania have agreed to intensify
their border co-operation, especially on the surveillance of the Danube.
On the management of the future EU external borders, significant progress was made in
procedures and the level of control, particularly at the airports and sea ports. The status of the
five sea ports that handle international traffic has been now clarified. The equipment used for
border control seems to be sufficient for conducting high-quality controls. Around 270 border
police officials were recruited, reducing the vacancies to less than 750.
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The setting up of joint mobile teams of the customs and border police for in-depth checks
along the borders is delayed. Given their role in the implementation of the Schengen
acquis,
further efforts are needed to ensure timely establishment of the teams. The infrastructure of
the border crossings is not adapted yet to the goals of the strategy.
There is still a lack of border police officers to carry out checks at certain border crossing
points. Additionally, even if an operational risk analysis capacity generally exists,
improvements at local level are still required.
A r a s u a a pea t n fro i t Shne Ifr ao S s m (I) t
s e r B l r ’ r r i s o j n g h cegn nom t n yt SS a a
gd
g i s p ao
in e
i
e
later stage after accession, it is essential that Bulgaria's preparations for inclusion in the SIS II
and participation in relevant working groups are stepped up to ensure that Bulgaria is working
towards SIS II requirements. A number of deadlines set in earlier Action Plans have been
missed; full and timely implementation of measures is essential in this area. Overall,
preparations in this area need to be stepped up.
On
visa policy,
alignment with the EU positive list has continued by concluding bilateral
agreements with Brazil and Venezuela. Bulgaria now participates in all VIS-related working
groups and technical meetings and this should help to ensure that its national visa system is
correctly aligned with VIS requirements.
Bulgaria is committed to introducing a visa regime for the former Yugoslav Republic of
Macedonia and Serbia & Montenegro before accession. Alignment with the EU positive list is
yet incomplete. All Bulgarian consular posts have magnifying glasses, UV lamps and three
metro-viewers. Furthermore, the missions have been equipped with specialised software to
control documents. Overall, preparations in the area of visa policy are well on track.
In the field of
asylum,
the technical preparations to be ready to use EURODAC as from
accession are on track. The EURODAC Master Plan Project is being implemented and a
Directorate was established in the Ministry of Interior to deal with Dublin II and EURODAC.
The administrative capacity of the Agency for Refugees needs to be further strengthened.
Capacity building activities with the authorities and with the judiciary on asylum legislation,
procedures and applications are yet to be completed. The setting up of two new reception
centres in Sofia and Pastrogor is seriously delayed. Preparations in this area need to be
stepped up.
In the area of
police co-operation and combating organised crime,
a new Law on the
Ministry of Interior was adopted in February 2006 that aims to improve the co-operation
between the various law enforcement agencies fighting crime, streamlining their work and
introducing a professional career path for the Ministry of Interior officials. Preparations for
the implementation of the new Penal Procedure Code continued, including recruitment and
training of police officers with investigative powers. Regarding the operational results in the
fight against organised crime an increase in activity of various police forces was noticeable.
International co-operation with neighbouring countries and EU Member States in dismantling
international criminal networks continued. The fight against organised crime has gained more
political attention and some law enforcement agencies are more active in this field. Some
measures are taken in order to uncover links between law enforcement bodies and organised
crime groups.
The impact of recently adopted legislation on the overall crime situation needs to be followed
since it entered into force at the end of April 2006. The impact and adequacy of the new Penal
Procedure Code on fighting organised crime has to be closely monitored. Its effectiveness
could be weakened by the considerable reduction of police investigators leaving only 2000 of
them, the two years time limit within which an investigation must be completed while
organised crime cases take often much longer to solve and the fact that police investigators
are not allowed to be a witness in court. Given its geographic location and the challenges the
entire area is facing as regards organised crime, Bulgaria's regional co-operation, in particular
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at operational level, needs to be intensified. Data protection and confidential information
treatment is not yet always adequate, which affects international cooperation.
There remain serious concerns about the effectiveness of Bulgaria's fight against organised
crime. While this has been a stated national priority there are still no tangible results in
investigating and prosecuting organised crime networks, including the implementation of a
multi-disciplinary strategy. A harmonised approach towards crime statistics, allowing
Bulgaria to monitor the situation more closely, is yet to be established. The frequent contract
killings of people linked to organised crime groups seldom give rise to successful
investigations and prosecutions and continue to represent a challenge to the rule of law in the
country. The illegal possession of firearms remains a problem. The success rate in prosecuting
crimes often linked to organised crime such as money laundering, counterfeiting of goods,
currency and documents, trafficking of human beings, prostitution and drug smuggling is still
very low. Mechanisms aiming at enhancing the fight against organised crime such as the
witness protection scheme are not fully operational yet.
The National Service to Combat Organised Crime continues to suffer from a lack of high
quality staff and seems in general to have a reactive instead of a pro-active attitude. Bulgaria
had since years, legal tools allowing the investigation and effective prosecution of known
organised criminals. It therefore remains to be seen if the changed legal framework will lead
to a real improvement of the fight against organised crime. Urgent attention is still needed in
this area.
In the field of
money laundering
(see also chapter 4
–
Free movement of capital),
some gaps
remain. Proper implementation of its legislation is unsatisfactory especially in the lack of
tangible results in enforcement, in particular the absence of convictions. The co-operation
between law enforcement agencies is still insufficient. Finally, the effectiveness of the fight
against money laundering continues to be seriously hampered by corruption, organised crime
and the informal economy. Sufficient training in all bodies dealing with money laundering
cases has still not been provided. Urgent attention is now needed in this area.
On the
fight against drugs,
limited progress can be reported as regards the strengthening of
the administrative capacity of the National Focal Point within the European Monitoring
Centre for Drugs and Drugs Addictions. Rules on the establishment and functioning of the
National Focal Point were adopted in December 2005. Some recent developments can also be
noted as regards investigating and prosecuting major drug smugglers. Bulgaria elaborated a
report on the implementation of the action plan to the National Anti-Drugs Strategy in March
2006 and continued to implement the National Anti-Drug Strategy 2003-08 and its Action
Plan broadly according to the deadlines. Domestic programmes regarding public awareness
and prevention are now being implemented.
However, a fully consistent and well-coordinated national drug policy, addressing particularly
demand reduction and enhancing funding for treatment programmes, has not been developed
yet. The administrative capacity is still limited, particularly as concerns highly qualified staff
as well as regarding the co-operation between various actors involved in the implementation
of the National Drug Strategy. The National Focal Point on drugs has only limited resources.
Therefore, preparations in this area need to be speeded up.
As regards the
fight against fraud and corruption,
a new anti-corruption strategy covering
the period 2006-08 was adopted. It was underpinned by an Action Plan. They can provide a
comprehensive framework for combating corruption if fully implemented.
However, the implementation of the strategy is not linked to a performance management
system, with concrete and measurable targets. The Secretariat of the Commission on
Prevention and Counteracting Corruption still has an insufficient administrative capacity. The
role of this Commission is essential, as it is the institution which encompasses knowledge
about all key anti-corruption measures.
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Law enforcement agencies, including the Customs Agency, remain very vulnerable to
corruption and improper behaviour. A comprehensive risk management programme that
addresses the business sector is still missing. Risk management has to be underpinned by a
reliable and regular reporting system.
A review of the system of a number of cash payments at external border posts is not addressed
yet. Boxes at the borders where customers can leave their complaints are barely used
indicating that public awareness campaigns are not efficient yet
(see also the political
section).
Overall, urgent attention is still needed in this area.
In the field of
data protection,
while the Data Protection Law was amended in December
2005, significant further alignment with the
acquis
is still required. This particularly concerns
the automated processing of personal data, the processing of personal data for defence,
national security and public order purposes, the mechanisms for adopting codes of conduct,
the tasks of data controllers, the time limits to lodge complaints and the provisions concerning
notification of processing operations. The administrative capacity of the Data Protection
Commission is still weak, which is partly caused by significant cuts in its 2006 budget. The
Commission does not have sufficient staff.
The handling of complaints remains ineffective. The budgetary independence of the
Commission is not fully guaranteed. The functioning of the registration and notification
scheme is still unsatisfactory as is the enforcement record in general. Co-operation with the
Ombudsman and other agencies is still insufficient. At this moment, Bulgaria is not
completely in a position to ensure full implementation of the
acquis
in the field of protection
of personal data (see
also chapter 3).
Therefore, preparations in this area need to be stepped
up considerably.
In the area of
judicial cooperation in civil and criminal matters,
Bulgaria is well advanced
in its legal alignment with the
acquis.
In January 2006 the Bulgarian Parliament ratified the
1996 Hague Convention on jurisdiction, applicable law, recognition, enforcement and
cooperation in respect of parental responsibility and measures for the protection of children.
However, the stipulation of the terms and conditions for enforcement of this convention by
the Ministry of Justice as central body under this Convention is outstanding. Questions remain
as regards the quality of the implementation of the
acquis
as well as regarding the overall
functioning and efficiency of the Bulgarian judicial system. The implementation of the new
penal procedure code will need to be monitored closely given its importance for the quality of
Bulgaria's international judicial co-operation in penal matters. Fight against cross border
organised crime need to be speeded up as this is one of the most important areas covered by
the judicial co-operation in criminal matters within the EU. Corruption continues to be a
serious challenge within the justice system and this may affect the smooth and correct
implementation of instruments in the area of mutual recognition. Preparations in this area
need to be enhanced.
Conclusion
Significant progress has been made in the area of
visa policy
and Bulgaria now generally
meets the commitments and requirements arising from accession negotiations in this area.
Significant progress has been made in the area of
Schengen and future EU external border.
However, further steps are still needed in order to complete the preparations for accession, in
particular to fully implement the Integrated Border Management Strategy and the Schengen
Action Plan 2006-07. Some progress in the areas of
asylum
and of
fight against drugs
and of
judicial cooperation in civil and criminal matters
was made. Specific attention is needed in
the area of
data protection
where progress remains slow. In these areas, remaining
preparations should be intensified. All these areas still require increased efforts and swift
action now in order to solve the outstanding issues before accession.
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In the areas of
police cooperation and fight against organised crime
and of
fight against
fraud and corruption
only very limited progress was made despite the fact that urgent action
was requested in October 2005. In the area of
money laundering,
the situation deteriorated
substantially. Bulgaria should take immediate and decisive action now in these three areas
order to be ready by the date of accession.
4.1.18. Chapter 25: Customs union
Concerning
administrative and operational capacity,
revenue collection and the fight
against counterfeiting and drugs have developed in the right direction. Preparations in the IT
system, notably with a view to achieving interconnectivity with EU systems, have progressed
well and, if no delays occur, Bulgaria appears on track to meet its obligations upon accession.
The infrastructure and equipment of crucial border crossing points are continuously being
upgraded.
The National Customs Agency (NCA) is actively promoting the use of simplified procedures,
in particular through its website and by liaising with business operators. Sustained efforts are
being made to reinforce post-clearance controls.
The Law on Excise Duties and Tax Warehouses, adopted in November 2005, provides for
transferring responsibility for administering excise duties from the tax administration to the
NCA as of July 2006
(see Chapter 10
–
Taxation).
The management of the NCA is putting in
place the necessary organisational measures to perform this task.
C s m of e ’ nweg o cs m rl adpoeue r a s od t ns ot
ut s fcr ko l e f ut s u s n rcdr e i go,h k t h
o
i s
d
o
e
s m n
a
e
effective training policy put in place within the NCA. As regards the fight against corruption,
a
nm e o d c l a m aue hv be t e a n t l e o t N A s co p n
u br f i i i r esr ae en a n l g h i s fh C ’at n l .
s pn y
s
k o
en
e
i a
NCA should maintain fight against corruption as its top priority.
Preparations are well on track as regards administrative and operational capacity in the
customs field. The NCA has made good progress towards IT systems inter-connectivity.
Bulgaria should maintain its pace of progress in preparing its IT systems for interconnectivity
upon accession.
Conclusion
Significant progress has been made on
administrative and operational capacity
in the
customs field. Bulgaria is now generally meeting the commitments and requirements arising
from the accession negotiations. Preparations are continuing and Bulgaria is expected to be in
a position to implement the
acquis
from the time of accession if the current pace of progress is
maintained.
4.1.19. Chapter 28: Financial control
As regards
control over structural action expenditure,
the compliance assessments for
Phare and ISPA have been initiated.
However, Bulgaria has accumulated substantial delays with Extended Decentralised
Implementation System (EDIS) accreditation for both the Phare and the ISPA programmes.
The timetables included in the relevant action plans for EDIS accreditation, which envisage
final accreditation by the end of June 2006, have not been adhered to for the intermediate
steps, and there are serious risks that the process will not be completed by the end of 2006,
with substantial consequences involving the loss of large amounts of pre-accession funding.
This also casts
ob oe B l r ’ cpcypoe yt cn o ft eSrc r F ns
dut vr u a a aai rpr o ot lu r t t a ud
s
g is
t
l
r
u
uul
expenditure. Urgent action is now needed in this area.
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On
protection of the EU’financial interests,
an Action Plan and a Strategy on Combating
s
Fraud affecting the financial interests of the European Communities have been adopted and
training has been provided for relevant bodies. The output on communication of irregularities
and suspected fraud has significantly improved recently.
The Anti-Fraud Strategy, which is the framework for protecting
t E ’f ac ln r ti
h U si ni i e s n
e
n a te s
Bulgaria, is too vague to become effective. An inter-institutional working group has been
created on 12 April to propose a new draft strategy for fight against fraud affecting the
European Communities' financial interests. The working procedures and the operational
capacity of the Bulgarian AFCOS (Council Coordinating the Fight against the Infringements
affecting the Financial Interests of the European Community) in inter-institutional
cooperation and coordination between the authorities involved remains insufficient. Two
Working Groups have been set up on 14 April by the decision of the Minister of Interior.
They will have the tasks to improve the cooperation between the bodies having competencies
in checks and investigations and the report of irregularities affecting.
Preparations need to be stepped up in this area.
Conclusion
Progress has been made with regard to the
protection of the EU’
sfinancial
interests.
However, increased efforts are still needed to sustain the progress made. Action is needed
with regard to the strengthening of administrative capacity and the improvement of
coordination by the new working groups.
The situation with
control over structural action expenditure
has deteriorated. This area is
now a cause of serious concern. Bulgaria should take immediate and decisive action now and
significantly speed up EDIS accreditation in order to be ready by accession.
4.2.
Translation of the
acquis
into Bulgarian
In accordance with Articles 2 and 58 of the Act of Accession, all acts adopted by the Union
institutions prior to accession become applicable to the new Member States and are to be
published in a special edition of the Official Journal of the European Union, including in the
new official languages. While the EU institutions take responsibility for the final revision and
publication of the translations, it falls to the acceding States to produce the translations and to
ensure thorough legal and linguistic revision. In the context of translation of the
acquis,
the
Court of Justice has defined a set of key judgments to be translated as a priority (totalling
about 15 000 pages).
Of the nearly 90 000 pages of
acquis,
Bulgaria has already translated nearly 95%. However,
44% of this still has to be revised by the national authorities before submission to the EU
institutions. Translation and revision capacity in Bulgaria has not yet reached the necessary
throughput level of some 6 000 pages per month, largely due to difficulties with recruiting
and retaining staff. The Bulgarian government is urged to give this matter due attention,
otherwise the
acquis
might not be published in time for accession on 1 January 2007.
4.3.
General evaluation
Bulgaria has reached a considerable degree of alignment with the
acquis.
The October 2005 report concluded that Bulgaria would be ready by accession in a large
number of areas. A number of other areas required increased efforts, and 16 areas gave rise to
serious concern.
Since then, further progress has been made. Bulgaria should be ready by accession in the
following additional areas if the current pace of progress is maintained: public procurement,
mutual recognition of industrial product specifications; freedom to provide non-financial
services; most agriculture Common Market Organisations; aviation; excise duties; taxation
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implementing structures; postal services liberalisation; regional policy legislation; chemicals
and genetically modified organisms, noise legislation; visa policy; and customs preparations.
Progress has also been made in a number of areas, which no longer give rise to serious
concern but still require increased efforts to complete preparations: the insurance sector, the
protection of intellectual property rights, the paying agency for agriculture, the milk common
market organisation, animal diseases control measures, veterinary border inspection posts;
animal welfare, trade in live animals and animal products, veterinary aspects of public health;
institutional and financial management structures for regional policy, as well as Schengen
preparations and the management of the future EU external borders.
Increased efforts are also needed for: mutual recognition of professional qualifications;
financial services, information society services, protection of personal data; legislation to fight
money laundering; agriculture trade mechanisms; the Common market organisations on wine
and alcohol and on beefmeat; legislation in the veterinary and phytosanitary sector; most
aspects of fisheries; sea transport; VAT, direct taxation rules; labour law, social dialogue,
social inclusion, anti-discrimination policy, the European Social Fund, public health; energy
market liberalisation; nuclear energy and nuclear safety, in particular the commitments to
early closure and subsequent decommissioning of the reactors of the Kozloduy plant; steel
industry restructuring; electronic communications; programming, monitoring and
procurement capacity for regional policy; horizontal environmental legislation, water quality,
integrated pollution prevention and control, waste management; consumer protection; asylum,
judicial co-operation; fight against drugs; protection of the EU's financial interests; and the
translation of the
acquis
into Bulgarian.
There remain six areas of serious concern, which require urgent action:
–
setting up a proper integrated administration and control system (IACS) in agriculture,
(acquis chapter 7);
–
building-up of rendering collection and treatment facilities in line with the
acquis
on TSE
and animal by-products (acquis chapter 7);
–
clearer evidence of results in investigating and prosecuting organised crime networks
(acquis chapter 24);
–
more effective and efficient implementation of laws for the fight against fraud and
corruption (acquis chapter 24);
–
intensified enforcement of anti-money laundering provisions (acquis chapter 24);
–
strengthened financial control for the future use of structural and cohesion funds (acquis
chapter 28).
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