COMMENT: Bulgaria’s anti-corruption legislation becomes a political football

COMMENT: Bulgaria’s anti-corruption legislation becomes a political football
Bulgaria’s president, Rumen Radev, blocked the anti-corruption bill supposedly due to the fact that it contained too many loopholes.
By Nicholas Kaufmann in Brussels January 9, 2018

Bulgaria is doubling down on organised crime and corruption, but stamping it out is proving to be a tough nut to crack — a problem poignantly illustrated by the farce surrounding a new anti-corruption law. Fearing that the legislation falls short of providing effective instruments to investigate corruption networks, Bulgaria’s president, Rumen Radev, blocked the bill supposedly due to the fact that it contained too many loopholes. With Bulgaria having assumed the rotating presidency of the European Council on January 1, this move does not bode well for the rest of the year and the country’s fight against organised crime and corruption.

The Bulgarian parliament passed the anti-corruption legislation in December 2017 under heavy EU pressure over its slow progress in improving its judiciary. But even then, the country’s vice-president, Iliana Yotova, argued that it fails to adequately protect the identities of those reporting relevant crimes. Clearly, vested interests in the legislature took it upon themselves to push through a wholly diluted law in time for the Bulgarian EU Council presidency.

Since Bulgaria’s 2007 EU accession, organised crime has continued to be a major stumbling block to the country’s development and wider European ambitions. Much of Bulgaria’s ill repute can be attributed to its home-grown organised crime networks that run money laundering, credit card fraud and human trafficking operations across Europe. These groups often operate in white, grey and black markets simultaneously, fronting their illegal activities with legitimate companies. This complex web of interconnections between the legitimate and the illegal is what gives Bulgaria its reputation as one of the most corrupt EU member states.

According to Europol, the EU’s criminal intelligence agency, Bulgarian crime groups are among the most widespread in Europe. Europol believes that these crime groups differ from others in that they “exert considerable influence” over Bulgaria’s economic activities, thereby not only stifling competition and foreign investments but also providing a platform from which to influence political processes and state institutions.

The lack of adequate prosecution leaves a lot of free space for criminals to out-manoeuvre the judiciary and keep afloat the criminal syndicates undermining the country. This also serves to neuter those state agencies originally designed to put an end to criminal activity, such as the Bulgarian Border Police. While corruption scandals within the organisation are well-documented, when 23 customs officers and businessmen were arrested in June, the agency saw its credibility plummet to unprecedented lows.

When even the enforcers are corrupt, it’s no wonder the country’s economy is suffering. The grey market in Bulgaria is the largest in the EU, accounting for a staggering 30% of GDP, a 2017 study from the Association of Chartered Certified Accountants showed. Naturally, this represents a hole in state revenues – estimated at a whopping €1bn per year – which, in turn, impacts the government’s ability to provide public services.

As if to drive the point home, the extent of the economic impact of organised crime was spectacularly demonstrated in early December 2017. Bulgarian authorities, in cooperation with the Southeast European Law Enforcement Center (SELC), seized almost $3.5bn in Bitcoin in a raid on a sophisticated Bulgarian organised crime ring  – enough to settle one fifth of Sofia’s national debt.

At the same time, it’s not like Sofia has been twiddling its thumbs. In 2015, Bulgaria initiated a push to revitalise the reform efforts, which resulted in the drafting of a national strategy on judicial reform. Bulgaria’s constitution was also amended in a move that represented an important step forward in the bid to reform the Supreme Judicial Council.

These steps have not passed unnoticed. The EU Commission commended Bulgaria in its most recent annual progress report for having successfully enacted a number of important reforms that improved civil procedures and the internal governance of courts. However, Brussels noted a significant lack of progress in criminal procedures meant to tackle high-level corruption and organised crime – most of these cases aren’t followed up, leaving the accused largely unscathed.

While it is important to stress that Bulgaria has made steps in the right direction and is increasingly cooperating with European law enforcement agencies to get a grip on crime and corruption, there’s still a lot to be done.

The fact that Bulgaria lacks a unified, specialised anti-corruption agency has greatly impeded its anti-corruption fight. This is a shortfall that was not addressed in the national anti-corruption strategy paper either. The absence of a coordinating body has greatly fragmented institutional competencies and authority across the system, a factor that partially explains the low prosecution rates. Establishing such an authority will not only help fill the gap in adequately trained officers, but will strengthen the state’s ability to strike at corruption and related crime across all levels of society. 

Holding the rotating presidency of the Council of the EU as of 2018, Bulgaria has the responsibility to take anti-corruption to its logical conclusion, or risk being indefinitely relegated to a second-tier position among EU members. For this to become a reality, however, it all depends on whether Europe’s reform proposals are heeded. 

Nicholas Kaufmann is a public affairs consultant, currently based in Brussels, doing contract work for European institutions.