The world news this week came from the White House. The United States imposed sanctions on the Russian oil giants "Lukoil" and "Rosneft".
The actions of the Donald Trump administration directly affect Bulgaria, because exactly 26 years and 2 weeks ago - on October 12, 1999, the government of Ivan Kostov sold 58% of the shares of the domestic refinery "Neftokhim - Burgas" to the Russian corporate group "Lukoil".
In 2005, the Russian oil giant bought out shares of minority shareholders and thus controlled over 90% of the company's capital. The state retains the so-called "golden share". At the end of the week, the parliament adopted legislative amendments according to which the sale of the refinery can only be carried out after coordination with the State Agency for National Security and National Defense and a government decision.
What are the legal options for solving the problem of sanctions? Minister of Justice Georgi Georgiev answers this and other questions in the "Interview".
Ivo Nikodimov: What is the current status from a purely legal point of view of "Lukoil" at the moment?
Georgi Georgiev, Minister of Justice: The Bulgarian company "Lukoil", which owns the refinery and several other subsidiaries that service the accompanying business, are part of the sanctions. They are covered by the sanctions because they have several levels of ownership in various foreign countries, and ultimately their real owner is the Russian company "Lukoil", which is already on the sanctions list. There is a month until the new sanctions come into effect. If, of course, negotiations between the US and Russia do not progress in the meantime.
However, how is the company affected by these US sanctions and what exactly will happen?
What usually happens is that the bank transactions that must take place in order to buy fuel and pay for it will not be able to be serviced by banks under the threat of being subject to additional sanctions, disregarding the imposed ones.
So are we to understand that the fuel that is sold at gas stations, they will then have no way of paying the supplier?
It is a little more complicated, but the end result is that the refinery, the sanctioned companies will not be able to receive payments to different bank accounts. This is to a large extent the effect of sanctions that are otherwise national of a foreign country. They are not directly applied in the European Union, but in this way, through the influence on the SWIFT system, they actually achieve the effect we are talking about.
There are three months, but what are the possible solutions?
We were called to a meeting by the Prime Minister - representatives of the various security services, line ministries - the economy, energy, justice, interior, finance, of course. The Minister of Energy reported that the fuel market is secured, so that by the end of the year there is no reason to worry about the upcoming entry into force of the sanctions and the possible shocks they will lead to. For this, it is important for people to be calm. The state has a plan in several steps.
The first of which, without being an energy expert, is the work of Minister Stankov, I quote his words. The first is screening and monitoring, checking the available quantities, i.e. yes, what does the Bulgarian state and retail chains in general have at their disposal. Secondly, introducing a very serious monitoring mechanism for what is happening and outlining specific steps, but this is a specialized matter that is being worked on by colleagues from the Ministry of Energy, who assured us that there are no reasons for concern at this stage.
Is it possible to ask for a postponement, as Germany wants, in order to prepare, or does this not apply to us? What is the case with Hungary and Slovakia, because they have no access to the sea and have no other way to supply fuel?
Each case is specific. Europe is in this situation together, i.e. no country is on its own. And the solutions we are looking for are coordinated with European partners. The Minister of Energy is within the formats that work in the European Commission, the committees for the supply of petroleum products. We are refining common strategies so that they achieve the objectives that have been set, without directly affecting EU citizens in a way that would hinder economic activities. Alongside them, we are holding intensive talks with our American partners. I personally lead the talks with the office in the American government that imposes these sanctions, so that we can coordinate our actions and behavior as a partner country.
You returned from Paris this week, where a decision was made, removing several countries from the so-called "gray list" for money laundering: South Africa, Nigeria, Mozambique and Burkina Faso. However, Bulgaria remains for now. What else is expected of us?
Two years ago, we were included in this list as a country that does not deal with the issue of money laundering. Money laundering, financing of terrorism. These are the reasons why three years ago, during the government of Mr. Denkov, Bulgaria received a yellow card and was given one year to take urgent action. Unfortunately, not enough was done, which is why two years ago we received a red card with our inclusion in this list. What does this mean for people to actually know? Extremely unprestigious in the first place.
Secondly, however, it repels investors, because large international companies, global corporations that build factories, new capacities and so on, thereby creating jobs for citizens, when they see that the country is on the gray list for money laundering, do not invest in such countries. That is, we are talking about a slowdown in the growth of the gross domestic product, a reduction in the chance for new investments and, along with this, serious difficulties for Bulgarian business, because it is very export-oriented and including Bulgarian banks have problems working in international systems, because it is as if your credit rating with the bank is very low, because your income is unstable.
That is the analogy. We have found this in the last nine months. We have rolled up our sleeves. I would also like to thank the members of parliament who adopted all the changes that we prepared in the Ministry of Justice. We have fundamentally changed the Criminal Code in several areas, so that we can receive this very serious praise for progress at the end of the two-year period that has been given to us. We have been involved in the last few months, catching up on almost everything that was not done in the past two years, and this is part of the price that Bulgaria is paying for the political chaos, because out of 25 criteria, 22 have been recognized as already fulfilled. I have personally participated in these international meetings in recent months, where I report on progress, explaining that it is not a very easy job in 6 months to do what we have not done in 2 or 3 years.
There are still 3 criteria left.
These are concrete measures. The first of the measures has actually already been implemented by the Ministry of Justice. The text has been prepared. We have talked to the people's representatives. It is a matter of a few weeks for this legal change to enter into force. What is being looked at, however, is how the new legislation that we have adopted during these months is being implemented for this necessary time. The plan is as follows.
In January, we report on progress on these remaining three criteria, after which we want to open a procedure for removing us from the list, which takes on-site inspections and a few more months, i.e. by the middle of next year, Bulgaria should be excluded from the grey list. This is a feat that we hope to achieve, because it is a sin. A country in the European Union, a member state of the eurozone, for years to neglect its obligations to prevent money laundering. This is a threat to Bulgaria in general, not just to foreign investors.
While you were in Paris, however, the former deputy city prosecutor of Sofia, Ivo Iliev, was beaten with a hammer. You have appointed security for Mr. Iliev himself, who is in a hospital, and for his family, but also for another magistrate, I quote your official statement, who worked with him. Why is this security for the second magistrate necessary?
We are protecting not one but two magistrates. This is a matter that is confidential. In the Ministry of Justice, we have a special unit that deals with the security of the judiciary, not only the courtrooms, but also in cases where security for magistrates is necessary. This is an expression of the commitment, support and care of the Bulgarian state for Bulgarian magistrates. We have over 4,500 judges, prosecutors and investigators.
What happened is unacceptable. An attack on our understanding of statehood. The Ministry of Interior is working on the various versions. I hope and expect them to develop and this case will not be covered up. I have the assurance of the Minister of the Interior that serious efforts are being made in this direction. An unacceptable attack. I talk to the magistrate's wife every day. Otherwise, with regard to other magistrates whom we protect - when we have data, we follow a very strict protocol. No Bulgarian magistrate, judge, prosecutor and investigator should fear for their safety and that of their family.
On Friday you were at a meeting with the Notary Chamber. You want punishment for notaries who have participated in one way or another in transactions that are property fraud. For how many notaries do you want punishment and why?
After the unprecedented number of inspections that I ordered - over 80 inspections of notaries, I have requested 8 disciplinary sanctions, and in 3 cases we have the deprivation of rights, which is the most severe that I can ask the Notary Chamber to impose. This is required as part of the increased control that we exercise over notarial activity, because the state has given notaries part of its powers. A huge part of Bulgarian notaries are honest, conscientious and do their job. However, there are also those among them who do not take this care. We have identified cases in which, say, someone knocks on the door one day at your property and you wake up with a notarial deed based on the questioning of three witnesses that you have never seen.
Constative notarial deed?
Exactly. And it turns out that the property is no longer yours. We have such a case on an important large boulevard in the central part of Sofia, over half a decare of property. The owner's daughter understands that the property is no longer theirs. They had a building, and the building was demolished, and so on. There is another case in Balchik. In Sofia, another appetizing property, a third such case. Whether they are part of the property mafia or not will be established, since I send all the materials from my inspections to the prosecutor's office, but what is important and a signal on the one hand of gratitude that we are conducting these inspections with the Chamber, but on the other hand, it is a clear signal to everyone to comply with the rules and guarantee the safety of citizens under their fundamental right - the right to property. That is why notaries are respected. They are also respected by me as a minister.
We help each other a lot in the changes that we want to make in order to tighten the regime, to foresee their powers much more clearly and to clearly outline the due care that is required of them. You know the cases. One of the other people punished by me, for whom I want to have his rights to work as a notary taken away at all, confessed with a power of attorney such transactions that the properties of an elderly man in Kazanlak were looted. He was left with nothing on the basis of a power of attorney, with which transactions should not be confessed at all. Criminal proceedings are also underway, there are arrests, but in the meantime years pass in legal battles.
This property mafia, on which we declared war, is not a homogeneous mass. We are talking about different organized collectives, very serious, with serious legal knowledge, for which we are still, link by link, unraveling the various schemes and trying, because this may sound like a government initiative at the moment, enthusiasm that may fizzle out. No, to make it a policy, we are changing the laws, just like we did for arbitrations.
After the case with the 90-year-old woman, thank God, her apartment was saved by a decision of the Supreme Court, but we changed things so that there will be no new cases like this. What is important, however: to work in coordination with the guilds such as bailiffs, notaries, and receivers, taking into account very clearly the powers and responsibilities of each of us. And to know that in case of violations, they will not get away with it. Not because the minister is fixated on this, but because this is the meaning of the law. To protect the weaker and the one who has the power to violate their rights, when he does so, to pay a heavy price for it.