Bulgaria to withdraw ban on external funding for magistrates' organisations; drive for more corruption convictions to remain

The legislative changes, proposed by GERB and designed to strengthen judicial independence, had aimed to limit external funding options for professional associations of judges, prosecutors, and investigators. The draft bill would have barred magistrates from participating in teaching and research activities funded by foreign countries or entities.

Responding to the criticism

The Union of Judges in Bulgaria (SSB), the European Association of Judges (EAC), America for Bulgaria Foundation, opposition political parties, organisations, and other experts had all expressed strong criticism of the proposals. The America for Bulgaria Foundation previously funded the SSB. According to the critics, the amendments violated the constitutional right of freedom of association and limited funding options from EU financing mechanisms and other international partners. The parliamentary leader of GERB, Tsvetan Tsvetanov, clarified that, in rolling-back its initial proposals, the party viewed it as inappropriate to ban funding from the EU and the America for Bulgaria Foundation. On 24 July, Prime Minister Boyko Borisov met with US Deputy Assistant Secretary of State Hoyt Yee. In an interview on 24 July, Yee said that the amendments to the Judicial System Act seemed "anti-American" and appeared to be designed to disturb Bulgarian-American relations.

Expansion of the Specialised Criminal Court's prerogatives

German Chancellor Angela Merkel (left) walks next to the prime minister of Bulgaria Boyko Borisov after a joint press conference in Berlin, Germany, on 7 June 2017.

DPA: 91367312

In a parallel legislative development on 26 July, parliament approved in its final reading amendments to the Criminal Procedure Code to move high-level corruption cases hearings from the Sofia City Court to the Specialised Criminal Court. The specialised prosecutor's office, linked to the Specialised Criminal Court, already handles cases involving organised criminal groups and relating to areas such as money laundering, kidnappings, and fraud. In December 2016, the Sofia City Court, Bulgaria's largest, was accused by Prosecutor General Sotir Tsatsarov of slow handling of court cases (see Bulgaria: 27 April 2017: Bulgarian prosecutors' investigations likely to maintain risks of operational disruption and contract alteration; prosecution transparency modestly enhanced). The amendments also envisage changes to the procedures of the Specialised Criminal Court, seeking to accelerate the completion of cases. The latest annual Cooperation and Verification Mechanism (CVM) report published in January by the European Commission states that Bulgaria has a weak track record of achieving final convictions in serious organised crime and corruption cases. Previously, the CVM report had noted that the Specialised Prosecution Service and Court remain hindered by an unfocused attribution of tasks and very formalistic provisions of the Criminal Procedure Code.

Slow anti-corruption efforts

In 2015 and 2016, the Reformist Bloc, the junior coalition partner in the previous GERB-led government that resigned in November 2016, had attempted to introduce legislation to establish an anti-corruption body capable of conducting administrative investigations and to check conflicts of interest and the personal property of high-level officials. The first draft of the anti-graft law was rejected in September 2015 by parliament and has never gained majority legislative support because of disagreements over the powers of the new body (see Bulgaria: 8 September 2015: Bulgarian parliament's rejection of anti-graft legislation indicates poor reform prospects in two-year outlook and reflects fragmented legislature). In June 2017, eight international business organisations in Bulgaria once again urged the government to intensify efforts to eliminate judicial corruption and ensure independence of judges and prosecutors, arguing that this presents a barrier against attracting foreign investment.

Lifting CVM

The government would like to obtain the lifting of the CVM, perceived as an obstruction to Bulgaria's entry into the Schengen area (see Bulgaria: 14 December 2015: Diluted constitutional amendments to halt judicial reform and anti-corruption drive, threatening Bulgaria's Schengen entry and government stability). Bulgaria has been under the CVM since accession to the EU in 2007 and has been repeatedly urged to improve efforts in fighting corruption and to enhance the independence of its judiciary and transparency in the prosecution service. According to the European Commission, the CVM will be lifted when all relevant benchmark standards are achieved.

Outlook and implications

Bulgaria's political decisions are prone to influence by key international partners, creating the potential for volatility in policy-making. Criticism by international partners, including EU states and the United States, is likely to lead to policy reversal, especially in anti-corruption, labour market, and tax legislation, and pre-publication versions of this report had predicted the removal of the amendments to limit external funding to magistrates' associations.

In any case, this measure had appeared potentially designed to shift the focus of public debate away from the expansion of the competences of the Specialised Criminal Court. Despite the SSB and other experts criticising the amendments adjusting its role, saying that they are unjustified and unclear, this court is now likely to become the primary location for corruption cases. At first, this reorganisation may generate initial disruption, but within the next two years IHS Markit expects intensified and more effective prosecution of complex cases, with greater scope for convictions in corruption cases. However, we continue to assess that these efforts are most likely to target only low- and medium-level corruption, mainly in the construction and energy sectors, seeking to establish a track record of successful prosecutions that achieve convictions. Constituting such a track record would help meet CVM requirements and increase the likelihood of the CVM procedure being lifted by end-2018. In turn, together with political efforts to escalate the process, this will make Bulgaria's Schengen accession more likely in the three-year outlook. Nonetheless, comprehensive anti-corruption reform and the creation of a special anti-corruption body remain unlikely, and the courts and prosecution service continue to face the risk of political interference.