Category: Bulgaria

In recent months, Bulgaria has undergone significant changes to its Anti-Money Laundering (AML) legislation intending to achieve the long-overdue complete transposition of the EU 2018/843 Directive into national law and meeting the higher standards set forth in the Financial Action Task Force’s (FATF) recommendations on Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT), especially following the country’s inclusion in FATF’s so-called “grey list” of jurisdictions under increased monitoring.  Naturally, these changes give rise to a number of new obligations for businesses to comply with. The purpose of this article is to provide an overview of the most significant changes.

Some of the changes affect the AML internal rules of the Obliged Entities (OE). In compliance with these, the internal rules shall now include information on the updating periods of the customer databases and dossiers, consistent with the identified customer risk rating. Additionally, the internal rules shall indicate the update periods of the entity’s Risk Assessment – at least once every 3 years. However, certain high-risk OE (such as leasing companies, investment intermediaries, insurance undertakings, insurance intermediaries, etc.) are required to update their risk assessments annually and designate a specific date for the update to occur each calendar year.

Furthermore, the OE’s internal rules must include policies and procedures regarding the verification of the professional competence and reliability of the internal AML department employees as well as other employees whose job functions involve AML /CFT-related duties.

The customer due diligence procedure has also undergone certain changes. One of these is situations in which the customer is represented by a proxy before the OE. The OE must now identify the natural persons acting as customers’ proxies in the same manner that they identify the actual customers. Additionally, proof of the proxies’ authorized representative powers (PoA) must be requested by the OE.

Also, as part of the due diligence process, as of October 6, 2023, the OE must determine the source of funds involved in each business relationship or transaction (before the revisions, this was only required in specific situations).

Another noteworthy modification is the introduction of a new mechanism for reporting discrepancies in beneficial ownership data. This mechanism comes into effect on July 16, 2024, as a part of the transposition of the EU 2018/843 Directive. This new rule requires all OE to disclose to the Registry Agency any discrepancies they identify between the beneficial owners’ data they have gathered and the register data. Once the discrepancy is reported, the Registry Agency notifies the relevant company in writing, urging it to update its Ultimate Beneficial Ownership (UBO) information within 7 days or face penalty. Therefore, it is highly recommended that all OE maintain their UBO information up-to-date as the 7-day deadline may be difficult to meet, particularly for companies with more complicated structures.

It is worth noting that the list of OE has been expanded as a result of last year’s legislative amendments. Pursuant to these changes, individuals who, by way of their business, grant access to safe-deposit boxes at public vaults are now considered OE. Another addition to the list of OE are providers engaged in virtual assets transfer or exchange services, virtual assets safekeeping and administration services enabling control over virtual assets, and virtual assets public offering services. These changes are in line with the EU AML framework and reflect the rising tide of crypto platforms and retail financial services.

Additional personal requirements have been introduced concerning the natural persons eligible to perform certain activities. Previously, only the natural persons providing services as company service providers, legal service providers, or real estate agents were subjected to a personal requirement for a clean criminal record – they were required not to have been convicted of an intentional, publicly prosecutable criminal offence unless they had been rehabilitated. Following the amendments in the Measures Against Money Laundering Act (MAMLA), several additional personal requirements were imposed. Currently, in addition to having clean criminal record, these individuals are required also not to have been members of a management or control body, or general partners, in a company that has been subject to bankruptcy proceedings or has been dissolved due to bankruptcy within the last two years preceding the date of the decision declaring bankruptcy, in case there were unsatisfied creditors. These individuals shall not be restricted from holding senior management positions under Art. 124 of the MAMLA (foreseeing restrictions for natural persons that have been sanctioned for violations of the MAMLA), nor from holding positions of material responsibility. Their reliability and suitability must be proven based on collected data.

All the abovementioned personal requirements for natural persons eligible to perform certain activities are now listed in a new separate provision (Art. 9d of MAMLA). The scope of the newly-created provision also covers the custodian wallet providers (a wallet in which a third party is responsible for managing your private keys), the persons who, by way of their business, grant access to safe-deposit boxes at public vaults, as well as the providers engaged in exchange services between virtual currencies and fiat currencies, virtual assets transfer or exchange services, virtual assets safekeeping and administration services enabling control over virtual assets and virtual assets public offering services.

These personal requirements shall also apply to procurators, managers, members of management or control bodies, or limited partners in companies that carry out any of the aforementioned activities, as well as to their beneficial owners.

Besides the amendments to Bulgaria’s national AML legislation, it is important to note another major development that will have a considerable impact on AML rules throughout the EU. This is the recently adopted legislative package of new anti-money laundering measures at the EU level (hereinafter referred to as the “EU AML Package”), which brings a long-awaited reform to EU AML legislation.

The new comprehensive EU AML package consists of several new directives and regulations with the ambitious purpose of harmonising the AML/CFT legislation across the EU as the regulations will apply directly in all Member States. On June 19, 2024, the EU Official Journal published the EU Single Rulebook Regulation (Regulation (EU) 2024/1624), the sixth Anti-Money Laundering Directive (Directive (EU) 2024/1640), and the Anti-Money Laundering Authority Regulation (Regulation (EU) 2024/1620), which established a new European Authority for Anti-Money Laundering and Countering the Financing of Terrorism.

The new rules will take effect three years after the regulations and directives come into force (with some exceptions).

A more detailed review of the impact of these changes on EU-obliged entities will soon be provided in a separate article.

By Mario Kralev, Associate, and Sevdelina Rabuhchieva, Senior Associate, Gugushev & Partners, PONTES

CMS has advised Solar Park Trakia on the completion of the development of the 50-megawatt Sinotovo photovoltaic project in Bulgaria.

According to CMS, “following the completion of the construction of the PV section, the project will develop further with the installation of battery storage, combined heat and power facility and water-from-waste plant.”

The CMS team included Managing Partner Kostadin Sirleshtov, Counsel Borislava Piperkova, Senior Associates Diyan Georgiev and Elena Yotova-Yordanova, Associates Dian Boev and Viktoriya Toneva, and Trainees Boris Kirov and Niya Ivanova. 

The Supreme Administrative Court (SAC) ordered the National Revenue Agency (NRA) to repay default interest charged on precisely defined and fully paid advance corporate income tax instalments that were not declared.

The court, in a final decision dated 21 March 2024, ruled that a company’s appeal against an act of set-off and recovery issued by the NRA was justified. By the act of set-off and recovery, the NRA refused to reimburse the company for the default interest charged on the advance corporate income tax instalments for 2021, which were paid without submitting a declaration pursuant to Art. 87a, para. 1 of the Corporate Income Tax Act (CITA), by which, after the amendment of the law, in force from 01.01.2021, the advance instalments for the current calendar year are to be declared in a standard form between 1 March and 15 April of the same year. It was established before the court that the company did not submit an initial declaration pursuant to Art. 87a CITA, but that the monthly advance payments were transferred to the company’s tax and social security account within the legal deadlines, and that the advance payments paid by the company covered and even exceeded the annual corporate tax due, while the company had no other obligations to repay the instalments. Given these facts, the SAC stated that, despite the absence of a declaration pursuant to Art. 87a CITA, as the company had determined and paid the annual corporate income tax in full, which had been credited to the state budget, to the tax account, and at the same time, due to the absence of an excess within the meaning of Art. 89, par. 1 CITA, this provision is inapplicable, and the contested act of the NRA, which refuses to reimburse the interest collected for late payment of tax instalments, is contrary to the substantive law and the purpose of the law.

In order to overturn the NRA’s refusal to reimburse the collected interest, the SAC panel, in upholding the decision of the court of first instance, accepted that

1. the obligation to determine and pay the advance instalments of corporate income tax arises by virtue of the law (Art. 83, paras. 1 and 2, Art. 90, para. 1 CITA) and not by virtue of the submission of a tax return;
2. by paying the monthly advance instalments within the legal deadlines, the company has determined the amount of the advance instalments due, although not in the form provided for by law – by a declaration pursuant to Article 87a CITA;
3. the taxes due are deemed to have been paid on the date on which the amounts are credited to the State budget in the account of the relevant territorial directorate of the NRA;
4. the NRA has not fulfilled its obligation under Art. 87, paragraph 2, point 4 of the Tax and Social Security Procedural Code (TSIPC) to record in the company’s tax and social security account the payments made by the same company with a precise indication of the reason on the payment slip;
5. the sums paid as advance payments were at the disposal of the NRA and that the public purse was not damaged;
6. in accordance with Art. 89, para. 1 CITA, the purpose of the law is to compensate for the damage caused by the late payment of the part of the instalments paid after the deadline of Art. 90, para. 1 CITA, and that this is a prerequisite for the liability for interest under Art. 89, para. 1 CITA, is an excess of the annual tax over the specified advance instalments and not over the instalments declared by the taxpayer;
7. the failure to submit a declaration in due time pursuant to Art. 87a CITA is a ground for administrative-criminal liability (Art. 261 CITA), but does not constitute an independent basis for an obligation to pay default interest pursuant to Art. 89, para. 1 CITA.

With this decision, the SAC has accepted that the tax authorities are obliged to act proactively and that, when amounts are received in the tax and social security account of a taxpayer but no declaration is made, the NRA itself, in accordance with the principles of objectivity, ex officio and the right of defence (Art. 3, Art. 5 and Art. 6 TSIPC), in order to clarify ex officio the facts and circumstances relevant to the determination and discharge of the obligated person’s contributions, including by informing the taxpayer of the necessity and possibility of submitting a missing declaration, albeit belatedly.

By Meglena Konstantinova, Senior Associate, Boyanov & Co

As of June 1, 2025, the traditional paper labour book will be phased out in favor of a digital alternative. All employment data will now be maintained in an electronic employment register managed by the National Revenue Agency (NRA). This transition is part of a broader effort to modernize the Labour Code and digitize employment relationships, aiming to eliminate the risks associated with physical document loss and to ensure that data is always current and accurate.

Transition Process for Employers

Employers are required to complete the paper labour books of their employees by June 1, 2025, and return them to the employees. The final entry must detail the length of service completed by the employee with the employer up to June 1, 2025. This entry should be signed by the chief accountant and the employer, and affixed with the employer’s seal if one is available.

Introduction of the Unified Electronic Employment Record

The paper labour book will be replaced by the unified electronic employment record, a key component of the new electronic employment register. This electronic document will contain all pertinent employment data and circumstances, serving as an official supporting document for employment verification.

The format and procedure for data storage in the employment register, as well as the processes for data entry, deletion, and certification of circumstances, will be regulated by a special Ordinance. Although a draft of this Ordinance was available for public discussion until June 20, 2024, it has not yet been officially adopted by the Council of Ministers.

Data Requirements and Submission Procedures

Employers must provide detailed information to the NRA for inclusion in the unified electronic employment record, including amongst others, the employee’s and the employer’s identification, the grounds of the employment contract, basic remuneration details, position codes, working hours and length of service, paid annual leave information, etc.

Deadlines for Data Submission

The deadlines for the provision of employment data to the NRA remain the same, although additional situations will require information to be provided to the NRA, as within three days : the conclusion and amendment of the employment contract, the place of work, term of the employment contract, the duration of working hours, the agreed paid annual leave, etc. and within seven days – the termination of the employment contract, entry into force of certain court decisions, etc.

The employer will also have to submit an electronic employment record with data on the beginning of the performance of the employment contract before the employee starts work.

Submission and Access to Electronic Employment Records

Employers must submit electronic employment records through the NRA’s electronic services portal, using a qualified electronic signature. They can also be submitted on an electronic device along with a template cover letter. Upon submission, the NRA issues a protocol detailing the entered records. Employers must provide employees with a copy of this protocol before they commence work.

Accessing the Electronic Employment Register

The NRA will provide access to the electronic employment register for:

1. Employees, for their own records.
2. Parents or guardians of employees under 18.
3. Employers, for data they submitted and for certain data from previous employers except for data on the amount of labour remuneration and benefits.

In addition, employees are entitled to information on the access history of their unified electronic employment record, except for instances of access by the pre-trial proceedings authorities in accordance with the procedure laid down in the Criminal Procedure Code and the State Agency for National Security.

Data Sharing with the National Statistical Institute

The NRA will share employment register data with the National Statistical Institute (NSI) monthly. This data will be used for statistical purposes and published in aggregated form, detailing employment relationships, remuneration, and working hours according to professional and economic classifications. The specifics of this data exchange will be regulated by an agreement between the NRA and NSI.

This modernization represents a significant step forward in digitizing employment records, enhancing data accuracy and accessibility, and streamlining administrative processes for both employers and employees.

By Martina Dimitrova, Senior Associate, Eversheds Sutherland

Yankulov & Associates has advised Stanislav Gochev on an investment from Adarna Invest for WPP Gorichane that also saw the exit of Valentin Ivanov. Reportedly, Schoenherr advised Adarna Invest and Novel Law advised Valentin Ivanov.

According to Yankulov & Associates, WPP Gorichane is a wind energy development contractor working for the Finnish fund Taaleri Energia in Bulgaria. Moreover, the firm reports that Adarna Invest is owned by Atanas Dobrev, a “seasoned telecoms manager and green energy enthusiast.”

The Yankulov & Associates team included Managing Partner Alexander Yankulov.

The Anti-Money Laundering and Countering Financing of Terrorism legislative package of the European Union (“EU”), proposed on 20 July 2021 by the European Commission, and approved by the European Parliament plenary this April was published in the Official Journal of the EU on 19 June. The new legislative package introduces significant regulatory changes in connection with the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, both on European and national level.

The legislative package rests on the following legal acts:

• Regulation[1] establishing an Authority for anti-money laundering and countering the financing of terrorism (the “AML Authority”) with supervisory powers, which will coordinate cooperation and exchange of information within the EU;
• Regulation[2] on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (“AML/CFT Regulation”), by which directly applicable rules and procedures in member states will be introduced;
• New Directive[3], replacing the existing Fourth AML Directive[4], as amended, and supplementing the AML/CFT Regulation.

Authority for Anti-Money Laundering and Countering the Financing of Terrorism

The role and objective of the newly established AML Authority will be to strengthen the Anti-Money Laundering (“AML”) and Countering the Financing of Terrorism (“CFT”) legal framework by harmonizing supervisory practices across financial and non-financial sectors, directly supervising some high-risk and cross-border financial entities and coordinating financial intelligence units (“FIUs”). Located in Frankfurt am Main, Germany, it will function as a decentralized EU regulatory agency overseeing the AML/CFT system, including the non-financial sector.

Key responsibilities and respective powers of the AML Authority

In relation to the regulatory environment the AML Authority shall aim at strengthening the cooperation and information exchange between obliged entities, supervisors and supervisory authorities and non-AML/CFT authorities. It will be responsible for collecting and analyzing information on the application of AML/CFT rules, as well as the establishment of a central AML/CFT database containing any relevant data for supervisory activities with access for competent national authorities and bodies on a need-to-know and confidential basis. The AML Authority will also monitor developments and assess threats, vulnerabilities, and risks related to money laundering and terrorism financing, as it can issue clarifications and Q&A memoranda and provide trainings to raise awareness of and address these risks. For the purposes of carrying out these tasks the AML Authority shall have the power to develop regulatory technical standards, issue guidelines and recommendations, and provide opinions to the European Parliament, the EU Council, and the EU Commission on all issues related to its area of competence.

In relation to obliged entities the AML Authority’s main task is to ensure regulatory compliance. In general, it is envisaged that it will have supervisory and investigative functions with respect to selected obliged entities, with the ability to participate in group-wide supervision, and in particular in AML/CFT supervisory colleges. It will have the power to impose pecuniary sanctions, including periodic penalty payments, require financial supervisors to make use of their powers in the area of AML/CFT, issue binding decisions addressed to selected obliged entities.

The administrative measures in the AML Authority’s competence for non-compliance with the decisions taken include issuance of orders and recommendations, as well as public statements identifying a natural or legal person in breach of the AML/CFT rules. It will also be capable to interfere in entities’ activities by restrictions or limitation of business, operations or network of institutions comprising an obliged entity, require the divestment of activities, changes in governance structure or proposing withdrawal or suspension of an authorization where applicable.

In relation to supervisors the AML Authority will have to provide AML/CFT assistance and promote high supervisory standards and practices. It shall investigate breaches or non-application of EU law, issue recommendations and warnings, and mediate disagreements on measures for obliged entities. Financial supervisors must notify the AML Authority if an obliged entity’s situation deteriorates rapidly and significantly, and the Authority in turn shall be able to require the submission of information or documents, initiate investigations and address recommendations in cases of systematic supervision failures by a financial supervisor.

In relation to FIUs the AML Authority will have the function to support and improve cooperation between them by promoting common approaches and best practices, preparing and coordinating assessments and analyses of money laundering and terrorism financing threats, as well as resolving disagreements. To enhance consistency and effectiveness, it shall establish a peer review process, and provide specialized training and expertise. The AML Authority will have the power to request non-operational data and analyses from FIUs, collect information and statistics, and issue guidelines and recommendations.

Direct Supervision of Selected Obliged Entities

One of the most important developments of the new legislative package is that the AML Authority will have the power to directly supervise some high-risk entities operating across at least six member states. In this regard, it should develop and maintain AML/CFT benchmarks and a supervisory methodology for classifying entities into risk categories, detailing the approach to their supervision. The AML Authority will periodically assess customers, products, services, transactions, delivery channels, and geographical areas of credit and financial institutions, regardless of their operating method (through infrastructure on the territory concerned or remotely).

Credit institutions and financial institutions, and groups thereof with a high residual risk profile shall qualify as selected obliged entities, with the first selection process starting by 2027. Additionally, the AML Authority will be able to take on direct supervision tasks for non-selected entities in exceptional circumstances at the request of a financial supervisor and conduct all necessary on-site inspections.

New rules on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing

One of the main objectives of the AML/CFT Regulation is to harmonize the rules and procedures related to AML/CFT across all member states of the EU. This approach will create a more consistent and effective framework across the EU, reducing discrepancies between national regulations and enhancing cross-border cooperation.

Therefore, the new AML/CFT Regulation sets uniform rules on customer due diligence and beneficial ownership transparency, measures with respect to occasional transactions or business relationships with politically exposed persons, measures to mitigate risks deriving from anonymous instruments, limits to large cash payments, specific measures for individual third-country respondent institutions, prohibition of correspondent relationships with shell institutions, etc.

Obligations with respect to AML/CFT measures

The new legal framework expands the scope of obliged entities, now including all types and categories of crypto-asset service providers under the new MiCA regime, crowdfunding platforms, mortgage and consumer credit intermediaries, investment migration operators assisting third country nationals in obtaining EU residence permit, persons trading in certain high-value goods as well as in precious metals and stones, professional football clubs and football agents.

By virtue of the AML/CFT Regulation obliged entities are required to implement AML/CFT measures and report suspicious activities to FIUs. Specifically, they shall have in place internal policies, procedures, and controls to ensure compliance, take appropriate measures, proportionate to the nature of their business, to identify and assess money laundering and terrorism financing risks they are exposed to, including the risks of non-implementation and evasion of targeted financial sanctions. Obliged entities must also ensure their relevant employees, agents, and distributors are aware of the regulatory requirements and internal policies, including data processing for the purposes of AML/CFT. These requirements shall apply to all branches and subsidiaries of the obliged entity, both within member states and in third countries. In addition, entities wishing to carry out activities within the territory of another Member State for the first time must notify their home state supervisors.

The AML/CFT Regulation introduces special rules for the obliged entities to outsource to third parties tasks related to the measures for combating money laundering and terrorism financing.

Customer due diligence

The rules for customer due diligence are now harmonized by the AML/CFT Regulation, thus creating a single framework with more detailed and harmonized rules and information needed to identify beneficial owners by obliged entities, as they must make the information collected available to competent authorities upon request and without delay. Obliged entities, inter alia, are responsible to carry out identification of the purpose and intended nature of a business relationship or one-off transaction, ongoing monitoring of the business relationship and transactions performed by customers and to update customer information regularly. The new AML/CFT Regulation also includes disclosure requirements for nominee shareholders and nominee directors.

Another requirement is that obliged entities should report to the central registers any discrepancies they find between the information available in the central registers and the information they collect. There are certain exceptions in this regard, such as cases of minor discrepancies, outdated data, when there are no grounds to suspect intention of concealing information, or in relation to information which independent legal professionals, auditors, accountants, etc. receive from, or obtain on, a client. It is worth mentioning that the Bulgarian legislation already contains such requirements (entering into force as of 16 July 2024) for the obliged entities to report to the Bulgarian Registry Agency any discrepancy they identified during their checks, when such discrepancies are related to the data available in the Bulgarian Commercial Register and Register of Non-profit Legal Entities for the ultimate beneficial owners of the relevant entities.  

For the purposes of dealing with money laundering and terrorism financing threats from outside the EU, non-EU legal entities also need to register their beneficial ownership in the member states’ central registers when they have certain links with the EU. Moreover, third countries with significant strategic deficiencies and with compliance weaknesses in their national AML/CFT regimes shall be identified by the EU Commission and designated as “high-risk third countries”, as a result of which obliged entities will have to apply enhanced due diligence measures with respect to the business relationships or one-off transactions involving natural or legal persons from that third country.

On the other hand, similar to what is provided in the current AML/CFT regime, where the business relationship or transaction presents a low degree of risk, obliged entities may apply simplified due diligence measures, such as verifying the identity of the customer and the beneficial owner after the establishment of the business relationship, reducing the frequency of customer identification updates, the amount of information collected and the frequency or degree of scrutiny of transactions.

Under certain conditions obliged entities may rely on other obligated entities, whether located in a Member State or in a third country, to meet the customer due diligence requirements.

Entry into force and application

The newly approved legislative acts interact cohesively, complementing each other to establish a sustainable legal framework. This framework includes directly applicable provisions where possible and binding AML/CFT measures for member states where direct rules are not feasible or justified.

The implementation of the new rules will be gradual, with the full set expected to be in place by mid-2027. However, some provisions will take longer for the private sector, member states, and the EU Commission to implement and will be introduced at a later stage.

The provisions for establishing the AML Authority, as well as those concerning the implementation of certain of its tasks, apply as of 1 July with the aim for the AML Authority to begin most of its activities by mid-2025.

[1] Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010.

[2] Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

[3] Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive(EU) 2019/1937, and amending and repealing Directive (EU) 2015/849

[4] Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC

By Margarita Zhivkova, Associate, Eversheds Sutherland

Djingov Gouginski Kyutchukov & Velichkov has advised Bianor Holding on its acquisition of Digital Lights and Prime Holding. Karastoyanov, Mitkov & Associates advised the seller of Digital Lights Dimitar Dimitrov. Shopova, Kolarova & Partners advised Prime Holding’s sellers Noratex and minority shareholders.

Digital Lights is a software company specializing in building mobility, business, and cosmos software solutions.

Prime Holding is a technology company providing consultancy services in the field of software development.

According to DGKV, “the acquisition of the two software companies is part of Bianor’s growth strategy to consolidate other Bulgarian software businesses and diversify its existing portfolio. Digital Lights and Prime Holding are now united along with the other Bianor group companies under the Wiser Technology trade name.”

Earlier this year, DGKV advised Bianor Holding on capital increase (as reported by CEE Legal Matters on April 23, 2024). In 2023, DGKV advised Bianor Holding on the acquisition of Itido Technologies and Databreathe (as reported by CEE Legal Matters on March 24, 2023).

The DGKV team included Partners Georgi Tzvetkov and Gergana Monovska and Senior Associate Silviya Apostolova.

The Karastoyanov, Mitkov & Associates team included Managing Partner Dimitar Karastoyanov and Partner Iva Angelova.

The Shopova, Kolarova & Partners team included Managing Partners Elena Shopova and Lora Kolarova and Associate Lawyer Ekaterina Churilova.

Editor’s Note: After this article was published, PwC Legal informed CEE Legal Matters that it advised Bianor Holding as well. The firm’s team included Director Angel Bangachev and Senior Manager Krassimir Stephanov.

Eversheds Sutherland Bulgarian member firm Tsvetkova Bebov & Partners has advised on TBI Bank’s EUR 20 million issuance of MREL notes.

The notes mature in 2026.

TBI Bank is a financial technology bank operating in Bulgaria, Romania, and Greece.

In 2024, Eversheds Sutherland advised on the second TBI Bank EUR 10 million issuance of MREL Notes (as reported by CEE Legal Matters on February 2, 2024), and, in 2023, Eversheds Sutherland advised on the first TBI Bank EUR 10 million issuance of preferred MREL bonds (as reported by CEE Legal Matters on July 26, 2023).

The Eversheds Sutherland team included Managing Partner Nikolay Bebov, Partner Damyan Leshev, Counsel Maria Karacholova, and Senior Associate Petar Ivanov.

The long-awaited Han Tervel tender procedure has been opened for bidding following the adoption of the Council of Ministers’ decision dated 23 August 2023 and its recent publication in the Official Journal of the EU.

The deadline for submitting applications will be 17:30 EET (Bulgarian time) on 5 November 2024 and the deadline for submitting offers will be 17:30 EET (Bulgarian time) on 20 November 2024. 

The price of the tender documents will be BGN 10,000 (EUR 5,000) and the documents can be purchased from the Ministry of Energy.

The recent extraction developments in the Black Sea and large discoveries in the Romanian and Turkey Black Sea, combined with the recent takeover of the Han Asparuh block by OMV Offshore Bulgaria, are the likely driving forces behind the tender.  

The large Han Tervel block, located in offshore Bulgaria, borders the Turkish Sakarya natural gas discovery with a total volume of reserves expected to exceed 710 billion cubic meters. As a result, it is expected that the tender will attract major players in the field.

UK-based Vintage Petroleum carried out limited exploration in the area in 2002 to 2007. Currently, offshore exploration in the Bulgarian waters of the Black Sea is only taking place in the Han Asparuh block by OMV Petrom. To the west of Han Tervel is the Han Kubrat (formerly Silistar) block where exploration rights were granted to Shell, Woodside and Repsol between 2016 and 2021.

The parameters of the tender include:

• the location (i.e. Bulgaria’s exclusive economic zone in the southern Bulgaria Black Sea coast and close to Turkey’s maritime border);
• the area’s size (4,032 square km);
• the bid participation deposit amount (BGN 15,000 or approximately EUR 7,500);
• the specification that the bidder must prove a generated total net income of EUR 150 million in sales for the last three financial years;
• each bid will also be evaluated on the basis of the proposed work programme and funds allocated for environmental protection;
• The minimum mandatory work programme must include the following: acquisition of new 3D seismic surveys, the preparation of a geological model to delineate prospective drilling targets, an assessment of oil and gas potential and the optional drilling of an exploration well.

By Kostadin Sirleshtov, Managing Partner, Denitsa Dudevska, Senior Associate, and Viktoriya Dimitrova, Associate, CMS

Wolf Theiss has advised Bulgarian-American Credit Bank on its issuance and listing of EUR 15 million 8.00% 2024-2034 subordinated tier 2 notes.

According to Wolf Theiss, “the subordinated notes were placed with professional clients and eligible counterparties and are governed by the laws of Bulgaria. They have a maturity of ten years with an issuer call right after five years, along with a denomination of EUR 100,000 each.”

The Wolf Theiss team included Partner Katerina Kraeva, Counsel Nikolaus Dinhof-Renezeder, Associates Sebastian Prakljacic and Rainer Holweg, and Legal Trainees Paola Zgurova and Peter Marcher.