Bulgaria found itself in a difficult situation after a local court ruled that the US Magnitsky Act, which sanctioned three high-profile Bulgarians in June 2021, cannot be applied in the country.
The move, considered the largest Global Magnitsky action taken in a single day, saw the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanction gambling oligarch Vassil Bozhkov, former MP and media tycoon Delyan Peevski, and the deputy chief of the National Bureau for Control on Special Intelligence-Gathering Devices Ilko Zhelyazkov.
The sanctions also targeted 64 entities related to the individuals.
However, on 3 February (Thursday) the Bulgarian Supreme Administrative Court ruled that as far as the cases brought before it thus far, US sanctions under the Magnitsky Act on Bulgarian territory are illegal. The court said that Washington’s sanctions could not be applied against Bulgarians in Bulgaria because they do not have a basis in Bulgarian and EU law.
“A decision issued by an institution of a non-EU country based on the provisions of the legislation of that country with extraterritorial application will not be recognized on the territory of the EU,” the Bulgarian court said in its ruling.
Thus, the authorities in Sofia are under pressure to speed up the adoption of a Bulgarian law regulating the application of the US sanctions on Bulgarian territory. The parliament has several months before the Supreme Court rules again on the issue as other cases relating to Magnitsky sanctions are being brought before it.
US cleans up Bulgarian mafia
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Bulgarians for corruption in Bulgaria, as well as their networks encompassing 64 entities.
The move was part of the largest Global Magnitsky action taken in a …
On Friday, Deputy Prime Minister and Finance Minister Asen Vassilev announced that the ruling coalition would urgently adopt a Bulgarian version of the Magnitsky-type of legislation.
Vassilev said Bulgarian law would apply to foreign sanctions, not just US ones. This law is necessary to protect the Bulgarian banking system and the economy from future shocks, he said.
“I expect the bill to be submitted to parliament within weeks, and I expect quite active political debates,” said Vassilev.
Local impact
The US move had a huge impact on the Bulgarian political landscape and largely contributed to the emergence of a new government with an anti-corruption platform.
Immediately after the imposition of US sanctions last year, the Bulgarian government made detailed blacklists of all related parties and companies, and state-owned companies were banned from doing business with them.
Bulgarian banks immediately seized the bank accounts of those sanctioned so as not to find themselves in the situation of the Latvian bank ABVL, which is in liquidation due to non-compliance with international sanctions against North Korea in 2018.
The ruling coalition has declared its intention to enforce the US Magnitsky sanctions, even though the office of the Prosecutor General, who is hostile to the government, has taken no action regarding them.
Banking sanctions blocked Vassil Bozhkov’s Bulgarian Summer party from running in last summer’s parliamentary elections because its leadership failed to open a bank account. Elsewhere, Delyan Peevski found a way around the sanctions by getting his parliamentary salary paid in cash.
Legal wrangling
Bulgarian judges refer to European regulations, accepting that EU countries are not obliged to comply with legislation with the extraterritorial application. This means that a decision made by US institutions, which is based solely on US law, does not have to be recognised in the EU.
The Supreme Administrative Court said the decision of the Bulgarian government was taken in violation of the right to protection of the people included in the lists. They have not received information from the government about the actions against them, and there is no evidence that the authorities have informed them of the grounds for the sanctions.
The court also cited the case law of the European Court of Justice, which allows such sanctions to be imposed, but only if they exist in EU law.
The Court of Justice has explicitly emphasised that interference with fundamental rights may be legitimate but must be subject to respect for the rights of the defence, the right to participate and the targeted individuals’ awareness of sanctions.
The court decisions are in two cases filed by Delyan Peevski’s mother – Irena Krasteva, Vassil Bozhkov’s wife, Elena Dineva, and Bozhkov’s own company.
Business partners have filed another 60 lawsuits and contractors affected by the sanctions, who have been placed on Bulgaria’s Magnitsky blacklist, which are likely to end in the same way аs the cases of the most recent rulings.
[Edited by Alice Taylor]
Source: euractiv.com
