Bulgarian economy not affected by EU’s Russia sanctions

The EU’s sanctions on Russia because of the war in Ukraine do not affect the Bulgarian economy, acting Economy Minister Nikola Stoyanov told parliamentarians on Thursday.

Stoyanov was requested to speak to parliamentarians on Thursday, following a request filed by the pro-Russian party, Vazrazhdane.

The effect on the Bulgarian economy is insignificant, with exports to Russia seeing a less than 2% drop in 2022, said Stoyanov, citing the available macro data.

Even before the war in Ukraine, more than 60% of Bulgaria’s trade was with the European Union, as trade with Russia had only amounted to 5-6% in the ten years that preceded it, he added.

According to the minister, it is too early to say how the sanctions will impact the various sectors. The contracts signed before the sanctions came into force will continue to be valid until their fulfilment, said Stoyanov, noting that there are also assumptions about stocking up some Russia-imported goods when it became clear that there would be sanctions.

The minister added that much more time must pass before the real effect of these sanctions on the Bulgarian economy can be seen.

Speaking of the eleventh sanctions package still being negotiated between EU countries, the minister said it is mainly aimed at limiting the possibilities of circumventing the previous sanctions by re-exporting prohibited products and technologies to Russia from third countries.

He added that most of the information relating to member state discussions over the eleventh package is sensitive and cannot be shared in a public plenary discussion.

Asked whether companies use Bulgaria to avoid sanctions, Stoyanov said Bulgaria strictly complies with the obligations under the EU’s Russia sanctions regime and monitors all attempts to circumvent them – a job he said was done by “the Bulgarian services, together with the Finance Ministry and other institutions”.

At the end of April, the Bulgarian prosecutor’s office investigated whether the government and the responsible institutions were implementing sanctions against Russia. The investigation was launched after information “related to the manner of implementation by the Republic of Bulgaria of sanctions imposed by the EU on Russia.” was published in the media, the prosecutor’s office announced at the time.

In February, EURACTIV reported that Bulgaria had not imposed sanctions against Russian citizens or companies appearing on the EU sanctions list. The sanctions regime was imposed after the annexation of Crimea in 2014.

In Bulgaria, the sanctions must be imposed by the tax authorities, but the National Revenue Agency has not carried out a single freeze so far.

Earlier, GERB MP Delyan Dobrev said that millions of Russian oligarchs are being laundered through a bank in Bulgaria. The prosecutor’s office announced that it had ordered the State Agency for National Security to investigate the case.

(Krassen Nikolov | EURACTIV.bg)