Small fries enter EU Blacklist

Sega Newspaper material by Svetozar Terziev. The Cabinet shall submit to Brussels the names of 50 companies suspected of EU funds misappropriation but with the request that sanctions are still not imposed on them.

Almost unknown companies entered the "fearful" blacklist which Bulgaria must deliver to Brussels, high-rank government source claims. Big players like Binder Road Construction Company, which outraged the European Commission (EC) and the Bulgarian public for having profited from public funds, are not among the enlisted in the EU Early Warning System.

Bulgaria has included about 50 companies in the list of suspects of EU funds misappropriation. These are companies which have committed irregularities only under PHARE.

High-rank Bulgarian officials expressed doubts that the list is going to satisfy Brussels since the EC insisted on the disclosure of thievish companies without making difference between misappropriations of EU or Bulgarian funds. The letter of the EC Director for Enlargement Michael Lee from 8 May addressed to the National Authorizing Officer Dimitar Ivanovski insisted on the disclosure of incorrect contracting companies under contracts with the two Executive Agencies at the Ministry of Finance and the Ministry of Regional Development and Public Works which manage the greater part of pre-accession funds. But it is added parenthetically that the request refers also to projects related to the Republican Road Infrastructure Fund where a "fraternal" funding was found out by means of public resources to the value of BGN 120-130 million. The Minister of Finance Plamen Oresharski stood up for the accused Binder Company saying that it has not participated in EU-funds tenders.

The government was trying to evade for quite a while the explicit insistence of Brussels on the submission of such blacklist. Meglena Plugchieva, the Deputy Prime Minister in charge of EU funds absorption, initially claimed that she may include in the blacklist only companies with issued court orders for EU funds misappropriation. However, currently no such court orders have been issued and, moreover, the Bulgarian court does not enjoy a favourable reputation in Brussels. Therefore, Michael Lee insists on submission of information of suspects and not only of convicted ones. After consultations with Brussels, Bulgarian authorities have finally undertaken to fulfill this requirement as well.

There is still a debate among government circles over the legitimacy of imposing administrative penalties only on suspicions of fraud. Some experts say that systematic misappropriation must be ascertained whereas, in case of isolated violations, companies should not be stigmatized. EC, however, insists on reporting each violation of relevant rules.

In order to avoid conflicts, the administration insists that a special normative act is issued, for instance, a government decree. But there is not enough time for the adoption of such. Therefore, the list consisting of 50 companies shall be submitted to Brussels until the end of the week accompanied by the request that no sanctions are imposed before the adoption of relevant decree. There will be a reservation to it that the names of some companies may be withdrawn if further inquiries prove their innocence.

For the time being the names of those included in the blacklist shall remain secret. The Government, however, has drawn up a bill which allows for the public announcement of at least those convicted of misappropriation. The bill has already been submitted to the Legislative Council with the National Parliament, source of Sega Newspaper says. After its coming into force those convicted of misappropriation shall be prohibited from accessing public funds (including EU funds) for 5 to 7 year period. It shall refer not only to the companies as juridical persons but also to the physical persons which have participated in their managing bodies. In this way, those guilty of misappropriation shall not be able to apply for EU funding by means of establishing new companies. The adoption of the law, however, cannot be concluded within the 1-month period given by Michael Lee.

A week before the deadline date (16 June) the Bulgarian authorities have addressed most of the issues posed by Michael Lee in his irate letter. Next Monday there will be a summary report on Michael Lee's desk referring not only to the administrative reshuffles but also to the inspections conducted and the measures introduced for tightening supervision bodies.