20 years together

October 2012

26 October 2012

On 9 October 2012 a five-member panel of the Supreme Administrative Court issued a decision, repealing for the first time in Bulgarian case-law specific obligations imposed by the Communications Regulation Commission on undertakings with significant power on the market of telecommunication services, and namely the obligation for reduction of the prices of termination of incoming international voice calls, imposed on the three mobile operators.

In its capacity as a court representative of one of the latter, Dimitrov, Petrov & Co. Law Firm, in the person of Mr. Hristo Nihrizov, conducted a consistent and well-grounded defense, whose arguments were adopted and fully shared by the court. As a result of this breakthrough in case-law for the sphere of mobile telecommunication services in the country, the prices of incoming international calls to mobile networks in Bulgaria were held up for a period of 15 months.

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Ordinance for amendment and supplement of Ordinance No 6 of 2008 on the requirements and quality parameters of the universal service, the special measures for people with disabilities and the procedure for selection of enterprises providing public electronic communications networks and/or services, and for assignment of the obligation for provision of the universal service

With the Ordinance for amendment and supplement of Ordinance No 6 of 2008 on the requirements and quality parameters of the universal service, the special measures for people with disabilities and the procedure for selection of enterprises providing public electronic communications networks and/or services, and for assignment of the obligation for provision of the universal service (the Ordinance), promulgated in the State Gazette, issue 77 of October 9, 2012, the title of the latter is changed as follows: Ordinance for the universal service under the Electronic Communications Act.

A new section is created in the Ordinance regulating the provision of a public telephone service through connection that allows incoming and outgoing national and international calls. Thus, every enterprise that is obliged to provide the universal service shall provide the end users 24 hours a day, 7 days a week with the opportunity of: 1. receiving and making national and international calls, as well as reception and transmission of facsimile messages; and 2. data transfer at a speed suitable for functional internet access.

The amendment abolishes the Communications Regulation Commission’s (CRC) right to require from enterprises providing the universal service to provide end users with possibilities of deferred payment of fees for connection to the public telephone networks. However, upon announcement of a procedure for the selection of an enterprise to provide the universal service, the CRC may specify the price offered and the provision of electronic communication terminal equipment for people with hearing, vision and speech disabilities as a criterion for the choice.

Enterprises are obliged to install technically reliable public telephones and telephone sets to be used for voice telephone services in points of public access, and the installed public telephones and telephone sets should be equipped with charging devices. In this sense “Points of public access to voice telephone services”, according to the amendments in the Additional Provisions, are “locations for access to voice telephone services through telephone sets installed at these points, such as libraries, community centers, schools, telecenters, Internet cafes, metropolitan stations, airports, railway stations, bus stations and others”.  

Enterprises shall also provide access to public telephones for people with disabilities and free advice on the technical characteristics of electronic communications devices, as well as telephone directory, inquiry services and contracts in a form suitable for people with disabilities.

Enterprises are obliged to provide a quality of services in accordance with the parameters specified by the CRC. Through public telephones and points of public access to voice telephone services, access to telephone emergency services, including number “112“, shall be provided without any means of payment.

Enterprises that are obliged to provide the universal service shall publish comprehensive, comparable, easily accessible and understandable information for the users about the rates of quality parameters reported during the previous year.

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During the Meritas’ EMEA (Europe, Middle East, Africa) Regional Meeting that took place on October 11 - 12, 2012, in Istanbul, Turkey, Assoc. Prof. Dr. George Dimitrov, partner at Dimitrov, Petrov & Co. Law Firm, co-presented a lecture on the New Online Gambling Regime in Europe along with representatives from other countries, on a breakout session followed by discussions. Mr. Dimitrov focused his presentation on the new Gambling Act in Bulgaria adopted in March 2012, which allows the provision of gambling services at a distance.

According to the new provisions, all kinds of gambling, except for lottery and instant lottery games, may be provided at a distance through the Internet and other electronic communication means. The introduction of the new е-gambling regulation is combined with special tax rules on gambling, including e-gambling. In particular, the only tax due with regard to such activities is a 15% corporate tax. No VAT is due by organizers or customers of e-gambling services. Thus, the Bulgarian legislation proves to be one of the most liberal regulations of online gambling in Europe.

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Decision No 12 of the Constitutional Court of Republic of Bulgaria on Constitutional File No 4 from 2012

Decision No 12 of 2012 of the Constitutional Court was promulgated in the State Gazette (SG), issue 79 dated October 16, 2012. The Court was approached upon the request of the Ombudsman of the Republic of Bulgaria to declare the unconstitutionality of Art. 417, item 2 of the Civil Procedure Code (CPC), which regulates the issuance of writ of execution based upon a document or an extract from ledgers, which ascertain claims of state institutions, municipalities and banks.

According to the petitioner the challenged text violates Art. 19, Para 2 of the Constitution, which provides that law shall establish and ensure all citizens and legal entities equal legal conditions for economic activity by preventing abuse of monopoly and unfair competition and protecting consumers.

The Court ruled that the challenged Art. 417, item 2 of CPC is not in conflict with the Constitution, and therefore rejected the request to declare its unconstitutionality. The main motive of the Court is connected to the understanding that the different legal regulation provided for collection of claims of state and municipal institutions under warrant procedure, materializes the differentiated approach of the legislator within the legitimate purpose: to protect the public interest in connection with the execution of public functions of state institutions and municipalities. Receipt of revenue into the state or municipal budget by a rapid and simplified procedure ensures the proper functioning of state institutions and municipalities, and the implementation of their inherent public functions. With respect to constitutionality, this legislative solution provides achievement and assurance of the financial stability of the state and municipalities, which ensures complete undisturbed business development by all individuals in a competitive environment and in conditions of free enterprise. As for banks, the Court justifies their inclusion among the subjects of Art. 417, i. 2 of CPC with the possible financial difficulties of banks that could result from the accumulation of consistently unperformed obligations to them that threaten execution of payment transactions, customer service, and, in case of intension of these processes, rights of depositors, state economy, implementation of state and municipal budgets, leading to the occurrence of other public and social consequences. Therefore, the Court finds that a simplified, rapid and effective conduct of enforcement in favour of the subjects referred to above is in the interest of the whole society.

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Regulation for amendment and supplement to the Rules for the conditions and procedure for transferring of authorizations for use of individually assigned scarce resource

The Regulation for amendment and supplement to the Rules for the conditions and procedure for transferring of authorizations for use of individually assigned scarce resource was promulgated in the State Gazette, issue 81 of October 23, 2012.

According to the amendments, a new Art. 2a is created, covering some of the provisions of Art. 2 of the previous version of the Rules. Moreover, for the purpose of optimisation and better clarity, new texts have been added. By virtue of the new Art. 2a, Para. 4 in the cases of lease of scarce resource – radio frequency spectrum, the authorization for the use of this resource issued by the CRC remains in favour of the lessor. As prescribed by Art. 2a, Para. 5 and Para. 6, requirements arise for the lessee to notify the CRC upon entry into force of the lease contract, and  for both the lessor and the lessee – to notify the CRC upon termination of the contract for lease of a radio frequency spectrum.

Art. 3, Para. 2 is abolished, which results in cancelation of the requirement that the subject, scope and term of the authorization for provision of electronic communications via existing and/or new analogue electronic communications networks for terrestrial analogue broadcasting should be identical with the subject, scope and term of the license for radio and television activity.

A series of changes have been made to provide clearer regulation of the regime for lease of individually assigned scarce resource – radio frequency spectrum. The title of Chapter Two of the Rules has been amended as follows: “Transfer of authorizations for use of individually assigned scarce resource and partial transfer of the rights and obligations under existing authorizations for use of individually assigned scarce resource - radio frequency spectrum or its lease”. In Art. 6, Art. 8a and Art. 9 the phrase “lease” is added at certain places for clearer and more accurate regulation of the legal concept.

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Interpretative Decision No 2 of October 23, 2012 by the Supreme Court of Cassation

The General Assembly of the Civil College of the Supreme Court of Cassation (GACC of SCC) adopted an interpretative decision on the following issue: ‘Is it lawful an employee to be reinstated in his/her former office after a disciplinary dismissal performed by the deadline of the employee’s notice to the employer for termination of the employment contract pursuant to Art. 326, Para 1 of the Labour Code (LC), in the event that the disciplinary dismissal order was revoked but in the meantime the notice period has expired?’

With regard to this issue, the GACC of SCC took into consideration the following: The expiration of the period included in the notice inevitably leads to termination of the employment contract. LC does not provide possibility the period stated in the notice to be extended, suspended or interrupted, and it is still running even when the employee is on annual leave. The provision of Art. 326, Para 4 of LC indicates the moment when the period starts – the next day after the notice is received by the employer, and the notice may be revoked without the consent of the employer no later than the latter receives it, whereupon it binds the employee and with the expiration of the period it takes effect – the employment contract is terminated. After revocation of the disciplinary dismissal, if during the trial it is found that the period of the notice pursuant to Art. 326, Para 1 of LC has expired, reinstatement of the employee cannot be enacted, since it sets as a prerequisite an employment contract in force, which would exist if there was no illegal dismissal, therefore a claim brought under Art. 344, Para 2 of LC shall be found to be ungrounded. At the time of enactment of the decision there is no substantive transformative subjective right for reinstatement and the decision cannot reinstate an employee in his/her former office in the event of revocation of the disciplinary dismissal performed by the deadline of the employee’s notice to the employer for termination of the employment contract pursuant to Art. 326, Para 1 of LC, if in the meantime the notice period has expired.

With a view to the above-mentioned the GACC of the SCC replied in the negative to the interpreted issue.

The decision has been signed with dissenting opinion by some of the judges.

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Interpretative Decision No 2 of October 24, 2012 by the Supreme Court of Cassation

The General Assembly of the Civil College and the Commercial College of the Supreme Court of Cassation (GACCCC of SCC) adopted an interpretative decision on the following issue: “Are the rulings pursuant to Art. 282 of the Civil Procedure Code (CPC), by which the Supreme Court of Cassation (SCC) rules upon the applicant’s request for suspension of enforcement of the appellate decision, subject to appeal under Art. 274, Para 1, i. 1 of CPC?” With regard to this issue, the GACCCC of SCC took into consideration the following:

Ruling adopted by a panel of SCC may be appealed through a private complaint before another three-judge panel of the same court pursuant to Art. 274, Para 1 of CPC. According to the transmission provision of Art. 274, Para 2 of CPC, only rulings which obstruct the further development of the case and the rulings explicitly specified in the law are subject to appeal through a private complaint. Rulings under Art. 282 of CPC, which SCC rules upon the applicant’s request for suspension of enforcement of the appellate decision do not cover the purview of Art. 274, Para 1 of CPC and therefore are not subject to appeal. The procedure for appeal under Art. 274, Para 1, i. 1 of CPC is not applicable, as the rulings under Art. 282 of CPC do not obstruct the development of the case. The procedure law does not explicitly provide possibility for the parties to file private complaints against the specified category of rulings, and therefore appeal cannot be realized under Art. 274, Para 1, i. 2 of CPC.

With a view to the above-mentioned the GACCCC of the SCC adopted the following:

The rulings, by which the Supreme Court of Cassation rules upon the applicant’s request for suspension of enforcement of the appellate decision, are not subject to appeal under Art. 274, Para 1, i. 1 of CPC.

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Decision No 13 of the Constitutional Court of Republic of Bulgaria on Constitutional File No 6 from 2012

Decision No 13 from 2012 of the Constitutional Court was promulgated in the State Gazette (SG), issue 82 dated October 26, 2012. The Court was approached upon the request of 59 members of the Parliament to declare the unconstitutionality of several provisions of the effective Illegal Assets Forfeiture Act (IAFA). Among them are Art. 2, which provides the procedure established by IAFA to be carried out independently from administrative penal procedure against the person inspected and/or its affiliates, and Art. 24, Para 3 and 4, according to which officials are obliged, when they become aware of the circumstances under Para 3 (acquisition of benefit by administrative violation to a value of over BGN 150,000, which cannot be expropriated by any other means), to approach the Commission for Forfeiture of Illegal Assets (“the Commission”). Citizens have the opportunity to address signals to the Commission, too, in case they become aware of the circumstances mentioned above.

According to the petitioner the challenged texts violate the constitutional protection of the ownership right, inviolability of private property, the citizens’ right of private life and the freedom and privacy of correspondence and other communications.

The Court ruled that Art. 2 in its part ‘or administrative penal’ and Art. 24, Para 3 and 4 of IAFA are unconstitutional as they are in conflict with Art. 4, Para 1 of the Constitution establishing the principle of rule of law, as well as with Art. 57, Para 2 of the Constitution, which prohibits abuse of rights and their exercise if it infringes rights or legitimate interests of others.

The main motives of the Court are as follows:

(1) The obligation for notification is correctly imposed on the sanctioning administrative authority that has at its disposal all data in the administrative file, including evidence that the administrative penal ruling is enacted. All other state and municipal authorities not only do not have the primary data from the administrative records, but also are unable to assess the acquisition of benefit, its market value at the time of acquisition and the non-existence of possibility for expropriation of the benefit by other means, because the challenged act contains no legal definition of these terms.

(2) The constitutional ownership right may more seriously be violated by Para 4 of Art. 24 of IAFA which provides citizens with the opportunity to address signals directly to the Commission, in case they become aware of the circumstances under Para 3. These provisions allow all Bulgarian citizens to alert the Commission of actual or alleged administrative violations, which can turn IAFA into a tool for administrative arbitrariness by groundless initiation of examination for ascertainment of significant discrepancy in the property of persons who allegedly committed serious administrative violations.

(3) The Constitutional Court finds that the principle of independent development of the civil procedure under IAFA established in Art. 2 of the act, conforms with the legal regulations concerning its beginning, execution and completion, but only in connection with criminal proceedings. Preliminary examination in connection with a serious administrative violation shall be initiated only in the event that an act of sanctioning administrative authority is in force, i.e. the procedure for ascertainment of an administrative violation and imposition of an administrative penalty shall be permanently concluded.

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Act for Amendment and Supplement to the Tax Insurance Procedure Code

The Act for Amendment and Supplement to the Tax Insurance Procedure Code (AASTIPC) was promulgated in the State Gazette, issue 82 of October 26, 2012.

The main amendments introduced in the Tax Insurance Procedure Code (TIPC) in the first place include the suspension of administrative proceedings. In Art. 34, Para. 3 the text following “persons” has been erased. In the same article new Para. 4, 5, 6, 7 and 8 have been created. These paragraphs provide that the absence of any judgment delivered within a 7-day term as of the  receipt of the application for suspension of the proceedings is considered a tacit denial. The order and the denial for suspension of the proceedings are subject to appeal within a 14-day term from the delivery of the order, respectively from expiry of the 7-day term under Para. 4 through the administrative body whose order is appealed. The appeal is brought before the administrative court according to the head office of the territorial directorate in the district of which the body is located. In another 14-day term the court delivers a ruling reversing or revoking the order or denying suspension of the proceedings. This is a final ruling.

Furthermore, in Art. 119, Para. 2 and 3 the following amendments have been made: the inspection act is issued within a 14-day term from the submission of the objection or from the expiry of the term for submission of an objection by the body which has assigned the inspection and the chief inspector. Where the identification of duties and liabilities in the proceedings is inadmissible, the proceedings are terminated with an order. Where the parties under Para. 2 cannot reach an agreement, the inspection act, respectively the order for termination, is issued by another revenue body specified by the territorial director or by a person authorized by the territorial director, based on a written notice by the body which has assigned the inspection.

The most important change in AASTIPC is the introduction of a regulation for administrative cooperation through information exchange between EU Member States, as might be required for establishing of tax liabilities. The regulation covers Art. 143a to Art. 143z. Art. 143a, Para. 2 stipulates the exclusion from the scope of the regulation of the value added tax, customs duties and excise duties, mandatory insurance contributions, fees for issue of certificates and other documents issued by state or local bodies, contractual receivables, including remuneration under service contracts of public interest.

The competent authority to perform the administrative cooperation according to Art. 143c is the territorial director of the National Revenue Agency (NRA) or officials authorized by the territorial director. The territorial director determines with an order the structural units at NRA to perform the cooperation. According to Art. 143d the types of administrative cooperation are: information exchange on request, automatic information exchange, spontaneous information exchange, application for delivery, attendance and participation in administrative proceedings, parallel audits and inspections.

The procedure for performance of the cooperation is regulated. The information exchange on request is performed by the local inquiring body, if possible by electronic means, in a standard form, with all the documents regarding the request enclosed. The local requested body provides the information available or organizes the administrative proceedings provided for collecting such information. If the body has the information available, it shall provide it within a 2-month term, and otherwise – within a 6-month term. In case it proves that the terms provided are not sufficient to collect the information, the local requested body may extend the term, notifying the inquiring body of the extension.

The automatic information exchange is performed by the executive director of NRA by providing the competent authorities of the EU Member States with information about particular categories of revenues determined in TIPC. The aforesaid procedure shall take place before June, 30 in the year in which the information has been collected.

The spontaneous information exchange is performed by the executive director of NRA on his own initiative in the hypotheses exhaustively enumerated in Art. 143i.

Art. 143k provides for the possibility for competent authorities from one EU Member State to attend and participate in proceedings of another EU Member State. This is subject to agreement between the respective competent authorities. The denial of cooperation to a foreign administrative body is equivalent to denial of cooperation to a revenue body under TIPC.

Art. 143l regulates the procedure for performance of parallel audits and inspections by two or more EU Member States, where the tax liabilities of a person are of mutual interest to these states. The request for delivery of acts and documents issued by the revenue bodies in relation to the application of tax law is performed pursuant to Art. 143m, and the request for delivery from another Member State – pursuant to Art. 143n.


According to Art. 143p, Para. 1, the information which contains individualizing data for a person is considered tax and insurance information within the meaning of TIPC. This information may be used and forwarded to third states only pursuant to  Para. 2, 3 and 4. Art. 143q specifies the cases where the local requested body is not obligated to provide information pursuant to this section.

§ 1, item 18 and item 19 of the Additional Provisions provides a legal definition of a local inquiring body and local requested body.

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Interpretative Decision No 3 of November 29, 2012 & Interpretative Decision No 8 of October 31, 2012 by the Supreme Court of Cassation

The General Assembly of the Civil College of the Supreme Court of Cassation (GACC of SCC) adopted two interpretative decisions on the implementation of two separate provisions of the Civil Procedure Code (CPC).
 
With regard to those issues GACC of SCC adopted the following:

1. Only notary deeds that ascertain ownership right over real estate are subject to revocation pursuant to Art. 537, Para 2 of CPC. The same provision does not apply to notary deeds that certify transactions which transfer, alter or terminate real property rights.

2. Where an applicant has made a request for suspension of the enforcement of an appellate decision concerning property rights under Art. 282, Para 2, i. 2 of the CPC, the interest which is subject to appeal corresponds to the value of the claim, filed with the statement of claim, determined in accordance with Art. 70, Para 1 of CPC. The amount of the security due pursuant to Art. 282, Para 2, i. 2 of CPC shall be determined upon the tax value of the property, and if none: upon the market value of the property right, specified in the statement of claim before the court of the first instance.

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