European Union imposed the first sanctions against Russia for the first time back in 2014 – because of the illegal annexation of the Ukrainian peninsula of Crimea. After that, Russia started a war in Ukraine – first in the Donbas region, and on February 24, 2022, it attacked the entire country.
Since then, the EU has adopted 9 packages of sanctions against the aggressor state, as well as against specific Russian legal entities and individuals. After February 24, the restrictions against the Kremlin tightened even more. The union accepted the last package on December 16.
More than 8 years after the annexation of Crimea and more than 10 months after Putin launched the full-scale war, Bulgaria still has no legislation regulating the imposition of sanctions against Russian individuals and legal entities and related people and companies.
According to EU regulation, dedicated to sanctions, which is constantly being updated, the assets of the companies on the lists should be frozen and the individuals should be banned from traveling. “Assets” means economic resources, property and financial means. Sanctions also apply to so-called “related persons” – companies, entities, governing bodies or specific people – having relations with those against whom they are imposed.
Since the sanctions were adopted by a regulation and not by a directive, they have immediate effect and can be applied without special laws – only on the basis of the European document. As long as there is a willingness to take responsibility. An attempt at direct enforcement was made by the Public Procurement Agency, which, although not until 2022, wrote rules to suspend public procurement in which individuals and legal entities from Russia participate.
For the implementation of the sanctions at the national level, a by-law is still needed for the technical details of enforcement, the EPP (“Democratic Bulgaria”) MEP Radan Kanev told Free Europe.
There were and are reasons for arrests
Until now, the Bulgarian state has had enough reasons for confiscation and seizure of property based on the European sanctions against Russia for these 8 years. And some of them are public. Such is the case with the deputy head of the presidential administration of Vladimir Putin – Dmitry Kozak, and the former deputy from the presidential party “United Russia” Vladimir Pligin.
Plygin is on the EU sanctions list as the author of the laws on the annexation of Crimea, and Kozak at the time was the deputy prime minister responsible for Russia’s actions on the Ukrainian peninsula. As of 2020, he is known as “the man for Ukraine” after replaced Dmitry Surkov.
In September 2014, 4 months after the two Russians were on the list of EU-sanctioned persons, companies owned by their sons – Alexey Kozak and Alexander Pligin – bought houses in the Bujaka area of Sozopol. It is obvious that these are family deals, because the companies were previously owned by the wives of politicians, according to official records.
The sons sold their houses in the fall of 2016, with the buying firm affiliated with the firm that sold them two years earlier. The history of the transactions is told in OFFNews. DANS has the data on the ownership of the companies that bought the houses back in 2014, as the information was passed on by a journalist, but there is no information that any action was taken.
Another example is that of the Russian Dmitry Pumplyansky, who has been on the EU sanctions list since March 9, 2022 as extremely close to Vladimir Putin. He is connected with the Russian companies “Completion Development S.a.r.l.” and “Pipe Metallurgical Company” (TMK), supplied and manufactured the pipes for the gas pipeline for the so-called “Balkan Stream” (the continuation of “Turkish Stream” through Bulgaria to Serbia – b.r. His name appears as a related person with the branch of the first company registered in Bulgaria, according to the Commercial Register. There is no data on arrests in Bulgaria of the related persons.
In March, Pumpyansky’s superyacht Axioma was impounded in Gibraltar at the request of the American bank JP Morgan due to accumulated debts due to sanctions against the billionaire. It was auctioned at the end of September.
Bulgaria participates pro forma and reluctantly
“At the moment, Bulgaria participates in the EU sanctions regime rather pro forma and with reluctance – this has been a fact since 2014, and the trend from February 22, 2022 has not changed significantly,” he said Radan Kanev in front of Free Europe.
In addition to the fact that there is no law governing the seizure or confiscation of property due to EU sanctions, it is also unclear which institutions are responsible for imposing them.
“The problem is that we do not have legislation that refers to the confiscation of those who have been sanctioned. And this is the result of the lack of desire of any of the institutions to take responsibility,” he said. Vesela Cherneva, Deputy Director of the European Council for Foreign Policy. She was an adviser to Kiril Petkov when he was prime minister.
Despite several cases in which Bulgaria arrested alleged spies working for Russia, to this day there are no known Bulgarian officials convicted. The last such case is from April 2022, when the prosecutor’s office reported that First Secretary of the Russian Embassy in Bulgaria is involved in espionage in DANS for the benefit of Russia.
According to Radan Kanev, the examples known by the media of (at least) circumvention of the sanctions lead to “several large-scale, capital issues”, the first two of which are related to the activities of “Lukoil” in Bulgaria, especially after they came into force of the EU-imposed ban on the import of Russian crude oil and the export of its products:
- – Does Bulgaria have an action plan in case of the need to establish state control over the oil refinery in Burgas? (Obviously, there was no plan for stopping gas supplies, despite the successful crisis response of the “Petkov” cabinet).
- – Does the concession on the Rosenets port, which is used by Lukoil, and especially the decision to extend it, comply with the sanctions regime?
- – Does the legal status and activity of the complex in Kamchia, de jure property of the government (local authority) of Moscow, and de facto – a center of Russian propaganda activity in Bulgaria, correspond to the sanctions regime?
- – Does the government in Bulgaria monitor the activities of media that directly serve the Russian military aggression in Ukraine and its propaganda, as well as their financing, including with budget funds or funds of the European institutions? The lack of answers to these questions puts Bulgaria in an extremely vulnerable position as a member of the EU, Kanev believes. According to him, this is probably one of the reasons for Bulgaria’s stumbling on the way to the Schengen area and the threat of separation of Bulgaria from Romania in this process.
A “coordination group” is yet to discuss
On October 20, 2022, the official cabinet created a coordination group “on the implementation of the restrictive measures of the European Union.” This is happening 8 years after the first sanctions and 10 months after the start of the war in Ukraine. The group is chaired by the Deputy Minister of Finance. His deputies are deputy ministers of the economy and energy, and participants are deputy ministers from all ministries, the deputy heads of the National Security Agency, the Public Procurement Agency, customs and representatives of all state bodies that have some functions in the application of sanctions.
It is also understood from the government’s decision that the coordination group will “discuss issues related to the identification of the competent national institutions for the implementation of the restrictive measures and their derogations”.
There was a similar working group in Kiril Petkov’s office, which was headed by the then Deputy Prime Minister Asen Vassilev. There is also a draft law prepared by the Ministry of Foreign Affairs, which is still being agreed between the institutions and is far from entering the parliament. According to Cherneva, the existence of a draft law that has not yet been discussed in the National Assembly also speaks of the lack of responsibility.
Is there a body responsible for enforcing the sanctions?
Although in every country there must be a competent authority for the implementation of sanctions, it is not clear who it is in Bulgaria. In the Official Journal of the EU – in the regulation itself – there is a link to a competent authority for imposing the sanctions against Russia for each country. For Bulgaria, the link leads to a no longer existing page on the website of the Ministry of Foreign Affairs. The up-to-date sanctions page on the External website says that the coordination group in question, created on 10/20/2022, is responsible in Bulgaria.
They are listed there however, other “responsible” departments, such as the Ministry of Finance – for customs control, the Arms Export Control Commission – for monitoring the restrictions on the distribution of weapons of mass destruction, DANS – responsible for the sanctions under the Law on Measures against the Financing of the Theory and access restrictions. The Ministry of Foreign Affairs also shares responsibility for the latter. Restrictive measures in the field of transport are entrusted to the maritime and aviation administration of the line ministry.
However, nowhere in this list does it say anything about who exactly is the authority responsible for imposing the sanctions against Russia and who is responsible for confiscation of assets of sanctioned persons.
Violation of sanctions will now be a crime against the EU
Violation of sanctions will now be a crime against the EU. The solution was retrieved on November 28 by the member countries. The list of European crimes is included in the Treaty on the Functioning of the European Union. It includes: terrorism, human trafficking and sexual exploitation of women and children, drug trafficking, arms trafficking, money laundering, corruption, counterfeiting of means of payment, computer crime and organized crime. And already – violation of sanctions against Russia.
The EU Council’s decision means that member states must harmonize laws and measures in the event of sanctions being breached.
Radan Kanev, who is also a lawyer, said that the effective imposition of sanctions is the task of the competent national authorities of the member states of the Union. The decision of the Council of the EU to classify the violation of sanctions as “European crimes” makes them acts that should be classified as criminal under the criminal law of each member state, Kanev explained.
According to him, this is a step in the direction of harmonization of the measures, but it is far from canceling the national competence. The decision only obliges Bulgaria to include in the Penal Code the violation of sanctions as a crime, but does not introduce rules for the prevention of violations, their establishment and effective enforcement of the legal consequences of the sanctions, Kanev said.
Consequences and interests
“With the entry into force of the classification of sanction violations as crimes, many Bulgarian commercial companies, as well as public institutions, risk being included in a list of potential perpetrators/assistants of such a crime, with very serious consequences,” Kanev said.
Since sanctioned persons in Bulgaria are mainly Russians, behind the reluctance to sanction there is certainly also the reluctance to harm the interests of Russia in general, Vesela Cherneva said.