The Bulgarian National Bank (Central Bank – BNB) has grounds to initiate action because of media reports in recent days, targeting Corporate Commercial Bank (KTB) and its management, and to impose hefty fines on multiple media and the Prosecution under the Credit Institutions Act.

This absurd case arose on Thursday (June 12), when Chief Prosecutor Sotir Tsatsarov commented publicly on proceedings of the prosecution connected to the claim of the Bulgarian “protest network” (organization of anti-government protesters in the country – editor’s note) against murky alleged media mogul and Member of the Parliament, Deliyan Peevski, banker Tsvetan Vasilev and controversial new politician and former TV host, Nikolay Barekov, who, according to the claimants, are acting as organized criminal group. It emerged that 12 people from Corporate Commercial Bank have been questioned, but they did not include majority owner Tsvetan Vasilev.

KTB strongly protested in a special press release, which says: “Under these circumstances, a reasonable suspicion arises whether the pre-trial proceedings are being used for participation in an absurd and illegal campaign undermining the prestige and the commercial image of one of the largest and most stable Bulgarian banks.”

The next day, Friday, June 13, the public radio, BNR, disseminated information that the majority owner of Corporate Commercial Bank (KTB), Tsvetan Vasilev, was probed for ordering the murder of the MP from the Movement for Rights and Freedoms (DPS, the party largely representing the Turkish minority in Bulgaria – editor’s note) Deliyan Peevski, while there were ongoing raids in the offices of KTB. The information was circulated by almost all major Bulgarian media. We learned that three people have been arrested in this case.

However, on Saturday, June 14, the court ruled that the three arrested should be released because “there was absolutely no reasonable assumption that the three committed the crime of which they are accused.” It turned out that no charges have been pressed against Tsvetan Vasilev and raids of KTB offices have not been conducted.

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So far, these statements of the State Prosecution and of the media have not caused any reaction of BNB, which may initiate administrative punishment against the Prosecution and the public radio under Article 152a of the Credit Institutions Act – false claims that undermine the reputation of the bank.

BNB Used as Striking Bat against Media?

If the Central Bank fails to start a probe, it means double standard and “tailor-made” use of this institution to intimidate just certain media. Two years ago, Bivol received a threatening letter from BNB, based precisely on that article of the Act.

The letter informed that the Central Bank has started a probe over four banks described as “bad apples” in a diplomatic cable by former US Ambassador Beyrle from 2006. The four filed a complaint against Bivol for publishing the WikiLeaks cable.

“The major problems in the Bulgarian banking system include money laundering by Bulgarian and foreign criminals and connected lending,” the Ambassador wrote in the classified cable. It describes in detail the ownership and the operation of several “bad apples” banks. The information on them came from the head of the Bulgarian Financial Intelligence, Dr. Vassil Kirov. First Investment Bank of Tzeko Minev, Corporate Commercial Bank of Tsvetan Vassilev, Investbank of Petya Slavova and Central Cooperative Bank of the alleged powerful organized crime group TIM are among these banks. They are also the four banks that signed the complaint against Bivol.

What is specific for Article 152a of the Credit Institutions Act is that the Central Bank may impose a hefty fine on any person or institution that take own initiative to disseminate false information or circumstances for a bank. There is no need of a court decision and at first BNB has the authority to decide itself whether the facts are true or false. Only then, the fine may be challenged in court. The penalty, however, is such that it could bankrupt a small independent media.

Art. 152a. (New – State Gazette 105 from 2011) (1) Whoever disseminates false information and circumstances about a bank, which undermines the bank’s reputation and credibility is sanctioned with a fine of 2 000 to 5 000 levs, and 3 000 to 10 000 levs for repeat offenders;

(2) If the offense under paragraph 1 is committed through a mass media outlet, the fine ranges from 5 000 to 10 000 levs, and 8 000 to 20 000 levs for repeat offenders;

(3) If the offender under paragraph 1 or 2 is a legal entity, a property sanction is imposed as follows:

1. The cases under paragraph 1 – from 10 000 to 30 000 levs and for repeat offenders – from 30 000 to 50 000 levs;

2. Cases under paragraph 2 – from 20 000 to 50 000 levs and for repeat offenders – from 50 000 to 150 000 levs;

Bivol asked BNB to provide the claim of the four banks to prepare its defense, but we were denied access to the document. After the strong reaction of the international human rights organization “Reporters Without Borders” BNB did not launch an administrative procedure under Article 152a, but there is no evidence that it has been terminated either.

Bivol’s complaint to the Ombudsman Konstantin Penchev against this Article of the law remains without consequence. The former head of the Supreme Administrative Court replied that in his opinion there was no problem, since fines are imposed only for “false information or circumstances.”

In the current case, the information of the public radio, citing the Prosecution, about an investigation targeting Tsvetan Vasilev and about raids at KTB offices was declared false not only by the bank, but also by the court.

Dura lex, sed lex*, BNB should do what the law imposes – hunt and fine the media and the Prosecution so that the public can grasp the absurdity of the legal norm.

The opposite means that Article 152a was introduced to be used selectively to strike the small, the independent and the irreconcilable.

*The law is harsh, but it is the Law (Latin)

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