EC Sends Emissaries to Bulgaria over Abuses by Private Enforcement Agents

Nikolay Marchenko

Bulgarian private enforcement agents (PEAs) are engaged in illegal commercial activity because companies associated with them are buying debtors’ properties. The complaints of the victims of the Bulgarian Chamber of PEAs have reached Brussels already. The victims’ Association “Solidarnost” (Solidarity) has filed 15 petitions with the European Parliament’s (EP) Committee on Petitions. The European Union (EU) Ombudsman’s team is investigating them. In February 2020, a special fact-finding mission of MEPs will arrive in Sofia to check the abuses of PEAs in Bulgaria, Bivol learned. They will hold meetings with Justice and Economy Ministers Danail Kirilov and Emil Karanikolov and representatives of the central bank (the Bulgarian National Bank, BNB.)

Bivol obtained the exclusive information about the upcoming visit from “Solidarnost” and from the MEP of the Bulgarian coalition Democratic Bulgaria (European People’s Party, EPP) Radan Kanev.

According to him, only two other Bulgarian MEPs of the VMRO party, Andrey Slabakov and Angel Dzhambazki, have confirmed the need for such a mission to check the situation with the PEAs in Bulgaria.

Nevertheless, Kanev is not very optimistic about the outcome of the mission.

“My position is that without legislative changes there can be no real result. In principle, the Committee on Petitions has no direct authority. The maximum it can do is a fact finding mission and a report to the European Commission.”

The office of MEP Andrey Slabakov also confirmed for Bivol the information about the mission. According to it, the mission in Sofia should consist of at least ten people from different Member States.

Bivol obtained the agenda of the two-day visit (February 25-26) as well. In addition to Justice Minister Danail Kirilov and Economy Minister Emil Karanikolov, the MEPs will hold a meeting with the head of the BNB’s Banking Supervision Directorate, and with the Mayor of the northwestern city of Montana and employees of the Regional Inspectorate of Environment and Waters due to environmental concerns.

“Solidarnost” received a replay to its complaint by the European Union Ombudsman Emily O’Reilly on December 18, 2019. It is also available to Bivol.

It states that the Ombudsman will analyze the information provided and decide what resolution to impose on the complaint and whether to inform the European Commission about the violations described by the Bulgarian NGO.

Bulgarian NGO “landing” in Brussels

As announced on September 5, 2019, on the site of Evrocom TV, a group of Bulgarian lawyers and human rights activists, led by the “Solidarnost” NGO had attended a hearing at the EP’s Committee on Petitions.

At the hearing in Brussels, the human rights activist Nikolai “The Barefooted” Kolev and attorney Vladislav Yanev have announced that the Bulgarian people are been robbed “legally” through banks and PEAs. Yanev has given as an example a judge from the Black Sea city of Varna, who is a borrower from a bank while presiding a case of injured consumers against the same bank.

Attorney Svetla Milanova has called for rigorous monitoring because the Bulgarian institutions seemingly “are taking steps to change the legislation, but these changes are not happening to the end.”

Then, the Committee has acknowledged that, indeed, the procedures in the guidelines for the enforcement of court rules “are not harmonized with those of the EU” but it could intervene “only when European legislation has a regulation on specific aspects”.

The Committee recalls that in January 2019, the EC initiated proceedings against Bulgaria, including because of the Code of Civil Procedure (CCP). The amendments would increase consumer rights.

“The Committee has no right to intervene in individual cases in the Bulgarian courts; we will monitor and discuss the next steps”.

However, there is still an obvious result from the meeting, at least because the Committee has agreed to send a mission to Sofia to verify the complaints.

In December 2019, Ivaylo Iliev, Chair of “Solidarnost” wrote to the new Chair of the EP’s Committee on Petitions, Dolors Montserrat, asking information about the date, stay, the composition of the mission and the subject of the review, due to the exceptional interest of the Association’s members.

Tsetska Tsacheva: We do not accept the claimants’ allegations

The reason for submitting 15 new petitions is the presence of three petitions by Ivaylo Iliev in 2017.
The reply to the EP Committee on Petitions by the Ministry of Justice of the Republic of Bulgaria, under the leadership of the then Minister Tsetska Tsacheva, has taken over a year.

The EP received the 17-page formal response only on December 19, 2018. In it, Tsacheva’s subordinates generally explain that the PEA and the CCP of the Republic of Bulgaria are not only for the benefit of the citizens but also “well-aligned” with the EU legislation.

The petitions are disputed on the grounds that what they describe was hardly possible under the current legislation.

“Actually, no freezing of all assets can be discussed, as the enforcement measures imposed by the enforcement agent and the enforcement measures taken must be proportionate to the obligation.”

The NGO sees the written position of Tsetska Tsacheva’s team as “perfunctory” and “useless”.

Conflict of interest among PEAs?

The many complaints by citizens to “Solidarnost” show that the PEAs are establishing related companies to buy seized real estate and other properties of the debtors.

However, the Private Enforcement Agents Act prohibits such practices. It postulates that a PEA cannot hold political positions, positions in local governments, government bodies, practice law, be hired on a permanent labor contract, work as a notary public, be a trustee in bankruptcy, carry on a commercial activity, be a manager or participate in the supervisory or management bodies of commercial companies or cooperatives.

Meanwhile, the “Solidarnost” report to Bivol states that some of the PEAs, including at least two members of the Chamber of PEAs’ Board of Directors, are sole proprietors of the companies’ capital, while their relatives have been appointed managers to cover up the PEAs’ illegal activities.

“Solidarnost” are outraged because they have repeatedly sent reports to the institutions, but no action to prevent the problem has followed so far.

In most cases, the replies from the institutions explain that the competent authority for supervising and controlling the PEAs is the Chamber of PEAs itself.

“You, yourself, understand the situation in which there is a lack of proper oversight and the PEAs are to be supervised by the Chamber of PEAS,” said “Solidarnost” Chair Ivaylo Iliev.

There is a whole list of PEAs in the complaints, including three of the most influential in Bulgaria. Two of them are members of the Board of Directors of the Chamber of PEAs. Another is the son of a former Chair of the Bar Association in the southern city of Haskovo.

Maria Krasinova Tsacheva is on the Board of Directors of the Chamber of PEAs of the Republic of Bulgaria and her husband Vladimir Lyudmilov Tsachev is a PEA. Together, they are partners in three companies.

According to the complaints, “some illegal actions are being carried out” in the city of Haskovo by PEA Zahari Zapryanov. He is a business partner with his sister Vera Georgieva Georgieva and his mother Veska Georgieva Zapryanova, who is a former Chair of the Bar Association – Haskovo and in another company with Delcho Nikolaev Pehlivanov, who is “the main participant in the auctions announced by the PEA for the purchase of real estate”.

Delcho Pehlivanov in turn conducts business through eight companies. However, the most interesting is “SANIKA 2003” Ltd.. The NGO says that it is a real estate agency that manages the properties purchased at public auctions.

Delcho Pehlivanov is one of the protagonists of Bivol’s investigation “LAWMAKERS’ ‘SHACKS’ IN SOFIA”. He is a business partner with the mayor of Mineralni Bani (Mineral Baths, SPA) – Haskovo, Myumyun Iskander from the party Movement for Rights and Freedoms (DPS), largely representing the Bulgarian Muslim minority. His assets include a large number of lucrative land swaps in Haskovo and the nearby town of Harmanli, carried out in 2009 at the end of the term of the Triple Coalition government in which the DPS participated. According to media reports, a while ago, two men have attacked and beaten him in broad daylight in Haskovo.

Stoyan Yakimov – a millionaire PEA?

Stoyan Blagoev Yakimov is Deputy Chairman of the Board of Directors of the Chamber of PEAs. He became well known in Bulgaria because of the case with the collapsed Corporate Commercial Bank (CCB) and other cases.

He has been the protagonist of numerous investigations, including Bivol’s “COMPANIES CONNECTED TO CONTROVERSIAL LAWYER ACQUIRE PROPERTIES USED AS COLLATERAL IN COLLAPSED BANK” from 2016. It established that with the help of PEA Stoyan Yakimov, companies connected to Momchil Mondeshki, a lawyer close to controversial media mogul and DPS lawmaker Delyan Peevski, have managed to acquire properties of CCB for a reduced price.

According to a report by “Solidarnost”, PEA Stoyan Yakimov further violates the law by being a partner in at least seven companies with his wife, who is most often referred to as a manager. A search in the Commercial Register indicates that Stoyan Yakimov is indeed engaged in commercial activities with investments in agriculture, renewable energy, real estate and more.

His wife Vasilka Nikolaeva Yakimova is a manager in four companies in which she is an owner or a partner.
BOYANA ESTATES 2013 has acquired real estate for public sale by a PEA in an office building in Sofia for BGN 223,000. Interestingly, the rent of one square meter of office space in this building on “Gotse Delchev Blvd”, according to research by Bivol in real estate agencies in Sofia is EUR 100.

On August 7, 2014, financial expert Vassil Kendov wrote in detail about his dispute with PEA Stoyan Yakimov on his Kendov.com blog.

>“The bank told me that my company account had been blocked by PEA Stoyan Yakimov, which was definitely a surprise to me. I had not received a warning message because it was unnecessary. The amount was paid back in 2012 by bank transfer,” writes Vassil Kendov.

The financier then tells how he continues to receive letters from the National Revenue Agency (NRA) that he has not paid the Value Added Tax (VAT).

It has turned out that the PEA simply has not transferred the money to the NRA, which is why Kendov’s company account has been blocked.

The Chamber of PEAS is not an organization that is easy to contact and reach – an answering machine answers calls to the two listed landline phone numbers without connecting to a real person. The site does not list the emails or numbers (even landline) of the members of the Board of Directors, and citizens cannot contact the Head of Public Relations and Protocol.

However, after reaching her on her cellphone, she declined to comment on the case. “I have never heard of any complaints or petitions,” Antoaneta Nikova-Velinova, a spokesperson for the Chamber of PEAs, told Bivol. Nevertheless, she called the next day to give the position of the management, and it turns out that it is aware of the complaints.

“Two inspections (in 2018 and 2019) were carried out by the Committee for Combatting Corruption and the withdrawal of illegally acquired property (KPKONPI) (sic). There were no violations of the law. Maria Tsacheva was probed in 2019. No violations found.”

Last but not least, it should be noted that the official website of the Chamber of PEAs in Bulgaria contains very little information, in addition to the sketchy availability of contact data, despite being created with European taxpayers’ money,

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